Is Hong Kong Exchanges and Clearing Limited’s (HKG:388) CEO Pay Fair?
Charles Li has been the CEO of Hong Kong Exchanges and Clearing Limited (HKG:388) since 2010. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Hong Kong Exchanges and Clearing
How Does Charles Li’s Compensation Compare With Similar Sized Companies?
According to our data, Hong Kong Exchanges and Clearing Limited has a market capitalization of HK$283.5b, and pays its CEO total annual compensation worth HK$49m. That’s a notable increase of 11% on last year. We looked at a group of companies with market capitalizations over HK$62.6b and the median CEO compensation was HK$5m.
It would therefore appear that Hong Kong Exchanges and Clearing Limited pays Charles Li more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Hong Kong Exchanges and Clearing, below.
Is Hong Kong Exchanges and Clearing Limited Growing?
Over the last three years, Hong Kong Exchanges and Clearing Limited has not seen its earnings per share change much, though they have improved slightly. Its revenue is up 29% over last year.
It’s great to see that revenue growth is strong. And in that context, the modest EPS improvement certainly isn’t shabby. So while I’d stop short of saying growth is absolutely outstanding, there are definitely some clear positives!
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Hong Kong Exchanges and Clearing Limited Been A Good Investment?
Hong Kong Exchanges and Clearing Limited has generated a total shareholder return of 17% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
In Summary…
We examined the amount Hong Kong Exchanges and Clearing Limited pays its CEO, and compared it to the amount paid by other large companies. As discussed above, we discovered that the company pays more than the median of that group.
We generally prefer to see stronger EPS growth, and we’re not particularly impressed with the total shareholder return, over the last three years. Considering this, we wouldn’t want to see any big pay rises, although we’d stop short of calling the CEO compensation unfair. Shareholders may want to check for free if Hong Kong Exchanges and Clearing Limited insiders are buying or selling shares.
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
