How Should Investors Feel About Vongroup Limited’s (HKG:318) CEO Pay?
David Vong has been the CEO of Vongroup Limited (HKG:318) since 2005. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Vongroup
How Does David Vong’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Vongroup Limited has a market cap of HK$86m, and is paying total annual CEO compensation of HK$1.7m. (This is based on the year to 2018). While we always look at total compensation first, we note that the salary component is less, at HK$600k. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO compensation in that group is HK$1.7m.
So David Vong is paid around the average of the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at Vongroup has changed over time.
Is Vongroup Limited Growing?
Over the last three years Vongroup Limited has grown its earnings per share (EPS) by an average of 77% per year (using a line of best fit). In the last year, its revenue is up 159%.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.
We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Vongroup Limited Been A Good Investment?
Given the total loss of 60% over three years, many shareholders in Vongroup Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
David Vong is paid around the same as most CEOs of similar size companies.
We’d say the company can boast of its EPS growth, but it’s disappointing to see negative shareholder returns over three years. Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. So you may want to check if insiders are buying Vongroup shares with their own money (free access).
Or you might rather take a peek at this analytical visualization of historic cash flow, earnings 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.
