Kim Lai became the CEO of DTXS Silk Road Investment Holdings Company Limited (HKG:620) in 2017. First, this article will compare CEO compensation with compensation at similar sized 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.
How Does Kim Lai's Compensation Compare With Similar Sized Companies?
Our data indicates that DTXS Silk Road Investment Holdings Company Limited is worth HK$4.0b, and total annual CEO compensation was reported as HK$7.0m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$3.3m. We looked at a group of companies with market capitalizations from HK$1.6b to HK$6.2b, and the median CEO total compensation was HK$2.6m.
As you can see, Kim Lai is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean DTXS Silk Road Investment Holdings Company Limited is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at DTXS Silk Road Investment Holdings has changed from year to year.
Is DTXS Silk Road Investment Holdings Company Limited Growing?
DTXS Silk Road Investment Holdings Company Limited saw earnings per share stay pretty flat over the last three years, albeit with a slight decrease, according to the line of best fit. It achieved revenue growth of 3.8% over the last year.
The lack of earnings per share growth in the last three years is unimpressive. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has DTXS Silk Road Investment Holdings Company Limited Been A Good Investment?
Most shareholders would probably be pleased with DTXS Silk Road Investment Holdings Company Limited for providing a total return of 71% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by DTXS Silk Road Investment Holdings Company Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. However, we can't argue with the strong returns to shareholders, over the same time period. Considering this, shareholders are probably not too worried about the CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling DTXS Silk Road Investment Holdings (free visualization of insider trades).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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