In 2015, Rocky Poon was appointed CEO of FSE Services Group Limited (HKG:331). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Rocky Poon's Compensation Compare With Similar Sized Companies?
According to our data, FSE Services Group Limited has a market capitalization of HK$1.5b, and paid its CEO total annual compensation worth HK$7.2m over the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at HK$3.6m. We examined companies with market caps from HK$775m to HK$3.1b, and discovered that the median CEO total compensation of that group was HK$2.2m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of FSE Services Group. On a sector level, around 90% of total compensation represents salary and 9.9% is other remuneration. Non-salary compensation represents a greater slice of the remuneration pie for FSE Services Group, in sharp contrast to the overall sector.
It would therefore appear that FSE Services Group Limited pays Rocky Poon more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. You can see a visual representation of the CEO compensation at FSE Services Group, below.
Is FSE Services Group Limited Growing?
On average over the last three years, FSE Services Group Limited has seen earnings per share (EPS) move in a favourable direction by 8.1% each year (using a line of best fit). It saw its revenue drop 5.1% over the last year.
I would argue that the lack of revenue growth in the last year is less than ideal, but the improvement in EPS is good. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 FSE Services Group Limited Been A Good Investment?
Most shareholders would probably be pleased with FSE Services Group Limited for providing a total return of 68% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We examined the amount FSE Services Group Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
One might like to have seen stronger growth, but shareholder returns have been pleasing, over the last three years. Considering this fine result for investors, we daresay the CEO compensation might be apt. Shifting gears from CEO pay for a second, we've spotted 3 warning signs for FSE Services Group you should be aware of, and 2 of them are potentially serious.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.