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How Should Investors React To Hi-P International Limited's (SGX:H17) CEO Pay?

Simply Wall St

Hsiao Yao has been the CEO of Hi-P International Limited (SGX:H17) since 2003. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Hi-P International

How Does Hsiao Yao's Compensation Compare With Similar Sized Companies?

According to our data, Hi-P International Limited has a market capitalization of S$941m, and pays its CEO total annual compensation worth S$4.1m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at S$1.2m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of S$554m to S$2.2b. The median total CEO compensation was S$48k.

As you can see, Hsiao Yao is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Hi-P International 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 Hi-P International has changed from year to year.

SGX:H17 CEO Compensation, August 21st 2019

Is Hi-P International Limited Growing?

Hi-P International Limited has increased its earnings per share (EPS) by an average of 46% a year, over the last three years (using a line of best fit). Its revenue is down -6.3% over last year.

This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Hi-P International Limited Been A Good Investment?

Boasting a total shareholder return of 254% over three years, Hi-P International Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We compared total CEO remuneration at Hi-P International Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Hi-P International (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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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. Thank you for reading.