Is Metro Holdings Limited (SGX:M01) Excessively Paying Its CEO?
Lawrence Chiang has been the CEO of Metro Holdings Limited (SGX:M01) since 2016. 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.
View our latest analysis for Metro Holdings
How Does Lawrence Chiang’s Compensation Compare With Similar Sized Companies?
According to our data, Metro Holdings Limited has a market capitalization of S$903m, and pays its CEO total annual compensation worth S$3.0m. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at S$1.3m. When we examined a selection of companies with market caps ranging from S$549m to S$2.2b, we found the median CEO compensation was S$281k.
As you can see, Lawrence Chiang is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Metro Holdings Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Metro Holdings has changed over time.
Is Metro Holdings Limited Growing?
Over the last three years Metro Holdings Limited has grown its earnings per share (EPS) by an average of 19% per year. It achieved revenue growth of 1.9% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.
Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Metro Holdings Limited Been A Good Investment?
Most shareholders would probably be pleased with Metro Holdings Limited for providing a total return of 47% over three years. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
In Summary…
We compared the total CEO remuneration paid by Metro Holdings Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Metro Holdings shares (free trial).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
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.
