Joseph Leung has been the CEO of Lam Soon (Hong Kong) Limited (HKG:411) since 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Joseph Leung's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Lam Soon (Hong Kong) Limited has a market cap of HK$3.5b, and reported total annual CEO compensation of HK$6.1m for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$3.8m. 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.
It would therefore appear that Lam Soon (Hong Kong) Limited pays Joseph Leung 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 Lam Soon (Hong Kong), below.
Is Lam Soon (Hong Kong) Limited Growing?
On average over the last three years, Lam Soon (Hong Kong) Limited has grown earnings per share (EPS) by 16% each year (using a line of best fit). Its revenue is down 1.1% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Lam Soon (Hong Kong) Limited Been A Good Investment?
Boasting a total shareholder return of 85% over three years, Lam Soon (Hong Kong) Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Lam Soon (Hong Kong) Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Lam Soon (Hong Kong) shares (free trial).
If you want to buy a stock that is better than Lam Soon (Hong Kong), this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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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