William Cheng is the CEO of Shun Ho Holdings Limited (HKG:253). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does William Cheng's Compensation Compare With Similar Sized Companies?
Our data indicates that Shun Ho Holdings Limited is worth HK$372m, and total annual CEO compensation was reported as HK$14m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at HK$12m. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO total compensation in that group is HK$1.8m.
Thus we can conclude that William Cheng receives more in total compensation than the median of a group of companies in the same market, and of similar size to Shun Ho Holdings Limited. However, this doesn't necessarily mean the pay is too high. 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 Shun Ho Holdings has changed over time.
Is Shun Ho Holdings Limited Growing?
On average over the last three years, Shun Ho Holdings Limited has grown earnings per share (EPS) by 19% each year (using a line of best fit). Its revenue is up 7.2% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Shun Ho Holdings Limited Been A Good Investment?
With a three year total loss of 39%, Shun Ho Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by Shun Ho Holdings Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. So you may want to check if insiders are buying Shun Ho Holdings shares with their own money (free access).
If you want to buy a stock that is better than Shun Ho Holdings, this free list of high return, low debt companies is a great place to look.
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