Hang Cheng became the CEO of Travel Expert (Asia) Enterprises Limited (HKG:1235) in 2011. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 Hang Cheng’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Travel Expert (Asia) Enterprises Limited has a market cap of HK$240m, and is paying total annual CEO compensation of HK$754k. That’s less than last year. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO compensation to be HK$2m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Travel Expert (Asia) Enterprises has changed from year to year.
Is Travel Expert (Asia) Enterprises Limited Growing?
Travel Expert (Asia) Enterprises Limited has reduced its earnings per share by an average of 103% a year, over the last three years. Its revenue is down -5.5% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Travel Expert (Asia) Enterprises Limited Been A Good Investment?
Given the total loss of 40% over three years, many shareholders in Travel Expert (Asia) Enterprises Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
It looks like Travel Expert (Asia) Enterprises Limited pays its CEO less than similar sized companies.
Shareholders should note that compensation for Hang Cheng is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Travel Expert (Asia) Enterprises Limited (free visualization of insider trades).
Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.
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 firstname.lastname@example.org.