Hang Cheng has been the CEO of Travel Expert (Asia) Enterprises Limited (HKG:1235) since 2011. 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 process should give us an idea about how appropriately the CEO is paid.
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How Does Hang Cheng's Compensation Compare With Similar Sized Companies?
According to our data, Travel Expert (Asia) Enterprises Limited has a market capitalization of HK$189m, and pays its CEO total annual compensation worth HK$754k. (This figure is for the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at HK$679k. 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$1.5m.
A first glance this seems like a real positive for shareholders, since Hang Cheng is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Travel Expert (Asia) Enterprises has changed over time.
Is Travel Expert (Asia) Enterprises Limited Growing?
Travel Expert (Asia) Enterprises Limited has reduced its earnings per share by an average of 125% a year, over the last three years (measured with a line of best fit). Its revenue is down -5.3% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Travel Expert (Asia) Enterprises Limited Been A Good Investment?
Since shareholders would have lost about 49% over three years, some Travel Expert (Asia) Enterprises Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
It appears that Travel Expert (Asia) Enterprises Limited remunerates its CEO below most 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. While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. So you may want to check if insiders are buying Travel Expert (Asia) Enterprises shares with their own money (free access).
If you want to buy a stock that is better than Travel Expert (Asia) Enterprises, this free list of high return, low debt companies is a great place to look.
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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. Thank you for reading.