Is Newtree Group Holdings Limited's (HKG:1323) CEO Pay Justified?
Wai Sing Wong has been the CEO of Newtree Group Holdings Limited (HKG:1323) since 2016. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Newtree Group Holdings
How Does Wai Sing Wong's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Newtree Group Holdings Limited has a market cap of HK$1.3b, and is paying total annual CEO compensation of HK$18m. (This number is for the twelve months until March 2019). While we always look at total compensation first, we note that the salary component is less, at HK$1.7m. When we examined a selection of companies with market caps ranging from HK$784m to HK$3.1b, we found the median CEO total compensation was HK$2.2m.
It would therefore appear that Newtree Group Holdings Limited pays Wai Sing Wong 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. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Newtree Group Holdings, below.
Is Newtree Group Holdings Limited Growing?
Over the last three years Newtree Group Holdings Limited has grown its earnings per share (EPS) by an average of 101% per year (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Newtree Group Holdings Limited Been A Good Investment?
I think that the total shareholder return of 104%, over three years, would leave most Newtree Group Holdings Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
We compared the total CEO remuneration paid by Newtree Group Holdings Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Newtree Group Holdings (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.
