The CEO of Kingboard Laminates Holdings Limited (HKG:1888) is Kwok Keung Cheung. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Kwok Keung Cheung's Compensation Compare With Similar Sized Companies?
According to our data, Kingboard Laminates Holdings Limited has a market capitalization of HK$25b, and paid its CEO total annual compensation worth HK$18m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$2.9m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from HK$16b to HK$50b, and the median CEO total compensation was HK$4.0m.
As you can see, Kwok Keung Cheung is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Kingboard Laminates Holdings Limited is paying too much. 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 Kingboard Laminates Holdings has changed over time.
Is Kingboard Laminates Holdings Limited Growing?
Kingboard Laminates Holdings Limited has reduced its earnings per share by an average of 5.5% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down 2.1%.
Unfortunately, earnings per share have trended lower over the last 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. Shareholders might be interested in this free visualization of analyst forecasts.
Has Kingboard Laminates Holdings Limited Been A Good Investment?
I think that the total shareholder return of 63%, over three years, would leave most Kingboard Laminates Holdings Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Kingboard Laminates Holdings Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. However, we can't argue with the strong returns to shareholders, over the same time period. Considering this, shareholders are probably not too worried about the CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Kingboard Laminates Holdings (free visualization of insider trades).
Important note: Kingboard Laminates Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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