Should You Worry About Lippo Limited’s (HKG:226) CEO Pay?
John Lee is the CEO of Lippo Limited (HKG:226). 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. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Lippo
How Does John Lee’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Lippo Limited has a market cap of HK$1.6b, and is paying total annual CEO compensation of HK$4.2m. (This number is for the twelve months until March 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at HK$1.4m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$785m to HK$3.1b. The median total CEO compensation was HK$1.8m.
Thus we can conclude that John Lee receives more in total compensation than the median of a group of companies in the same market, and of similar size to Lippo 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 a visual representation of the CEO compensation at Lippo, below.
Is Lippo Limited Growing?
Lippo Limited has reduced its earnings per share by an average of 81% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 2.4% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Lippo Limited Been A Good Investment?
Given the total loss of 18% over three years, many shareholders in Lippo Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary…
We compared the total CEO remuneration paid by Lippo 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.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Over the same period, investors would have come away with nothing in the way of share price gains. Some might well form the view that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Lippo shares (free trial).
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.
