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Should You Worry About Luks Group (Vietnam Holdings) Company Limited’s (HKG:366) CEO Pay?

Cheung Cheng has been the CEO of Luks Group (Vietnam Holdings) Company Limited (HKG:366) since 2015. First, this article will compare CEO compensation with compensation at similar sized companies. 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 method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Luks Group (Vietnam Holdings)

How Does Cheung Cheng’s Compensation Compare With Similar Sized Companies?

According to our data, Luks Group (Vietnam Holdings) Company Limited has a market capitalization of HK$1.1b, and pays its CEO total annual compensation worth HK$3m. Notably, that’s an increase of 55% over the year before. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO compensation was HK$2m.

It would therefore appear that Luks Group (Vietnam Holdings) Company Limited pays Cheung Cheng 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Luks Group (Vietnam Holdings) has changed over time.

SEHK:366 CEO Compensation November 1st 18

Is Luks Group (Vietnam Holdings) Company Limited Growing?

Over the last three years, Luks Group (Vietnam Holdings) Company Limited has not seen its earnings per share change much, though they have improved slightly. In the last year, its revenue is up 4.5%.

I would argue that the improvement in revenue isn’t particularly impressive, but I’m happy with the modest EPS growth. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information.

We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Luks Group (Vietnam Holdings) Company Limited Been A Good Investment?

Since shareholders would have lost about 16% over three years, some Luks Group (Vietnam Holdings) Company Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We compared the total CEO remuneration paid by Luks Group (Vietnam Holdings) Company Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. This doesn’t look great when you consider CEO remuneration is up on last year. Shareholders may wish to consider further research. Although we don’t think the CEO pay is too high, it is probably more on the generous side of things. Shareholders may want to check for free if Luks Group (Vietnam Holdings) Company Limited insiders are buying or selling shares.

Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .

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 editorial-team@simplywallst.com.