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Should You Worry About Sky Light Holdings Limited's (HKG:3882) CEO Pay Cheque?

Simply Wall St

Terry Tang is the CEO of Sky Light Holdings Limited (HKG:3882). First, this article will compare CEO compensation with compensation at similar sized companies. 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.

View our latest analysis for Sky Light Holdings

How Does Terry Tang's Compensation Compare With Similar Sized Companies?

Our data indicates that Sky Light Holdings Limited is worth HK$295m, and total annual CEO compensation was reported as HK$902k for the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth HK$884k. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO total compensation to be HK$1.8m.

A first glance this seems like a real positive for shareholders, since Terry Tang is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.

You can see a visual representation of the CEO compensation at Sky Light Holdings, below.

SEHK:3882 CEO Compensation, January 4th 2020

Is Sky Light Holdings Limited Growing?

Over the last three years Sky Light Holdings Limited has shrunk its earnings per share by an average of 19% per year (measured with a line of best fit). It saw its revenue drop 28% over the 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. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has Sky Light Holdings Limited Been A Good Investment?

Since shareholders would have lost about 82% over three years, some Sky Light Holdings 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...

It looks like Sky Light Holdings Limited pays its CEO less than similar sized companies.

The compensation paid to Terry Tang is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). 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. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Sky Light Holdings (free visualization of insider trades).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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. Thank you for reading.