Does Shun Tak Holdings Limited's (HKG:242) CEO Salary Reflect Performance?

Pansy Catilina Ho became the CEO of Shun Tak Holdings Limited (HKG:242) in 1999. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Shun Tak Holdings

How Does Pansy Catilina Ho's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Shun Tak Holdings Limited has a market cap of HK$9.9b, and reported total annual CEO compensation of HK$14m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at HK$10.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$7.8b to HK$25b. The median total CEO compensation was HK$4.4m.

Thus we can conclude that Pansy Catilina Ho receives more in total compensation than the median of a group of companies in the same market, and of similar size to Shun Tak Holdings 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.

The graphic below shows how CEO compensation at Shun Tak Holdings has changed from year to year.

Is Shun Tak Holdings Limited Growing?

Over the last three years Shun Tak Holdings Limited has grown its earnings per share (EPS) by an average of 113% per year (using a line of best fit). It achieved revenue growth of 235% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. It could be important to check this free visual depiction of what analysts expect for the future.

Has Shun Tak Holdings Limited Been A Good Investment?

I think that the total shareholder return of 33%, over three years, would leave most Shun Tak Holdings Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We examined the amount Shun Tak 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.

However we must not forget that the EPS growth has been very strong over three years. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Shun Tak Holdings.

Important note: Shun Tak 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.

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.

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