Is International Business Settlement Holdings Limited's (HKG:147) CEO Being Overpaid?

The CEO of International Business Settlement Holdings Limited (HKG:147) is Leong Yuen. 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. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for International Business Settlement Holdings

How Does Leong Yuen's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that International Business Settlement Holdings Limited has a market cap of HK$3.3b, and reported total annual CEO compensation of HK$960k for the year to March 2019. Notably, the salary of HK$960k is the vast majority of the CEO compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$1.6b to HK$6.2b. The median total CEO compensation was HK$2.6m.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of International Business Settlement Holdings. Speaking on an industry level, we can see that nearly 72% of total compensation represents salary, while the remainder of 28% is other remuneration. International Business Settlement Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry.

Most shareholders would consider it a positive that Leong Yuen takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion. You can see a visual representation of the CEO compensation at International Business Settlement Holdings, below.

Is International Business Settlement Holdings Limited Growing?

International Business Settlement Holdings Limited has reduced its earnings per share by an average of 37% a year, over the last three years (measured with a line of best fit). Its revenue is down 77% over last year.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has International Business Settlement Holdings Limited Been A Good Investment?

Since shareholders would have lost about 90% over three years, some International Business Settlement Holdings Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

It appears that International Business Settlement Holdings Limited remunerates its CEO below most similar sized companies.

Shareholders should note that compensation for Leong Yuen is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. On another note, International Business Settlement Holdings has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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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