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Is TK Group (Holdings) Limited's (HKG:2283) CEO Paid Enough Relative To Peers?

The CEO of TK Group (Holdings) Limited (HKG:2283) is Michael Yung. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for TK Group (Holdings)

How Does Michael Yung's Compensation Compare With Similar Sized Companies?

According to our data, TK Group (Holdings) Limited has a market capitalization of HK$2.9b, and paid its CEO total annual compensation worth HK$7.1m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at HK$2.4m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from HK$1.6b to HK$6.2b, we found the median CEO total compensation was HK$2.6m.

It would therefore appear that TK Group (Holdings) Limited pays Michael Yung 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. 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 TK Group (Holdings) has changed from year to year.

SEHK:2283 CEO Compensation, February 24th 2020
SEHK:2283 CEO Compensation, February 24th 2020

Is TK Group (Holdings) Limited Growing?

TK Group (Holdings) Limited has increased its earnings per share (EPS) by an average of 20% a year, over the last three years (using a line of best fit). Its revenue is up 10% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. It could be important to check this free visual depiction of what analysts expect for the future.

Has TK Group (Holdings) Limited Been A Good Investment?

I think that the total shareholder return of 67%, over three years, would leave most TK Group (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 compared total CEO remuneration at TK Group (Holdings) Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at TK Group (Holdings).

Important note: TK Group (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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