Yahoo Finance Is CK Infrastructure Holdings Limited's (HKG:1038) CEO Paid Enough Relative To Peers?
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In 1970 Hing Lam Kam was appointed CEO of CK Infrastructure Holdings Limited (HKG:1038). This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for CK Infrastructure Holdings
How Does Hing Lam Kam's Compensation Compare With Similar Sized Companies?
According to our data, CK Infrastructure Holdings Limited has a market capitalization of HK$160b, and pays its CEO total annual compensation worth HK$16m. (This figure is for the year to December 2018). That's a fairly small increase of 3.1% on year before. While we always look at total compensation first, we note that the salary component is less, at HK$4.2m. We took a group of companies with market capitalizations over HK$63b, and calculated the median CEO total compensation to be HK$4.7m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
It would therefore appear that CK Infrastructure Holdings Limited pays Hing Lam Kam more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at CK Infrastructure Holdings has changed from year to year.
Is CK Infrastructure Holdings Limited Growing?
Over the last three years CK Infrastructure Holdings Limited has shrunk its earnings per share by an average of 2.3% per year (measured with a line of best fit). It achieved revenue growth of 11% over the last year.
Unfortunately there is a complete lack of earnings per share improvement, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has CK Infrastructure Holdings Limited Been A Good Investment?
Given the total loss of 7.4% over three years, many shareholders in CK Infrastructure Holdings Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We compared total CEO remuneration at CK Infrastructure Holdings Limited with the amount paid at other large companies. Our data suggests that it pays above the median CEO pay within that group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Arguably worse, investors are without a positive return for the last three years. Some might well form the view that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling CK Infrastructure Holdings shares (free trial).
Important note: CK Infrastructure 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.
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.
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. Thank you for reading.
