Kent Wong became the CEO of Chow Tai Fook Jewellery Group Limited (HKG:1929) in 2011. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Kent Wong’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Chow Tai Fook Jewellery Group Limited has a market cap of HK$71b, and reported total annual CEO compensation of HK$15m for the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at HK$5.9m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$31b to HK$93b. The median total CEO compensation was HK$4.5m.
As you can see, Kent Wong is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Chow Tai Fook Jewellery Group Limited is paying too much. 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 Chow Tai Fook Jewellery Group has changed from year to year.
Is Chow Tai Fook Jewellery Group Limited Growing?
Chow Tai Fook Jewellery Group Limited has increased its earnings per share (EPS) by an average of 16% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 3.7%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.
Has Chow Tai Fook Jewellery Group Limited Been A Good Investment?
Chow Tai Fook Jewellery Group Limited has generated a total shareholder return of 23% over three years, so most shareholders would be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared the total CEO remuneration paid by Chow Tai Fook Jewellery Group Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. We also note that, over the same time frame, shareholder returns haven’t been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. So you may want to check if insiders are buying Chow Tai Fook Jewellery Group shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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