Is AMS Public Transport Holdings Limited’s (HKG:77) CEO Paid Enough Relative To Peers?

Man Chun Chan became the CEO of AMS Public Transport Holdings Limited (HKG:77) in 2005. 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. 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.

View our latest analysis for AMS Public Transport Holdings

How Does Man Chun Chan’s Compensation Compare With Similar Sized Companies?

According to our data, AMS Public Transport Holdings Limited has a market capitalization of HK$242m, and paid its CEO total annual compensation worth HK$4.4m over the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at HK$3.9m. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO total compensation was HK$1.8m.

Thus we can conclude that Man Chun Chan receives more in total compensation than the median of a group of companies in the same market, and of similar size to AMS Public Transport 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.

You can see, below, how CEO compensation at AMS Public Transport Holdings has changed over time.

SEHK:77 CEO Compensation, January 15th 2020
SEHK:77 CEO Compensation, January 15th 2020

Is AMS Public Transport Holdings Limited Growing?

AMS Public Transport Holdings Limited has reduced its earnings per share by an average of 93% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 1.3% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don’t have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has AMS Public Transport Holdings Limited Been A Good Investment?

Since shareholders would have lost about 27% over three years, some AMS Public Transport Holdings Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We compared the total CEO remuneration paid by AMS Public Transport Holdings Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us. Arguably worse, investors are without a positive return for the last three years. This analysis suggests to us that the CEO is paid too generously! So you may want to check if insiders are buying AMS Public Transport Holdings shares with their own money (free access).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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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