Is Sky Light Holdings Limited’s (HKG:3882) CEO Being Overpaid?

The CEO of Sky Light Holdings Limited (HKG:3882) is Terry Tang. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Sky Light Holdings

How Does Terry Tang’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Sky Light Holdings Limited has a market cap of HK$310m, and reported total annual CEO compensation of HK$902k for the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth HK$884k. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO total compensation to be HK$1.7m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion. Shareholders might be interested in this free visualization of analyst forecasts.

You can see a visual representation of the CEO compensation at Sky Light Holdings, below.

SEHK:3882 CEO Compensation, November 26th 2019
SEHK:3882 CEO Compensation, November 26th 2019

Is Sky Light Holdings Limited Growing?

Sky Light Holdings Limited has reduced its earnings per share by an average of 19% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down 28%.

Unfortunately, earnings per share have trended lower over the last three years. And the impression is worse when you consider revenue is down year-on-year. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.

Has Sky Light Holdings Limited Been A Good Investment?

Since shareholders would have lost about 84% over three years, some Sky Light Holdings Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

Sky Light Holdings Limited is currently paying its CEO below what is normal for companies of its size.

Terry Tang is paid less than CEOs of similar size companies, but the company isn’t growing and total shareholder returns have been disappointing. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. So you may want to check if insiders are buying Sky Light Holdings 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.

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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