What Can We Make Of TOMO Holdings' (HKG:6928) CEO Compensation?

David Siew has been the CEO of TOMO Holdings Limited (HKG:6928) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether TOMO Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for TOMO Holdings

How Does Total Compensation For David Siew Compare With Other Companies In The Industry?

Our data indicates that TOMO Holdings Limited has a market capitalization of HK$369m, and total annual CEO compensation was reported as S$367k for the year to December 2019. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is S$360.1k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was S$189k. This suggests that David Siew is paid more than the median for the industry.

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. TOMO Holdings has gone down a largely traditional route, paying David Siew a high salary, giving it preference over non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

TOMO Holdings Limited's Growth

TOMO Holdings Limited has reduced its earnings per share by 13% a year over the last three years. It saw its revenue drop 37% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has TOMO Holdings Limited Been A Good Investment?

Given the total shareholder loss of 60% over three years, many shareholders in TOMO Holdings Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

TOMO Holdings pays its CEO a majority of compensation through a salary. As we touched on above, TOMO Holdings Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Disappointingly, share price gains over the last three years have failed to materialize. What's equally worrying is that the company isn't growing by our analysis. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for TOMO Holdings that investors should be aware of in a dynamic business environment.

Switching gears from TOMO Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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