In 2012 Derek Zen was appointed CEO of Build King Holdings Limited (HKG:240). 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Derek Zen’s Compensation Compare With Similar Sized Companies?
According to our data, Build King Holdings Limited has a market capitalization of HK$1.0b, and pays its CEO total annual compensation worth HK$4.6m. (This number is for the twelve months until 2016). Notably, the salary of HK$4.6m is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO compensation was HK$1.7m.
As you can see, Derek Zen is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Build King Holdings Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Build King Holdings has changed over time.
Is Build King Holdings Limited Growing?
On average over the last three years, Build King Holdings Limited has grown earnings per share (EPS) by 45% each year. It achieved revenue growth of 19% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.
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 Build King Holdings Limited Been A Good Investment?
Most shareholders would probably be pleased with Build King Holdings Limited for providing a total return of 178% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by Build King 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.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying Build King Holdings shares with their own money (free access).
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.