Does Sam Woo Construction Group's (HKG:3822) CEO Salary Compare Well With The Performance Of The Company?

The CEO of Sam Woo Construction Group Limited (HKG:3822) is Chun Kwok Lau, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Sam Woo Construction Group.

View our latest analysis for Sam Woo Construction Group

Comparing Sam Woo Construction Group Limited's CEO Compensation With the industry

Our data indicates that Sam Woo Construction Group Limited has a market capitalization of HK$175m, and total annual CEO compensation was reported as HK$1.5m for the year to March 2020. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at HK$840.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.9m. This suggests that Sam Woo Construction Group remunerates its CEO largely in line with the industry average.

On an industry level, around 91% of total compensation represents salary and 8.7% is other remuneration. It's interesting to note that Sam Woo Construction Group allocates a smaller portion of compensation to salary in comparison to the broader industry. 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.

A Look at Sam Woo Construction Group Limited's Growth Numbers

Over the last three years, Sam Woo Construction Group Limited has shrunk its earnings per share by 22% per year. It achieved revenue growth of 53% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Sam Woo Construction Group Limited Been A Good Investment?

Given the total shareholder loss of 45% over three years, many shareholders in Sam Woo Construction Group Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we noted earlier, Sam Woo Construction Group pays its CEO in line with similar-sized companies belonging to the same industry. However, revenues have increased over the past year, a positive sign for the company. On the other hand, shareholder returns for Chun Kwok are negative over the same period. EPS growth is bleak as well, adding fuel to the fire. We'd say CEO compensation isn't unfair, but shareholders may be wary of a bump in pay before the company substantially improves overall performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 4 warning signs for Sam Woo Construction Group (1 is concerning!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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