What Does Dream International's (HKG:1126) CEO Pay Reveal?

This article will reflect on the compensation paid to Kyoo Choi who has served as CEO of Dream International Limited (HKG:1126) since 2012. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Dream International.

See our latest analysis for Dream International

Comparing Dream International Limited's CEO Compensation With the industry

At the time of writing, our data shows that Dream International Limited has a market capitalization of HK$1.9b, and reported total annual CEO compensation of HK$7.4m for the year to December 2019. We note that's a small decrease of 5.6% on last year. Notably, the salary which is HK$5.37m, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between HK$775m and HK$3.1b, we discovered that the median CEO total compensation of that group was HK$2.9m. Hence, we can conclude that Kyoo Choi is remunerated higher than the industry median. What's more, Kyoo Choi holds HK$1.1b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 72% of total compensation represents salary, while the remainder of 28% is other remuneration. There isn't a significant difference between Dream International and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Dream International Limited's Growth Numbers

Dream International Limited has seen its earnings per share (EPS) increase by 10% a year over the past three years. It achieved revenue growth of 8.8% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Dream International Limited Been A Good Investment?

Given the total shareholder loss of 4.8% over three years, many shareholders in Dream International Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we noted earlier, Dream International pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, the EPS growth is certainly impressive, but it's disappointing to see negative shareholder returns over the same period. Although we'd stop short of calling it inappropriate, we think Kyoo is earning a very handsome sum.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Dream International that you should be aware of before investing.

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.

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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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