Here's What We Think About Sky Light Holdings' (HKG:3882) CEO Pay

Simply Wall St
November 25, 2020

The CEO of Sky Light Holdings Limited (HKG:3882) is Terry Tang, 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 Sky Light Holdings.

See our latest analysis for Sky Light Holdings

How Does Total Compensation For Terry Tang Compare With Other Companies In The Industry?

At the time of writing, our data shows that Sky Light Holdings Limited has a market capitalization of HK$220m, and reported total annual CEO compensation of HK$902k for the year to December 2019. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at HK$816.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$4.0m. This suggests that Terry Tang is paid below the industry median. Furthermore, Terry Tang directly owns HK$150m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20192018Proportion (2019)
Salary HK$816k HK$884k 90%
Other HK$86k HK$18k 10%
Total CompensationHK$902k HK$902k100%

On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. Sky Light Holdings pays out 90% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

SEHK:3882 CEO Compensation November 25th 2020

A Look at Sky Light Holdings Limited's Growth Numbers

Sky Light Holdings Limited's earnings per share (EPS) grew 55% per year over the last three years. Its revenue is down 37% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Sky Light Holdings Limited Been A Good Investment?

With a three year total loss of 86% for the shareholders, Sky Light Holdings Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Terry is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth over three years is certainly impressive. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. But shareholders will likely want to hold off on any raise for Terry until investor returns are positive.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Sky Light Holdings (1 can't be ignored!) that you should be aware of before investing here.

Important note: Sky Light Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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