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 assess whether Sky Light Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Sky Light Holdings Limited's CEO Compensation With the industry
At the time of writing, our data shows that Sky Light Holdings Limited has a market capitalization of HK$210m, 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. In other words, Sky Light Holdings pays its CEO lower than the industry median. What's more, Terry Tang holds HK$143m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 74% of total compensation represents salary and 26% is other remuneration. Sky Light Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Sky Light Holdings Limited's Growth
Sky Light Holdings Limited has seen its earnings per share (EPS) increase by 24% a year over the past three years. It saw its revenue drop 45% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 89% for the shareholders, Sky Light Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
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. It's tough to criticize CEO compensation when the per-share EPS movement is positive. But we believe shareholders would want to see healthier returns before the CEO gets a raise.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Sky Light Holdings you should be aware of, and 1 of them can't be ignored.
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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