Seng-Hui Lee became the CEO of Allied Group Limited (HKG:373) in 1998. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does Seng-Hui Lee’s Compensation Compare With Similar Sized Companies?
According to our data, Allied Group Limited has a market capitalization of HK$7.7b, and pays its CEO total annual compensation worth HK$72m. (This number is for the twelve months until December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at HK$10m. We looked at a group of companies with market capitalizations from HK$3.1b to HK$13b, and the median CEO total compensation was HK$3.2m.
Thus we can conclude that Seng-Hui Lee receives more in total compensation than the median of a group of companies in the same market, and of similar size to Allied Group Limited. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Allied Group has changed over time.
Is Allied Group Limited Growing?
On average over the last three years, Allied Group Limited has grown earnings per share (EPS) by 9.6% each year (using a line of best fit). In the last year, its revenue is up 23%.
I would argue that the modest growth in revenue is a notable positive. And, while modest, the earnings per share growth is noticeable. So while we’d stop just short of calling this a top performer, but we think it is well worth watching. 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 Allied Group Limited Been A Good Investment?
Most shareholders would probably be pleased with Allied Group Limited for providing a total return of 33% 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 Allied Group Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. Considering this fine result for investors, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Allied Group (free visualization of insider trades).
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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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.