Here's Why We Think TBK & Sons Holdings Limited's (HKG:1960) CEO Compensation Looks Fair for the time being

Under the guidance of CEO Han Tan, TBK & Sons Holdings Limited (HKG:1960) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 14 December 2022. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

Our analysis indicates that 1960 is potentially overvalued!

How Does Total Compensation For Han Tan Compare With Other Companies In The Industry?

According to our data, TBK & Sons Holdings Limited has a market capitalization of HK$425m, and paid its CEO total annual compensation worth RM980k over the year to June 2022. We note that's a decrease of 25% compared to last year. Notably, the salary which is RM585.0k, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of RM1.1m. From this we gather that Han Tan is paid around the median for CEOs in the industry.

Component	2022	2021	Proportion (2022)
Salary	RM585k	RM780k	60%
Other	RM395k	RM532k	40%
Total Compensation	RM980k	RM1.3m	100%

Speaking on an industry level, nearly 80% of total compensation represents salary, while the remainder of 20% is other remuneration. It's interesting to note that TBK & Sons Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

TBK & Sons Holdings Limited's Growth

Over the last three years, TBK & Sons Holdings Limited has shrunk its earnings per share by 22% per year. Its revenue is up 337% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one 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 TBK & Sons Holdings Limited Been A Good Investment?

Most shareholders would probably be pleased with TBK & Sons Holdings Limited for providing a total return of 123% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Although the company has performed relatively well, we still think there are some areas that could be improved. Still, we think that until shareholders see an improvement in EPS growth, they may find it hard to justify a pay rise for the CEO.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for TBK & Sons Holdings you should be aware of, and 2 of them are a bit unpleasant.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.