IAG Holdings Limited's (HKG:8513) CEO Compensation Looks Acceptable To Us And Here's Why

Under the guidance of CEO Swee Hoe Phua, IAG Holdings Limited (HKG:8513) has performed reasonably well recently. As shareholders go into the upcoming AGM on 31 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for IAG Holdings

Comparing IAG Holdings Limited's CEO Compensation With the industry

Our data indicates that IAG Holdings Limited has a market capitalization of HK$179m, and total annual CEO compensation was reported as S$331k for the year to December 2020. Notably, that's an increase of 11% over the year before. We note that the salary portion, which stands at S$233.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of S$305k. From this we gather that Swee Hoe Phua is paid around the median for CEOs in the industry.

Component	2020	2019	Proportion (2020)
Salary	S$233k	S$228k	70%
Other	S$98k	S$69k	30%
Total Compensation	S$331k	S$297k	100%

On an industry level, around 61% of total compensation represents salary and 39% is other remuneration. IAG Holdings pays out 70% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

IAG Holdings Limited's Growth

IAG Holdings Limited's earnings per share (EPS) grew 75% per year over the last three years. It achieved revenue growth of 38% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has IAG Holdings Limited Been A Good Investment?

With a total shareholder return of 6.8% over three years, IAG Holdings Limited has done okay by shareholders, but there's always room for improvement. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for IAG Holdings that investors should be aware of in a dynamic business environment.

Switching gears from IAG Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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