Nai Tuen Chua is the CEO of Southeast Asia Properties & Finance Limited (HKG:252), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Southeast Asia Properties & Finance pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Nai Tuen Chua Compare With Other Companies In The Industry?
At the time of writing, our data shows that Southeast Asia Properties & Finance Limited has a market capitalization of HK$757m, and reported total annual CEO compensation of HK$5.7m for the year to March 2020. Notably, that's an increase of 69% over the year before. In particular, the salary of HK$5.68m, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.2m. This suggests that Nai Tuen Chua is paid more than the median for the industry. Furthermore, Nai Tuen Chua directly owns HK$15m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 78% of total compensation out of all the companies we analyzed, while other remuneration made up 22% of the pie. Southeast Asia Properties & Finance has gone down a largely traditional route, paying Nai Tuen Chua a high salary, giving it preference over non-salary benefits. 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.
Southeast Asia Properties & Finance Limited's Growth
Southeast Asia Properties & Finance Limited has reduced its earnings per share by 116% a year over the last three years. In the last year, its revenue is down 37%.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Southeast Asia Properties & Finance Limited Been A Good Investment?
With a three year total loss of 16% for the shareholders, Southeast Asia Properties & Finance Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
Southeast Asia Properties & Finance pays its CEO a majority of compensation through a salary. As we noted earlier, Southeast Asia Properties & Finance pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.
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 2 warning signs for Southeast Asia Properties & Finance you should be aware of, and 1 of them shouldn't be ignored.
Important note: Southeast Asia Properties & Finance 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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