What Can We Make Of Sun Hung Kai Properties' (HKG:16) CEO Compensation?

This article will reflect on the compensation paid to Raymond Kwok who has served as CEO of Sun Hung Kai Properties Limited (HKG:16) since 2008. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Sun Hung Kai Properties

How Does Total Compensation For Raymond Kwok Compare With Other Companies In The Industry?

Our data indicates that Sun Hung Kai Properties Limited has a market capitalization of HK$315b, and total annual CEO compensation was reported as HK$3.9m for the year to June 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at HK$2.74m constitutes the majority of total compensation received by the CEO.

On comparing similar companies in the industry with market capitalizations above HK$62b, we found that the median total CEO compensation was HK$22m. This suggests that Raymond Kwok is paid below the industry median. Furthermore, Raymond Kwok directly owns HK$7.3b worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. There isn't a significant difference between Sun Hung Kai Properties and the broader market, in terms of salary allocation in the overall compensation package. 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.

Sun Hung Kai Properties Limited's Growth

Over the last three years, Sun Hung Kai Properties Limited has shrunk its earnings per share by 17% per year. In the last year, its revenue is down 3.1%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Sun Hung Kai Properties Limited Been A Good Investment?

Since shareholders would have lost about 1.2% over three years, some Sun Hung Kai Properties Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, Sun Hung Kai Properties Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. EPS growth has failed to impress us, and the same can be said about shareholder returns. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Sun Hung Kai Properties that you should be aware of before investing.

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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