Guy Martin Coutts Bradley has been the CEO of Swire Properties Limited (HKG:1972) since 2015. First, this article will compare CEO compensation with compensation at other large companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
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How Does Guy Martin Coutts Bradley's Compensation Compare With Similar Sized Companies?
Our data indicates that Swire Properties Limited is worth HK$117b, and total annual CEO compensation was reported as HK$16m for the year to December 2019. That's a notable increase of 15% on last year. We think total compensation is more important but we note that the CEO salary is lower, at HK$5.0m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations over HK$62b and the median CEO total compensation was HK$6.0m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Swire Properties stands. On a sector level, around 69% of total compensation represents salary and 31% is other remuneration. Non-salary compensation represents a greater slice of the remuneration pie for Swire Properties, in sharp contrast to the overall sector.
It would therefore appear that Swire Properties Limited pays Guy Martin Coutts Bradley more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. The graphic below shows how CEO compensation at Swire Properties has changed from year to year.
Is Swire Properties Limited Growing?
Swire Properties Limited has reduced its earnings per share by an average of 8.6% a year, over the last three years (measured with a line of best fit). Its revenue is down 6.3% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Swire Properties Limited Been A Good Investment?
With a three year total loss of 15%, Swire Properties Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We compared total CEO remuneration at Swire Properties Limited with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.
We think many shareholders would be underwhelmed with the business growth over the last three years. Over the same period, investors would have come away with nothing in the way of share price gains. This contrasts with the growth in CEO remuneration, year on year. In our opinion the CEO might be paid too generously! Taking a breather from CEO compensation, we've spotted 4 warning signs for Swire Properties (of which 1 is a bit unpleasant!) you should know about in order to have a holistic understanding of the stock.
If you want to buy a stock that is better than Swire Properties, this free list of high return, low debt companies is a great place to look.
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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. Thank you for reading.