Is Veeko International Holdings Limited’s (HKG:1173) CEO Pay Fair?

Yuk Sum Lam is the CEO of Veeko International Holdings Limited (HKG:1173). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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.

View our latest analysis for Veeko International Holdings

How Does Yuk Sum Lam’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Veeko International Holdings Limited has a market cap of HK$423m, and is paying total annual CEO compensation of HK$691k. (This number is for the twelve months until March 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth HK$660k. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO total compensation was HK$1.5m.

Most shareholders would consider it a positive that Yuk Sum Lam takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see, below, how CEO compensation at Veeko International Holdings has changed over time.

SEHK:1173 CEO Compensation, March 18th 2019
SEHK:1173 CEO Compensation, March 18th 2019

Is Veeko International Holdings Limited Growing?

Over the last three years Veeko International Holdings Limited has shrunk its earnings per share by an average of 79% per year (measured with a line of best fit). Its revenue is down -1.4% 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. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. 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 Veeko International Holdings Limited Been A Good Investment?

With a three year total loss of 35%, Veeko International Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

Veeko International Holdings Limited is currently paying its CEO below what is normal for companies of its size.

Yuk Sum Lam is paid less than CEOs of similar size companies, but the company isn’t growing and total shareholder returns have been disappointing. Considering all these factors, we’d stop short of saying the CEO pay is too high, but we don’t think shareholders would want to see a pay rise before business performance improves. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Veeko International Holdings.

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We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.