Here's What We Learned About The CEO Pay At Transport International Holdings Limited (HKG:62)

Roger Lee became the CEO of Transport International Holdings Limited (HKG:62) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Transport International Holdings

Comparing Transport International Holdings Limited's CEO Compensation With the industry

Our data indicates that Transport International Holdings Limited has a market capitalization of HK$7.0b, and total annual CEO compensation was reported as HK$8.3m for the year to December 2019. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is HK$6.08m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from HK$3.1b to HK$12b, the reported median CEO total compensation was HK$8.1m. From this we gather that Roger Lee is paid around the median for CEOs in the industry. Moreover, Roger Lee also holds HK$1.9m worth of Transport International Holdings stock directly under their own name.

Talking in terms of the industry, salary represented approximately 76% of total compensation out of all the companies we analyzed, while other remuneration made up 24% of the pie. There isn't a significant difference between Transport International Holdings 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.

A Look at Transport International Holdings Limited's Growth Numbers

Over the last three years, Transport International Holdings Limited has shrunk its earnings per share by 36% per year. In the last year, its revenue is down 13%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Transport International Holdings Limited Been A Good Investment?

Given the total shareholder loss of 29% over three years, many shareholders in Transport International Holdings Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As previously discussed, Roger is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 4 warning signs for Transport International Holdings (1 is a bit concerning!) that you should be aware of before investing here.

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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