In 1998 Dominic Ng was appointed CEO of East West Bancorp, Inc. (NASDAQ:EWBC). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
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How Does Dominic Ng’s Compensation Compare With Similar Sized Companies?
According to our data, East West Bancorp, Inc. has a market capitalization of US$6.6b, and pays its CEO total annual compensation worth US$7.4m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO compensation was US$7.0m.
That means Dominic Ng receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at East West Bancorp has changed from year to year.
Is East West Bancorp, Inc. Growing?
Over the last three years East West Bancorp, Inc. has grown its earnings per share (EPS) by an average of 16% per year (using a line of best fit). It achieved revenue growth of 8.9% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.
It could be important to check this free visual depiction of what analysts expect for the future.
Has East West Bancorp, Inc. Been A Good Investment?
I think that the total shareholder return of 40%, over three years, would leave most East West Bancorp, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Remuneration for Dominic Ng is close enough to the median pay for a CEO of a similar sized company .
The company is growing earnings per share and total shareholder returns have been pleasing. Indeed, many might consider the pay rather modest, given the solid company performance! So you may want to check if insiders are buying East West Bancorp shares with their own money (free access).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.