May 28, 2020

Should you be pleased about the CEO pay at Star Properties Group (Cayman Islands) Limited’s (HKG:1560)


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Simply Wall St. from Yahoo Finance

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The of Star Properties Group (Cayman Islands) Limited (HKG:1560) is Joe Chan. 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Star Properties Group (Cayman Islands)

How Does Joe Chan’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Star Properties Group (Cayman Islands) Limited has a market cap of HK$423m, and is paying total annual CEO compensation of HK$18m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at HK$1.9m. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO total compensation in that group is HK$1.7m.

It would therefore appear that Star Properties Group (Cayman Islands) Limited pays Joe Chan more than the median CEO remuneration at companies of a similar size, 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.

You can see, below, how CEO compensation at Star Properties Group (Cayman Islands) has changed over time.

SEHK:1560 CEO Compensation, July 11th 2019
SEHK:1560 CEO Compensation, July 11th 2019

Is Star Properties Group (Cayman Islands) Limited Growing?

Over the last three years Star Properties Group (Cayman Islands) Limited has grown its earnings per share (EPS) by an average of 35% per year (using a line of best fit). It saw its revenue drop -8.3% over the last year.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Star Properties Group (Cayman Islands) Limited Been A Good Investment?

Since shareholders would have lost about 35% over three years, some Star Properties Group (Cayman Islands) Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We compared the total CEO remuneration paid by Star Properties Group (Cayman Islands) Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Star Properties Group (Cayman Islands) shares (free trial).

Arguably, business quality is much more important than CEO compensation levels.

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