The CEO of I.T Limited (HKG:999) is Kar Sham. First, this article will compare CEO compensation with compensation at similar sized 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.
How Does Kar Sham’s Compensation Compare With Similar Sized Companies?
Our data indicates that I.T Limited is worth HK$3.3b, and total annual CEO compensation is HK$22m. (This number is for the twelve months until February 2019). That’s below the compensation, last year. We think total compensation is more important but we note that the CEO salary is lower, at HK$8.2m. We examined companies with market caps from HK$1.6b to HK$6.3b, and discovered that the median CEO total compensation of that group was HK$2.4m.
As you can see, Kar Sham is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean I.T Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at I.T has changed from year to year.
Is I.T Limited Growing?
Over the last three years I.T Limited has grown its earnings per share (EPS) by an average of 26% per year (using a line of best fit). Its revenue is up 5.4% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. 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 I.T Limited Been A Good Investment?
I.T Limited has generated a total shareholder return of 11% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
We examined the amount I.T Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. We also think investors are doing ok, over the same time period. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we’d recommend further research on management. So you may want to check if insiders are buying I.T shares with their own money (free access).
Important note: I.T may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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