Henry Cheng became the CEO of New World Development Company Limited (HKG:17) in 1989. First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. 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.
Check out our latest analysis for New World Development
How Does Henry Cheng's Compensation Compare With Similar Sized Companies?
According to our data, New World Development Company Limited has a market capitalization of HK$109b, and paid its CEO total annual compensation worth HK$68m over the year to June 2019. We note that's an increase of 19% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at . We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a group of companies with market caps over HK$62b, we found that their median CEO total compensation was HK$6.7m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
It would therefore appear that New World Development Company Limited pays Henry Cheng more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at New World Development has changed from year to year.
Is New World Development Company Limited Growing?
On average over the last three years, New World Development Company Limited has grown earnings per share (EPS) by 33% each year (using a line of best fit). Its revenue is up 26% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Shareholders might be interested in this free visualization of analyst forecasts.
Has New World Development Company Limited Been A Good Investment?
Most shareholders would probably be pleased with New World Development Company Limited for providing a total return of 46% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.