In This Article:
John Lee is the CEO of Lippo Limited (HKG:226). 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Lippo
How Does John Lee's Compensation Compare With Similar Sized Companies?
Our data indicates that Lippo Limited is worth HK$1.3b, and total annual CEO compensation was reported as HK$17m for the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at HK$1.4m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$784m to HK$3.1b. The median total CEO compensation was HK$2.2m.
Thus we can conclude that John Lee receives more in total compensation than the median of a group of companies in the same market, and of similar size to Lippo Limited. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Lippo has changed over time.
Is Lippo Limited Growing?
Over the last three years Lippo Limited has shrunk its earnings per share by an average of 70% per year (measured with a line of best fit). Its revenue is up 2.3% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Lippo Limited Been A Good Investment?
With a three year total loss of 39%, Lippo Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We compared total CEO remuneration at Lippo Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.