In 2005 Michael Tung was appointed CEO of Time Watch Investments Limited (HKG:2033). First, this article will compare CEO compensation with compensation at similar sized 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Michael Tung’s Compensation Compare With Similar Sized Companies?
Our data indicates that Time Watch Investments Limited is worth HK$1.9b, and total annual CEO compensation is HK$17m. (This number is for the twelve months until June 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at HK$7.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$785m to HK$3.1b. The median total CEO compensation was HK$2.2m.
As you can see, Michael Tung is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Time Watch Investments Limited is paying too much. 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 Time Watch Investments has changed from year to year.
Is Time Watch Investments Limited Growing?
On average over the last three years, Time Watch Investments Limited has shrunk earnings per share by 4.3% each year (measured with a line of best fit). Revenue was pretty flat on last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue is seriously uninspiring. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Time Watch Investments Limited Been A Good Investment?
Time Watch Investments Limited has served shareholders reasonably well, with a total return of 16% over three years. 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 Time Watch Investments Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
While shareholder returns are acceptable, they don’t delight. So you may want to delve deeper, because we don’t think the CEO pay is too low. Shareholders may want to check for free if Time Watch Investments insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.