Yahoo Finance Is Melco International Development Limited (HKG:200) Overpaying Its CEO?
Lawrence Ho became the CEO of Melco International Development Limited (HKG:200) in 2006. First, this article will compare CEO compensation with compensation at similar sized companies. 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.
See our latest analysis for Melco International Development
How Does Lawrence Ho's Compensation Compare With Similar Sized Companies?
Our data indicates that Melco International Development Limited is worth HK$29b, and total annual CEO compensation is HK$200m. (This number is for the twelve months until December 2017). We think total compensation is more important but we note that the CEO salary is lower, at HK$80m. We looked at a group of companies with market capitalizations from HK$16b to HK$50b, and the median CEO total compensation was HK$3.2m.
It would therefore appear that Melco International Development Limited pays Lawrence Ho 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 Melco International Development has changed over time.
Is Melco International Development Limited Growing?
Over the last three years Melco International Development Limited has shrunk its earnings per share by an average of 72% per year (measured with a line of best fit). Its revenue is down -1.2% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Melco International Development Limited Been A Good Investment?
Most shareholders would probably be pleased with Melco International Development Limited for providing a total return of 111% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
We compared total CEO remuneration at Melco International Development Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
But clearly there are some positives, because investors have done well over the same time frame. Given this situation we doubt shareholders are particularly concerned about the CEO compensation. So you may want to check if insiders are buying Melco International Development shares with their own money (free access).
Important note: Melco International Development 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.
