Yahoo Finance Should You Worry About East West Bancorp, Inc.'s (NASDAQ:EWBC) CEO Pay Cheque?
In 1992 Dominic Ng was appointed CEO of East West Bancorp, Inc. (NASDAQ:EWBC). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for East West Bancorp
How Does Dominic Ng's Compensation Compare With Similar Sized Companies?
According to our data, East West Bancorp, Inc. has a market capitalization of US$5.6b, and paid its CEO total annual compensation worth US$7.6m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.2m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.8m.
That means Dominic Ng receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at East West Bancorp, below.
Is East West Bancorp, Inc. Growing?
On average over the last three years, East West Bancorp, Inc. has grown earnings per share (EPS) by 14% each year (using a line of best fit). In the last year, its revenue is up 3.4%.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.
Has East West Bancorp, Inc. Been A Good Investment?
With a three year total loss of 25%, East West Bancorp, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Remuneration for Dominic Ng is close enough to the median pay for a CEO of a similar sized company .
We think that the EPS growth is very pleasing, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling East West Bancorp (free visualization of insider trades).
Important note: East West Bancorp 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.
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.
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. Thank you for reading.
