Checking for good management: Salaries analysis

Checking for good management: Salaries analysis

OK, so one of the ways to see good management is to see their salaries. I dug into their annual report.

1) How do I analyses management's salary in relation to their performance? How much is too much? How little is too little? What is a good acceptable band of salary?
Look at Salary to net profit ratio???

2) It says there "above 2.75M" without a fixed number on how much exactly each director/CEO gets.
Above 2.75M can be 3M, or 500M, or 10000M. Its really obscured information here. So how do I get the detailed information on exactly how much each director received?


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Few ways u can detect excesses:

1) a comparable peer company of similar business and size, compare the salary.

2) red flags when:
a) earnings are falling, or flat when their pay are increasing.
b) excessive options given to executives, especially at bear years when exercise price of options are ridiciously low and vol high.

Take a look at yongnam, and YZJ and find their comparables, u will know what I mean

Quote:2) It says there "above 2.75M" without a fixed number on how much exactly each director/CEO gets.
Above 2.75M can be 3M, or 500M, or 10000M. Its really obscured information here. So how do I get the detailed information on exactly how much each director received? Huh

Just take the information of all the annual reports and do a logical deduction.

FY2009
Above $3 million, salary = 25%, bonus = 74%

FY2010
Above $2.25 million, salary = 32%, bonus = 67%

FY2011
Above $1.5 million, salary = 45%, bonus = 54%

FY2012
Above #2.75 million, salary = 26%, bonus = 73%

The logical deduction will be around $750k to $800k for the salary.

(05-01-2014, 01:23 PM)yeokiwi Wrote:

Quote:2) It says there "above 2.75M" without a fixed number on how much exactly each director/CEO gets.
Above 2.75M can be 3M, or 500M, or 10000M. Its really obscured information here. So how do I get the detailed information on exactly how much each director received? Huh

Just take the information of all the annual reports and do a logical deduction.

FY2009
Above $3 million, salary = 25%, bonus = 74%

FY2010
Above $2.25 million, salary = 32%, bonus = 67%

FY2011
Above $1.5 million, salary = 45%, bonus = 54%

FY2012
Above #2.75 million, salary = 26%, bonus = 73%

The logical deduction will be around $750k to $800k for the salary.

wa, now must solve simultaneous equation, 4 unknown, 4 equation to derive this.

Why cant the stupid companies just tell it straight, must go and obscure this information.

This kind of company who deliberately obscure information instead of telling it straight, I despise.

1) I usually put those salaries as percentage of the gross profit since there are administration costs. Salaries do tell whether the directors are overpaying themselves - but if they are really capable, I don't mind themselves getting a higher salary. There are high-paid CEOs but they can deliver results. I do believe a certain truth that high salary retains high calibre leaders. But if they can't produce results, sorry, that is not justifiable and it'd be a red flag. However, that being said, you should also look for other metrics in your analysis.

2) Greenrookie is right, you can do peer-to-peer industry comparison. wahkao, those companies are not 'stupid', I think it is quite rude to call them stupid for not revealing their salaries. The question to ask yourself, is it industry practice to reveal salaries of top management openly? Is it wise to do so? Can you show that majority of the listed companies reveal their salaries? No doubt it is useful for shareholders to know, though.