Key Insights

• Jilin Province Huinan Changlong Bio-pharmacy to hold its Annual General Meeting on 28th of May
• CEO Hong Zhang's total compensation includes salary of CN¥273.0k
• The total compensation is 85% less than the average for the industry
• Over the past three years, Jilin Province Huinan Changlong Bio-pharmacy's EPS grew by 5.4% and over the past three years, the total shareholder return was 90%

The decent performance at Jilin Province Huinan Changlong Bio-pharmacy Company Limited (HKG:8049) recently will please most shareholders as they go into the AGM coming up on 28th of May. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

How Does Total Compensation For Hong Zhang Compare With Other Companies In The Industry?

Our data indicates that Jilin Province Huinan Changlong Bio-pharmacy Company Limited has a market capitalization of HK$835m, and total annual CEO compensation was reported as CN¥623k for the year to December 2023. Notably, that's an increase of 16% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥273k.

In comparison with other companies in the Hong Kong Pharmaceuticals industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥4.1m. That is to say, Hong Zhang is paid under the industry median. What's more, Hong Zhang holds HK$152m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 63% of total compensation represents salary, while the remainder of 37% is other remuneration. Jilin Province Huinan Changlong Bio-pharmacy sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Jilin Province Huinan Changlong Bio-pharmacy Company Limited's Growth Numbers

Over the past three years, Jilin Province Huinan Changlong Bio-pharmacy Company Limited has seen its earnings per share (EPS) grow by 5.4% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

We would prefer it if there was revenue growth, but the modest EPS growth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Jilin Province Huinan Changlong Bio-pharmacy Company Limited Been A Good Investment?

We think that the total shareholder return of 90%, over three years, would leave most Jilin Province Huinan Changlong Bio-pharmacy Company Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Jilin Province Huinan Changlong Bio-pharmacy that investors should look into moving forward.

Important note: Jilin Province Huinan Changlong Bio-pharmacy is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.