Key Insights

• TOT BIOPHARM International will host its Annual General Meeting on 26th of June
• Total pay for CEO Jun Liu includes CN¥3.73m salary
• The total compensation is similar to the average for the industry
• TOT BIOPHARM International's three-year loss to shareholders was 45% while its EPS grew by 70% over the past three years

The underwhelming share price performance of TOT BIOPHARM International Company Limited (HKG:1875) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 26th of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

How Does Total Compensation For Jun Liu Compare With Other Companies In The Industry?

According to our data, TOT BIOPHARM International Company Limited has a market capitalization of HK$2.0b, and paid its CEO total annual compensation worth CN¥7.5m over the year to December 2023. We note that's an increase of 53% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥3.7m.

In comparison with other companies in the Hong Kong Biotechs industry with market capitalizations ranging from HK$781m to HK$3.1b, the reported median CEO total compensation was CN¥7.5m. From this we gather that Jun Liu is paid around the median for CEOs in the industry.

On an industry level, around 46% of total compensation represents salary and 54% is other remuneration. TOT BIOPHARM International is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

TOT BIOPHARM International Company Limited's Growth

Over the past three years, TOT BIOPHARM International Company Limited has seen its earnings per share (EPS) grow by 70% per year. Its revenue is up 77% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has TOT BIOPHARM International Company Limited Been A Good Investment?

With a total shareholder return of -45% over three years, TOT BIOPHARM International Company Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling TOT BIOPHARM International (free visualization of insider trades).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com