Key Insights

• JBM (Healthcare) to hold its Annual General Meeting on 6th of August
• CEO Patrick Wong's total compensation includes salary of HK$2.19m
• The total compensation is 59% less than the average for the industry
• JBM (Healthcare)'s three-year loss to shareholders was 12% while its EPS grew by 78% over the past three years

Performance at JBM (Healthcare) Limited (HKG:2161) has been rather uninspiring recently and shareholders may be wondering how CEO Patrick Wong plans to fix this. At the next AGM coming up on 6th of August, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.

How Does Total Compensation For Patrick Wong Compare With Other Companies In The Industry?

Our data indicates that JBM (Healthcare) Limited has a market capitalization of HK$823m, and total annual CEO compensation was reported as HK$2.4m for the year to March 2024. Notably, that's a decrease of 15% over the year before. In particular, the salary of HK$2.19m, makes up a huge portion of the total compensation being paid to the CEO.

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 HK$5.8m. This suggests that Patrick Wong is paid below the industry median. Furthermore, Patrick Wong directly owns HK$615k worth of shares in the company.

Talking in terms of the industry, salary represented approximately 65% of total compensation out of all the companies we analyzed, while other remuneration made up 35% of the pie. According to our research, JBM (Healthcare) has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at JBM (Healthcare) Limited's Growth Numbers

JBM (Healthcare) Limited has seen its earnings per share (EPS) increase by 78% a year over the past three years. It achieved revenue growth of 25% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has JBM (Healthcare) Limited Been A Good Investment?

Since shareholders would have lost about 12% over three years, some JBM (Healthcare) Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The uninspiring share price returns contrasts with the strong EPS growth, suggesting that there may be other factors at play causing it to diverge from fundamentals. Shareholders will get the chance to question the board on key concerns and revisit their investment thesis with regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for JBM (Healthcare) that investors should think about before committing capital to this stock.

Important note: JBM (Healthcare) 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.

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