Key Insights

• Extrawell Pharmaceutical Holdings' Annual General Meeting to take place on 23rd of August
• Total pay for CEO Yi Xie includes HK$1.32m salary
• Total compensation is 76% below industry average
• Extrawell Pharmaceutical Holdings' three-year loss to shareholders was 65% while its EPS was down 15% over the past three years

Performance at Extrawell Pharmaceutical Holdings Limited (HKG:858) has not been particularly rosy recently and shareholders will likely be holding CEO Yi Xie and the board accountable for this. At the upcoming AGM on 23rd of August, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

How Does Total Compensation For Yi Xie Compare With Other Companies In The Industry?

According to our data, Extrawell Pharmaceutical Holdings Limited has a market capitalization of HK$86m, and paid its CEO total annual compensation worth HK$1.4m over the year to March 2024. This was the same as last year. We note that the salary portion, which stands at HK$1.32m constitutes the majority of total compensation received by 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. Accordingly, Extrawell Pharmaceutical Holdings pays its CEO under the industry median.

On an industry level, around 65% of total compensation represents salary and 35% is other remuneration. According to our research, Extrawell Pharmaceutical Holdings 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 Extrawell Pharmaceutical Holdings Limited's Growth Numbers

Extrawell Pharmaceutical Holdings Limited has reduced its earnings per share by 15% a year over the last three years. Its revenue is down 19% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Extrawell Pharmaceutical Holdings Limited Been A Good Investment?

With a total shareholder return of -65% over three years, Extrawell Pharmaceutical Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Extrawell Pharmaceutical Holdings (of which 2 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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.