Key Insights

• RemeGen's Annual General Meeting to take place on 28th of June
• CEO Jianmin Fang's total compensation includes salary of CN¥5.43m
• The overall pay is 385% above the industry average
• RemeGen's three-year loss to shareholders was 79% while its EPS was down 40% over the past three years

Shareholders of RemeGen Co., Ltd. (HKG:9995) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also lacking, despite revenue growth. Shareholders will have a chance to take their concerns to the board at the next AGM on 28th of June and vote on resolutions including executive compensation, which studies show may have an impact on company performance. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

Comparing RemeGen Co., Ltd.'s CEO Compensation With The Industry

According to our data, RemeGen Co., Ltd. has a market capitalization of HK$23b, and paid its CEO total annual compensation worth CN¥15m over the year to December 2023. That's a notable decrease of 45% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥5.4m.

For comparison, other companies in the Hong Kong Biotechs industry with market capitalizations ranging between HK$16b and HK$50b had a median total CEO compensation of CN¥3.0m. This suggests that Jianmin Fang is paid more than the median for the industry. Moreover, Jianmin Fang also holds HK$1.6b worth of RemeGen stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 46% of total compensation represents salary, while the remainder of 54% is other remuneration. RemeGen 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 RemeGen Co., Ltd.'s Growth Numbers

RemeGen Co., Ltd. has reduced its earnings per share by 40% a year over the last three years. It achieved revenue growth of 58% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has RemeGen Co., Ltd. Been A Good Investment?

The return of -79% over three years would not have pleased RemeGen Co., Ltd. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. The upcoming AGM will provide shareholders the opportunity to revisit the company's remuneration policies and evaluate if the board's judgement and decision-making is aligned with that of the company's shareholders.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for RemeGen that investors should think about before committing capital to this stock.

Important note: RemeGen 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