Key Insights

• Charmacy Pharmaceutical's Annual General Meeting to take place on 20th of May
• Total pay for CEO Chuanglong Yao includes CN¥636.3k salary
• The overall pay is 47% below the industry average
• Charmacy Pharmaceutical's total shareholder return over the past three years was 188% while its EPS grew by 8.2% over the past three years

Shareholders will probably not be disappointed by the robust results at Charmacy Pharmaceutical Co., Ltd. (HKG:2289) recently and they will be keeping this in mind as they go into the AGM on 20th 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 Chuanglong Yao Compare With Other Companies In The Industry?

Our data indicates that Charmacy Pharmaceutical Co., Ltd. has a market capitalization of HK$1.5b, and total annual CEO compensation was reported as CN¥728k for the year to December 2023. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at CN¥636.3k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Healthcare industry with market capitalizations ranging from HK$781m to HK$3.1b, the reported median CEO total compensation was CN¥1.4m. This suggests that Chuanglong Yao is paid below the industry median. What's more, Chuanglong Yao holds HK$479m 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 72% of total compensation represents salary, while the remainder of 28% is other remuneration. According to our research, Charmacy Pharmaceutical has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Charmacy Pharmaceutical Co., Ltd.'s Growth

Over the past three years, Charmacy Pharmaceutical Co., Ltd. has seen its earnings per share (EPS) grow by 8.2% per year. It achieved revenue growth of 5.5% over the last year.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Charmacy Pharmaceutical Co., Ltd. Been A Good Investment?

Boasting a total shareholder return of 188% over three years, Charmacy Pharmaceutical Co., Ltd. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

While the company seems to be headed in the right direction performance-wise, there's always room for 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. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 2 which are a bit concerning) in Charmacy Pharmaceutical we think you should know about.

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.