Key Insights

• Hygeia Healthcare Holdings will host its Annual General Meeting on 28th of June
• Total pay for CEO Yiwen Zhu includes CN¥600.0k salary
• The total compensation is similar to the average for the industry
• Hygeia Healthcare Holdings' three-year loss to shareholders was 71% while its EPS grew by 42% over the past three years

Shareholders of Hygeia Healthcare Holdings Co., Limited (HKG:6078) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 28th of June. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Comparing Hygeia Healthcare Holdings Co., Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Hygeia Healthcare Holdings Co., Limited has a market capitalization of HK$18b, and reported total annual CEO compensation of CN¥2.5m for the year to December 2023. That's a notable decrease of 33% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥600k.

In comparison with other companies in the Hong Kong Healthcare industry with market capitalizations ranging from HK$7.8b to HK$25b, the reported median CEO total compensation was CN¥2.6m. From this we gather that Yiwen Zhu is paid around the median for CEOs in the industry. Furthermore, Yiwen Zhu directly owns HK$8.2b worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 72% of total compensation represents salary and 28% is other remuneration. Hygeia Healthcare Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Hygeia Healthcare Holdings Co., Limited's Growth

Hygeia Healthcare Holdings Co., Limited's earnings per share (EPS) grew 42% per year over the last three years. Its revenue is up 28% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Hygeia Healthcare Holdings Co., Limited Been A Good Investment?

The return of -71% over three years would not have pleased Hygeia Healthcare Holdings Co., Limited shareholders. 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. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

Whatever your view on compensation, you might want to check if insiders are buying or selling Hygeia Healthcare Holdings shares (free trial).

Switching gears from Hygeia Healthcare Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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