Shareholders Will Probably Hold Off On Increasing Joincare Pharmaceutical Group Industry Co.,Ltd.'s (SHSE:600380) CEO Compensation For The Time Being

Key Insights

• Joincare Pharmaceutical Group IndustryLtd will host its Annual General Meeting on 7th of June
• CEO Xiong Yu's total compensation includes salary of CN¥2.60m
• Total compensation is 92% above industry average
• Over the past three years, Joincare Pharmaceutical Group IndustryLtd's EPS grew by 7.1% and over the past three years, the total loss to shareholders 9.8%

In the past three years, shareholders of Joincare Pharmaceutical Group Industry Co.,Ltd. (SHSE:600380) have seen a loss on their investment. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 7th of June. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Joincare Pharmaceutical Group IndustryLtd

How Does Total Compensation For Xiong Yu Compare With Other Companies In The Industry?

According to our data, Joincare Pharmaceutical Group Industry Co.,Ltd. has a market capitalization of CN¥23b, and paid its CEO total annual compensation worth CN¥3.6m over the year to December 2023. There was no change in the compensation compared to last year. Notably, the salary which is CN¥2.60m, represents most of the total compensation being paid.

For comparison, other companies in the Chinese Pharmaceuticals industry with market capitalizations ranging between CN¥14b and CN¥46b had a median total CEO compensation of CN¥1.9m. Accordingly, our analysis reveals that Joincare Pharmaceutical Group Industry Co.,Ltd. pays Xiong Yu north of the industry median.

Component	2023	2022	Proportion (2023)
Salary	CN¥2.6m	CN¥2.6m	72%
Other	CN¥1.0m	CN¥1.0m	28%
Total Compensation	CN¥3.6m	CN¥3.6m	100%

On an industry level, roughly 26% of total compensation represents salary and 74% is other remuneration. Joincare Pharmaceutical Group IndustryLtd pays out 72% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Joincare Pharmaceutical Group Industry Co.,Ltd.'s Growth Numbers

Joincare Pharmaceutical Group Industry Co.,Ltd. has seen its earnings per share (EPS) increase by 7.1% a year over the past three years. In the last year, its revenue is down 3.6%.

We generally like to see a little revenue growth, but the modest EPS growth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Joincare Pharmaceutical Group Industry Co.,Ltd. Been A Good Investment?

Since shareholders would have lost about 9.8% over three years, some Joincare Pharmaceutical Group Industry Co.,Ltd. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

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 be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

Shareholders may want to check for free if Joincare Pharmaceutical Group IndustryLtd insiders are buying or selling shares.

Switching gears from Joincare Pharmaceutical Group IndustryLtd, 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.