We Think The Compensation For Livzon Pharmaceutical Group Inc.'s (SZSE:000513) CEO Looks About Right

Key Insights

• Livzon Pharmaceutical Group's Annual General Meeting to take place on 14th of June
• Salary of CN¥110.8k is part of CEO Yanggang Tang's total remuneration
• Total compensation is 69% below industry average
• Livzon Pharmaceutical Group's three-year loss to shareholders was 13% while its EPS grew by 3.0% over the past three years

Shareholders may be wondering what CEO Yanggang Tang plans to do to improve the less than great performance at Livzon Pharmaceutical Group Inc. (SZSE:000513) recently. At the next AGM coming up on 14th of June, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.

See our latest analysis for Livzon Pharmaceutical Group

Comparing Livzon Pharmaceutical Group Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Livzon Pharmaceutical Group Inc. has a market capitalization of CN¥32b, and reported total annual CEO compensation of CN¥581k for the year to December 2023. Notably, that's an increase of 12% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥111k.

On examining similar-sized companies in the Chinese Pharmaceuticals industry with market capitalizations between CN¥14b and CN¥46b, we discovered that the median CEO total compensation of that group was CN¥1.9m. This suggests that Yanggang Tang is paid below the industry median. Furthermore, Yanggang Tang directly owns CN¥14m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥111k	CN¥111k	19%
Other	CN¥470k	CN¥410k	81%
Total Compensation	CN¥581k	CN¥520k	100%

Talking in terms of the industry, salary represented approximately 26% of total compensation out of all the companies we analyzed, while other remuneration made up 74% of the pie. In Livzon Pharmaceutical Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Livzon Pharmaceutical Group Inc.'s Growth Numbers

Livzon Pharmaceutical Group Inc.'s earnings per share (EPS) grew 3.0% per year over the last three years. In the last year, its revenue is down 2.4%.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. 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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Livzon Pharmaceutical Group Inc. Been A Good Investment?

Given the total shareholder loss of 13% over three years, many shareholders in Livzon Pharmaceutical Group Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

It may not be surprising to some that the recent weak performance in the share price may be driven in part by rather flat EPS growth. Shareholders will get the chance to question the board on key concerns and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Livzon Pharmaceutical Group that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.