Here's Why Shareholders Should Examine Shandong Weigao Group Medical Polymer Company Limited's (HKG:1066) CEO Compensation Package More Closely

Key Insights

• Shandong Weigao Group Medical Polymer will host its Annual General Meeting on 27th of May
• Total pay for CEO Rinan Cong includes CN¥1.23m salary
• The total compensation is 100% higher than the average for the industry
• Shandong Weigao Group Medical Polymer's EPS declined by 3.6% over the past three years while total shareholder loss over the past three years was 20%

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Shandong Weigao Group Medical Polymer Company Limited (HKG:1066) has not performed well recently and CEO Rinan Cong will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 27th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Shandong Weigao Group Medical Polymer

Comparing Shandong Weigao Group Medical Polymer Company Limited's CEO Compensation With The Industry

Our data indicates that Shandong Weigao Group Medical Polymer Company Limited has a market capitalization of HK$27b, and total annual CEO compensation was reported as CN¥3.8m for the year to December 2024. We note that's a small decrease of 4.4% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥1.2m.

For comparison, other companies in the Hong Kong Medical Equipment industry with market capitalizations ranging between HK$16b and HK$50b had a median total CEO compensation of CN¥1.9m. Hence, we can conclude that Rinan Cong is remunerated higher than the industry median. Furthermore, Rinan Cong directly owns HK$1.2m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 68% of total compensation represents salary and 32% is other remuneration. Shandong Weigao Group Medical Polymer 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.

Shandong Weigao Group Medical Polymer Company Limited's Growth

Shandong Weigao Group Medical Polymer Company Limited has reduced its earnings per share by 3.6% a year over the last three years. Its revenue is down 1.1% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Shandong Weigao Group Medical Polymer Company Limited Been A Good Investment?

Since shareholders would have lost about 20% over three years, some Shandong Weigao Group Medical Polymer Company Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Shandong Weigao Group Medical Polymer that investors should be aware of in a dynamic business environment.

Switching gears from Shandong Weigao Group Medical Polymer, 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.