We Think Shandong Weigao Group Medical Polymer Company Limited's (HKG:1066) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Shandong Weigao Group Medical Polymer's Annual General Meeting to take place on 28th of May
• Salary of CN¥1.68m is part of CEO Rinan Cong's total remuneration
• Total compensation is 126% above industry average
• Over the past three years, Shandong Weigao Group Medical Polymer's EPS fell by 2.0% and over the past three years, the total loss to shareholders 67%

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 will be interested in what the board will have to say about turning performance around at the next AGM on 28th of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent 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

According to our data, Shandong Weigao Group Medical Polymer Company Limited has a market capitalization of HK$24b, and paid its CEO total annual compensation worth CN¥4.0m over the year to December 2023. We note that's a decrease of 19% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥1.7m.

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¥1.8m. This suggests that Rinan Cong is paid more than the median for the industry. Moreover, Rinan Cong also holds HK$11m worth of Shandong Weigao Group Medical Polymer stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	CN¥1.7m	CN¥950k	42%
Other	CN¥2.3m	CN¥4.0m	58%
Total Compensation	CN¥4.0m	CN¥5.0m	100%

On an industry level, roughly 68% of total compensation represents salary and 32% is other remuneration. In Shandong Weigao Group Medical Polymer's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Shandong Weigao Group Medical Polymer Company Limited's Growth Numbers

Over the last three years, Shandong Weigao Group Medical Polymer Company Limited has shrunk its earnings per share by 2.0% per year. Its revenue is down 3.8% over the previous year.

A lack of EPS improvement is not good to see. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Shandong Weigao Group Medical Polymer Company Limited Been A Good Investment?

Few Shandong Weigao Group Medical Polymer Company Limited shareholders would feel satisfied with the return of -67% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid 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 is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Shandong Weigao Group Medical Polymer that investors should think about before committing capital to this stock.

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.