We Think Human Health Holdings Limited's (HKG:1419) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Human Health Holdings' Annual General Meeting to take place on 2nd of December
• Total pay for CEO Kin Ping Chan includes HK$2.51m salary
• The overall pay is 156% above the industry average
• Over the past three years, Human Health Holdings' EPS fell by 45% and over the past three years, the total loss to shareholders 4.6%

The results at Human Health Holdings Limited (HKG:1419) have been quite disappointing recently and CEO Kin Ping Chan bears some responsibility for this. At the upcoming AGM on 2nd of December, shareholders can hear from the board including their plans for turning around performance. 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 Human Health Holdings

How Does Total Compensation For Kin Ping Chan Compare With Other Companies In The Industry?

According to our data, Human Health Holdings Limited has a market capitalization of HK$296m, and paid its CEO total annual compensation worth HK$4.4m over the year to June 2024. Notably, that's a decrease of 11% over the year before. We note that the salary of HK$2.51m makes up a sizeable portion of the total compensation received by the CEO.

On comparing similar-sized companies in the Hong Kong Healthcare industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.7m. Hence, we can conclude that Kin Ping Chan is remunerated higher than the industry median. Furthermore, Kin Ping Chan directly owns HK$5.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	HK$2.5m	HK$2.4m	58%
Other	HK$1.9m	HK$2.5m	42%
Total Compensation	HK$4.4m	HK$4.9m	100%

On an industry level, roughly 79% of total compensation represents salary and 21% is other remuneration. It's interesting to note that Human Health Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Human Health Holdings Limited's Growth Numbers

Over the last three years, Human Health Holdings Limited has shrunk its earnings per share by 45% per year. In the last year, its revenue is down 41%.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Human Health Holdings Limited Been A Good Investment?

Given the total shareholder loss of 4.6% over three years, many shareholders in Human Health Holdings Limited are probably rather dissatisfied, to say the least. 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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Human Health Holdings that you should be aware of before investing.

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.