It's Unlikely That Shareholders Will Increase AK Medical Holdings Limited's (HKG:1789) Compensation By Much This Year

Key Insights

• AK Medical Holdings will host its Annual General Meeting on 18th of June
• CEO Zhijiang Li's total compensation includes salary of CN¥814.0k
• Total compensation is 78% below industry average
• AK Medical Holdings' three-year loss to shareholders was 60% while its EPS was down 17% over the past three years

Performance at AK Medical Holdings Limited (HKG:1789) has not been particularly rosy recently and shareholders will likely be holding CEO Zhijiang Li and the board accountable for this. The next AGM coming up on 18th of June will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. The data we gathered below shows that CEO compensation looks acceptable for now.

View our latest analysis for AK Medical Holdings

Comparing AK Medical Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that AK Medical Holdings Limited has a market capitalization of HK$5.7b, and reported total annual CEO compensation of CN¥1.1m for the year to December 2023. Notably, that's an increase of 12% over the year before. In particular, the salary of CN¥814.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Medical Equipment industry with market capitalizations ranging from HK$3.1b to HK$12b, the reported median CEO total compensation was CN¥5.0m. That is to say, Zhijiang Li is paid under the industry median. What's more, Zhijiang Li holds HK$2.6b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	CN¥814k	CN¥806k	75%
Other	CN¥273k	CN¥166k	25%
Total Compensation	CN¥1.1m	CN¥972k	100%

Speaking on an industry level, nearly 64% of total compensation represents salary, while the remainder of 36% is other remuneration. AK Medical Holdings pays out 75% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

AK Medical Holdings Limited's Growth

Over the last three years, AK Medical Holdings Limited has shrunk its earnings per share by 17% per year. In the last year, its revenue is up 4.0%.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. 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 AK Medical Holdings Limited Been A Good Investment?

The return of -60% over three years would not have pleased AK Medical Holdings Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO 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. That's why we did some digging and identified 1 warning sign for AK Medical Holdings that you should be aware of before investing.

Switching gears from AK Medical Holdings, 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.