Shareholders May Be Wary Of Increasing Yonghe Medical Group Co., Ltd.'s (HKG:2279) CEO Compensation Package

Key Insights

• Yonghe Medical Group will host its Annual General Meeting on 20th of June
• Total pay for CEO Yu Zhang includes CN¥1.63m salary
• Total compensation is similar to the industry average
• Yonghe Medical Group's EPS declined by 78% over the past three years while total shareholder loss over the past three years was 88%

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Yonghe Medical Group Co., Ltd. (HKG:2279) has not performed well recently and CEO Yu Zhang 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 20th of June. 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Yonghe Medical Group

How Does Total Compensation For Yu Zhang Compare With Other Companies In The Industry?

According to our data, Yonghe Medical Group Co., Ltd. has a market capitalization of HK$600m, and paid its CEO total annual compensation worth CN¥2.2m over the year to December 2024. That's a notable increase of 27% on last year. We note that the salary portion, which stands at CN¥1.63m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Healthcare industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.9m. This suggests that Yonghe Medical Group remunerates its CEO largely in line with the industry average. Moreover, Yu Zhang also holds HK$218m worth of Yonghe Medical Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 78% of total compensation represents salary and 22% is other remuneration. Our data reveals that Yonghe Medical Group allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Yonghe Medical Group Co., Ltd.'s Growth Numbers

Over the last three years, Yonghe Medical Group Co., Ltd. has shrunk its earnings per share by 78% per year. In the last year, its revenue is up 1.5%.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Yonghe Medical Group Co., Ltd. Been A Good Investment?

The return of -88% over three years would not have pleased Yonghe Medical Group Co., Ltd. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Yonghe Medical Group that investors should look into moving forward.

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.