We Think Shareholders May Consider Being More Generous With Charmacy Pharmaceutical Co., Ltd.'s (HKG:2289) CEO Compensation Package

Key Insights

• Charmacy Pharmaceutical's Annual General Meeting to take place on 22nd of May
• Total pay for CEO Chuanglong Yao includes CN¥694.4k salary
• The total compensation is 60% less than the average for the industry
• Charmacy Pharmaceutical's total shareholder return over the past three years was 26% while its EPS grew by 32% over the past three years

Our free stock report includes 2 warning signs investors should be aware of before investing in Charmacy Pharmaceutical. Read for free now.

Shareholders will be pleased by the robust performance of Charmacy Pharmaceutical Co., Ltd. (HKG:2289) recently and this will be kept in mind in the upcoming AGM on 22nd of May. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

View our latest analysis for Charmacy Pharmaceutical

Comparing Charmacy Pharmaceutical Co., Ltd.'s CEO Compensation With The Industry

At the time of writing, our data shows that Charmacy Pharmaceutical Co., Ltd. has a market capitalization of HK$837m, and reported total annual CEO compensation of CN¥738k for the year to December 2024. That's mostly flat as compared to the prior year's compensation. In particular, the salary of CN¥694.4k, makes up a huge portion of the total compensation being paid to 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 CN¥1.9m. This suggests that Chuanglong Yao is paid below the industry median. What's more, Chuanglong Yao holds HK$268m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	CN¥694k	CN¥636k	94%
Other	CN¥43k	CN¥92k	6%
Total Compensation	CN¥738k	CN¥728k	100%

On an industry level, roughly 77% of total compensation represents salary and 23% is other remuneration. Charmacy Pharmaceutical pays out 94% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Charmacy Pharmaceutical Co., Ltd.'s Growth Numbers

Over the past three years, Charmacy Pharmaceutical Co., Ltd. has seen its earnings per share (EPS) grow by 32% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Charmacy Pharmaceutical Co., Ltd. Been A Good Investment?

Charmacy Pharmaceutical Co., Ltd. has generated a total shareholder return of 26% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

While the company seems to be headed in the right direction performance-wise, there's always room for improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which is significant) in Charmacy Pharmaceutical we think you should know about.

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.