Shareholders May Not Be So Generous With Bamboos Health Care Holdings Limited's (HKG:2293) CEO Compensation And Here's Why

In the past three years, the share price of Bamboos Health Care Holdings Limited (HKG:2293) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 29 November 2021. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Bamboos Health Care Holdings

Comparing Bamboos Health Care Holdings Limited's CEO Compensation With the industry

At the time of writing, our data shows that Bamboos Health Care Holdings Limited has a market capitalization of HK$328m, and reported total annual CEO compensation of HK$3.1m for the year to June 2021. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$1.2m.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.9m. This suggests that Winsome Hai is paid more than the median for the industry. Moreover, Winsome Hai also holds HK$221m worth of Bamboos Health Care Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	HK$1.2m	HK$1.4m	39%
Other	HK$1.9m	HK$1.8m	61%
Total Compensation	HK$3.1m	HK$3.1m	100%

Speaking on an industry level, nearly 87% of total compensation represents salary, while the remainder of 13% is other remuneration. Bamboos Health Care Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Bamboos Health Care Holdings Limited's Growth

Over the past three years, Bamboos Health Care Holdings Limited has seen its earnings per share (EPS) grow by 13% per year. It achieved revenue growth of 46% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Bamboos Health Care Holdings Limited Been A Good Investment?

The return of -36% over three years would not have pleased Bamboos Health Care Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Bamboos Health Care Holdings that investors should think about before committing capital to this stock.

Important note: Bamboos Health Care Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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.

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