Some Shareholders May find It Hard To Increase Guangdong Kanghua Healthcare Group Co., Ltd.'s (HKG:3689) CEO Compensation This Year

Key Insights

• Guangdong Kanghua Healthcare Group to hold its Annual General Meeting on 18th of June
• CEO Wangzhi Chen's total compensation includes salary of CN¥1.26m
• Total compensation is similar to the industry average
• Guangdong Kanghua Healthcare Group's EPS declined by 45% over the past three years while total shareholder return over the past three years was 1.5%

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Share price growth at Guangdong Kanghua Healthcare Group Co., Ltd. (HKG:3689) has remained rather flat over the last few years and it may be because earnings has struggled to grow at all. Some of these issues will occupy shareholders' minds as the AGM rolls around on 18th of June. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

View our latest analysis for Guangdong Kanghua Healthcare Group

Comparing Guangdong Kanghua Healthcare Group Co., Ltd.'s CEO Compensation With The Industry

Our data indicates that Guangdong Kanghua Healthcare Group Co., Ltd. has a market capitalization of HK$662m, and total annual CEO compensation was reported as CN¥2.0m for the year to December 2024. Notably, that's an increase of 37% over the year before. Notably, the salary which is CN¥1.26m, represents most of the total compensation being paid.

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¥2.0m. From this we gather that Wangzhi Chen is paid around the median for CEOs in the industry.

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. It's interesting to note that Guangdong Kanghua Healthcare Group allocates a smaller portion of compensation to salary in comparison to the broader industry. 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.

Guangdong Kanghua Healthcare Group Co., Ltd.'s Growth

Over the last three years, Guangdong Kanghua Healthcare Group Co., Ltd. has shrunk its earnings per share by 45% per year. Revenue was pretty flat on last year.

Overall this is not a very positive result for shareholders. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Guangdong Kanghua Healthcare Group Co., Ltd. Been A Good Investment?

Guangdong Kanghua Healthcare Group Co., Ltd. has not done too badly by shareholders, with a total return of 1.5%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

While it's true that the share price growth hasn't been bad, it's hard to overlook the lack of earnings growth and this makes us question whether there will be any strong catalyst for the stock to improve. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 3 warning signs for Guangdong Kanghua Healthcare Group that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.