Shareholders May Be A Bit More Conservative With Hygeia Healthcare Holdings Co., Limited's (HKG:6078) CEO Compensation For Now

Key Insights

• Hygeia Healthcare Holdings' Annual General Meeting to take place on 28th of June
• Total pay for CEO Yiwen Zhu includes CN¥600.0k salary
• The overall pay is comparable to the industry average
• Hygeia Healthcare Holdings' EPS grew by 42% over the past three years while total shareholder loss over the past three years was 71%

The underwhelming share price performance of Hygeia Healthcare Holdings Co., Limited (HKG:6078) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 28th of June could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Hygeia Healthcare Holdings

Comparing Hygeia Healthcare Holdings Co., Limited's CEO Compensation With The Industry

According to our data, Hygeia Healthcare Holdings Co., Limited has a market capitalization of HK$18b, and paid its CEO total annual compensation worth CN¥2.5m over the year to December 2023. Notably, that's a decrease of 33% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥600k.

On comparing similar companies from the Hong Kong Healthcare industry with market caps ranging from HK$7.8b to HK$25b, we found that the median CEO total compensation was CN¥2.6m. From this we gather that Yiwen Zhu is paid around the median for CEOs in the industry. What's more, Yiwen Zhu holds HK$8.2b 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¥600k	CN¥492k	24%
Other	CN¥1.9m	CN¥3.2m	76%
Total Compensation	CN¥2.5m	CN¥3.7m	100%

On an industry level, around 72% of total compensation represents salary and 28% is other remuneration. In Hygeia Healthcare Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Hygeia Healthcare Holdings Co., Limited's Growth

Hygeia Healthcare Holdings Co., Limited's earnings per share (EPS) grew 42% per year over the last three years. In the last year, its revenue is up 28%.

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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Hygeia Healthcare Holdings Co., Limited Been A Good Investment?

The return of -71% over three years would not have pleased Hygeia Healthcare Holdings Co., 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. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Hygeia Healthcare Holdings.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com