We Think Shareholders Are Less Likely To Approve A Pay Rise For Shanghai HeartCare Medical Technology Corporation Limited's (HKG:6609) CEO For Now

Key Insights

• Shanghai HeartCare Medical Technology's Annual General Meeting to take place on 26th of May
• Total pay for CEO Guohui Wang includes CN¥978.0k salary
• The overall pay is comparable to the industry average
• Shanghai HeartCare Medical Technology's EPS grew by 53% over the past three years while total shareholder loss over the past three years was 11%

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As many shareholders of Shanghai HeartCare Medical Technology Corporation Limited (HKG:6609) will be aware, they have not made a gain on their investment in the past three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 26th of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. 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 Shanghai HeartCare Medical Technology

Comparing Shanghai HeartCare Medical Technology Corporation Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Shanghai HeartCare Medical Technology Corporation Limited has a market capitalization of HK$1.1b, and reported total annual CEO compensation of CN¥1.7m for the year to December 2024. Notably, that's an increase of 41% over the year before. In particular, the salary of CN¥978.0k, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Medical Equipment industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.6m. This suggests that Shanghai HeartCare Medical Technology remunerates its CEO largely in line with the industry average. Furthermore, Guohui Wang directly owns HK$107m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 68% of total compensation represents salary and 32% is other remuneration. Shanghai HeartCare Medical Technology pays a modest slice of remuneration through salary, as compared to the broader industry. 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 Shanghai HeartCare Medical Technology Corporation Limited's Growth Numbers

Over the past three years, Shanghai HeartCare Medical Technology Corporation Limited has seen its earnings per share (EPS) grow by 53% per year. In the last year, its revenue is up 20%.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Shanghai HeartCare Medical Technology Corporation Limited Been A Good Investment?

Since shareholders would have lost about 11% over three years, some Shanghai HeartCare Medical Technology Corporation Limited investors would surely be feeling negative emotions. 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. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

Whatever your view on compensation, you might want to check if insiders are buying or selling Shanghai HeartCare Medical Technology shares (free trial).

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.