We Discuss Why China Health Group Limited's (HKG:673) CEO May Deserve A Higher Pay Packet

Shareholders will probably not be disappointed by the robust results at China Health Group Limited (HKG:673) recently and they will be keeping this in mind as they go into the AGM on 30 September 2022. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on 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.

See our latest analysis for China Health Group

How Does Total Compensation For Ho Chung Compare With Other Companies In The Industry?

Our data indicates that China Health Group Limited has a market capitalization of HK$672m, and total annual CEO compensation was reported as HK$1.5m for the year to March 2022. Notably, that's a decrease of 18% over the year before. Notably, the salary which is HK$1.20m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.2m. Accordingly, China Health Group pays its CEO under the industry median.

Component	2022	2021	Proportion (2022)
Salary	HK$1.2m	HK$1.2m	78%
Other	HK$346k	HK$678k	22%
Total Compensation	HK$1.5m	HK$1.9m	100%

Speaking on an industry level, nearly 80% of total compensation represents salary, while the remainder of 20% is other remuneration. Although there is a difference in how total compensation is set, China Health Group more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

China Health Group Limited's Growth

China Health Group Limited's earnings per share (EPS) grew 32% per year over the last three years. In the last year, its revenue is up 22%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has China Health Group Limited Been A Good Investment?

With a total shareholder return of 32% over three years, China Health Group Limited shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

The company's overall performance, while not bad, could be better. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in China Health Group we think you should know about.

Switching gears from China Health Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.