This Is Why Shareholders May Want To Hold Back On A Pay Rise For Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited's (HKG:874) CEO

Key Insights

• Guangzhou Baiyunshan Pharmaceutical Holdings' Annual General Meeting to take place on 3rd of June
• Salary of CN¥560.5k is part of CEO Hong Li's total remuneration
• The overall pay is 51% below the industry average
• Over the past three years, Guangzhou Baiyunshan Pharmaceutical Holdings' EPS fell by 12% and over the past three years, the total loss to shareholders 10%

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Performance at Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited (HKG:874) has not been particularly rosy recently and shareholders will likely be holding CEO Hong Li and the board accountable for this. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 3rd of June. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

View our latest analysis for Guangzhou Baiyunshan Pharmaceutical Holdings

Comparing Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited's CEO Compensation With The Industry

According to our data, Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited has a market capitalization of HK$45b, and paid its CEO total annual compensation worth CN¥1.3m over the year to December 2024. We note that's a decrease of 13% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥560k.

On examining similar-sized companies in the Hong Kong Healthcare industry with market capitalizations between HK$31b and HK$94b, we discovered that the median CEO total compensation of that group was CN¥2.7m. Accordingly, Guangzhou Baiyunshan Pharmaceutical Holdings pays its CEO under the industry median.

On an industry level, roughly 77% of total compensation represents salary and 23% is other remuneration. In Guangzhou Baiyunshan Pharmaceutical Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited's Growth Numbers

Over the last three years, Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited has shrunk its earnings per share by 12% per year. It saw its revenue drop 3.0% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited Been A Good Investment?

Since shareholders would have lost about 10% over three years, some Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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 2 warning signs for Guangzhou Baiyunshan Pharmaceutical Holdings that investors should be aware of in a dynamic business environment.

Switching gears from Guangzhou Baiyunshan Pharmaceutical Holdings, 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.