Most Shareholders Will Probably Find That The Compensation For Essex Bio-Technology Limited's (HKG:1061) CEO Is Reasonable

Key Insights

• Essex Bio-Technology's Annual General Meeting to take place on 21st of May
• Total pay for CEO Haizhou Fang includes HK$1.67m salary
• The total compensation is 85% less than the average for the industry
• Essex Bio-Technology's total shareholder return over the past three years was 25% while its EPS was down 3.3% over the past three years

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Shareholders may be wondering what CEO Haizhou Fang plans to do to improve the less than great performance at Essex Bio-Technology Limited (HKG:1061) recently. At the next AGM coming up on 21st of May, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for Essex Bio-Technology

How Does Total Compensation For Haizhou Fang Compare With Other Companies In The Industry?

Our data indicates that Essex Bio-Technology Limited has a market capitalization of HK$2.5b, and total annual CEO compensation was reported as HK$1.8m for the year to December 2024. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at HK$1.67m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Biotechs industry with market capitalizations ranging from HK$1.6b to HK$6.2b, the reported median CEO total compensation was HK$12m. In other words, Essex Bio-Technology pays its CEO lower than the industry median. Furthermore, Haizhou Fang directly owns HK$23m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	HK$1.7m	HK$1.7m	91%
Other	HK$156k	HK$143k	9%
Total Compensation	HK$1.8m	HK$1.8m	100%

On an industry level, around 52% of total compensation represents salary and 48% is other remuneration. It's interesting to note that Essex Bio-Technology pays out a greater portion of remuneration through salary, compared to the 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.

A Look at Essex Bio-Technology Limited's Growth Numbers

Over the last three years, Essex Bio-Technology Limited has shrunk its earnings per share by 3.3% per year. It saw its revenue drop 3.9% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Essex Bio-Technology Limited Been A Good Investment?

Essex Bio-Technology Limited has generated a total shareholder return of 25% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Shareholder returns while positive, need to be looked at along with earnings, which have failed to grow and this could mean that the current momentum may not continue. These concerns could be addressed to the board and shareholders should revisit their investment thesis to see if it still makes sense.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Essex Bio-Technology that investors should look into moving forward.

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.