We Think Some Shareholders May Hesitate To Increase TOT BIOPHARM International Company Limited's (HKG:1875) CEO Compensation

Key Insights

• TOT BIOPHARM International's Annual General Meeting to take place on 14th of June
• Salary of CN¥3.73m is part of CEO Jun Liu's total remuneration
• The overall pay is comparable to the industry average
• TOT BIOPHARM International's EPS grew by 70% over the past three years while total shareholder loss over the past three years was 51%

The underwhelming share price performance of TOT BIOPHARM International Company Limited (HKG:1875) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 14th of June. 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 TOT BIOPHARM International

How Does Total Compensation For Jun Liu Compare With Other Companies In The Industry?

According to our data, TOT BIOPHARM International Company Limited has a market capitalization of HK$1.7b, and paid its CEO total annual compensation worth CN¥7.5m over the year to December 2023. That's a notable increase of 53% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥3.7m.

For comparison, other companies in the Hong Kong Biotechs industry with market capitalizations ranging between HK$781m and HK$3.1b had a median total CEO compensation of CN¥7.7m. From this we gather that Jun Liu is paid around the median for CEOs in the industry.

Component	2023	2022	Proportion (2023)
Salary	CN¥3.7m	CN¥2.9m	49%
Other	CN¥3.8m	CN¥2.0m	51%
Total Compensation	CN¥7.5m	CN¥4.9m	100%

On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. It's interesting to note that TOT BIOPHARM International pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at TOT BIOPHARM International Company Limited's Growth Numbers

Over the past three years, TOT BIOPHARM International Company Limited has seen its earnings per share (EPS) grow by 70% per year. Its revenue is up 77% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has TOT BIOPHARM International Company Limited Been A Good Investment?

With a total shareholder return of -51% over three years, TOT BIOPHARM International Company Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. 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 TOT BIOPHARM International 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.