We Think Some Shareholders May Hesitate To Increase Mabpharm Limited's (HKG:2181) CEO Compensation

Key Insights

• Mabpharm to hold its Annual General Meeting on 18th of June
• CEO Hao Wang's total compensation includes salary of CN¥1.08m
• Total compensation is similar to the industry average
• Mabpharm's three-year loss to shareholders was 11% while its EPS grew by 19% over the past three years

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In the past three years, the share price of Mabpharm Limited (HKG:2181) has struggled to generate growth for its shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 18th of June could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for Mabpharm

How Does Total Compensation For Hao Wang Compare With Other Companies In The Industry?

According to our data, Mabpharm Limited has a market capitalization of HK$2.1b, and paid its CEO total annual compensation worth CN¥5.6m over the year to December 2024. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥1.1m.

In comparison with other companies in the Hong Kong Biotechs industry with market capitalizations ranging from HK$785m to HK$3.1b, the reported median CEO total compensation was CN¥5.6m. This suggests that Mabpharm remunerates its CEO largely in line with the industry average.

Talking in terms of the industry, salary represented approximately 52% of total compensation out of all the companies we analyzed, while other remuneration made up 48% of the pie. Mabpharm sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Mabpharm Limited's Growth Numbers

Mabpharm Limited has seen its earnings per share (EPS) increase by 19% a year over the past three years. In the last year, its revenue is up 196%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Mabpharm Limited Been A Good Investment?

Given the total shareholder loss of 11% over three years, many shareholders in Mabpharm Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid 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. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for Mabpharm you should be aware of, and 1 of them is potentially serious.

Important note: Mabpharm is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.