It's Probably Less Likely That Luye Pharma Group Ltd.'s (HKG:2186) CEO Will See A Huge Pay Rise This Year

Key Insights

• Luye Pharma Group's Annual General Meeting to take place on 28th of May
• Salary of CN¥3.15m is part of CEO Dian Bo Liu's total remuneration
• Total compensation is similar to the industry average
• Luye Pharma Group's EPS grew by 61% over the past three years while total shareholder loss over the past three years was 9.9%

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In the past three years, the share price of Luye Pharma Group Ltd. (HKG:2186) 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. These are some of the concerns that shareholders may want to bring up at the next AGM held on 28th of May. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Luye Pharma Group

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

According to our data, Luye Pharma Group Ltd. has a market capitalization of HK$7.9b, and paid its CEO total annual compensation worth CN¥3.2m over the year to December 2024. We note that's a decrease of 23% compared to last year. Notably, the salary which is CN¥3.15m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Pharmaceuticals industry with market capitalizations ranging between HK$3.1b and HK$13b had a median total CEO compensation of CN¥3.1m. From this we gather that Dian Bo Liu is paid around the median for CEOs in the industry.

Speaking on an industry level, nearly 65% of total compensation represents salary, while the remainder of 35% is other remuneration. Luye Pharma Group pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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 Luye Pharma Group Ltd.'s Growth Numbers

Over the past three years, Luye Pharma Group Ltd. has seen its earnings per share (EPS) grow by 61% per year. Its revenue is down 1.3% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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 Luye Pharma Group Ltd. Been A Good Investment?

Since shareholders would have lost about 9.9% over three years, some Luye Pharma Group Ltd. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Dian Bo receives almost all of their compensation through a salary. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

Whatever your view on compensation, you might want to check if insiders are buying or selling Luye Pharma Group shares (free trial).

Switching gears from Luye Pharma 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.