Here's Why Shareholders Will Not Be Complaining About Abbisko Cayman Limited's (HKG:2256) CEO Pay Packet

Key Insights

• Abbisko Cayman's Annual General Meeting to take place on 18th of June
• CEO Yao-Chang Xu's total compensation includes salary of CN¥4.18m
• Total compensation is similar to the industry average
• Over the past three years, Abbisko Cayman's EPS grew by 112% and over the past three years, the total shareholder return was 199%

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We have been pretty impressed with the performance at Abbisko Cayman Limited (HKG:2256) recently and CEO Yao-Chang Xu deserves a mention for their role in it. Coming up to the next AGM on 18th of June, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

See our latest analysis for Abbisko Cayman

How Does Total Compensation For Yao-Chang Xu Compare With Other Companies In The Industry?

At the time of writing, our data shows that Abbisko Cayman Limited has a market capitalization of HK$6.4b, and reported total annual CEO compensation of CN¥8.8m for the year to December 2024. Notably, that's a decrease of 38% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥4.2m.

For comparison, other companies in the Hong Kong Biotechs industry with market capitalizations ranging between HK$3.1b and HK$13b had a median total CEO compensation of CN¥6.8m. So it looks like Abbisko Cayman compensates Yao-Chang Xu in line with the median for the industry. Moreover, Yao-Chang Xu also holds HK$821m worth of Abbisko Cayman stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 52% of total compensation represents salary and 48% is other remuneration. Abbisko Cayman is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Abbisko Cayman Limited's Growth

Over the past three years, Abbisko Cayman Limited has seen its earnings per share (EPS) grow by 112% per year. Its revenue is up 2,544% over the last year.

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. 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 Abbisko Cayman Limited Been A Good Investment?

Boasting a total shareholder return of 199% over three years, Abbisko Cayman Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. Seeing that earnings growth and share price performance seems to be on the right path, the more pressing focus for shareholders at the AGM may be how the board and management plans to turn the company into a sustainably profitable one.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which shouldn't be ignored) in Abbisko Cayman we think you should know about.

Switching gears from Abbisko Cayman, 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.