Shareholders May Not Be So Generous With WuXi Biologics (Cayman) Inc.'s (HKG:2269) CEO Compensation And Here's Why

Key Insights

• WuXi Biologics (Cayman) to hold its Annual General Meeting on 19th of June
• Salary of CN¥3.99m is part of CEO Chris Chen's total remuneration
• The total compensation is 281% higher than the average for the industry
• WuXi Biologics (Cayman)'s EPS grew by 24% over the past three years while total shareholder loss over the past three years was 89%

Shareholders of WuXi Biologics (Cayman) Inc. (HKG:2269) will have been dismayed by the negative share price return over the last three years. 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 19th 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 think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for WuXi Biologics (Cayman)

How Does Total Compensation For Chris Chen Compare With Other Companies In The Industry?

Our data indicates that WuXi Biologics (Cayman) Inc. has a market capitalization of HK$46b, and total annual CEO compensation was reported as CN¥97m for the year to December 2023. Notably, that's an increase of 23% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥4.0m.

In comparison with other companies in the Hong Kong Life Sciences industry with market capitalizations ranging from HK$31b to HK$94b, the reported median CEO total compensation was CN¥25m. Hence, we can conclude that Chris Chen is remunerated higher than the industry median. What's more, Chris Chen holds HK$165m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	CN¥4.0m	CN¥3.0m	4%
Other	CN¥93m	CN¥76m	96%
Total Compensation	CN¥97m	CN¥79m	100%

On an industry level, roughly 61% of total compensation represents salary and 39% is other remuneration. A high-salary is usually a no-brainer when it comes to attracting the best executives, but WuXi Biologics (Cayman) paid Chris Chen a nominal salary to the CEO over the past 12 months, instead focusing on non-salary compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

WuXi Biologics (Cayman) Inc.'s Growth

WuXi Biologics (Cayman) Inc.'s earnings per share (EPS) grew 24% per year over the last three years. Its revenue is up 12% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has WuXi Biologics (Cayman) Inc. Been A Good Investment?

With a total shareholder return of -89% over three years, WuXi Biologics (Cayman) Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

WuXi Biologics (Cayman) primarily uses non-salary benefits to reward its CEO. Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for WuXi Biologics (Cayman) that investors should be aware of in a dynamic business environment.

Switching gears from WuXi Biologics (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.