Increases to Jacobson Pharma Corporation Limited's (HKG:2633) CEO Compensation Might Cool off for now

Key Insights

• Jacobson Pharma's Annual General Meeting to take place on 28th of August
• CEO Derek Sum's total compensation includes salary of HK$4.08m
• The overall pay is 256% above the industry average
• Jacobson Pharma's EPS grew by 1.3% over the past three years while total shareholder return over the past three years was 58%

Performance at Jacobson Pharma Corporation Limited (HKG:2633) has been reasonably good and CEO Derek Sum has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 28th of August. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Jacobson Pharma

How Does Total Compensation For Derek Sum Compare With Other Companies In The Industry?

According to our data, Jacobson Pharma Corporation Limited has a market capitalization of HK$1.1b, and paid its CEO total annual compensation worth HK$21m over the year to March 2024. Notably, that's an increase of 52% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$4.1m.

In comparison with other companies in the Hong Kong Pharmaceuticals industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$5.8m. Accordingly, our analysis reveals that Jacobson Pharma Corporation Limited pays Derek Sum north of the industry median. Moreover, Derek Sum also holds HK$679m worth of Jacobson Pharma stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	HK$4.1m	HK$3.5m	20%
Other	HK$17m	HK$10m	80%
Total Compensation	HK$21m	HK$14m	100%

Talking in terms of the industry, salary represented approximately 65% of total compensation out of all the companies we analyzed, while other remuneration made up 35% of the pie. Jacobson Pharma sets aside a smaller share of compensation for salary, in comparison to the overall 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 Jacobson Pharma Corporation Limited's Growth Numbers

Jacobson Pharma Corporation Limited has seen its earnings per share (EPS) increase by 1.3% a year over the past three years. Its revenue is up 16% over the last year.

This revenue growth could really point to a brighter future. And, while modest, the EPS growth is noticeable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. 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 Jacobson Pharma Corporation Limited Been A Good Investment?

Boasting a total shareholder return of 58% over three years, Jacobson Pharma Corporation 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.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which shouldn't be ignored) in Jacobson Pharma we think you should know about.

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.