Grand Pharmaceutical Group Limited's (HKG:512) CEO Compensation Looks Acceptable To Us And Here's Why

Key Insights

• Grand Pharmaceutical Group will host its Annual General Meeting on 10th of April
• Total pay for CEO Chao Zhou includes HK$2.48m salary
• The total compensation is similar to the average for the industry
• Over the past three years, Grand Pharmaceutical Group's EPS grew by 1.3% and over the past three years, the total shareholder return was 34%

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Under the guidance of CEO Chao Zhou, Grand Pharmaceutical Group Limited (HKG:512) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 10th of April. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for Grand Pharmaceutical Group

Comparing Grand Pharmaceutical Group Limited's CEO Compensation With The Industry

According to our data, Grand Pharmaceutical Group Limited has a market capitalization of HK$22b, and paid its CEO total annual compensation worth HK$2.5m over the year to December 2024. Notably, that's an increase of 33% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$2.5m.

For comparison, other companies in the Hong Kong Pharmaceuticals industry with market capitalizations ranging between HK$16b and HK$50b had a median total CEO compensation of HK$3.5m. From this we gather that Chao Zhou is paid around the median for CEOs in the industry. Furthermore, Chao Zhou directly owns HK$2.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	HK$2.5m	HK$1.7m	100%
Other	-	HK$172k	-
Total Compensation	HK$2.5m	HK$1.9m	100%

On an industry level, roughly 65% of total compensation represents salary and 35% is other remuneration. At the company level, Grand Pharmaceutical Group pays Chao Zhou solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Grand Pharmaceutical Group Limited's Growth Numbers

Over the past three years, Grand Pharmaceutical Group Limited has seen its earnings per share (EPS) grow by 1.3% per year. It achieved revenue growth of 11% over the last year.

We would argue that the modest growth in revenue is a notable positive. And, while modest, the EPS growth is noticeable. Although we'll stop short of calling the stock a top performer, we think the company has potential. 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 Grand Pharmaceutical Group Limited Been A Good Investment?

Most shareholders would probably be pleased with Grand Pharmaceutical Group Limited for providing a total return of 34% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Grand Pharmaceutical Group rewards its CEO solely through a salary, ignoring non-salary benefits completely. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for Grand Pharmaceutical Group (1 is significant!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.