Here's Why It's Unlikely That Austar Lifesciences Limited's (HKG:6118) CEO Will See A Pay Rise This Year

Key Insights

• Austar Lifesciences' Annual General Meeting to take place on 23rd of May
• Total pay for CEO Mars Ho includes CN¥922.0k salary
• The overall pay is comparable to the industry average
• Over the past three years, Austar Lifesciences' EPS fell by 61% and over the past three years, the total loss to shareholders 71%

We've discovered 3 warning signs about Austar Lifesciences. View them for free.

Austar Lifesciences Limited (HKG:6118) has not performed well recently and CEO Mars Ho will probably need to up their game. At the upcoming AGM on 23rd of May, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Austar Lifesciences

Comparing Austar Lifesciences Limited's CEO Compensation With The Industry

Our data indicates that Austar Lifesciences Limited has a market capitalization of HK$379m, and total annual CEO compensation was reported as CN¥938k for the year to December 2024. That's mostly flat as compared to the prior year's compensation. In particular, the salary of CN¥922.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Life Sciences industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥855k. This suggests that Austar Lifesciences remunerates its CEO largely in line with the industry average. Moreover, Mars Ho also holds HK$251m worth of Austar Lifesciences 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	CN¥922k	CN¥919k	98%
Other	CN¥16k	CN¥16k	2%
Total Compensation	CN¥938k	CN¥935k	100%

On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. Investors will find it interesting that Austar Lifesciences pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. 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.

Austar Lifesciences Limited's Growth

Over the last three years, Austar Lifesciences Limited has shrunk its earnings per share by 61% per year. Its revenue is down 15% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Austar Lifesciences Limited Been A Good Investment?

Few Austar Lifesciences Limited shareholders would feel satisfied with the return of -71% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Mars receives almost all of their compensation through a salary. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Austar Lifesciences (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Austar Lifesciences, 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.