Should Shareholders Worry About CanSino Biologics Inc.'s (HKG:6185) CEO Compensation Package?

Key Insights

• CanSino Biologics to hold its Annual General Meeting on 27th of June
• CEO Xuefeng Yu's total compensation includes salary of CN¥2.54m
• Total compensation is 55% below industry average
• CanSino Biologics' three-year loss to shareholders was 95% while its EPS was down 86% over the past three years

Performance at CanSino Biologics Inc. (HKG:6185) has not been particularly rosy recently and shareholders will likely be holding CEO Xuefeng Yu and the board accountable for this. At the upcoming AGM on 27th of June, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. The data we gathered below shows that CEO compensation looks acceptable for now.

View our latest analysis for CanSino Biologics

How Does Total Compensation For Xuefeng Yu Compare With Other Companies In The Industry?

At the time of writing, our data shows that CanSino Biologics Inc. has a market capitalization of HK$8.0b, and reported total annual CEO compensation of CN¥4.0m for the year to December 2023. We note that's a decrease of 20% compared to last year. Notably, the salary which is CN¥2.54m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Biotechs industry with market capitalizations ranging from HK$3.1b to HK$12b, the reported median CEO total compensation was CN¥8.8m. Accordingly, CanSino Biologics pays its CEO under the industry median. Moreover, Xuefeng Yu also holds HK$589m worth of CanSino Biologics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	CN¥2.5m	CN¥2.5m	64%
Other	CN¥1.4m	CN¥2.5m	36%
Total Compensation	CN¥4.0m	CN¥4.9m	100%

Speaking on an industry level, nearly 46% of total compensation represents salary, while the remainder of 54% is other remuneration. It's interesting to note that CanSino Biologics pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at CanSino Biologics Inc.'s Growth Numbers

Over the last three years, CanSino Biologics Inc. has shrunk its earnings per share by 86% per year. Its revenue is down 42% 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. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has CanSino Biologics Inc. Been A Good Investment?

With a total shareholder return of -95% over three years, CanSino Biologics Inc. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling CanSino Biologics (free visualization of insider trades).

Switching gears from CanSino Biologics, 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.

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