Why We Think Shanghai Haohai Biological Technology Co., Ltd.'s (HKG:6826) CEO Compensation Is Not Excessive At All

Key Insights

• Shanghai Haohai Biological Technology will host its Annual General Meeting on 29th of May
• Total pay for CEO Jianying Wu includes CN¥855.0k salary
• The total compensation is 61% less than the average for the industry
• Over the past three years, Shanghai Haohai Biological Technology's EPS grew by 7.0% and over the past three years, the total loss to shareholders 37%

Shareholders may be wondering what CEO Jianying Wu plans to do to improve the less than great performance at Shanghai Haohai Biological Technology Co., Ltd. (HKG:6826) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 29th of May. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for Shanghai Haohai Biological Technology

How Does Total Compensation For Jianying Wu Compare With Other Companies In The Industry?

According to our data, Shanghai Haohai Biological Technology Co., Ltd. has a market capitalization of HK$15b, and paid its CEO total annual compensation worth CN¥1.9m over the year to December 2023. We note that's an increase of 11% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥855k.

For comparison, other companies in the Hong Kong Biotechs industry with market capitalizations ranging between HK$7.8b and HK$25b had a median total CEO compensation of CN¥4.9m. Accordingly, Shanghai Haohai Biological Technology pays its CEO under the industry median. Moreover, Jianying Wu also holds HK$262m worth of Shanghai Haohai Biological Technology 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¥855k	CN¥845k	45%
Other	CN¥1.0m	CN¥873k	55%
Total Compensation	CN¥1.9m	CN¥1.7m	100%

On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. Shanghai Haohai Biological Technology is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Shanghai Haohai Biological Technology Co., Ltd.'s Growth

Shanghai Haohai Biological Technology Co., Ltd.'s earnings per share (EPS) grew 7.0% per year over the last three years. It achieved revenue growth of 18% over the last year.

We think the revenue growth is good. And the modest growth in EPS isn't bad, either. Although we'll stop short of calling the stock a top performer, we think the company has potential. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Shanghai Haohai Biological Technology Co., Ltd. Been A Good Investment?

The return of -37% over three years would not have pleased Shanghai Haohai Biological Technology Co., Ltd. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The fact that shareholders are sitting on a loss is certainly disheartening. Perhaps the poor price performance may have something to do with the the fact that earnings per share growth has not been performing as strongly either. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

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 Shanghai Haohai Biological Technology that investors should be aware of in a dynamic business environment.

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.