Genor Biopharma Holdings Limited's (HKG:6998) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Genor Biopharma Holdings' Annual General Meeting to take place on 27th of June
• CEO Feng Guo's total compensation includes salary of CN¥4.50m
• The overall pay is 242% above the industry average
• Genor Biopharma Holdings' EPS grew by 88% over the past three years while total shareholder loss over the past three years was 94%

The underwhelming share price performance of Genor Biopharma Holdings Limited (HKG:6998) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 27th of June could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Genor Biopharma Holdings

How Does Total Compensation For Feng Guo Compare With Other Companies In The Industry?

According to our data, Genor Biopharma Holdings Limited has a market capitalization of HK$612m, and paid its CEO total annual compensation worth CN¥24m over the year to December 2023. We note that's a decrease of 25% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥4.5m.

On comparing similar-sized companies in the Hong Kong Biotechs industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥7.1m. Hence, we can conclude that Feng Guo is remunerated higher than the industry median. Furthermore, Feng Guo directly owns HK$7.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥4.5m	CN¥4.5m	19%
Other	CN¥20m	CN¥28m	81%
Total Compensation	CN¥24m	CN¥32m	100%

Speaking on an industry level, nearly 46% of total compensation represents salary, while the remainder of 54% is other remuneration. Genor Biopharma Holdings 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.

Genor Biopharma Holdings Limited's Growth

Genor Biopharma Holdings Limited's earnings per share (EPS) grew 88% per year over the last three years. In the last year, the company lost virtually all of its revenue.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Genor Biopharma Holdings Limited Been A Good Investment?

The return of -94% over three years would not have pleased Genor Biopharma Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 2 warning signs for Genor Biopharma Holdings (1 is significant!) that you should be aware of before investing here.

Important note: Genor Biopharma Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com