Shareholders Will Probably Be Cautious Of Increasing Biosino Bio-Technology and Science Incorporation's (HKG:8247) CEO Compensation At The Moment

Key Insights

• Biosino Bio-Technology and Science Incorporation will host its Annual General Meeting on 28th of June
• Salary of CN¥1.81m is part of CEO Peng Chen's total remuneration
• The overall pay is 74% below the industry average
• Biosino Bio-Technology and Science Incorporation's three-year loss to shareholders was 44% while its EPS was down 89% over the past three years

The underwhelming performance at Biosino Bio-Technology and Science Incorporation (HKG:8247) recently has probably not pleased shareholders. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 28th of June. From our analysis below, we think CEO compensation looks appropriate for now.

View our latest analysis for Biosino Bio-Technology and Science Incorporation

How Does Total Compensation For Peng Chen Compare With Other Companies In The Industry?

According to our data, Biosino Bio-Technology and Science Incorporation has a market capitalization of HK$101m, and paid its CEO total annual compensation worth CN¥1.8m over the year to December 2023. That is, the compensation was roughly the same as last year. Notably, the salary of CN¥1.8m is the entirety of the CEO compensation.

For comparison, other companies in the Hong Kong Biotechs industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥7.1m. In other words, Biosino Bio-Technology and Science Incorporation pays its CEO lower than the industry median.

Component	2023	2022	Proportion (2023)
Salary	CN¥1.8m	CN¥1.8m	100%
Other	-	-	-
Total Compensation	CN¥1.8m	CN¥1.8m	100%

Speaking on an industry level, nearly 46% of total compensation represents salary, while the remainder of 54% is other remuneration. On a company level, Biosino Bio-Technology and Science Incorporation prefers to reward its CEO through a salary, opting not to pay Peng Chen through 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.

Biosino Bio-Technology and Science Incorporation's Growth

Over the last three years, Biosino Bio-Technology and Science Incorporation has shrunk its earnings per share by 89% per year. Its revenue is down 23% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Biosino Bio-Technology and Science Incorporation Been A Good Investment?

Few Biosino Bio-Technology and Science Incorporation shareholders would feel satisfied with the return of -44% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Biosino Bio-Technology and Science Incorporation pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Biosino Bio-Technology and Science Incorporation that investors should be aware of in a dynamic business environment.

Important note: Biosino Bio-Technology and Science Incorporation 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