We Discuss Why Glory Health Industry Limited's (HKG:2329) CEO Compensation May Be Closely Reviewed

Key Insights

• Glory Health Industry to hold its Annual General Meeting on 28th of June
• CEO Zhangsun Zhang's total compensation includes salary of CN¥3.00m
• The total compensation is 77% higher than the average for the industry
• Glory Health Industry's EPS declined by 78% over the past three years while total shareholder loss over the past three years was 73%

Glory Health Industry Limited (HKG:2329) has not performed well recently and CEO Zhangsun Zhang will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 28th of June. 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Glory Health Industry

Comparing Glory Health Industry Limited's CEO Compensation With The Industry

According to our data, Glory Health Industry Limited has a market capitalization of HK$493m, and paid its CEO total annual compensation worth CN¥3.0m over the year to December 2023. This was the same as last year. Notably, the salary of CN¥3.0m is the entirety of the CEO compensation.

In comparison with other companies in the Hong Kong Real Estate industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.7m. This suggests that Zhangsun Zhang is paid more than the median for the industry. Furthermore, Zhangsun Zhang directly owns HK$368m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥3.0m	CN¥3.0m	100%
Other	-	-	-
Total Compensation	CN¥3.0m	CN¥3.0m	100%

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. At the company level, Glory Health Industry pays Zhangsun Zhang solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Glory Health Industry Limited's Growth

Over the last three years, Glory Health Industry Limited has shrunk its earnings per share by 78% per year. It saw its revenue drop 36% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Glory Health Industry Limited Been A Good Investment?

With a total shareholder return of -73% over three years, Glory Health Industry Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Glory Health Industry rewards its CEO solely through a salary, ignoring non-salary benefits completely. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for Glory Health Industry (of which 3 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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.

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

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