We Think Shareholders Will Probably Be Generous With Genes Tech Group Holdings Company Limited's (HKG:8257) CEO Compensation

The performance at Genes Tech Group Holdings Company Limited (HKG:8257) has been quite strong recently and CEO Ming-Hsiang Yang has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 25 June 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for Genes Tech Group Holdings

How Does Total Compensation For Ming-Hsiang Yang Compare With Other Companies In The Industry?

At the time of writing, our data shows that Genes Tech Group Holdings Company Limited has a market capitalization of HK$275m, and reported total annual CEO compensation of NT$5.2m for the year to December 2020. That's a fairly small increase of 5.8% over the previous year. Notably, the salary which is NT$3.70m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was NT$4.6m. So it looks like Genes Tech Group Holdings compensates Ming-Hsiang Yang in line with the median for the industry. What's more, Ming-Hsiang Yang holds HK$7.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	NT$3.7m	NT$3.6m	71%
Other	NT$1.5m	NT$1.3m	29%
Total Compensation	NT$5.2m	NT$4.9m	100%

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. Genes Tech Group Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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.

Genes Tech Group Holdings Company Limited's Growth

Genes Tech Group Holdings Company Limited's earnings per share (EPS) grew 61% per year over the last three years. In the last year, its revenue is down 19%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Genes Tech Group Holdings Company Limited Been A Good Investment?

Boasting a total shareholder return of 36% over three years, Genes Tech Group Holdings Company Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Genes Tech Group Holdings you should be aware of, and 1 of them can't be ignored.

Important note: Genes Tech Group 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. 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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