We Think The Compensation For TDH Holdings, Inc.'s (NASDAQ:PETZ) CEO Looks About Right

Key Insights

• TDH Holdings' Annual General Meeting to take place on 27th of October
• Salary of US$85.0k is part of CEO Dandan Liu's total remuneration
• The total compensation is 70% less than the average for the industry
• TDH Holdings' three-year loss to shareholders was 96% while its EPS grew by 89% over the past three years

The performance at TDH Holdings, Inc. (NASDAQ:PETZ) has been rather lacklustre of late and shareholders may be wondering what CEO Dandan Liu is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 27th of October. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for TDH Holdings

Comparing TDH Holdings, Inc.'s CEO Compensation With The Industry

According to our data, TDH Holdings, Inc. has a market capitalization of US$12m, and paid its CEO total annual compensation worth US$120k over the year to December 2022. We note that's an increase of 100% above last year. Notably, the salary which is US$85.0k, represents most of the total compensation being paid.

For comparison, other companies in the American Food industry with market capitalizations below US$200m, reported a median total CEO compensation of US$398k. That is to say, Dandan Liu is paid under the industry median. Moreover, Dandan Liu also holds US$1.6m worth of TDH Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	US$85k	US$60k	71%
Other	US$35k	-	29%
Total Compensation	US$120k	US$60k	100%

On an industry level, around 29% of total compensation represents salary and 71% is other remuneration. According to our research, TDH Holdings has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at TDH Holdings, Inc.'s Growth Numbers

TDH Holdings, Inc.'s earnings per share (EPS) grew 89% per year over the last three years. In the last year, its revenue is up 187%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 TDH Holdings, Inc. Been A Good Investment?

Few TDH Holdings, Inc. shareholders would feel satisfied with the return of -96% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders have earned a negative share price return is certainly disconcerting. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key question may be why the fundamentals have not yet been reflected into the share price. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for TDH Holdings that investors should think about before committing capital to this 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.

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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.