We Think Some Shareholders May Hesitate To Increase Avalon GloboCare Corp.'s (NASDAQ:ALBT) CEO Compensation

Key Insights

• Avalon GloboCare's Annual General Meeting to take place on 12th of October
• CEO David Jin's total compensation includes salary of US$360.0k
• The total compensation is similar to the average for the industry
• Avalon GloboCare's EPS grew by 16% over the past three years while total shareholder loss over the past three years was 94%

In the past three years, the share price of Avalon GloboCare Corp. (NASDAQ:ALBT) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 12th of October. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Avalon GloboCare

Comparing Avalon GloboCare Corp.'s CEO Compensation With The Industry

According to our data, Avalon GloboCare Corp. has a market capitalization of US$8.2m, and paid its CEO total annual compensation worth US$360k over the year to December 2022. This was the same amount the CEO received in the prior year. Notably, the salary of US$360k is the entirety of the CEO compensation.

On comparing similar-sized companies in the American Real Estate industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$403k. So it looks like Avalon GloboCare compensates David Jin in line with the median for the industry. Furthermore, David Jin directly owns US$1.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	US$360k	US$360k	100%
Other	-	-	-
Total Compensation	US$360k	US$360k	100%

Speaking on an industry level, nearly 29% of total compensation represents salary, while the remainder of 71% is other remuneration. On a company level, Avalon GloboCare prefers to reward its CEO through a salary, opting not to pay David Jin through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Avalon GloboCare Corp.'s Growth

Avalon GloboCare Corp. has seen its earnings per share (EPS) increase by 16% a year over the past three years. In the last year, its revenue is down 21%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Avalon GloboCare Corp. Been A Good Investment?

Few Avalon GloboCare Corp. shareholders would feel satisfied with the return of -94% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Avalon GloboCare pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 5 warning signs for Avalon GloboCare (of which 2 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: Avalon GloboCare 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.

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.