Key Insights
- Austar Lifesciences' Annual General Meeting to take place on 31st of May
- Total pay for CEO Mars Ho includes CN¥919.0k salary
- The overall pay is comparable to the industry average
- Austar Lifesciences' three-year loss to shareholders was 92% while its EPS was down 51% over the past three years
Austar Lifesciences Limited (HKG:6118) has not performed well recently and CEO Mars Ho will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 31st of May. 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 Austar Lifesciences
Comparing Austar Lifesciences Limited's CEO Compensation With The Industry
At the time of writing, our data shows that Austar Lifesciences Limited has a market capitalization of HK$410m, and reported total annual CEO compensation of CN¥935k for the year to December 2023. That's just a smallish increase of 4.5% on last year. In particular, the salary of CN¥919.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the Hong Kong Life Sciences industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.1m. So it looks like Austar Lifesciences compensates Mars Ho in line with the median for the industry. Moreover, Mars Ho also holds HK$275m worth of Austar Lifesciences stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2023 | 2022 | Proportion (2023) |
| Salary | CN¥919k | CN¥880k | 98% |
| Other | CN¥16k | CN¥15k | 2% |
| Total Compensation | CN¥935k | CN¥895k | 100% |
Talking in terms of the industry, salary represented approximately 61% of total compensation out of all the companies we analyzed, while other remuneration made up 39% of the pie. Austar Lifesciences is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Austar Lifesciences Limited's Growth Numbers
Over the last three years, Austar Lifesciences Limited has shrunk its earnings per share by 51% per year. It saw its revenue drop 18% over the last year.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Austar Lifesciences Limited Been A Good Investment?
With a total shareholder return of -92% over three years, Austar Lifesciences Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Austar Lifesciences pays its CEO a majority of compensation through a salary. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Austar Lifesciences that investors should think about before committing capital to this stock.
Important note: Austar Lifesciences 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.