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Key Insights

• Zhongzhi Pharmaceutical Holdings' Annual General Meeting to take place on 13th of May
• CEO Ying Feng Lai's total compensation includes salary of CN¥1.62m
• The overall pay is 33% below the industry average
• Zhongzhi Pharmaceutical Holdings' total shareholder return over the past three years was 14% while its EPS grew by 21% over the past three years

The decent performance at Zhongzhi Pharmaceutical Holdings Limited (HKG:3737) recently will please most shareholders as they go into the AGM coming up on 13th of May. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

Check out our latest analysis for Zhongzhi Pharmaceutical Holdings

Comparing Zhongzhi Pharmaceutical Holdings Limited's CEO Compensation With The Industry

According to our data, Zhongzhi Pharmaceutical Holdings Limited has a market capitalization of HK$803m, and paid its CEO total annual compensation worth CN¥2.5m over the year to December 2024. Notably, that's an increase of 82% over the year before. In particular, the salary of CN¥1.62m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Pharmaceuticals industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥3.7m. In other words, Zhongzhi Pharmaceutical Holdings pays its CEO lower than the industry median. Furthermore, Ying Feng Lai directly owns HK$5.6m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 58% of total compensation represents salary, while the remainder of 42% is other remuneration. Zhongzhi Pharmaceutical Holdings pays out 64% of remuneration in the form of a salary, significantly higher than the industry average. 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.

A Look at Zhongzhi Pharmaceutical Holdings Limited's Growth Numbers

Zhongzhi Pharmaceutical Holdings Limited's earnings per share (EPS) grew 21% per year over the last three years. Its revenue is up 8.0% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Zhongzhi Pharmaceutical Holdings Limited Been A Good Investment?

Zhongzhi Pharmaceutical Holdings Limited has served shareholders reasonably well, with a total return of 14% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

The company's overall performance, while not bad, could be better. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

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 Zhongzhi Pharmaceutical Holdings that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.