In This Article:
Chuanglong Yao became the CEO of Charmacy Pharmaceutical Co., Ltd. (HKG:2289) in 2000. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Charmacy Pharmaceutical
How Does Chuanglong Yao's Compensation Compare With Similar Sized Companies?
According to our data, Charmacy Pharmaceutical Co., Ltd. has a market capitalization of HK$807m, and paid its CEO total annual compensation worth CN¥715k over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥649k. We took a group of companies with market capitalizations below CN¥1.4b, and calculated the median CEO total compensation to be CN¥1.5m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Charmacy Pharmaceutical has changed over time.
Is Charmacy Pharmaceutical Co., Ltd. Growing?
Over the last three years Charmacy Pharmaceutical Co., Ltd. has shrunk its earnings per share by an average of 7.0% per year (measured with a line of best fit). Its revenue is down 14% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Charmacy Pharmaceutical Co., Ltd. Been A Good Investment?
Since shareholders would have lost about 4.1% over three years, some Charmacy Pharmaceutical Co., Ltd. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
It appears that Charmacy Pharmaceutical Co., Ltd. remunerates its CEO below most similar sized companies.
Chuanglong Yao is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. So you may want to check if insiders are buying Charmacy Pharmaceutical shares with their own money (free access).