We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Ocumension Therapeutics' (HKG:1477) CEO For Now

Key Insights

• Ocumension Therapeutics to hold its Annual General Meeting on 20th of June
• Salary of CN¥4.25m is part of CEO Victor Liu's total remuneration
• The total compensation is 78% higher than the average for the industry
• Over the past three years, Ocumension Therapeutics' EPS grew by 90% and over the past three years, the total loss to shareholders 75%

In the past three years, the share price of Ocumension Therapeutics (HKG:1477) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 20th of June. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Ocumension Therapeutics

Comparing Ocumension Therapeutics' CEO Compensation With The Industry

Our data indicates that Ocumension Therapeutics has a market capitalization of HK$4.6b, and total annual CEO compensation was reported as CN¥5.9m for the year to December 2023. That's a notable increase of 16% on last year. In particular, the salary of CN¥4.25m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Pharmaceuticals industry with market capitalizations ranging between HK$1.6b and HK$6.2b had a median total CEO compensation of CN¥3.3m. This suggests that Victor Liu is paid more than the median for the industry. Moreover, Victor Liu also holds HK$201m worth of Ocumension Therapeutics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 65% of total compensation out of all the companies we analyzed, while other remuneration made up 35% of the pie. Ocumension Therapeutics is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.

Ocumension Therapeutics' Growth

Ocumension Therapeutics's earnings per share (EPS) grew 90% per year over the last three years. It achieved revenue growth of 55% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Ocumension Therapeutics Been A Good Investment?

The return of -75% over three years would not have pleased Ocumension Therapeutics shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

Whatever your view on compensation, you might want to check if insiders are buying or selling Ocumension Therapeutics shares (free trial).

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.