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Shareholders will probably not be too impressed with the underwhelming results at Hutchison China MediTech Limited (LON:HCM) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 28 April 2021. 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.
View our latest analysis for Hutchison China MediTech
Comparing Hutchison China MediTech Limited's CEO Compensation With the industry
According to our data, Hutchison China MediTech Limited has a market capitalization of UK£3.1b, and paid its CEO total annual compensation worth US$1.4m over the year to December 2020. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$383k.
On comparing similar companies from the same industry with market caps ranging from UK£1.4b to UK£4.6b, we found that the median CEO total compensation was US$1.4m. This suggests that Hutchison China MediTech remunerates its CEO largely in line with the industry average. Moreover, Christian Hogg also holds UK£48m worth of Hutchison China MediTech stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | US$383k | US$375k | 27% |
| Other | US$1.0m | US$1.1m | 73% |
| Total Compensation | US$1.4m | US$1.4m | 100% |
On an industry level, around 52% of total compensation represents salary and 48% is other remuneration. Hutchison China MediTech sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Hutchison China MediTech Limited's Growth Numbers
Over the last three years, Hutchison China MediTech Limited has shrunk its earnings per share by 33% per year. In the last year, its revenue is up 11%.
Overall this is not a very positive result for shareholders. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..