Here's Why We Think TDH Holdings, Inc.'s (NASDAQ:PETZ) CEO Compensation Looks Fair
Key Insights
TDH Holdings to hold its Annual General Meeting on 27th of October
Total pay for CEO Dandan Liu includes US$85.0k salary
The overall pay is 70% below the industry average
TDH Holdings' EPS grew by 89% over the past three years while total shareholder loss over the past three years was 96%
The performance at TDH Holdings, Inc. (NASDAQ:PETZ) has been rather lacklustre of late and shareholders may be wondering what CEO Dandan Liu is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 27th of October. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We think CEO compensation looks appropriate given the data we have put together.
View our latest analysis for TDH Holdings
Comparing TDH Holdings, Inc.'s CEO Compensation With The Industry
At the time of writing, our data shows that TDH Holdings, Inc. has a market capitalization of US$12m, and reported total annual CEO compensation of US$120k for the year to December 2022. We note that's an increase of 100% above last year. Notably, the salary which is US$85.0k, represents most of the total compensation being paid.
On comparing similar-sized companies in the American Food industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$398k. Accordingly, TDH Holdings pays its CEO under the industry median. Furthermore, Dandan Liu directly owns US$1.6m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2022 | 2021 | Proportion (2022) |
Salary | US$85k | US$60k | 71% |
Other | US$35k | - | 29% |
Total Compensation | US$120k | US$60k | 100% |
Speaking on an industry level, nearly 29% of total compensation represents salary, while the remainder of 71% is other remuneration. According to our research, TDH Holdings has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
TDH Holdings, Inc.'s Growth
Over the past three years, TDH Holdings, Inc. has seen its earnings per share (EPS) grow by 89% per year. Its revenue is up 187% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has TDH Holdings, Inc. Been A Good Investment?
With a total shareholder return of -96% over three years, TDH Holdings, Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
The loss to shareholders over the past three years is certainly concerning. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. A key question may be why the fundamentals have not yet been reflected into the share price. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for TDH Holdings that investors should think about before committing capital to this stock.
Important note: TDH Holdings 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.
