A Look At BioPorto's (CPH:BIOPOR) CEO Remuneration

This article will reflect on the compensation paid to Peter Eriksen who has served as CEO of BioPorto A/S (CPH:BIOPOR) since 2013. This analysis will also assess whether BioPorto pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for BioPorto

Comparing BioPorto A/S' CEO Compensation With the industry

According to our data, BioPorto A/S has a market capitalization of kr.962m, and paid its CEO total annual compensation worth kr.5.9m over the year to December 2019. That's a notable increase of 66% on last year. We note that the salary portion, which stands at kr.3.28m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between kr.608m and kr.2.4b had a median total CEO compensation of kr.3.2m. Accordingly, our analysis reveals that BioPorto A/S pays Peter Eriksen north of the industry median.

On an industry level, roughly 61% of total compensation represents salary and 39% is other remuneration. Although there is a difference in how total compensation is set, BioPorto more or less reflects the market in terms of setting the salary. 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 BioPorto A/S' Growth Numbers

Over the last three years, BioPorto A/S has shrunk its earnings per share by 22% per year. It saw its revenue drop 23% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has BioPorto A/S Been A Good Investment?

We think that the total shareholder return of 34%, over three years, would leave most BioPorto A/S shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As we touched on above, BioPorto A/S is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company isn't growing EPS, but shareholder returns have been impressive over the last three years. Considering positive investor returns, it would be bold of us to criticize CEO compensation, but shareholders might want to see healthier EPS growth before a raise is given out.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 4 warning signs for BioPorto (2 are concerning!) that you should be aware of before investing here.

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.

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This article by Simply Wall St is general in nature. 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.
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