Most Shareholders Will Probably Find That The Compensation For BioCardia, Inc.'s (NASDAQ:BCDA) CEO Is Reasonable

Key Insights

• BioCardia to hold its Annual General Meeting on 20th of May
• CEO Peter Altman's total compensation includes salary of US$515.5k
• The overall pay is 34% below the industry average
• Over the past three years, BioCardia's EPS grew by 26% and over the past three years, the total loss to shareholders 89%

Performance at BioCardia, Inc. (NASDAQ:BCDA) has been rather uninspiring recently and shareholders may be wondering how CEO Peter Altman plans to fix this. At the next AGM coming up on 20th of May, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for BioCardia

How Does Total Compensation For Peter Altman Compare With Other Companies In The Industry?

At the time of writing, our data shows that BioCardia, Inc. has a market capitalization of US$11m, and reported total annual CEO compensation of US$746k for the year to December 2023. Notably, that's a decrease of 17% over the year before. We note that the salary portion, which stands at US$515.5k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the American Biotechs industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$1.1m. This suggests that Peter Altman is paid below the industry median. Furthermore, Peter Altman directly owns US$219k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	US$516k	US$531k	69%
Other	US$231k	US$371k	31%
Total Compensation	US$746k	US$902k	100%

On an industry level, roughly 23% of total compensation represents salary and 77% is other remuneration. According to our research, BioCardia has allocated a higher percentage of pay to salary in comparison to the wider industry. 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 BioCardia, Inc.'s Growth Numbers

Over the past three years, BioCardia, Inc. has seen its earnings per share (EPS) grow by 26% per year. Its revenue is down 65% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 BioCardia, Inc. Been A Good Investment?

The return of -89% over three years would not have pleased BioCardia, Inc. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The fact that shareholders have earned a negative share price return is certainly disconcerting. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. A key focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 7 warning signs for BioCardia (3 are potentially serious!) that you should be aware of before investing here.

Important note: BioCardia 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.