Shareholders Will Probably Hold Off On Increasing Biocept, Inc.'s (NASDAQ:BIOC) CEO Compensation For The Time Being

In the past three years, the share price of Biocept, Inc. (NASDAQ:BIOC) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 09 July 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Biocept

How Does Total Compensation For Mike Nall Compare With Other Companies In The Industry?

At the time of writing, our data shows that Biocept, Inc. has a market capitalization of US$56m, and reported total annual CEO compensation of US$1.8m for the year to December 2020. We note that's an increase of 47% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$495k.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$1.2m. Hence, we can conclude that Mike Nall is remunerated higher than the industry median.

Component	2020	2019	Proportion (2020)
Salary	US$495k	US$435k	28%
Other	US$1.3m	US$781k	72%
Total Compensation	US$1.8m	US$1.2m	100%

On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. According to our research, Biocept has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Biocept, Inc.'s Growth Numbers

Biocept, Inc.'s earnings per share (EPS) grew 115% per year over the last three years. It achieved revenue growth of 636% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Biocept, Inc. Been A Good Investment?

Few Biocept, Inc. shareholders would feel satisfied with the return of -92% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 5 warning signs for Biocept (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Important note: Biocept 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. 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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