Does Bio-Path Holdings, Inc.’s (NASDAQ:BPTH) CEO Salary Reflect Performance?

In 2008 Peter Nielsen was appointed CEO of Bio-Path Holdings, Inc. (NASDAQ:BPTH). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

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How Does Peter Nielsen’s Compensation Compare With Similar Sized Companies?

Our data indicates that Bio-Path Holdings, Inc. is worth US$1.9m, and total annual CEO compensation is US$594k. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$475k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO compensation in that group is US$300k.

It would therefore appear that Bio-Path Holdings, Inc. pays Peter Nielsen more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. Take a look at Bio-Path Holdings’s key growth metrics by clicking on this link to view earnings, revenue and cash flow.

You can see a visual representation of the CEO compensation at Bio-Path Holdings, below.

NasdaqCM:BPTH CEO Compensation January 22nd 19
NasdaqCM:BPTH CEO Compensation January 22nd 19

Is Bio-Path Holdings, Inc. Growing?

Over the last three years Bio-Path Holdings, Inc. has shrunk its earnings per share by an average of 8.4% per year. Its revenue is up 185% over last year.

As investors, we are a bit wary of companies that have lower earnings per share, over three years. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching.

Has Bio-Path Holdings, Inc. Been A Good Investment?

With a three year total loss of 99%, Bio-Path Holdings, Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We examined the amount Bio-Path Holdings, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Bio-Path Holdings (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.