Shareholders May Be More Conservative With BioXcel Therapeutics, Inc.'s (NASDAQ:BTAI) CEO Compensation For Now

Key Insights

• BioXcel Therapeutics will host its Annual General Meeting on 10th of June
• CEO Vimal Mehta's total compensation includes salary of US$1.00m
• The total compensation is 328% higher than the average for the industry
• BioXcel Therapeutics' three-year loss to shareholders was 95% while its EPS was down 19% over the past three years

Shareholders of BioXcel Therapeutics, Inc. (NASDAQ:BTAI) will have been dismayed by the negative share price return over the last three years. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 10th of June, where they can impact on future company performance by voting on resolutions, including executive compensation. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

View our latest analysis for BioXcel Therapeutics

How Does Total Compensation For Vimal Mehta Compare With Other Companies In The Industry?

According to our data, BioXcel Therapeutics, Inc. has a market capitalization of US$68m, and paid its CEO total annual compensation worth US$4.7m over the year to December 2023. That's a fairly small increase of 3.8% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.

In comparison with other companies in the American Biotechs industry with market capitalizations under US$200m, the reported median total CEO compensation was US$1.1m. Accordingly, our analysis reveals that BioXcel Therapeutics, Inc. pays Vimal Mehta north of the industry median. Moreover, Vimal Mehta also holds US$77k worth of BioXcel Therapeutics stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	US$1.0m	US$944k	21%
Other	US$3.7m	US$3.6m	79%
Total Compensation	US$4.7m	US$4.6m	100%

On an industry level, roughly 23% of total compensation represents salary and 77% is other remuneration. BioXcel Therapeutics is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

BioXcel Therapeutics, Inc.'s Growth

Over the last three years, BioXcel Therapeutics, Inc. has shrunk its earnings per share by 19% per year. In the last year, its revenue is up 202%.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has BioXcel Therapeutics, Inc. Been A Good Investment?

The return of -95% over three years would not have pleased BioXcel Therapeutics, Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. In 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 is in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 6 warning signs for BioXcel Therapeutics you should be aware of, and 2 of them are a bit unpleasant.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.