In 2008 Jeff Wolf was appointed CEO of Heat Biologics, Inc. (NASDAQ:HTBX). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Jeff Wolf’s Compensation Compare With Similar Sized Companies?
According to our data, Heat Biologics, Inc. has a market capitalization of US$25m, and pays its CEO total annual compensation worth US$1.2m. (This figure is for the year to December 2018). That’s a notable increase of 21% on last year. We think total compensation is more important but we note that the CEO salary is lower, at US$417k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$452k.
As you can see, Jeff Wolf is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Heat Biologics, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Heat Biologics, below.
Is Heat Biologics, Inc. Growing?
Heat Biologics, Inc. has increased its earnings per share (EPS) by an average of 98% a year, over the last three years (using a line of best fit). It achieved revenue growth of 155% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Shareholders might be interested in this free visualization of analyst forecasts.
Has Heat Biologics, Inc. Been A Good Investment?
With a three year total loss of 89%, Heat Biologics, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Heat Biologics, Inc. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. This doesn’t look great when you consider CEO remuneration is up on last year. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Heat Biologics shares (free trial).
Important note: Heat Biologics may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.