It's Probably Less Likely That Petros Pharmaceuticals, Inc.'s (NASDAQ:PTPI) CEO Will See A Huge Pay Rise This Year

Key Insights

• Petros Pharmaceuticals to hold its Annual General Meeting on 20th of November
• Total pay for CEO Fady Boctor includes US$350.0k salary
• The total compensation is similar to the average for the industry
• Over the past three years, Petros Pharmaceuticals' EPS grew by 8.5% and over the past three years, the total loss to shareholders 98%

Shareholders of Petros Pharmaceuticals, Inc. (NASDAQ:PTPI) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 20th of November could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Petros Pharmaceuticals

How Does Total Compensation For Fady Boctor Compare With Other Companies In The Industry?

At the time of writing, our data shows that Petros Pharmaceuticals, Inc. has a market capitalization of US$2.9m, and reported total annual CEO compensation of US$875k for the year to December 2023. That's a notable increase of 28% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$350k.

On comparing similar-sized companies in the American Pharmaceuticals industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$875k. From this we gather that Fady Boctor is paid around the median for CEOs in the industry.

Component	2023	2022	Proportion (2023)
Salary	US$350k	US$350k	40%
Other	US$525k	US$332k	60%
Total Compensation	US$875k	US$682k	100%

On an industry level, roughly 28% of total compensation represents salary and 72% is other remuneration. It's interesting to note that Petros Pharmaceuticals pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Petros Pharmaceuticals, Inc.'s Growth

Petros Pharmaceuticals, Inc. has seen its earnings per share (EPS) increase by 8.5% a year over the past three years. Its revenue is up 7.0% over the last year.

We'd prefer higher revenue growth, but we're happy with the modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Petros Pharmaceuticals, Inc. Been A Good Investment?

With a total shareholder return of -98% over three years, Petros Pharmaceuticals, Inc. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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 6 warning signs for Petros Pharmaceuticals (of which 3 are concerning!) that you should know about in order to have a holistic understanding of the stock.

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

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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.