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Is Bio-Path Holdings, Inc.’s (NASDAQ:BPTH) CEO Pay Justified?

Simply Wall St

Peter Nielsen became the CEO of Bio-Path Holdings, Inc. (NASDAQ:BPTH) in 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Bio-Path Holdings

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

Our data indicates that Bio-Path Holdings, Inc. is worth US$14m, and total annual CEO compensation is US$594k. (This figure is for the year to December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$475k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$413k.

Thus we can conclude that Peter Nielsen receives more in total compensation than the median of a group of companies in the same market, and of similar size to Bio-Path Holdings, Inc.. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Bio-Path Holdings has changed over time.

NasdaqCM:BPTH CEO Compensation, March 4th 2019

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 (measured with a line of best fit). Its revenue is up 185% over last year.

Investors should note that, over three years, earnings per share are down. 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. Although we don’t have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

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

Given the total loss of 98% over three years, many shareholders in Bio-Path Holdings, Inc. are probably rather dissatisfied, to say the least. 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. As discussed above, we discovered that the company pays more than the median of that group.

While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Bio-Path Holdings.

Important note: Bio-Path Holdings 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.