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Is Catabasis Pharmaceuticals, Inc.'s (NASDAQ:CATB) CEO Pay Fair?

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Simply Wall St
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Jill Milne became the CEO of Catabasis Pharmaceuticals, Inc. (NASDAQ:CATB) in 2008. 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Catabasis Pharmaceuticals

How Does Jill Milne's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Catabasis Pharmaceuticals, Inc. has a market cap of US$68m, and reported total annual CEO compensation of US$1.1m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$476k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$523k.

It would therefore appear that Catabasis Pharmaceuticals, Inc. pays Jill Milne 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. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at Catabasis Pharmaceuticals has changed from year to year.

NasdaqGM:CATB CEO Compensation, December 24th 2019
NasdaqGM:CATB CEO Compensation, December 24th 2019

Is Catabasis Pharmaceuticals, Inc. Growing?

Over the last three years Catabasis Pharmaceuticals, Inc. has grown its earnings per share (EPS) by an average of 65% per year (using a line of best fit). Revenue was pretty flat on last year.

This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.

Has Catabasis Pharmaceuticals, Inc. Been A Good Investment?

Since shareholders would have lost about 85% over three years, some Catabasis Pharmaceuticals, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Catabasis Pharmaceuticals, Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of 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. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Catabasis Pharmaceuticals.

Important note: Catabasis Pharmaceuticals 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.

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.

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. Thank you for reading.