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Is Catabasis Pharmaceuticals, Inc.’s (NASDAQ:CATB) CEO Overpaid Relative To Its Peers?

Daryl Painter

Jill Milne has been the CEO of Catabasis Pharmaceuticals, Inc. (NASDAQ:CATB) since 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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

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

Our data indicates that Catabasis Pharmaceuticals, Inc. is worth US$35m, and total annual CEO compensation is US$633k. (This figure is for the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$462k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$303k.

As you can see, Jill Milne is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Catabasis Pharmaceuticals, Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Catabasis Pharmaceuticals has changed over time.

NasdaqGM:CATB CEO Compensation January 15th 19

Is Catabasis Pharmaceuticals, Inc. Growing?

Catabasis Pharmaceuticals, Inc. has increased its earnings per share (EPS) by an average of 62% a year, over the last three years (using a line of best fit). Revenue was pretty flat on last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Catabasis Pharmaceuticals, Inc. Been A Good Investment?

With a three year total loss of 90%, Catabasis Pharmaceuticals, Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We examined the amount Catabasis Pharmaceuticals, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. 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. Shareholders may want to check for free if Catabasis Pharmaceuticals insiders are buying or selling shares.

Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.