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Is Heat Biologics, Inc.'s (NASDAQ:HTBX) CEO Overpaid Relative To Its Peers?

Simply Wall St

Jeff Wolf has been the CEO of Heat Biologics, Inc. (NASDAQ:HTBX) since 2008. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. 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.

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View our latest analysis for Heat Biologics

How Does Jeff Wolf's Compensation Compare With Similar Sized Companies?

Our data indicates that Heat Biologics, Inc. is worth US$29m, and total annual CEO compensation is US$1.2m. (This number is for the twelve months until 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$448k.

It would therefore appear that Heat Biologics, Inc. pays Jeff Wolf 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. 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 Heat Biologics has changed over time.

NasdaqCM:HTBX CEO Compensation, May 23rd 2019

Is Heat Biologics, Inc. Growing?

Over the last three years Heat Biologics, Inc. has grown its earnings per share (EPS) by an average of 98% per year (using a line of best fit). Its revenue is up 155% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Heat Biologics, Inc. Been A Good Investment?

Since shareholders would have lost about 87% over three years, some Heat Biologics, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared total CEO remuneration at Heat Biologics, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. 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. Shareholders may want to check for free if Heat Biologics insiders are buying or selling shares.

If you want to buy a stock that is better than Heat Biologics, this free list of high return, low debt companies is a great place to look.

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.