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Should You Worry About Brainstorm Cell Therapeutics Inc’s (NASDAQ:BCLI) CEO Pay?

Chaim Lebovits is the CEO of Brainstorm Cell Therapeutics Inc (NASDAQ:BCLI), which has recently grown to a market capitalization of US$91.73M. Recognizing whether CEO incentives are aligned with shareholders is a crucial part of investing. This is because, if incentives are aligned, more value is created for shareholders which directly impacts your returns as an investor. Today we will assess Lebovits’s pay and compare this to the company’s performance over the same period, as well as measure it against other US CEOs leading companies of similar size and profitability. See our latest analysis for Brainstorm Cell Therapeutics

What has been the trend in BCLI’s earnings?

Earnings is a powerful indication of BCLI’s ability to invest shareholders’ funds and generate returns. Therefore I will use earnings as a proxy of Lebovits’s performance in the past year. In the past year, BCLI released negative earnings of -US$5.46M , which is a further decline from prior year’s loss of -US$4.98M. Furthermore, on average, BCLI has been loss-making in the past, with a 5-year average EPS of -US$0.43. During times of negative earnings, the company may be facing a period of reinvestment and growth, or it can be a sign of some headwind. Regardless, CEO compensation should represent the current state of the business. In the latest financial report, Lebovits’s total compensation increased by 81.55% to US$1.01M.

NasdaqCM:BCLI Income Statement Jun 2nd 18
NasdaqCM:BCLI Income Statement Jun 2nd 18

What’s a reasonable CEO compensation?

Though no standard benchmark exists, as compensation should account for specific factors of the company and market, we can determine a high-level base line to see if BCLI is an outlier. This exercise can help shareholders ask the right question about Lebovits’s incentive alignment. Normally, a US small-cap is worth around $1B, produces earnings of $96M, and pays its CEO at roughly $2.7M per annum. Typically I would use earnings and market cap to account for variations in performance, however, BCLI’s negative earnings reduces the usefulness of my formula. Looking at the range of compensation for small-cap executives, it seems like Lebovits is paid aptly compared to those in similar-sized companies. Overall, though BCLI is unprofitable, it seems like the CEO’s pay is fair.

Next Steps:

In order to determine whether or not you should invest in BCLI, your thesis should be built on fundamentals. Even though CEO pay isn’t technically a key concern, it could serve as an indication as to how board members align incentives and how they think about setting policies. These issues directly impacts how BCLI makes money, and factors impacting your return on investment. If you have not done so already, I highly recommend you to complete your research by taking a look at the following:

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  1. Governance: To find out more about BCLI’s governance, look through our infographic report of the company’s board and management.

  2. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.

  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of BCLI? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!


To help readers see pass 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.