In a recent move to reduce costs, Cytosorbents (NASDAQ:) Corporation (NASDAQ: CTSO) has implemented a voluntary salary reduction program that includes its top executives. The program, authorized by the Company’s Board of Directors on March 29, 2024, is part of a broader cost-cutting initiative aimed at best serving the interests of the Company and its shareholders.
The pay reduction agreements, which amend existing employment contracts, will see Chief Executive Officer Phillip P. Chan’s base pay reduced by 35%, while President and Chief Operating Officer Vincent J. Capponi, Chief Financial Officer Kathleen P. Bloch and Medical Director Officer Efthymios N. Deliargyris will each receive a 15% reduction. These adjustments will take effect from April 1, 2024 to December 31, 2024, after which their salaries will return to previous levels starting January 1, 2025.
In exchange for their voluntary participation, the affected executives were granted non-qualified stock options on March 29, 2024, under the Company’s 2014 Long-Term Incentive Plan. The value of the stock options is the amount of the salary reduction for each participant, calculated based on the closing market price of $0.95 per share of Cytosorbents common stock on March 28, 2024. The options have an exercise price market value set at the fair on the assignment date, in line with the provisions of the Plan.
The news is based on Cytosorbents’ latest 8K storage.
Insights on InvestingPro
As Cytosorbents Corporation (NASDAQ:CTSO) takes significant steps to manage its financials through a voluntary salary reduction program, a closer look at the company’s performance metrics and analyst insights reveals a challenging economic landscape. The company’s market capitalization stands at a modest $51.85 million, reflecting the scale of its operations and investor valuation.
The financial prudence demonstrated by the company’s executives is underlined by an (adjusted) P/E ratio for the trailing twelve months as of the fourth quarter of 2023 of -1.87, indicating that investors do not currently expect earnings to cover the share price. This is further strengthened by the company’s revenue growth, which, while positive at 4.79% in the trailing twelve months as of Q4 2023, saw a quarterly decline of 7.69% in Q4 2023. The takeaways from InvestingPro highlight that analysts are not predicting the profitability of cytosorbents. this year and point out that the company is rapidly burning through cash, which could explain the decision to reduce executive salaries.
Despite the salary cuts, the company’s share price has seen a significant decline over the past year, with a 1-year total price return to date of -72.44%. This data, combined with InvestingPro’s suggestion that the share price has fallen significantly over the past year, suggests the company’s cost-cutting measures are a response to broader financial pressures.
For those interested in learning more about Cytosorbents’ financial health and future prospects, InvestingPro offers additional insights and metrics. There are additional recommendations from InvestingPro, which provide a comprehensive analysis of the company’s financial situation and market performance. To access this information and make informed investment decisions, use the coupon code PRONEWS24 to get an additional 10% discount on the annual or biennial Pro and Pro+ subscription.
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