It's Unlikely That Exelixis, Inc.'s (NASDAQ:EXEL) CEO Will See A Huge Pay Rise This Year

Key Insights

• Exelixis to hold its Annual General Meeting on 30th of May
• Total pay for CEO Mike Morrissey includes US$1.19m salary
• Total compensation is 35% above industry average
• Over the past three years, Exelixis' EPS grew by 50% and over the past three years, the total loss to shareholders 9.2%

As many shareholders of Exelixis, Inc. (NASDAQ:EXEL) will be aware, they have not made a gain on their investment in the past three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 30th of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Exelixis

Comparing Exelixis, Inc.'s CEO Compensation With The Industry

According to our data, Exelixis, Inc. has a market capitalization of US$6.1b, and paid its CEO total annual compensation worth US$16m over the year to December 2023. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.

On examining similar-sized companies in the American Biotechs industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$12m. This suggests that Mike Morrissey is paid more than the median for the industry. Furthermore, Mike Morrissey directly owns US$32m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$1.2m	US$1.1m	7%
Other	US$15m	US$16m	93%
Total Compensation	US$16m	US$17m	100%

Speaking on an industry level, nearly 24% of total compensation represents salary, while the remainder of 76% is other remuneration. It's interesting to note that Exelixis allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Exelixis, Inc.'s Growth Numbers

Exelixis, Inc. has seen its earnings per share (EPS) increase by 50% a year over the past three years. It achieved revenue growth of 11% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Exelixis, Inc. Been A Good Investment?

Given the total shareholder loss of 9.2% over three years, many shareholders in Exelixis, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Exelixis.

Switching gears from Exelixis, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.