John Higgins became the CEO of Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) in 2007. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Ligand Pharmaceuticals
How Does John Higgins’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Ligand Pharmaceuticals Incorporated has a market cap of US$2.6b, and is paying total annual CEO compensation of US$5.5m. (This number is for the twelve months until December 2017). While we always look at total compensation first, we note that the salary component is less, at US$612k. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$4.9m.
So John Higgins is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Ligand Pharmaceuticals, below.
Is Ligand Pharmaceuticals Incorporated Growing?
On average over the last three years, Ligand Pharmaceuticals Incorporated has shrunk earnings per share by 26% each year (measured with a line of best fit). It achieved revenue growth of 78% over the last year.
Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. It’s hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.
Has Ligand Pharmaceuticals Incorporated Been A Good Investment?
With a total shareholder return of 11% over three years, Ligand Pharmaceuticals Incorporated shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary…
Remuneration for John Higgins is close enough to the median pay for a CEO of a similar sized company .
We think many would like to see better growth. But we don’t think the CEO compensation is a problem. So you may want to check if insiders are buying Ligand Pharmaceuticals shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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.