Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In 2003 Simon Pimstone was appointed CEO of Xenon Pharmaceuticals Inc. (NASDAQ:XENE). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Simon Pimstone’s Compensation Compare With Similar Sized Companies?
Our data indicates that Xenon Pharmaceuticals Inc. is worth US$261m, and total annual CEO compensation is US$1.2m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$401k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.2m.
That means Simon Pimstone receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Xenon Pharmaceuticals, below.
Is Xenon Pharmaceuticals Inc. Growing?
On average over the last three years, Xenon Pharmaceuticals Inc. has shrunk earnings per share by 15% each year (measured with a line of best fit). In the last year, its revenue is down -98%.
Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Has Xenon Pharmaceuticals Inc. Been A Good Investment?
Boasting a total shareholder return of 38% over three years, Xenon Pharmaceuticals Inc. has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
Simon Pimstone is paid around what is normal the leaders of comparable size companies.
The company isn’t growing earnings per share, but shareholder returns have been strong over the last three years. So we think most shareholders wouldn’t be too worried about CEO compensation, which is close to the median for similar sized companies. Shareholders may want to check for free if Xenon Pharmaceuticals insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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 firstname.lastname@example.org. 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.