It's Unlikely That The CEO Of Xencor, Inc. (NASDAQ:XNCR) Will See A Huge Pay Rise This Year

In the past three years, shareholders of Xencor, Inc. (NASDAQ:XNCR) have seen a loss on their investment. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 24 June 2021, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

View our latest analysis for Xencor

Comparing Xencor, Inc.'s CEO Compensation With the industry

According to our data, Xencor, Inc. has a market capitalization of US$2.2b, and paid its CEO total annual compensation worth US$4.5m over the year to December 2020. Notably, that's an increase of 20% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$600k.

In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$4.7m. From this we gather that Bassil Dahiyat is paid around the median for CEOs in the industry. What's more, Bassil Dahiyat holds US$4.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$600k	US$567k	13%
Other	US$3.9m	US$3.2m	87%
Total Compensation	US$4.5m	US$3.7m	100%

On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. Xencor pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Xencor, Inc.'s Growth Numbers

Over the last three years, Xencor, Inc. has shrunk its earnings per share by 11% per year. It achieved revenue growth of 61% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Xencor, Inc. Been A Good Investment?

Since shareholders would have lost about 7.9% over three years, some Xencor, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Xencor that you should be aware of before investing.

Switching gears from Xencor, 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. 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.
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