In 2007 Mike Clayman was appointed CEO of Flexion Therapeutics, Inc. (NASDAQ:FLXN). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Mike Clayman's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Flexion Therapeutics, Inc. has a market cap of US$345m, and is paying total annual CEO compensation of US$3.2m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$600k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.8m.
Thus we can conclude that Mike Clayman receives more in total compensation than the median of a group of companies in the same market, and of similar size to Flexion Therapeutics, Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Flexion Therapeutics has changed from year to year.
Is Flexion Therapeutics, Inc. Growing?
Flexion Therapeutics, Inc. has reduced its earnings per share by an average of 24% a year, over the last three years (measured with a line of best fit). Its revenue is up 1112% over 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. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Shareholders might be interested in this free visualization of analyst forecasts.
Has Flexion Therapeutics, Inc. Been A Good Investment?
Given the total loss of 49% over three years, many shareholders in Flexion Therapeutics, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at Flexion Therapeutics, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. Whatever your view on compensation, you might want to check if insiders are buying or selling Flexion Therapeutics shares (free trial).
If you want to buy a stock that is better than Flexion Therapeutics, this free list of high return, low debt companies is a great place to look.
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If you spot an error that warrants correction, please contact the editor at email@example.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.