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How Should Investors Feel About Xencor, Inc.'s (NASDAQ:XNCR) CEO Pay?

Simply Wall St

In 2005 Bassil Dahiyat was appointed CEO of Xencor, Inc. (NASDAQ:XNCR). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Xencor

How Does Bassil Dahiyat's Compensation Compare With Similar Sized Companies?

Our data indicates that Xencor, Inc. is worth US$1.8b, and total annual CEO compensation was reported as US$4.4m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$550k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.9m.

So Bassil Dahiyat is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at Xencor has changed over time.

NasdaqGM:XNCR CEO Compensation, February 26th 2020
NasdaqGM:XNCR CEO Compensation, February 26th 2020

Is Xencor, Inc. Growing?

Over the last three years Xencor, Inc. has grown its earnings per share (EPS) by an average of 24% per year (using a line of best fit). It achieved revenue growth of 286% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. It could be important to check this free visual depiction of what analysts expect for the future.

Has Xencor, Inc. Been A Good Investment?

Xencor, Inc. has generated a total shareholder return of 20% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Remuneration for Bassil Dahiyat is close enough to the median pay for a CEO of a similar sized company .

We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. So considering these factors, we think the CEO pay is probably quite reasonable. So you may want to check if insiders are buying Xencor shares with their own money (free access).

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.

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.

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. Thank you for reading.