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How Should Investors React To Exelixis, Inc.'s (NASDAQ:EXEL) CEO Pay?

Simply Wall St

Michael Morrissey became the CEO of Exelixis, Inc. (NASDAQ:EXEL) in 2010. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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.

See our latest analysis for Exelixis

How Does Michael Morrissey's Compensation Compare With Similar Sized Companies?

Our data indicates that Exelixis, Inc. is worth US$5.1b, and total annual CEO compensation was reported as US$8.0m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$945k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO total compensation was US$6.8m.

So Michael Morrissey receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Exelixis has changed from year to year.

NasdaqGS:EXEL CEO Compensation, December 5th 2019

Is Exelixis, Inc. Growing?

Exelixis, Inc. has increased its earnings per share (EPS) by an average of 92% a year, over the last three years (using a line of best fit). It achieved revenue growth of 28% over the last year.

This demonstrates that the company has been improving recently. A good result. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. You might want to check this free visual report on analyst forecasts for future earnings.

Has Exelixis, Inc. Been A Good Investment?

Exelixis, Inc. has not done too badly by shareholders, with a total return of 6.4%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Michael Morrissey is paid around the same as most CEOs of similar size companies.

The company is growing EPS but shareholder returns have been sound but not amazing. So upon reflection one could argue that the CEO pay is quite reasonable. So you may want to check if insiders are buying Exelixis 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.

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.