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Is MacroGenics, Inc.'s (NASDAQ:MGNX) CEO Overpaid Relative To Its Peers?

Simply Wall St

In 2001 Scott Koenig was appointed CEO of MacroGenics, Inc. (NASDAQ:MGNX). 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

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View our latest analysis for MacroGenics

How Does Scott Koenig's Compensation Compare With Similar Sized Companies?

Our data indicates that MacroGenics, Inc. is worth US$794m, and total annual CEO compensation is US$5.2m. (This figure is for the year to December 2018). Notably, that's an increase of 50% over the year before. While we always look at total compensation first, we note that the salary component is less, at US$599k. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$2.7m.

It would therefore appear that MacroGenics, Inc. pays Scott Koenig more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

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

NasdaqGS:MGNX CEO Compensation, May 17th 2019

Is MacroGenics, Inc. Growing?

On average over the last three years, MacroGenics, Inc. has shrunk earnings per share by 9.9% each year (measured with a line of best fit). In the last year, its revenue is down -59%.

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. You might want to check this free visual report on analyst forecasts for future earnings.

Has MacroGenics, Inc. Been A Good Investment?

Since shareholders would have lost about 24% over three years, some MacroGenics, Inc. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared the total CEO remuneration paid by MacroGenics, Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

Over the same period, investors would have come away with nothing in the way of share price gains. Notably, the CEO remuneration is actually up on last year. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at MacroGenics.

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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 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. Thank you for reading.