Lonnel Coats has been the CEO of Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) since 2014. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Lonnel Coats's Compensation Compare With Similar Sized Companies?
According to our data, Lexicon Pharmaceuticals, Inc. has a market capitalization of US$351m, and paid its CEO total annual compensation worth US$3.1m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$634k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.7m.
Thus we can conclude that Lonnel Coats receives more in total compensation than the median of a group of companies in the same market, and of similar size to Lexicon Pharmaceuticals, 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 Lexicon Pharmaceuticals has changed from year to year.
Is Lexicon Pharmaceuticals, Inc. Growing?
Lexicon Pharmaceuticals, Inc. has increased its earnings per share (EPS) by an average of 29% a year, over the last three years (using a line of best fit). Its revenue is up 310% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.
Has Lexicon Pharmaceuticals, Inc. Been A Good Investment?
Given the total loss of 76% over three years, many shareholders in Lexicon Pharmaceuticals, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared total CEO remuneration at Lexicon Pharmaceuticals, Inc. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Lexicon Pharmaceuticals.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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