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Should You Be Pleased About The CEO Pay At Lexicon Pharmaceuticals, Inc.'s (NASDAQ:LXRX)

Simply Wall St

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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. 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 method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Lexicon Pharmaceuticals

How Does Lonnel Coats's Compensation Compare With Similar Sized Companies?

Our data indicates that Lexicon Pharmaceuticals, Inc. is worth US$615m, and total annual CEO compensation is US$3.1m. (This is based on the year to December 2018). That's a notable increase of 41% on last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$634k. 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.

So Lonnel Coats receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

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

NasdaqGS:LXRX CEO Compensation, June 13th 2019

Is Lexicon Pharmaceuticals, Inc. Growing?

Over the last three years Lexicon Pharmaceuticals, Inc. has shrunk its earnings per share by an average of 30% per year (measured with a line of best fit). In the last year, its revenue is down -52%.

Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.

Has Lexicon Pharmaceuticals, Inc. Been A Good Investment?

With a three year total loss of 58%, Lexicon Pharmaceuticals, Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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

After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. This doesn't look great when you consider CEO remuneration is up on last year. Suffice it to say, we don't think the CEO is underpaid! Shareholders may want to check for free if Lexicon Pharmaceuticals insiders are buying or selling shares.

If you want to buy a stock that is better than Lexicon Pharmaceuticals, this free list of high return, low debt companies is a great place to look.

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.