U.S. markets open in 2 hours 26 minutes

Is Xenon Pharmaceuticals Inc (NASDAQ:XENE) Overpaying Its CEO?

Simon Pimstone has been the CEO of Xenon Pharmaceuticals Inc (NASDAQ:XENE) since 2003. First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Xenon Pharmaceuticals

How Does Simon Pimstone’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Xenon Pharmaceuticals Inc has a market cap of US$213m, and is paying total annual CEO compensation of US$1.5m. That’s a notable increase of 105% on last year. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$930k.

Thus we can conclude that Simon Pimstone receives more in total compensation than the median of a group of companies in the same market, and of similar size to Xenon Pharmaceuticals Inc. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Xenon Pharmaceuticals, below.

NasdaqGM:XENE CEO Compensation November 15th 18

Is Xenon Pharmaceuticals Inc Growing?

Over the last three years Xenon Pharmaceuticals Inc has shrunk its earnings per share by an average of 28% per year. It saw its revenue drop -98% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

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

Has Xenon Pharmaceuticals Inc Been A Good Investment?

With a three year total loss of 1.8%, Xenon Pharmaceuticals Inc would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We compared the total CEO remuneration paid by Xenon Pharmaceuticals Inc, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

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

Just as bad, share price gains for investors have failed to materialize, over the same period. This contrasts with the growth in CEO remuneration, year on year. In our opinion the CEO might be paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Xenon Pharmaceuticals Inc shares (free trial).

Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.