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

Simply Wall St

Simon Pimstone has been the CEO of Xenon Pharmaceuticals Inc. (NASDAQ:XENE) since 2003. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. 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.

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Check out our latest analysis for Xenon Pharmaceuticals

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

According to our data, Xenon Pharmaceuticals Inc. has a market capitalization of US$246m, and pays its CEO total annual compensation worth US$1.2m. (This number is for the twelve months until December 2018). That's actually a decrease on the year before. We think total compensation is more important but we note that the CEO salary is lower, at US$401k. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.1m.

So Simon Pimstone 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 a visual representation of the CEO compensation at Xenon Pharmaceuticals, below.

NasdaqGM:XENE CEO Compensation, May 21st 2019
NasdaqGM:XENE CEO Compensation, May 21st 2019

Is Xenon Pharmaceuticals Inc. Growing?

On average over the last three years, Xenon Pharmaceuticals Inc. has shrunk earnings per share by 15% each year (measured with a line of best fit). Its revenue is down -98% over 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.

Has Xenon Pharmaceuticals Inc. Been A Good Investment?

Boasting a total shareholder return of 42% over three years, Xenon Pharmaceuticals Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Simon Pimstone is paid around the same as most CEOs of similar size companies.

We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we can't see a reason to suggest the pay is inappropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Xenon Pharmaceuticals shares (free trial).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.