Yahoo Finance What Does XOMA's (NASDAQ:XOMA) CEO Pay Reveal?
Jim Neal has been the CEO of XOMA Corporation (NASDAQ:XOMA) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether XOMA pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for XOMA
Comparing XOMA Corporation's CEO Compensation With the industry
Our data indicates that XOMA Corporation has a market capitalization of US$493m, and total annual CEO compensation was reported as US$1.5m for the year to December 2019. Notably, that's an increase of 12% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$499k.
In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$2.0m. So it looks like XOMA compensates Jim Neal in line with the median for the industry. What's more, Jim Neal holds US$912k worth of shares in the company in their own name.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$499k | US$484k | 34% |
Other | US$981k | US$839k | 66% |
Total Compensation | US$1.5m | US$1.3m | 100% |
On an industry level, roughly 25% of total compensation represents salary and 75% is other remuneration. XOMA is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at XOMA Corporation's Growth Numbers
XOMA Corporation has reduced its earnings per share by 43% a year over the last three years. Its revenue is down 89% over the previous year.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has XOMA Corporation Been A Good Investment?
XOMA Corporation has generated a total shareholder return of 22% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
To Conclude...
As we touched on above, XOMA Corporation is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. XOMA has had a tough time in recent years, with declining EPS growth, and although shareholder returns are stable, they are hardly worth celebrating. This doesn't compare well with CEO compensation, which is close to the industry median. We wouldn't go as far as saying CEO compensation is inappropriate, but we don't think the executive is underpaid.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for XOMA that you should be aware of before investing.
Switching gears from XOMA, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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