Key Insights

• ACADIA Pharmaceuticals to hold its Annual General Meeting on 29th of May
• CEO Steve Davis' total compensation includes salary of US$856.6k
• The overall pay is comparable to the industry average
• Over the past three years, ACADIA Pharmaceuticals' EPS grew by 40% and over the past three years, the total loss to shareholders 27%

In the past three years, the share price of ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 29th of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Comparing ACADIA Pharmaceuticals Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that ACADIA Pharmaceuticals Inc. has a market capitalization of US$2.5b, and reported total annual CEO compensation of US$7.6m for the year to December 2023. Notably, that's a decrease of 46% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$857k.

For comparison, other companies in the American Biotechs industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$8.4m. From this we gather that Steve Davis is paid around the median for CEOs in the industry. What's more, Steve Davis holds US$2.5m worth of shares in the company in their own name.

Speaking on an industry level, nearly 24% of total compensation represents salary, while the remainder of 76% is other remuneration. ACADIA Pharmaceuticals sets aside a smaller share of compensation for 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.

ACADIA Pharmaceuticals Inc.'s Growth

Over the past three years, ACADIA Pharmaceuticals Inc. has seen its earnings per share (EPS) grow by 40% per year. It achieved revenue growth of 56% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has ACADIA Pharmaceuticals Inc. Been A Good Investment?

Given the total shareholder loss of 27% over three years, many shareholders in ACADIA Pharmaceuticals Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at ACADIA Pharmaceuticals.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.