Is ASML Holding N.V. (AMS:ASML) Excessively Paying Its CEO?

In 2013 Peter T. F. Wennink was appointed CEO of ASML Holding N.V. (AMS:ASML). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for ASML Holding

How Does Peter T. F. Wennink’s Compensation Compare With Similar Sized Companies?

Our data indicates that ASML Holding N.V. is worth €93b, and total annual CEO compensation was reported as €3.5m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at €978k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a group of companies with market caps over €7.3b, we found that their median CEO total compensation was €3.5m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts – even though some are quite a bit bigger than others).

So Peter T. F. Wennink receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at ASML Holding, below.

ENXTAM:ASML CEO Compensation, September 14th 2019
ENXTAM:ASML CEO Compensation, September 14th 2019

Is ASML Holding N.V. Growing?

Over the last three years ASML Holding N.V. has grown its earnings per share (EPS) by an average of 20% per year (using a line of best fit). In the last year, its revenue is up 7.8%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.

Has ASML Holding N.V. Been A Good Investment?

Boasting a total shareholder return of 153% over three years, ASML Holding N.V. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

Remuneration for Peter T. F. Wennink is close enough to the median pay for a CEO of a large company .

The company is growing earnings per share and total shareholder returns have been pleasing. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Shareholders may want to check for free if ASML Holding insiders are buying or selling shares.

Important note: ASML Holding may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.