Shareholders May Not Be So Generous With Techpoint, Inc.'s (TSE:6697) CEO Compensation And Here's Why

Key Insights

• Techpoint will host its Annual General Meeting on 30th of May
• Salary of US$220.0k is part of CEO Fumihiro Kozato's total remuneration
• The total compensation is 76% higher than the average for the industry
• Over the past three years, Techpoint's EPS grew by 36% and over the past three years, the total loss to shareholders 23%

The underwhelming share price performance of Techpoint, Inc. (TSE:6697) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 30th of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Techpoint

Comparing Techpoint, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Techpoint, Inc. has a market capitalization of JP¥24b, and reported total annual CEO compensation of US$319k for the year to December 2023. There was no change in the compensation compared to last year. We note that the salary portion, which stands at US$220.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Japanese Semiconductor industry with market capitalizations below JP¥31b, reported a median total CEO compensation of US$181k. Hence, we can conclude that Fumihiro Kozato is remunerated higher than the industry median. What's more, Fumihiro Kozato holds JP¥4.6b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$220k	US$220k	69%
Other	US$99k	US$99k	31%
Total Compensation	US$319k	US$319k	100%

On an industry level, around 32% of total compensation represents salary and 68% is other remuneration. Techpoint pays out 69% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Techpoint, Inc.'s Growth

Techpoint, Inc.'s earnings per share (EPS) grew 36% per year over the last three years. Its revenue is up 7.3% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Techpoint, Inc. Been A Good Investment?

With a three year total loss of 23% for the shareholders, Techpoint, Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid 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 probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Techpoint that you should be aware of before investing.

Switching gears from Techpoint, 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.

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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.