What Can We Learn About ASML Holding's (AMS:ASML) CEO Compensation?

Simply Wall St
October 28, 2020

This article will reflect on the compensation paid to Peter T. F. Wennink who has served as CEO of ASML Holding N.V. (AMS:ASML) since 2013. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for ASML Holding

How Does Total Compensation For Peter T. F. Wennink Compare With Other Companies In The Industry?

According to our data, ASML Holding N.V. has a market capitalization of €129b, and paid its CEO total annual compensation worth €4.4m over the year to December 2019. Notably, that's an increase of 27% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €1.0m.

For comparison, other companies in the industry with market capitalizations above €6.8b, reported a median total CEO compensation of €7.5m. In other words, ASML Holding pays its CEO lower than the industry median. Furthermore, Peter T. F. Wennink directly owns €9.6m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20192018Proportion (2019)
Salary €1.0m €978k 23%
Other €3.4m €2.5m 77%
Total Compensation€4.4m €3.4m100%

On an industry level, around 61% of total compensation represents salary and 39% is other remuneration. ASML Holding pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ENXTAM:ASML CEO Compensation October 28th 2020

A Look at ASML Holding N.V.'s Growth Numbers

ASML Holding N.V. has seen its earnings per share (EPS) increase by 19% a year over the past three years. It achieved revenue growth of 26% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

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

Boasting a total shareholder return of 106% over three years, ASML Holding N.V. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As we noted earlier, ASML Holding pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Considering robust EPS growth, we believe Peter T. F. to be modestly paid. Plus, we can't ignore the impressive shareholder returns, and won't be surprised if some shareholders were to reward such excellent all-around performance with a raise.

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

Important note: ASML Holding is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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