Does Microelectronics Technology's (TPE:2314) CEO Salary Compare Well With Industry Peers?

Allen Yen has been the CEO of Microelectronics Technology Inc. (TPE:2314) since 2007, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Microelectronics Technology

How Does Total Compensation For Allen Yen Compare With Other Companies In The Industry?

According to our data, Microelectronics Technology Inc. has a market capitalization of NT$6.6b, and paid its CEO total annual compensation worth NT$5.2m over the year to December 2019. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at NT$5.04m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from NT$2.9b to NT$11b, the reported median CEO total compensation was NT$7.3m. This suggests that Microelectronics Technology remunerates its CEO largely in line with the industry average.

Talking in terms of the industry, salary represented approximately 76% of total compensation out of all the companies we analyzed, while other remuneration made up 24% of the pie. Investors will find it interesting that Microelectronics Technology pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Microelectronics Technology Inc.'s Growth Numbers

Over the last three years, Microelectronics Technology Inc. has shrunk its earnings per share by 109% per year. It saw its revenue drop 33% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Microelectronics Technology Inc. Been A Good Investment?

Since shareholders would have lost about 12% over three years, some Microelectronics Technology Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Allen receives almost all of their compensation through a salary. As we noted earlier, Microelectronics Technology pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

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 Microelectronics Technology that you should be aware of before investing.

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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