Does Analog Devices, Inc.’s (NASDAQ:ADI) CEO Pay Reflect Performance?

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Vince Roche has been the CEO of Analog Devices, Inc. (NASDAQ:ADI) since 2013. This analysis aims first to contrast CEO compensation with other large 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 method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Analog Devices

How Does Vince Roche’s Compensation Compare With Similar Sized Companies?

According to our data, Analog Devices, Inc. has a market capitalization of US$37b, and pays its CEO total annual compensation worth US$11m. (This number is for the twelve months until November 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$985k. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. (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).

That means Vince Roche receives fairly typical remuneration for the CEO of a large company. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see a visual representation of the CEO compensation at Analog Devices, below.

NasdaqGS:ADI CEO Compensation, June 7th 2019
NasdaqGS:ADI CEO Compensation, June 7th 2019

Is Analog Devices, Inc. Growing?

On average over the last three years, Analog Devices, Inc. has grown earnings per share (EPS) by 23% each year (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.

This demonstrates that the company has been improving recently. A good result. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.

Has Analog Devices, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Analog Devices, Inc. for providing a total return of 87% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

Remuneration for Vince Roche 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. So you may want to check if insiders are buying Analog Devices shares with their own money (free access).

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

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.