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Shareholders Will Probably Hold Off On Increasing Analog Devices, Inc.'s (NASDAQ:ADI) CEO Compensation For The Time Being
Under the guidance of CEO Vince Roche, Analog Devices, Inc. (NASDAQ:ADI) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 10 March 2021. However, some shareholders may still want to keep CEO compensation within reason.
See our latest analysis for Analog Devices
Comparing Analog Devices, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Analog Devices, Inc. has a market capitalization of US$55b, and reported total annual CEO compensation of US$12m for the year to October 2020. That's just a smallish increase of 3.4% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$9.4m. Accordingly, our analysis reveals that Analog Devices, Inc. pays Vince Roche north of the industry median. What's more, Vince Roche holds US$2.5m worth of shares in the company in their own name.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | US$1.1m | US$1.0m | 8% |
| Other | US$11m | US$11m | 92% |
| Total Compensation | US$12m | US$12m | 100% |
On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. It's interesting to note that Analog Devices allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Analog Devices, Inc.'s Growth Numbers
Over the past three years, Analog Devices, Inc. has seen its earnings per share (EPS) grow by 20% per year. In the last year, its revenue is up 1.8%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Analog Devices, Inc. Been A Good Investment?
We think that the total shareholder return of 73%, over three years, would leave most Analog Devices, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.
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. We've identified 2 warning signs for Analog Devices that investors should be aware of in a dynamic business environment.
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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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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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About NasdaqGS:ADI
Analog Devices
Engages in the design, manufacture, testing, and marketing of integrated circuits (ICs), software, and subsystems products in the United States, rest of North and South America, Europe, Japan, China, and rest of Asia.
High growth potential with solid track record and pays a dividend.
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anthony_x0j2w on Platform Group SE KGaA ·
Hello,(I am a shareholder).I spent the summer investigating in whatever I was able to find in the press, the trustee, or legal, and comparing it to FS Benner's declaration/transcripts:press: MM has a tendancy to use facts, modify them and turn them the way they want: 100% of their claims against TPG0 is traçable factually, 80% is flawed and interpreted. Example are numerous: 11M loans banks to be paid seems right, but it has not been an issue at all, it has been paid in full. (and it happens all the time in every business...); the previous HR becoming a financial director in the article herself being attacked by TPG on the legal side; the wrong address of curator (if truly announced by TPG).Trustee: according to my research (which can be incomplete) no communication to the Nordic trustee (hereby, bond holders) has been done on a, indebtedness (late payment) > 1M€, which is their obligation by contract (clause 14.d - https://corporate.the-platform-group.com/bond/) => this is a sign of a huge lie and fraud, or the sign that there is no indebtedness > 1M€ over the whole TPG group.Legal: still awaiting for an answer, probable that I won't get it.VALUATIONYou can spent hours working the fundamentals, if they're flawed...the thesis falls.Anyway, I always substracts the badwill (that I consider non-current - you have it in the CFS) & non-controlling interests from my valuation:Earnings ~22MFCF ~40M€The financial statements are not the issue here, we are more on an cheap option on the sincerity of the accounts that a real valuation. Unfortunately, these are unverifiable elements, hence the low price./!\ Careful:the accounts are consolidated and skip the subsidiaries issues...Careful with the business model: TPG0 is a financial holding that acquire subsidiaries, hold the debt, and has no operations. 100% of the Cash Flow comes from subs' dividends => it is a risk here, more a plumber risk than an operational one, but nevertheless...The auditor is too small, and managed by the same firm than before, with 140K€/year commission => it's too low, nobody external really reviewed what Benner and his team are doing internallycapital increase do not go through the CFS, but through change in equity AND equity in the BSIf the equity stays low too long, the WACC increase will be unbearable (I have a 30% global, with a 118% on equity): diluting is expensive => TPG machine can stay broken for a while.Most of the people I talk with never saw this, while this is ESSENTIAL to Benner's business model.SEVERAL EVENTS THAT COULD CHANGE:AEP is being audited by KPMG: if Benner plays the "we will propose KPMG to our shareholders BEOY", this can increase the trust in him significantly/KPMG (or other) to validate the 2026 IFRS accounts & having a word on HGB's: though still consolidated, at least we'll know...AEP being eventually acquired: while it carries a high integration risk due to its size, they talked about it so many times, that trust goes with it.Without this combination of event, the equity is doomed to stay at this level, IMO.Do not forget to also follow the bond: with TPG's announced safe harbor plan for buyback (25% of daily exchange), it is also interesting to check this illiquid and retail market: https://live.deutsche-boerse.com/bond/no0013256834-the-platform-group-ag-8-875-24-28?mic=XFRA
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