Shareholders Will Probably Hold Off On Increasing Analog Devices, Inc.'s (NASDAQ:ADI) CEO Compensation For The Time Being

Simply Wall St
March 03, 2021
Source: Shutterstock

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.

Component20202019Proportion (2020)
Salary US$1.1m US$1.0m 8%
Other US$11m US$11m 92%
Total CompensationUS$12m US$12m100%

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.

NasdaqGS:ADI CEO Compensation March 4th 2021

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.

If you decide to trade Analog Devices, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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 Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at)

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Simply Wall St character - Warren

Simply Wall St

Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.