We Think Some Shareholders May Hesitate To Increase Applied Materials, Inc.'s (NASDAQ:AMAT) CEO Compensation

Key Insights

• Applied Materials will host its Annual General Meeting on 6th of March
• Salary of US$1.03m is part of CEO Gary Dickerson's total remuneration
• Total compensation is 35% above industry average
• Applied Materials' total shareholder return over the past three years was 30% while its EPS grew by 2.5% over the past three years

Under the guidance of CEO Gary Dickerson, Applied Materials, Inc. (NASDAQ:AMAT) 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 6th of March. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Applied Materials

Comparing Applied Materials, Inc.'s CEO Compensation With The Industry

Our data indicates that Applied Materials, Inc. has a market capitalization of US$134b, and total annual CEO compensation was reported as US$28m for the year to October 2024. That's just a smallish increase of 3.5% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.

On comparing similar companies in the American Semiconductor industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$21m. Hence, we can conclude that Gary Dickerson is remunerated higher than the industry median. What's more, Gary Dickerson holds US$185m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 12% of total compensation represents salary, while the remainder of 88% is other remuneration. Investors may find it interesting that Applied Materials paid a marginal salary to Gary Dickerson, over the past year, focusing on non-salary compensation instead. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Applied Materials, Inc.'s Growth

Applied Materials, Inc. has seen its earnings per share (EPS) increase by 2.5% a year over the past three years. In the last year, its revenue is up 4.3%.

We're not particularly impressed by the revenue growth, but we're happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Applied Materials, Inc. Been A Good Investment?

Applied Materials, Inc. has served shareholders reasonably well, with a total return of 30% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Applied Materials primarily uses non-salary benefits to reward its CEO. Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Applied Materials (free visualization of insider trades).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.