Lisa Su has been the CEO of Advanced Micro Devices, Inc. (NASDAQ:AMD) since 2014. This analysis aims first to contrast CEO compensation with other large companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
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How Does Lisa Su’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Advanced Micro Devices, Inc. has a market cap of US$30b, and is paying total annual CEO compensation of US$13m. (This is based on the year to December 2018). We note that’s an increase of 23% above last year. While we always look at total compensation first, we note that the salary component is less, at US$961k. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$12m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
So Lisa Su is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Advanced Micro Devices has changed from year to year.
Is Advanced Micro Devices, Inc. Growing?
Advanced Micro Devices, Inc. has increased its earnings per share (EPS) by an average of 106% a year, over the last three years (using a line of best fit). It achieved revenue growth of 6.7% over the last year.
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. Shareholders might be interested in this free visualization of analyst forecasts.
Has Advanced Micro Devices, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Advanced Micro Devices, Inc. for providing a total return of 632% 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.
Lisa Su is paid around the same as most CEOs of large companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. So one could argue the CEO compensation is quite modest, if you consider company performance! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Advanced Micro Devices (free visualization of insider trades).
Important note: Advanced Micro Devices may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.