Is Amkor Technology, Inc.’s (NASDAQ:AMKR) CEO Being Overpaid?

In 2013 Steve Kelley was appointed CEO of Amkor Technology, Inc. (NASDAQ:AMKR). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Amkor Technology

How Does Steve Kelley’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Amkor Technology, Inc. has a market cap of US$2.1b, and is paying total annual CEO compensation of US$7.9m. (This figure is for the year to December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$801k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.5m.

It would therefore appear that Amkor Technology, Inc. pays Steve Kelley more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Amkor Technology has changed from year to year.

NasdaqGS:AMKR CEO Compensation, April 6th 2019
NasdaqGS:AMKR CEO Compensation, April 6th 2019

Is Amkor Technology, Inc. Growing?

Amkor Technology, Inc. has increased its earnings per share (EPS) by an average of 41% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 2.6%.

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. You might want to check this free visual report on analyst forecasts for future earnings.

Has Amkor Technology, Inc. Been A Good Investment?

Boasting a total shareholder return of 65% over three years, Amkor Technology, Inc. has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.

In Summary…

We compared the total CEO remuneration paid by Amkor Technology, Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Amkor Technology (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.

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.