This Is Why Entegris, Inc.'s (NASDAQ:ENTG) CEO Compensation Looks Appropriate

Key Insights

• Entegris will host its Annual General Meeting on 24th of April
• Salary of US$1.00m is part of CEO Bertrand Loy's total remuneration
• The overall pay is 31% below the industry average
• Entegris' total shareholder return over the past three years was 17% while its EPS was down 18% over the past three years

The performance at Entegris, Inc. (NASDAQ:ENTG) has been rather lacklustre of late and shareholders may be wondering what CEO Bertrand Loy is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 24th of April. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for Entegris

Comparing Entegris, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Entegris, Inc. has a market capitalization of US$19b, and reported total annual CEO compensation of US$13m for the year to December 2023. That's a notable increase of 11% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued 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$20m. Accordingly, Entegris pays its CEO under the industry median. Moreover, Bertrand Loy also holds US$21m worth of Entegris stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$1.0m	US$1.0m	7%
Other	US$12m	US$11m	93%
Total Compensation	US$13m	US$12m	100%

On an industry level, around 11% of total compensation represents salary and 89% is other remuneration. In Entegris' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Entegris, Inc.'s Growth

Over the last three years, Entegris, Inc. has shrunk its earnings per share by 18% per year. In the last year, its revenue is up 7.4%.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Entegris, Inc. Been A Good Investment?

Entegris, Inc. has served shareholders reasonably well, with a total return of 17% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

While it's true that shareholders have seen decent returns, it's hard to overlook the lack of earnings growth and this makes us wonder if the current returns can continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which can't be ignored) in Entegris we think you should know about.

Important note: Entegris is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.