Shareholders Would Not Be Objecting To Kulicke and Soffa Industries, Inc.'s (NASDAQ:KLIC) CEO Compensation And Here's Why

We have been pretty impressed with the performance at Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC) recently and CEO Fusen Ernie Chen deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 03 March 2022. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Kulicke and Soffa Industries

Comparing Kulicke and Soffa Industries, Inc.'s CEO Compensation With the industry

According to our data, Kulicke and Soffa Industries, Inc. has a market capitalization of US$3.1b, and paid its CEO total annual compensation worth US$6.4m over the year to October 2021. We note that's an increase of 16% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$769k.

On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$5.3m. So it looks like Kulicke and Soffa Industries compensates Fusen Ernie Chen in line with the median for the industry. Moreover, Fusen Ernie Chen also holds US$40m worth of Kulicke and Soffa Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 14% of total compensation out of all the companies we analyzed, while other remuneration made up 86% of the pie. It's interesting to note that Kulicke and Soffa Industries 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.

A Look at Kulicke and Soffa Industries, Inc.'s Growth Numbers

Kulicke and Soffa Industries, Inc. has seen its earnings per share (EPS) increase by 55% a year over the past three years. In the last year, its revenue is up 130%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Kulicke and Soffa Industries, Inc. Been A Good Investment?

Boasting a total shareholder return of 126% over three years, Kulicke and Soffa Industries, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for Kulicke and Soffa Industries you should be aware of, and 2 of them are a bit unpleasant.

Switching gears from Kulicke and Soffa Industries, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.