Here's Why Shareholders Will Not Be Complaining About NXP Semiconductors N.V.'s (NASDAQ:NXPI) CEO Pay Packet

Key Insights

• NXP Semiconductors' Annual General Meeting to take place on 29th of May
• Total pay for CEO Kurt Sievers includes US$1.19m salary
• The total compensation is similar to the average for the industry
• NXP Semiconductors' total shareholder return over the past three years was 43% while its EPS grew by 93% over the past three years

We have been pretty impressed with the performance at NXP Semiconductors N.V. (NASDAQ:NXPI) recently and CEO Kurt Sievers deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 29th of May. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

Check out our latest analysis for NXP Semiconductors

Comparing NXP Semiconductors N.V.'s CEO Compensation With The Industry

At the time of writing, our data shows that NXP Semiconductors N.V. has a market capitalization of US$70b, and reported total annual CEO compensation of US$21m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.

In comparison with other companies in the American Semiconductor industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$17m. This suggests that NXP Semiconductors remunerates its CEO largely in line with the industry average. What's more, Kurt Sievers holds US$52m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$1.2m	US$1.1m	6%
Other	US$20m	US$20m	94%
Total Compensation	US$21m	US$21m	100%

Talking in terms of the industry, salary represented approximately 11% of total compensation out of all the companies we analyzed, while other remuneration made up 89% of the pie. In NXP Semiconductors' case, non-salary compensation represents a greater slice of total remuneration, 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.

NXP Semiconductors N.V.'s Growth

Over the past three years, NXP Semiconductors N.V. has seen its earnings per share (EPS) grow by 93% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 NXP Semiconductors N.V. Been A Good Investment?

We think that the total shareholder return of 43%, over three years, would leave most NXP Semiconductors N.V. shareholders smiling. 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.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for NXP Semiconductors that investors should think about before committing capital to this stock.

Switching gears from NXP Semiconductors, 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.