Increases to CEO Compensation Might Be Put On Hold For Now at SkyWater Technology, Inc. (NASDAQ:SKYT)

Key Insights

• SkyWater Technology will host its Annual General Meeting on 21st of May
• CEO Tom Sonderman's total compensation includes salary of US$543.9k
• The total compensation is 38% higher than the average for the industry
• SkyWater Technology's EPS grew by 65% over the past three years while total shareholder return over the past three years was 57%

We've discovered 3 warning signs about SkyWater Technology. View them for free.

Under the guidance of CEO Tom Sonderman, SkyWater Technology, Inc. (NASDAQ:SKYT) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 21st of May. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for SkyWater Technology

How Does Total Compensation For Tom Sonderman Compare With Other Companies In The Industry?

Our data indicates that SkyWater Technology, Inc. has a market capitalization of US$403m, and total annual CEO compensation was reported as US$1.9m for the year to December 2024. Notably, that's a decrease of 19% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$544k.

On comparing similar companies from the American Semiconductor industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$1.4m. Accordingly, our analysis reveals that SkyWater Technology, Inc. pays Tom Sonderman north of the industry median. What's more, Tom Sonderman holds US$3.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	US$544k	US$527k	28%
Other	US$1.4m	US$1.8m	72%
Total Compensation	US$1.9m	US$2.4m	100%

Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. It's interesting to note that SkyWater Technology pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at SkyWater Technology, Inc.'s Growth Numbers

SkyWater Technology, Inc. has seen its earnings per share (EPS) increase by 65% a year over the past three years. It achieved revenue growth of 7.9% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 SkyWater Technology, Inc. Been A Good Investment?

Most shareholders would probably be pleased with SkyWater Technology, Inc. for providing a total return of 57% 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.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for SkyWater Technology that investors should think about before committing capital to this stock.

Switching gears from SkyWater Technology, 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.