Shareholders Will Probably Hold Off On Increasing Synaptics Incorporated's (NASDAQ:SYNA) CEO Compensation For The Time Being

Key Insights

• Synaptics' Annual General Meeting to take place on 24th of October
• Salary of US$725.0k is part of CEO Michael E. Hurlston's total remuneration
• The total compensation is 190% higher than the average for the industry
• Synaptics' EPS declined by 19% over the past three years while total shareholder return over the past three years was 20%

The share price of Synaptics Incorporated (NASDAQ:SYNA) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. The upcoming AGM on 24th of October may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for Synaptics

How Does Total Compensation For Michael E. Hurlston Compare With Other Companies In The Industry?

At the time of writing, our data shows that Synaptics Incorporated has a market capitalization of US$3.8b, and reported total annual CEO compensation of US$20m for the year to June 2023. We note that's an increase of 38% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$725k.

For comparison, other companies in the American Semiconductor industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$6.8m. Accordingly, our analysis reveals that Synaptics Incorporated pays Michael E. Hurlston north of the industry median. What's more, Michael E. Hurlston holds US$31m 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$725k	US$700k	4%
Other	US$19m	US$13m	96%
Total Compensation	US$20m	US$14m	100%

On an industry level, roughly 12% of total compensation represents salary and 88% is other remuneration. Synaptics has chosen to walk a path less trodden, opting to compensate its CEO with less of a traditional salary and more non-salary rewards over the last year. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Synaptics Incorporated's Growth Numbers

Over the last three years, Synaptics Incorporated has shrunk its earnings per share by 19% per year. It saw its revenue drop 22% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Synaptics Incorporated Been A Good Investment?

Synaptics Incorporated has generated a total shareholder return of 20% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Synaptics prefers rewarding its CEO through non-salary benefits. Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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 3 warning signs (and 1 which is a bit unpleasant) in Synaptics we think you should know about.

Switching gears from Synaptics, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.