NetApp, Inc.'s (NASDAQ:NTAP) CEO Looks Like They Deserve Their Pay Packet

Key Insights

• NetApp will host its Annual General Meeting on 13th of September
• Total pay for CEO George Kurian includes US$1.00m salary
• Total compensation is similar to the industry average
• NetApp's total shareholder return over the past three years was 96% while its EPS grew by 18% over the past three years

The performance at NetApp, Inc. (NASDAQ:NTAP) has been quite strong recently and CEO George Kurian has played a role in it. Coming up to the next AGM on 13th of September, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for NetApp

How Does Total Compensation For George Kurian Compare With Other Companies In The Industry?

At the time of writing, our data shows that NetApp, Inc. has a market capitalization of US$17b, and reported total annual CEO compensation of US$11m for the year to April 2023. That's a notable decrease of 40% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.

In comparison with other companies in the American Tech industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$14m. This suggests that NetApp remunerates its CEO largely in line with the industry average. Furthermore, George Kurian directly owns US$22m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$1.0m	US$991k	9%
Other	US$10m	US$18m	91%
Total Compensation	US$11m	US$19m	100%

On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. In NetApp's 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.

NetApp, Inc.'s Growth

Over the past three years, NetApp, Inc. has seen its earnings per share (EPS) grow by 18% per year. It saw its revenue drop 3.9% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 NetApp, Inc. Been A Good Investment?

We think that the total shareholder return of 96%, over three years, would leave most NetApp, Inc. 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...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for NetApp (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

Important note: NetApp 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.