We Take A Look At Why Amphenol Corporation's (NYSE:APH) CEO Compensation Is Well Earned

Key Insights

• Amphenol's Annual General Meeting to take place on 15th of May
• Total pay for CEO Richard Norwitt includes US$1.51m salary
• The total compensation is similar to the average for the industry
• Amphenol's total shareholder return over the past three years was 144% while its EPS grew by 16% over the past three years

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The performance at Amphenol Corporation (NYSE:APH) has been quite strong recently and CEO Richard Norwitt has played a role in it. Coming up to the next AGM on 15th of May, 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.

Check out our latest analysis for Amphenol

How Does Total Compensation For Richard Norwitt Compare With Other Companies In The Industry?

According to our data, Amphenol Corporation has a market capitalization of US$96b, and paid its CEO total annual compensation worth US$17m over the year to December 2024. That's a notable increase of 57% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.5m.

On comparing similar companies in the American Electronic industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$14m. So it looks like Amphenol compensates Richard Norwitt in line with the median for the industry. What's more, Richard Norwitt holds US$232m 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$1.5m	US$1.5m	9%
Other	US$16m	US$9.5m	91%
Total Compensation	US$17m	US$11m	100%

On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. It's interesting to note that Amphenol allocates a smaller portion of compensation to salary 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.

A Look at Amphenol Corporation's Growth Numbers

Over the past three years, Amphenol Corporation has seen its earnings per share (EPS) grow by 16% per year. Its revenue is up 31% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Amphenol Corporation Been A Good Investment?

Most shareholders would probably be pleased with Amphenol Corporation for providing a total return of 144% over three years. 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. 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.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Amphenol that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.