We Think Amphenol Corporation's (NYSE:APH) CEO Compensation Looks Fair

Key Insights

• Amphenol to hold its Annual General Meeting on 16th of May
• Salary of US$1.46m is part of CEO Richard Norwitt's total remuneration
• The total compensation is similar to the average for the industry
• Amphenol's total shareholder return over the past three years was 101% while its EPS grew by 16% over the past three years

It would be hard to discount the role that CEO Richard Norwitt has played in delivering the impressive results at Amphenol Corporation (NYSE:APH) recently. Coming up to the next AGM on 16th of May, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

Check out our latest analysis for Amphenol

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

Our data indicates that Amphenol Corporation has a market capitalization of US$76b, and total annual CEO compensation was reported as US$11m for the year to December 2023. We note that's a decrease of 22% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.5m.

For comparison, other companies in the American Electronic industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$11m. From this we gather that Richard Norwitt is paid around the median for CEOs in the industry. What's more, Richard Norwitt holds US$183m 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$1.5m	US$1.4m	13%
Other	US$9.5m	US$13m	87%
Total Compensation	US$11m	US$14m	100%

On an industry level, roughly 31% of total compensation represents salary and 69% is other remuneration. Amphenol pays a modest slice of remuneration through salary, as compared 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.

Amphenol Corporation's Growth

Amphenol Corporation's earnings per share (EPS) grew 16% per year over the last three years. Its revenue is up 1.5% over the last year.

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. 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?

We think that the total shareholder return of 101%, over three years, would leave most Amphenol Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

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.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Amphenol.

Important note: Amphenol 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.