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A Quick Analysis On Keysight Technologies' (NYSE:KEYS) CEO Compensation
Ron Nersesian became the CEO of Keysight Technologies, Inc. (NYSE:KEYS) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Keysight Technologies pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Keysight Technologies
Comparing Keysight Technologies, Inc.'s CEO Compensation With the industry
According to our data, Keysight Technologies, Inc. has a market capitalization of US$26b, and paid its CEO total annual compensation worth US$15m over the year to October 2020. Notably, that's an increase of 37% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$833k.
In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$9.0m. Accordingly, our analysis reveals that Keysight Technologies, Inc. pays Ron Nersesian north of the industry median. What's more, Ron Nersesian holds US$37m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | US$833k | US$1.0m | 5% |
| Other | US$14m | US$10m | 95% |
| Total Compensation | US$15m | US$11m | 100% |
Talking in terms of the industry, salary represented approximately 34% of total compensation out of all the companies we analyzed, while other remuneration made up 66% of the pie. Keysight Technologies sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Keysight Technologies, Inc.'s Growth
Over the past three years, Keysight Technologies, Inc. has seen its earnings per share (EPS) grow by 81% per year. It saw its revenue drop 1.9% 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Keysight Technologies, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Keysight Technologies, Inc. for providing a total return of 205% 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.
In Summary...
As previously discussed, Ron is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, Keysight Technologies has produced strong EPS growth and shareholder returns over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Ron's performance creates value for the company.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Keysight Technologies that you should be aware of before investing.
Important note: Keysight Technologies 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.
When trading Keysight Technologies or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
Valuation is complex, but we're here to simplify it.
Discover if Keysight Technologies might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free AnalysisThis article by Simply Wall St is general in nature. 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.
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About NYSE:KEYS
Keysight Technologies
Provides electronic design and test solutions worldwide.
Flawless balance sheet with proven track record.
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