Yahoo Finance How Should Investors React To Silicon Laboratories Inc.'s (NASDAQ:SLAB) CEO Pay?
In 2012 G. Tuttle was appointed CEO of Silicon Laboratories Inc. (NASDAQ:SLAB). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Silicon Laboratories
How Does G. Tuttle's Compensation Compare With Similar Sized Companies?
According to our data, Silicon Laboratories Inc. has a market capitalization of US$5.2b, and paid its CEO total annual compensation worth US$6.1m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$648k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.5m.
So G. Tuttle receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Silicon Laboratories has changed over time.
Is Silicon Laboratories Inc. Growing?
Over the last three years Silicon Laboratories Inc. has shrunk its earnings per share by an average of 12% per year (measured with a line of best fit). It saw its revenue drop 2.3% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has Silicon Laboratories Inc. Been A Good Investment?
I think that the total shareholder return of 83%, over three years, would leave most Silicon Laboratories Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
G. Tuttle is paid around the same as most CEOs of similar size companies.
We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we can't see a reason to suggest the pay is inappropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Silicon Laboratories shares (free trial).
If you want to buy a stock that is better than Silicon Laboratories, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
