Yahoo Finance We Take A Look At Why NXP Semiconductors N.V.'s (NASDAQ:NXPI) CEO Compensation Is Well Earned
Key Insights
NXP Semiconductors' Annual General Meeting to take place on 29th of May
Total pay for CEO Kurt Sievers includes US$1.19m salary
The overall pay is comparable to the industry average
NXP Semiconductors' EPS grew by 93% over the past three years while total shareholder return over the past three years was 43%
We have been pretty impressed with the performance at NXP Semiconductors N.V. (NASDAQ:NXPI) recently and CEO Kurt Sievers deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 29th of May. 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. Here is our take on why we think CEO compensation is not extravagant.
Check out our latest analysis for NXP Semiconductors
Comparing NXP Semiconductors N.V.'s CEO Compensation With The Industry
Our data indicates that NXP Semiconductors N.V. has a market capitalization of US$70b, and total annual CEO compensation was reported as US$21m for the year to December 2023. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.
For comparison, other companies in the American Semiconductor industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$17m. From this we gather that Kurt Sievers is paid around the median for CEOs in the industry. Moreover, Kurt Sievers also holds US$52m worth of NXP Semiconductors stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.2m | US$1.1m | 6% |
Other | US$20m | US$20m | 94% |
Total Compensation | US$21m | US$21m | 100% |
On an industry level, roughly 11% of total compensation represents salary and 89% is other remuneration. NXP Semiconductors 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.
NXP Semiconductors N.V.'s Growth
NXP Semiconductors N.V. has seen its earnings per share (EPS) increase by 93% a year over the past three years. Revenue was pretty flat on last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 NXP Semiconductors N.V. Been A Good Investment?
Boasting a total shareholder return of 43% over three years, NXP Semiconductors N.V. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar 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.
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 2 warning signs for NXP Semiconductors that investors should think about before committing capital to this stock.
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.
