Yahoo Finance It Looks Like Shareholders Would Probably Approve Synopsys, Inc.'s (NASDAQ:SNPS) CEO Compensation Package
Key Insights
Synopsys will host its Annual General Meeting on 12th of April
CEO Aart de Geus' total compensation includes salary of US$540.0k
The overall pay is comparable to the industry average
Over the past three years, Synopsys' EPS grew by 24% and over the past three years, the total shareholder return was 172%
We have been pretty impressed with the performance at Synopsys, Inc. (NASDAQ:SNPS) recently and CEO Aart de Geus deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 12th of April. 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.
View our latest analysis for Synopsys
How Does Total Compensation For Aart de Geus Compare With Other Companies In The Industry?
Our data indicates that Synopsys, Inc. has a market capitalization of US$58b, and total annual CEO compensation was reported as US$10m for the year to October 2022. 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$540k.
On comparing similar companies in the American Software industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$14m. From this we gather that Aart de Geus is paid around the median for CEOs in the industry. Moreover, Aart de Geus also holds US$158m worth of Synopsys stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2022 | 2021 | Proportion (2022) |
Salary | US$540k | US$540k | 5% |
Other | US$9.5m | US$9.4m | 95% |
Total Compensation | US$10m | US$10.0m | 100% |
Speaking on an industry level, nearly 9% of total compensation represents salary, while the remainder of 91% is other remuneration. In Synopsys' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Synopsys, Inc.'s Growth
Synopsys, Inc. has seen its earnings per share (EPS) increase by 24% a year over the past three years. It achieved revenue growth of 15% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and 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 Synopsys, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Synopsys, Inc. for providing a total return of 172% over three years. 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. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
Shareholders may want to check for free if Synopsys insiders are buying or selling shares.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
