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Mohan Maheswaran became the CEO of Semtech Corporation (NASDAQ:SMTC) in 2006. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Mohan Maheswaran's Compensation Compare With Similar Sized Companies?
According to our data, Semtech Corporation has a market capitalization of US$2.9b, and pays its CEO total annual compensation worth US$6.5m. (This figure is for the year to January 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$600k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.3m.
So Mohan Maheswaran receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Semtech has changed from year to year.
Is Semtech Corporation Growing?
Over the last three years Semtech Corporation has grown its earnings per share (EPS) by an average of 23% per year (using a line of best fit). In the last year, its revenue is up 6.7%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.
Has Semtech Corporation Been A Good Investment?
Boasting a total shareholder return of 83% over three years, Semtech Corporation has done well by shareholders. 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.
Mohan Maheswaran is paid around what is normal the leaders of comparable size companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. So one could argue the CEO compensation is quite modest, if you consider company performance! Shareholders may want to check for free if Semtech insiders are buying or selling shares.
If you want to buy a stock that is better than Semtech, this free list of high return, low debt companies is a great place to look.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.