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Here's What We Learned About The CEO Pay At Synopsys, Inc. (NASDAQ:SNPS)

Simply Wall St
·3 mins read

Aart de Geus has been the CEO of Synopsys, Inc. (NASDAQ:SNPS) since 2012, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Synopsys.

See our latest analysis for Synopsys

How Does Total Compensation For Aart de Geus Compare With Other Companies In The Industry?

According to our data, Synopsys, Inc. has a market capitalization of US$34b, and paid its CEO total annual compensation worth US$9.6m over the year to October 2019. We note that's an increase of 30% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$540k.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$9.6m. This suggests that Synopsys remunerates its CEO largely in line with the industry average. Moreover, Aart de Geus also holds US$103m worth of Synopsys stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2019

2018

Proportion (2019)

Salary

US$540k

US$535k

6%

Other

US$9.1m

US$6.9m

94%

Total Compensation

US$9.6m

US$7.4m

100%

On an industry level, roughly 12% of total compensation represents salary and 88% is other remuneration. Synopsys 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.

ceo-compensation
ceo-compensation

Synopsys, Inc.'s Growth

Synopsys, Inc. has seen its earnings per share (EPS) increase by 24% a year over the past three years. In the last year, its revenue is up 6.2%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Synopsys, Inc. Been A Good Investment?

Boasting a total shareholder return of 165% over three years, Synopsys, Inc. has done well by shareholders. 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 we touched on above, Synopsys, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Investors would surely be happy to see that returns have been great, and that EPS is up. So one could argue that CEO compensation is quite modest, if you consider company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Synopsys (free visualization of insider trades).

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.