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We have been pretty impressed with the performance at Marvell Technology, Inc. (NASDAQ:MRVL) recently and CEO Matt Murphy deserves a mention for their role in it. Coming up to the next AGM on 16 July 2021, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.
How Does Total Compensation For Matt Murphy Compare With Other Companies In The Industry?
At the time of writing, our data shows that Marvell Technology, Inc. has a market capitalization of US$47b, and reported total annual CEO compensation of US$15m for the year to January 2021. We note that's a decrease of 29% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$935k.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$12m. From this we gather that Matt Murphy is paid around the median for CEOs in the industry. Furthermore, Matt Murphy directly owns US$13m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. In Marvell Technology's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Marvell Technology, Inc.'s Growth Numbers
Marvell Technology, Inc.'s earnings per share (EPS) grew 22% per year over the last three years. Its revenue is up 14% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few 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 Marvell Technology, Inc. Been A Good Investment?
We think that the total shareholder return of 168%, over three years, would leave most Marvell Technology, Inc. shareholders smiling. 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.
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. 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.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Marvell Technology that investors should think about before committing capital to this stock.
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.
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