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How Should Investors React To BE Semiconductor Industries N.V.'s (AMS:BESI) CEO Pay?

Simply Wall St

Richard Blickman became the CEO of BE Semiconductor Industries N.V. (AMS:BESI) in 1995. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for BE Semiconductor Industries

How Does Richard Blickman's Compensation Compare With Similar Sized Companies?

According to our data, BE Semiconductor Industries N.V. has a market capitalization of €2.4b, and paid its CEO total annual compensation worth €6.8m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at €1.4m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from €1.8b to €5.8b, we found the median CEO total compensation was €2.1m.

Thus we can conclude that Richard Blickman receives more in total compensation than the median of a group of companies in the same market, and of similar size to BE Semiconductor Industries N.V.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at BE Semiconductor Industries has changed from year to year.

ENXTAM:BESI CEO Compensation, December 3rd 2019

Is BE Semiconductor Industries N.V. Growing?

BE Semiconductor Industries N.V. has increased its earnings per share (EPS) by an average of 7.2% a year, over the last three years (using a line of best fit). It saw its revenue drop 39% over the last year.

I generally like to see a little revenue growth, but it is good to see EPS growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Shareholders might be interested in this free visualization of analyst forecasts.

Has BE Semiconductor Industries N.V. Been A Good Investment?

I think that the total shareholder return of 151%, over three years, would leave most BE Semiconductor Industries N.V. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared total CEO remuneration at BE Semiconductor Industries N.V. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Over the last three years returns to investors have been great, though we might have liked stronger business growth. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling BE Semiconductor Industries (free visualization of insider trades).

Important note: BE Semiconductor Industries may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.

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. Thank you for reading.