In 2003 Kishore Seendripu was appointed CEO of MaxLinear, Inc. (NYSE:MXL). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Kishore Seendripu's Compensation Compare With Similar Sized Companies?
According to our data, MaxLinear, Inc. has a market capitalization of US$1.5b, and pays its CEO total annual compensation worth US$4.1m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$538k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.1m.
So Kishore Seendripu receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at MaxLinear has changed over time.
Is MaxLinear, Inc. Growing?
On average over the last three years, MaxLinear, Inc. has shrunk earnings per share by 102% each year (measured with a line of best fit). In the last year, its revenue is down -23%.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has MaxLinear, Inc. Been A Good Investment?
MaxLinear, Inc. has generated a total shareholder return of 9.0% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.
Remuneration for Kishore Seendripu is close enough to the median pay for a CEO of a similar sized company .
The company isn't growing earnings per share, and nor have the total returns inspired us. We're not saying the CEO pay is too generous, but one might argue that the company should improve returns to shareholders before increasing it. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling MaxLinear (free visualization of insider trades).
If you want to buy a stock that is better than MaxLinear, this free list of high return, low debt companies is a great place to look.
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