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This article will reflect on the compensation paid to Tunç Doluca who has served as CEO of Maxim Integrated Products, Inc. (NASDAQ:MXIM) since 2007. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Tunç Doluca Compare With Other Companies In The Industry?
Our data indicates that Maxim Integrated Products, Inc. has a market capitalization of US$26b, and total annual CEO compensation was reported as US$7.3m for the year to June 2020. That's a notable decrease of 20% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$825k.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$10m. This suggests that Maxim Integrated Products remunerates its CEO largely in line with the industry average. What's more, Tunç Doluca holds US$126m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 14% of total compensation out of all the companies we analyzed, while other remuneration made up 86% of the pie. In Maxim Integrated Products' 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.
Maxim Integrated Products, Inc.'s Growth
Maxim Integrated Products, Inc.'s earnings per share (EPS) grew 7.0% per year over the last three years. Its revenue is up 3.1% over the last year.
We'd prefer higher revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Maxim Integrated Products, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Maxim Integrated Products, Inc. for providing a total return of 90% over three years. 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.
As we noted earlier, Maxim Integrated Products pays its CEO in line with similar-sized companies belonging to the same industry. But the company has been found wanting in terms of EPS growth over the past three years. On the other hand, shareholder returns over the same period have been very healthy. So while shareholders shouldn't be overly concerned about CEO compensation, we suspect most would prefer to see improved performance, before a bump in pay.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 3 warning signs for Maxim Integrated Products that investors should be aware of in a dynamic business environment.
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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