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Should You Be Pleased About The CEO Pay At Analog Devices, Inc.’s (NASDAQ:ADI)

Cameron Brookes

In 2013 Vince Roche was appointed CEO of Analog Devices, Inc. (NASDAQ:ADI). This analysis aims first to contrast CEO compensation with other large companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Analog Devices

How Does Vince Roche’s Compensation Compare With Similar Sized Companies?

Our data indicates that Analog Devices, Inc. is worth US$36b, and total annual CEO compensation is US$11m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$878k. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO compensation was US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

That means Vince Roche receives fairly typical remuneration for the CEO of a large company. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

The graphic below shows how CEO compensation at Analog Devices has changed from year to year.

NASDAQGS:ADI CEO Compensation January 27th 19

Is Analog Devices, Inc. Growing?

Analog Devices, Inc. has increased its earnings per share (EPS) by an average of 17% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 21%.

This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Analog Devices, Inc. Been A Good Investment?

I think that the total shareholder return of 94%, over three years, would leave most Analog Devices, 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.

In Summary…

Vince Roche is paid around what is normal the leaders of larger companies.

Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Indeed, many might consider the pay rather modest, given the solid company performance! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Analog Devices.

Or you might prefer this data-rich interactive visualization of historic revenue and earnings.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.