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This article will reflect on the compensation paid to Ajei Gopal who has served as CEO of ANSYS, Inc. (NASDAQ:ANSS) since 2017. This analysis will also assess whether ANSYS pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing ANSYS, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that ANSYS, Inc. has a market capitalization of US$26b, and reported total annual CEO compensation of US$20m for the year to December 2019. That's a notable increase of 93% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$794k.
In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$9.8m. This suggests that Ajei Gopal is paid more than the median for the industry. Moreover, Ajei Gopal also holds US$20m worth of ANSYS stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. Investors may find it interesting that ANSYS paid a marginal salary to Ajei Gopal, over the past year, focusing on non-salary compensation instead. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at ANSYS, Inc.'s Growth Numbers
Over the past three years, ANSYS, Inc. has seen its earnings per share (EPS) grow by 14% per year. In the last year, its revenue is up 9.3%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has ANSYS, Inc. Been A Good Investment?
Boasting a total shareholder return of 104% over three years, ANSYS, Inc. has done well by shareholders. 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.
ANSYS primarily uses non-salary benefits to reward its CEO. As we noted earlier, ANSYS pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that Ajei deserves a raise!
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for ANSYS that investors should look into moving forward.
Switching gears from ANSYS, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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