This Is Why Infineon Technologies AG's (ETR:IFX) CEO Compensation Looks Appropriate
Key Insights
Infineon Technologies will host its Annual General Meeting on 23rd of February
Salary of €1.41m is part of CEO Jochen Hanebeck's total remuneration
Total compensation is 30% below industry average
Infineon Technologies' three-year loss to shareholders was 6.4% while its EPS grew by 97% over the past three years
Performance at Infineon Technologies AG (ETR:IFX) has been rather uninspiring recently and shareholders may be wondering how CEO Jochen Hanebeck plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 23rd of February. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.
See our latest analysis for Infineon Technologies
Comparing Infineon Technologies AG's CEO Compensation With The Industry
Our data indicates that Infineon Technologies AG has a market capitalization of €44b, and total annual CEO compensation was reported as €3.0m for the year to September 2023. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at €1.4m.
For comparison, other companies in the German Semiconductor industry with market capitalizations above €7.4b, reported a median total CEO compensation of €4.3m. That is to say, Jochen Hanebeck is paid under the industry median.
Component | 2023 | 2022 | Proportion (2023) |
Salary | €1.4m | €1.1m | 47% |
Other | €1.6m | €1.9m | 53% |
Total Compensation | €3.0m | €3.1m | 100% |
On an industry level, roughly 47% of total compensation represents salary and 53% is other remuneration. There isn't a significant difference between Infineon Technologies and the broader market, in terms of salary allocation in the overall compensation package. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Infineon Technologies AG's Growth
Over the past three years, Infineon Technologies AG has seen its earnings per share (EPS) grow by 97% per year. In the last year, its revenue is up 7.0%.
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 Infineon Technologies AG Been A Good Investment?
Since shareholders would have lost about 6.4% over three years, some Infineon Technologies AG investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Despite the strong EPS growth recently, the share price has not performed to expectations and it suggests that other factors might be driving it, apart from fundamentals. Shareholders will get the chance to question the board on key concerns and revisit their investment thesis with regards to the company.
CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Infineon Technologies (free visualization of insider trades).
Switching gears from Infineon Technologies, 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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
