In 2006 Rick Wallace was appointed CEO of KLA-Tencor Corporation (NASDAQ:KLAC). This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Rick Wallace’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that KLA-Tencor Corporation has a market cap of US$19b, and is paying total annual CEO compensation of US$12m. (This is based on the year to June 2018). While we always look at total compensation first, we note that the salary component is less, at US$900k. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts – even though some are quite a bit bigger than others).
So Rick Wallace 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 a visual representation of the CEO compensation at KLA-Tencor, below.
Is KLA-Tencor Corporation Growing?
Over the last three years KLA-Tencor Corporation has grown its earnings per share (EPS) by an average of 18% per year (using a line of best fit). In the last year, its revenue is up 13%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has KLA-Tencor Corporation Been A Good Investment?
Most shareholders would probably be pleased with KLA-Tencor Corporation for providing a total return of 84% over three years. 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.
Remuneration for Rick Wallace is close enough to the median pay for a CEO of a large company .
The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! So you may want to check if insiders are buying KLA-Tencor shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.