Yahoo Finance Cadence Design Systems, Inc.'s (NASDAQ:CDNS) CEO Will Probably Have Their Compensation Approved By Shareholders
Key Insights
Cadence Design Systems to hold its Annual General Meeting on 2nd of May
Total pay for CEO Anirudh Devgan includes US$750.0k salary
The overall pay is comparable to the industry average
Cadence Design Systems' EPS grew by 17% over the past three years while total shareholder return over the past three years was 108%
We have been pretty impressed with the performance at Cadence Design Systems, Inc. (NASDAQ:CDNS) recently and CEO Anirudh Devgan deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 2nd of May. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.
View our latest analysis for Cadence Design Systems
How Does Total Compensation For Anirudh Devgan Compare With Other Companies In The Industry?
At the time of writing, our data shows that Cadence Design Systems, Inc. has a market capitalization of US$75b, and reported total annual CEO compensation of US$17m for the year to December 2023. That's a notable decrease of 46% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$750k.
On comparing similar companies in the American Software industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$16m. This suggests that Cadence Design Systems remunerates its CEO largely in line with the industry average. Moreover, Anirudh Devgan also holds US$19m worth of Cadence Design Systems stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$750k | US$725k | 4% |
Other | US$17m | US$31m | 96% |
Total Compensation | US$17m | US$32m | 100% |
On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. Cadence Design Systems has chosen to walk a path less trodden, opting to compensate its CEO with less of a traditional salary and more non-salary rewards over the last year. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Cadence Design Systems, Inc.'s Growth Numbers
Cadence Design Systems, Inc. has seen its earnings per share (EPS) increase by 17% a year over the past three years. It achieved revenue growth of 11% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Cadence Design Systems, Inc. Been A Good Investment?
We think that the total shareholder return of 108%, over three years, would leave most Cadence Design Systems, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Cadence Design Systems primarily uses non-salary benefits to reward its CEO. Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Cadence Design Systems (free visualization of insider trades).
Important note: Cadence Design Systems is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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.
