Yahoo Finance The Compensation For Rambus Inc.'s (NASDAQ:RMBS) CEO Looks Deserved And Here's Why
Key Insights
Rambus' Annual General Meeting to take place on 25th of April
Salary of US$625.0k is part of CEO Luc Seraphin's total remuneration
The overall pay is comparable to the industry average
Rambus' EPS grew by 127% over the past three years while total shareholder return over the past three years was 190%
We have been pretty impressed with the performance at Rambus Inc. (NASDAQ:RMBS) recently and CEO Luc Seraphin deserves a mention for their role in it. Coming up to the next AGM on 25th of April, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.
Check out our latest analysis for Rambus
How Does Total Compensation For Luc Seraphin Compare With Other Companies In The Industry?
At the time of writing, our data shows that Rambus Inc. has a market capitalization of US$6.1b, and reported total annual CEO compensation of US$8.4m for the year to December 2023. Notably, that's an increase of 18% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$625k.
On examining similar-sized companies in the American Semiconductor industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$8.4m. This suggests that Rambus remunerates its CEO largely in line with the industry average. Furthermore, Luc Seraphin directly owns US$15m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$625k | US$598k | 7% |
Other | US$7.8m | US$6.5m | 93% |
Total Compensation | US$8.4m | US$7.1m | 100% |
Talking in terms of the industry, salary represented approximately 11% of total compensation out of all the companies we analyzed, while other remuneration made up 89% of the pie. It's interesting to note that Rambus allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Rambus Inc.'s Growth Numbers
Rambus Inc. has seen its earnings per share (EPS) increase by 127% a year over the past three years. In the last year, its revenue is up 1.4%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Rambus Inc. Been A Good Investment?
We think that the total shareholder return of 190%, over three years, would leave most Rambus Inc. shareholders smiling. 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.
To Conclude...
Some shareholders will probably be more lenient on CEO compensation in the upcoming AGM given the pleasing performance of the company recently. Seeing that earnings growth and share price performance seems to be on the right path, the more pressing focus for shareholders at the AGM may be how the board and management plans to turn the company into a sustainably profitable one.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Rambus that you should be aware of before investing.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.
