Yahoo Finance MKS Instruments, Inc.'s (NASDAQ:MKSI) CEO Might Not Expect Shareholders To Be So Generous This Year
Key Insights
MKS Instruments' Annual General Meeting to take place on 7th of May
Salary of US$950.0k is part of CEO John T. Lee's total remuneration
The overall pay is comparable to the industry average
MKS Instruments' EPS declined by 99% over the past three years while total shareholder loss over the past three years was 31%
MKS Instruments, Inc. (NASDAQ:MKSI) has not performed well recently and CEO John T. Lee will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 7th of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.
See our latest analysis for MKS Instruments
Comparing MKS Instruments, Inc.'s CEO Compensation With The Industry
According to our data, MKS Instruments, Inc. has a market capitalization of US$8.0b, and paid its CEO total annual compensation worth US$8.0m over the year to December 2023. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$950k.
In comparison with other companies in the American Semiconductor industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$8.4m. So it looks like MKS Instruments compensates John T. Lee in line with the median for the industry. What's more, John T. Lee holds US$13m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$950k | US$945k | 12% |
Other | US$7.1m | US$7.2m | 88% |
Total Compensation | US$8.0m | US$8.1m | 100% |
Speaking on an industry level, nearly 11% of total compensation represents salary, while the remainder of 89% is other remuneration. Although there is a difference in how total compensation is set, MKS Instruments more or less reflects the market in terms of setting the salary. 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 MKS Instruments, Inc.'s Growth Numbers
Over the last three years, MKS Instruments, Inc. has shrunk its earnings per share by 99% per year. It achieved revenue growth of 2.1% over the last year.
Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has MKS Instruments, Inc. Been A Good Investment?
The return of -31% over three years would not have pleased MKS Instruments, Inc. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for MKS Instruments (1 shouldn't be ignored!) that you should be aware of before investing here.
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.
