It's Unlikely That Applied Materials, Inc.'s (NASDAQ:AMAT) CEO Will See A Huge Pay Rise This Year
Key Insights
Applied Materials to hold its Annual General Meeting on 7th of March
Total pay for CEO Gary Dickerson includes US$1.03m salary
The total compensation is 58% higher than the average for the industry
Over the past three years, Applied Materials' EPS grew by 27% and over the past three years, the total shareholder return was 91%
CEO Gary Dickerson has done a decent job of delivering relatively good performance at Applied Materials, Inc. (NASDAQ:AMAT) recently. As shareholders go into the upcoming AGM on 7th of March, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.
Check out our latest analysis for Applied Materials
How Does Total Compensation For Gary Dickerson Compare With Other Companies In The Industry?
At the time of writing, our data shows that Applied Materials, Inc. has a market capitalization of US$164b, and reported total annual CEO compensation of US$27m for the year to October 2023. We note that's an increase of 32% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.
In comparison with other companies in the American Semiconductor industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$17m. Hence, we can conclude that Gary Dickerson is remunerated higher than the industry median. Furthermore, Gary Dickerson directly owns US$285m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.0m | US$1.0m | 4% |
Other | US$26m | US$19m | 96% |
Total Compensation | US$27m | US$20m | 100% |
Speaking on an industry level, nearly 11% of total compensation represents salary, while the remainder of 89% is other remuneration. Investors may find it interesting that Applied Materials paid a marginal salary to Gary Dickerson, over the past year, focusing on non-salary compensation instead. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Applied Materials, Inc.'s Growth Numbers
Applied Materials, Inc.'s earnings per share (EPS) grew 27% per year over the last three years. In the last year, its revenue changed by just 0.9%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Applied Materials, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Applied Materials, Inc. for providing a total return of 91% over three years. 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.
In Summary...
Applied Materials prefers rewarding its CEO through non-salary benefits. Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Applied Materials that you should be aware of before investing.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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