Key Insights

• Silicon Laboratories to hold its Annual General Meeting on 18th of April

• Total pay for CEO Matt Johnson includes US$563.7k salary

• The total compensation is similar to the average for the industry

• Over the past three years, Silicon Laboratories' EPS grew by 87% and over the past three years, the total loss to shareholders 13%

In the past three years, shareholders of Silicon Laboratories Inc. (NASDAQ:SLAB) have seen a loss on their investment. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 18th of April. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Silicon Laboratories

How Does Total Compensation For Matt Johnson Compare With Other Companies In The Industry?

According to our data, Silicon Laboratories Inc. has a market capitalization of US$4.1b, and paid its CEO total annual compensation worth US$6.9m over the year to December 2023. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$564k.

On comparing similar companies from the American Semiconductor industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$6.9m. This suggests that Silicon Laboratories remunerates its CEO largely in line with the industry average.

Speaking on an industry level, nearly 11% of total compensation represents salary, while the remainder of 89% is other remuneration. In Silicon Laboratories' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Silicon Laboratories Inc.'s Growth

Silicon Laboratories Inc.'s earnings per share (EPS) grew 87% per year over the last three years. Its revenue is down 24% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Silicon Laboratories Inc. Been A Good Investment?

Since shareholders would have lost about 13% over three years, some Silicon Laboratories Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Silicon Laboratories (free visualization of insider trades).

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.