Key Insights

• Silicon Laboratories' Annual General Meeting to take place 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 15%

Shareholders of Silicon Laboratories Inc. (NASDAQ:SLAB) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 18th of April. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

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

At the time of writing, our data shows that Silicon Laboratories Inc. has a market capitalization of US$4.2b, and reported total annual CEO compensation of US$6.9m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, 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.

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 Silicon Laboratories 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.

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.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in 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 Silicon Laboratories Inc. Been A Good Investment?

Given the total shareholder loss of 15% over three years, many shareholders in Silicon Laboratories Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. 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. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

Shareholders may want to check for free if Silicon Laboratories insiders are buying or selling shares.

Important note: Silicon Laboratories 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.