In 2016 Liam Griffin was appointed CEO of Skyworks Solutions, Inc. (NASDAQ:SWKS). First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Liam Griffin's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Skyworks Solutions, Inc. has a market cap of US$15b, and reported total annual CEO compensation of US$9.3m for the year to September 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$895k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
So Liam Griffin is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Skyworks Solutions has changed from year to year.
Is Skyworks Solutions, Inc. Growing?
Skyworks Solutions, Inc. has increased its earnings per share (EPS) by an average of 4.2% a year, over the last three years (using a line of best fit). Its revenue is down 7.5% over last year.
I would argue that the lack of revenue growth in the last year is less than ideal, but I'm happy with the EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. You might want to check this free visual report on analyst forecasts for future earnings.
Has Skyworks Solutions, Inc. Been A Good Investment?
Skyworks Solutions, Inc. has served shareholders reasonably well, with a total return of 15% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
Remuneration for Liam Griffin is close enough to the median pay for a CEO of a large company .
We think many would like to see better growth. While there is room for improvement, we haven't seen evidence to suggest the pay is too generous. So you may want to check if insiders are buying Skyworks Solutions shares with their own money (free access).
Important note: Skyworks Solutions may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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