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Should You Be Pleased About The CEO Pay At Applied Materials, Inc.'s (NASDAQ:AMAT)

Simply Wall St

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Gary Dickerson has been the CEO of Applied Materials, Inc. ( NASDAQ:AMAT ) since 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Applied Materials

How Does Gary Dickerson's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Applied Materials, Inc. has a market cap of US$44b, and is paying total annual CEO compensation of US$14m. (This figure is for the year to October 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

That means Gary Dickerson receives fairly typical remuneration for the CEO of a large company. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Applied Materials has changed from year to year.

NasdaqGS:AMAT CEO Compensation, July 15th 2019

Is Applied Materials, Inc. Growing?

On average over the last three years, Applied Materials, Inc. has grown earnings per share (EPS) by 34% each year (using a line of best fit). In the last year, its revenue is down -4.4%.

This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings .

Has Applied Materials, Inc. Been A Good Investment?

Boasting a total shareholder return of 84% over three years, Applied Materials, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Gary Dickerson is paid around the same as most CEOs of large companies.

The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Applied Materials.

If you want to buy a stock that is better than Applied Materials, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.