Key Insights

• Ichor Holdings will host its Annual General Meeting on 15th of May
• Salary of US$640.0k is part of CEO Jeff Andreson's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, Ichor Holdings' EPS fell by 64% and over the past three years, the total loss to shareholders 20%

The results at Ichor Holdings, Ltd. (NASDAQ:ICHR) have been quite disappointing recently and CEO Jeff Andreson bears some responsibility for this. At the upcoming AGM on 15th of May, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

How Does Total Compensation For Jeff Andreson Compare With Other Companies In The Industry?

At the time of writing, our data shows that Ichor Holdings, Ltd. has a market capitalization of US$1.3b, and reported total annual CEO compensation of US$5.7m for the year to December 2023. We note that's an increase of 13% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$640k.

In comparison with other companies in the American Semiconductor industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$5.7m. This suggests that Ichor Holdings remunerates its CEO largely in line with the industry average. Furthermore, Jeff Andreson directly owns US$4.0m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 11% of total compensation represents salary, while the remainder of 89% is other remuneration. There isn't a significant difference between Ichor Holdings and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Ichor Holdings, Ltd.'s Growth Numbers

Over the last three years, Ichor Holdings, Ltd. has shrunk its earnings per share by 64% per year. It saw its revenue drop 35% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Ichor Holdings, Ltd. Been A Good Investment?

With a three year total loss of 20% for the shareholders, Ichor Holdings, Ltd. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Ichor Holdings (1 is a bit unpleasant!) that you should be aware of before investing here.

Switching gears from Ichor Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.