A Look At MagnaChip Semiconductor's (NYSE:MX) CEO Remuneration

This article will reflect on the compensation paid to YJ Kim who has served as CEO of MagnaChip Semiconductor Corporation (NYSE:MX) since 2015. This analysis will also assess whether MagnaChip Semiconductor pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for MagnaChip Semiconductor

How Does Total Compensation For YJ Kim Compare With Other Companies In The Industry?

At the time of writing, our data shows that MagnaChip Semiconductor Corporation has a market capitalization of US$419m, and reported total annual CEO compensation of US$2.2m for the year to December 2019. Notably, that's a decrease of 27% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$558k.

In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$1.9m. From this we gather that YJ Kim is paid around the median for CEOs in the industry. What's more, YJ Kim holds US$2.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. It's interesting to note that MagnaChip Semiconductor pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at MagnaChip Semiconductor Corporation's Growth Numbers

MagnaChip Semiconductor Corporation has reduced its earnings per share by 84% a year over the last three years. It achieved revenue growth of 12% over the last year.

Overall this is not a very positive result for shareholders. While the revenue growth is good to see, it is outweighed by the fact that earnings are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 MagnaChip Semiconductor Corporation Been A Good Investment?

Given the total shareholder loss of 2.3% over three years, many shareholders in MagnaChip Semiconductor Corporation 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...

As previously discussed, YJ is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, earnings growth and total shareholder return have been negative for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for MagnaChip Semiconductor that investors should think about before committing capital to this stock.

Switching gears from MagnaChip Semiconductor, 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.

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. 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.

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