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Does Moelis & Company’s (NYSE:MC) CEO Salary Reflect Performance?

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In 2007 Ken Moelis was appointed CEO of Moelis & Company (NYSE:MC). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Moelis

How Does Ken Moelis’s Compensation Compare With Similar Sized Companies?

According to our data, Moelis & Company has a market capitalization of US$2.7b, and pays its CEO total annual compensation worth US$6.5m. (This number is for the twelve months until December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$400k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$4.7m.

As you can see, Ken Moelis is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Moelis & Company is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Moelis has changed over time.

NYSE:MC CEO Compensation, February 22nd 2019
NYSE:MC CEO Compensation, February 22nd 2019

Is Moelis & Company Growing?

Over the last three years Moelis & Company has grown its earnings per share (EPS) by an average of 6.1% per year (using a line of best fit). It achieved revenue growth of 29% over the last year.

It’s great to see that revenue growth is strong. And in that context, the modest EPS improvement certainly isn’t shabby. I’d stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. It could be important to check this free visual depiction of what analysts expect for the future.

Has Moelis & Company Been A Good Investment?

Boasting a total shareholder return of 139% over three years, Moelis & Company has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

We compared the total CEO remuneration paid by Moelis & Company, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying Moelis shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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