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Andrés Ricardo Gluski Weilert became the CEO of The AES Corporation (NYSE:AES) in 2011, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether AES pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Andrés Ricardo Gluski Weilert Compare With Other Companies In The Industry?
Our data indicates that The AES Corporation has a market capitalization of US$12b, and total annual CEO compensation was reported as US$11m for the year to December 2019. We note that's an increase of 11% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$212k. Hence, we can conclude that Andrés Ricardo Gluski Weilert is remunerated higher than the industry median. What's more, Andrés Ricardo Gluski Weilert holds US$26m 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, around 16% of total compensation represents salary and 84% is other remuneration. AES pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
The AES Corporation's Growth
The AES Corporation has seen its earnings per share (EPS) increase by 50% a year over the past three years. In the last year, its revenue is down 9.2%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has The AES Corporation Been A Good Investment?
We think that the total shareholder return of 82%, over three years, would leave most The AES Corporation shareholders smiling. 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.
As previously discussed, Andrés Ricardo is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, AES has produced strong EPS growth and shareholder returns over the last three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that Andrés Ricardo deserves a raise!
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 5 warning signs for AES (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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