Jean-François M. Van Boxmeer became the CEO of Heineken N.V. (AMS:HEIA) in 2005. First, this article will compare CEO compensation with compensation at other large 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Jean-François M. Van Boxmeer's Compensation Compare With Similar Sized Companies?
According to our data, Heineken N.V. has a market capitalization of €54b, and pays its CEO total annual compensation worth €8.2m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at €1.3m. We looked at a group of companies with market capitalizations over €7.2b and the median CEO total compensation was €3.5m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
It would therefore appear that Heineken N.V. pays Jean-François M. Van Boxmeer more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Heineken, below.
Is Heineken N.V. Growing?
Heineken N.V. has increased its earnings per share (EPS) by an average of 10% a year, over the last three years (using a line of best fit). Its revenue is up 4.8% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.
Has Heineken N.V. Been A Good Investment?
With a total shareholder return of 25% over three years, Heineken N.V. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We examined the amount Heineken N.V. pays its CEO, and compared it to the amount paid by other large companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. We also think investors are doing ok, over the same time period. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we'd recommend further research on management. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Heineken (free visualization of insider trades).
If you want to buy a stock that is better than Heineken, this free list of high return, low debt companies is a great place to look.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.