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Rodney Sacks became the CEO of Monster Beverage Corporation (NASDAQ:MNST) in 1990, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Monster Beverage.
Comparing Monster Beverage Corporation's CEO Compensation With the industry
According to our data, Monster Beverage Corporation has a market capitalization of US$42b, and paid its CEO total annual compensation worth US$14m over the year to December 2019. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at US$850k.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$9.4m. This suggests that Rodney Sacks is paid more than the median for the industry. Furthermore, Rodney Sacks directly owns US$200m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. Monster Beverage 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.
Monster Beverage Corporation's Growth
Monster Beverage Corporation has seen its earnings per share (EPS) increase by 17% a year over the past three years. It achieved revenue growth of 7.9% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Monster Beverage Corporation Been A Good Investment?
We think that the total shareholder return of 43%, over three years, would leave most Monster Beverage Corporation shareholders smiling. 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.
As we noted earlier, Monster Beverage pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But EPS growth and shareholder returns have been top-notch for the past three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. Given the strong history of shareholder returns, the shareholders are probably very happy with Rodney's performance.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Monster Beverage that you should be aware of before investing.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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