Performance at Moelis & Company (NYSE:MC) has been reasonably good and CEO Ken Moelis has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 03 June 2021. However, some shareholders may still want to keep CEO compensation within reason.
Comparing Moelis & Company's CEO Compensation With the industry
At the time of writing, our data shows that Moelis & Company has a market capitalization of US$3.7b, and reported total annual CEO compensation of US$9.9m for the year to December 2020. That's a notable increase of 93% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$400k.
For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$5.7m. Hence, we can conclude that Ken Moelis is remunerated higher than the industry median. Moreover, Ken Moelis also holds US$21m worth of Moelis stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. Investors may find it interesting that Moelis paid a marginal salary to Ken Moelis, over the past year, focusing on non-salary compensation instead. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Moelis & Company's Growth Numbers
Moelis & Company's earnings per share (EPS) grew 45% per year over the last three years. Its revenue is up 38% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Moelis & Company Been A Good Investment?
With a total shareholder return of 20% over three years, Moelis & Company shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
Moelis primarily uses non-salary benefits to reward its CEO. Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.
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 4 warning signs for Moelis (of which 1 is potentially serious!) 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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