In 2005 Carlos de Brito was appointed CEO of Anheuser-Busch InBev SA/NV (EBR:ABI). This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. 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 Carlos de Brito’s Compensation Compare With Similar Sized Companies?
According to our data, Anheuser-Busch InBev SA/NV has a market capitalization of €168b, and pays its CEO total annual compensation worth US$2.6m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.7m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$1.9m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Thus we can conclude that Carlos de Brito receives more in total compensation than the median of a group of large companies in the same market as Anheuser-Busch InBev SA/NV. However, this doesn’t necessarily mean the pay 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 Anheuser-Busch InBev, below.
Is Anheuser-Busch InBev SA/NV Growing?
Over the last three years Anheuser-Busch InBev SA/NV has grown its earnings per share (EPS) by an average of 27% per year (using a line of best fit). It saw its revenue drop -4.2% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business.
Has Anheuser-Busch InBev SA/NV Been A Good Investment?
Since shareholders would have lost about 18% over three years, some Anheuser-Busch InBev SA/NV shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount Anheuser-Busch InBev SA/NV 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. On the other hand returns to investors over the same period have probably disappointed many. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Anheuser-Busch InBev shares (free trial).
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.
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