Does Heineken N.V.’s (AMS:HEIA) CEO Pay Matter?

Jean-François M. Van Boxmeer became the CEO of Heineken N.V. (AMS:HEIA) in 2005. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Heineken

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 figure is for the year to December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued 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. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

As you can see, Jean-François M. Van Boxmeer is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Heineken N.V. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Heineken has changed over time.

ENXTAM:HEIA CEO Compensation, August 23rd 2019
ENXTAM:HEIA CEO Compensation, August 23rd 2019

Is Heineken N.V. Growing?

On average over the last three years, Heineken N.V. has grown earnings per share (EPS) by 10% each year (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 also good to see modest revenue growth, suggesting the underlying business is healthy.

Has Heineken N.V. Been A Good Investment?

Heineken N.V. has served shareholders reasonably well, with a total return of 27% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

We compared total CEO remuneration at Heineken N.V. with the amount paid at other large companies. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. We also think investors are doing ok, over the same time period. While it may be worth researching further, we don’t see a problem with the CEO pay, given the good EPS growth. Whatever your view on compensation, you might want to check if insiders are buying or selling Heineken shares (free trial).

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.