This Is Why Heineken N.V.'s (AMS:HEIA) CEO Compensation Looks Appropriate

Key Insights

• Heineken will host its Annual General Meeting on 20th of April
• CEO Dolf van den Brink's total compensation includes salary of €1.25m
• The total compensation is similar to the average for the industry
• Heineken's EPS grew by 7.8% over the past three years while total shareholder return over the past three years was 38%

Under the guidance of CEO Dolf van den Brink, Heineken N.V. (AMS:HEIA) has performed reasonably well recently. As shareholders go into the upcoming AGM on 20th of April, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

See our latest analysis for Heineken

Comparing Heineken N.V.'s CEO Compensation With The Industry

According to our data, Heineken N.V. has a market capitalization of €57b, and paid its CEO total annual compensation worth €6.6m over the year to December 2022. We note that's a decrease of 21% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at €1.3m.

In comparison with other companies in the the Netherlands Beverage industry with market capitalizations over €7.3b, the reported median total CEO compensation was €6.0m. This suggests that Heineken remunerates its CEO largely in line with the industry average. What's more, Dolf van den Brink holds €5.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2022	2021	Proportion (2022)
Salary	€1.3m	€1.3m	19%
Other	€5.4m	€7.2m	81%
Total Compensation	€6.6m	€8.4m	100%

On an industry level, roughly 54% of total compensation represents salary and 46% is other remuneration. It's interesting to note that Heineken allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Heineken N.V.'s Growth Numbers

Heineken N.V.'s earnings per share (EPS) grew 7.8% per year over the last three years. Its revenue is up 31% over the last year.

It's great to see that revenue growth is strong. And in that context, the modest EPS improvement certainly isn't shabby. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Heineken N.V. Been A Good Investment?

We think that the total shareholder return of 38%, over three years, would leave most Heineken N.V. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

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. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Heineken that you should be aware of before investing.

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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.