It's Unlikely That Moelis & Company's (NYSE:MC) CEO Will See A Huge Pay Rise This Year

CEO Ken Moelis has done a decent job of delivering relatively good performance at Moelis & Company (NYSE:MC) recently. As shareholders go into the upcoming AGM on 03 June 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Moelis

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. Notably, that's an increase of 93% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$400k.

In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was 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.

Component	2020	2019	Proportion (2020)
Salary	US$400k	US$400k	4%
Other	US$9.5m	US$4.7m	96%
Total Compensation	US$9.9m	US$5.1m	100%

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 non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Moelis & Company's Growth

Over the past three years, Moelis & Company has seen its earnings per share (EPS) grow by 45% per year. It achieved revenue growth of 38% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Moelis prefers rewarding its CEO through non-salary benefits. 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, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 4 warning signs for Moelis you should be aware of, and 1 of them is a bit concerning.

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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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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