This article will reflect on the compensation paid to Marcos Eduardo Galperín who has served as CEO of MercadoLibre, Inc. (NASDAQ:MELI) since 1999. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Marcos Eduardo Galperín Compare With Other Companies In The Industry?
Our data indicates that MercadoLibre, Inc. has a market capitalization of US$84b, and total annual CEO compensation was reported as US$11m for the year to December 2019. That's a notable increase of 32% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$507k.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$1.9m. Accordingly, our analysis reveals that MercadoLibre, Inc. pays Marcos Eduardo Galperín north of the industry median.
Speaking on an industry level, nearly 24% of total compensation represents salary, while the remainder of 76% is other remuneration. A high-salary is usually a no-brainer when it comes to attracting the best executives, but MercadoLibre paid Marcos Eduardo Galperín a nominal salary to the CEO over the past 12 months, instead focusing on non-salary compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
MercadoLibre, Inc.'s Growth
Over the last three years, MercadoLibre, Inc. has shrunk its earnings per share by 68% per year. It achieved revenue growth of 62% over the last year.
Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has MercadoLibre, Inc. Been A Good Investment?
Most shareholders would probably be pleased with MercadoLibre, Inc. for providing a total return of 437% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
MercadoLibre primarily uses non-salary benefits to reward its CEO. As we touched on above, MercadoLibre, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But MercadoLibre is growing its revenue, and total shareholder returns have also been pleasing for the last three years. Sadly, EPS growth did not follow suit, remaining during this time. All things considered, although EPS growth would've been nice, the positive investor returns and revenue growth lead us to believe Marcos is appropriately paid.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 2 warning signs for MercadoLibre (1 can't be ignored!) that you should be aware of before investing here.
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. 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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