Yahoo Finance Shareholders May Not Be So Generous With PepsiCo, Inc.'s (NASDAQ:PEP) CEO Compensation And Here's Why
Key Insights
PepsiCo to hold its Annual General Meeting on 1st of May
Total pay for CEO Ramon Laguarta includes US$1.69m salary
The total compensation is 143% higher than the average for the industry
PepsiCo's total shareholder return over the past three years was 33% while its EPS grew by 7.2% over the past three years
CEO Ramon Laguarta has done a decent job of delivering relatively good performance at PepsiCo, Inc. (NASDAQ:PEP) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 1st of May. However, some shareholders will still be cautious of paying the CEO excessively.
View our latest analysis for PepsiCo
How Does Total Compensation For Ramon Laguarta Compare With Other Companies In The Industry?
Our data indicates that PepsiCo, Inc. has a market capitalization of US$243b, and total annual CEO compensation was reported as US$34m for the year to December 2023. That's a notable increase of 19% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.7m.
On comparing similar companies in the American Beverage industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$14m. Hence, we can conclude that Ramon Laguarta is remunerated higher than the industry median. What's more, Ramon Laguarta holds US$33m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.7m | US$1.6m | 5% |
Other | US$32m | US$27m | 95% |
Total Compensation | US$34m | US$28m | 100% |
Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. PepsiCo has chosen to walk a path less trodden, opting to compensate its CEO with less of a traditional salary and more non-salary rewards over the last year. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at PepsiCo, Inc.'s Growth Numbers
Over the past three years, PepsiCo, Inc. has seen its earnings per share (EPS) grow by 7.2% per year. Its revenue is up 4.4% over the last year.
We'd prefer higher revenue growth, but we're happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has PepsiCo, Inc. Been A Good Investment?
Most shareholders would probably be pleased with PepsiCo, Inc. for providing a total return of 33% 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.
To Conclude...
PepsiCo primarily uses non-salary benefits to reward its CEO. Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.
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 3 warning signs for PepsiCo that investors should think about before committing capital to this stock.
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. 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.
