Yahoo Finance We Think Shareholders Are Less Likely To Approve A Pay Rise For Heineken N.V.'s (AMS:HEIA) CEO For Now
Key Insights
Heineken to hold its Annual General Meeting on 25th of April
Salary of €1.30m is part of CEO Dolf van den Brink's total remuneration
The overall pay is comparable to the industry average
Over the past three years, Heineken's EPS grew by 29% and over the past three years, the total loss to shareholders 6.0%
As many shareholders of Heineken N.V. (AMS:HEIA) will be aware, they have not made a gain on their investment in the past three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 25th of April. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
Check out our latest analysis for Heineken
How Does Total Compensation For Dolf van den Brink Compare With Other Companies In The Industry?
Our data indicates that Heineken N.V. has a market capitalization of €50b, and total annual CEO compensation was reported as €5.8m for the year to December 2023. Notably, that's a decrease of 13% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €1.3m.
On comparing similar companies in the the Netherlands Beverage industry with market capitalizations above €7.5b, we found that the median total CEO compensation was €5.7m. From this we gather that Dolf van den Brink is paid around the median for CEOs in the industry. Furthermore, Dolf van den Brink directly owns €6.5m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | €1.3m | €1.3m | 22% |
Other | €4.5m | €5.4m | 78% |
Total Compensation | €5.8m | €6.6m | 100% |
On an industry level, around 53% of total compensation represents salary and 47% 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
Over the past three years, Heineken N.V. has seen its earnings per share (EPS) grow by 29% per year. Its revenue is up 5.7% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Heineken N.V. Been A Good Investment?
Since shareholders would have lost about 6.0% over three years, some Heineken N.V. investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
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. We've identified 2 warning signs for Heineken that investors should be aware of in a dynamic business environment.
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.
