Ken Moelis became the CEO of Moelis & Company (NYSE:MC) in 2007. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Ken Moelis's Compensation Compare With Similar Sized Companies?
Our data indicates that Moelis & Company is worth US$2.1b, and total annual CEO compensation was reported as US$8.8m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$400k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$3.9m.
It would therefore appear that Moelis & Company pays Ken Moelis more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Moelis has changed from year to year.
Is Moelis & Company Growing?
On average over the last three years, Moelis & Company has grown earnings per share (EPS) by 15% each year (using a line of best fit). Its revenue is down 6.8% over last year.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Moelis & Company Been A Good Investment?
Boasting a total shareholder return of 43% over three years, Moelis & Company has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Moelis & Company pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Moelis.
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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