Key Insights

• Constellation Brands' Annual General Meeting to take place on 17th of July
• Salary of US$1.35m is part of CEO Bill Newlands's total remuneration
• The overall pay is comparable to the industry average
• Constellation Brands' total shareholder return over the past three years was 17% while its EPS grew by 27% over the past three years

Under the guidance of CEO Bill Newlands, Constellation Brands, Inc. (NYSE:STZ) has performed reasonably well recently. As shareholders go into the upcoming AGM on 17th of July, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

How Does Total Compensation For Bill Newlands Compare With Other Companies In The Industry?

Our data indicates that Constellation Brands, Inc. has a market capitalization of US$46b, and total annual CEO compensation was reported as US$15m for the year to February 2024. We note that's a decrease of 9.0% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.4m.

In comparison with other companies in the American Beverage industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$18m. So it looks like Constellation Brands compensates Bill Newlands in line with the median for the industry. Moreover, Bill Newlands also holds US$3.7m worth of Constellation Brands stock directly under their own name.

Talking in terms of the industry, salary represented approximately 12% of total compensation out of all the companies we analyzed, while other remuneration made up 88% of the pie. Constellation Brands sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Constellation Brands, Inc.'s Growth

Over the past three years, Constellation Brands, Inc. has seen its earnings per share (EPS) grow by 27% per year. Its revenue is up 5.3% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Constellation Brands, Inc. Been A Good Investment?

Constellation Brands, Inc. has served shareholders reasonably well, with a total return of 17% over three years. 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.

To Conclude...

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, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 3 warning signs for Constellation Brands that investors should look into moving forward.

Important note: Constellation Brands is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com