Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



How Investors Can Win From Philip Morris's Leadership

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

I've been looking at Philip Morris International (NYSE: PM  ) , the globally focused tobacco company that Altria (NYSE: MO  ) spun off back in early 2008. The stock has attracted investors willing to capitalize on the huge income and growth opportunity of tobacco companies while offering them access to a world of current and potential customers. Yet just as U.S. companies Lorillard (NYSE: LO  ) , Reynolds American, and Vector Group (NYSE: VGR  ) have experienced an increasingly hostile legal and regulatory environment for smoking domestically, the question remains whether Philip Morris International can avoid a similar backlash overseas.

That international growth potential makes up the core thesis of my premium report on Philip Morris International. To overcome those obstacles, the company will need strong leadership at the helm. Let's take a closer look at who's running the show at Philip Morris.

CEO Louis Camilleri is no stranger to the tobacco industry. He's been at the helm of Philip Morris International since its spinoff from Altria in March 2008, and he had been Altria's CEO from 2002 until then. His history with Altria goes decades, with Camilleri having joined Philip Morris Europe in 1978 and rising through the ranks to take on various executive positions in Philip Morris's Eastern Europe, Middle East, and Africa division before taking responsibility for the entire European Union region.

Camilleri also acts as chairman of Philip Morris International's board and was chairman of Altria throughout most of his tenure as CEO. He also served as chairman of the board at Kraft Foods, another former Altria company, from 2002 to 2007 and is still on the board of Mexican telecom company America Movil (NYSE: AMX  ) .

For investors concerned about whether executive incentives are aligned with shareholder interests, Camilleri's fairly substantial share holdings should bring some comfort. He owns about 1.56 million shares of Philip Morris stock, worth roughly $137 million at current prices. That represents less than 0.1% of the company's outstanding shares, but for a corporation with a market capitalization of almost $150 billion, it's hard to argue that Camilleri hasn't demonstrated his commitment to seeing the stock perform well.

Yet a major source of Camilleri's stock wealth has come directly from his compensation as CEO. From 2009 to 2011, the executive received total compensation of more than $70 million, with almost $35 million of that coming in the form of stock awards and almost $25 million more coming from non-equity incentive plan compensation.

Still, shareholders have seen amazing performance from the stock over the years. Philip Morris stock had limited losses of only 10% to 15% during 2008's market meltdown, and shares recovered to their early 2008 spinoff levels by late 2009. Since then, the share price has risen around 80%, and that excludes Philip Morris's generous dividend payouts. Although some might characterize Camilleri's compensation as equally generous, he at least can point to the rise in the stock as evidence that he has done his job well.

In general, Philip Morris employees seem to believe Camilleri's doing a good job. According to Glassdoor, 94% of those rating Camilleri approve of his job performance as CEO.

A smokin' performance
With Louis Camilleri at the helm, Philip Morris has been able to capitalize on its unique opportunity. Despite rich compensation, Camilleri has kept his stake in the company high, reassuring fellow shareholders that he has their interests at heart.

Learn more
That was just a small part of the Motley Fool's new premium report on Philip Morris International. To find out whether Philip Morris is a buy right now, you'll want to read the full report, which also includes regular updates as events occur. Click here now and get your report today.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2183198, ~/Articles/ArticleHandler.aspx, 9/28/2016 1:30:37 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 4 hours ago Sponsored by:
DOW 18,228.30 133.47 0.74%
S&P 500 2,159.93 13.83 0.64%
NASD 5,305.71 48.22 0.92%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/27/2016 4:01 PM
PM $99.33 Up +0.19 +0.19%
Philip Morris Inte… CAPS Rating: ****
AMX $11.37 Up +0.14 +1.25%
America Movil CAPS Rating: ***
LO.DL $0.00 Down +0.00 +0.00%
Lorillard CAPS Rating: ****
MO $63.32 Up +0.29 +0.46%
Altria Group CAPS Rating: ****
VGR $21.69 Down +0.00 +0.00%
Vector Group CAPS Rating: ***