Is Allegiant Travel Company's (NASDAQ:ALGT) CEO Paid At A Competitive Rate?
In 2003 Maurice Gallagher was appointed CEO of Allegiant Travel Company (NASDAQ:ALGT). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Allegiant Travel
How Does Maurice Gallagher's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Allegiant Travel Company has a market cap of US$2.9b, and reported total annual CEO compensation of US$2.9m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at . We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.1m.
Most shareholders would consider it a positive that Maurice Gallagher takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Allegiant Travel, below.
Is Allegiant Travel Company Growing?
Over the last three years Allegiant Travel Company has shrunk its earnings per share by an average of 3.0% per year (measured with a line of best fit). In the last year, its revenue is up 9.6%.
In the last three years the company has failed to grow earnings per share. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Allegiant Travel Company Been A Good Investment?
With a total shareholder return of 13% over three years, Allegiant Travel Company shareholders would, in general, be reasonably content. 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.
In Summary...
It looks like Allegiant Travel Company pays its CEO less than similar sized companies.
The compensation paid to Maurice Gallagher is lower than is usual at similar sized companies. But the company lacks earnings per share growth, and returns to shareholders are less than stellar. We would like to see EPS growth from the business, although we wouldn't say the CEO pay is high. Shareholders may want to check for free if Allegiant Travel insiders are buying or selling shares.
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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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