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Is Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) Overpaying Its CEO?

Simply Wall St

In 2006 Bill Flynn was appointed CEO of Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Atlas Air Worldwide Holdings

How Does Bill Flynn's Compensation Compare With Similar Sized Companies?

Our data indicates that Atlas Air Worldwide Holdings, Inc. is worth US$759m, and total annual CEO compensation is US$6.9m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.1m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.7m.

It would therefore appear that Atlas Air Worldwide Holdings, Inc. pays Bill Flynn 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 Atlas Air Worldwide Holdings has changed from year to year.

NasdaqGS:AAWW CEO Compensation, September 13th 2019

Is Atlas Air Worldwide Holdings, Inc. Growing?

On average over the last three years, Atlas Air Worldwide Holdings, Inc. has grown earnings per share (EPS) by 79% each year (using a line of best fit). Its revenue is up 14% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. It could be important to check this free visual depiction of what analysts expect for the future.

Has Atlas Air Worldwide Holdings, Inc. Been A Good Investment?

Since shareholders would have lost about 24% over three years, some Atlas Air Worldwide Holdings, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared total CEO remuneration at Atlas Air Worldwide Holdings, Inc. with the amount paid at companies with a similar market capitalization. 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. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Atlas Air Worldwide Holdings shares (free trial).

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.