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Is Auckland International Airport Limited (NZSE:AIA) Overpaying Its CEO?

Simply Wall St

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Adrian Littlewood has been the CEO of Auckland International Airport Limited (NZSE:AIA) since 2012. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Auckland International Airport

How Does Adrian Littlewood's Compensation Compare With Similar Sized Companies?

According to our data, Auckland International Airport Limited has a market capitalization of NZ$12b, and pays its CEO total annual compensation worth NZ$3.6m. (This is based on the year to June 2018). We think total compensation is more important but we note that the CEO salary is lower, at NZ$1.3m. When we examined a selection of companies with market caps ranging from NZ$6.0b to NZ$18b, we found the median CEO total compensation was NZ$4.1m.

So Adrian Littlewood is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Auckland International Airport has changed from year to year.

NZSE:AIA CEO Compensation, July 16th 2019
NZSE:AIA CEO Compensation, July 16th 2019

Is Auckland International Airport Limited Growing?

Auckland International Airport Limited has increased its earnings per share (EPS) by an average of 37% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 11%.

This demonstrates that the company has been improving recently. A good result. 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 Auckland International Airport Limited Been A Good Investment?

Most shareholders would probably be pleased with Auckland International Airport Limited for providing a total return of 51% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Adrian Littlewood is paid around the same as most CEOs of similar size companies.

The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling Auckland International Airport shares (free trial).

If you want to buy a stock that is better than Auckland International Airport, this free list of high return, low debt companies is a great place to look.

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.