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Is The Boeing Company (NYSE:BA) Overpaying Its CEO?

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Dennis Muilenburg has been the CEO of The Boeing Company (NYSE:BA) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

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View our latest analysis for Boeing

How Does Dennis Muilenburg's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that The Boeing Company has a market cap of US$200b, and is paying total annual CEO compensation of US$23m. (This number is for the twelve months until December 2018). Notably, that's an increase of 27% over the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.7m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$12m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.

It would therefore appear that The Boeing Company pays Dennis Muilenburg more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at Boeing, below.

NYSE:BA CEO Compensation, May 21st 2019
NYSE:BA CEO Compensation, May 21st 2019

Is The Boeing Company Growing?

The Boeing Company has increased its earnings per share (EPS) by an average of 38% a year, over the last three years (using a line of best fit). Its revenue is up 5.5% over last year.

This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.

Has The Boeing Company Been A Good Investment?

Most shareholders would probably be pleased with The Boeing Company for providing a total return of 200% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We compared total CEO remuneration at The Boeing Company with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Boeing (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.