Ed Bastian has been the CEO of Delta Air Lines Inc (NYSE:DAL) since 2016. First, this article will compare CEO compensation with compensation at other large companies. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Ed Bastian’s Compensation Compare With Similar Sized Companies?
Our data indicates that Delta Air Lines Inc is worth US$38b, and total annual CEO compensation is US$13m. That’s a modest increase of 5.2% on the prior year year. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO compensation was US$11m.
That means Ed Bastian receives fairly typical remuneration for the CEO of a large company. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Delta Air Lines has changed from year to year.
Is Delta Air Lines Inc Growing?
Delta Air Lines Inc has reduced its earnings per share by an average of 2.5% a year, over the last three years. In the last year, its revenue is up 9.1%.
Unfortunately there is a complete lack of earnings per share improvement, over three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Delta Air Lines Inc Been A Good Investment?
Delta Air Lines Inc has generated a total shareholder return of 22% over three years, so most shareholders would 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.
Ed Bastian is paid around what is normal the leaders of larger companies.
We’re not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We’re not saying the CEO pay is too generous, but we’d venture the company should look to improve its business metrics (and share price) before paying any more.
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
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The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.