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Does Air Lease's (NYSE:AL) CEO Salary Compare Well With Industry Peers?

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Simply Wall St
·4 min read
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John Plueger became the CEO of Air Lease Corporation (NYSE:AL) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Air Lease

Comparing Air Lease Corporation's CEO Compensation With the industry

Our data indicates that Air Lease Corporation has a market capitalization of US$4.9b, and total annual CEO compensation was reported as US$7.9m for the year to December 2019. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.

In comparison with other companies in the industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$6.2m. This suggests that Air Lease remunerates its CEO largely in line with the industry average. Moreover, John Plueger also holds US$35m worth of Air Lease stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2019

2018

Proportion (2019)

Salary

US$1.0m

US$1.0m

13%

Other

US$6.9m

US$6.7m

87%

Total Compensation

US$7.9m

US$7.7m

100%

Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. Air Lease pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

A Look at Air Lease Corporation's Growth Numbers

Over the past three years, Air Lease Corporation has seen its earnings per share (EPS) grow by 9.7% per year. Its revenue is up 8.1% over the last year.

We're not particularly impressed by the revenue growth, but we're happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Air Lease Corporation Been A Good Investment?

With a total shareholder return of 2.3% over three years, Air Lease Corporation has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As we touched on above, Air Lease Corporation is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, EPS and total shareholder return are solid yet uninspiring. So, although the CEO compensation seems reasonable, shareholders might want to see some further progress before they agree that John should get a raise.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for Air Lease (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Important note: Air Lease is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.