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Does Air Transport Services Group, Inc.'s (NASDAQ:ATSG) CEO Pay Reflect Performance?

Simply Wall St

Joe Hete became the CEO of Air Transport Services Group, Inc. (NASDAQ:ATSG) in 2007. 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. 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.

See our latest analysis for Air Transport Services Group

How Does Joe Hete's Compensation Compare With Similar Sized Companies?

According to our data, Air Transport Services Group, Inc. has a market capitalization of US$1.4b, and paid its CEO total annual compensation worth US$2.3m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$750k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$3.9m.

Most shareholders would consider it a positive that Joe Hete takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see a visual representation of the CEO compensation at Air Transport Services Group, below.

NasdaqGS:ATSG CEO Compensation, January 2nd 2020
NasdaqGS:ATSG CEO Compensation, January 2nd 2020

Is Air Transport Services Group, Inc. Growing?

Air Transport Services Group, Inc. has increased its earnings per share (EPS) by an average of 55% a year, over the last three years (using a line of best fit). It achieved revenue growth of 42% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. You might want to check this free visual report on analyst forecasts for future earnings.

Has Air Transport Services Group, Inc. Been A Good Investment?

I think that the total shareholder return of 48%, over three years, would leave most Air Transport Services Group, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Air Transport Services Group, Inc. is currently paying its CEO below what is normal for companies of its size.

Since the business is growing, many would argue this suggests the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Joe Hete deserves a raise! It is relatively rare to see a modestly paid CEO when performance is so impressive. It would be even more positive if company insiders are buying shares. So you may want to check if insiders are buying Air Transport Services Group shares with their own money (free access).

If you want to buy a stock that is better than Air Transport Services Group, this free list of high return, low debt companies is a great place to look.

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.

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. Thank you for reading.