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Robin Hayes became the CEO of JetBlue Airways Corporation (NASDAQ:JBLU) in 2015, 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.
How Does Total Compensation For Robin Hayes Compare With Other Companies In The Industry?
Our data indicates that JetBlue Airways Corporation has a market capitalization of US$2.8b, and total annual CEO compensation was reported as US$4.0m for the year to December 2019. Notably, that's an increase of 10% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$598k.
On examining similar-sized companies in the industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$4.3m. This suggests that JetBlue Airways remunerates its CEO largely in line with the industry average. Moreover, Robin Hayes also holds US$5.3m worth of JetBlue Airways stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. JetBlue Airways is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at JetBlue Airways Corporation's Growth Numbers
Over the last three years, JetBlue Airways Corporation has shrunk its earnings per share by 22% per year. Revenue was pretty flat on last year.
Overall this is not a very positive result for shareholders. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has JetBlue Airways Corporation Been A Good Investment?
Since shareholders would have lost about 55% over three years, some JetBlue Airways Corporation investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As previously discussed, Robin is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining earnings growth and shareholder returns over the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for JetBlue Airways that you should be aware of before investing.
Switching gears from JetBlue Airways, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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.
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