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Most Shareholders Will Probably Find That The CEO Compensation For Air Lease Corporation (NYSE:AL) Is Reasonable

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·4 min read
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Despite Air Lease Corporation's (NYSE:AL) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. Some of these issues will occupy shareholders' minds as the AGM rolls around on 05 May 2021. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

See our latest analysis for Air Lease

How Does Total Compensation For John Plueger Compare With Other Companies In The Industry?

According to our data, Air Lease Corporation has a market capitalization of US$5.6b, and paid its CEO total annual compensation worth US$6.0m over the year to December 2020. That's a notable decrease of 24% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.

For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$6.0m. 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

2020

2019

Proportion (2020)

Salary

US$1.0m

US$1.0m

17%

Other

US$5.0m

US$6.9m

83%

Total Compensation

US$6.0m

US$7.9m

100%

On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. Air Lease pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

A Look at Air Lease Corporation's Growth Numbers

Over the last three years, Air Lease Corporation has shrunk its earnings per share by 16% per year. Revenue was pretty flat on last year.

The decline in EPS is a bit concerning. And the flat revenue hardly impresses. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Air Lease Corporation Been A Good Investment?

Air Lease Corporation has generated a total shareholder return of 23% 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.

To Conclude...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Air Lease (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Air Lease, 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.

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