How Much Is Alliance Aviation Services Limited (ASX:AQZ) Paying Its CEO?
Lee Schofield has been the CEO of Alliance Aviation Services Limited (ASX:AQZ) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Alliance Aviation Services
How Does Total Compensation For Lee Schofield Compare With Other Companies In The Industry?
Our data indicates that Alliance Aviation Services Limited has a market capitalization of AU$547m, and total annual CEO compensation was reported as AU$653k for the year to June 2020. Notably, that's an increase of 28% over the year before. We note that the salary portion, which stands at AU$387.6k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the same industry with market capitalizations ranging between AU$275m and AU$1.1b had a median total CEO compensation of AU$1.5m. In other words, Alliance Aviation Services pays its CEO lower than the industry median. Furthermore, Lee Schofield directly owns AU$507k worth of shares in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$388k | AU$384k | 59% |
Other | AU$265k | AU$125k | 41% |
Total Compensation | AU$653k | AU$508k | 100% |
On an industry level, roughly 34% of total compensation represents salary and 66% is other remuneration. It's interesting to note that Alliance Aviation Services pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Alliance Aviation Services Limited's Growth
Alliance Aviation Services Limited's earnings per share (EPS) grew 4.7% per year over the last three years. Its revenue is up 7.7% over the last year.
We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Alliance Aviation Services Limited Been A Good Investment?
Boasting a total shareholder return of 169% over three years, Alliance Aviation Services Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
As we touched on above, Alliance Aviation Services Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. In contrast, shareholder returns have been excellent over the past three years, and that’s certainly a promising trend to keep an eye on. As a result of the juicy return to investors, CEO compensation may well be quite reasonable.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Alliance Aviation Services that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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