In 2016 John Plueger was appointed CEO of Air Lease Corporation (NYSE:AL). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
How Does John Plueger's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Air Lease Corporation has a market cap of US$2.7b, and reported total annual CEO compensation of US$7.7m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.2m.
Thus we can conclude that John Plueger receives more in total compensation than the median of a group of companies in the same market, and of similar size to Air Lease Corporation. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Air Lease has changed over time.
Is Air Lease Corporation Growing?
Air Lease Corporation has increased its earnings per share (EPS) by an average of 8.7% a year, over the last three years (using a line of best fit). Its revenue is up 20% over last year.
This revenue growth could really point to a brighter future. And, while modest, the earnings per share growth is noticeable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has Air Lease Corporation Been A Good Investment?
Since shareholders would have lost about 37% over three years, some Air Lease Corporation shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by Air Lease Corporation, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. CEO compensation is an important area to keep your eyes on, but we've also identified 4 warning signs for Air Lease (1 can't be ignored!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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