U.S. Markets closed

Is Willis Lease Finance Corporation’s (NASDAQ:WLFC) CEO Being Overpaid?

Simply Wall St

Charlie Willis has been the CEO of Willis Lease Finance Corporation (NASDAQ:WLFC) since 1985. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Willis Lease Finance

How Does Charlie Willis’s Compensation Compare With Similar Sized Companies?

Our data indicates that Willis Lease Finance Corporation is worth US$261m, and total annual CEO compensation is US$5.4m. (This figure is for the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at US$1.0m. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO compensation of that group was US$927k.

It would therefore appear that Willis Lease Finance Corporation pays Charlie Willis more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Willis Lease Finance has changed from year to year.

NasdaqGM:WLFC CEO Compensation, March 1st 2019

Is Willis Lease Finance Corporation Growing?

Willis Lease Finance Corporation has increased its earnings per share (EPS) by an average of 84% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 5.9%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Willis Lease Finance Corporation Been A Good Investment?

I think that the total shareholder return of 111%, over three years, would leave most Willis Lease Finance Corporation shareholders smiling. 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…

We examined the amount Willis Lease Finance Corporation pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. Shareholders may want to check for free if Willis Lease Finance insiders are buying or selling shares.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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. Thank you for reading.