Yahoo Finance What Does Qantas Airways' (ASX:QAN) CEO Pay Reveal?
This article will reflect on the compensation paid to Alan Joyce who has served as CEO of Qantas Airways Limited (ASX:QAN) since 2008. 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 Qantas Airways
How Does Total Compensation For Alan Joyce Compare With Other Companies In The Industry?
Our data indicates that Qantas Airways Limited has a market capitalization of AU$8.5b, and total annual CEO compensation was reported as AU$4.8m for the year to June 2020. Notably, that's a decrease of 28% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$1.6m.
On examining similar-sized companies in the industry with market capitalizations between AU$5.5b and AU$17b, we discovered that the median CEO total compensation of that group was AU$4.5m. From this we gather that Alan Joyce is paid around the median for CEOs in the industry. Furthermore, Alan Joyce directly owns AU$14m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$1.6m | AU$2.1m | 34% |
Other | AU$3.2m | AU$4.4m | 66% |
Total Compensation | AU$4.8m | AU$6.6m | 100% |
On an industry level, roughly 34% of total compensation represents salary and 66% is other remuneration. There isn't a significant difference between Qantas Airways and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Qantas Airways Limited's Growth Numbers
Qantas Airways Limited has reduced its earnings per share by 57% a year over the last three years. It saw its revenue drop 21% over the last year.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. 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 Qantas Airways Limited Been A Good Investment?
With a three year total loss of 15% for the shareholders, Qantas Airways Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we noted earlier, Qantas Airways pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Qantas Airways (1 can't be ignored!) that you should be aware of before investing here.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
