Yahoo Finance Shareholders May Be More Conservative With SkyWest, Inc.'s (NASDAQ:SKYW) CEO Compensation For Now
Key Insights
SkyWest will host its Annual General Meeting on 7th of May
Salary of US$546.9k is part of CEO Chip Childs's total remuneration
Total compensation is 86% above industry average
SkyWest's EPS declined by 7.4% over the past three years while total shareholder return over the past three years was 52%
SkyWest, Inc. (NASDAQ:SKYW) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. The upcoming AGM on 7th of May may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. 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.
View our latest analysis for SkyWest
Comparing SkyWest, Inc.'s CEO Compensation With The Industry
At the time of writing, our data shows that SkyWest, Inc. has a market capitalization of US$2.9b, and reported total annual CEO compensation of US$5.5m for the year to December 2023. That's a notable increase of 68% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$547k.
On examining similar-sized companies in the American Airlines industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$3.0m. Hence, we can conclude that Chip Childs is remunerated higher than the industry median. Furthermore, Chip Childs directly owns US$8.8m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$547k | US$500k | 10% |
Other | US$5.0m | US$2.8m | 90% |
Total Compensation | US$5.5m | US$3.3m | 100% |
Speaking on an industry level, nearly 11% of total compensation represents salary, while the remainder of 89% is other remuneration. There isn't a significant difference between SkyWest and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
SkyWest, Inc.'s Growth
SkyWest, Inc. has reduced its earnings per share by 7.4% a year over the last three years. Its revenue is up 2.9% over the last year.
Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has SkyWest, Inc. Been A Good Investment?
Boasting a total shareholder return of 52% over three years, SkyWest, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for SkyWest that you should be aware of before investing.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
