Here's Why Shareholders May Consider Paying Flight Centre Travel Group Limited's (ASX:FLT) CEO A Little More

Key Insights

• Flight Centre Travel Group to hold its Annual General Meeting on 15th of November
• Total pay for CEO Skroo Turner includes AU$666.6k salary
• The overall pay is 75% below the industry average
• Flight Centre Travel Group's total shareholder return over the past three years was 24% while its EPS grew by 79% over the past three years

Shareholders will be pleased by the robust performance of Flight Centre Travel Group Limited (ASX:FLT) recently and this will be kept in mind in the upcoming AGM on 15th of November. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

Check out our latest analysis for Flight Centre Travel Group

Comparing Flight Centre Travel Group Limited's CEO Compensation With The Industry

According to our data, Flight Centre Travel Group Limited has a market capitalization of AU$4.2b, and paid its CEO total annual compensation worth AU$896k over the year to June 2023. That's a notable increase of 31% on last year. Notably, the salary which is AU$666.6k, represents most of the total compensation being paid.

On examining similar-sized companies in the Australian Hospitality industry with market capitalizations between AU$3.1b and AU$10.0b, we discovered that the median CEO total compensation of that group was AU$3.6m. This suggests that Skroo Turner is paid below the industry median. Furthermore, Skroo Turner directly owns AU$321m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	AU$667k	AU$651k	74%
Other	AU$229k	AU$33k	26%
Total Compensation	AU$896k	AU$684k	100%

On an industry level, around 57% of total compensation represents salary and 43% is other remuneration. Flight Centre Travel Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Flight Centre Travel Group Limited's Growth Numbers

Over the past three years, Flight Centre Travel Group Limited has seen its earnings per share (EPS) grow by 79% per year. It achieved revenue growth of 126% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Flight Centre Travel Group Limited Been A Good Investment?

Flight Centre Travel Group Limited has served shareholders reasonably well, with a total return of 24% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

While the company seems to be headed in the right direction performance-wise, there's always room for improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Flight Centre Travel Group 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.

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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.