Stock Analysis

Shareholders Will Likely Find FLYHT Aerospace Solutions Ltd.'s (CVE:FLY) CEO Compensation Acceptable

TSXV:FLY
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Key Insights

  • FLYHT Aerospace Solutions to hold its Annual General Meeting on 19th of June
  • Total pay for CEO Kent Jacobs includes CA$268.7k salary
  • The overall pay is 55% below the industry average
  • Over the past three years, FLYHT Aerospace Solutions' EPS grew by 50% and over the past three years, the total loss to shareholders 51%

The performance at FLYHT Aerospace Solutions Ltd. (CVE:FLY) has been rather lacklustre of late and shareholders may be wondering what CEO Kent Jacobs is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 19th of June. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

View our latest analysis for FLYHT Aerospace Solutions

Comparing FLYHT Aerospace Solutions Ltd.'s CEO Compensation With The Industry

According to our data, FLYHT Aerospace Solutions Ltd. has a market capitalization of CA$15m, and paid its CEO total annual compensation worth CA$292k over the year to December 2023. That is, the compensation was roughly the same as last year. Notably, the salary which is CA$268.7k, represents most of the total compensation being paid.

For comparison, other companies in the Canadian Aerospace & Defense industry with market capitalizations below CA$275m, reported a median total CEO compensation of CA$654k. In other words, FLYHT Aerospace Solutions pays its CEO lower than the industry median.

Component20232022Proportion (2023)
Salary CA$269k CA$190k 92%
Other CA$24k CA$98k 8%
Total CompensationCA$292k CA$288k100%

Talking in terms of the industry, salary represented approximately 43% of total compensation out of all the companies we analyzed, while other remuneration made up 57% of the pie. FLYHT Aerospace Solutions 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.

ceo-compensation
TSXV:FLY CEO Compensation June 13th 2024

FLYHT Aerospace Solutions Ltd.'s Growth

FLYHT Aerospace Solutions Ltd.'s earnings per share (EPS) grew 50% per year over the last three years. It saw its revenue drop 15% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has FLYHT Aerospace Solutions Ltd. Been A Good Investment?

The return of -51% over three years would not have pleased FLYHT Aerospace Solutions Ltd. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The fact that shareholders are sitting on a loss is certainly disheartening. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. A key focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 2 which are concerning) in FLYHT Aerospace Solutions we think you should know about.

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.

Valuation is complex, but we're helping make it simple.

Find out whether FLYHT Aerospace Solutions is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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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.