Shareholders Will Probably Hold Off On Increasing Icelandair Group hf.'s (ICE:ICEAIR) CEO Compensation For The Time Being

The underwhelming share price performance of Icelandair Group hf. (ICE:ICEAIR) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 03 March 2022. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Icelandair Group hf

Comparing Icelandair Group hf.'s CEO Compensation With the industry

Our data indicates that Icelandair Group hf. has a market capitalization of Kr72b, and total annual CEO compensation was reported as US$638k for the year to December 2021. Notably, that's an increase of 48% over the year before. In particular, the salary of US$518.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between Kr25b and Kr102b had a median total CEO compensation of US$638k. This suggests that Icelandair Group hf remunerates its CEO largely in line with the industry average.

Component	2021	2020	Proportion (2021)
Salary	US$518k	US$355k	81%
Other	US$120k	US$76k	19%
Total Compensation	US$638k	US$431k	100%

On an industry level, roughly 62% of total compensation represents salary and 38% is other remuneration. According to our research, Icelandair Group hf has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Icelandair Group hf.'s Growth

Icelandair Group hf.'s earnings per share (EPS) grew 13% per year over the last three years. It achieved revenue growth of 35% 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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Icelandair Group hf. Been A Good Investment?

With a total shareholder return of -76% over three years, Icelandair Group hf. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 2 warning signs for Icelandair Group hf (1 can't be ignored!) that you should be aware of before investing here.

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.