Shareholders Will Likely Find Gogo Inc.'s (NASDAQ:GOGO) CEO Compensation Acceptable

Key Insights

• Gogo to hold its Annual General Meeting on 4th of June
• CEO Oakleigh Thorne's total compensation includes salary of US$700.0k
• The total compensation is 42% less than the average for the industry
• Over the past three years, Gogo's EPS grew by 43% and over the past three years, the total loss to shareholders 19%

Performance at Gogo Inc. (NASDAQ:GOGO) has been rather uninspiring recently and shareholders may be wondering how CEO Oakleigh Thorne plans to fix this. At the next AGM coming up on 4th of June, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.

See our latest analysis for Gogo

How Does Total Compensation For Oakleigh Thorne Compare With Other Companies In The Industry?

At the time of writing, our data shows that Gogo Inc. has a market capitalization of US$1.3b, and reported total annual CEO compensation of US$3.6m for the year to December 2023. That's a notable increase of 9.7% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$700k.

On comparing similar companies from the American Wireless Telecom industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$6.1m. That is to say, Oakleigh Thorne is paid under the industry median. What's more, Oakleigh Thorne holds US$1.5m worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	US$700k	US$700k	20%
Other	US$2.9m	US$2.5m	80%
Total Compensation	US$3.6m	US$3.2m	100%

On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. Gogo is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Gogo Inc.'s Growth

Gogo Inc. has seen its earnings per share (EPS) increase by 43% a year over the past three years. It saw its revenue drop 1.6% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Gogo Inc. Been A Good Investment?

Since shareholders would have lost about 19% over three years, some Gogo Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The fact that shareholders have earned a negative share price return is certainly disconcerting. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. A key question may be why the fundamentals have not yet been reflected into the share price. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Gogo that you should be aware of before investing.

Important note: Gogo is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.