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In 2015 Robin Hayes was appointed CEO of JetBlue Airways Corporation (NASDAQ:JBLU). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Robin Hayes’s Compensation Compare With Similar Sized Companies?
According to our data, JetBlue Airways Corporation has a market capitalization of US$5.5b, and pays its CEO total annual compensation worth US$3.6m. (This number is for the twelve months until December 2018). That’s a modest increase of 7.3% on the prior year year. We think total compensation is more important but we note that the CEO salary is lower, at US$579k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.9m.
Most shareholders would consider it a positive that Robin Hayes takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at JetBlue Airways, below.
Is JetBlue Airways Corporation Growing?
On average over the last three years, JetBlue Airways Corporation has shrunk earnings per share by 17% each year (measured with a line of best fit). It achieved revenue growth of 8.5% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has JetBlue Airways Corporation Been A Good Investment?
JetBlue Airways Corporation has generated a total shareholder return of 8.8% over three years, so most shareholders wouldn’t be too disappointed. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
JetBlue Airways Corporation is currently paying its CEO below what is normal for companies of its size.
Shareholders should note that compensation for Robin Hayes is under the median of a group of similar sized companies. However, the earnings per share are not moving in the right direction, and the returns to shareholders could have been better. We would like to see EPS growth from the business, although we wouldn’t say the CEO pay is high. Shareholders may want to check for free if JetBlue Airways insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.