Shareholders May Be Wary Of Increasing Mesa Air Group, Inc.'s (NASDAQ:MESA) CEO Compensation Package

Mesa Air Group, Inc. (NASDAQ:MESA) has not performed well recently and CEO Jonathan Ornstein will probably need to up their game. At the upcoming AGM on 08 February 2022, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Mesa Air Group

How Does Total Compensation For Jonathan Ornstein Compare With Other Companies In The Industry?

According to our data, Mesa Air Group, Inc. has a market capitalization of US$183m, and paid its CEO total annual compensation worth US$1.9m over the year to September 2021. That's a notable decrease of 19% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$600k.

On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$714k. Accordingly, our analysis reveals that Mesa Air Group, Inc. pays Jonathan Ornstein north of the industry median. Moreover, Jonathan Ornstein also holds US$3.0m worth of Mesa Air Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	US$600k	US$600k	32%
Other	US$1.3m	US$1.7m	68%
Total Compensation	US$1.9m	US$2.3m	100%

On an industry level, roughly 13% of total compensation represents salary and 87% is other remuneration. Mesa Air Group pays out 32% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Mesa Air Group, Inc.'s Growth

Over the last three years, Mesa Air Group, Inc. has shrunk its earnings per share by 30% per year. It saw its revenue drop 7.6% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Mesa Air Group, Inc. Been A Good Investment?

Few Mesa Air Group, Inc. shareholders would feel satisfied with the return of -41% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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 4 warning signs for Mesa Air 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.