How Is Gama Aviation's (LON:GMAA) CEO Paid Relative To Peers?

This article will reflect on the compensation paid to Marwan Abdel-Khalek who has served as CEO of Gama Aviation Plc (LON:GMAA) since 1983. This analysis will also assess whether Gama Aviation pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Gama Aviation

Comparing Gama Aviation Plc's CEO Compensation With the industry

At the time of writing, our data shows that Gama Aviation Plc has a market capitalization of UK£25m, and reported total annual CEO compensation of UK£611k for the year to December 2019. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at US$479.4k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below UK£154m, reported a median total CEO compensation of UK£603k. This suggests that Gama Aviation remunerates its CEO largely in line with the industry average. What's more, Marwan Abdel-Khalek holds UK£5.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 75% of total compensation represents salary, while the remainder of 25% is other remuneration. There isn't a significant difference between Gama Aviation and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Gama Aviation Plc's Growth Numbers

Gama Aviation Plc has reduced its earnings per share by 75% a year over the last three years. Its revenue is up 5.1% over the last year.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Gama Aviation Plc Been A Good Investment?

Given the total shareholder loss of 83% over three years, many shareholders in Gama Aviation Plc are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, Gama Aviation pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 4 warning signs for Gama Aviation (of which 2 are a bit concerning!) that you should know about in order to have a holistic understanding of the 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.

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. 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.

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