Mark Hoplamazian became the CEO of Hyatt Hotels Corporation (NYSE:H) in 2006, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Hyatt Hotels pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Hyatt Hotels Corporation's CEO Compensation With the industry
At the time of writing, our data shows that Hyatt Hotels Corporation has a market capitalization of US$5.3b, and reported total annual CEO compensation of US$15m for the year to December 2019. That's a notable increase of 18% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.
On comparing similar companies from the same industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$8.9m. Accordingly, our analysis reveals that Hyatt Hotels Corporation pays Mark Hoplamazian north of the industry median. Moreover, Mark Hoplamazian also holds US$18m worth of Hyatt Hotels stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 25% of total compensation represents salary and 75% is other remuneration. Hyatt Hotels sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Hyatt Hotels Corporation's Growth
Over the past three years, Hyatt Hotels Corporation has seen its earnings per share (EPS) grow by 10% per year. In the last year, its revenue is down 32%.
This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Hyatt Hotels Corporation Been A Good Investment?
With a three year total loss of 14% for the shareholders, Hyatt Hotels Corporation would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, Hyatt Hotels pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company has impressed with its EPS growth, but it's disappointing to see negative shareholder returns over the same period. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Hyatt Hotels (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.
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.
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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