Does Chesapeake Lodging Trust’s (NYSE:CHSP) CEO Pay Compare Well With Peers?
In 2009 James Francis was appointed CEO of Chesapeake Lodging Trust (NYSE:CHSP). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Chesapeake Lodging Trust
How Does James Francis’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Chesapeake Lodging Trust has a market cap of US$1.7b, and is paying total annual CEO compensation of US$5.1m. (This figure is for the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$775k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO compensation was US$3.6m.
It would therefore appear that Chesapeake Lodging Trust pays James Francis more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Chesapeake Lodging Trust has changed from year to year.
Is Chesapeake Lodging Trust Growing?
Chesapeake Lodging Trust has increased its earnings per share (EPS) by an average of 11% a year, over the last three years In the last year, its revenue changed by just -0.6%.
This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Chesapeake Lodging Trust Been A Good Investment?
Chesapeake Lodging Trust has served shareholders reasonably well, with a total return of 26% over three years. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary…
We examined the amount Chesapeake Lodging Trust pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. Looking at the same time period, we think that the shareholder returns are respectable. While it may be worth researching further, we don’t see a problem with the CEO pay, given the good EPS growth. So you may want to check if insiders are buying Chesapeake Lodging Trust shares with their own money (free access).
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
