Mark Brugger has been the CEO of DiamondRock Hospitality Company (NYSE:DRH) since 2008. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Mark Brugger's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that DiamondRock Hospitality Company has a market cap of US$2.0b, and is paying total annual CEO compensation of US$5.1m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$775k. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$4.0m.
That means Mark Brugger receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at DiamondRock Hospitality has changed from year to year.
Is DiamondRock Hospitality Company Growing?
DiamondRock Hospitality Company has reduced its earnings per share by an average of 9.3% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 3.4%.
Unfortunately, earnings per share have trended lower over the last 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 DiamondRock Hospitality Company Been A Good Investment?
With a total shareholder return of 4.4% over three years, DiamondRock Hospitality Company has done okay by shareholders. 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.
Mark Brugger is paid around what is normal the leaders of comparable size companies.
The company isn't growing earnings per share, and nor have the total returns inspired us. We wouldn't say the CEO pay is too high, but it's probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. So you may want to check if insiders are buying DiamondRock Hospitality shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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