Does Pebblebrook Hotel Trust's (NYSE:PEB) CEO Salary Compare Well With Industry Peers?
This article will reflect on the compensation paid to Jon Bortz who has served as CEO of Pebblebrook Hotel Trust (NYSE:PEB) since 2009. This analysis will also assess whether Pebblebrook Hotel Trust pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Pebblebrook Hotel Trust
Comparing Pebblebrook Hotel Trust's CEO Compensation With the industry
At the time of writing, our data shows that Pebblebrook Hotel Trust has a market capitalization of US$1.5b, and reported total annual CEO compensation of US$5.4m for the year to December 2019. That's a slightly lower by 4.1% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$750k.
In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$4.6m. So it looks like Pebblebrook Hotel Trust compensates Jon Bortz in line with the median for the industry. Moreover, Jon Bortz also holds US$14m worth of Pebblebrook Hotel Trust stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$750k | US$750k | 14% |
Other | US$4.7m | US$4.9m | 86% |
Total Compensation | US$5.4m | US$5.6m | 100% |
On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. Pebblebrook Hotel Trust is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Pebblebrook Hotel Trust's Growth Numbers
Over the last three years, Pebblebrook Hotel Trust has shrunk its earnings per share by 54% per year. In the last year, its revenue is down 13%.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Pebblebrook Hotel Trust Been A Good Investment?
Since shareholders would have lost about 57% over three years, some Pebblebrook Hotel Trust investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
As previously discussed, Jon is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining earnings growth and shareholder returns over the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Pebblebrook Hotel Trust (1 can't be ignored!) that you should be aware of before investing here.
Important note: Pebblebrook Hotel Trust is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
