How Does Pebblebrook Hotel Trust's (NYSE:PEB) CEO Pay Compare With Company Performance?
Jon Bortz became the CEO of Pebblebrook Hotel Trust (NYSE:PEB) in 2009, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Pebblebrook Hotel Trust
Comparing Pebblebrook Hotel Trust's CEO Compensation With the industry
Our data indicates that Pebblebrook Hotel Trust has a market capitalization of US$1.5b, and total annual CEO compensation was reported as US$5.4m for the year to December 2019. That's a slight decrease of 4.1% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$750k.
For comparison, other companies in the same industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of 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, roughly 15% of total compensation represents salary and 85% is other remuneration. Our data reveals that Pebblebrook Hotel Trust allocates salary more or less in line with the wider market. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Pebblebrook Hotel Trust's Growth Numbers
Pebblebrook Hotel Trust has reduced its earnings per share by 54% a year over the last three years. In the last year, its revenue is down 13%.
The decline in earnings is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Pebblebrook Hotel Trust Been A Good Investment?
With a three year total loss of 57% for the shareholders, Pebblebrook Hotel Trust would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
As we noted earlier, Pebblebrook Hotel Trust pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, earnings growth and shareholder returns have been in the red for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Pebblebrook Hotel Trust (1 doesn't sit too well with us!) that you should be aware of before investing here.
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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