Drew Sims became the CEO of Sotherly Hotels Inc (NASDAQ:SOHO) in 2004. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Drew Sims’s Compensation Compare With Similar Sized Companies?
Our data indicates that Sotherly Hotels Inc is worth US$100m, and total annual CEO compensation is US$818k. (This is based on the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$576k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO compensation in that group is US$296k.
As you can see, Drew Sims is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Sotherly Hotels Inc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Sotherly Hotels has changed over time.
Is Sotherly Hotels Inc Growing?
Sotherly Hotels Inc has reduced its earnings per share by an average of 124% a year, over the last three years. It achieved revenue growth of 13% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Sotherly Hotels Inc Been A Good Investment?
With a total shareholder return of 29% over three years, Sotherly Hotels Inc shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared total CEO remuneration at Sotherly Hotels Inc with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
And while shareholder returns have been respectable, they have hardly been superb. So you may want to delve deeper, because we don’t think the CEO pay is too low. Shareholders may want to check for free if Sotherly Hotels insiders are buying or selling shares.
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow 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 firstname.lastname@example.org.