Rob Katz has been the CEO of Vail Resorts, Inc. (NYSE:MTN) since 2006. First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Rob Katz's Compensation Compare With Similar Sized Companies?
According to our data, Vail Resorts, Inc. has a market capitalization of US$9.8b, and paid its CEO total annual compensation worth US$3.6m over the year to July 2019. That's a fairly small increase of 7.3% on year before. While we always look at total compensation first, we note that the salary component is less, at US$962k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Most shareholders would consider it a positive that Rob Katz takes less in total compensation than the CEOs of most other large companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Vail Resorts has changed from year to year.
Is Vail Resorts, Inc. Growing?
Over the last three years Vail Resorts, Inc. has grown its earnings per share (EPS) by an average of 21% per year (using a line of best fit). Its revenue is up 13% over last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Vail Resorts, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Vail Resorts, Inc. for providing a total return of 65% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
It appears that Vail Resorts, Inc. remunerates its CEO below most large companies.
Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Rob Katz deserves a raise! It is relatively rare to see a modestly paid CEO when performance is so impressive. It would be even more positive if company insiders are buying shares. So you may want to check if insiders are buying Vail Resorts shares with their own money (free access).
Important note: Vail Resorts may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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