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How Much Did InnSuites Hospitality Trust's (NYSEMKT:IHT) CEO Pocket Last Year?

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  • IHT

James Wirth has been the CEO of InnSuites Hospitality Trust (NYSEMKT:IHT) since 1998, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Note: The company does not report funds from operations, and as a result, we have used earnings per share in our analysis.

See our latest analysis for InnSuites Hospitality Trust

How Does Total Compensation For James Wirth Compare With Other Companies In The Industry?

According to our data, InnSuites Hospitality Trust has a market capitalization of US$13m, and paid its CEO total annual compensation worth US$153k over the year to January 2020. We note that's a small decrease of 4.6% on last year. Notably, the salary which is US$147.1k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$1.2m. That is to say, James Wirth is paid under the industry median. Moreover, James Wirth also holds US$6.2m worth of InnSuites Hospitality Trust stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2020

2019

Proportion (2020)

Salary

US$147k

US$154k

96%

Other

US$5.9k

US$6.2k

4%

Total Compensation

US$153k

US$160k

100%

On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. InnSuites Hospitality Trust is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

A Look at InnSuites Hospitality Trust's Growth Numbers

Over the last three years, InnSuites Hospitality Trust has shrunk its earnings per share by 28% per year. Its revenue is up 6.5% over the last year.

The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has InnSuites Hospitality Trust Been A Good Investment?

Given the total shareholder loss of 40% over three years, many shareholders in InnSuites Hospitality Trust are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

InnSuites Hospitality Trust pays its CEO a majority of compensation through a salary. As we noted earlier, InnSuites Hospitality Trust pays its CEO lower than the norm for similar-sized companies belonging to the same industry. EPS growth has failed to impress us, and the same can be said about shareholder returns. We can't say the CEO compensation is high, but shareholders will be cold to a bump at this stage, considering negative investor returns.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 5 warning signs for InnSuites Hospitality Trust you should be aware of, and 2 of them are concerning.

Important note: InnSuites Hospitality 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.