How Much is PPHE Hotel Group's (LON:PPH) CEO Getting Paid?
This article will reflect on the compensation paid to Boris Ivesha who has served as CEO of PPHE Hotel Group Limited (LON:PPH) since 2007. This analysis will also assess whether PPHE Hotel Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for PPHE Hotel Group
How Does Total Compensation For Boris Ivesha Compare With Other Companies In The Industry?
At the time of writing, our data shows that PPHE Hotel Group Limited has a market capitalization of UK£429m, and reported total annual CEO compensation of UK£532k for the year to December 2019. This means that the compensation hasn't changed much from last year. In particular, the salary of UK£426.5k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the same industry with market capitalizations ranging between UK£152m and UK£607m had a median total CEO compensation of UK£576k. From this we gather that Boris Ivesha is paid around the median for CEOs in the industry. What's more, Boris Ivesha holds UK£47m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2019 | 2018 | Proportion (2019) |
Salary | UK£427k | UK£417k | 80% |
Other | UK£105k | UK£120k | 20% |
Total Compensation | UK£532k | UK£537k | 100% |
On an industry level, around 77% of total compensation represents salary and 23% is other remuneration. Although there is a difference in how total compensation is set, PPHE Hotel Group more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at PPHE Hotel Group Limited's Growth Numbers
Over the last three years, PPHE Hotel Group Limited has shrunk its earnings per share by 17% per year. In the last year, its revenue is down 24%.
The decline in EPS 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. 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 PPHE Hotel Group Limited Been A Good Investment?
Given the total shareholder loss of 3.3% over three years, many shareholders in PPHE Hotel Group Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As previously discussed, Boris 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 EPS 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 compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for PPHE Hotel Group that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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