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Is Summit Hotel Properties, Inc.'s (NYSE:INN) CEO Overpaid Relative To Its Peers?

Simply Wall St

Dan Hansen became the CEO of Summit Hotel Properties, Inc. (NYSE:INN) in 2010. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. 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.

Check out our latest analysis for Summit Hotel Properties

How Does Dan Hansen's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Summit Hotel Properties, Inc. has a market cap of US$1.2b, and is paying total annual CEO compensation of US$4.4m. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at US$700k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.7m.

Thus we can conclude that Dan Hansen receives more in total compensation than the median of a group of companies in the same market, and of similar size to Summit Hotel Properties, Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Summit Hotel Properties has changed over time.

NYSE:INN CEO Compensation, August 30th 2019

Is Summit Hotel Properties, Inc. Growing?

On average over the last three years, Summit Hotel Properties, Inc. has shrunk earnings per share by 33% each year (measured with a line of best fit). Revenue was pretty flat on last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Summit Hotel Properties, Inc. Been A Good Investment?

With a three year total loss of 7.6%, Summit Hotel Properties, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Summit Hotel Properties, Inc., and compared it to remuneration at a group of similar sized companies. 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.

Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! So you may want to check if insiders are buying Summit Hotel Properties shares with their own money (free access).

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.