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Is Travelzoo’s (NASDAQ:TZOO) CEO Pay Justified?

Holger Bartel became the CEO of Travelzoo (NASDAQ:TZOO) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Travelzoo

How Does Holger Bartel’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Travelzoo has a market cap of US$104m, and is paying total annual CEO compensation of US$1.6m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$142k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$296k.

It would therefore appear that Travelzoo pays Holger Bartel more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. 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 Travelzoo has changed over time.

NasdaqGS:TZOO CEO Compensation November 29th 18
NasdaqGS:TZOO CEO Compensation November 29th 18

Is Travelzoo Growing?

Over the last three years Travelzoo has shrunk its earnings per share by an average of 48% per year. It achieved revenue growth of 4.6% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.

It could be important to check this free visual depiction of what analysts expect for the future.

Has Travelzoo Been A Good Investment?

Travelzoo has not done too badly by shareholders, with a total return of 1.4%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

We examined the amount Travelzoo pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.

While shareholder returns are acceptable, they don’t delight. So we think more research is needed, but we don’t think the CEO underpaid. Shareholders may want to check for free if Travelzoo 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 editorial-team@simplywallst.com.