Should You Worry About Apple Hospitality REIT, Inc.’s (NYSE:APLE) CEO Pay Cheque?
In 2014 Justin Knight was appointed CEO of Apple Hospitality REIT, Inc. (NYSE:APLE). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Apple Hospitality REIT
How Does Justin Knight’s Compensation Compare With Similar Sized Companies?
Our data indicates that Apple Hospitality REIT, Inc. is worth US$3.6b, and total annual CEO compensation is US$3.6m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$500k. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO compensation of that group was US$5.1m.
So Justin Knight is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Apple Hospitality REIT has changed from year to year.
Is Apple Hospitality REIT, Inc. Growing?
On average over the last three years, Apple Hospitality REIT, Inc. has grown earnings per share (EPS) by 6.7% each year. In the last year, its revenue is up 2.6%.
I’d prefer higher revenue growth, but the modest improvement in EPS is good. Considering these factors I’d say performance has been pretty decent, though not amazing.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Apple Hospitality REIT, Inc. Been A Good Investment?
Since shareholders would have lost about 7.7% over three years, some Apple Hospitality REIT, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
Justin Knight is paid around what is normal the leaders of comparable size companies.
The company cannot boast particularly strong per share growth. And it’s hard to argue that the returns over the last three years have delighted. So many would argue that the CEO is certainly not underpaid. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Apple Hospitality REIT.
Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .
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.
