Should You Worry About Chatham Lodging Trust's (NYSE:CLDT) CEO Pay Cheque?
Jeff Fisher has been the CEO of Chatham Lodging Trust (NYSE:CLDT) since 2009. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
View our latest analysis for Chatham Lodging Trust
How Does Jeff Fisher's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Chatham Lodging Trust has a market cap of US$861m, and reported total annual CEO compensation of US$4.4m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$625k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. 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.
As you can see, Jeff Fisher is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Chatham Lodging Trust is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Chatham Lodging Trust has changed from year to year.
Is Chatham Lodging Trust Growing?
On average over the last three years, Chatham Lodging Trust has shrunk earnings per share by 11% each year (measured with a line of best fit). Its revenue is up 5.0% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Chatham Lodging Trust Been A Good Investment?
Chatham Lodging Trust has generated a total shareholder return of 15% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
We compared total CEO remuneration at Chatham Lodging Trust with the amount paid at companies with a similar market capitalization. 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 to impress us, over the last three years. And shareholder returns are decent but not great. So we doubt many shareholders would consider the CEO pay to be particularly modest! So you may want to check if insiders are buying Chatham Lodging Trust shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
