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Should You Worry About Travelzoo's (NASDAQ:TZOO) CEO Pay?

Simply Wall St

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Holger Bartel has been the CEO of Travelzoo (NASDAQ:TZOO) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Travelzoo

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

According to our data, Travelzoo has a market capitalization of US$206m, and pays its CEO total annual compensation worth US$232k. (This is based on the year to December 2018). That's below the compensation, last year. Notably, the salary of US$232k is the vast majority of the CEO compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.1m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see a visual representation of the CEO compensation at Travelzoo, below.

NasdaqGS:TZOO CEO Compensation, June 7th 2019

Is Travelzoo Growing?

Over the last three years Travelzoo has shrunk its earnings per share by an average of 35% per year (measured with a line of best fit). In the last year, its revenue is up 2.1%.

Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has Travelzoo Been A Good Investment?

Most shareholders would probably be pleased with Travelzoo for providing a total return of 114% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Travelzoo is currently paying its CEO below what is normal for companies of its size.

It's well worth noting that while Holger Bartel is paid less than most company leaders (at similar sized companies), there isn't much EPS growth. Having said that, returns to shareholders have been great. So, while it would be nice to have EPS growth, on our analysis the CEO compensation is not an issue. Whatever your view on compensation, you might want to check if insiders are buying or selling Travelzoo shares (free trial).

Important note: Travelzoo may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.