How Does Helloworld Travel's (ASX:HLO) CEO Salary Compare to Peers?

This article will reflect on the compensation paid to Andrew Burnes who has served as CEO of Helloworld Travel Limited (ASX:HLO) since 2016. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Helloworld Travel

Comparing Helloworld Travel Limited's CEO Compensation With the industry

According to our data, Helloworld Travel Limited has a market capitalization of AU$329m, and paid its CEO total annual compensation worth AU$589k over the year to June 2020. That is, the compensation was roughly the same as last year. In particular, the salary of AU$543.2k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between AU$130m and AU$521m had a median total CEO compensation of AU$608k. So it looks like Helloworld Travel compensates Andrew Burnes in line with the median for the industry. Moreover, Andrew Burnes also holds AU$22m worth of Helloworld Travel stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. Helloworld Travel pays out 92% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Helloworld Travel Limited's Growth Numbers

Over the last three years, Helloworld Travel Limited has shrunk its earnings per share by 45% per year. Its revenue is down 21% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Helloworld Travel Limited Been A Good Investment?

With a three year total loss of 49% for the shareholders, Helloworld Travel Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As previously discussed, Andrew is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Helloworld Travel that investors should look into moving forward.

Switching gears from Helloworld Travel, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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