We Think Shareholders Are Less Likely To Approve A Pay Rise For Meliá Hotels International, S.A.'s (BME:MEL) CEO For Now

Key Insights

• Meliá Hotels International to hold its Annual General Meeting on 9th of May
• Salary of €865.0k is part of CEO Gabriel Escarrer Jaume's total remuneration
• The total compensation is similar to the average for the industry
• Meliá Hotels International's EPS grew by 71% over the past three years while total shareholder loss over the past three years was 19%

Our free stock report includes 2 warning signs investors should be aware of before investing in Meliá Hotels International. Read for free now.

The underwhelming share price performance of Meliá Hotels International, S.A. (BME:MEL) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 9th of May could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Meliá Hotels International

How Does Total Compensation For Gabriel Escarrer Jaume Compare With Other Companies In The Industry?

At the time of writing, our data shows that Meliá Hotels International, S.A. has a market capitalization of €1.4b, and reported total annual CEO compensation of €1.8m for the year to December 2024. Notably, that's an increase of 21% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at €865k.

On comparing similar companies from the Spain Hospitality industry with market caps ranging from €886m to €2.8b, we found that the median CEO total compensation was €2.0m. So it looks like Meliá Hotels International compensates Gabriel Escarrer Jaume in line with the median for the industry. Moreover, Gabriel Escarrer Jaume also holds €1.1m worth of Meliá Hotels International stock directly under their own name.

Component	2024	2023	Proportion (2024)
Salary	€865k	€869k	49%
Other	€905k	€589k	51%
Total Compensation	€1.8m	€1.5m	100%

On an industry level, around 48% of total compensation represents salary and 52% is other remuneration. Meliá Hotels International is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Meliá Hotels International, S.A.'s Growth

Over the past three years, Meliá Hotels International, S.A. has seen its earnings per share (EPS) grow by 71% per year. It achieved revenue growth of 4.4% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Meliá Hotels International, S.A. Been A Good Investment?

With a three year total loss of 19% for the shareholders, Meliá Hotels International, S.A. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Meliá Hotels International that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.