It Looks Like Hostelworld Group plc's (LON:HSW) CEO May Expect Their Salary To Be Put Under The Microscope

Shareholders will probably not be too impressed with the underwhelming results at Hostelworld Group plc (LON:HSW) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 26 April 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Hostelworld Group

How Does Total Compensation For Gary Morrison Compare With Other Companies In The Industry?

According to our data, Hostelworld Group plc has a market capitalization of UK£108m, and paid its CEO total annual compensation worth €498k over the year to December 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at €443.6k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between UK£71m and UK£286m had a median total CEO compensation of €271k. This suggests that Gary Morrison is paid more than the median for the industry.

Component	2020	2019	Proportion (2020)
Salary	€444k	€431k	89%
Other	€55k	€55k	11%
Total Compensation	€498k	€486k	100%

Talking in terms of the industry, salary represented approximately 53% of total compensation out of all the companies we analyzed, while other remuneration made up 47% of the pie. Hostelworld Group pays out 89% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Hostelworld Group plc's Growth Numbers

Hostelworld Group plc has reduced its earnings per share by 109% a year over the last three years. Its revenue is down 81% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Hostelworld Group plc Been A Good Investment?

With a total shareholder return of -73% over three years, Hostelworld Group plc shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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 1 warning sign for Hostelworld Group that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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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