We Think Tourism Holdings Limited's (NZSE:THL) CEO Compensation Package Needs To Be Put Under A Microscope

Shareholders will probably not be too impressed with the underwhelming results at Tourism Holdings Limited (NZSE:THL) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 21 October 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Tourism Holdings

How Does Total Compensation For Grant Webster Compare With Other Companies In The Industry?

Our data indicates that Tourism Holdings Limited has a market capitalization of NZ$419m, and total annual CEO compensation was reported as NZ$1.2m for the year to June 2021. We note that's an increase of 40% above last year. Notably, the salary which is NZ$651.1k, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between NZ$144m and NZ$575m had a median total CEO compensation of NZ$506k. This suggests that Grant Webster is paid more than the median for the industry. Moreover, Grant Webster also holds NZ$6.2m worth of Tourism Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	NZ$651k	NZ$588k	56%
Other	NZ$515k	NZ$243k	44%
Total Compensation	NZ$1.2m	NZ$831k	100%

Talking in terms of the industry, salary represented approximately 56% of total compensation out of all the companies we analyzed, while other remuneration made up 44% of the pie. Tourism Holdings is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.

Tourism Holdings Limited's Growth

Over the last three years, Tourism Holdings Limited has shrunk its earnings per share by 76% per year. Its revenue is down 10% over the previous year.

Few shareholders would be pleased to read that EPS have declined. 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 Tourism Holdings Limited Been A Good Investment?

The return of -42% over three years would not have pleased Tourism Holdings Limited shareholders. 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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Tourism Holdings that investors should be aware of in a dynamic business environment.

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.

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.

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