The results at Playa Hotels & Resorts N.V. (NASDAQ:PLYA) have been quite disappointing recently and CEO Bruce Wardinski bears some responsibility for this. At the upcoming AGM on 29 June 2021, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.
How Does Total Compensation For Bruce Wardinski Compare With Other Companies In The Industry?
According to our data, Playa Hotels & Resorts N.V. has a market capitalization of US$1.2b, and paid its CEO total annual compensation worth US$4.1m over the year to December 2020. That's a notable increase of 35% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$202k.
For comparison, other companies in the same industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$3.6m. From this we gather that Bruce Wardinski is paid around the median for CEOs in the industry. What's more, Bruce Wardinski holds US$26m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 22% of total compensation out of all the companies we analyzed, while other remuneration made up 78% of the pie. Interestingly, the company has chosen to go down an unconventional route in that it pays a smaller salary to Bruce Wardinski as compared to non-salary compensation over the one-year period examined. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Playa Hotels & Resorts N.V.'s Growth Numbers
Over the last three years, Playa Hotels & Resorts N.V. has shrunk its earnings per share by 122% per year. It saw its revenue drop 72% over the last year.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Playa Hotels & Resorts N.V. Been A Good Investment?
The return of -32% over three years would not have pleased Playa Hotels & Resorts N.V. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
Playa Hotels & Resorts prefers rewarding its CEO through non-salary benefits. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Playa Hotels & Resorts that investors should think about before committing capital to this stock.
Switching gears from Playa Hotels & Resorts, 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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