Shareholders May Not Be So Generous With Hilton Worldwide Holdings Inc.'s (NYSE:HLT) CEO Compensation And Here's Why
Key Insights
- Hilton Worldwide Holdings' Annual General Meeting to take place on 14th of May
- CEO Chris Nassetta's total compensation includes salary of US$1.30m
- Total compensation is 72% above industry average
- Hilton Worldwide Holdings' EPS grew by 36% over the past three years while total shareholder return over the past three years was 82%
Under the guidance of CEO Chris Nassetta, Hilton Worldwide Holdings Inc. (NYSE:HLT) has performed reasonably well recently. As shareholders go into the upcoming AGM on 14th of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.
View our latest analysis for Hilton Worldwide Holdings
Comparing Hilton Worldwide Holdings Inc.'s CEO Compensation With The Industry
At the time of writing, our data shows that Hilton Worldwide Holdings Inc. has a market capitalization of US$56b, and reported total annual CEO compensation of US$28m for the year to December 2024. That's just a smallish increase of 5.3% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.3m.
In comparison with other companies in the American Hospitality industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$16m. Accordingly, our analysis reveals that Hilton Worldwide Holdings Inc. pays Chris Nassetta north of the industry median. Furthermore, Chris Nassetta directly owns US$850m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$1.3m | US$1.3m | 5% |
| Other | US$27m | US$25m | 95% |
| Total Compensation | US$28m | US$27m | 100% |
On an industry level, around 17% of total compensation represents salary and 83% is other remuneration. Investors may find it interesting that Hilton Worldwide Holdings paid a marginal salary to Chris Nassetta, over the past year, focusing on non-salary compensation instead. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Hilton Worldwide Holdings Inc.'s Growth Numbers
Hilton Worldwide Holdings Inc. has seen its earnings per share (EPS) increase by 36% a year over the past three years. It achieved revenue growth of 5.2% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Hilton Worldwide Holdings Inc. Been A Good Investment?
We think that the total shareholder return of 82%, over three years, would leave most Hilton Worldwide Holdings Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
To Conclude...
Hilton Worldwide Holdings primarily uses non-salary benefits to reward its CEO. Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Hilton Worldwide Holdings (1 is potentially serious!) that you should be aware of before investing here.
Important note: Hilton Worldwide Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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.