Is Host Hotels & Resorts, Inc.’s (NYSE:HST) CEO Overpaid Relative To Its Peers?

Jim Risoleo has been the CEO of Host Hotels & Resorts, Inc. (NYSE:HST) since 2017. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Host Hotels & Resorts

How Does Jim Risoleo’s Compensation Compare With Similar Sized Companies?

According to our data, Host Hotels & Resorts, Inc. has a market capitalization of US$13b, and pays its CEO total annual compensation worth US$8.0m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$900k. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.

That means Jim Risoleo receives fairly typical remuneration for the CEO of a large company. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see, below, how CEO compensation at Host Hotels & Resorts has changed over time.

NYSE:HST CEO Compensation, August 3rd 2019
NYSE:HST CEO Compensation, August 3rd 2019

Is Host Hotels & Resorts, Inc. Growing?

On average over the last three years, Host Hotels & Resorts, Inc. has grown earnings per share (EPS) by 11% each year (using a line of best fit). It achieved revenue growth of 3.2% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.

Has Host Hotels & Resorts, Inc. Been A Good Investment?

Host Hotels & Resorts, Inc. has not done too badly by shareholders, with a total return of 9.8%, over three years. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary…

Jim Risoleo is paid around the same as most CEOs of large companies.

We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. As a result of these considerations, I would suggest the CEO pay is reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Host Hotels & Resorts.

Important note: Host Hotels & Resorts may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.