In 2006 Jay Shah was appointed CEO of Hersha Hospitality Trust (NYSE:HT). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jay Shah’s Compensation Compare With Similar Sized Companies?
Our data indicates that Hersha Hospitality Trust is worth US$775m, and total annual CEO compensation is US$4.7m. (This number is for the twelve months until 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$750k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.3m.
As you can see, Jay Shah is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Hersha Hospitality Trust is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Hersha Hospitality Trust has changed over time.
Is Hersha Hospitality Trust Growing?
Hersha Hospitality Trust has reduced its earnings per share by an average of 18% a year, over the last three years. In the last year, its revenue changed by just 0.01%.
Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue is seriously uninspiring. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Hersha Hospitality Trust Been A Good Investment?
With a three year total loss of 8.6%, Hersha Hospitality Trust would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared total CEO remuneration at Hersha Hospitality Trust with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! Shareholders may want to check for free if Hersha Hospitality Trust insiders are buying or selling shares.
Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.