We Think Shareholders May Want To Consider A Review Of Xenia Hotels & Resorts, Inc.'s (NYSE:XHR) CEO Compensation Package

Xenia Hotels & Resorts, Inc. (NYSE:XHR) has not performed well recently and CEO Marcel Verbaas will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 18 May 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Xenia Hotels & Resorts

How Does Total Compensation For Marcel Verbaas Compare With Other Companies In The Industry?

At the time of writing, our data shows that Xenia Hotels & Resorts, Inc. has a market capitalization of US$2.2b, and reported total annual CEO compensation of US$5.9m for the year to December 2020. That's a fairly small increase of 3.7% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$900k.

On comparing similar companies from the same industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$4.2m. This suggests that Marcel Verbaas is paid more than the median for the industry. Furthermore, Marcel Verbaas directly owns US$9.0m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$900k	US$800k	15%
Other	US$5.0m	US$4.9m	85%
Total Compensation	US$5.9m	US$5.7m	100%

On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. Xenia Hotels & Resorts is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Xenia Hotels & Resorts, Inc.'s Growth Numbers

Xenia Hotels & Resorts's funds from operations (FFO) reversed its movement and declined to -US$126m from US$196m last year. In the last year, its revenue is down 77%.

A lack of improvement is not good to see. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

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

Since shareholders would have lost about 8.3% over three years, some Xenia Hotels & Resorts, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which can't be ignored) in Xenia Hotels & Resorts we think you should know about.

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.

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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. 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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