What Can We Conclude About InnSuites Hospitality Trust's (NYSEMKT:IHT) CEO Pay?

James Wirth became the CEO of InnSuites Hospitality Trust (NYSEMKT:IHT) in 1998, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for InnSuites Hospitality Trust.

Note: The company does not report funds from operations, and as a result, we have used earnings per share in our analysis.

See our latest analysis for InnSuites Hospitality Trust

How Does Total Compensation For James Wirth Compare With Other Companies In The Industry?

According to our data, InnSuites Hospitality Trust has a market capitalization of US$24m, and paid its CEO total annual compensation worth US$153k over the year to January 2020. That's a slightly lower by 4.6% over the previous year. Notably, the salary which is US$147.1k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$607k. Accordingly, InnSuites Hospitality Trust pays its CEO under the industry median. Moreover, James Wirth also holds US$11m worth of InnSuites Hospitality Trust stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	US$147k	US$154k	96%
Other	US$5.9k	US$6.2k	4%
Total Compensation	US$153k	US$160k	100%

On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. Investors will find it interesting that InnSuites Hospitality Trust pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at InnSuites Hospitality Trust's Growth Numbers

InnSuites Hospitality Trust has reduced its earnings per share by 28% a year over the last three years. In the last year, its revenue is up 6.5%.

Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has InnSuites Hospitality Trust Been A Good Investment?

InnSuites Hospitality Trust has generated a total shareholder return of 16% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

InnSuites Hospitality Trust pays its CEO a majority of compensation through a salary. As we noted earlier, InnSuites Hospitality Trust pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been unexciting, and EPS growth has fared even worse. It's tough for us to say that James is earning a high compensation, but any bump in pay is unlikely at this stage since shareholders will likely hold off support until performance improves.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for InnSuites Hospitality Trust (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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