AETHOS Consulting Group Releases its 2015 Hotel CEO Pay-for-Performance Report
Did Hotel CEOs Get Paid What They Deserved?
Using a proprietary pay-for-performance model, hospitality advisory firm AETHOS Consulting Group has just released its 2015 report evaluating the performance of top CEOs (from the previous year) in the hospitality, travel and entertainment industries. And the results are in:
"We find that value creation should be the most significant factor in doling out CEO paychecks," explains Keith Kefgen, CEO and Managing Director of AETHOS Consulting Group, and co-author of the report." For public companies, significant factors correspond to shareholder returns. That is why CEOs like Disney's Bob Iger, Priceline's Darren Huston and Wyndhams's Stephen Holmes, can demand multi-million dollar paychecks and be worth every penny."
The AETHOS Pay-for-Performance Model analyzes key financial metrics such as company size, stock appreciation, EBITDA growth and total direct compensation within the defined peer group. The market capitalization of the peer group ranged from Walt Disney's colossal $195 billion to Supertel's $11 million.
"Comparing CEOs from two vastly different companies may seem puzzling," adds AETHOS consultant Derek Walker, also co-author of the report, "but that is precisely what the model is intended to do."
It comes as no surprise that the highest paid CEOs in the industry arise from the largest companies. All 10 of the highest paid CEOs on the AETHOS list work for the 10 highest earning companies in 2014. Walt Disney topped the list, paying Bob Iger a total package of $46 million, doubling the $21 million Priceline's Darren Huston received. Following close behind are the major hotel chains, with Marriott, Wyndham, Starwood and Hilton all paying their CEO between $10 million and $15 million. The other double digit millionaire making the list is Royal Caribbean's Richard Fain, earning $12 million in 2014. The average CEO paycheck in 2014 was $6.4 million, rising 23% from the previous year's $5.2 million average.
"Although their pay packages were significant, these top-earning CEOs appeared to deserve it," adds Kefgen. "All had an AETHOS Value Index (AVI) near 100, indicating that their pay is on par when compared with their peers in the market.
Topping this year's list of pay-for-performance CEOs are Andrew Sims of Sotherly Hotels and Stephen Weisz of Marriott Vacation, both of whom had and AVI of 152 and 143 respectively, signifying that each should have earned nearly 50% more than their 2014 compensation package. Rounding out the top five pay-for-performance CEO spots are Warren Haruki of Maui Land & Pineapple Company, Jeffrey Fisher of Chatham Lodging Trust, and Darren Huston of Priceline.
To read the Report in its entirety, click here
About AETHOS Consulting Group
AETHOS Consulting Group is a global advisory firm serving the hospitality industry. The firm enhances value for its partner organizations via access, know-how and fresh thinking. Core competencies include executive search, compensation consulting, business strategy and psychometric assessments. The firm is designed as a single partnership operating from ten locations in North America, Europe and Asia Pacific. www.aethoscg.com.
Media Contact
Leora Lanz (for AETHOS)
LHL Communications [email protected]