| |
| |
One moment, please... we are searching the news archive.
|
|
|
Hotel Industry News |
Saturday November 22nd, 2008 |
 |
Compensation Trends - Dot com Makes a Comeback by Keith Kefgen & Brad Bloom |
|
Change is inevitable even when it comes to investing in technology. In little more than two years after the dot.com debacle, a dot.com CEO wins our top performance award. It is a testament to a solid business plan and a commitment to a pay-for-performance philosophy. We hope it is a sign for a economic turnaround in the coming year. |
Top Performers
This year’s most underrated CEO was Mr. David Litman, of Hotels.com. Based on our pay-for-performance model, Mr. Litman was underpaid by approximately $1.64 million in 2002. This marks the second straight year in which he has earned a spot among the top 10. The model takes in to consideration three primary criteria, EBITDA growth, market capitalization and stock appreciation, and compares that to total compensation. John Q. Hammons, CEO of the company that shares the same name, is a repeat on this honored list, as is Robert E. Schermer Jr. of Meritage Hospitality Group, Inc.
New names in the top 10 this year include Thomas Kitchin of Jameson Inns, Robert M. Solmson of RFS, Donald K. Barbieri of Westcoast Hospitality, Joseph P. Martori of ILX Resorts Inc, Jeffrey H. Fisher of Inkeepers USA, George Whittlemore of Humphrey Hospitality Trust, and Lewis S. Beck of Janus Hotels and Resorts. Small Cap companies dominated the list as Large Cap companies lost significant market value in 2002, while paychecks remained rich.
Top Appreciators
The five best investments over the past three years were Hotels.com, Loews, John Q. Hammons, Host Marriott and Starwood. These companies had the best stock appreciation from December 1999 to December 2002. No surprise that a couple of these CEOs have been previous winners of our award. Although the lodging industry has been out of favor with Wall Street, these companies have been solid investments.
Top Salaries and Bonuses
Average CEO salary increased to $548,000 in 2002, representing a paltry 1%. The leaders of this list are hardly a surprise, with Henry R. Silverman leading the way once again. Rounding out the top five are Isadore Sharp, J.W. Marriott Jr., Barry S. Sternlicht, and Michael D. Eisner. However, as a result of the poor economy, the average CEO bonus slipped slightly to $482,000. The poor market conditions kept some of the CEOs from collecting a large bonus but not Henry Silverman who nearly doubled his bonus to nearly $8 million.
Top Stock Incentives
The year 2002 saw a major shift away from mega stock option grants and a move towards restricted stock awards. While Mr. Sternlicht of Starwood appeared for the second consecutive year with stock options worth nearly $17 million, the other four CEOs were new to the list. They include Joe S. Houssian of Intrawest Corp., Christopher Nassetta of Host Marriott, Michael Eisner of Walt Disney, and J.W. Marriott Jr. of Marriott International.
Richest CEOs
Almost all lodging CEOs got poorer in 2002, with company stock portfolios down nearly 18% on average. Arison and Marriott remained the industry’s only billionaires, with a stock portfolio worth $5.6 billion and $1.02 billion, respectively. Also among the wealthiest CEOs are Mr. Silverman, Mr. Litman, and Mr. Eisner. The biggest future payday belongs to Bill Marriott who is holding stock options worth $48 million. This is a sharp decrease from 2001 when Mr. Silverman, stood to make $255 million. Other leaders in this category include Mr. Sternlicht, George Johnson Jr. of Extended Stay America, and Peter Rummel of St. Joe Company.
For the average worker these paychecks probably seem staggering. We predict that investors are going to scrutinize executive pay like never before. In numerous shareholder votes recently, executive pay was hotly contested. In the case of GlaxoSmithKline shareholders voted against a new pay package and requested executives return previously granted compensation. That could become an interesting concept, “if you perform poorly, you have to pay the company for working there”.
Keith Kefgen
President
HVS Executive Search
372 Willis Avenue
Mineola, NY 11501
516-248-8828 Ext. 220
516-742-1905
|
|
|
 |
|
 |
|
|
Contact Information:
372 Willis Avenue
Mineola, New York 11501
516-248-8828
516-742-3059 FAX
Click for Website
|
|
Since 1980, HVS International, the leading global hospitality consulting organization, has provided financial and valuation consulting services for more than 10,000 hotels in all 50 states and more than 60 foreign countries. |
|
|
|
Post Release
Get Content
Email News Brief
Saved Articles
Advertising
Handheld
XML/RSS
Post News