Despite strong share price growth of 54% for Marriott Vacations Worldwide Corporation (NYSE:VAC) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 14 May 2021. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

Check out our latest analysis for Marriott Vacations Worldwide

Comparing Marriott Vacations Worldwide Corporation's CEO Compensation With the industry

At the time of writing, our data shows that Marriott Vacations Worldwide Corporation has a market capitalization of US$7.3b, and reported total annual CEO compensation of US$5.4m for the year to December 2020. That's a notable decrease of 37% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$700k.

In comparison with other companies in the industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$6.5m. So it looks like Marriott Vacations Worldwide compensates Steve Weisz in line with the median for the industry. Furthermore, Steve Weisz directly owns US$60m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. It's interesting to note that Marriott Vacations Worldwide allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Marriott Vacations Worldwide Corporation's Growth Numbers

Over the last three years, Marriott Vacations Worldwide Corporation has shrunk its earnings per share by 116% per year. It saw its revenue drop 48% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Marriott Vacations Worldwide Corporation Been A Good Investment?

Boasting a total shareholder return of 54% over three years, Marriott Vacations Worldwide Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Marriott Vacations Worldwide (1 is a bit unpleasant!) that you should be aware of before investing here.

Important note: Marriott Vacations Worldwide is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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