Highest-Paid Hotel CEOs

25.08.2023 - 13:30 / skift.com / Sean Oneill / Patrick Pacious / Geoffrey Ballotti / Chris Nassetta

Rob Goldstein, CEO and chairman of Las Vegas Sands Corp., was last year’s best-compensated public hotel company CEO, collecting $40 million. The second-most was Patrick Pacious, president and CEO of Choice Hotels International, who earned $27 million in total compensation.

Yet the newsiest detail in hotel CEO pay was something else. Most major hotel company CEOs ended 2022 with less actual overall compensation than first awarded. A new regulatory measure this year made it easier to see the difference between what CEOs aimed for and what they actually got.

A new rule this year required U.S. companies to more clearly report the equity awards that account for pay packages for top executives. In the past, companies reported compensation as valued when awarded. This year, the U.S. Securities and Exchange Commission required companies to disclose a “compensation actually paid” measure — which provides a clearer picture of the paper gains and losses of top bosses for the three most recent years.

Hotel CEO pay packages begin with a salary and then add a buffet of incentives tied to meeting performance targets or the shifting value of company stock. An annual bonus, stock share awards, and other compensation help to boost the average pay of a top boss. Yet the variable compensation can be tricky to estimate because an executive may hold it indefinitely and the value will fluctuate.

Exhibit A: In 2022, Hilton CEO Chris Nassetta earned a base salary of $1.3 million. But he also had an opportunity to receive $23.5 million in compensation but only received $8.4 million. Hilton tied CEO pay to targets for financial performance. About half of the incentives were linked to an adjusted earnings target. Other targets included free cash flow, net room growth, and diversity equity and inclusion goals for staffing.

Hilton’s stock sagged 19% last year, which depressed the value of its equity awards. In comparison, the Baird/STR Hotel Stock Index, which tracks 20 large hotel companies and real estate investment trusts, was down 15% for the year.

Wyndham CEO Geoffrey Ballotti is another executive who saw less than “expected” remuneration. Under the old measure, Ballotti was notionally awarded $9.7 million in compensation last year. But under the new measure, he was effectively awarded only $1.6 million — primarily because of a change in the fair value of equity awards granted in prior years.

Another notable compensation package was for Thomas Reeg, CEO of Caesars, the casino and hotel operator. He was paid a base salary of $2 million last year. But variable compensation made up most of his remuneration. A 56% plunge in the company’s equity value last year impacted his compensation so much that his compensation was