Key Insights

• Vail Resorts to hold its Annual General Meeting on 5th of December
• Salary of US$1.09m is part of CEO Kirsten Lynch's total remuneration
• The overall pay is 43% below the industry average
• Vail Resorts' three-year loss to shareholders was 38% while its EPS grew by 25% over the past three years

The performance at Vail Resorts, Inc. (NYSE:MTN) has been rather lacklustre of late and shareholders may be wondering what CEO Kirsten Lynch is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 5th of December. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Comparing Vail Resorts, Inc.'s CEO Compensation With The Industry

According to our data, Vail Resorts, Inc. has a market capitalization of US$6.8b, and paid its CEO total annual compensation worth US$6.3m over the year to July 2024. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.

In comparison with other companies in the American Hospitality industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$11m. In other words, Vail Resorts pays its CEO lower than the industry median. Furthermore, Kirsten Lynch directly owns US$6.6m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 18% of total compensation represents salary and 82% is other remuneration. Although there is a difference in how total compensation is set, Vail Resorts more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Vail Resorts, Inc.'s Growth

Vail Resorts, Inc.'s earnings per share (EPS) grew 25% per year over the last three years. The trailing twelve months of revenue was pretty much the same as the prior period.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Vail Resorts, Inc. Been A Good Investment?

With a total shareholder return of -38% over three years, Vail Resorts, Inc. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The fact that shareholders are sitting on a loss is certainly disheartening. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. A key question may be why the fundamentals have not yet been reflected into the share price. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance.

Arguably, business quality is much more important than CEO compensation levels.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.