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Executive Compensation at HGVC

Discussion in 'Hilton Grand Vacations Club / HGVC' started by Talent312, May 1, 2018.

  1. Talent312

    Talent312 Tug Review Crew: Rookie TUG Member

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    It's fairly clear who has benefited the most from the HGVC spin-off from Hilton:

    Key Executive Compensation - 2016 vs. 2017

    Key Executive Compensation........ 5,215,206 ... 15,436,418
    Mark D. Wang/President and CEO.. 3,374,268 ..... 6,306,642
    James Mikolaichik/Exec.VP & CFO..... 923,077 ..... 3,086,065
    Charles R. Corbin/Exec.VP and Legal Officer ........ 2,144,038
    Dennis A. Delorenzo/Exec.VP and Sales Officer .... 2,035,871
    Barbara L. Hollkamp/Exec.VP and HR Officer ....... 1,863,802
    -- source: Morningstar - HGV

    From the PR when Hilton announced the spin-off (2/26/16):
    "There will be no changes to your fees attributed to this transaction."

    <jus' sayin'>
    .
     
    hurnik likes this.
  2. JIMinNC

    JIMinNC TUG Member

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    Just remember part of that executive comp for 2017 probably includes stock compensation and stock options which have increased in value as HGV stock has risen from around $25/share or so to over $40/share. Usually stock-based comp is included in these executive comp numbers. It's not just base salary and bonus.
     
    CalGalTraveler likes this.
  3. Arimaas

    Arimaas TUG Member

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    Either way, I'm in the wrong line of work.
     
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  4. brp

    brp TUG Member

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    Yup. CEO's a great job if you can get it. No doubt.

    Cheers.
     
  5. PigsDad

    PigsDad TUG Member

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    I wouldn't go that far. Sure, the pay is great, but they have absolutely no life outside the job. Sorry, not interested -- money can't buy you time with your loved ones.

    Kurt
     
  6. CalGalTraveler

    CalGalTraveler TUG Member

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    Let's hope they keep that stock price high because it reduces the chance of a takeover by Diamond etc. and it provides more resources for an acquisition should they decide to expand more rapidly based on the recent mergers.
     
  7. brp

    brp TUG Member

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    True. I should have said "great job for those that want the lifestyle and pay rate." Not for me either.

    Of course, even where I am, I'm checking work email pretty much all the time...but that's in between sets at Jazz Fest :)

    Cheers.
     
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  8. Arimaas

    Arimaas TUG Member

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    Something Tells me their seats at jazz fest are a lot nicer than ours ;)
     
  9. brp

    brp TUG Member

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    Yeah, they're at the side of the stage while we're out on the grass (or in the WWOZ tent if we do the right thing :))

    Cheers.
     
  10. Tamaradarann

    Tamaradarann TUG Review Crew: Veteran TUG Member

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    I agree with the comments that I have read about the excessive executive compensation of HGVC execs, however, CEO's of other companies also make huge salaries. I believe that sports stars, movie stars, music artists etc. make much more than they they should also. Other people that I know like the school teacher in Hawaii make much less than they should. I really wish I could do something about the inequity of compensation. However, since it is so widespread I can't get upset about the HGVC execs.
     
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  11. brp

    brp TUG Member

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    Why do you feel that CEOs and various entertainers are overpaid? What about the value they generate, or does that not matter- and only the external vestiges of what they do count?

    CEOs are tasked with making companies profitable and honoring their fiduciary responsibility to their shareholders as well as obligations to their employees. If they do that well, why should they not be highly compensated. Our CEO is making very good decisions and this is benefiting the almost 20K employees, plus the shareholders. I don't feel that he is overpaid.

    As to entertainers- we're the ones that pay them. If people didn't want to pay the going rates for movies, concerts and sporting events, they wouldn't be making as much. So we do, and they do.

    Both of these areas are very specialized skills that a very small percentage of the population can do with competence. They should, IMO, be rewarded for such. This is not to detract from teachers, for whom I have a high regard. It is not an easy job. But it is also accessible as an occupation by a much higher percentage of the population. Hence, lower compensation (plus the sources for the compensation are far more limited).

    So, I guess I don't understand the "more than they should," as I don't see any quantification of, nor basis for, how much they "should" make.

    Cheers.
     
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  12. jestme

    jestme Guest

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    This string is specifically related to HGVC executives who all have basically received a 300% increase in compensation. I know of no other industry where a 300% increase to all executive salaries have happened in one year. The issue in this case isn't what they make as compensation for their accomplishments or experience, if it is justified based on other CEO's salary in a similar industry. It is the size of the increase, not only for the CEO, but for a number of V.P's as well. If you have ever received a 300% increase in a year, I applaud you. In today's world of low inflation rates, 300% in increases is typically more than what non-executives make in a whole career, never in a single year.
     
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  13. Tamaradarann

    Tamaradarann TUG Review Crew: Veteran TUG Member

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    The basis that I use is what they contribute to society. If you use supply and demand as the basis for how much the athletes and entertainers should make I can't argue with what they make. The demand for their entertainment, even with the high prices of today is still high. The best athletes in the prime spectator sports and the most sort after entertainers are in short supply.

    However, if you use the value of what they add to society as the basis, a school teacher that may teach thousands of students in the course of their career adds to the development of our future generations and contributes more than any athlete or entertainer. Certainly there are many "qualified" teachers because we don't use a hiring, retention, and pay scale system based on the "best teachers" as we do for athletes or the "most popular teachers" as we do for entertainers. Although we do use some selection process, in fact, any teacher that meets the minimum qualifications can be hired.

    Finally, I must make a comment on the point you make about the "sources of compensation." Being from Long Island, with some of the highest property taxes in the country, I don't want to pay anymore in property taxes than I do now. (By the way the property taxes in Hawaii are about 1/10 of what they are on Long Island and school teachers make about 1/2 as much and have to pay for about 1/2 of their health insurance.) However, all people, except the very rich have a limited amount of income to spend. Some of it MUST be spent on taxes, housing, food, clothing, transportation to work, health care etc. The remainder is available for discretionary spending like travel and entertainment. If you want to make an argument that athletes and entertainers can be paid higher than teachers since the "sources of compensation" are not limited like they are for teachers, then perhaps our taxes are NOT high enough and our funds that are available for discretionary spending are too high.
     
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  14. brp

    brp TUG Member

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    I was responding to a post with a scope expanded to all CEOs, athletes and entertainers and my post was in reference to that.

    But on the topic here, it looks like the compensation roughly tripled, so total compensation is 300% representing a 200% increase. If we were to look at this as taking a different job (possibly reasonable as this changed from part of Hilton to a separate company), then big increases are not all that odd. I recently changed jobs and total annual compensation a little more than doubled to some salary increase, but a substantial change in non-salary compensation- as happened with them. So, 100% increase (as opposed to 200%), but that's for a non CEO type position. But, yes, a 200% increase is quite a lot.



    Yes, we're using different metrics to decide whether the compensation for athletes and entertainers is fair relative to teachers. Based on the different criteria, we're going to come to different conclusions. Both valid, just different, view.

    Cheers.
     
    Last edited: May 6, 2018
  15. Arimaas

    Arimaas TUG Member

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    This has turned into an occupy Wall Street rally ;).
     
  16. 1Kflyerguy

    1Kflyerguy TUG Review Crew: Rookie TUG Member

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    I am an HGVC stockholder, I recall from the annual report that Mark Wang has base salary of around 900K. He does get a cash bonus, but most of the difference is stock based compensation. Since this was the year that HGVC split from Hilton. I wonder if some of the Hilton compensation is included, if so then I would imagine a lot of stock options and possibly RSU were exercised prior to the split, since any options for Hilton would become void once they left .
     
  17. CalGalTraveler

    CalGalTraveler TUG Member

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    I don't think contribution to society is the right metric - Mother Teresa did not get a fat salary.

    A better metric is how it compares with peer CEOs. Based on my work in Corporate America this looks in the ballpark especially since most of this is stock based.

    Plus they are actually expanding the system with real value for owners. Not boosting the stock with hollow corporate stock buybacks and non-sense acquisitions which boost the top line to please Wall St. Or performing balance sheet leverage calisthetics that do nothing but boost their salary.

    We want the stock to continue to remain high to stave off Diamond and other raiders. I have been following the Marriott and Vistana forums lately, and although not perfect, HGVC is fair system and they treat their owners well.

    They executed the spin-off with minimal disruption to owners. They are growing the portfolio. Shouldn't they be rewarded in line with other executives of public corporations? Otherwise they will leave for better compensation and we will be stuck with a bunch of losers making bad decisions.
     
    Last edited: May 6, 2018
  18. Tamaradarann

    Tamaradarann TUG Review Crew: Veteran TUG Member

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    I also don't want to continue this conversation along the lines of "occupy wall street discussion". I agree that the HGVC product is a good one that I enjoy and I commend the executives who are responsible for keeping it that way. CEO's of major companies are responsible for producing a product or service and managing many numbers of people. That is a major responsibility and our society would clearly crumbly if companies didn't perform they way the do and should. They should be compensated well. My comments about inequity were directed at athletes and entertainers whose only responsibility was for their own performance, while exceptional in their field, was only entertainment. My comparison was their contribution to our society and salary versus a school teacher.
     
  19. brp

    brp TUG Member

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    Don't underestimate the contribution to our society of entertainment.

    Cheers.
     
  20. brp

    brp TUG Member

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    Not really. Occupy Wall Street was a bunch of purposeless drivel. The arguments here, on both sides, have been much more well-reasoned. Not the same at all.

    Cheers.
     
  21. Arimaas

    Arimaas TUG Member

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    Since I don't really know much about the OWS Movement, other than my dealings with them in and around NYC, my comment was supposed to be a rhetorical humorous comment that the posts seem to have taken a sharp turn from the original post, not really commentary on the OWS movement.

    Either way, like I eluded to in a prior post, wish I made either ceo or entertainer money.
     
    Last edited: May 6, 2018
  22. Tamaradarann

    Tamaradarann TUG Review Crew: Veteran TUG Member

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    I don't. We saw a great Diana Ross Concert in Honolulu in January and we have have 2 Yankee Games to attend in May and July coming up. We enjoy and appreciate great entertainment and sports. However, some ballplayers make $25,000,000 dollars a year and school teachers make around $100,000 a year. I don't feel that those ballplayers are worth 250 times what a school teacher is worth.
     
  23. brp

    brp TUG Member

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    I definitely understand your point. In the long run, though, the people paying for the entertainment do feel (most likely implicitly) that the ballplayer is worth that multiple. If you asked most people, they'd say no. Hence, it is implicit.

    In the end, it's about how replaceable one is. More people can teach school than throw strikes at 101 MPH. Supply and demand.

    Cheers.
     
  24. Tamaradarann

    Tamaradarann TUG Review Crew: Veteran TUG Member

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    Yes, that is the way it is; but should it be that way.
     
  25. JIMinNC

    JIMinNC TUG Member

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    As others have noted, most of that 300% increase was likely one-time event related to stock-based compensation, stock options, stock RSUs, etc. Base salaries of top execs rarely increase that much and bonuses are usually performance based against specific goals and metrics. It's not unusual to see huge jumps like this in one year, followed by a big drop the next - if they didn't exercise options or get as many vesting RSUs in that year. Everyone notices the big jump up, but then the subsequent drops don't get noticed.

    I agree that in many cases these salaries seem excessive when compared to other jobs that are important to the basic needs of our society, but as brp says above, it's supply and demand in a free market. There are are lot of people who can do the job of a school teacher, a firefighter, or a policeman - there aren't nearly as many who are skilled at leading a billion-dollar corporation, filling a 20,000 arena with people wanting to hear their music, throw a 100 mph fastball, play basketball at the NBA level, or being able to complete 18 holes of PGA Tour golf while only taking 66 strokes on a regular basis.
     
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