Please ensure Javascript is enabled for purposes of website accessibility

Hyatt Executives Could Make Bank on Annual Stock Awards Despite 50% Pay Cut

By Rhian Hunt - Mar 31, 2020 at 1:09PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The CEO alone got a quarter-million stock option equivalents.

Eleven of the top executives at Hyatt Hotels Corporation (H 2.73%) could end up raking in millions of dollars in compensation despite a recent temporary reduction in pay, according to SEC filings and Wall Street Journal research. Simultaneously, approximately two-thirds of Hyatt employees have been furloughed without pay or had their hours reduced for the next two months as a cost-cutting measure during the coronavirus outbreak.

Two of Hyatt's leading corporate officers, CEO Mark Hoplamazian and chairman Thomas Pritzker, opted to give up 100% of their base salaries during the months of April and May. Nine more top personnel took a 50% pay cut. Furloughed workers can use vacation time, if available, to receive pay during part of the furlough period, or can apply for unemployment benefits. The furloughs and pay cuts will start on April 1.

The pool at a Hyatt hotel in Cancun.

Image source: Hyatt Hotels.

While the executives are taking substantial up-front pay cuts, Hyatt filings with the SEC reveal that they received varying numbers of "restricted stock units" (RSUs) and "stock appreciation rights" (SARs) on March 24 as part of the hotel company's Long-Term Incentive Plan. SARs are an improved form of stock options that give the holder monetary proceeds without needing to exercise (buy) the option.

Some executives received approximately 4,000 RSUs and no options. Hoplamazian got 56,000 RSUs and 267,454 SARs, while Executive VP H. Charles Floyd gained 16,491 RSUs and 90,371 SARs.

The Wall Street Journal reports that, once Hyatt's share value rebounds, these incentives will be worth tens of millions of dollars.

Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool recommends Hyatt Hotels. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Hyatt Hotels Corporation Stock Quote
Hyatt Hotels Corporation
$92.51 (2.73%) $2.46

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/14/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.