The CEO of Travelport, considered the weakest of the three global distribution system/tech companies, emerged with the largest pay package, more than $16 million in 2014.
Gordon Wilson, Travelport CEO since mid-2011, took the company public in September 2014 after an aborted attempt by predecessor Jeff Clarke in 2010.
Wilson’s total 2014 compensation gives him major bragging rights when compared with $7.1 million for Sabre CEO Tom Klein and just $1.1 million for Madrid-based Amadeus CEO Luis Maroto.
Both Wilson of Travelport and Klein of Sabre had several compensation-related advantages over Maroto: Travelport and Sabre both conducted IPOs in 2014 while Amadeus went public in Madrid in 2010. Maroto became Amadeus CEO in 2011 — after the IPO. His predecessor, David Jones, benefitted from the spoils of the IPO.
With the stock market debuts of Sabre and then Travelport in 2014, this is the first time that all three major global distribution systems are public companies.
Travelport turbocharged Wilson’s 2014 compensation by giving him stock awards of more than $13 million. It turns out, though, that this includes $8.3 million in stock awards that were granted in 2013 but didn’t get finalized and paid until May 2014.
Sabre’s Klein, whose 2014 base salary of more than $907,000 was the highest among the three CEOs, benefitted from a stock award of more than $3.8 million last year. Klein’s more than $1 million cash bonus plan/incentive plan payment represented 85.5 percent of his target cash bonus opportunity.
The following is the three CEOs’ 2014 total compensation:
|CEO & Company||Salary||Bonus||Stock Awards||Option Awards||Incentive Plan||Change in Pension Value||All Other||Total Compensation|
|Gordon Wilson, Travelport||$867,615||$581,817||$13,000,156||NA||$1,387,561||NA||$200,506||$16,027,655|
|Tom Klein, Sabre||$907,692||NA||$3,825,008||$1,274,999||$1,045,762||$45,100||$24,114||$7,122,675|
|Luis Maroto, Amadeus||$473,320||$544,660||NA||NA||NA||NA||$86,060||$1,104,040|
Note: Chart slides to the left and right to view all the rows and columns. For Amadeus, euros were converted to dollars at 6/10/2015 exchange rates
Source: Financial filings
Then there’s the 2014 total compensation package of Amadeus CEO Luis Maroto at $1.1 million (975,000 euros).
In Spain, public companies are only required to disclose executives’ pay when they are board members. Amadeus therefore didn’t disclose Maroto’s 2013 pay because he was appointed to the board in June 2014. So his $1.1 million compensation package in 2014 reflects only six months as a board member.
Maroto received around $544, 660 (481,000 euros) in what Amadeus calls short-term variable renumeration, or a bonus, in 2014.
So why was Maroto’s pay so low compared with Travelport’s Wilson and Sabre’s Klein? One factor is that Maroto didn’t shepherd Amadeus through an IPO in 2014 as the other two CEOs did. Another reason is that his compensation reflects accepted levels in Spain and Amadeus benchmarks executive salaries largely against other European companies.
The three companies — Amadeus, Sabre and Travelport — certainly are not carbon copies of one another. All three distribute airline inventory to travel agencies but both Amadeus and Sabre have much larger airline IT businesses than does Travelport, for example.
The irony then, as can be seen in the following chart, is that Maroto, the CEO of the largest and most profitable company of the trio, Amadeus, takes home the lowest compensation.
Conversely, Wilson, the CEO of the smallest and least profitable company, Travelport, had the highest total compensation package of the three CEOs in 2014. Travelport, though, grew its profits at the fastest clip, 145 percent, last year.
Revenue and Profits at 3 Distribution Firms in 2014
|Company||Revenue||% Change||Net Income||% Change|
|Amadeus||$3.8 Billion||10.10%||706.3 Million*||12.80%|
|Sabre||$2.6 Billion||4.30%||$232.4 Million||27.60%|
|Travelport||$2.1 Billion||3%||$91 Million||145%|
Note: For Amadeus euro were converted to dollars at 6/11/2015 exchange rates.
Source: Financial filings