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Executive pay at Amadeus, Sabre, and Travelport is about the same, even though company performance has recently varied. It's unclear how much of that discrepancy can be chalked up to differing norms and taxes in the countries where the firms are based.

Three of largest travel tech and distribution companies  — Amadeus, Sabre, and Travelport — say they link their CEOs’ money-making opportunities to their business performance.

Yet the performance of the three companies has lately diverged, while the executive pay has remained comparable.

A look at CEO compensation at these companies shows that the bosses have all earned about the same in recent years, excluding temporary boosts when Sabre and Travelport emulated Amadeus and went public.

For example, prior to its 2014 IPO, Travelport boss Gordon Wilson received an equity award of $8.3 million with performance-based vesting that was granted in the run-up to the debut on the public markets to encourage a smooth ride.

In the three years since, Wilson has seen his total compensation otherwise remain about the same as his peers, despite overseeing his company’s smaller gains in revenue and net income.

For instance, in 2016, Travelport had mere 6 percent increase in revenue, a percentage gain that was roughly half of what its peer companies turned in. (See charts, below.)

Similarly, the market capitalization of Travelport is roughly a tenth of that of Amadeus, even though the executive pay package is about the same for the CEOs at the two companies.

The pattern holds in past years, too.

The company responds that its compensation committee looks at other factors besides the metrics mentioned above, and that its compensation process has been rated as high-quality by Institutional Shareholder Services, a UK-based proxy adviser. The 2014 share award reflected seven years of work by Wilson, it also notes.

Another explanation for the discrepancy among CEO total pay packages may be due to differences in the tax policies and the norms of the countries where the businesses are headquartered.

2016 CEO Compensation at Travelport, Sabre, and Amadeus

CEO & Company (2016) Salary Bonus Stock Awards Option Awards Incentive Plan Change in Pension Value All Other Total Compensation 2016
Gordon Wilson, Travelport $679,690 none $3,074,996 $1,025,000 $876,800 n/a $157,284 $5,813,770
Tom Klein, Sabre $975,000 none $4,139,126 $860,891 $876,330 $30,600 $28,524 $6,910,471
Luis Maroto, Amadeus $970,400 $1,304,000 $3,192,000 n/a n/a n/a $352,000 $5,818,400

Note: Maroto was paid in euros, conversion made as of May 19, 2017
Note: Wilson was paid in pounds, conversion made as of December 31, 2016

2016 Revenue and Profit at Three Travel Tech Companies

Company Revenue % Change Net Income % Change
Amadeus $5.0 billion* 14% $1,020 million* 21%
Sabre $3.373 billion 14% $242.6 million -55%*
Travelport $2.35 billion 6% $15 million -25%

Note: For Amadeus euro were converted to dollars at May 19, 2017 exchange rates.
*This steep decline partly reflects the one-off loss of income from the sale of Travelocity.
Source: Financial filings.

Revenue and Profits at 3 Travel Tech Firms in 2015

Company Revenue % Change
Net Income % Change
Amadeus $4.38 billion* 14.0% $769 million* 8.5%
Sabre $2.96 billion 12.5% $545 million 33%
Travelport $2.21 billion 3.0% $20 million -78.0%*

*Note: For Amadeus euro were converted to dollars at 5/19/2017 exchange rates.
*This steep decline partly reflects a one-off 2014 gain from the sale of Orbitz stock.
Source: Financial filings

CEO Compensation 2014 – 2016

CEO, Company Total Compensation 2014 Total Compensation 2015 Total Compensation 2016
Gordon Wilson, Travelport $16,027,655 $3,165,962 $5,813,770
Tom Klein, Sabre $7,122,675 $8,662,632 $6,910,471
Luis Maroto, Amadeus $1,104,040 $2,998,000 $5,818,400

Note: Maroto was paid in euros, conversion made as of May 19, 2017
Note: Wilson was paid in pounds, conversions made as of year end for respective years

Wilson, like then-Sabre CEO Tom Klein, received no cash bonus in 2016.

Because Travelport didn’t meet some short-term performance targets, Wilson missed out on a 2016 bonus that had been potentially worth up to 150 percent of his base salary of $679,690. But the company says it did meet longer-term targets in recent years and Wilson continued to be awarded shares.

The compensation trends at these travel tech companies — best known for their distribution activities — have been fairly steady. Skift noticed similar patterns a couple of years ago when we last looked at CEO pay at the trio.

As we noted at the time in a story about Amadeus CEO Luis Maroto’s 2014 compensation, “Maroto, the CEO of the largest and most profitable company of the trio, Amadeus, takes home the lowest compensation.”

Note: Comparisons among the companies became possible only since 2014, when Sabre and Travelport began filing detailed financial statements.

Sabre’s edge

Tom Klein resigned as Sabre president and CEO on December 31, 2016, and Sean Menke became the new boss.

Sabre boosted Menke’s base salary to $825,000 for 2017. He received an equity grant, with a quarter of the $2.5 million in stock options and restricted stock units vesting by the start of 2018 and the rest in stages after.

But don’t feel bad for Klein.

For 2016, Klein’s base salary was $975,000. He received a short-term incentive pay of $876,330. He could have earned an additional $549,000 award had the company met all of its targets — or up to $1.95 million more if the company had exceeded its targets dramatically.

As a side note, over time Klein has amassed 780,718 shares of Sabre stock. Using Friday’s share price of $22.70 as an approximation of their value, that hoard is worth $17.7 million.

Executive Perks

Curious executive perks in 2016 may amuse some readers.

Last year Amadeus gave Maroto $87,000 in payments toward life insurance premiums.

Wilson, for his part, was given an allowance of $39,546 for car rides last year, a typical perk for him in recent years.

Perhaps the most useful of the executive perks we saw is one that Sabre gave Klein, which was to cover the cost of financial planning for him. He receved about $26,000 in financial planning services across the past few years.

Maybe finanical planning should be a standard free perk for all travel tech CEO executives. Given the complexity of all of their countless types of compensation, it may be best to hand the work of tracking it to a professional.

Check out our interviews this spring with the CEOs of Amadeus, Sabre, Travelport, and other top travel tech companies.

Uncover the next wave of innovation in travel.
June 4 in New York City
See Who's Coming

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Tags: amadeus, ceo pay, gdss, sabre, travelport

Photo credit: Luis Maroto has been the chief of Amadeus for several years and has overseen the company's outsized gains in revenue and profit compared to the company's rivals, yet his total compensation has been about the same as his counterparts at those companies. Amadeus

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