Why won’t Choice’s directors stay at their hotels?

April 9, 2008

Last week, Choice Hotels (CHH) filed this proxy and unlike a lot of directors who tend to take to company freebies like pigs at the trough — Al Gore’s use of Apple (AAPL) products is just one example — there’s plenty of room at the inn that Choice directors aren’t using.

The giveaways, which are pretty common, are usually there to help directors gain a better understanding of the company’s products, and, provided they’re not over-used, can provide useful feedback to both frontline employees and senior management. Starwood (HOT) for example, gives each of its directors 750,000 SPG points, which it values at $11,250, to encourage its directors to stay at their various properties. And Marriott (MAR) also has a similar program for its directors.

But Choice’s brands, which include EconoLodge and Rodeway Inn, are definitely a bit more downscale than those offered by either Marriott or Starwood. Perhaps that’s why the 6 independent directors only spent $1,212 at Choice properties last year. Actually, that $1,212 was only spent by three directors, since three directors didn’t use the perk — called Stay at Choice — at all. In addition, only one Choice executive — senior vice president for brand operations Bruce Haase — really tapped into the program, according to the filing, to the tune of $4,494. It’s hard to imagine how Audit Committee Chair John Schwieters, who rang up $156 at Choice properties — could glean much from that kind of visit.

Finally, on a totally unrelated note, I was on Marketplace last night with Kai Ryssdal talking about what usually happens at shareholder meetings. Hope you’ll listen in, if you didn’t catch it last night.

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