The Webjet Ltd (ASX: WEB) share price is one to watch after an update on its managing director’s contract this morning.
What did Webjet announce this morning?
Webjet has extended the term of its managing director, John Guscic, and made other changes to his contract. The term of his contract has now been extended from 30 June 2021 to 30 June 2023.
The Webjet share price will be one to watch leading up to the February earnings season following the leadership team update.
Changes have been made to Mr Guscic’s remuneration arrangements to be detailed in the FY20 annual report.
The Board considers the contract extension will be of “material benefit” to the group as part of its strategy execution.
Webjet Chairman, Roger Sharp, noted the long tenure of Mr Guscic and Webjet’s growth during this time. In the last 10 years under his guidance, the Webjet share price has rocketed higher.
The travel company’s shares opened this morning at $14.44 per share after gaining 10.91% since the start of the year and have since dipped slightly to $14.35 at the time of writing.
The Webjet share price was trading at just $2.15 per share back in January 2010, meaning investors have seen a gain of more than 570% in the last decade.
That’s pretty handy when you consider the group also pays a 1.53% dividend yield, which isn’t included in those gains.
Why is the Webjet share price surging higher?
The travel company has been on watch in January as takeover speculation has increased.
The rumours date back to December when speculation was rife about Webjet being a potential private equity target.
Webjet addressed the rumours in a statement, but the Australian Financial Review (AFR) understands Mr Guscic and the Board were discussing how much the company may be worth in any sale.
The Webjet share price has been volatile in recent years but 2020 is looking good so far. The positive momentum has carried the travel group’s shares to $14.35 per share at the time of writing, from a 52-week low in October 2019.
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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.