Does Golden Entertainment, Inc.'s (NASDAQ:GDEN) CEO Salary Reflect Performance?

In 2015, Blake Sartini was appointed CEO of Golden Entertainment, Inc. (NASDAQ:GDEN). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Golden Entertainment

How Does Blake Sartini's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Golden Entertainment, Inc. has a market cap of US$221m, and reported total annual CEO compensation of US$3.8m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.4m.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Golden Entertainment. On a sector level, around 26% of total compensation represents salary and 74% is other remuneration. Our data reveals that Golden Entertainment allocates salary in line with the wider market.

Thus we can conclude that Blake Sartini receives more in total compensation than the median of a group of companies in the same market, and of similar size to Golden Entertainment, Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. You can see, below, how CEO compensation at Golden Entertainment has changed over time.

Is Golden Entertainment, Inc. Growing?

On average over the last three years, Golden Entertainment, Inc. has shrunk earnings per share by 119% each year (measured with a line of best fit). In the last year, its revenue is up 14%.

Few shareholders would be pleased to read that earnings per share are lower over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has Golden Entertainment, Inc. Been A Good Investment?

With a three year total loss of 46%, Golden Entertainment, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared the total CEO remuneration paid by Golden Entertainment, Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

We think many shareholders would be underwhelmed with the business growth over the last three years. Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! Looking into other areas, we've picked out 1 warning sign for Golden Entertainment that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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