How Much is Sports Entertainment Group's (ASX:SEG) CEO Getting Paid?

This article will reflect on the compensation paid to Craig Hutchison who has served as CEO of Sports Entertainment Group Limited (ASX:SEG) since 2018. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Sports Entertainment Group

How Does Total Compensation For Craig Hutchison Compare With Other Companies In The Industry?

According to our data, Sports Entertainment Group Limited has a market capitalization of AU$56m, and paid its CEO total annual compensation worth AU$624k over the year to June 2020. That's a notable decrease of 19% on last year. Notably, the salary which is AU$576.6k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below AU$261m, we found that the median total CEO compensation was AU$624k. This suggests that Sports Entertainment Group remunerates its CEO largely in line with the industry average. What's more, Craig Hutchison holds AU$9.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 68% of total compensation out of all the companies we analyzed, while other remuneration made up 32% of the pie. According to our research, Sports Entertainment Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Sports Entertainment Group Limited's Growth Numbers

Over the past three years, Sports Entertainment Group Limited has seen its earnings per share (EPS) grow by 98% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Sports Entertainment Group Limited Been A Good Investment?

Given the total shareholder loss of 50% over three years, many shareholders in Sports Entertainment Group Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Sports Entertainment Group pays its CEO in line with similar-sized companies belonging to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Sports Entertainment Group you should be aware of, and 1 of them shouldn't be ignored.

Important note: Sports Entertainment Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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