Does Golden Entertainment's (NASDAQ:GDEN) CEO Salary Compare Well With The Performance Of The Company?

Blake Sartini became the CEO of Golden Entertainment, Inc. (NASDAQ:GDEN) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Golden Entertainment.

View our latest analysis for Golden Entertainment

How Does Total Compensation For Blake Sartini Compare With Other Companies In The Industry?

At the time of writing, our data shows that Golden Entertainment, Inc. has a market capitalization of US$509m, and reported total annual CEO compensation of US$4.9m for the year to December 2019. We note that's an increase of 30% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.

For comparison, other companies in the same industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$2.1m. Accordingly, our analysis reveals that Golden Entertainment, Inc. pays Blake Sartini north of the industry median. Moreover, Blake Sartini also holds US$803k worth of Golden Entertainment stock directly under their own name.

Talking in terms of the industry, salary represented approximately 25% of total compensation out of all the companies we analyzed, while other remuneration made up 75% of the pie. Golden Entertainment pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Golden Entertainment, Inc.'s Growth Numbers

Over the last three years, Golden Entertainment, Inc. has shrunk its earnings per share by 106% per year. Its revenue is down 22% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Golden Entertainment, Inc. Been A Good Investment?

Given the total shareholder loss of 44% over three years, many shareholders in Golden Entertainment, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Blake is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. Arguably worse, we've been waiting for positive EPS growth for the last three years. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Golden Entertainment that investors should be aware of in a dynamic business environment.

Important note: Golden Entertainment 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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