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We Think Some Shareholders May Hesitate To Increase Golden Entertainment, Inc.'s (NASDAQ:GDEN) CEO Compensation
Golden Entertainment, Inc. (NASDAQ:GDEN) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. The upcoming AGM on 04 June 2021 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
Check out our latest analysis for Golden Entertainment
Comparing Golden Entertainment, Inc.'s CEO Compensation With the industry
According to our data, Golden Entertainment, Inc. has a market capitalization of US$1.2b, and paid its CEO total annual compensation worth US$5.2m over the year to December 2020. That's a modest increase of 5.9% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.
For comparison, other companies in the same industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$3.6m. Hence, we can conclude that Blake Sartini is remunerated higher than the industry median. What's more, Blake Sartini holds US$5.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. There isn't a significant difference between Golden Entertainment and the broader market, in terms of salary allocation in the overall compensation package. 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 78% per year. Its revenue is down 23% over the previous year.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Golden Entertainment, Inc. Been A Good Investment?
Boasting a total shareholder return of 39% over three years, Golden Entertainment, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Golden Entertainment that investors should look into moving forward.
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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Golden Entertainment, Inc., together with its subsidiaries, engages in the ownership and operation of a diversified entertainment platform in the United States.
Slightly overvalued with limited growth.