Here's Why Monarch Casino & Resort, Inc.'s (NASDAQ:MCRI) CEO May Have Their Pay Bumped Up

By
Simply Wall St
Published
June 01, 2021
NasdaqGS:MCRI
Source: Shutterstock

The decent performance at Monarch Casino & Resort, Inc. (NASDAQ:MCRI) recently will please most shareholders as they go into the AGM coming up on 08 June 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

Check out our latest analysis for Monarch Casino & Resort

How Does Total Compensation For John Farahi Compare With Other Companies In The Industry?

According to our data, Monarch Casino & Resort, Inc. has a market capitalization of US$1.3b, and paid its CEO total annual compensation worth US$2.3m over the year to December 2020. That's a notable increase of 33% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$591k.

On comparing similar companies from the same industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$3.6m. That is to say, John Farahi is paid under the industry median. What's more, John Farahi holds US$208m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary US$591k US$750k 26%
Other US$1.7m US$947k 74%
Total CompensationUS$2.3m US$1.7m100%

Talking in terms of the industry, salary represented approximately 22% of total compensation out of all the companies we analyzed, while other remuneration made up 78% of the pie. According to our research, Monarch Casino & Resort has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
NasdaqGS:MCRI CEO Compensation June 2nd 2021

A Look at Monarch Casino & Resort, Inc.'s Growth Numbers

Monarch Casino & Resort, Inc.'s earnings per share (EPS) grew 1.6% per year over the last three years. In the last year, its revenue is down 14%.

We would prefer it if there was revenue growth, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Monarch Casino & Resort, Inc. Been A Good Investment?

We think that the total shareholder return of 58%, over three years, would leave most Monarch Casino & Resort, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's overall performance, while not bad, could be better. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Monarch Casino & Resort that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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