We Think Some Shareholders May Hesitate To Increase MGM Resorts International's (NYSE:MGM) CEO Compensation

Key Insights

• MGM Resorts International will host its Annual General Meeting on 7th of May
• Salary of US$2.00m is part of CEO Bill Hornbuckle's total remuneration
• Total compensation is 38% above industry average
• MGM Resorts International's EPS grew by 2.5% over the past three years while total shareholder loss over the past three years was 23%

We've discovered 2 warning signs about MGM Resorts International. View them for free.

Shareholders of MGM Resorts International (NYSE:MGM) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 7th of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for MGM Resorts International

How Does Total Compensation For Bill Hornbuckle Compare With Other Companies In The Industry?

At the time of writing, our data shows that MGM Resorts International has a market capitalization of US$9.0b, and reported total annual CEO compensation of US$16m for the year to December 2024. We note that's a small decrease of 7.0% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$2.0m.

On examining similar-sized companies in the American Hospitality industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$11m. Hence, we can conclude that Bill Hornbuckle is remunerated higher than the industry median. Moreover, Bill Hornbuckle also holds US$19m worth of MGM Resorts International stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	US$2.0m	US$2.0m	13%
Other	US$14m	US$15m	87%
Total Compensation	US$16m	US$17m	100%

On an industry level, around 18% of total compensation represents salary and 82% is other remuneration. MGM Resorts International pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

MGM Resorts International's Growth

MGM Resorts International's earnings per share (EPS) grew 2.5% per year over the last three years. Its revenue is up 6.7% over the last year.

We'd prefer higher revenue growth, but we're happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has MGM Resorts International Been A Good Investment?

Given the total shareholder loss of 23% over three years, many shareholders in MGM Resorts International are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for MGM Resorts International that investors should think about before committing capital to this stock.

Switching gears from MGM Resorts International, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.