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What Can We Conclude About Boyd Gaming's (NYSE:BYD) CEO Pay?

Simply Wall St
·3 min read

Keith Smith became the CEO of Boyd Gaming Corporation (NYSE:BYD) in 2008, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Boyd Gaming

Comparing Boyd Gaming Corporation's CEO Compensation With the industry

According to our data, Boyd Gaming Corporation has a market capitalization of US$3.1b, and paid its CEO total annual compensation worth US$9.6m over the year to December 2019. We note that's an increase of 24% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.4m.

For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$6.7m. Hence, we can conclude that Keith Smith is remunerated higher than the industry median. What's more, Keith Smith holds US$29m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2019

2018

Proportion (2019)

Salary

US$1.4m

US$1.3m

15%

Other

US$8.2m

US$6.5m

85%

Total Compensation

US$9.6m

US$7.8m

100%

On an industry level, around 25% of total compensation represents salary and 75% is other remuneration. Boyd Gaming 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.

ceo-compensation
ceo-compensation

Boyd Gaming Corporation's Growth

Boyd Gaming Corporation has reduced its earnings per share by 51% a year over the last three years. It saw its revenue drop 17% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Boyd Gaming Corporation Been A Good Investment?

Boyd Gaming Corporation has served shareholders reasonably well, with a total return of 10% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As previously discussed, Keith is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look great when you realize that the company has been suffering from negative EPS growth for the last three years. And shareholder returns are decent but not great. So you can understand why we do not think CEO compensation is particularly modest!

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for Boyd Gaming you should be aware of, and 1 of them is a bit unpleasant.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.