Is Gaming and Leisure Properties, Inc.’s (NASDAQ:GLPI) CEO Pay Justified?
Peter Carlino became the CEO of Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) in 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Peter Carlino’s Compensation Compare With Similar Sized Companies?
Our data indicates that Gaming and Leisure Properties, Inc. is worth US$7.1b, and total annual CEO compensation is US$11m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$1.8m. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO compensation of that group was US$7.0m.
As you can see, Peter Carlino is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Gaming and Leisure Properties, Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Gaming and Leisure Properties has changed from year to year.
Is Gaming and Leisure Properties, Inc. Growing?
Over the last three years Gaming and Leisure Properties, Inc. has grown its earnings per share (EPS) by an average of 18% per year (using a line of best fit). Its revenue is up 2.4% over last year.
This demonstrates that the company has been improving recently. A good result. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Gaming and Leisure Properties, Inc. Been A Good Investment?
Boasting a total shareholder return of 64% over three years, Gaming and Leisure Properties, Inc. has done well by shareholders. 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.
In Summary…
We compared the total CEO remuneration paid by Gaming and Leisure Properties, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Gaming and Leisure Properties shares (free trial).
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
