U.S. Markets closed

Is MGM China Holdings Limited's (HKG:2282) CEO Pay Fair?

Simply Wall St

The CEO of MGM China Holdings Limited (HKG:2282) is Grant Bowie. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for MGM China Holdings

How Does Grant Bowie's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that MGM China Holdings Limited has a market cap of HK$50b, and is paying total annual CEO compensation of HK$53m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at HK$16m. We examined companies with market caps from HK$31b to HK$94b, and discovered that the median CEO total compensation of that group was HK$5.8m.

As you can see, Grant Bowie is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean MGM China Holdings Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at MGM China Holdings has changed over time.

SEHK:2282 CEO Compensation, September 17th 2019

Is MGM China Holdings Limited Growing?

MGM China Holdings Limited has reduced its earnings per share by an average of 32% a year, over the last three years (measured with a line of best fit). Its revenue is up 29% over last year.

As investors, we are a bit wary of companies that have lower earnings per share, over three years. On the other hand, the strong revenue growth suggests the business is growing. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. You might want to check this free visual report on analyst forecasts for future earnings.

Has MGM China Holdings Limited Been A Good Investment?

With a three year total loss of 2.3%, MGM China Holdings Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We examined the amount MGM China Holdings Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling MGM China Holdings (free visualization of insider trades).

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.