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Dan Lee became the CEO of Full House Resorts, Inc. (NASDAQ:FLL) in 2014, 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 assess whether Full House Resorts pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Full House Resorts, Inc.'s CEO Compensation With the industry
According to our data, Full House Resorts, Inc. has a market capitalization of US$77m, and paid its CEO total annual compensation worth US$633k over the year to December 2019. We note that's an increase of 8.7% above last year. We note that the salary portion, which stands at US$500.0k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$450k. Hence, we can conclude that Dan Lee is remunerated higher than the industry median. Moreover, Dan Lee also holds US$3.7m worth of Full House Resorts stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 25% of total compensation represents salary and 75% is other remuneration. According to our research, Full House Resorts has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Full House Resorts, Inc.'s Growth
Over the last three years, Full House Resorts, Inc. has shrunk its earnings per share by 10% per year. In the last year, its revenue is down 23%.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Full House Resorts, Inc. Been A Good Investment?
With a total shareholder return of 2.2% over three years, Full House Resorts, Inc. has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.
As we touched on above, Full House Resorts, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, EPS has not been growing sufficiently to impress us, over the last three years. And shareholder returns are decent but not great. So you may want to delve deeper, because we don't think the amount Dan makes is justifiable.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Full House Resorts that investors should be aware of in a dynamic business environment.
Switching gears from Full House Resorts, 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.
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.
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