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This Is The Reason Why We Think MGM Growth Properties LLC's (NYSE:MGP) CEO Deserves A Bump Up To Their Compensation

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The impressive results at MGM Growth Properties LLC (NYSE:MGP) recently will be great news for shareholders. At the upcoming AGM on 05 May 2021, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

View our latest analysis for MGM Growth Properties

Comparing MGM Growth Properties LLC's CEO Compensation With the industry

Our data indicates that MGM Growth Properties LLC has a market capitalization of US$11b, and total annual CEO compensation was reported as US$4.2m for the year to December 2020. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$850k.

On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$7.5m. In other words, MGM Growth Properties pays its CEO lower than the industry median. What's more, James Stewart holds US$4.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2020

2019

Proportion (2020)

Salary

US$850k

US$834k

20%

Other

US$3.3m

US$3.2m

80%

Total Compensation

US$4.2m

US$4.1m

100%

Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. According to our research, MGM Growth Properties has allocated a higher percentage of pay to salary in comparison to the wider 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

MGM Growth Properties LLC's Growth

MGM Growth Properties LLC's funds from operations (FFO) grew 11% per yearover the last three years. Revenue was pretty flat on last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has MGM Growth Properties LLC Been A Good Investment?

Most shareholders would probably be pleased with MGM Growth Properties LLC for providing a total return of 54% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which is a bit unpleasant) in MGM Growth Properties we think you should know about.

Important note: MGM Growth Properties is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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 (at) simplywallst.com.