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Is The Star Entertainment Group Limited’s (ASX:SGR) CEO Paid Enough Relative To Peers?

Blake Harford

Matt Bekier became the CEO of The Star Entertainment Group Limited (ASX:SGR) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Star Entertainment Group

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How Does Matt Bekier’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that The Star Entertainment Group Limited has a market cap of AU$4.1b, and is paying total annual CEO compensation of AU$4.9m. (This number is for the twelve months until 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$1.7m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of AU$2.8b to AU$9.0b. The median total CEO compensation was AU$3.7m.

It would therefore appear that The Star Entertainment Group Limited pays Matt Bekier more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Star Entertainment Group, below.

ASX:SGR CEO Compensation January 30th 19

Is The Star Entertainment Group Limited Growing?

Over the last three years The Star Entertainment Group Limited has grown its earnings per share (EPS) by an average of 2.9% per year (using a line of best fit). In the last year, its revenue is up 5.5%.

I’m not particularly impressed by the revenue growth, but the modest improvement in EPS is good. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information.

You might want to check this free visual report on analyst forecasts for future earnings.

Has The Star Entertainment Group Limited Been A Good Investment?

Given the total loss of 9.3% over three years, many shareholders in The Star Entertainment Group Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We examined the amount The Star Entertainment Group Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Although we’d stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Star Entertainment Group.

Or you might rather take a peek at this analytical visualization of historic cash flow, 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.