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Should You Worry About Boyd Gaming Corporation's (NYSE:BYD) CEO Pay Cheque?

Simply Wall St

In 2008 Keith Smith was appointed CEO of Boyd Gaming Corporation (NYSE:BYD). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Boyd Gaming

How Does Keith Smith's Compensation Compare With Similar Sized Companies?

According to our data, Boyd Gaming Corporation has a market capitalization of US$3.0b, and paid its CEO total annual compensation worth US$7.8m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.3m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.1m.

Thus we can conclude that Keith Smith receives more in total compensation than the median of a group of companies in the same market, and of similar size to Boyd Gaming Corporation. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Boyd Gaming, below.

NYSE:BYD CEO Compensation, November 1st 2019

Is Boyd Gaming Corporation Growing?

Boyd Gaming Corporation has reduced its earnings per share by an average of 15% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 36% over the last year.

Investors should note that, over three years, earnings per share are down. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. 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. Shareholders might be interested in this free visualization of analyst forecasts.

Has Boyd Gaming Corporation Been A Good Investment?

I think that the total shareholder return of 63%, over three years, would leave most Boyd Gaming Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared total CEO remuneration at Boyd Gaming Corporation with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

While we generally prefer to see stronger EPS growth, there's no arguing with the strong returns to shareholders, over the last three years. Considering this fine result for investors, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Boyd Gaming (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.