We Discuss Why MGM Resorts International's (NYSE:MGM) CEO Will Find It Hard To Get A Pay Rise From Shareholders This Year

Key Insights

• MGM Resorts International to hold its Annual General Meeting on 1st of May

• Salary of US$2.00m is part of CEO Bill Hornbuckle's total remuneration

• The total compensation is similar to the average for the industry

• MGM Resorts International's total shareholder return over the past three years was 1.7% while its EPS grew by 66% over the past three years

Performance at MGM Resorts International (NYSE:MGM) has been reasonably good and CEO Bill Hornbuckle has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 1st of May. We present our case of why we think CEO compensation looks fair.

View our latest analysis for MGM Resorts International

How Does Total Compensation For Bill Hornbuckle Compare With Other Companies In The Industry?

At the time of writing, our data shows that MGM Resorts International has a market capitalization of US$14b, and reported total annual CEO compensation of US$17m for the year to December 2023. That's a fairly small increase of 4.7% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$2.0m.

On comparing similar companies in the American Hospitality industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$14m. So it looks like MGM Resorts International compensates Bill Hornbuckle in line with the median for the industry. Moreover, Bill Hornbuckle also holds US$21m worth of MGM Resorts International 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 18% of total compensation represents salary and 82% is other remuneration. MGM Resorts International pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at MGM Resorts International's Growth Numbers

MGM Resorts International's earnings per share (EPS) grew 66% per year over the last three years. It achieved revenue growth of 23% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has MGM Resorts International Been A Good Investment?

MGM Resorts International has generated a total shareholder return of 1.7% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

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 4 warning signs (and 1 which is potentially serious) in MGM Resorts International we think you should know about.

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.