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What Can We Make Of Sports Entertainment Group's (ASX:SEG) CEO Compensation?

Craig Hutchison became the CEO of Sports Entertainment Group Limited (ASX:SEG) in 2018, 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 Sports Entertainment Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Sports Entertainment Group

Comparing Sports Entertainment Group Limited's CEO Compensation With the industry

Our data indicates that Sports Entertainment Group Limited has a market capitalization of AU$75m, and total annual CEO compensation was reported as AU$624k for the year to June 2020. We note that's a decrease of 19% compared to last year. We note that the salary portion, which stands at AU$576.6k constitutes the majority of total compensation received by the CEO.

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On comparing similar-sized companies in the industry with market capitalizations below AU$272m, we found that the median total CEO compensation was AU$537k. From this we gather that Craig Hutchison is paid around the median for CEOs in the industry. Furthermore, Craig Hutchison directly owns AU$16m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2020

2019

Proportion (2020)

Salary

AU$577k

AU$525k

92%

Other

AU$48k

AU$243k

8%

Total Compensation

AU$624k

AU$767k

100%

Talking in terms of the industry, salary represented approximately 69% of total compensation out of all the companies we analyzed, while other remuneration made up 31% of the pie. It's interesting to note that Sports Entertainment Group pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
ceo-compensation

Sports Entertainment Group Limited's Growth

Sports Entertainment Group Limited has seen its earnings per share (EPS) increase by 98% a year over the past three years. Revenue was pretty flat on last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Sports Entertainment Group Limited Been A Good Investment?

Sports Entertainment Group Limited has served shareholders reasonably well, with a total return of 20% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

As we touched on above, Sports Entertainment Group Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But EPS growth for the company has been strong over the last three years, though shareholder returns in comparison haven't been as impressive. So considering these factors, we think the compensation is probably quite reasonable, but investor returns need a boost moving forward.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Sports Entertainment Group (1 is a bit concerning!) that you should be aware of before investing here.

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.

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@simplywallst.com.