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Is Red Rock Resorts, Inc.'s (NASDAQ:RRR) CEO Overpaid Relative To Its Peers?

Simply Wall St

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Frank Fertitta has been the CEO of Red Rock Resorts, Inc. ( NASDAQ:RRR ) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Red Rock Resorts

How Does Frank Fertitta's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Red Rock Resorts, Inc. has a market cap of US$2.7b, and is paying total annual CEO compensation of US$2.0m. (This is based on the year to December 2018). That's just a smallish increase of 0.9% on last year. While we always look at total compensation first, we note that the salary component is less, at US$1.0m. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.2m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see a visual representation of the CEO compensation at Red Rock Resorts, below.

NasdaqGS:RRR CEO Compensation, June 19th 2019

Is Red Rock Resorts, Inc. Growing?

Red Rock Resorts, Inc. has increased its earnings per share (EPS) by an average of 30% a year, over the last three years (using a line of best fit). It achieved revenue growth of 4.2% over the last year.

This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings .

Has Red Rock Resorts, Inc. Been A Good Investment?

Red Rock Resorts, Inc. has generated a total shareholder return of 6.0% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

It appears that Red Rock Resorts, Inc. remunerates its CEO below most similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. The total shareholder return might not be amazing, but that doesn't mean that Frank Fertitta is paid too much.

It's great to see a company that pays its CEO reasonably, even while growing. It would be an additional positive if insiders are buying shares. Whatever your view on compensation, you might want to check if insiders are buying or selling Red Rock Resorts shares (free trial).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.