Casino operators’ board compensation hits record high, shareholder returns lag

Macau’s six casino operators posted “record-high total board emoluments” in 2024, but their financial returns to shareholders have yet to recover to pre-pandemic levels, a recent report from brokerage CLSA Ltd. reveals.

CLSA’s analysis shows that total board payouts among operators reached a record high of USD119.2 million (MOP963 million) in 2024.

Citing CLSA research and operators’ annual reports, market-wide total board emoluments stood at $119.2 million, or $63.5 million (approximately MOP513 million) when excluding share options.

Jeffrey Kiang, CLSA’s equity analyst, pointed to uneven stewardship across the sector.

“We see room for improvement in stewardship for shareholders among Macau gaming concessionaires, though some are doing a better job than others,” he said.

Cash returned to shareholders fell to just under $1.15 billion (MOP9.3 billion), down 64% from the 2019 level, the analyst added. Notably, only Galaxy Entertainment Group Ltd. and MGM China Holdings Ltd. had board emolument trends that moved in line with dividends paid to shareholders when comparing 2019 and 2024 figures.

Aggregate earnings attributable to shareholders and market capitalization in 2024 remained 40% and 50%, respectively, below 2019 levels.

CLSA added that excluding Melco International Development Ltd. and SJM Holdings Ltd., which have yet to reinstate dividends, cash returns to shareholders remain substantially depressed.

Market-wide, total board emoluments as a percentage of market capitalization “have grown from 1.72% in 2011 to 5.45% in 2024,” the report stated.

Among the six operators, only Galaxy, SJM Holdings, and Melco “recorded lower board compensation in 2024 versus 2019, partially aided by retirements of certain directors,” noted CLSA.

CLSA also examined insider share transactions as a measure of confidence.

Insiders at Melco International and Sands China Ltd. have been net buyers since mid-2017, spending approximately $98 million (MOP792 million). The report also showed that insiders at SJM Holdings, Galaxy, MGM China, and Wynn Macau Ltd., conversely, sold shares with a net value of $111 million (MOP898 million) during the same period.