A recent analysis by brokerage CLSA Ltd has cast a spotlight on the financial dynamics within Macau’s gaming industry, particularly concerning shareholder returns and board compensations. Despite recording unprecedented board payments across Macau’s six casino operators in 2024, the overall earnings, market capitalization, and shareholder returns remained notably below the figures from 2019. This situation presents a challenge for these operators, emphasizing the need for better alignment of interests and stewardship practices to benefit shareholders.
Financial Performance and Board Emolument
According to CLSA's report, the total cash returned to shareholders by the end of 2024 was just under $1.15 billion, representing a 64% decrease compared to 2019. Only Galaxy Entertainment Group Ltd and MGM China Holdings Ltd have aligned their board remuneration with dividends paid to shareholders, highlighting a disparity across the sector. CLSA analyst Jeffrey Kiang noted, 'Broadly speaking, their total board emolument reached a record high in 2024 at $119.2 million, or $63.5 million excluding share options.' This figure marks a 15% increase in board compensation from pre-pandemic levels observed in 2019. At the same time, the report shows a significant decline in aggregate earnings attributable to shareholders and market capitalization by 40% and 50%, respectively, compared to those in 2019.
Imbalance in Shareholder Value Creation
The report further explores the actions taken by Macau’s gaming operators regarding shareholder value creation through stock buybacks. It observes insiders' activities in the open market, particularly highlighting purchases by insiders of Melco International and Sands China Ltd, amounting to $98 million since mid-2017. Contrarily, insiders of SJM Holdings, Galaxy, MGM China, and Wynn Macau have collectively sold shares worth $111 million from the second half of 2017. This trend indicates a potential lack of confidence and highlights the necessity for improved agency-principal relationships where goals are fully aligned with shareholders' interests. CLSA's observations point toward a pressing need for better strategies to enhance stewardship and value returns to shareholders beyond the levels prior to the pandemic.
Source: Macau ops can do better on returns to shareholders, amid record board payouts: CLSA, GGRAsia, July 15, 2025.
Posted by Wizard
Jul 16 2025
Jul 16 2025
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