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Is CoreCivic, Inc.'s (NYSE:CXW) CEO Being Overpaid?

Simply Wall St

Damon Hininger became the CEO of CoreCivic, Inc. (NYSE:CXW) in 2009. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for CoreCivic

How Does Damon Hininger's Compensation Compare With Similar Sized Companies?

According to our data, CoreCivic, Inc. has a market capitalization of US$2.0b, and pays its CEO total annual compensation worth US$4.1m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$926k. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$4.1m.

So Damon Hininger receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at CoreCivic has changed over time.

NYSE:CXW CEO Compensation, September 2nd 2019

Is CoreCivic, Inc. Growing?

CoreCivic, Inc. has reduced its earnings per share by an average of 11% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 8.2%.

Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has CoreCivic, Inc. Been A Good Investment?

I think that the total shareholder return of 35%, over three years, would leave most CoreCivic, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Damon Hininger is paid around the same as most CEOs of similar size companies.

We're not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we think most shareholders wouldn't be too worried about CEO compensation, which is close to the median for similar sized companies. So you may want to check if insiders are buying CoreCivic shares with their own money (free access).

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

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.