Is CoreCivic, Inc. (NYSE:CXW) Excessively Paying Its CEO?
In 2009 Damon Hininger was appointed CEO of CoreCivic, Inc. (NYSE:CXW). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for CoreCivic
How Does Damon Hininger's Compensation Compare With Similar Sized Companies?
Our data indicates that CoreCivic, Inc. is worth US$1.9b, and total annual CEO compensation was reported as US$4.1m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$926k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$4.1m.
So Damon Hininger receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at CoreCivic has changed from year to year.
Is CoreCivic, Inc. Growing?
CoreCivic, Inc. has reduced its earnings per share by an average of 7.8% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 7.9%.
Few shareholders would be pleased to read that earnings per share are lower over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. 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 could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has CoreCivic, Inc. Been A Good Investment?
Since shareholders would have lost about 36% over three years, some CoreCivic, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Damon Hininger is paid around the same as most CEOs of similar size companies.
Returns have been disappointing and the company is not growing its earnings per share. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling CoreCivic (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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