Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Bill Carstanjen has been the CEO of Churchill Downs Incorporated (NASDAQ:CHDN) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Bill Carstanjen's Compensation Compare With Similar Sized Companies?
According to our data, Churchill Downs Incorporated has a market capitalization of US$4.4b, and pays its CEO total annual compensation worth US$21m. (This is based on the year to December 2018). That's a notable increase of 184% on last year. While we always look at total compensation first, we note that the salary component is less, at US$1.3m. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.2m.
Thus we can conclude that Bill Carstanjen receives more in total compensation than the median of a group of companies in the same market, and of similar size to Churchill Downs Incorporated. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Churchill Downs, below.
Is Churchill Downs Incorporated Growing?
On average over the last three years, Churchill Downs Incorporated has grown earnings per share (EPS) by 42% each year (using a line of best fit). It achieved revenue growth of 20% over the last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Churchill Downs Incorporated Been A Good Investment?
I think that the total shareholder return of 181%, over three years, would leave most Churchill Downs Incorporated shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by Churchill Downs Incorporated, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Churchill Downs 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 email@example.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.