In 2014 Bill Carstanjen was appointed CEO of Churchill Downs Incorporated (NASDAQ:CHDN). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Bill Carstanjen's Compensation Compare With Similar Sized Companies?
Our data indicates that Churchill Downs Incorporated is worth US$5.4b, and total annual CEO compensation was reported as US$21m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.3m. 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$4.0b to US$12b. The median total CEO compensation was US$6.7m.
As you can see, Bill Carstanjen is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Churchill Downs Incorporated is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Churchill Downs has changed over time.
Is Churchill Downs Incorporated Growing?
Over the last three years Churchill Downs Incorporated has grown its earnings per share (EPS) by an average of 33% per year (using a line of best fit). In the last year, its revenue is up 31%.
This demonstrates that the company has been improving recently. A good result. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Shareholders might be interested in this free visualization of analyst forecasts.
Has Churchill Downs Incorporated Been A Good Investment?
Most shareholders would probably be pleased with Churchill Downs Incorporated for providing a total return of 176% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by Churchill Downs Incorporated, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying Churchill Downs shares with their own money (free access).
If you want to buy a stock that is better than Churchill Downs, this free list of high return, low debt companies is a great place to look.
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.
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. Thank you for reading.