Marcus Smith became the CEO of Speedway Motorsports, Inc. (NYSE:TRK) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Marcus Smith's Compensation Compare With Similar Sized Companies?
Our data indicates that Speedway Motorsports, Inc. is worth US$561m, and total annual CEO compensation is US$2.5m. (This is based on the year to December 2018). That's just a smallish increase of 5.1% on last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$600k. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.6m.
Thus we can conclude that Marcus Smith receives more in total compensation than the median of a group of companies in the same market, and of similar size to Speedway Motorsports, Inc.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Speedway Motorsports has changed over time.
Is Speedway Motorsports, Inc. Growing?
Speedway Motorsports, Inc. has increased its earnings per share (EPS) by an average of 75% a year, over the last three years (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.
Has Speedway Motorsports, Inc. Been A Good Investment?
Since shareholders would have lost about 16% over three years, some Speedway Motorsports, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We compared the total CEO remuneration paid by Speedway Motorsports, Inc., 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 we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Shareholders may want to check for free if Speedway Motorsports insiders are buying or selling shares.
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 firstname.lastname@example.org. 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.