Does Churchill Downs Incorporated's (NASDAQ:CHDN) CEO Pay Reflect Performance?

Bill Carstanjen became the CEO of Churchill Downs Incorporated (NASDAQ:CHDN) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Churchill Downs

How Does Bill Carstanjen's Compensation Compare With Similar Sized Companies?

Our data indicates that Churchill Downs Incorporated is worth US$5.0b, and total annual CEO compensation was reported as US$21m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.3m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO total compensation was US$6.7m.

It would therefore appear that Churchill Downs Incorporated pays Bill Carstanjen more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance. You might want to check this free visual report on analyst forecasts for future earnings.

You can see a visual representation of the CEO compensation at Churchill Downs, below.

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). It achieved revenue growth of 31% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly.

Has Churchill Downs Incorporated Been A Good Investment?

Boasting a total shareholder return of 160% over three years, Churchill Downs Incorporated has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We compared total CEO remuneration at Churchill Downs Incorporated with the amount paid at companies with a similar market capitalization. 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. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. 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.

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.