It Looks Like Canterbury Park Holding Corporation's (NASDAQ:CPHC) CEO May Expect Their Salary To Be Put Under The Microscope

Shareholders will probably not be too impressed with the underwhelming results at Canterbury Park Holding Corporation (NASDAQ:CPHC) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 03 June 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Canterbury Park Holding

Comparing Canterbury Park Holding Corporation's CEO Compensation With the industry

At the time of writing, our data shows that Canterbury Park Holding Corporation has a market capitalization of US$67m, and reported total annual CEO compensation of US$387k for the year to December 2020. We note that's a small decrease of 3.7% on last year. We note that the salary portion, which stands at US$233.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$421k. So it looks like Canterbury Park Holding compensates Randy Sampson in line with the median for the industry. Furthermore, Randy Sampson directly owns US$14m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$233k	US$270k	60%
Other	US$154k	US$131k	40%
Total Compensation	US$387k	US$401k	100%

On an industry level, around 22% of total compensation represents salary and 78% is other remuneration. It's interesting to note that Canterbury Park Holding pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Canterbury Park Holding Corporation's Growth Numbers

Over the last three years, Canterbury Park Holding Corporation has shrunk its earnings per share by 35% per year. Its revenue is down 47% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Canterbury Park Holding Corporation Been A Good Investment?

Since shareholders would have lost about 11% over three years, some Canterbury Park Holding Corporation investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 1 which is significant) in Canterbury Park Holding we think you should know about.

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.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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