We Discuss Whether Texas Roadhouse, Inc.'s (NASDAQ:TXRH) CEO Is Due For A Pay Rise

Key Insights

• Texas Roadhouse will host its Annual General Meeting on 16th of May
• Total pay for CEO Jerry Morgan includes US$1.19m salary
• The total compensation is 65% less than the average for the industry
• Texas Roadhouse's total shareholder return over the past three years was 83% while its EPS grew by 63% over the past three years

The impressive results at Texas Roadhouse, Inc. (NASDAQ:TXRH) recently will be great news for shareholders. This would be kept in mind at the upcoming AGM on 16th of May which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

See our latest analysis for Texas Roadhouse

How Does Total Compensation For Jerry Morgan Compare With Other Companies In The Industry?

According to our data, Texas Roadhouse, Inc. has a market capitalization of US$11b, and paid its CEO total annual compensation worth US$5.3m over the year to December 2023. That's a notable increase of 21% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.

For comparison, other companies in the American Hospitality industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$15m. Accordingly, Texas Roadhouse pays its CEO under the industry median. Furthermore, Jerry Morgan directly owns US$15m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$1.2m	US$973k	22%
Other	US$4.2m	US$3.4m	78%
Total Compensation	US$5.3m	US$4.4m	100%

On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. Texas Roadhouse is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Texas Roadhouse, Inc.'s Growth Numbers

Over the past three years, Texas Roadhouse, Inc. has seen its earnings per share (EPS) grow by 63% per year. It achieved revenue growth of 14% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Texas Roadhouse, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Texas Roadhouse, Inc. for providing a total return of 83% over three years. 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.

In Summary...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Texas Roadhouse that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.