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In 2009 Damon Hininger was appointed CEO of CoreCivic, Inc. (NYSE:CXW). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Damon Hininger’s Compensation Compare With Similar Sized Companies?
Our data indicates that CoreCivic, Inc. is worth US$2.6b, and total annual CEO compensation is US$2.4m. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$887k. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO compensation was US$4.7m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at CoreCivic, below.
Is CoreCivic, Inc. Growing?
CoreCivic, Inc. has reduced its earnings per share by an average of 12% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 4.0% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has CoreCivic, Inc. Been A Good Investment?
Given the total loss of 3.8% over three years, many shareholders in CoreCivic, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
It looks like CoreCivic, Inc. pays its CEO less than similar sized companies.
Shareholders should note that compensation for Damon Hininger is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. So you may want to check if insiders are buying CoreCivic shares with their own money (free access).
Important note: CoreCivic may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.