William Carstanjen
Churchill DownsAbout William Carstanjen
William C. Carstanjen (age 57) is Chief Executive Officer of Churchill Downs Incorporated (CHDN) since August 2014 and has served as a director since July 2015; prior roles at CHDN include President & COO (2011–2014), COO (2009–2011), EVP/Chief Development Officer (2005–2009), and General Counsel (2005–2006) . He began his career at Cravath, Swaine & Moore LLP (M&A/corporate) and held senior legal roles at General Electric before joining CHDN; he also serves as a Director of Glenview Trust Company and the American Gaming Association . Under his leadership, CHDN delivered record 2024 results: net revenue ~$2.7B, net income $426.8M, and Adjusted EBITDA $1.159B; 2024 Adjusted EBITDA was 106.5% of target (driving above-target annual bonuses), and TSR for the 2022–2024 PSU cycle was 19% (top 42% of Russell 2000), producing a 200% payout on those PSUs; across 2019–2024, CHDN’s cumulative TSR ($100 basis) outperformed its peer group ($197.63 vs $129.80) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Churchill Downs Incorporated | Chief Executive Officer | Aug 2014–Present | Led diversification into online, historical horse racing (HRM) operations, and regional casino gaming; grew Kentucky Oaks/Derby events . |
| Churchill Downs Incorporated | President & Chief Operating Officer | 2011–2014 | Drove operating execution during early portfolio diversification . |
| Churchill Downs Incorporated | Chief Operating Officer | 2009–2011 | Operational leadership amid expansion initiatives . |
| Churchill Downs Incorporated | EVP, General Counsel & Chief Development Officer | 2005–2009 | M&A and development leadership supporting growth strategy . |
| Churchill Downs Incorporated | General Counsel | 2005–2006 | Established legal/governance frameworks during early tenure . |
| General Electric (GE) | Managing Director & General Counsel, GE Commercial Finance Energy Financial Services (prior roles at GE) | 2000–2005 | Transactional/strategic legal leadership; corporate finance and M&A expertise . |
| Cravath, Swaine & Moore LLP | Attorney (M&A/Corporate) | Prior to 2000 | M&A/corporate finance/corporate governance foundation . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Glenview Trust Company | Director | Not disclosed | Current directorship . |
| American Gaming Association | Director | Not disclosed | Current directorship . |
Fixed Compensation
- Base salary increased 9% in 2024 to $1,800,000 (from $1,650,000 in 2023) based on peer benchmarking by FW Cook .
- Target annual incentive for CEO increased to 250% of salary in 2024 (from 175%), aligning with peer positioning; maximum 500% .
Multi-year compensation (Summary Compensation Table, CEO):
| Metric (USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | 1,500,000 | 1,626,923 | 1,776,923 |
| Stock Awards (Grant-Date FV) | 6,538,424 | 7,051,043 | 6,585,361 |
| Non-Equity Incentive Plan Compensation | 4,035,025 | 3,511,979 | 6,714,460 |
| All Other Compensation | 19,664 | 21,689 | 26,919 |
| Total Compensation | 12,093,113 | 12,211,634 | 15,103,663 |
Performance Compensation
Executive Annual Incentive Plan (EAIP) design and 2024 outcome:
| Component | Weight | Target/Metric | Actual | Payout vs Target | Contribution to Total |
|---|---|---|---|---|---|
| Financial (Adjusted EBITDA) | 75% | Target $1,088.9M Adjusted EBITDA | $1,159.2M (106.5% of target) | 132.3% of component | 99% of target award |
| Qualitative (Strategic/Operational/Individual) | 25% | Committee assessment | Above target (key projects delivered) | 200% of component | 50% of target award |
| Total EAIP Payout (CEO) | — | Target $4,500,000; Max $9,000,000 | — | — | $6,714,460 paid (149% of target) |
Long-Term Incentive (ELTI) – 2024 grants and structure:
| Grant (2024) | Shares (#) | Grant-Date Fair Value ($) | Allocation | Vesting/Performance |
|---|---|---|---|---|
| RSUs (2/8/2024) | 27,645 | 3,400,335 | ~50% of LTI | Time-vest in 3 equal annual installments: 12/31/2024, 12/31/2025, 12/31/2026 . |
| PSUs (3/7/2024) | 27,643 (target) | 3,185,026 | ~50% of LTI | 50% on 2-year Cumulative Adjusted EBITDA (2024–2025) and 50% on 3-year Cumulative Cash Flow (2024–2026); TSR modifier ±25% over 2024–2026 . |
Performance stock units – 2022–2024 performance cycle result (certified Feb 2025):
| Metric (Target/Max/Actual) | Result | Weighted Payout | TSR Modifier | Final Payout |
|---|---|---|---|---|
| 2-year Cumulative Adjusted EBITDA (Target $1,715.0M; Max $2,058.0M; Actual $2,062.1M) | > Max | 200% | 100% | 200% |
| 3-year Cumulative Cash Flow (Target $1,482.0M; Max $1,778.4M; Actual $1,969.9M) | > Max | 200% | — | — |
| CEO 2022 PSU Payout | — | — | — | 58,812 PSUs (200% of 29,406 target); cash-settled at $123.27/sh (Feb 6, 2025) |
Pay-versus-performance alignment: “Compensation Actually Paid” to PEO fluctuated with stock price and PSU/RSU valuation; over 2019–2024, CHDN TSR ($197.63) exceeded peer TSR ($129.80) alongside rising Adjusted EBITDA (to $1,159.2M in 2024) and net income of $426.8M .
Equity Ownership & Alignment
- Beneficial ownership: 1,591,644 shares (2.17% of outstanding 73,487,843), excluding deferred RSUs and unvested units; CEO meets 6x salary stock ownership guideline (met) .
- Anti-hedging and anti-pledging: Directors and officers are prohibited from hedging and from pledging or margining CHDN securities; enhances alignment and reduces counterparty risk .
- Options: None of the NEOs held outstanding options at 2024 year-end .
Outstanding and unearned equity at 12/31/2024:
| Item | Amount | Market/Notes |
|---|---|---|
| Unvested RSUs | 179,446 | $23,963,219 market value at $133.54/sh . |
| Unearned PSUs (target) | 54,865 | $7,326,672 market/payout value at $133.54/sh . |
Upcoming vesting schedule (potential supply overhang):
| Date | Instrument | Shares |
|---|---|---|
| Oct 30, 2025 | RSUs (from 2018 7-Year Grants) | 151,942 |
| Dec 31, 2025 | RSUs | 18,289 |
| Dec 31, 2025 | PSUs (performance period end) | 27,222 (subject to performance) |
| Dec 31, 2026 | RSUs | 9,215 |
| Dec 31, 2026 | PSUs (performance period end) | 27,643 (subject to performance) |
| Dec 31, 2027 | RSUs (2016/2018 awards) | 16,225 |
Stock ownership guidelines (CEO: 6x salary) and status:
| Executive Officer | Guideline | Status |
|---|---|---|
| William C. Carstanjen | 6x salary | Met |
Employment Terms
Key agreements and provisions:
| Topic | Terms |
|---|---|
| Agreements | Executive Change in Control, Severance and Indemnity Agreements; no single-trigger vesting; double-trigger on CIC . |
| Non-solicitation | 2-year post-termination non-solicit of employees/customers . |
| Severance (no CIC) | 2x (salary + target bonus) cash; pro-rata in-cycle target bonus; equity per plan; 3 months health benefits (cash equivalent) . |
| Severance (within 2 yrs post-CIC) | Double-trigger; multiple of 2x (salary + target bonus) . |
| Tax gross-ups | None; 280G “best-net” cutback applies . |
Potential payments as of 12/31/2024 (CEO):
| Scenario | Cash Severance ($) | Equity Acceleration/Continuation ($) | Total ($) |
|---|---|---|---|
| Involuntary or good reason termination | 17,109,758 | 27,617,185 | 44,726,943 |
| Death or Disability | 4,500,000 (pro-rata target bonus) | 27,617,185 | 32,117,185 |
| Involuntary or good reason termination within 2 yrs of CIC | 17,109,758 | 31,289,891 | 48,399,649 |
Board Governance
- Board service: Director since 2015; not independent due to CEO role .
- Board leadership: Independent Chairman (R. Alex Rankin); CEO and Chairman roles separated; independent directors meet in executive session after each Board meeting; enhances oversight and mitigates CEO+Chair dual-role concerns .
- Committees: CEO is not listed as a voting member on standing committees (Executive, Audit, Compensation, Nominating & Governance) .
- Meetings/attendance: Board met 4 times in 2024; all incumbent directors attended ≥75% of Board/committee meetings .
- Compensation Committee: Independent members (Chair Daniel P. Harrington; members Douglas C. Grissom, Andréa Carter, Paul C. Varga; ex officio Rankin) with FW Cook as independent consultant since 2015 .
- Say-on-Pay: ~98% approval at 2024 annual meeting; no changes made as a result .
Compensation Peer Group (Benchmarking)
2024 peer set used for TSR and compensation benchmarking: ALL, BYD, CZR, DKNG, FLTR, GLPI, MGM, PENN, RRR, LNW, WYNN; updated from prior year with removal of SPHR/MSGE .
Performance & Track Record
- 2024 operating achievements: Opened Terre Haute Casino Resort (IN), The Rose Gaming Resort (VA), completed Churchill Downs Racetrack Paddock redevelopment for the 150th Kentucky Derby, sold 49% of United Tote, continued capital management (dividends/buybacks) maintaining a strong balance sheet, expanded ESG initiatives and leadership development .
- Financial performance: Record 2024 Adjusted EBITDA of $1,159.2M vs $1,088.9M target (106.5%); record net income $426.8M .
- PSU outcomes: For the 2022–2024 cycle, both 2-year Adj. EBITDA and 3-year Cash Flow exceeded maximum goals; TSR 19% (top 42% Russell 2000), yielding 200% PSU payout (CEO received 58,812 PSUs; cash-settled at $123.27) .
- Pay-for-performance: Majority of CEO pay is at-risk (EAIP and ELTI), aligned to Adj. EBITDA, cash flow, and relative TSR; anti-hedging/anti-pledging and stringent ownership guidelines reinforce alignment .
Investment Implications
- Alignment and incentives: Strong pay-for-performance architecture with rigorous multi-year metrics and TSR modifier; 98% Say-on-Pay support reduces governance overhang risk .
- Retention vs. selling pressure: Large 7-Year Grant tranches vest Oct 30, 2025 (151,942 RSUs), plus year-end 2025–2026 RSU/PSU vestings; these dates represent potential supply overhang windows even as they strengthen retention through milestone-based vesting .
- Change-in-control economics: Double-trigger with 2x (salary + target bonus) and significant equity acceleration/continuation; no excise tax gross-ups but material totals ($44.7M–$48.4M in modeled scenarios) indicate meaningful CIC sensitivity for trading around event risk .
- Governance posture: Independent Chair and prohibited hedging/pledging mitigate dual-role and alignment concerns; CEO is non-independent but not Chair, and committee independence/consultant usage is robust .
- Execution track record: Delivery of major projects and sustained growth in Adjusted EBITDA underpin performance-award outcomes; continued capex execution and Derby/HRM growth pipeline are key levers for future incentive payouts and potential equity value creation .