This article will reflect on the compensation paid to Edward Atsinger who has served as CEO of Salem Media Group, Inc. (NASDAQ:SALM) since 1986. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Salem Media Group, Inc.'s CEO Compensation With the industry
According to our data, Salem Media Group, Inc. has a market capitalization of US$25m, and paid its CEO total annual compensation worth US$1.3m over the year to December 2019. That's a fairly small increase of 4.1% over the previous year. Notably, the salary which is US$805.1k, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$1.6m. So it looks like Salem Media Group compensates Edward Atsinger in line with the median for the industry. What's more, Edward Atsinger holds US$7.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 21% of total compensation out of all the companies we analyzed, while other remuneration made up 79% of the pie. Salem Media Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Salem Media Group, Inc.'s Growth
Salem Media Group, Inc. has reduced its earnings per share by 120% a year over the last three years. In the last year, its revenue is down 7.0%.
Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Salem Media Group, Inc. Been A Good Investment?
Since shareholders would have lost about 82% over three years, some Salem Media Group, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As previously discussed, Edward is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
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 4 warning signs for Salem Media Group that investors should think about before committing capital to this stock.
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.
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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