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Is Entercom Communications Corp.'s (NYSE:ETM) CEO Overpaid Relative To Its Peers?

Simply Wall St

David Field has been the CEO of Entercom Communications Corp. (NYSE:ETM) since 2002. 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.

See our latest analysis for Entercom Communications

How Does David Field's Compensation Compare With Similar Sized Companies?

According to our data, Entercom Communications Corp. has a market capitalization of US$526m, and pays its CEO total annual compensation worth US$3.5m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$1.9m.

Thus we can conclude that David Field receives more in total compensation than the median of a group of companies in the same market, and of similar size to Entercom Communications Corp.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Entercom Communications, below.

NYSE:ETM CEO Compensation, August 22nd 2019

Is Entercom Communications Corp. Growing?

Over the last three years Entercom Communications Corp. has shrunk its earnings per share by an average of 50% per year (measured with a line of best fit). In the last year, its revenue is up 42%.

As investors, we are a bit wary of companies that have lower earnings per share, over three years. On the other hand, the strong revenue growth suggests the business is growing. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. It could be important to check this free visual depiction of what analysts expect for the future.

Has Entercom Communications Corp. Been A Good Investment?

With a three year total loss of 70%, Entercom Communications Corp. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at Entercom Communications Corp. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. Whatever your view on compensation, you might want to check if insiders are buying or selling Entercom Communications shares (free trial).

If you want to buy a stock that is better than Entercom Communications, this free list of high return, low debt companies is a great place to look.

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 editorial-team@simplywallst.com. 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.