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Is Entravision Communications Corporation (NYSE:EVC) Overpaying Its CEO?

Simply Wall St

Walter Ulloa has been the CEO of Entravision Communications Corporation (NYSE:EVC) since 1996. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Entravision Communications

How Does Walter Ulloa’s Compensation Compare With Similar Sized Companies?

Our data indicates that Entravision Communications Corporation is worth US$354m, and total annual CEO compensation is US$4.2m. (This number is for the twelve months until December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.3m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.5m.

It would therefore appear that Entravision Communications Corporation pays Walter Ulloa more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration 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 Entravision Communications, below.

NYSE:EVC CEO Compensation, March 4th 2019

Is Entravision Communications Corporation Growing?

Over the last three years Entravision Communications Corporation has grown its earnings per share (EPS) by an average of 66% per year (using a line of best fit). Its revenue is down -46% over last year.

This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Entravision Communications Corporation Been A Good Investment?

Since shareholders would have lost about 45% over three years, some Entravision Communications Corporation shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We compared total CEO remuneration at Entravision Communications Corporation with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Shareholders may want to check for free if Entravision Communications insiders are buying or selling shares.

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.

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.