Here's Why Some Shareholders May Not Be Too Generous With A.H. Belo Corporation's (NYSE:AHC) CEO Compensation This Year
Performance at A.H. Belo Corporation (NYSE:AHC) has not been particularly rosy recently and shareholders will likely be holding CEO Robert Decherd and the board accountable for this. The next AGM coming up on 13 May 2021 will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. We think most shareholders will probably pass the CEO compensation, based on what we gathered.
Check out our latest analysis for A.H. Belo
How Does Total Compensation For Robert Decherd Compare With Other Companies In The Industry?
According to our data, A.H. Belo Corporation has a market capitalization of US$44m, and paid its CEO total annual compensation worth US$226k over the year to December 2020. Notably, that's a decrease of 37% over the year before. Notably, the salary of US$226k is the entirety of the CEO compensation.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$690k. This suggests that Robert Decherd is paid below the industry median. Furthermore, Robert Decherd directly owns US$4.6m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$226k | US$360k | 100% |
Other | - | - | - |
Total Compensation | US$226k | US$360k | 100% |
Talking in terms of the industry, salary represented approximately 20% of total compensation out of all the companies we analyzed, while other remuneration made up 80% of the pie. At the company level, A.H. Belo pays Robert Decherd solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at A.H. Belo Corporation's Growth Numbers
Over the last three years, A.H. Belo Corporation has shrunk its earnings per share by 25% per year. It saw its revenue drop 15% over the last year.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has A.H. Belo Corporation Been A Good Investment?
With a total shareholder return of -41% over three years, A.H. Belo Corporation shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
A.H. Belo rewards its CEO solely through a salary, ignoring non-salary benefits completely. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for A.H. Belo that investors should look into moving forward.
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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