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How Should Investors React To Salem Media Group, Inc.'s (NASDAQ:SALM) CEO Pay?

Simply Wall St

In 1986 Edward Atsinger was appointed CEO of Salem Media Group, Inc. (NASDAQ:SALM). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Salem Media Group

How Does Edward Atsinger's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Salem Media Group, Inc. has a market cap of US$42m, and is paying total annual CEO compensation of US$1.3m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$990k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$498k.

It would therefore appear that Salem Media Group, Inc. pays Edward Atsinger 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.

The graphic below shows how CEO compensation at Salem Media Group has changed from year to year.

NasdaqGM:SALM CEO Compensation, August 26th 2019

Is Salem Media Group, Inc. Growing?

Salem Media Group, Inc. has reduced its earnings per share by an average of 25% a year, over the last three years (measured with a line of best fit). Its revenue is down -1.8% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. 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. Shareholders might be interested in this free visualization of analyst forecasts.

Has Salem Media Group, Inc. Been A Good Investment?

Given the total loss of 70% over three years, many shareholders in Salem Media Group, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We examined the amount Salem Media Group, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

Over the same period, investors would have come away with nothing in the way of share price gains. Some might well form the view that the CEO is paid too generously! So you may want to check if insiders are buying Salem Media Group shares with their own money (free access).

If you want to buy a stock that is better than Salem Media Group, 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.