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Is Saga Communications, Inc.'s (NASDAQ:SGA) CEO Being Overpaid?

Simply Wall St

In 1986 Ed Christian was appointed CEO of Saga Communications, Inc. (NASDAQ:SGA). 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Saga Communications

How Does Ed Christian's Compensation Compare With Similar Sized Companies?

According to our data, Saga Communications, Inc. has a market capitalization of US$183m, and paid its CEO total annual compensation worth US$3.4m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.1m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.1m.

Thus we can conclude that Ed Christian receives more in total compensation than the median of a group of companies in the same market, and of similar size to Saga Communications, Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Saga Communications has changed from year to year.

NasdaqGM:SGA CEO Compensation, January 15th 2020

Is Saga Communications, Inc. Growing?

Over the last three years Saga Communications, Inc. has grown its earnings per share (EPS) by an average of 6.8% per year (using a line of best fit). Revenue was pretty flat on last year.

I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. Considering these factors I'd say performance has been pretty decent, though not amazing. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Saga Communications, Inc. Been A Good Investment?

Since shareholders would have lost about 30% over three years, some Saga Communications, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared the total CEO remuneration paid by Saga Communications, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Saga Communications.

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

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.

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. Thank you for reading.