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Is Shenandoah Telecommunications Company’s (NASDAQ:SHEN) CEO Being Overpaid?

Joel Foster

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In 1988 Chris French was appointed CEO of Shenandoah Telecommunications Company (NASDAQ:SHEN). 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 – 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 Shenandoah Telecommunications

How Does Chris French’s Compensation Compare With Similar Sized Companies?

According to our data, Shenandoah Telecommunications Company has a market capitalization of US$2.3b, and pays its CEO total annual compensation worth US$1.8m. (This figure is for the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$598k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.4m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business.

You can see a visual representation of the CEO compensation at Shenandoah Telecommunications, below.

NASDAQGS:SHEN CEO Compensation February 11th 19

Is Shenandoah Telecommunications Company Growing?

On average over the last three years, Shenandoah Telecommunications Company has grown earnings per share (EPS) by 41% each year (using a line of best fit). It achieved revenue growth of 1.3% over the last year.

This demonstrates that the company has been improving recently. A good result. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.

Has Shenandoah Telecommunications Company Been A Good Investment?

Most shareholders would probably be pleased with Shenandoah Telecommunications Company for providing a total return of 121% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

Shenandoah Telecommunications Company is currently paying its CEO below what is normal for companies of its size. Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Chris French deserves a raise!

It is relatively rare to see a modestly paid CEO when performance is so impressive. But it is even better if company insiders are also buying shares with their own money. Shareholders may want to check for free if Shenandoah Telecommunications 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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.