In 1986 Ed Christian was appointed CEO of Saga Communications, Inc. (NASDAQ:SGA). 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.
See our latest analysis for Saga Communications
How Does Ed Christian’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Saga Communications, Inc. has a market cap of US$181m, and reported total annual CEO compensation of US$3.4m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.1m. We further remind readers that the CEO may face performance requirements to receive the non-salary part 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$1.5m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it’s no different in the case of Saga Communications. Talking in terms of the sector, salary represented approximately 22% of total compensation out of all the companies we analysed, while other remuneration made up 78% of the pie. Saga Communications is paying a higher share of its remuneration through a salary in comparison to the overall industry.
It would therefore appear that Saga Communications, Inc. pays Ed Christian 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. 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.
Is Saga Communications, Inc. Growing?
On average over the last three years, Saga Communications, Inc. has seen earnings per share (EPS) move in a favourable direction by 2.1% each year (using a line of best fit). In the last year, its revenue is down 1.4%.
I would argue that the lack of revenue growth in the last year is less than ideal, but the improvement in EPS is good. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching. Although we don’t have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Saga Communications, Inc. Been A Good Investment?
Since shareholders would have lost about 33% 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. Our data suggests that it pays above the median CEO pay within that group.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. Shifting gears from CEO pay for a second, we’ve picked out 1 warning sign for Saga Communications that investors should be aware of in a dynamic business environment.
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.
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.