Shareholders May Be Wary Of Increasing Postmedia Network Canada Corp.'s (TSE:PNC.B) CEO Compensation Package

Key Insights

• Postmedia Network Canada's Annual General Meeting to take place on 26th of February
• CEO Andrew MacLeod's total compensation includes salary of CA$1.10m
• The overall pay is 222% above the industry average
• Postmedia Network Canada's EPS declined by 85% over the past three years while total shareholder loss over the past three years was 30%

Shareholders will probably not be too impressed with the underwhelming results at Postmedia Network Canada Corp. (TSE:PNC.B) recently. At the upcoming AGM on 26th of February, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Postmedia Network Canada

Comparing Postmedia Network Canada Corp.'s CEO Compensation With The Industry

At the time of writing, our data shows that Postmedia Network Canada Corp. has a market capitalization of CA$111m, and reported total annual CEO compensation of CA$1.6m for the year to August 2023. That's a notable increase of 13% on last year. In particular, the salary of CA$1.10m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Canadian Media industry with market capitalizations below CA$270m, reported a median total CEO compensation of CA$506k. Hence, we can conclude that Andrew MacLeod is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	CA$1.1m	CA$1.1m	67%
Other	CA$532k	CA$379k	33%
Total Compensation	CA$1.6m	CA$1.4m	100%

Speaking on an industry level, nearly 72% of total compensation represents salary, while the remainder of 28% is other remuneration. Although there is a difference in how total compensation is set, Postmedia Network Canada more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Postmedia Network Canada Corp.'s Growth

Postmedia Network Canada Corp. has reduced its earnings per share by 85% a year over the last three years. In the last year, its revenue is down 7.6%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Postmedia Network Canada Corp. Been A Good Investment?

The return of -30% over three years would not have pleased Postmedia Network Canada Corp. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Postmedia Network Canada (of which 3 make us uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Postmedia Network Canada, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.