We Think Shareholders May Want To Consider A Review Of Postmedia Network Canada Corp.'s (TSE:PNC.B) CEO Compensation Package

Key Insights

• Postmedia Network Canada to hold its Annual General Meeting on 19th of February
• CEO Andrew MacLeod's total compensation includes salary of CA$1.10m
• Total compensation is 480% above industry average
• Postmedia Network Canada's EPS declined by 2.6% over the past three years while total shareholder loss over the past three years was 31%

Shareholders will probably not be too impressed with the underwhelming results at Postmedia Network Canada Corp. (TSE:PNC.B) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 19th of February. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Postmedia Network Canada

How Does Total Compensation For Andrew MacLeod Compare With Other Companies In 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$1.9m for the year to August 2024. That's a notable increase of 16% on last year. We note that the salary of CA$1.10m makes up a sizeable portion of the total compensation received by the CEO.

On comparing similar-sized companies in the Canada Media industry with market capitalizations below CA$286m, we found that the median total CEO compensation was CA$325k. Hence, we can conclude that Andrew MacLeod is remunerated higher than the industry median. Furthermore, Andrew MacLeod directly owns CA$122k worth of shares in the company.

Component	2024	2023	Proportion (2024)
Salary	CA$1.1m	CA$1.1m	58%
Other	CA$785k	CA$532k	42%
Total Compensation	CA$1.9m	CA$1.6m	100%

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. In Postmedia Network Canada's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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

Over the last three years, Postmedia Network Canada Corp. has shrunk its earnings per share by 2.6% per year. Its revenue is down 6.4% over the previous year.

A lack of EPS improvement is not good to see. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Postmedia Network Canada Corp. Been A Good Investment?

With a total shareholder return of -31% over three years, Postmedia Network Canada Corp. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 5 warning signs for Postmedia Network Canada (of which 4 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.