Shareholders May Be Wary Of Increasing Cumulus Media Inc.'s (NASDAQ:CMLS) CEO Compensation Package

Key Insights

• Cumulus Media will host its Annual General Meeting on 2nd of May
• Salary of US$1.45m is part of CEO Mary Berner's total remuneration
• The overall pay is 467% above the industry average
• Cumulus Media's EPS declined by 6.7% over the past three years while total shareholder loss over the past three years was 71%

Shareholders will probably not be too impressed with the underwhelming results at Cumulus Media Inc. (NASDAQ:CMLS) recently. At the upcoming AGM on 2nd of May, shareholders can hear from the board including their plans for turning around performance. 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. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Cumulus Media

Comparing Cumulus Media Inc.'s CEO Compensation With The Industry

According to our data, Cumulus Media Inc. has a market capitalization of US$46m, and paid its CEO total annual compensation worth US$4.5m over the year to December 2023. Notably, that's a decrease of 17% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.5m.

For comparison, other companies in the American Media industry with market capitalizations below US$200m, reported a median total CEO compensation of US$797k. This suggests that Mary Berner is paid more than the median for the industry. Moreover, Mary Berner also holds US$754k worth of Cumulus Media stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	US$1.5m	US$1.5m	32%
Other	US$3.1m	US$4.0m	68%
Total Compensation	US$4.5m	US$5.5m	100%

Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. It's interesting to note that Cumulus Media pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Cumulus Media Inc.'s Growth Numbers

Cumulus Media Inc. has reduced its earnings per share by 6.7% a year over the last three years. It saw its revenue drop 11% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Cumulus Media Inc. Been A Good Investment?

With a total shareholder return of -71% over three years, Cumulus Media Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Cumulus Media that investors should think about before committing capital to this 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.