Most Shareholders Will Probably Find That The Compensation For Chicken Soup for the Soul Entertainment, Inc.'s (NASDAQ:CSSE) CEO Is Reasonable

Shareholders may be wondering what CEO Bill Rouhana plans to do to improve the less than great performance at Chicken Soup for the Soul Entertainment, Inc. (NASDAQ:CSSE) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 22 June 2021. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for Chicken Soup for the Soul Entertainment

Comparing Chicken Soup for the Soul Entertainment, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Chicken Soup for the Soul Entertainment, Inc. has a market capitalization of US$505m, and reported total annual CEO compensation of US$135k for the year to December 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at US$126.0k constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$580k. That is to say, Bill Rouhana is paid under the industry median. Furthermore, Bill Rouhana directly owns US$11m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$126k	US$126k	94%
Other	US$8.6k	US$9.3k	6%
Total Compensation	US$135k	US$135k	100%

On an industry level, around 30% of total compensation represents salary and 70% is other remuneration. Chicken Soup for the Soul Entertainment is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Chicken Soup for the Soul Entertainment, Inc.'s Growth Numbers

Chicken Soup for the Soul Entertainment, Inc. has reduced its earnings per share by 97% a year over the last three years. Its revenue is up 15% over the last year.

Few shareholders would be pleased to read that EPS have declined. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Chicken Soup for the Soul Entertainment, Inc. Been A Good Investment?

We think that the total shareholder return of 258%, over three years, would leave most Chicken Soup for the Soul Entertainment, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us wonder if these strong returns can continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 5 warning signs for Chicken Soup for the Soul Entertainment that investors should be aware of in a dynamic business environment.

Switching gears from Chicken Soup for the Soul Entertainment, 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. 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.
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