Is Hemisphere Media Group, Inc.’s (NASDAQ:HMTV) CEO Overpaid Relative To Its Peers?

In 2013 Alan Sokol was appointed CEO of Hemisphere Media Group, Inc. (NASDAQ:HMTV). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Hemisphere Media Group

How Does Alan Sokol’s Compensation Compare With Similar Sized Companies?

According to our data, Hemisphere Media Group, Inc. has a market capitalization of US$530m, and pays its CEO total annual compensation worth US$1.7m. (This is based on the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$900k. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO compensation of that group was US$1.5m.

So Alan Sokol receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at Hemisphere Media Group, below.

NasdaqGM:HMTV CEO Compensation, March 5th 2019
NasdaqGM:HMTV CEO Compensation, March 5th 2019

Is Hemisphere Media Group, Inc. Growing?

On average over the last three years, Hemisphere Media Group, Inc. has shrunk earnings per share by 89% each year (measured with a line of best fit). It saw its revenue drop -11% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. 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. Shareholders might be interested in this free visualization of analyst forecasts.

Has Hemisphere Media Group, Inc. Been A Good Investment?

With a three year total loss of 1.8%, Hemisphere Media Group, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

Remuneration for Alan Sokol is close enough to the median pay for a CEO of a similar sized company .

The company isn’t growing EPS, and shareholder returns have been disappointing. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. Whatever your view on compensation, you might want to check if insiders are buying or selling Hemisphere Media Group shares (free trial).

Important note: Hemisphere Media Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.

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. Thank you for reading.