This article will reflect on the compensation paid to Ed Christian who has served as CEO of Saga Communications, Inc. (NASDAQ:SGA) since 1986. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Saga Communications
Comparing Saga Communications, Inc.'s CEO Compensation With the industry
According to our data, Saga Communications, Inc. has a market capitalization of US$130m, and paid its CEO total annual compensation worth US$3.4m over the year to December 2019. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$1.3m. Accordingly, our analysis reveals that Saga Communications, Inc. pays Ed Christian north of the industry median. Furthermore, Ed Christian directly owns US$20m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$1.1m | US$1.1m | 33% |
| Other | US$2.3m | US$2.3m | 67% |
| Total Compensation | US$3.4m | US$3.4m | 100% |
On an industry level, around 22% of total compensation represents salary and 78% is other remuneration. Saga Communications is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Saga Communications, Inc.'s Growth
Over the last three years, Saga Communications, Inc. has shrunk its earnings per share by 36% per year. It saw its revenue drop 20% over the last year.
Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Saga Communications, Inc. Been A Good Investment?
With a three year total loss of 43% for the shareholders, Saga Communications, Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As previously discussed, Ed is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Saga Communications that you should be aware of before investing.
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. 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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About NasdaqGM:SGA
Saga Communications
A media company, engages in acquiring, developing, and operating broadcast properties in the United States.
Flawless balance sheet moderate.
