We Think Shareholders May Want To Consider A Review Of Saga Communications, Inc.'s (NASDAQ:SGA) CEO Compensation Package

Saga Communications, Inc. (NASDAQ:SGA) has not performed well recently and CEO Ed Christian will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 10 May 2021. 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Saga Communications

How Does Total Compensation For Ed Christian Compare With Other Companies In The Industry?

Our data indicates that Saga Communications, Inc. has a market capitalization of US$134m, and total annual CEO compensation was reported as US$2.0m for the year to December 2020. We note that's a decrease of 40% compared to last year. Notably, the salary which is US$1.16m, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$690k. This suggests that Ed Christian is paid more than the median for the industry. What's more, Ed Christian holds US$21m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$1.2m	US$1.1m	57%
Other	US$877k	US$2.3m	43%
Total Compensation	US$2.0m	US$3.4m	100%

On an industry level, around 20% of total compensation represents salary and 80% is other remuneration. According to our research, Saga Communications has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Saga Communications, Inc.'s Growth Numbers

Over the last three years, Saga Communications, Inc. has shrunk its earnings per share by 58% per year. In the last year, its revenue is down 22%.

Few shareholders would be pleased to read that EPS have declined. 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. 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?

The return of -38% over three years would not have pleased Saga Communications, Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO 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 is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for Saga Communications (of which 1 is potentially serious!) 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. 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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