Adam Symson has been the CEO of The E.W. Scripps Company (NASDAQ:SSP) since 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for E.W. Scripps
How Does Adam Symson's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that The E.W. Scripps Company has a market cap of US$640m, and reported total annual CEO compensation of US$4.4m for the year to December 2019. That's a notable increase of 31% on last year. While we always look at total compensation first, we note that the salary component is less, at US$1.0m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$3.1m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of E.W. Scripps. Talking in terms of the sector, salary represented approximately 22% of total compensation out of all the companies we analysed, while other remuneration made up 78% of the pie. E.W. Scripps does not set aside a larger portion of remuneration in the form of salary, maintaining the same rate as the wider market.
As you can see, Adam Symson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean The E.W. Scripps Company is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. The graphic below shows how CEO compensation at E.W. Scripps has changed from year to year.
Is The E.W. Scripps Company Growing?
The E.W. Scripps Company has reduced its earnings per share by an average of 23% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 18%.
Sadly for shareholders, earnings per share are actually down, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. 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 The E.W. Scripps Company Been A Good Investment?
With a three year total loss of 64%, The E.W. Scripps Company would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We examined the amount The E.W. Scripps Company pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
We think many shareholders would be underwhelmed with the business growth over the last three years. Just as bad, share price gains for investors have failed to materialize, over the same period. Notably, the CEO remuneration is actually up on last year. In our opinion the CEO might be paid too generously! Taking a breather from CEO compensation, we've spotted 4 warning signs for E.W. Scripps (of which 3 are concerning!) you should know about in order to have a holistic understanding of the stock.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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