Should Shareholders Have Second Thoughts About A Pay Rise For A.H. Belo Corporation's (NYSE:AHC) CEO This Year?

The underwhelming performance at A.H. Belo Corporation (NYSE:AHC) recently has probably not pleased shareholders. At the upcoming AGM on 13 May 2021, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. From our analysis below, we think CEO compensation looks appropriate for now.

Check out our latest analysis for A.H. Belo

How Does Total Compensation For Robert Decherd Compare With Other Companies In The Industry?

At the time of writing, our data shows that A.H. Belo Corporation has a market capitalization of US$44m, and reported total annual CEO compensation of US$226k for the year to December 2020. We note that's a decrease of 37% compared to last year. Notably, the salary of US$226k is the entirety of the CEO compensation.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$690k. This suggests that Robert Decherd is paid below the industry median. Furthermore, Robert Decherd directly owns US$4.6m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$226k	US$360k	100%
Other	-	-	-
Total Compensation	US$226k	US$360k	100%

On an industry level, around 20% of total compensation represents salary and 80% is other remuneration. At the company level, A.H. Belo pays Robert Decherd solely through a salary, preferring to go down a conventional route. 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 A.H. Belo Corporation's Growth Numbers

A.H. Belo Corporation has reduced its earnings per share by 25% a year over the last three years. It saw its revenue drop 15% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has A.H. Belo Corporation Been A Good Investment?

The return of -41% over three years would not have pleased A.H. Belo Corporation shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

A.H. Belo rewards its CEO solely through a salary, ignoring non-salary benefits completely. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 3 warning signs for A.H. Belo that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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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