This article will reflect on the compensation paid to Robert Decherd who has served as CEO of A.H. Belo Corporation (NYSE:AHC) since 2018. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for A.H. Belo
Comparing A.H. Belo Corporation's CEO Compensation With the industry
Our data indicates that A.H. Belo Corporation has a market capitalization of US$32m, and total annual CEO compensation was reported as US$360k for the year to December 2019. That's a notable increase of 31% on last year. Notably, the salary of US$360k 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$1.3m. In other words, A.H. Belo pays its CEO lower than the industry median. What's more, Robert Decherd holds US$3.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$360k | US$210k | 100% |
| Other | - | US$65k | - |
| Total Compensation | US$360k | US$275k | 100% |
On an industry level, around 22% of total compensation represents salary and 78% is other remuneration. On a company level, A.H. Belo prefers to reward its CEO through a salary, opting not to pay Robert Decherd through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A.H. Belo Corporation's Growth
A.H. Belo Corporation has reduced its earnings per share by 5.2% a year over the last three years. It saw its revenue drop 15% over the last year.
Overall this is not a very positive result for shareholders. 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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has A.H. Belo Corporation Been A Good Investment?
Given the total shareholder loss of 60% over three years, many shareholders in A.H. Belo Corporation are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
A.H. Belo pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, A.H. Belo pays its CEO lower than the norm for similar-sized companies belonging to the same industry. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for A.H. Belo (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.
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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Slight with mediocre balance sheet.
