We Discuss Why Audacy, Inc.'s (NYSE:AUD) CEO Compensation May Be Closely Reviewed

Shareholders will probably not be too impressed with the underwhelming results at Audacy, Inc. (NYSE:AUD) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 14 May 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Audacy

Comparing Audacy, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Audacy, Inc. has a market capitalization of US$663m, and reported total annual CEO compensation of US$2.3m for the year to December 2020. We note that's a decrease of 49% compared to last year. In particular, the salary of US$1.16m, makes up a fairly large portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$1.8m. So it looks like Audacy compensates David Field in line with the median for the industry. Furthermore, David Field directly owns US$29m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$1.2m	US$1.2m	52%
Other	US$1.1m	US$3.2m	48%
Total Compensation	US$2.3m	US$4.5m	100%

Talking in terms of the industry, salary represented approximately 20% of total compensation out of all the companies we analyzed, while other remuneration made up 80% of the pie. According to our research, Audacy has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Audacy, Inc.'s Growth

Over the last three years, Audacy, Inc. has shrunk its earnings per share by 79% per year. It saw its revenue drop 29% 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Audacy, Inc. Been A Good Investment?

Few Audacy, Inc. shareholders would feel satisfied with the return of -32% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a 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 can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for Audacy that investors should look into moving forward.

Important note: Audacy is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

If you’re looking to trade Audacy, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.