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In 2002 David Field was appointed CEO of Entercom Communications Corp. (NYSE:ETM). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Entercom Communications
How Does David Field’s Compensation Compare With Similar Sized Companies?
According to our data, Entercom Communications Corp. has a market capitalization of US$934m, and pays its CEO total annual compensation worth US$3.5m. (This is based on the year to December 2018). That’s a fairly small increase of 0.4% on year before. While we always look at total compensation first, we note that the salary component is less, at US$1.2m. 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$2.3m.
Thus we can conclude that David Field receives more in total compensation than the median of a group of companies in the same market, and of similar size to Entercom Communications Corp.. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Entercom Communications has changed over time.
Is Entercom Communications Corp. Growing?
Over the last three years Entercom Communications Corp. has grown its earnings per share (EPS) by an average of 4.6% per year (using a line of best fit). It achieved revenue growth of 147% over the last year.
It’s great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. So while I’d stop short of saying growth is absolutely outstanding, there are definitely some clear positives! It could be important to check this free visual depiction of what analysts expect for the future.
Has Entercom Communications Corp. Been A Good Investment?
With a three year total loss of 38%, Entercom Communications Corp. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
We compared the total CEO remuneration paid by Entercom Communications Corp., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Although we’d stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. So you may want to check if insiders are buying Entercom Communications shares with their own money (free access).
Important note: Entercom Communications may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.