Shareholders May Be Wary Of Increasing Consolidated Communications Holdings, Inc.'s (NASDAQ:CNSL) CEO Compensation Package

Consolidated Communications Holdings, Inc. (NASDAQ:CNSL) has not performed well recently and CEO Bob Udell will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 26 April 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Consolidated Communications Holdings

Comparing Consolidated Communications Holdings, Inc.'s CEO Compensation With the industry

According to our data, Consolidated Communications Holdings, Inc. has a market capitalization of US$549m, and paid its CEO total annual compensation worth US$3.4m over the year to December 2020. That's a notable increase of 12% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$600k.

On examining similar-sized companies in the industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$2.6m. Accordingly, our analysis reveals that Consolidated Communications Holdings, Inc. pays Bob Udell north of the industry median. What's more, Bob Udell holds US$3.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$600k	US$600k	18%
Other	US$2.8m	US$2.5m	82%
Total Compensation	US$3.4m	US$3.1m	100%

On an industry level, around 24% of total compensation represents salary and 76% is other remuneration. Consolidated Communications Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Consolidated Communications Holdings, Inc.'s Growth Numbers

Over the last three years, Consolidated Communications Holdings, Inc. has shrunk its earnings per share by 24% per year. In the last year, its revenue is down 2.4%.

Few shareholders would be pleased to read that EPS have declined. 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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Consolidated Communications Holdings, Inc. Been A Good Investment?

Since shareholders would have lost about 28% over three years, some Consolidated Communications Holdings, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Consolidated Communications Holdings (1 is a bit unpleasant!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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