A Quick Analysis On Shenandoah Telecommunications' (NASDAQ:SHEN) CEO Compensation

Chris French has been the CEO of Shenandoah Telecommunications Company (NASDAQ:SHEN) since 1988, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Shenandoah Telecommunications pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Shenandoah Telecommunications

How Does Total Compensation For Chris French Compare With Other Companies In The Industry?

Our data indicates that Shenandoah Telecommunications Company has a market capitalization of US$2.1b, and total annual CEO compensation was reported as US$2.5m for the year to December 2019. That's a notable increase of 29% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$664k.

In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$2.3m. From this we gather that Chris French is paid around the median for CEOs in the industry. Moreover, Chris French also holds US$80m worth of Shenandoah Telecommunications stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 22% of total compensation out of all the companies we analyzed, while other remuneration made up 78% of the pie. Shenandoah Telecommunications is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Shenandoah Telecommunications Company's Growth

Over the past three years, Shenandoah Telecommunications Company has seen its earnings per share (EPS) grow by 110% per year. It achieved revenue growth of 102% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Shenandoah Telecommunications Company Been A Good Investment?

Shenandoah Telecommunications Company has served shareholders reasonably well, with a total return of 29% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As we noted earlier, Shenandoah Telecommunications pays its CEO in line with similar-sized companies belonging to the same industry. However, it's admirable that over the last three years, EPS growth for the company has been impressive, though the same can't be said for investor returns. As a result of these considerations, we would suggest the compensation is reasonable, but looking ahead shareholders will likely want to see healthier returns.

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 2 warning signs for Shenandoah Telecommunications (of which 1 is concerning!) 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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