Shareholders Will Probably Hold Off On Increasing United States Cellular Corporation's (NYSE:USM) CEO Compensation For The Time Being
Key Insights
- United States Cellular will host its Annual General Meeting on 20th of May
- CEO LT Therivel's total compensation includes salary of US$901.9k
- The overall pay is 114% above the industry average
- Over the past three years, United States Cellular's EPS fell by 82% and over the past three years, the total shareholder return was 101%
The share price of United States Cellular Corporation (NYSE:USM) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. Some of these issues will occupy shareholders' minds as the AGM rolls around on 20th of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
Check out our latest analysis for United States Cellular
How Does Total Compensation For LT Therivel Compare With Other Companies In The Industry?
According to our data, United States Cellular Corporation has a market capitalization of US$5.1b, and paid its CEO total annual compensation worth US$7.7m over the year to December 2024. Notably, that's a decrease of 29% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$902k.
For comparison, other companies in the American Wireless Telecom industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$3.6m. Accordingly, our analysis reveals that United States Cellular Corporation pays LT Therivel north of the industry median. Furthermore, LT Therivel directly owns US$13m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$902k | US$867k | 12% |
| Other | US$6.8m | US$10.0m | 88% |
| Total Compensation | US$7.7m | US$11m | 100% |
Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. United States Cellular sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
United States Cellular Corporation's Growth
Over the last three years, United States Cellular Corporation has shrunk its earnings per share by 82% per year. In the last year, its revenue is down 4.1%.
The decline in EPS is a bit concerning. 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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has United States Cellular Corporation Been A Good Investment?
Boasting a total shareholder return of 101% over three years, United States Cellular Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for United States Cellular that you should be aware of before investing.
Important note: United States Cellular 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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.