Shareholders will probably not be too impressed with the underwhelming results at Beasley Broadcast Group, Inc. (NASDAQ:BBGI) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 27 May 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.
How Does Total Compensation For Barbara Beasley Compare With Other Companies In The Industry?
Our data indicates that Beasley Broadcast Group, Inc. has a market capitalization of US$79m, and total annual CEO compensation was reported as US$2.0m for the year to December 2020. Notably, that's an increase of 13% over the year before. In particular, the salary of US$1.10m, 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 under US$200m, the reported median total CEO compensation was US$690k. Accordingly, our analysis reveals that Beasley Broadcast Group, Inc. pays Barbara Beasley north of the industry median. Moreover, Barbara Beasley also holds US$3.6m worth of Beasley Broadcast Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 22% of total compensation represents salary and 78% is other remuneration. It's interesting to note that Beasley Broadcast Group pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Beasley Broadcast Group, Inc.'s Growth Numbers
Over the last three years, Beasley Broadcast Group, Inc. has shrunk its earnings per share by 120% per year. Its revenue is down 25% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Beasley Broadcast Group, Inc. Been A Good Investment?
With a total shareholder return of -71% over three years, Beasley Broadcast Group, Inc. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
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. That's why we did our research, and identified 3 warning signs for Beasley Broadcast Group (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Beasley Broadcast Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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