Yahoo Finance We Think Some Shareholders May Hesitate To Increase Shenandoah Telecommunications Company's (NASDAQ:SHEN) CEO Compensation
Key Insights
Shenandoah Telecommunications to hold its Annual General Meeting on 30th of April
Total pay for CEO Chris French includes US$689.0k salary
The overall pay is comparable to the industry average
Shenandoah Telecommunications' three-year loss to shareholders was 53% while its EPS grew by 67% over the past three years
Shareholders of Shenandoah Telecommunications Company (NASDAQ:SHEN) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 30th of April could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
Check out 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$766m, and total annual CEO compensation was reported as US$3.4m for the year to December 2023. That's a notable increase of 21% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$689k.
On examining similar-sized companies in the American Telecom industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$3.4m. From this we gather that Chris French is paid around the median for CEOs in the industry. Moreover, Chris French also holds US$26m worth of Shenandoah Telecommunications stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$689k | US$684k | 20% |
Other | US$2.7m | US$2.1m | 80% |
Total Compensation | US$3.4m | US$2.8m | 100% |
Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. According to our research, Shenandoah Telecommunications has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Shenandoah Telecommunications Company's Growth
Shenandoah Telecommunications Company's earnings per share (EPS) grew 67% per year over the last three years. In the last year, its revenue is up 7.5%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Shenandoah Telecommunications Company Been A Good Investment?
The return of -53% over three years would not have pleased Shenandoah Telecommunications Company shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Shenandoah Telecommunications (1 is concerning!) that you should be aware of before investing here.
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. 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.
