Here's Why Shareholders Should Examine Audacy, Inc.'s (NYSE:AUD) CEO Compensation Package More Closely

Audacy, Inc. (NYSE:AUD) has not performed well recently and CEO David Field 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 14 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.

See our latest analysis for Audacy

Comparing Audacy, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Audacy, Inc. has a market capitalization of US$663m, and reported total annual CEO compensation of US$2.3m for the year to December 2020. That's a notable decrease of 49% on last year. Notably, the salary which is US$1.16m, represents a considerable chunk of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$1.8m. So it looks like Audacy compensates David Field in line with the median for the industry. Moreover, David Field also holds US$29m worth of Audacy stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 20% of total compensation represents salary and 80% is other remuneration. According to our research, Audacy has allocated a higher percentage of pay to salary in comparison to the wider 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.

Audacy, Inc.'s Growth

Over the last three years, Audacy, Inc. has shrunk its earnings per share by 79% per year. Its revenue is down 29% 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Audacy, Inc. Been A Good Investment?

With a total shareholder return of -32% over three years, Audacy, Inc. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

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 can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Audacy that you should be aware of before investing.

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.

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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