Key Insights

• Lee Enterprises to hold its Annual General Meeting on 22nd of February
• Salary of US$813.5k is part of CEO Kevin Mowbray's total remuneration
• The overall pay is 134% above the industry average
• Lee Enterprises' EPS declined by 87% over the past three years while total shareholder loss over the past three years was 56%

The results at Lee Enterprises, Incorporated (NASDAQ:LEE) have been quite disappointing recently and CEO Kevin Mowbray bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 22nd of February. 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.

How Does Total Compensation For Kevin Mowbray Compare With Other Companies In The Industry?

At the time of writing, our data shows that Lee Enterprises, Incorporated has a market capitalization of US$61m, and reported total annual CEO compensation of US$1.3m for the year to September 2023. We note that's a decrease of 43% compared to last year. Notably, the salary which is US$813.5k, represents most of the total compensation being paid.

On comparing similar-sized companies in the American Media industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$567k. Hence, we can conclude that Kevin Mowbray is remunerated higher than the industry median. Furthermore, Kevin Mowbray directly owns US$1.3m worth of shares in the company.

Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. It's interesting to note that Lee Enterprises pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Lee Enterprises, Incorporated's Growth Numbers

Over the last three years, Lee Enterprises, Incorporated has shrunk its earnings per share by 87% per year. Its revenue is down 13% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Lee Enterprises, Incorporated Been A Good Investment?

With a total shareholder return of -56% over three years, Lee Enterprises, Incorporated shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 2 which don't sit too well with us) in Lee Enterprises we think you should know about.

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.