Key Insights

• News to hold its Annual General Meeting on 20th of November
• CEO Robert Thomson's total compensation includes salary of US$3.00m
• The total compensation is similar to the average for the industry
• Over the past three years, News' EPS fell by 9.1% and over the past three years, the total shareholder return was 27%

The share price of News Corporation (NASDAQ:NWSA) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 20th of November. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Comparing News Corporation's CEO Compensation With The Industry

Our data indicates that News Corporation has a market capitalization of US$17b, and total annual CEO compensation was reported as US$20m for the year to June 2024. That's a modest increase of 5.3% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$3.0m.

In comparison with other companies in the American Media industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$20m. So it looks like News compensates Robert Thomson in line with the median for the industry. Furthermore, Robert Thomson directly owns US$58k worth of shares in the company.

Talking in terms of the industry, salary represented approximately 19% of total compensation out of all the companies we analyzed, while other remuneration made up 81% of the pie. It's interesting to note that News allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at News Corporation's Growth Numbers

News Corporation has reduced its earnings per share by 9.1% a year over the last three years. In the last year, its revenue is up 2.7%.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 News Corporation Been A Good Investment?

With a total shareholder return of 27% over three years, News Corporation shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company's remuneration policies and evaluate if the board's judgement and decision-making is aligned with that of the company's shareholders.

So you may want to check if insiders are buying News shares with their own money (free access).

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.