Salem Media halts stock dividends, cuts CEO's salary over COVID-19 uncertainties
America's leading Christian multimedia company, Salem Media Group, will temporarily suspend quarterly dividends on common stock and slash executive salaries by 10% as the company faces decreased revenues during the coronavirus pandemic.
The California-based multimedia broadcaster specializing in Christian and conservative content announced Monday that it will implement several cost-cutting strategies due to “uncertainty from the rapidly evolving impact of COVID-19 on the economy.”
“Salem’s Board of Directors has made the decision, as part of a larger effort to conserve cash, to temporarily suspend the regular quarterly cash dividend on its common stock,” Salem Executive Vice President and Chief Financial Officer Evan Masyr said in a statement.
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“The Board of Directors will re-assess the dividend suspension throughout the year to determine, in light of facts and circumstances at that time, whether and when to reinstate the dividend.”
The Christian Post reached out to Masyr for further comment Friday. A response is pending.
The multimedia company — which encompasses media properties in radio, digital media, books and newsletter publishing — attracts an audience of millions nationally.
The Salem Radio Network owns and operates 115 radio stations. Salem claims to own 73 stations in the nation's top 25 markets and 25 in the top 10.
Other cost-reduction strategies implemented by Salem to further preserve capital and liquidity include limiting capital expenditures, reducing discretionary spending for things like travel and entertainment, eliminating open positions and new hires, reducing staffing, requesting rent concessions from landlords, reducing employee compensation and requesting discounts from vendors.
In a Form 8-K filing, the compensation committee for Salem’s board of directors informed investors that the company has cut by 10% the annual base salaries of CEO Edward Atsinger III, Salem President of Broadcast Media David Santrella and Salem President of New Media David Evans.
As of May 11, Atsinger’s base annual salary changed from $1 million to $900,000. Santrella’s base annual salary was reduced from $530,600 to $477,540 and Evans’ base annual salary was decreased from $550,000 to $495,000.
The salary reductions were made under Section 3 of their respective employment agreements, which allows Salem to make unilateral compensation adjustments.
“Taken together, Salem believes these are the right actions to successfully weather this challenging environment,” Masyr assured.
Salem Media Group employs just over 1,100 employees.
Masyr warned shareholders at the end of March that the coronavirus pandemic would impact revenue.
“Based on current indications, Salem expects total first quarter 2020 revenue will be less than previously projected as a result of decreased revenues from advertising, programming, events and book sales,” Masyr explained.
“Due to continuing uncertainties regarding the ultimate scope and trajectory of COVID-19’s spread and evolution, the effects of the pandemic on Salem’s audiences, programmers and advertisers, and current and potential future governmental restrictions that may be adopted in the markets in which Salem operates, it is impossible to predict the total impact that the pandemic may have on Salem’s business.”
Salem Media Group is not the only organization facing financial hardship during the pandemic. Many churches and nonprofits have also been forced to make tough financial decisions as the pandemic has seemingly led to a drop in donations.
The Christian publishing company LifeWay Christian Resources in late April announced budget cuts, a staff reduction and a halt on hiring.
In the United Kingdom, the international humanitarian agency Christian Aid had to furlough 20% of its U.K. staff and reduce the salaries of non-furloughed staff.
