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Cumulus Media Inc. (NASDAQ:CMLS), a radio broadcasting company currently trading at $0.47 near its 52-week low, has announced changes to its corporate governance structure. According to InvestingPro data, the company operates with a significant debt burden of $797 million while maintaining a market capitalization of just $8.7 million. On Monday, the Board of Directors unanimously approved an amendment to the company’s Bylaws, which introduces a director resignation policy. This policy mandates that any incumbent director who fails to receive a majority of votes cast in an uncontested election must offer their resignation.
The amendment, effective immediately, was made in response to feedback from extensive stockholder engagement over the past year. With InvestingPro analysis showing the company’s overall financial health score as "WEAK," these governance changes come at a crucial time for stakeholders. InvestingPro subscribers have access to 15+ additional insights about CMLS’s financial position and market performance. According to the new policy, if an incumbent director does not secure the majority vote in an election that is not contested, they are required to submit their resignation promptly. The Nominating and Governance Committee (N&G Committee) will then recommend to the Board whether to accept or reject the resignation, or if other measures should be taken.
The Board will make a decision on the resignation within 90 days from the certification of the election results and will publicly disclose their decision, including the reasons if the resignation is not accepted. This move is seen as an effort to enhance the company’s accountability to its shareholders and align director interests with shareholder preferences.
The detailed text of the Bylaw Amendment is available in the Third Amended and Restated Bylaws filed with the SEC. This change is part of Cumulus Media’s commitment to maintaining high standards of corporate governance.
This article is based on a press release statement from Cumulus Media Inc. and reflects the company’s efforts to strengthen corporate governance through shareholder engagement. While the company maintains a healthy current ratio of 1.85, indicating adequate short-term liquidity, detailed analysis and comprehensive insights are available through InvestingPro’s exclusive Research Reports, covering this and 1,400+ other US stocks.
In other recent news, Cumulus Media Inc. reported a significant shortfall in its Q4 2024 earnings, with earnings per share (EPS) at -13.6 compared to the forecast of -0.37. Revenue also fell short, coming in at $218.58 million against a forecast of $224.85 million, reflecting ongoing challenges in the advertising market. Despite these misses, digital revenue grew by 5% year-over-year, and Digital Marketing Services saw a 27% increase. The company is focusing on cost reduction and investments in its digital business amid challenges in national and local advertising. Additionally, Cumulus Media received a notification from NASDAQ about non-compliance with stockholders’ equity requirements, as the company reported equity of $6,951,000, below the $10 million minimum requirement. The company is required to submit a compliance plan by April 21, 2025, to address this issue. Cumulus Media is exploring potential solutions, including transferring to the NASDAQ Capital Market, which has more accommodating listing requirements. Lastly, the company continues to face challenges in the advertising sector but remains optimistic about its digital growth and cost management strategies.
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