Does Kennedy-Wilson Holdings Inc’s (NYSE:KW) CEO Salary Reflect Performance?
Bill McMorrow has been the CEO of Kennedy-Wilson Holdings Inc (NYSE:KW) since 1988. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Kennedy-Wilson Holdings
How Does Bill McMorrow’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Kennedy-Wilson Holdings Inc has a market cap of US$2.8b, and is paying total annual CEO compensation of US$21m. We note that’s an increase of 10% above last year. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO compensation was US$5m.
It would therefore appear that Kennedy-Wilson Holdings Inc pays Bill McMorrow more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Kennedy-Wilson Holdings has changed over time.
Is Kennedy-Wilson Holdings Inc Growing?
On average over the last three years, Kennedy-Wilson Holdings Inc has grown earnings per share (EPS) by 63% each year. In the last year, its revenue is up 5.8%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Kennedy-Wilson Holdings Inc Been A Good Investment?
With a three year total loss of 14%, Kennedy-Wilson Holdings Inc would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary…
We compared total CEO remuneration at Kennedy-Wilson Holdings Inc with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. So shareholders might not feel great about the fact that CEO pay increased on last year. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. So you may want to check if insiders are buying Kennedy-Wilson Holdings Inc shares with their own money (free access).
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
