Storm McGrath became the CEO of Kip McGrath Education Centres Limited (ASX:KME) in 2007. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Storm McGrath's Compensation Compare With Similar Sized Companies?
Our data indicates that Kip McGrath Education Centres Limited is worth AU$68m, and total annual CEO compensation was reported as AU$461k for the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at AU$361k. We looked at a group of companies with market capitalizations under AU$296m, and the median CEO total compensation was AU$385k.
That means Storm McGrath receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Kip McGrath Education Centres has changed from year to year.
Is Kip McGrath Education Centres Limited Growing?
On average over the last three years, Kip McGrath Education Centres Limited has grown earnings per share (EPS) by 25% each year (using a line of best fit). Its revenue is up 25% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Kip McGrath Education Centres Limited Been A Good Investment?
Most shareholders would probably be pleased with Kip McGrath Education Centres Limited for providing a total return of 411% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Storm McGrath is paid around what is normal the leaders of comparable size companies.
The company is growing earnings per share and total shareholder returns have been pleasing. Indeed, many might consider the pay rather modest, given the solid company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling Kip McGrath Education Centres shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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