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This article will reflect on the compensation paid to James Kellett who has served as CEO of KNeoMedia Limited (ASX:KNM) since 2010. This analysis will also assess whether KNeoMedia pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For James Kellett Compare With Other Companies In The Industry?
At the time of writing, our data shows that KNeoMedia Limited has a market capitalization of AU$14m, and reported total annual CEO compensation of AU$350k for the year to June 2020. That's a slight decrease of 6.6% on the prior year. We note that the salary portion, which stands at AU$325.0k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below AU$277m, reported a median total CEO compensation of AU$237k. This suggests that James Kellett is paid more than the median for the industry.
Talking in terms of the industry, salary represented approximately 90% of total compensation out of all the companies we analyzed, while other remuneration made up 10% of the pie. There isn't a significant difference between KNeoMedia and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at KNeoMedia Limited's Growth Numbers
Over the last three years, KNeoMedia Limited has shrunk its earnings per share by 8.4% per year. Its revenue is up 1,036% over the last year.
The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has KNeoMedia Limited Been A Good Investment?
Since shareholders would have lost about 70% over three years, some KNeoMedia Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As previously discussed, James is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. At the same time, looking at EPS and total shareholder returns, it's tough to say KNeoMedia is in a sound position, considering both metrics are down. In contrast, revenue growth for the company has been showing a positive trend. Suffice it to say, we don't think the CEO is underpaid!
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 6 warning signs for KNeoMedia you should be aware of, and 4 of them are concerning.
Switching gears from KNeoMedia, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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. 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.
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