David Dunkel became the CEO of Kforce Inc. (NASDAQ:KFRC) in 1994. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does David Dunkel's Compensation Compare With Similar Sized Companies?
According to our data, Kforce Inc. has a market capitalization of US$855m, and paid its CEO total annual compensation worth US$4.3m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$875k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.5m.
Thus we can conclude that David Dunkel receives more in total compensation than the median of a group of companies in the same market, and of similar size to Kforce Inc.. However, this doesn't necessarily mean the pay 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.
The graphic below shows how CEO compensation at Kforce has changed from year to year.
Is Kforce Inc. Growing?
Over the last three years Kforce Inc. has grown its earnings per share (EPS) by an average of 26% per year (using a line of best fit). Its revenue is up 11% 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. It could be important to check this free visual depiction of what analysts expect for the future.
Has Kforce Inc. Been A Good Investment?
Most shareholders would probably be pleased with Kforce Inc. for providing a total return of 88% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We compared total CEO remuneration at Kforce Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Kforce (free visualization of insider trades).
If you want to buy a stock that is better than Kforce, this free list of high return, low debt companies is a great place to look.
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