Is K&S Corporation Limited's (ASX:KSC) CEO Pay Justified?
Paul Sarant became the CEO of K&S Corporation Limited (ASX:KSC) in 2014. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for K&S
How Does Paul Sarant's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that K&S Corporation Limited has a market cap of AU$196m, and reported total annual CEO compensation of AU$848k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$728k. We examined a group of similar sized companies, with market capitalizations of below AU$291m. The median CEO total compensation in that group is AU$384k.
It would therefore appear that K&S Corporation Limited pays Paul Sarant 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.
The graphic below shows how CEO compensation at K&S has changed from year to year.
Is K&S Corporation Limited Growing?
On average over the last three years, K&S Corporation Limited has grown earnings per share (EPS) by 124% each year (using a line of best fit). Its revenue is up 7.2% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has K&S Corporation Limited Been A Good Investment?
Given the total loss of 4.1% over three years, many shareholders in K&S Corporation Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We compared the total CEO remuneration paid by K&S Corporation Limited, and compared it to remuneration at a group of similar sized companies. 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. However, the returns to investors are far less impressive, over the same period. 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. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at K&S.
If you want to buy a stock that is better than K&S, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
