U.S. Markets close in 6 hrs 20 mins

Is KBS Fashion Group Limited (NASDAQ:KBSF) Overpaying Its CEO?

Simply Wall St

Keyan Yan has been the CEO of KBS Fashion Group Limited (NASDAQ:KBSF) since 2011. 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.

Check out our latest analysis for KBS Fashion Group

How Does Keyan Yan's Compensation Compare With Similar Sized Companies?

Our data indicates that KBS Fashion Group Limited is worth US$6.8m, and total annual CEO compensation is US$739k. (This is based on the year to December 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$739k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$498k.

It would therefore appear that KBS Fashion Group Limited pays Keyan Yan 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 KBS Fashion Group has changed over time.

NasdaqCM:KBSF CEO Compensation, September 16th 2019

Is KBS Fashion Group Limited Growing?

Over the last three years KBS Fashion Group Limited has shrunk its earnings per share by an average of 24% per year (measured with a line of best fit). It saw its revenue drop -15% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has KBS Fashion Group Limited Been A Good Investment?

Given the total loss of 58% over three years, many shareholders in KBS Fashion Group Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by KBS Fashion Group 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.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

Just as bad, share price gains for investors have failed to materialize, over the same period. Some might well form the view that the CEO is paid too generously! So you may want to check if insiders are buying KBS Fashion Group shares with their own money (free access).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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. Thank you for reading.