Is Knowles Corporation (NYSE:KN) Overpaying Its CEO?
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Jeff Niew has been the CEO of Knowles Corporation (NYSE:KN) since 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Knowles
How Does Jeff Niew's Compensation Compare With Similar Sized Companies?
According to our data, Knowles Corporation has a market capitalization of US$1.5b, and pays its CEO total annual compensation worth US$5.0m. (This figure is for the year to December 2018). That's less than last year. We think total compensation is more important but we note that the CEO salary is lower, at US$650k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.1m.
So Jeff Niew is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Knowles has changed from year to year.
Is Knowles Corporation Growing?
On average over the last three years, Knowles Corporation has grown earnings per share (EPS) by 93% each year (using a line of best fit). Its revenue is up 9.8% over last year.
This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.
Has Knowles Corporation Been A Good Investment?
Knowles Corporation has generated a total shareholder return of 12% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
Jeff Niew is paid around the same as most CEOs of similar size companies.
The company is growing EPS but shareholder returns have been sound but not amazing. As a result of these considerations, I would suggest the CEO pay is reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Knowles (free visualization of insider trades).
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.
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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.
