Is Korn/Ferry International’s (NYSE:KFY) CEO Salary Justified?
Gary Burnison has been the CEO of Korn/Ferry International (NYSE:KFY) since 2007. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Korn/Ferry International
How Does Gary Burnison’s Compensation Compare With Similar Sized Companies?
Our data indicates that Korn/Ferry International is worth US$2.8b, and total annual CEO compensation is US$8.6m. (This is based on the year to 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$910k. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO compensation was US$4.9m.
As you can see, Gary Burnison is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Korn/Ferry International is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Korn/Ferry International has changed from year to year.
Is Korn/Ferry International Growing?
Over the last three years Korn/Ferry International has grown its earnings per share (EPS) by an average of 19% per year. It achieved revenue growth of 15% over the last year.
This demonstrates that the company has been improving recently. A good result. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Korn/Ferry International Been A Good Investment?
Korn/Ferry International has generated a total shareholder return of 30% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary…
We compared total CEO remuneration at Korn/Ferry International with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. Looking at the same time period, we think that the shareholder returns are respectable. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we’d recommend further research on management. So you may want to check if insiders are buying Korn/Ferry International shares with their own money (free access).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
