Is Korn Ferry's (NYSE:KFY) CEO Being Overpaid?
In 2007 Gary Burnison was appointed CEO of Korn Ferry (NYSE:KFY). 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 process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Korn Ferry
How Does Gary Burnison's Compensation Compare With Similar Sized Companies?
Our data indicates that Korn Ferry is worth US$2.2b, and total annual CEO compensation was reported as US$9.2m for the year to April 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$910k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$3.9m.
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 is paying too much. 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 Korn Ferry has changed over time.
Is Korn Ferry Growing?
On average over the last three years, Korn Ferry has grown earnings per share (EPS) by 36% each year (using a line of best fit). It achieved revenue growth of 6.2% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.
Has Korn Ferry Been A Good Investment?
Most shareholders would probably be pleased with Korn Ferry for providing a total return of 42% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
We compared total CEO remuneration at Korn Ferry with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Korn Ferry (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
