Is Koss Corporation's (NASDAQ:KOSS) CEO Pay Justified?
In 1991 Michael Koss was appointed CEO of Koss Corporation (NASDAQ:KOSS). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Koss
How Does Michael Koss's Compensation Compare With Similar Sized Companies?
According to our data, Koss Corporation has a market capitalization of US$13m, and paid its CEO total annual compensation worth US$609k over the year to June 2019. Notably, that's an increase of 26% over the year before. We think total compensation is more important but we note that the CEO salary is lower, at US$325k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$510k.
That means Michael Koss receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Koss has changed over time.
Is Koss Corporation Growing?
On average over the last three years, Koss Corporation has shrunk earnings per share by 40% each year (measured with a line of best fit). Its revenue is down 7.1% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Koss Corporation Been A Good Investment?
Given the total loss of 25% over three years, many shareholders in Koss Corporation are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Michael Koss is paid around what is normal the leaders of comparable size companies.
The company isn't growing EPS, and shareholder returns have been disappointing. So shareholders might not feel great about the fact that CEO pay increased on last year. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. Whatever your view on compensation, you might want to check if insiders are buying or selling Koss shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
