It would be hard to discount the role that CEO Gary Burnison has played in delivering the impressive results at Korn Ferry (NYSE:KFY) recently. Coming up to the next AGM on 22 September 2022, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.
Comparing Korn Ferry's CEO Compensation With The Industry
At the time of writing, our data shows that Korn Ferry has a market capitalization of US$2.6b, and reported total annual CEO compensation of US$9.5m for the year to April 2022. We note that's a decrease of 16% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$985k.
For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$8.7m. So it looks like Korn Ferry compensates Gary Burnison in line with the median for the industry. Furthermore, Gary Burnison directly owns US$16m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 17% of total compensation represents salary and 83% is other remuneration. Korn Ferry sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Korn Ferry's Growth
Korn Ferry's earnings per share (EPS) grew 22% per year over the last three years. Its revenue is up 33% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Korn Ferry Been A Good Investment?
We think that the total shareholder return of 34%, over three years, would leave most Korn Ferry shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Korn Ferry that investors should look into moving forward.
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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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