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This article will reflect on the compensation paid to David Dunkel who has served as CEO of Kforce Inc. (NASDAQ:KFRC) since 1994. This analysis will also assess whether Kforce pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For David Dunkel Compare With Other Companies In The Industry?
Our data indicates that Kforce Inc. has a market capitalization of US$681m, and total annual CEO compensation was reported as US$7.1m for the year to December 2019. Notably, that's an increase of 65% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$875k.
On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$3.0m. This suggests that David Dunkel is paid more than the median for the industry. Furthermore, David Dunkel directly owns US$33m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 21% of total compensation out of all the companies we analyzed, while other remuneration made up 79% of the pie. In Kforce's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Kforce Inc.'s Growth Numbers
Kforce Inc.'s earnings per share (EPS) grew 18% per year over the last three years. In the last year, its revenue is up 2.8%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Kforce Inc. Been A Good Investment?
We think that the total shareholder return of 72%, over three years, would leave most Kforce Inc. 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.
As we noted earlier, Kforce pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, Kforce has produced strong EPS growth and shareholder returns over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that David's performance creates value for the company.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Kforce that you should be aware of before investing.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. 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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