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David Dunkel became the CEO of Kforce Inc. (NASDAQ:KFRC) in 1994. 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does David Dunkel's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Kforce Inc. has a market cap of US$878m, and is paying total annual CEO compensation of US$4.3m. (This is based on the year to December 2018). Notably, that's an increase of 39% over the year before. We think total compensation is more important but we note that the CEO salary is lower, at US$875k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.7m.
Thus we can conclude that David Dunkel receives more in total compensation than the median of a group of companies in the same market, and of similar size to Kforce Inc.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Kforce has changed over time.
Is Kforce Inc. Growing?
Over the last three years Kforce Inc. has grown its earnings per share (EPS) by an average of 18% per year (using a line of best fit). Its revenue is up 6.4% over last year.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.
Has Kforce Inc. Been A Good Investment?
I think that the total shareholder return of 122%, over three years, would leave most Kforce Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
We examined the amount Kforce Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark 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. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Kforce (free visualization of insider trades).
If you want to buy a stock that is better than Kforce, this free list of high return, low debt companies is a great place to look.
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 firstname.lastname@example.org. 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.