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Should You Worry About Kollakorn Corporation Limited's (ASX:KKL) CEO Pay Cheque?

Simply Wall St

David Matthews became the CEO of Kollakorn Corporation Limited (ASX:KKL) in 2016. 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

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View our latest analysis for Kollakorn

How Does David Matthews's Compensation Compare With Similar Sized Companies?

According to our data, Kollakorn Corporation Limited has a market capitalization of AU$1.9m, and pays its CEO total annual compensation worth AU$433k. (This number is for the twelve months until June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$285k. We looked at a group of companies with market capitalizations under AU$289m, and the median CEO total compensation was AU$355k.

So David Matthews receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at Kollakorn, below.

ASX:KKL CEO Compensation, May 26th 2019

Is Kollakorn Corporation Limited Growing?

Kollakorn Corporation Limited has reduced its earnings per share by an average of 20% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down -91%.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Kollakorn Corporation Limited Been A Good Investment?

Since shareholders would have lost about 87% over three years, some Kollakorn Corporation Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

David Matthews is paid around the same as most CEOs of similar size companies.

Returns have been disappointing and the company is not growing its earnings per share. Few would argue that it's wise for the company to pay any more, before returns improve. Shareholders may want to check for free if Kollakorn insiders are buying or selling shares.

If you want to buy a stock that is better than Kollakorn, 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 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.