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Should You Worry About Koss Corporation's (NASDAQ:KOSS) CEO Pay Cheque?

Michael Koss has been the CEO of Koss Corporation (NASDAQ:KOSS) since 1991. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Koss

How Does Michael Koss's Compensation Compare With Similar Sized Companies?

Our data indicates that Koss Corporation is worth US$8.3m, and total annual CEO compensation was reported as US$609k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$325k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$604k.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On an industry level, roughly 27% of total compensation represents salary and 73% is other remuneration. Koss pays out 53% of aggregate payment in the shape of a salary, which is significantly higher than the industry average.

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.

NasdaqCM:KOSS CEO Compensation May 22nd 2020
NasdaqCM:KOSS CEO Compensation May 22nd 2020

Is Koss Corporation Growing?

Over the last three years Koss Corporation has seen earnings per share (EPS) move in a positive direction by an average of 51% per year (using a line of best fit). In the last year, its revenue is down 13%.

This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Koss Corporation Been A Good Investment?

With a three year total loss of 36%, Koss Corporation would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Remuneration for Michael Koss is close enough to the median pay for a CEO of a similar sized company .

We think that the EPS growth is very pleasing, but we find the returns over the last three years to be lacking. We'd be surprised if shareholders want to see a pay rise for the CEO, but we'd stop short of calling their pay too generous. On another note, Koss has 3 warning signs (and 2 which are a bit concerning) we think you should know about.

Important note: Koss may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email 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. 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. Thank you for reading.

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