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

Simply Wall St

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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. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Koss

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

At the time of writing our data says that Koss Corporation has a market cap of US$16m, and is paying total annual CEO compensation of US$485k. (This is based on the year to June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$325k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$440k.

That means Michael Koss receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

The graphic below shows how CEO compensation at Koss has changed from year to year.

NasdaqCM:KOSS CEO Compensation, May 13th 2019

Is Koss Corporation Growing?

On average over the last three years, Koss Corporation has shrunk earnings per share by 67% each year (measured with a line of best fit). It achieved revenue growth of 2.9% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. 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 could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Koss Corporation Been A Good Investment?

Koss Corporation has generated a total shareholder return of 2.9% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

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

We feel that earnings per share have been a bit disappointing, but and we don't think the total returns are amazing. We wouldn't say the CEO pay is too high, but we'd venture the company should look to improve its business metrics (and share price) before paying any more. Whatever your view on compensation, you might want to check if insiders are buying or selling Koss shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.