In 2017 Robert Graham was appointed CEO of Kronos Worldwide, Inc. (NYSE:KRO). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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.
How Does Robert Graham’s Compensation Compare With Similar Sized Companies?
According to our data, Kronos Worldwide, Inc. has a market capitalization of US$1.2b, and pays its CEO total annual compensation worth US$2.6m. (This number is for the twelve months until December 2018). Notably, the salary of US$2.6m is the vast majority of the CEO compensation. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.0m.
Most shareholders would consider it a positive that Robert Graham takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Kronos Worldwide has changed over time.
Is Kronos Worldwide, Inc. Growing?
Over the last three years Kronos Worldwide, Inc. has grown its earnings per share (EPS) by an average of 33% per year (using a line of best fit). It saw its revenue drop -7.7% over the last year.
This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end.
Has Kronos Worldwide, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Kronos Worldwide, Inc. for providing a total return of 80% over three years. 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.
It appears that Kronos Worldwide, Inc. remunerates its CEO below most similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. And given most shareholders are probably very happy with recent returns, you might even think that Robert Graham deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. Shareholders may want to check for free if Kronos Worldwide insiders are buying or selling shares.
If you want to buy a stock that is better than Kronos Worldwide, this free list of high return, low debt companies is a great place to look.
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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.