Don Jennings has been the CEO of Kentucky First Federal Bancorp (NASDAQ:KFFB) since 2013. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Don Jennings’s Compensation Compare With Similar Sized Companies?
According to our data, Kentucky First Federal Bancorp has a market capitalization of US$64m, and pays its CEO total annual compensation worth US$209k. (This figure is for the year to June 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$190k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$479k.
A first glance this seems like a real positive for shareholders, since Don Jennings is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at Kentucky First Federal Bancorp, below.
Is Kentucky First Federal Bancorp Growing?
Over the last three years Kentucky First Federal Bancorp has shrunk its earnings per share by an average of 19% per year (measured with a line of best fit). It saw its revenue drop -6.4% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
Has Kentucky First Federal Bancorp Been A Good Investment?
With a total shareholder return of 8.3% over three years, Kentucky First Federal Bancorp has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.
It looks like Kentucky First Federal Bancorp pays its CEO less than similar sized companies.
Don Jennings is remunerated more modestly than is a normal at similar sized companies. However, the earnings per share are not moving in the right direction, and the returns to shareholders could have been better. We would like to see EPS growth from the business, although we wouldn’t say the CEO pay is high. Whatever your view on compensation, you might want to check if insiders are buying or selling Kentucky First Federal Bancorp shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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If you spot an error that warrants correction, please contact the editor at email@example.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.