Is Kforce Inc. (NASDAQ:KFRC) Overpaying Its CEO?

September 16, 2019

In 1994 David Dunkel was appointed CEO of Kforce Inc. (NASDAQ:KFRC). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Kforce

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

According to our data, Kforce Inc. has a market capitalization of US$794m, and paid its CEO total annual compensation worth US$4.3m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$875k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.7m.

As you can see, David Dunkel is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Kforce Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

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

NasdaqGS:KFRC CEO Compensation, September 17th 2019

Is Kforce Inc. Growing?

On average over the last three years, Kforce Inc. has grown earnings per share (EPS) by 22% each year (using a line of best fit). It achieved revenue growth of 8.0% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.

Has Kforce Inc. Been A Good Investment?

I think that the total shareholder return of 95%, over three years, would leave most Kforce Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We examined the amount Kforce Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Kforce (free visualization of insider trades).

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

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