Most Shareholders Will Probably Find That The Compensation For Kina Securities Limited's (ASX:KSL) CEO Is Reasonable

Key Insights

• Kina Securities will host its Annual General Meeting on 29th of May
• Salary of K1.95m is part of CEO Greg Pawson's total remuneration
• The total compensation is 35% less than the average for the industry
• Kina Securities' EPS declined by 0.8% over the past three years while total shareholder return over the past three years was 35%

The performance at Kina Securities Limited (ASX:KSL) has been rather lacklustre of late and shareholders may be wondering what CEO Greg Pawson is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 29th of May. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for Kina Securities

How Does Total Compensation For Greg Pawson Compare With Other Companies In The Industry?

Our data indicates that Kina Securities Limited has a market capitalization of AU$270m, and total annual CEO compensation was reported as K2.4m for the year to December 2023. That's a fairly small increase of 5.8% over the previous year. Notably, the salary which is K1.95m, represents most of the total compensation being paid.

In comparison with other companies in the Australian Banks industry with market capitalizations ranging from AU$150m to AU$600m, the reported median CEO total compensation was K3.7m. This suggests that Greg Pawson is paid below the industry median. Moreover, Greg Pawson also holds AU$1.5m worth of Kina Securities stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	K1.9m	K1.8m	81%
Other	K454k	K452k	19%
Total Compensation	K2.4m	K2.3m	100%

Speaking on an industry level, nearly 63% of total compensation represents salary, while the remainder of 37% is other remuneration. Kina Securities pays out 81% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Kina Securities Limited's Growth

Earnings per share at Kina Securities Limited are much the same as they were three years ago, albeit slightly lower. In the last year, its revenue is up 9.0%.

A lack of EPS improvement is not good to see. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Kina Securities Limited Been A Good Investment?

We think that the total shareholder return of 35%, over three years, would leave most Kina Securities Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Kina Securities that investors should look into moving forward.

Important note: Kina Securities is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.