Stock Analysis

Most Shareholders Will Probably Find That The CEO Compensation For Kelly Partners Group Holdings Limited (ASX:KPG) Is Reasonable

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Performance at Kelly Partners Group Holdings Limited (ASX:KPG) has been reasonably good and CEO Brett Kelly has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 07 October 2021. Here is our take on why we think the CEO compensation looks appropriate.

See our latest analysis for Kelly Partners Group Holdings

Comparing Kelly Partners Group Holdings Limited's CEO Compensation With the industry

According to our data, Kelly Partners Group Holdings Limited has a market capitalization of AU$150m, and paid its CEO total annual compensation worth AU$459k over the year to June 2021. That's just a smallish increase of 3.9% on last year. Notably, the salary which is AU$338.3k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below AU$276m, reported a median total CEO compensation of AU$388k. From this we gather that Brett Kelly is paid around the median for CEOs in the industry. Furthermore, Brett Kelly directly owns AU$76m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20212020Proportion (2021)
Salary AU$338k AU$321k 74%
Other AU$121k AU$120k 26%
Total CompensationAU$459k AU$442k100%

On an industry level, around 76% of total compensation represents salary and 24% is other remuneration. Our data reveals that Kelly Partners Group Holdings allocates salary more or less in line with the wider market. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ASX:KPG CEO Compensation October 1st 2021

A Look at Kelly Partners Group Holdings Limited's Growth Numbers

Kelly Partners Group Holdings Limited's earnings per share (EPS) grew 2.2% per year over the last three years. In the last year, its revenue is up 7.5%.

We're not particularly impressed by the revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Kelly Partners Group Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 204% over three years, Kelly Partners Group Holdings Limited has done well by shareholders. 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.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Kelly Partners Group Holdings that investors should be aware of in a dynamic business environment.

Important note: Kelly Partners Group Holdings 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.

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Find out whether Kelly Partners Group Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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