How Much Is K2 Asset Management Holdings Ltd (ASX:KAM) Paying Its CEO?

Campbell Neal is the CEO of K2 Asset Management Holdings Ltd (ASX:KAM), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for K2 Asset Management Holdings.

See our latest analysis for K2 Asset Management Holdings

Comparing K2 Asset Management Holdings Ltd's CEO Compensation With the industry

Our data indicates that K2 Asset Management Holdings Ltd has a market capitalization of AU$22m, and total annual CEO compensation was reported as AU$500k for the year to June 2020. That's a notable decrease of 32% on last year. Notably, the salary which is AU$479.1k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under AU$260m, the reported median total CEO compensation was AU$443k. This suggests that K2 Asset Management Holdings remunerates its CEO largely in line with the industry average. Furthermore, Campbell Neal directly owns AU$7.9m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. K2 Asset Management Holdings is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

K2 Asset Management Holdings Ltd's Growth

Over the last three years, K2 Asset Management Holdings Ltd has shrunk its earnings per share by 106% per year. It saw its revenue drop 34% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has K2 Asset Management Holdings Ltd Been A Good Investment?

With a three year total loss of 66% for the shareholders, K2 Asset Management Holdings Ltd would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Campbell receives almost all of their compensation through a salary. As previously discussed, Campbell is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 4 warning signs (and 1 which is concerning) in K2 Asset Management Holdings we think you should know about.

Important note: K2 Asset Management 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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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. 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.
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