How Much Is KNeoMedia's (ASX:KNM) CEO Getting Paid?

This article will reflect on the compensation paid to James Kellett who has served as CEO of KNeoMedia Limited (ASX:KNM) since 2010. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for KNeoMedia.

View our latest analysis for KNeoMedia

Comparing KNeoMedia Limited's CEO Compensation With the industry

At the time of writing, our data shows that KNeoMedia Limited has a market capitalization of AU$18m, and reported total annual CEO compensation of AU$350k for the year to June 2020. That's a slight decrease of 6.6% on the prior year. Notably, the salary which is AU$325.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below AU$263m, reported a median total CEO compensation of AU$154k. Hence, we can conclude that James Kellett is remunerated higher than the industry median.

On an industry level, around 90% of total compensation represents salary and 10% is other remuneration. KNeoMedia is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at KNeoMedia Limited's Growth Numbers

Over the last three years, KNeoMedia Limited has shrunk its earnings per share by 8.4% per year. It achieved revenue growth of 1,036% over the last year.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has KNeoMedia Limited Been A Good Investment?

Since shareholders would have lost about 88% over three years, some KNeoMedia Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, KNeoMedia Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. It concerns us that EPS growth for the company is negative, while share price gains did not materialize over the last three years. In contrast, revenue growth for the company has been showing a positive trend. Few would argue that it's wise for the company to pay any more, before returns improve.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 6 warning signs (and 3 which shouldn't be ignored) in KNeoMedia we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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