How Is K2fly's (ASX:K2F) CEO Compensated?

Brian Miller became the CEO of K2fly Limited (ASX:K2F) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for K2fly.

View our latest analysis for K2fly

How Does Total Compensation For Brian Miller Compare With Other Companies In The Industry?

At the time of writing, our data shows that K2fly Limited has a market capitalization of AU$35m, and reported total annual CEO compensation of AU$357k for the year to June 2020. We note that's an increase of 11% above last year. We note that the salary portion, which stands at AU$252.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below AU$263m, reported a median total CEO compensation of AU$344k. From this we gather that Brian Miller is paid around the median for CEOs in the industry. What's more, Brian Miller holds AU$992k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 59% of total compensation represents salary and 41% is other remuneration. According to our research, K2fly has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at K2fly Limited's Growth Numbers

K2fly Limited's earnings per share (EPS) grew 27% per year over the last three years. It achieved revenue growth of 48% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 K2fly Limited Been A Good Investment?

K2fly Limited has generated a total shareholder return of 14% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As previously discussed, Brian is compensated close to the median for companies of its size, and which belong to the same industry. But EPS growth over the last three years has been impressive, although the same cannot be said for shareholder returns. Considering overall performance, we'd say the compensation is fair, although stockholders will want to see higher returns moving forward.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 4 warning signs for K2fly (1 is significant!) that you should be aware of before investing here.

Important note: K2fly 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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