Does Knosys' (ASX:KNO) CEO Salary Compare Well With Industry Peers?

This article will reflect on the compensation paid to John Robert Thompson who has served as CEO of Knosys Limited (ASX:KNO) since 2016. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Knosys

How Does Total Compensation For John Robert Thompson Compare With Other Companies In The Industry?

According to our data, Knosys Limited has a market capitalization of AU$25m, and paid its CEO total annual compensation worth AU$413k over the year to June 2020. That's a notable increase of 13% on last year. In particular, the salary of AU$305.6k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under AU$260m, the reported median total CEO compensation was AU$337k. From this we gather that John Robert Thompson is paid around the median for CEOs in the industry. What's more, John Robert Thompson holds AU$413k worth of shares in the company in their own name.

On an industry level, roughly 60% of total compensation represents salary and 40% is other remuneration. Knosys is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Knosys Limited's Growth

Knosys Limited's earnings per share (EPS) grew 66% per year over the last three years. In the last year, its revenue is up 9.7%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Knosys Limited Been A Good Investment?

Most shareholders would probably be pleased with Knosys Limited for providing a total return of 173% over three years. 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.

To Conclude...

As we touched on above, Knosys Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Investors would surely be happy to see that returns have been great, and that EPS is up. So one could argue that CEO compensation is quite modest, if you consider company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 5 warning signs for Knosys that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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