What Can We Conclude About K&S' (ASX:KSC) CEO Pay?

This article will reflect on the compensation paid to Paul Sarant who has served as CEO of K&S Corporation Limited (ASX:KSC) since 2014. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for K&S.

Check out our latest analysis for K&S

Comparing K&S Corporation Limited's CEO Compensation With the industry

Our data indicates that K&S Corporation Limited has a market capitalization of AU$183m, and total annual CEO compensation was reported as AU$1.1m for the year to June 2020. That's a notable increase of 31% on last year. Notably, the salary which is AU$746.4k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below AU$265m, reported a median total CEO compensation of AU$522k. Accordingly, our analysis reveals that K&S Corporation Limited pays Paul Sarant north of the industry median. Furthermore, Paul Sarant directly owns AU$265k worth of shares in the company.

On an industry level, roughly 91% of total compensation represents salary and 9.3% is other remuneration. K&S sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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.

A Look at K&S Corporation Limited's Growth Numbers

K&S Corporation Limited has seen its earnings per share (EPS) increase by 19% a year over the past three years. It saw its revenue drop 13% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has K&S Corporation Limited Been A Good Investment?

Since shareholders would have lost about 14% over three years, some K&S Corporation Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, K&S Corporation 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. However, we must not forget that the EPS growth has been very strong, but it's disappointing to see negative shareholder returns over the same period. Although we'd stop short of calling it inappropriate, we think Paul is earning a very handsome sum.

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 2 warning signs for K&S that you should be aware of before investing.

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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