In 2000 Linda McCurdy was appointed CEO of K-Bro Linen Inc. (TSE:KBL). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
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How Does Linda McCurdy’s Compensation Compare With Similar Sized Companies?
Our data indicates that K-Bro Linen Inc. is worth CA$379m, and total annual CEO compensation is CA$2.0m. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$507k. When we examined a selection of companies with market caps ranging from CA$133m to CA$532m, we found the median CEO compensation was CA$889k.
As you can see, Linda McCurdy is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean K-Bro Linen Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at K-Bro Linen, below.
Is K-Bro Linen Inc. Growing?
On average over the last three years, K-Bro Linen Inc. has shrunk earnings per share by 40% each year. In the last year, its revenue is up 40%.
Investors should note that, over three years, earnings per share are down. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching.
You might want to check this free visual report on analyst forecasts for future earnings.
Has K-Bro Linen Inc. Been A Good Investment?
Since shareholders would have lost about 21% over three years, some K-Bro Linen Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We examined the amount K-Bro Linen Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Shareholders may wish to consider further research. Although we don’t think the CEO pay is too high, it is probably more on the generous side of things. Whatever your view on compensation, you might want to check if insiders are buying or selling K-Bro Linen shares (free trial).
Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.