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In 2000 Linda McCurdy was appointed CEO of K-Bro Linen Inc. (TSE:KBL). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Linda McCurdy’s Compensation Compare With Similar Sized Companies?
Our data indicates that K-Bro Linen Inc. is worth CA$421m, and total annual CEO compensation is CA$1.9m. (This number is for the twelve months until December 2018). That’s actually a decrease on the year before. While we always look at total compensation first, we note that the salary component is less, at CA$521k. We looked at a group of companies with market capitalizations from CA$264m to CA$1.1b, and the median CEO total compensation was CA$1.4m.
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, below, how CEO compensation at K-Bro Linen has changed over time.
Is K-Bro Linen Inc. Growing?
On average over the last three years, K-Bro Linen Inc. has shrunk earnings per share by 43% each year (measured with a line of best fit). It achieved revenue growth of 29% over the last year.
The reduction in earnings per share, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can’t form a strong opinion about business performance yet; but it’s one 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?
With a total shareholder return of 7.1% over three years, K-Bro Linen Inc. has done okay by shareholders. 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.
We compared total CEO remuneration at K-Bro Linen Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
We generally prefer to see stronger EPS growth, and we’re not particularly impressed with the total shareholder return, over the last three years. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. So you may want to check if insiders are buying K-Bro Linen shares with their own money (free access).
If you want to buy a stock that is better than K-Bro Linen, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.