Shareholders Will Most Likely Find Kingspan Group plc's (ISE:KRX) CEO Compensation Acceptable

Under the guidance of CEO Gene Murtagh, Kingspan Group plc (ISE:KRX) has performed reasonably well recently. As shareholders go into the upcoming AGM on 30 April 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

Check out our latest analysis for Kingspan Group

Comparing Kingspan Group plc's CEO Compensation With the industry

At the time of writing, our data shows that Kingspan Group plc has a market capitalization of €14b, and reported total annual CEO compensation of €3.2m for the year to December 2020. That's a notable decrease of 20% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €888k.

In comparison with other companies in the industry with market capitalizations over €6.6b , the reported median total CEO compensation was €3.2m. This suggests that Kingspan Group remunerates its CEO largely in line with the industry average. What's more, Gene Murtagh holds €83m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	€888k	€870k	28%
Other	€2.3m	€3.1m	72%
Total Compensation	€3.2m	€4.0m	100%

On an industry level, around 55% of total compensation represents salary and 45% is other remuneration. It's interesting to note that Kingspan Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Kingspan Group plc's Growth Numbers

Over the past three years, Kingspan Group plc has seen its earnings per share (EPS) grow by 9.1% per year. Its revenue is down 1.8% over the previous year.

We generally like to see a little revenue growth, but the modest improvement in EPS is good. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Kingspan Group plc Been A Good Investment?

We think that the total shareholder return of 107%, over three years, would leave most Kingspan Group plc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Kingspan Group that investors should look into moving forward.

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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