Kratos Defense & Security Solutions, Inc.'s (NASDAQ:KTOS) CEO Looks Like They Deserve Their Pay Packet
Key Insights
- Kratos Defense & Security Solutions to hold its Annual General Meeting on 14th of May
- CEO Eric DeMarco's total compensation includes salary of US$850.0k
- Total compensation is similar to the industry average
- Kratos Defense & Security Solutions' EPS grew by 410% over the past three years while total shareholder return over the past three years was 180%
We have been pretty impressed with the performance at Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) recently and CEO Eric DeMarco deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 14th of May. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.
View our latest analysis for Kratos Defense & Security Solutions
Comparing Kratos Defense & Security Solutions, Inc.'s CEO Compensation With The Industry
According to our data, Kratos Defense & Security Solutions, Inc. has a market capitalization of US$5.6b, and paid its CEO total annual compensation worth US$7.4m over the year to December 2024. Notably, that's an increase of 61% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$850k.
On comparing similar companies from the American Aerospace & Defense industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$8.1m. So it looks like Kratos Defense & Security Solutions compensates Eric DeMarco in line with the median for the industry. Furthermore, Eric DeMarco directly owns US$52m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$850k | US$850k | 12% |
| Other | US$6.5m | US$3.7m | 88% |
| Total Compensation | US$7.4m | US$4.6m | 100% |
On an industry level, around 18% of total compensation represents salary and 82% is other remuneration. Kratos Defense & Security Solutions pays a modest slice of remuneration through salary, as compared 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.
Kratos Defense & Security Solutions, Inc.'s Growth
Kratos Defense & Security Solutions, Inc.'s earnings per share (EPS) grew 410% per year over the last three years. In the last year, its revenue is up 9.6%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Kratos Defense & Security Solutions, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Kratos Defense & Security Solutions, Inc. for providing a total return of 180% 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...
Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. In saying that, some shareholders may feel that the more important issues to be addressed may be how the management plans to steer the company towards sustainable profitability in the future.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Kratos Defense & Security Solutions that investors should think about before committing capital to this stock.
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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.