Key Insights
- Kadant to hold its Annual General Meeting on 14th of May
- CEO Jeffrey Powell's total compensation includes salary of US$925.9k
- Total compensation is similar to the industry average
- Kadant's total shareholder return over the past three years was 57% while its EPS grew by 0.2% over the past three years
Under the guidance of CEO Jeffrey Powell, Kadant Inc. (NYSE:KAI) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 14th of May. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.
See our latest analysis for Kadant
How Does Total Compensation For Jeffrey Powell Compare With Other Companies In The Industry?
According to our data, Kadant Inc. has a market capitalization of US$3.5b, and paid its CEO total annual compensation worth US$6.1m over the year to December 2024. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$926k.
For comparison, other companies in the American Machinery industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$6.5m. So it looks like Kadant compensates Jeffrey Powell in line with the median for the industry. What's more, Jeffrey Powell holds US$16m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$926k | US$899k | 15% |
| Other | US$5.2m | US$5.1m | 85% |
| Total Compensation | US$6.1m | US$6.0m | 100% |
Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. Although there is a difference in how total compensation is set, Kadant more or less reflects the market in terms of setting the salary. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Kadant Inc.'s Growth
Kadant Inc. saw earnings per share stay pretty flat over the last three years. It achieved revenue growth of 6.9% over the last year.
We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Kadant Inc. Been A Good Investment?
Boasting a total shareholder return of 57% over three years, Kadant Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
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. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.
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. We've identified 1 warning sign for Kadant that investors should be aware of in a dynamic business environment.
Important note: Kadant is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
Valuation is complex, but we're here to simplify it.
Discover if Kadant might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.