Most Shareholders Will Probably Agree With KBR, Inc.'s (NYSE:KBR) CEO Compensation

Key Insights

• KBR to hold its Annual General Meeting on 15th of May
• CEO Stuart John Bradie's total compensation includes salary of US$1.23m
• The overall pay is comparable to the industry average
• KBR's total shareholder return over the past three years was 70% while its EPS was down 51% over the past three years

KBR, Inc. (NYSE:KBR) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 15th of May. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

Check out our latest analysis for KBR

How Does Total Compensation For Stuart John Bradie Compare With Other Companies In The Industry?

At the time of writing, our data shows that KBR, Inc. has a market capitalization of US$9.0b, and reported total annual CEO compensation of US$13m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.

On comparing similar companies from the American Professional Services industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$10m. From this we gather that Stuart John Bradie is paid around the median for CEOs in the industry. Furthermore, Stuart John Bradie directly owns US$45m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$1.2m	US$1.2m	10%
Other	US$11m	US$11m	90%
Total Compensation	US$13m	US$13m	100%

On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. It's interesting to note that KBR 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 KBR, Inc.'s Growth Numbers

Over the last three years, KBR, Inc. has shrunk its earnings per share by 51% per year. Its revenue is up 7.9% over the last year.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has KBR, Inc. Been A Good Investment?

We think that the total shareholder return of 70%, over three years, would leave most KBR, Inc. shareholders smiling. 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...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for KBR that investors should be aware of in a dynamic business environment.

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. 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.