Is KBS Fashion Group Limited’s (NASDAQ:KBSF) CEO Pay Justified?

In 2011 Keyan Yan was appointed CEO of KBS Fashion Group Limited (NASDAQ:KBSF). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for KBS Fashion Group

How Does Keyan Yan’s Compensation Compare With Similar Sized Companies?

Our data indicates that KBS Fashion Group Limited is worth US$5.6m, and total annual CEO compensation was reported as US$739k for the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$739k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$503k.

As you can see, Keyan Yan is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean KBS Fashion Group Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at KBS Fashion Group has changed over time.

NasdaqCM:KBSF CEO Compensation, October 21st 2019
NasdaqCM:KBSF CEO Compensation, October 21st 2019

Is KBS Fashion Group Limited Growing?

Over the last three years KBS Fashion Group Limited has shrunk its earnings per share by an average of 24% per year (measured with a line of best fit). Its revenue is down 15% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has KBS Fashion Group Limited Been A Good Investment?

With a three year total loss of 62%, KBS Fashion Group Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We compared the total CEO remuneration paid by KBS Fashion Group Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us. Arguably worse, investors are without a positive return for the last three years. Some might well form the view that the CEO is paid too generously! Shareholders may want to check for free if KBS Fashion Group insiders are buying or selling shares.

If you want to buy a stock that is better than KBS Fashion Group, 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 editorial-team@simplywallst.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.