Kontoor Brands, Inc.'s (NYSE:KTB) CEO Will Probably Find It Hard To See A Huge Raise This Year

Key Insights

• Kontoor Brands will host its Annual General Meeting on 18th of April
• CEO Scott Baxter's total compensation includes salary of US$1.24m
• The total compensation is similar to the average for the industry
• Kontoor Brands' EPS grew by 51% over the past three years while total shareholder loss over the past three years was 0.8%

As many shareholders of Kontoor Brands, Inc. (NYSE:KTB) will be aware, they have not made a gain on their investment in the past three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 18th of April could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Kontoor Brands

Comparing Kontoor Brands, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Kontoor Brands, Inc. has a market capitalization of US$3.0b, and reported total annual CEO compensation of US$9.9m for the year to December 2023. We note that's a decrease of 13% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.

On examining similar-sized companies in the American Luxury industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$10m. So it looks like Kontoor Brands compensates Scott Baxter in line with the median for the industry. What's more, Scott Baxter holds US$26m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$1.2m	US$1.2m	12%
Other	US$8.7m	US$10m	88%
Total Compensation	US$9.9m	US$11m	100%

On an industry level, around 24% of total compensation represents salary and 76% is other remuneration. Kontoor Brands sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Kontoor Brands, Inc.'s Growth

Kontoor Brands, Inc. has seen its earnings per share (EPS) increase by 51% a year over the past three years. The trailing twelve months of revenue was pretty much the same as the prior period.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Kontoor Brands, Inc. Been A Good Investment?

Given the total shareholder loss of 0.8% over three years, many shareholders in Kontoor Brands, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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. That's why we did some digging and identified 2 warning signs for Kontoor Brands that investors should think about before committing capital to this stock.

Important note: Kontoor Brands 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.

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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.