It Looks Like Shareholders Would Probably Approve Kirkland's, Inc.'s (NASDAQ:KIRK) CEO Compensation Package

The performance at Kirkland's, Inc. (NASDAQ:KIRK) has been quite strong recently and CEO Woody Woodward has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 22 June 2021. 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. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

Check out our latest analysis for Kirkland's

Comparing Kirkland's, Inc.'s CEO Compensation With the industry

According to our data, Kirkland's, Inc. has a market capitalization of US$334m, and paid its CEO total annual compensation worth US$2.2m over the year to January 2021. We note that's an increase of 40% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$689k.

In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$2.2m. So it looks like Kirkland's compensates Woody Woodward in line with the median for the industry. What's more, Woody Woodward holds US$3.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	US$689k	US$700k	31%
Other	US$1.6m	US$900k	69%
Total Compensation	US$2.2m	US$1.6m	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. It's interesting to note that Kirkland's pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Kirkland's, Inc.'s Growth

Over the past three years, Kirkland's, Inc. has seen its earnings per share (EPS) grow by 70% per year. It achieved revenue growth of 6.8% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Kirkland's, Inc. Been A Good Investment?

We think that the total shareholder return of 89%, over three years, would leave most Kirkland's, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Seeing that company performance has been quite good recently, some shareholders may feel that CEO compensation may not be the biggest focus in the upcoming AGM. Seeing that earnings growth and share price performance seems to be on the right path, the more pressing focus for shareholders at the AGM may be how the board and management plans to turn the company into a sustainably profitable one.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Kirkland's that investors should look into moving forward.

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. 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.
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