Kimball Electronics, Inc.'s (NASDAQ:KE) CEO Will Probably Have Their Compensation Approved By Shareholders

It would be hard to discount the role that CEO Don Charron has played in delivering the impressive results at Kimball Electronics, Inc. (NASDAQ:KE) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 09 November 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. Here is our take on why we think CEO compensation is not extravagant.

Check out our latest analysis for Kimball Electronics

How Does Total Compensation For Don Charron Compare With Other Companies In The Industry?

According to our data, Kimball Electronics, Inc. has a market capitalization of US$739m, and paid its CEO total annual compensation worth US$2.3m over the year to June 2021. We note that's an increase of 27% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$710k.

On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$2.3m. This suggests that Kimball Electronics remunerates its CEO largely in line with the industry average. Furthermore, Don Charron directly owns US$15m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	US$710k	US$710k	31%
Other	US$1.6m	US$1.1m	69%
Total Compensation	US$2.3m	US$1.8m	100%

On an industry level, roughly 29% of total compensation represents salary and 71% is other remuneration. Our data reveals that Kimball Electronics allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Kimball Electronics, Inc.'s Growth

Over the past three years, Kimball Electronics, Inc. has seen its earnings per share (EPS) grow by 53% per year. Its revenue is up 7.6% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few 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 Kimball Electronics, Inc. Been A Good Investment?

Boasting a total shareholder return of 55% over three years, Kimball Electronics, 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.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Kimball Electronics you should be aware of, and 1 of them shouldn't be ignored.

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.

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.

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