Here's What We Learned About The CEO Pay At K3 Business Technology Group plc (LON:KBT)

This article will reflect on the compensation paid to Adalsteinn Valdimarsson who has served as CEO of K3 Business Technology Group plc (LON:KBT) since 2016. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for K3 Business Technology Group.

View our latest analysis for K3 Business Technology Group

How Does Total Compensation For Adalsteinn Valdimarsson Compare With Other Companies In The Industry?

At the time of writing, our data shows that K3 Business Technology Group plc has a market capitalization of UK£47m, and reported total annual CEO compensation of UK£339k for the year to November 2019. This means that the compensation hasn't changed much from last year. Notably, the salary which is UK£300.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below UK£152m, reported a median total CEO compensation of UK£270k. This suggests that K3 Business Technology Group remunerates its CEO largely in line with the industry average. Moreover, Adalsteinn Valdimarsson also holds UK£110k worth of K3 Business Technology Group stock directly under their own name.

Speaking on an industry level, nearly 66% of total compensation represents salary, while the remainder of 34% is other remuneration. It's interesting to note that K3 Business Technology Group pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at K3 Business Technology Group plc's Growth Numbers

K3 Business Technology Group plc has reduced its earnings per share by 21% a year over the last three years. Its revenue is up 11% over the last year.

Few shareholders would be pleased to read that EPS have declined. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has K3 Business Technology Group plc Been A Good Investment?

With a three year total loss of 31% for the shareholders, K3 Business Technology Group plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, K3 Business Technology Group pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for K3 Business Technology Group (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

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. 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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