How Is Kairos Minerals' (ASX:KAI) CEO Compensated?

Terry Topping became the CEO of Kairos Minerals Limited (ASX:KAI) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Kairos Minerals

Comparing Kairos Minerals Limited's CEO Compensation With the industry

At the time of writing, our data shows that Kairos Minerals Limited has a market capitalization of AU$90m, and reported total annual CEO compensation of AU$318k for the year to June 2020. This means that the compensation hasn't changed much from last year. In particular, the salary of AU$290.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$279m, we found that the median total CEO compensation was AU$309k. This suggests that Kairos Minerals remunerates its CEO largely in line with the industry average. What's more, Terry Topping holds AU$582k worth of shares in the company in their own name.

On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. According to our research, Kairos Minerals has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Kairos Minerals Limited's Growth Numbers

Kairos Minerals Limited has seen its earnings per share (EPS) increase by 11% a year over the past three years. Its revenue is up 301% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Kairos Minerals Limited Been A Good Investment?

Kairos Minerals Limited has not done too badly by shareholders, with a total return of 3.7%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As we noted earlier, Kairos Minerals pays its CEO in line with similar-sized companies belonging to the same industry. But EPS growth for the company has been strong over the last three years, though shareholder returns in comparison haven't been as impressive. Considering overall performance, we'd say the compensation is fair, although stockholders will want to see higher returns moving forward.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 6 warning signs for Kairos Minerals (of which 3 are a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Important note: Kairos Minerals 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.

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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