Yahoo Finance Shareholders May Not Be So Generous With Kontoor Brands, Inc.'s (NYSE:KTB) CEO Compensation And Here's Why
Key Insights
Kontoor Brands' Annual General Meeting to take place on 18th of April
Total pay for CEO Scott Baxter includes US$1.24m salary
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%
In the past three years, shareholders of Kontoor Brands, Inc. (NYSE:KTB) have seen a loss on their investment. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 18th of April. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
See our latest analysis for Kontoor Brands
How Does Total Compensation For Scott Baxter Compare With Other Companies In The Industry?
According to our data, Kontoor Brands, Inc. has a market capitalization of US$3.0b, and paid its CEO total annual compensation worth US$9.9m over the year to December 2023. That's a notable decrease of 13% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, 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. From this we gather that Scott Baxter is paid around the median for CEOs in the industry. Moreover, Scott Baxter also holds US$26m worth of Kontoor Brands stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
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% |
Talking in terms of the industry, salary represented approximately 24% of total compensation out of all the companies we analyzed, while other remuneration made up 76% of the pie. It's interesting to note that Kontoor Brands allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked 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. Revenue was pretty flat on last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
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. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. 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.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. 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.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.
