Damian Banks became the CEO of Konekt Limited (ASX:KKT) in 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Konekt
How Does Damian Banks's Compensation Compare With Similar Sized Companies?
According to our data, Konekt Limited has a market capitalization of AU$29m, and pays its CEO total annual compensation worth AU$507k. (This figure is for the year to June 2019). That's below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at AU$423k. We looked at a group of companies with market capitalizations under AU$296m, and the median CEO total compensation was AU$360k.
As you can see, Damian Banks is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Konekt Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Konekt has changed from year to year.
Is Konekt Limited Growing?
Konekt Limited has reduced its earnings per share by an average of 56% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 9.0%.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Konekt Limited Been A Good Investment?
Since shareholders would have lost about 44% over three years, some Konekt Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We examined the amount Konekt Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.