Yahoo Finance Is Kraton Corporation's (NYSE:KRA) CEO Pay Justified?
Kevin Fogarty has been the CEO of Kraton Corporation (NYSE:KRA) since 2008. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Kraton
How Does Kevin Fogarty's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Kraton Corporation has a market cap of US$753m, and reported total annual CEO compensation of US$5.4m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$981k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$2.6m.
It would therefore appear that Kraton Corporation pays Kevin Fogarty more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. 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 Kraton has changed from year to year.
Is Kraton Corporation Growing?
Kraton Corporation has increased its earnings per share (EPS) by an average of 6.5% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 9.2%.
I generally like to see a little revenue growth, but it is good to see EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.
Has Kraton Corporation Been A Good Investment?
With a three year total loss of 17%, Kraton Corporation would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We examined the amount Kraton Corporation 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.
The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. Whatever your view on compensation, you might want to check if insiders are buying or selling Kraton shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
