Yahoo Finance We Think Kelly Services, Inc.'s (NASDAQ:KELY.A) CEO Compensation Package Needs To Be Put Under A Microscope
Key Insights
Kelly Services to hold its Annual General Meeting on 9th of May
CEO Peter W. Quigley's total compensation includes salary of US$900.0k
Total compensation is similar to the industry average
Kelly Services' three-year loss to shareholders was 6.9% while its EPS was down 33% over the past three years
Shareholders will probably not be too impressed with the underwhelming results at Kelly Services, Inc. (NASDAQ:KELY.A) recently. At the upcoming AGM on 9th of May, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.
Check out our latest analysis for Kelly Services
Comparing Kelly Services, Inc.'s CEO Compensation With The Industry
According to our data, Kelly Services, Inc. has a market capitalization of US$825m, and paid its CEO total annual compensation worth US$4.2m over the year to December 2023. We note that's an increase of 18% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$900k.
In comparison with other companies in the American Professional Services industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$4.4m. So it looks like Kelly Services compensates Peter W. Quigley in line with the median for the industry. Moreover, Peter W. Quigley also holds US$8.1m worth of Kelly Services stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2023 | Proportion (2023) |
Salary | US$900k | US$884k | 22% |
Other | US$3.3m | US$2.7m | 78% |
Total Compensation | US$4.2m | US$3.5m | 100% |
On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. Kelly Services pays out 22% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Kelly Services, Inc.'s Growth Numbers
Kelly Services, Inc. has reduced its earnings per share by 33% a year over the last three years. In the last year, its revenue is down 2.6%.
Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Kelly Services, Inc. Been A Good Investment?
Given the total shareholder loss of 6.9% over three years, many shareholders in Kelly Services, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Kelly Services that you should be aware of before investing.
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.
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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.
