Yahoo Finance We Think Some Shareholders May Hesitate To Increase Kaiser Aluminum Corporation's (NASDAQ:KALU) CEO Compensation
Key Insights
Kaiser Aluminum's Annual General Meeting to take place on 11th of June
Total pay for CEO Keith Harvey includes US$983.8k salary
Total compensation is 49% above industry average
Over the past three years, Kaiser Aluminum's EPS grew by 136% and over the past three years, the total loss to shareholders 23%
Shareholders of Kaiser Aluminum Corporation (NASDAQ:KALU) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 11th of June. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for Kaiser Aluminum
How Does Total Compensation For Keith Harvey Compare With Other Companies In The Industry?
Our data indicates that Kaiser Aluminum Corporation has a market capitalization of US$1.5b, and total annual CEO compensation was reported as US$6.2m for the year to December 2023. That's a notable increase of 21% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$984k.
On examining similar-sized companies in the American Metals and Mining industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$4.2m. This suggests that Keith Harvey is paid more than the median for the industry. Furthermore, Keith Harvey directly owns US$4.2m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$984k | US$926k | 16% |
Other | US$5.2m | US$4.2m | 84% |
Total Compensation | US$6.2m | US$5.1m | 100% |
On an industry level, roughly 35% of total compensation represents salary and 65% is other remuneration. It's interesting to note that Kaiser Aluminum allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Kaiser Aluminum Corporation's Growth Numbers
Over the past three years, Kaiser Aluminum Corporation has seen its earnings per share (EPS) grow by 136% per year. Its revenue is down 8.2% over the previous year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Kaiser Aluminum Corporation Been A Good Investment?
Given the total shareholder loss of 23% over three years, many shareholders in Kaiser Aluminum Corporation are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Kaiser Aluminum (2 are a bit unpleasant!) that you should be aware of before investing here.
Important note: Kaiser Aluminum 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.
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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.
