Key Insights

• K2 Asset Management Holdings to hold its Annual General Meeting on 20th of November

• CEO Campbell Neal's total compensation includes salary of AU$459.0k

• The total compensation is similar to the average for the industry

• K2 Asset Management Holdings' total shareholder return over the past three years was 30% while its EPS was down 73% over the past three years

The share price of K2 Asset Management Holdings Ltd (ASX:KAM) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 20th of November. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for K2 Asset Management Holdings

How Does Total Compensation For Campbell Neal Compare With Other Companies In The Industry?

Our data indicates that K2 Asset Management Holdings Ltd has a market capitalization of AU$17m, and total annual CEO compensation was reported as AU$484k for the year to June 2023. This means that the compensation hasn't changed much from last year. Notably, the salary which is AU$459.0k, represents most of the total compensation being paid.

In comparison with other companies in the Australian Capital Markets industry with market capitalizations under AU$314m, the reported median total CEO compensation was AU$473k. This suggests that K2 Asset Management Holdings remunerates its CEO largely in line with the industry average. Furthermore, Campbell Neal directly owns AU$6.2m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 65% of total compensation represents salary and 35% is other remuneration. K2 Asset Management Holdings pays out 95% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at K2 Asset Management Holdings Ltd's Growth Numbers

K2 Asset Management Holdings Ltd has reduced its earnings per share by 73% a year over the last three years. In the last year, its revenue is down 6.7%.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has K2 Asset Management Holdings Ltd Been A Good Investment?

With a total shareholder return of 30% over three years, K2 Asset Management Holdings Ltd shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for K2 Asset Management Holdings (of which 2 are significant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from K2 Asset Management Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.