Kimberly-Clark Corporation's (NYSE:KMB) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Kimberly-Clark to hold its Annual General Meeting on 2nd of May

• Total pay for CEO Mike Hsu includes US$1.47m salary

• The overall pay is 97% above the industry average

• Over the past three years, Kimberly-Clark's EPS fell by 6.5% and over the past three years, the total shareholder return was 15%

Despite Kimberly-Clark Corporation's (NYSE:KMB) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 2nd of May. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. 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 Kimberly-Clark

How Does Total Compensation For Mike Hsu Compare With Other Companies In The Industry?

According to our data, Kimberly-Clark Corporation has a market capitalization of US$46b, and paid its CEO total annual compensation worth US$17m over the year to December 2023. Notably, that's an increase of 14% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.5m.

On comparing similar companies in the American Household Products industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$8.4m. Hence, we can conclude that Mike Hsu is remunerated higher than the industry median. What's more, Mike Hsu holds US$27m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 13% of total compensation represents salary and 87% is other remuneration. Kimberly-Clark sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Kimberly-Clark Corporation's Growth

Over the last three years, Kimberly-Clark Corporation has shrunk its earnings per share by 6.5% per year. In the last year, its revenue changed by just 0.5%.

The decline in EPS is a bit concerning. And the flat revenue is seriously uninspiring. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Kimberly-Clark Corporation Been A Good Investment?

Kimberly-Clark Corporation has generated a total shareholder return of 15% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Kimberly-Clark 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.