Does KBS Fashion Group Limited's (NASDAQ:KBSF) CEO Pay Matter?

Simply Wall St

Keyan Yan became the CEO of KBS Fashion Group Limited (NASDAQ:KBSF) in 2011. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for KBS Fashion Group

How Does Keyan Yan's Compensation Compare With Similar Sized Companies?

According to our data, KBS Fashion Group Limited has a market capitalization of US$3.8m, and paid its CEO total annual compensation worth US$739k over the year to December 2018. Notably, the salary of US$739k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$602k.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of KBS Fashion Group. Speaking on an industry level, we can see that nearly 25% of total compensation represents salary, while the remainder of 75% is other remuneration. KBS Fashion Group pays out 100% of aggregate payment in the shape of a salary, which is significantly higher than the industry average.

That means Keyan Yan receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. You can see a visual representation of the CEO compensation at KBS Fashion Group, below.

NasdaqCM:KBSF CEO Compensation March 29th 2020

Is KBS Fashion Group Limited Growing?

Over the last three years KBS Fashion Group Limited has shrunk its earnings per share by an average of 24% per year (measured with a line of best fit). Its revenue is down 15% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has KBS Fashion Group Limited Been A Good Investment?

With a three year total loss of 73%, KBS Fashion Group Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Remuneration for Keyan Yan is close enough to the median pay for a CEO of a similar sized company .

Returns have been disappointing and the company is not growing its earnings per share. Few would argue that it's wise for the company to pay any more, before returns improve. Taking a breather from CEO compensation, we've spotted 6 warning signs for KBS Fashion Group (of which 2 are significant!) you should know about in order to have a holistic understanding of the stock.

Important note: KBS Fashion Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.

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