Yahoo Finance Does KAR Auction Services, Inc.'s (NYSE:KAR) CEO Pay Matter?
Jim Hallett has been the CEO of KAR Auction Services, Inc. (NYSE:KAR) since 2009. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for KAR Auction Services
How Does Jim Hallett's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that KAR Auction Services, Inc. has a market cap of US$3.7b, and is paying total annual CEO compensation of US$6.1m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$975k. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.1m.
That means Jim Hallett 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, below, how CEO compensation at KAR Auction Services has changed over time.
Is KAR Auction Services, Inc. Growing?
On average over the last three years, KAR Auction Services, Inc. has grown earnings per share (EPS) by 16% each year (using a line of best fit). Its revenue is up 33% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. You might want to check this free visual report on analyst forecasts for future earnings.
Has KAR Auction Services, Inc. Been A Good Investment?
Boasting a total shareholder return of 87% over three years, KAR Auction Services, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
Jim Hallett is paid around what is normal the leaders of comparable size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Whatever your view on compensation, you might want to check if insiders are buying or selling KAR Auction Services shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.
