Key Insights
- Kontoor Brands to hold its Annual General Meeting on 24th of April
- Salary of US$1.28m is part of CEO Scott Baxter's total remuneration
- Total compensation is similar to the industry average
- Kontoor Brands' total shareholder return over the past three years was 41% while its EPS grew by 9.3% over the past three years
CEO Scott Baxter has done a decent job of delivering relatively good performance at Kontoor Brands, Inc. (NYSE:KTB) recently. As shareholders go into the upcoming AGM on 24th of April, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.
See our latest analysis for Kontoor Brands
How Does Total Compensation For Scott Baxter Compare With Other Companies In The Industry?
At the time of writing, our data shows that Kontoor Brands, Inc. has a market capitalization of US$3.1b, and reported total annual CEO compensation of US$13m for the year to December 2024. That's a notable increase of 27% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.3m.
For comparison, other companies in the American Luxury industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$13m. This suggests that Kontoor Brands remunerates its CEO largely in line with the industry average. Furthermore, Scott Baxter directly owns US$26m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$1.3m | US$1.2m | 10% |
| Other | US$11m | US$8.7m | 90% |
| Total Compensation | US$13m | US$9.9m | 100% |
On an industry level, roughly 17% of total compensation represents salary and 83% is other remuneration. Kontoor Brands pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Kontoor Brands, Inc.'s Growth Numbers
Kontoor Brands, Inc. has seen its earnings per share (EPS) increase by 9.3% a year over the past three years. Revenue was pretty flat on last year.
We would prefer it if there was revenue growth, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Kontoor Brands, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Kontoor Brands, Inc. for providing a total return of 41% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
To Conclude...
Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Kontoor Brands you should be aware of, and 1 of them is a bit concerning.
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.
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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.