Yahoo Finance How Should Investors Feel About Power Financial Corporation’s (TSE:PWF) CEO Pay?
Robert Orr has been the CEO of Power Financial Corporation (TSE:PWF) since 2005. First, this article will compare CEO compensation with compensation at other large companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Power Financial
How Does Robert Orr’s Compensation Compare With Similar Sized Companies?
Our data indicates that Power Financial Corporation is worth CA$20b, and total annual CEO compensation is CA$12m. (This is based on the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at CA$4.6m. We took a group of companies with market capitalizations over CA$11b, and calculated the median CEO compensation to be CA$9.2m.
Thus we can conclude that Robert Orr receives more in total compensation than the median of a group of large companies in the same market as Power Financial Corporation. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Power Financial has changed from year to year.
Is Power Financial Corporation Growing?
Power Financial Corporation has reduced its earnings per share by an average of 4.7% a year, over the last three years. In the last year, its revenue is up 7.1%.
Sadly for shareholders, earnings per share are actually down, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Power Financial Corporation Been A Good Investment?
Since shareholders would have lost about 4.6% over three years, some Power Financial Corporation shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary…
We examined the amount Power Financial Corporation pays its CEO, and compared it to the amount paid by other large companies. We found that it pays well over the median amount paid in the benchmark group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Arguably worse, investors are without a positive return for the last three years. This analysis suggests to us that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Power Financial shares (free trial).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
