Yahoo Finance Is Power Financial Corporation (TSE:PWF) Excessively Paying Its CEO?
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Robert Orr has been the CEO of Power Financial Corporation (TSE:PWF) since 2005. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big 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 process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Power Financial
How Does Robert Orr's Compensation Compare With Similar Sized Companies?
According to our data, Power Financial Corporation has a market capitalization of CA$21b, and pays its CEO total annual compensation worth CA$14m. (This number is for the twelve months until December 2018). We note that's an increase of 9.3% above last year. We think total compensation is more important but we note that the CEO salary is lower, at CA$4.7m. We took a group of companies with market capitalizations over CA$11b, and calculated the median CEO total compensation to be CA$8.8m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
It would therefore appear that Power Financial Corporation pays Robert Orr more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Power Financial, below.
Is Power Financial Corporation Growing?
Over the last three years, Power Financial Corporation has not seen its earnings per share change much, though they have deteriorated slightly, according to a line of best fit. It saw its revenue drop -5.9% over the last year.
In the last three years the company has failed to grow earnings per s. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Power Financial Corporation Been A Good Investment?
With a total shareholder return of 17% over three years, Power Financial Corporation shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
We examined the amount Power Financial Corporation pays its CEO, and compared it to the amount paid by other large companies. Our data suggests that it pays above the median CEO pay within that group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
And shareholder returns are decent but not great. So we think more research is needed, but we don't think the CEO underpaid. So you may want to check if insiders are buying Power Financial shares with their own money (free access).
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.
