How Much Is PWR Holdings Limited (ASX:PWH) Paying Its CEO?

Kees Weel has been the CEO of PWR Holdings Limited (ASX:PWH) since 2003, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for PWR Holdings

Comparing PWR Holdings Limited's CEO Compensation With the industry

According to our data, PWR Holdings Limited has a market capitalization of AU$472m, and paid its CEO total annual compensation worth AU$644k over the year to June 2020. This means that the compensation hasn't changed much from last year. In particular, the salary of AU$450.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between AU$275m and AU$1.1b had a median total CEO compensation of AU$747k. So it looks like PWR Holdings compensates Kees Weel in line with the median for the industry. What's more, Kees Weel holds AU$49m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 79% of total compensation represents salary and 21% is other remuneration. PWR Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at PWR Holdings Limited's Growth Numbers

Over the past three years, PWR Holdings Limited has seen its earnings per share (EPS) grow by 12% per year. Revenue was pretty flat on last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has PWR Holdings Limited Been A Good Investment?

We think that the total shareholder return of 103%, over three years, would leave most PWR Holdings Limited shareholders smiling. 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.

To Conclude...

As previously discussed, Kees is compensated close to the median for companies of its size, and which belong to the same industry. Few would be critical of the leadership, since returns have been juicy and EPS are moving in the right direction. So one could argue that CEO compensation is quite modest, if you consider company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for PWR Holdings that investors should be aware of in a dynamic business environment.

Important note: PWR Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.