Robert Graham has been the CEO of PFB Corporation (TSE:PFB) since 2018, 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.
View our latest analysis for PFB
Comparing PFB Corporation's CEO Compensation With the industry
Our data indicates that PFB Corporation has a market capitalization of CA$111m, and total annual CEO compensation was reported as CA$429k for the year to December 2019. We note that's a decrease of 17% compared to last year. We note that the salary portion, which stands at CA$269.3k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below CA$264m, reported a median total CEO compensation of CA$359k. So it looks like PFB compensates Robert Graham in line with the median for the industry. Furthermore, Robert Graham directly owns CA$170k worth of shares in the company.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | CA$269k | CA$244k | 63% |
| Other | CA$159k | CA$274k | 37% |
| Total Compensation | CA$429k | CA$518k | 100% |
Talking in terms of the industry, salary represented approximately 22% of total compensation out of all the companies we analyzed, while other remuneration made up 78% of the pie. According to our research, PFB has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at PFB Corporation's Growth Numbers
PFB Corporation's earnings per share (EPS) grew 63% per year over the last three years. In the last year, its revenue is down 3.5%.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has PFB Corporation Been A Good Investment?
Most shareholders would probably be pleased with PFB Corporation for providing a total return of 128% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
As we touched on above, PFB Corporation is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Few would be critical of the leadership, since returns have been juicy and EPS are moving in the right direction. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for PFB that investors should be aware of in a dynamic business environment.
Important note: PFB 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.
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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.
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