Shareholders Will Probably Not Have Any Issues With Polar Power, Inc.'s (NASDAQ:POLA) CEO Compensation

Performance at Polar Power, Inc. (NASDAQ:POLA) has been rather uninspiring recently and shareholders may be wondering how CEO Arthur Sams plans to fix this. At the next AGM coming up on 21 December 2022, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for Polar Power

How Does Total Compensation For Arthur Sams Compare With Other Companies In The Industry?

According to our data, Polar Power, Inc. has a market capitalization of US$24m, and paid its CEO total annual compensation worth US$275k over the year to December 2021. This was the same as last year. It is worth noting that the CEO compensation consists entirely of the salary, worth US$275k.

In comparison with other companies in the American Electrical industry with market capitalizations under US$200m, the reported median total CEO compensation was US$968k. That is to say, Arthur Sams is paid under the industry median. Moreover, Arthur Sams also holds US$10m worth of Polar Power stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	US$275k	US$275k	100%
Other	-	-	-
Total Compensation	US$275k	US$275k	100%

Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. On a company level, Polar Power prefers to reward its CEO through a salary, opting not to pay Arthur Sams through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Polar Power, Inc.'s Growth Numbers

Polar Power, Inc. has seen its earnings per share (EPS) increase by 19% a year over the past three years. In the last year, its revenue is down 3.4%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Polar Power, Inc. Been A Good Investment?

Since shareholders would have lost about 22% over three years, some Polar Power, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Polar Power rewards its CEO solely through a salary, ignoring non-salary benefits completely. The fact that shareholders are sitting on a loss is certainly disheartening. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. A key focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Polar Power (2 are potentially serious!) that you should be aware of before investing here.

Switching gears from Polar Power, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.