Does Powell Industries, Inc.’s (NASDAQ:POWL) CEO Pay Reflect Performance?

Brett Cope has been the CEO of Powell Industries, Inc. (NASDAQ:POWL) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Powell Industries

How Does Brett Cope’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Powell Industries, Inc. has a market cap of US$427m, and is paying total annual CEO compensation of US$1.9m. (This figure is for the year to September 2018). While we always look at total compensation first, we note that the salary component is less, at US$495k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.8m.

That means Brett Cope receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

The graphic below shows how CEO compensation at Powell Industries has changed from year to year.

NasdaqGS:POWL CEO Compensation, July 23rd 2019
NasdaqGS:POWL CEO Compensation, July 23rd 2019

Is Powell Industries, Inc. Growing?

On average over the last three years, Powell Industries, Inc. has shrunk earnings per share by 92% each year (measured with a line of best fit). Its revenue is up 32% over last year.

Investors should note that, over three years, earnings per share are down. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching.

Has Powell Industries, Inc. Been A Good Investment?

Powell Industries, Inc. has served shareholders reasonably well, with a total return of 11% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

Remuneration for Brett Cope is close enough to the median pay for a CEO of a similar sized company .

We see room for improved growth, as well as fairly unremarkable returns over the last three years. But we don’t think the CEO compensation is a problem. Shareholders may want to check for free if Powell Industries insiders are buying or selling shares.

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.