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In 1995 Richard Horowitz was appointed CEO of P&F Industries, Inc. (NASDAQ:PFIN). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Richard Horowitz’s Compensation Compare With Similar Sized Companies?
Our data indicates that P&F Industries, Inc. is worth US$28m, and total annual CEO compensation is US$1.6m. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$700k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$300k.
As you can see, Richard Horowitz is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean P&F Industries, Inc. is paying too much. 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 P&F Industries, below.
Is P&F Industries, Inc. Growing?
P&F Industries, Inc. has reduced its earnings per share by an average of 4.7% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 13% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has P&F Industries, Inc. Been A Good Investment?
With a total shareholder return of 3.8% over three years, P&F Industries, Inc. has done okay by shareholders. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared the total CEO remuneration paid by P&F Industries, Inc., and compared it to remuneration at a group of similar sized 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.
While shareholder returns are acceptable, they don’t delight. So we doubt many shareholders would consider the CEO pay to be particularly modest! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling P&F Industries (free visualization of insider trades).
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.