PowerFleet, Inc.'s (NASDAQ:PWFL) CEO Compensation Is Looking A Bit Stretched At The Moment

The share price of PowerFleet, Inc. (NASDAQ:PWFL) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 20 July 2021. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

See our latest analysis for PowerFleet

How Does Total Compensation For Chris Wolfe Compare With Other Companies In The Industry?

At the time of writing, our data shows that PowerFleet, Inc. has a market capitalization of US$239m, and reported total annual CEO compensation of US$1.6m for the year to December 2020. That's a modest increase of 4.1% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$425k.

In comparison with other companies in the industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$941k. Hence, we can conclude that Chris Wolfe is remunerated higher than the industry median. Moreover, Chris Wolfe also holds US$1.7m worth of PowerFleet stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	US$425k	US$325k	26%
Other	US$1.2m	US$1.2m	74%
Total Compensation	US$1.6m	US$1.6m	100%

On an industry level, around 29% of total compensation represents salary and 71% is other remuneration. PowerFleet is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

PowerFleet, Inc.'s Growth

PowerFleet, Inc. has reduced its earnings per share by 25% a year over the last three years. Its revenue is up 13% over the last year.

Overall this is not a very positive result for shareholders. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 PowerFleet, Inc. Been A Good Investment?

With a total shareholder return of 12% over three years, PowerFleet, Inc. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for PowerFleet that investors should be aware of in a dynamic business environment.

Switching gears from PowerFleet, 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. 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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