Yahoo Finance How Does Perma-Pipe International Holdings' (NASDAQ:PPIH) CEO Pay Compare With Company Performance?
David Mansfield became the CEO of Perma-Pipe International Holdings, Inc. (NASDAQ:PPIH) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for Perma-Pipe International Holdings
Comparing Perma-Pipe International Holdings, Inc.'s CEO Compensation With the industry
Our data indicates that Perma-Pipe International Holdings, Inc. has a market capitalization of US$48m, and total annual CEO compensation was reported as US$1.2m for the year to January 2020. That's a notable increase of 35% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$382k.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$926k. Accordingly, our analysis reveals that Perma-Pipe International Holdings, Inc. pays David Mansfield north of the industry median. Furthermore, David Mansfield directly owns US$1.2m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$382k | US$357k | 32% |
Other | US$823k | US$533k | 68% |
Total Compensation | US$1.2m | US$890k | 100% |
On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. According to our research, Perma-Pipe International Holdings has allocated a higher percentage of pay to salary in comparison to the wider industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Perma-Pipe International Holdings, Inc.'s Growth Numbers
Perma-Pipe International Holdings, Inc. has seen its earnings per share (EPS) increase by 104% a year over the past three years. Its revenue is up 1.4% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Perma-Pipe International Holdings, Inc. Been A Good Investment?
Since shareholders would have lost about 25% over three years, some Perma-Pipe International Holdings, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we touched on above, Perma-Pipe International Holdings, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the earnings per share growth is certainly impressive, but shareholder returns — over the same period — have been disappointing. Considering overall performance, we can't say David is underpaid, in fact compensation is definitely on the higher side.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Perma-Pipe International Holdings that investors should think about before committing capital to this stock.
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.
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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