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Does Houston Wire & Cable's (NASDAQ:HWCC) CEO Salary Compare Well With The Performance Of The Company?

Simply Wall St
·3 min read

This article will reflect on the compensation paid to Jim Pokluda who has served as CEO of Houston Wire & Cable Company (NASDAQ:HWCC) since 2012. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Houston Wire & Cable

How Does Total Compensation For Jim Pokluda Compare With Other Companies In The Industry?

According to our data, Houston Wire & Cable Company has a market capitalization of US$44m, and paid its CEO total annual compensation worth US$942k over the year to December 2019. That's a notable decrease of 32% on last year. Notably, the salary which is US$549.2k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$719k. Hence, we can conclude that Jim Pokluda is remunerated higher than the industry median. Moreover, Jim Pokluda also holds US$1.6m worth of Houston Wire & Cable stock directly under their own name.

Component

2019

2018

Proportion (2019)

Salary

US$549k

US$515k

58%

Other

US$392k

US$877k

42%

Total Compensation

US$942k

US$1.4m

100%

On an industry level, roughly 22% of total compensation represents salary and 78% is other remuneration. Houston Wire & Cable pays out 58% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

A Look at Houston Wire & Cable Company's Growth Numbers

Houston Wire & Cable Company has seen its earnings per share (EPS) increase by 68% a year over the past three years. Its revenue is down 5.7% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Houston Wire & Cable Company Been A Good Investment?

Given the total shareholder loss of 55% over three years, many shareholders in Houston Wire & Cable Company are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, Houston Wire & Cable pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, we must not forget that the EPS growth has been very strong, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 4 warning signs for Houston Wire & Cable you should be aware of, and 1 of them is a bit concerning.

Switching gears from Houston Wire & Cable, 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.