In 2012 Jim Pokluda was appointed CEO of Houston Wire & Cable Company (NASDAQ:HWCC). 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. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Jim Pokluda’s Compensation Compare With Similar Sized Companies?
According to our data, Houston Wire & Cable Company has a market capitalization of US$87m, and pays its CEO total annual compensation worth US$2.4m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$499k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$303k.
Thus we can conclude that Jim Pokluda receives more in total compensation than the median of a group of companies in the same market, and of similar size to Houston Wire & Cable Company. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Houston Wire & Cable, below.
Is Houston Wire & Cable Company Growing?
On average over the last three years, Houston Wire & Cable Company has grown earnings per share (EPS) by 30% each year (using a line of best fit). Its revenue is up 15% over last year.
This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.
We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Houston Wire & Cable Company Been A Good Investment?
Houston Wire & Cable Company has served shareholders reasonably well, with a total return of 13% over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by Houston Wire & Cable Company, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. We also think investors are doing ok, over the same time period. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Houston Wire & Cable (free visualization of insider trades).
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
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.