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Is PFSweb, Inc. (NASDAQ:PFSW) Excessively Paying Its CEO?

Simply Wall St

In 2013 Mike Willoughby was appointed CEO of PFSweb, Inc. (NASDAQ:PFSW). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

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Check out our latest analysis for PFSweb

How Does Mike Willoughby's Compensation Compare With Similar Sized Companies?

According to our data, PFSweb, Inc. has a market capitalization of US$77m, and pays its CEO total annual compensation worth US$1.6m. (This is based on the year to December 2018). That's actually a decrease on the year before. We think total compensation is more important but we note that the CEO salary is lower, at US$538k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$450k.

Thus we can conclude that Mike Willoughby receives more in total compensation than the median of a group of companies in the same market, and of similar size to PFSweb, Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at PFSweb has changed from year to year.

NasdaqCM:PFSW CEO Compensation, May 20th 2019

Is PFSweb, Inc. Growing?

Over the last three years PFSweb, Inc. has grown its earnings per share (EPS) by an average of 71% per year (using a line of best fit). It saw its revenue drop -5.3% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. It could be important to check this free visual depiction of what analysts expect for the future.

Has PFSweb, Inc. Been A Good Investment?

Given the total loss of 70% over three years, many shareholders in PFSweb, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We examined the amount PFSweb, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling PFSweb shares (free trial).

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.