Rob Ruhlman has been the CEO of Preformed Line Products Company (NASDAQ:PLPC) since 2000. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Rob Ruhlman's Compensation Compare With Similar Sized Companies?
Our data indicates that Preformed Line Products Company is worth US$228m, and total annual CEO compensation was reported as US$4.3m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$867k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.5m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 25% of total compensation represents salary, while the remainder of 75% is other remuneration. Preformed Line Products is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation
As you can see, Rob Ruhlman is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Preformed Line Products Company is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance. The graphic below shows how CEO compensation at Preformed Line Products has changed from year to year.
Is Preformed Line Products Company Growing?
Over the last three years Preformed Line Products Company has seen earnings per share (EPS) move in a positive direction by an average of 21% per year (using a line of best fit). It achieved revenue growth of 5.7% 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. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Preformed Line Products Company Been A Good Investment?
Since shareholders would have lost about 4.9% over three years, some Preformed Line Products Company shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We examined the amount Preformed Line Products Company pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. While EPS is moving in the right direction, we'd say shareholders would want better returns before the CEO is paid much more. Looking into other areas, we've picked out 1 warning sign for Preformed Line Products that investors should think about before committing capital to this stock.
If you want to buy a stock that is better than Preformed Line Products, this free list of high return, low debt companies is a great place to look.
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