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Richard Horowitz became the CEO of P&F Industries, Inc. (NASDAQ:PFIN) in 1995. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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.
How Does Richard Horowitz's Compensation Compare With Similar Sized Companies?
According to our data, P&F Industries, Inc. has a market capitalization of US$26m, and pays its CEO total annual compensation worth US$1.7m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$700k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$462k.
As you can see, Richard Horowitz is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean P&F Industries, Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at P&F Industries has changed over time.
Is P&F Industries, Inc. Growing?
P&F Industries, Inc. has increased its earnings per share (EPS) by an average of 72% a year, over the last three years (using a line of best fit). Its revenue is up 3.4% over 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, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has P&F Industries, Inc. Been A Good Investment?
Since shareholders would have lost about 6.2% over three years, some P&F Industries, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We compared the total CEO remuneration paid by P&F Industries, Inc., and compared it to remuneration at a group of 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. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at P&F Industries.
Important note: P&F Industries may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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 email@example.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.