Bill Hammond is the CEO of Hammond Power Solutions Inc. (TSE:HPS.A). First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Hammond Power Solutions

How Does Bill Hammond's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Hammond Power Solutions Inc. has a market cap of CA$83m, and is paying total annual CEO compensation of CA$602k. (This figure is for 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 CA$436k. We examined a group of similar sized companies, with market capitalizations of below CA$268m. The median CEO total compensation in that group is CA$142k.

Thus we can conclude that Bill Hammond receives more in total compensation than the median of a group of companies in the same market, and of similar size to Hammond Power Solutions 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 Hammond Power Solutions has changed from year to year.

Is Hammond Power Solutions Inc. Growing?

Over the last three years Hammond Power Solutions Inc. has grown its earnings per share (EPS) by an average of 3.3% per year (using a line of best fit). It achieved revenue growth of 10% over the last year.

This revenue growth could really point to a brighter future. And the improvement in earnings per share is modest but respectable. Although we'll stop short of calling the stock a top performer, we think the company has potential. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Hammond Power Solutions Inc. Been A Good Investment?

Hammond Power Solutions Inc. has generated a total shareholder return of 21% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

We compared the total CEO remuneration paid by Hammond Power Solutions Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. Considering this, we wouldn't want to see any big pay rises, although we'd stop short of calling the CEO compensation unfair. Shareholders may want to check for free if Hammond Power Solutions insiders are buying or selling shares.

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.