Yahoo Finance Does Flowserve Corporation's (NYSE:FLS) CEO Salary Reflect Performance?
In 2017 Robert Rowe was appointed CEO of Flowserve Corporation (NYSE:FLS). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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.
Check out our latest analysis for Flowserve
How Does Robert Rowe's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Flowserve Corporation has a market cap of US$6.6b, and reported total annual CEO compensation of US$8.7m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.1m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.9m.
That means Robert Rowe receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Flowserve has changed over time.
Is Flowserve Corporation Growing?
Flowserve Corporation has reduced its earnings per share by an average of 21% a year, over the last three years (measured with a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
Unfortunately, earnings per share have trended lower over the last three years. And the flat revenue is seriously uninspiring. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Flowserve Corporation Been A Good Investment?
Flowserve Corporation has served shareholders reasonably well, with a total return of 25% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
Robert Rowe is paid around what is normal the leaders of comparable size companies.
We feel that earnings per share have been a bit disappointing, but and we don't think the total returns are amazing. We do not think the CEO pay is a problem, but one might argue that the company should improve returns to shareholders before increasing it. So you may want to check if insiders are buying Flowserve shares with their own money (free access).
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.
