Yahoo Finance Shareholders Will Most Likely Find Flowserve Corporation's (NYSE:FLS) CEO Compensation Acceptable
Key Insights
Flowserve will host its Annual General Meeting on 16th of May
Salary of US$1.20m is part of CEO Robert Rowe's total remuneration
Total compensation is similar to the industry average
Flowserve's total shareholder return over the past three years was 26% while its EPS grew by 21% over the past three years
Performance at Flowserve Corporation (NYSE:FLS) has been reasonably good and CEO Robert Rowe has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 16th of May. We present our case of why we think CEO compensation looks fair.
See our latest analysis for Flowserve
How Does Total Compensation For Robert Rowe Compare With Other Companies In The Industry?
According to our data, Flowserve Corporation has a market capitalization of US$6.4b, and paid its CEO total annual compensation worth US$11m over the year to December 2023. Notably, that's an increase of 22% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.
On examining similar-sized companies in the American Machinery industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$9.0m. So it looks like Flowserve compensates Robert Rowe in line with the median for the industry. What's more, Robert Rowe holds US$28m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.2m | US$1.2m | 11% |
Other | US$9.4m | US$7.5m | 89% |
Total Compensation | US$11m | US$8.7m | 100% |
On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. Flowserve sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Flowserve Corporation's Growth
Over the past three years, Flowserve Corporation has seen its earnings per share (EPS) grow by 21% per year. In the last year, its revenue is up 17%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Flowserve Corporation Been A Good Investment?
Flowserve Corporation has served shareholders reasonably well, with a total return of 26% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Flowserve that you should be aware of before investing.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
