Does Forward Industries, Inc.'s (NASDAQ:FORD) CEO Pay Compare Well With Peers?
Terry Wise has been the CEO of Forward Industries, Inc. (NASDAQ:FORD) since 2015. 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.
Check out our latest analysis for Forward Industries
How Does Terry Wise's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Forward Industries, Inc. has a market cap of US$10m, and reported total annual CEO compensation of US$300k for the year to September 2019. Notably, the salary of US$300k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$609k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Forward Industries stands. Talking in terms of the sector, salary represented approximately 29% of total compensation out of all the companies we analysed, while other remuneration made up 71% of the pie. It's interesting to note that Forward Industries pays out a greater portion of remuneration through salary, in comparison to the wider industry.
Most shareholders would consider it a positive that Terry Wise takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business. The graphic below shows how CEO compensation at Forward Industries has changed from year to year.
Is Forward Industries, Inc. Growing?
On average over the last three years, Forward Industries, Inc. has shrunk earnings per share by 91% each year (measured with a line of best fit). In the last year, its revenue is down 7.1%.
Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Forward Industries, Inc. Been A Good Investment?
Given the total loss of 4.4% over three years, many shareholders in Forward Industries, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
It appears that Forward Industries, Inc. remunerates its CEO below most similar sized companies.
Terry Wise is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. On another note, we've spotted 2 warning signs for Forward Industries that investors should look into moving forward.
Important note: Forward 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.
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.
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. Thank you for reading.
