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Kevin Hoben became the CEO of Omega Flex, Inc. (NASDAQ:OFLX) in 2005. 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Kevin Hoben's Compensation Compare With Similar Sized Companies?
Our data indicates that Omega Flex, Inc. is worth US$775m, and total annual CEO compensation is US$2.1m. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$414k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.2m.
That means Kevin Hoben receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at Omega Flex has changed over time.
Is Omega Flex, Inc. Growing?
On average over the last three years, Omega Flex, Inc. has grown earnings per share (EPS) by 7.5% each year (using a line of best fit). In the last year, its revenue is up 6.4%.
I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Omega Flex, Inc. Been A Good Investment?
I think that the total shareholder return of 128%, over three years, would leave most Omega Flex, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Kevin Hoben is paid around what is normal the leaders of comparable size companies.
While the growth could be better, the shareholder returns are clearly good. So all things considered I'd venture that the CEO pay is appropriate. Shareholders may want to check for free if Omega Flex insiders are buying or selling shares.
Important note: Omega Flex 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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.