A Look At SPX FLOW's (NYSE:FLOW) CEO Remuneration
Marc Michael has been the CEO of SPX FLOW, Inc. (NYSE:FLOW) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether SPX FLOW pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for SPX FLOW
How Does Total Compensation For Marc Michael Compare With Other Companies In The Industry?
At the time of writing, our data shows that SPX FLOW, Inc. has a market capitalization of US$1.9b, and reported total annual CEO compensation of US$4.9m for the year to December 2019. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$915k.
In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$4.3m. So it looks like SPX FLOW compensates Marc Michael in line with the median for the industry. What's more, Marc Michael holds US$8.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$915k | US$868k | 19% |
Other | US$3.9m | US$4.0m | 81% |
Total Compensation | US$4.9m | US$4.9m | 100% |
Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. It's interesting to note that SPX FLOW pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at SPX FLOW, Inc.'s Growth Numbers
SPX FLOW, Inc.'s earnings per share (EPS) grew 89% per year over the last three years. It saw its revenue drop 15% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has SPX FLOW, Inc. Been A Good Investment?
Boasting a total shareholder return of 41% over three years, SPX FLOW, Inc. has done well by shareholders. 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.
In Summary...
As we noted earlier, SPX FLOW pays its CEO in line with similar-sized companies belonging to the same industry. Investors would surely be happy to see that returns have been great, and that EPS is up. Indeed, many might consider that Marc is compensated rather modestly, given the solid company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for SPX FLOW (1 is a bit concerning!) that you should be aware of before investing here.
Important note: SPX FLOW is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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. 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.
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