In 2012 John Chisholm was appointed CEO of Flotek Industries, Inc. (NYSE:FTK). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does John Chisholm’s Compensation Compare With Similar Sized Companies?
Our data indicates that Flotek Industries, Inc. is worth US$175m, and total annual CEO compensation is US$6.1m. (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$50k. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO compensation was US$901k.
Thus we can conclude that John Chisholm receives more in total compensation than the median of a group of companies in the same market, and of similar size to Flotek Industries, Inc.. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Flotek Industries has changed from year to year.
Is Flotek Industries, Inc. Growing?
On average over the last three years, Flotek Industries, Inc. has shrunk earnings per share by 135% each year (measured with a line of best fit). In the last year, its revenue is down -17%.
Unfortunately, earnings per share have trended lower over the last three years. And the impression is worse when you consider revenue is down year-on-year. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Flotek Industries, Inc. Been A Good Investment?
With a three year total loss of 58%, Flotek Industries, Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at Flotek Industries, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. Some might well form the view that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Flotek Industries.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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.