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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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Terry Wise's Compensation Compare With Similar Sized Companies?
Our data indicates that Forward Industries, Inc. is worth US$10m, and total annual CEO compensation is US$300k. (This figure is for the year to September 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$300k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$492k.
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. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Forward Industries has changed over time.
Is Forward Industries, Inc. Growing?
Over the last three years Forward Industries, Inc. has shrunk its earnings per share by an average of 39% per year (measured with a line of best fit). Its revenue is up 21% over last year.
Unfortunately, earnings per share have trended lower over the last three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Forward Industries, Inc. Been A Good Investment?
Given the total loss of 35% over three years, many shareholders in Forward Industries, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
It looks like Forward Industries, Inc. pays its CEO less than similar sized companies.
Shareholders should note that compensation for Terry Wise is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. 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. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Forward Industries (free visualization of insider trades).
If you want to buy a stock that is better than Forward Industries, this free list of high return, low debt companies is a great place to look.
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.
If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.