Should You Worry About SPX FLOW Inc’s (NYSE:FLOW) CEO Salary Level?
Marc Michael has been the CEO of SPX FLOW Inc (NYSE:FLOW) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for SPX FLOW
How Does Marc Michael’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that SPX FLOW Inc has a market cap of US$1.5b, and is paying total annual CEO compensation of US$5.6m. Notably, that’s an increase of 39% over the year before. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO compensation was US$3.5m.
Thus we can conclude that Marc Michael receives more in total compensation than the median of a group of companies in the same market, and of similar size to SPX FLOW Inc. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at SPX FLOW, below.
Is SPX FLOW Inc Growing?
On average over the last three years, SPX FLOW Inc has grown earnings per share (EPS) by 36% each year. It achieved revenue growth of 8.5% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.
It could be important to check this free visual depiction of what analysts expect for the future.
Has SPX FLOW Inc Been A Good Investment?
SPX FLOW Inc has generated a total shareholder return of 20% over three years, so most shareholders would be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary…
We examined the amount SPX FLOW Inc pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. We also note that, over the same time frame, shareholder returns haven’t been bad. While it may be worth researching further, we don’t see a problem with the CEO pay, given the good EPS growth. Whatever your view on compensation, you might want to check if insiders are buying or selling SPX FLOW Inc shares (free trial).
Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
