A Quick Analysis On Omega Flex's (NASDAQ:OFLX) CEO Compensation

Kevin Hoben became the CEO of Omega Flex, Inc. (NASDAQ:OFLX) in 2005, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Omega Flex pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Omega Flex

Comparing Omega Flex, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Omega Flex, Inc. has a market capitalization of US$1.4b, and reported total annual CEO compensation of US$2.0m for the year to December 2019. That's a notable decrease of 15% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$445k.

For comparison, other companies in the same industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$4.6m. In other words, Omega Flex pays its CEO lower than the industry median. What's more, Kevin Hoben holds US$142m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. Omega Flex pays out 22% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Omega Flex, Inc.'s Growth

Over the past three years, Omega Flex, Inc. has seen its earnings per share (EPS) grow by 6.1% per year. Its revenue is down 6.0% over the previous year.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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?

We think that the total shareholder return of 138%, over three years, would leave most Omega Flex, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

As we touched on above, Omega Flex, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, shareholder returns have been have been very pleasing, over the last three years, and that should put a smile on the faces of investors. Considering this fine result for investors, we believe CEO compensation to be apt.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Omega Flex that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

If you’re looking to trade Omega Flex, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.