The Compensation For Flowserve Corporation's (NYSE:FLS) CEO Looks Deserved And Here's Why
Key Insights
- Flowserve to hold its Annual General Meeting on 16th of May
- CEO Robert Rowe's total compensation includes salary of US$1.20m
- The overall pay is comparable to the industry average
- Over the past three years, Flowserve's EPS grew by 43% and over the past three years, the total shareholder return was 71%
It would be hard to discount the role that CEO Robert Rowe has played in delivering the impressive results at Flowserve Corporation (NYSE:FLS) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 16th of May. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.
See our latest analysis for Flowserve
How Does Total Compensation For Robert Rowe Compare With Other Companies In The Industry?
According to our data, Flowserve Corporation has a market capitalization of US$6.3b, and paid its CEO total annual compensation worth US$11m over the year to December 2024. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.
On examining similar-sized companies in the American Machinery industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$9.1m. This suggests that Flowserve remunerates its CEO largely in line with the industry average. What's more, Robert Rowe holds US$21m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$1.2m | US$1.2m | 11% |
| Other | US$9.4m | US$9.4m | 89% |
| Total Compensation | US$11m | US$11m | 100% |
On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. Flowserve sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Flowserve Corporation's Growth Numbers
Flowserve Corporation's earnings per share (EPS) grew 43% per year over the last three years. In the last year, its revenue is up 4.2%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Flowserve Corporation Been A Good Investment?
We think that the total shareholder return of 71%, over three years, would leave most Flowserve Corporation shareholders smiling. 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...
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Flowserve that investors should think about before committing capital to this stock.
Switching gears from Flowserve, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
Valuation is complex, but we're here to simplify it.
Discover if Flowserve might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.