Here's Why TOMI Environmental Solutions, Inc.'s (NASDAQ:TOMZ) CEO Compensation Is The Least Of Shareholders' Concerns

Key Insights

• TOMI Environmental Solutions to hold its Annual General Meeting on 19th of November
• Total pay for CEO Halden Shane includes US$499.1k salary
• The overall pay is comparable to the industry average
• TOMI Environmental Solutions' EPS declined by 5.1% over the past three years while total shareholder return over the past three years was 33%

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The share price of TOMI Environmental Solutions, Inc. (NASDAQ:TOMZ) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. The upcoming AGM on 19th of November may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

View our latest analysis for TOMI Environmental Solutions

How Does Total Compensation For Halden Shane Compare With Other Companies In The Industry?

Our data indicates that TOMI Environmental Solutions, Inc. has a market capitalization of US$18m, and total annual CEO compensation was reported as US$572k for the year to December 2024. Notably, that's a decrease of 17% over the year before. Notably, the salary which is US$499.1k, represents most of the total compensation being paid.

On comparing similar-sized companies in the American Commercial Services industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$449k. From this we gather that Halden Shane is paid around the median for CEOs in the industry. Furthermore, Halden Shane directly owns US$2.6m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 21% of total compensation represents salary, while the remainder of 79% is other remuneration. TOMI Environmental Solutions is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at TOMI Environmental Solutions, Inc.'s Growth Numbers

Over the last three years, TOMI Environmental Solutions, Inc. has shrunk its earnings per share by 5.1% per year. It saw its revenue drop 13% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 TOMI Environmental Solutions, Inc. Been A Good Investment?

With a total shareholder return of 33% over three years, TOMI Environmental Solutions, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for TOMI Environmental Solutions (of which 2 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.