Shareholders May Be More Conservative With TOMI Environmental Solutions, Inc.'s (NASDAQ:TOMZ) CEO Compensation For Now

Key Insights

• TOMI Environmental Solutions will host its Annual General Meeting on 19th of November
• Total pay for CEO Halden Shane includes US$605.0k salary
• The overall pay is 42% above the industry average
• TOMI Environmental Solutions' three-year loss to shareholders was 41% while its EPS grew by 23% over the past three years

The underwhelming share price performance of TOMI Environmental Solutions, Inc. (NASDAQ:TOMZ) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 19th of November. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for TOMI Environmental Solutions

Comparing TOMI Environmental Solutions, Inc.'s CEO Compensation With The Industry

Our data indicates that TOMI Environmental Solutions, Inc. has a market capitalization of US$15m, and total annual CEO compensation was reported as US$690k for the year to December 2023. That's a slight decrease of 6.5% on the prior year. Notably, the salary which is US$605.0k, represents most of the total compensation being paid.

For comparison, other companies in the American Commercial Services industry with market capitalizations below US$200m, reported a median total CEO compensation of US$485k. Hence, we can conclude that Halden Shane is remunerated higher than the industry median. Moreover, Halden Shane also holds US$2.1m worth of TOMI Environmental Solutions stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$605k	US$550k	88%
Other	US$85k	US$187k	12%
Total Compensation	US$690k	US$737k	100%

Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. TOMI Environmental Solutions pays out 88% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

TOMI Environmental Solutions, Inc.'s Growth

TOMI Environmental Solutions, Inc.'s earnings per share (EPS) grew 23% per year over the last three years. It saw its revenue drop 5.1% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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?

The return of -41% over three years would not have pleased TOMI Environmental Solutions, Inc. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for TOMI Environmental Solutions (of which 2 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the 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.

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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.