Doug Pferdehirt has been the CEO of TechnipFMC plc (NYSE:FTI) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for TechnipFMC.
How Does Total Compensation For Doug Pferdehirt Compare With Other Companies In The Industry?
At the time of writing, our data shows that TechnipFMC plc has a market capitalization of US$2.9b, and reported total annual CEO compensation of US$15m for the year to December 2019. We note that's an increase of 15% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.
On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$5.5m. This suggests that Doug Pferdehirt is paid more than the median for the industry. Furthermore, Doug Pferdehirt directly owns US$3.7m worth of shares in the company.
On an industry level, roughly 21% of total compensation represents salary and 79% is other remuneration. It's interesting to note that TechnipFMC allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at TechnipFMC plc's Growth Numbers
Over the last three years, TechnipFMC plc has shrunk its earnings per share by 101% per year. In the last year, its revenue is up 2.6%.
Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has TechnipFMC plc Been A Good Investment?
Given the total shareholder loss of 74% over three years, many shareholders in TechnipFMC plc are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As previously discussed, Doug is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.
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. We did our research and spotted 2 warning signs for TechnipFMC that investors should look into moving forward.
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. 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.
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