Shareholders May Be More Conservative With FMC Corporation's (NYSE:FMC) CEO Compensation For Now

Key Insights

• FMC will host its Annual General Meeting on 30th of April
• Salary of US$1.20m is part of CEO Mark Douglas's total remuneration
• Total compensation is 38% above industry average
• FMC's EPS grew by 36% over the past three years while total shareholder loss over the past three years was 47%

Shareholders of FMC Corporation (NYSE:FMC) will have been dismayed by the negative share price return over the last three years. 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 30th of April. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for FMC

How Does Total Compensation For Mark Douglas Compare With Other Companies In The Industry?

According to our data, FMC Corporation has a market capitalization of US$7.3b, and paid its CEO total annual compensation worth US$9.6m over the year to December 2023. We note that's a decrease of 13% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.

In comparison with other companies in the American Chemicals industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$7.0m. This suggests that Mark Douglas is paid more than the median for the industry. Moreover, Mark Douglas also holds US$10.0m worth of FMC 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$1.2m	US$1.1m	12%
Other	US$8.4m	US$9.9m	88%
Total Compensation	US$9.6m	US$11m	100%

Talking in terms of the industry, salary represented approximately 19% of total compensation out of all the companies we analyzed, while other remuneration made up 81% of the pie. It's interesting to note that FMC allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

FMC Corporation's Growth

FMC Corporation has seen its earnings per share (EPS) increase by 36% a year over the past three years. In the last year, its revenue is down 23%.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has FMC Corporation Been A Good Investment?

With a total shareholder return of -47% over three years, FMC Corporation shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. 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. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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. We identified 4 warning signs for FMC (3 are a bit concerning!) that you should be aware of before investing here.

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.