John Chisholm has been the CEO of Flotek Industries, Inc. (NYSE:FTK) since 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Flotek Industries
Want to help shape the future of investing tools and platforms? Take the survey and be part of one of the most advanced studies of stock market investors to date.
How Does John Chisholm's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Flotek Industries, Inc. has a market cap of US$64m, and is paying total annual CEO compensation of US$6.1m. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$50k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$303k.
It would therefore appear that Flotek Industries, Inc. pays John Chisholm more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Flotek Industries, below.
Is Flotek Industries, Inc. Growing?
On average over the last three years, Flotek Industries, Inc. has shrunk earnings per share by 135% each year. In the last year, its revenue is down -17%.
Unfortunately, earnings per share have trended lower over the last three years. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Flotek Industries, Inc. Been A Good Investment?
Given the total loss of 65% over three years, many shareholders in Flotek Industries, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We compared total CEO remuneration at Flotek Industries, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Flotek Industries (free visualization of insider trades).
Or you might prefer examine intentlythis intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.