How Much Does Flexible Solutions International's (NYSEMKT:FSI) CEO Make?

Dan O’Brien became the CEO of Flexible Solutions International Inc. (NYSEMKT:FSI) in 1998, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Flexible Solutions International

Comparing Flexible Solutions International Inc.'s CEO Compensation With the industry

Our data indicates that Flexible Solutions International Inc. has a market capitalization of US$30m, and total annual CEO compensation was reported as US$750k for the year to December 2019. That's a notable decrease of 16% on last year. Notably, the salary of US$750k is the entirety of the CEO compensation.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$420k. Hence, we can conclude that Dan O’Brien is remunerated higher than the industry median. Furthermore, Dan O’Brien directly owns US$11m worth of shares in the company, implying that they are deeply invested in the company's success.

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. At the company level, Flexible Solutions International pays Dan O’Brien solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Flexible Solutions International Inc.'s Growth

Flexible Solutions International Inc. has reduced its earnings per share by 3.5% a year over the last three years. It achieved revenue growth of 2.6% over the last year.

Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Flexible Solutions International Inc. Been A Good Investment?

We think that the total shareholder return of 56%, over three years, would leave most Flexible Solutions International Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Flexible Solutions International pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we touched on above, Flexible Solutions International Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company isn't growing EPS, but shareholder returns have been impressive over the last three years. So while we would not say that Dan is generously paid, stockholders would want to see some EPS growth before agreeing that a raise is a good idea.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Flexible Solutions International 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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