In 1998 Dan O’Brien was appointed CEO of Flexible Solutions International Inc. (NYSEMKT:FSI). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Dan O’Brien’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Flexible Solutions International Inc. has a market cap of US$28m, and is paying total annual CEO compensation of US$902k. (This number is for the twelve months until December 2017). Notably, the salary of US$902k is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$427k.
It would therefore appear that Flexible Solutions International Inc. pays Dan O’Brien 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 Flexible Solutions International, below.
Is Flexible Solutions International Inc. Growing?
Over the last three years Flexible Solutions International Inc. has shrunk its earnings per share by an average of 6.8% per year (measured with a line of best fit). Its revenue is up 15% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Flexible Solutions International Inc. Been A Good Investment?
I think that the total shareholder return of 179%, over three years, would leave most Flexible Solutions International Inc. shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
We examined the amount Flexible Solutions International Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.We think many shareholders would be underwhelmed with the business growth over the last three years.
But clearly there are some positives, because investors have done well over the same time frame. So on this analysis we’d stop short of criticizing the level of CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Flexible Solutions International shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.