Is Flexible Solutions International Inc.’s (NYSEMKT:FSI) CEO Overpaid Relative To Its Peers?

Dan O’Brien became the CEO of Flexible Solutions International Inc. (NYSEMKT:FSI) in 1998. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Flexible Solutions International

How Does Dan O’Brien’s Compensation Compare With Similar Sized Companies?

Our data indicates that Flexible Solutions International Inc. is worth US$16m, and total annual CEO compensation is US$902k. (This number is for the twelve months until 2017). It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$902k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$302k.

As you can see, Dan O’Brien is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Flexible Solutions International Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at Flexible Solutions International has changed from year to year.

AMEX:FSI CEO Compensation January 2nd 19
AMEX:FSI CEO Compensation January 2nd 19

Is Flexible Solutions International Inc. Growing?

On average over the last three years, Flexible Solutions International Inc. has shrunk earnings per share by 3.6% each year. In the last year, its revenue is down -10%.

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. 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?

Most shareholders would probably be pleased with Flexible Solutions International Inc. for providing a total return of 37% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

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.

On the other hand, returns have been good, so the company is doing something right. Considering this, shareholders are probably not too worried about the CEO compensation. Shareholders may want to check for free if Flexible Solutions International insiders are buying or selling shares.

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow 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.