Key Insights

• Flowserve's Annual General Meeting to take place on 16th of May
• Total pay for CEO Robert Rowe includes US$1.20m salary
• The overall pay is comparable to the industry average
• Flowserve's EPS grew by 21% over the past three years while total shareholder return over the past three years was 26%

CEO Robert Rowe has done a decent job of delivering relatively good performance at Flowserve Corporation (NYSE:FLS) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 16th of May. We present our case of why we think CEO compensation looks fair.

Comparing Flowserve Corporation's CEO Compensation With The Industry

Our data indicates that Flowserve Corporation has a market capitalization of US$6.4b, and total annual CEO compensation was reported as US$11m for the year to December 2023. We note that's an increase of 22% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.

For comparison, other companies in the American Machinery industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$9.0m. So it looks like Flowserve compensates Robert Rowe in line with the median for the industry. Furthermore, Robert Rowe directly owns US$28m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. Flowserve sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Flowserve Corporation's Growth Numbers

Flowserve Corporation has seen its earnings per share (EPS) increase by 21% a year over the past three years. Its revenue is up 17% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Flowserve Corporation Been A Good Investment?

Flowserve Corporation has served shareholders reasonably well, with a total return of 26% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Flowserve that you should be aware of before investing.

Switching gears from Flowserve, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.