Yahoo Finance We Think Some Shareholders May Hesitate To Increase Fluor Corporation's (NYSE:FLR) CEO Compensation
Key Insights
Fluor to hold its Annual General Meeting on 1st of May
Salary of US$1.35m is part of CEO David Constable's total remuneration
Total compensation is 142% above industry average
Fluor's total shareholder return over the past three years was 74% while its EPS grew by 77% over the past three years
Performance at Fluor Corporation (NYSE:FLR) has been reasonably good and CEO David Constable has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 1st of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.
View our latest analysis for Fluor
Comparing Fluor Corporation's CEO Compensation With The Industry
At the time of writing, our data shows that Fluor Corporation has a market capitalization of US$6.9b, and reported total annual CEO compensation of US$19m for the year to December 2023. We note that's an increase of 42% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.4m.
In comparison with other companies in the American Construction industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$7.8m. This suggests that David Constable is paid more than the median for the industry. What's more, David Constable holds US$19m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.4m | US$1.4m | 7% |
Other | US$18m | US$12m | 93% |
Total Compensation | US$19m | US$13m | 100% |
Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. In Fluor's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader 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 Fluor Corporation's Growth Numbers
Fluor Corporation has seen its earnings per share (EPS) increase by 77% a year over the past three years. In the last year, its revenue is up 13%.
Shareholders would be glad to know that the company has improved itself over the last few years. 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 Fluor Corporation Been A Good Investment?
Boasting a total shareholder return of 74% over three years, Fluor Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Fluor that investors should be aware of in a dynamic business environment.
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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