Yahoo Finance Shareholders Will Probably Hold Off On Increasing Flex Ltd.'s (NASDAQ:FLEX) CEO Compensation For The Time Being
Key Insights
Flex to hold its Annual General Meeting on 8th of August
CEO Revathi Advaithi's total compensation includes salary of US$1.33m
The overall pay is 39% above the industry average
Over the past three years, Flex's EPS grew by 2.0% and over the past three years, the total shareholder return was 152%
CEO Revathi Advaithi has done a decent job of delivering relatively good performance at Flex Ltd. (NASDAQ:FLEX) recently. As shareholders go into the upcoming AGM on 8th of August, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.
View our latest analysis for Flex
Comparing Flex Ltd.'s CEO Compensation With The Industry
According to our data, Flex Ltd. has a market capitalization of US$13b, and paid its CEO total annual compensation worth US$15m over the year to March 2024. That's slightly lower by 3.1% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.3m.
On comparing similar companies in the American Electronic industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$11m. Accordingly, our analysis reveals that Flex Ltd. pays Revathi Advaithi north of the industry median. Moreover, Revathi Advaithi also holds US$51m worth of Flex stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2024 | 2023 | Proportion (2024) |
Salary | US$1.3m | US$1.3m | 9% |
Other | US$14m | US$14m | 91% |
Total Compensation | US$15m | US$16m | 100% |
Speaking on an industry level, nearly 31% of total compensation represents salary, while the remainder of 69% is other remuneration. In Flex's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Flex Ltd.'s Growth
Flex Ltd. has seen its earnings per share (EPS) increase by 2.0% a year over the past three years. In the last year, its revenue is down 7.9%.
We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Flex Ltd. Been A Good Investment?
We think that the total shareholder return of 152%, over three years, would leave most Flex Ltd. 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.
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. 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 is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Flex that you should be aware of before investing.
Switching gears from Flex, 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
