Shareholders May Be More Conservative With Tetra Tech, Inc.'s (NASDAQ:TTEK) CEO Compensation For Now

Key Insights

• Tetra Tech to hold its Annual General Meeting on 29th of February
• Salary of US$1.20m is part of CEO Dan Batrack's total remuneration
• Total compensation is 93% above industry average
• Tetra Tech's total shareholder return over the past three years was 29% while its EPS grew by 9.4% over the past three years

Performance at Tetra Tech, Inc. (NASDAQ:TTEK) has been reasonably good and CEO Dan Batrack has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 29th of February, 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 be hesitant of being overly generous with CEO compensation.

See our latest analysis for Tetra Tech

How Does Total Compensation For Dan Batrack Compare With Other Companies In The Industry?

At the time of writing, our data shows that Tetra Tech, Inc. has a market capitalization of US$9.5b, and reported total annual CEO compensation of US$12m for the year to October 2023. That's a notable increase of 15% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.

On comparing similar companies from the American Commercial Services industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$6.2m. Hence, we can conclude that Dan Batrack is remunerated higher than the industry median. What's more, Dan Batrack holds US$8.5m 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$1.2m	US$1.2m	10%
Other	US$11m	US$9.1m	90%
Total Compensation	US$12m	US$10m	100%

Talking in terms of the industry, salary represented approximately 25% of total compensation out of all the companies we analyzed, while other remuneration made up 75% of the pie. In Tetra Tech'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.

A Look at Tetra Tech, Inc.'s Growth Numbers

Tetra Tech, Inc.'s earnings per share (EPS) grew 9.4% per year over the last three years. It achieved revenue growth of 39% over the last year.

It's hard to interpret the strong revenue growth as anything other than a positive. With that in mind, the modestly improving EPS seems positive. We wouldn't say this is necessarily top notch growth, but it is certainly promising. 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 Tetra Tech, Inc. Been A Good Investment?

With a total shareholder return of 29% over three years, Tetra Tech, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

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. That's why we did some digging and identified 3 warning signs for Tetra Tech that you should be aware of before investing.

Switching gears from Tetra Tech, 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.