Tetra Tech, Inc.'s (NASDAQ:TTEK) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Tetra Tech to hold its Annual General Meeting on 28th of February
• Salary of US$1.20m is part of CEO Dan Batrack's total remuneration
• Total compensation is 52% above industry average
• Tetra Tech's total shareholder return over the past three years was 52% while its EPS grew by 25% 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 28th 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 will still be cautious of paying the CEO excessively.

View our latest analysis for Tetra Tech

Comparing Tetra Tech, Inc.'s CEO Compensation With The Industry

Our data indicates that Tetra Tech, Inc. has a market capitalization of US$7.5b, and total annual CEO compensation was reported as US$10m for the year to October 2022. We note that's an increase of 31% 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.

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$6.8m. This suggests that Dan Batrack is paid more than the median for the industry. Furthermore, Dan Batrack directly owns US$6.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	US$1.2m	US$1.1m	12%
Other	US$9.1m	US$6.8m	88%
Total Compensation	US$10m	US$7.9m	100%

On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. Tetra Tech pays a modest slice of remuneration through salary, as compared 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.

Tetra Tech, Inc.'s Growth

Tetra Tech, Inc.'s earnings per share (EPS) grew 25% per year over the last three years. In the last year, its revenue is up 10%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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?

We think that the total shareholder return of 52%, over three years, would leave most Tetra Tech, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

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. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Tetra Tech that investors should look into moving forward.

Important note: Tetra Tech is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.