Key Insights
- Baker Hughes' Annual General Meeting to take place on 20th of May
- Total pay for CEO Lorenzo Simonelli includes US$1.65m salary
- Total compensation is similar to the industry average
- Baker Hughes' EPS grew by 104% over the past three years while total shareholder return over the past three years was 18%
CEO Lorenzo Simonelli has done a decent job of delivering relatively good performance at Baker Hughes Company (NASDAQ:BKR) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 20th of May. Here is our take on why we think the CEO compensation looks appropriate.
View our latest analysis for Baker Hughes
Comparing Baker Hughes Company's CEO Compensation With The Industry
According to our data, Baker Hughes Company has a market capitalization of US$37b, and paid its CEO total annual compensation worth US$20m over the year to December 2024. Notably, that's a decrease of 10% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.6m.
On comparing similar companies in the American Energy Services industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$17m. So it looks like Baker Hughes compensates Lorenzo Simonelli in line with the median for the industry. Moreover, Lorenzo Simonelli also holds US$32m worth of Baker Hughes 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$1.6m | US$1.6m | 8% |
| Other | US$18m | US$21m | 92% |
| Total Compensation | US$20m | US$22m | 100% |
Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. Baker Hughes 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.
A Look at Baker Hughes Company's Growth Numbers
Baker Hughes Company has seen its earnings per share (EPS) increase by 104% a year over the past three years. Its revenue is up 6.2% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Baker Hughes Company Been A Good Investment?
With a total shareholder return of 18% over three years, Baker Hughes Company 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.
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. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.
So you may want to check if insiders are buying Baker Hughes shares with their own money (free access).
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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.