Nabors Industries Ltd.'s (NYSE:NBR) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Nabors Industries' Annual General Meeting to take place on 3rd of June
• CEO Tony Petrello's total compensation includes salary of US$1.75m
• The overall pay is 145% above the industry average
• Over the past three years, Nabors Industries' EPS grew by 62% and over the past three years, the total loss to shareholders 84%

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The underwhelming share price performance of Nabors Industries Ltd. (NYSE:NBR) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 3rd of June. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Nabors Industries

How Does Total Compensation For Tony Petrello Compare With Other Companies In The Industry?

Our data indicates that Nabors Industries Ltd. has a market capitalization of US$381m, and total annual CEO compensation was reported as US$12m for the year to December 2024. That's a notable increase of 18% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.8m.

For comparison, other companies in the American Energy Services industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$4.9m. Accordingly, our analysis reveals that Nabors Industries Ltd. pays Tony Petrello north of the industry median. Furthermore, Tony Petrello directly owns US$11m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. Our data reveals that Nabors Industries allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Nabors Industries Ltd.'s Growth Numbers

Over the past three years, Nabors Industries Ltd. has seen its earnings per share (EPS) grow by 62% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Nabors Industries Ltd. Been A Good Investment?

Few Nabors Industries Ltd. shareholders would feel satisfied with the return of -84% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Nabors Industries (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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.