Should Shareholders Reconsider Oil States International, Inc.'s (NYSE:OIS) CEO Compensation Package?

Oil States International, Inc. (NYSE:OIS) has not performed well recently and CEO Cindy Taylor will probably need to up their game. At the upcoming AGM on 11 May 2021, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Oil States International

How Does Total Compensation For Cindy Taylor Compare With Other Companies In The Industry?

According to our data, Oil States International, Inc. has a market capitalization of US$357m, and paid its CEO total annual compensation worth US$5.2m over the year to December 2020. We note that's an increase of 17% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$798k.

For comparison, other companies in the same industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$3.1m. This suggests that Cindy Taylor is paid more than the median for the industry. Furthermore, Cindy Taylor directly owns US$4.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$798k	US$850k	15%
Other	US$4.4m	US$3.6m	85%
Total Compensation	US$5.2m	US$4.4m	100%

Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. Oil States International sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Oil States International, Inc.'s Growth

Over the last three years, Oil States International, Inc. has shrunk its earnings per share by 72% per year. It saw its revenue drop 45% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Oil States International, Inc. Been A Good Investment?

The return of -84% over three years would not have pleased Oil States International, Inc. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Oil States International that investors should think about before committing capital to this stock.

Switching gears from Oil States International, 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.

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This article by Simply Wall St is general in nature. 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.
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