Shareholders Would Not Be Objecting To Select Water Solutions, Inc.'s (NYSE:WTTR) CEO Compensation And Here's Why

Key Insights

• Select Water Solutions' Annual General Meeting to take place on 8th of May
• Salary of US$792.3k is part of CEO John Schmitz's total remuneration
• Total compensation is similar to the industry average
• Select Water Solutions' EPS grew by 110% over the past three years while total shareholder return over the past three years was 57%

We have been pretty impressed with the performance at Select Water Solutions, Inc. (NYSE:WTTR) recently and CEO John Schmitz deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 8th of May. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for Select Water Solutions

How Does Total Compensation For John Schmitz Compare With Other Companies In The Industry?

At the time of writing, our data shows that Select Water Solutions, Inc. has a market capitalization of US$1.1b, and reported total annual CEO compensation of US$4.4m for the year to December 2023. We note that's a decrease of 42% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$792k.

On comparing similar companies from the American Energy Services industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$5.1m. So it looks like Select Water Solutions compensates John Schmitz in line with the median for the industry. Furthermore, John Schmitz directly owns US$15m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$792k	US$600k	18%
Other	US$3.6m	US$7.0m	82%
Total Compensation	US$4.4m	US$7.6m	100%

Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. It's interesting to note that Select Water Solutions pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Select Water Solutions, Inc.'s Growth

Select Water Solutions, Inc.'s earnings per share (EPS) grew 110% per year over the last three years. In the last year, its revenue is up 1.7%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Select Water Solutions, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Select Water Solutions, Inc. for providing a total return of 57% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for Select Water Solutions that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.