This Is Why Global Water Resources, Inc.'s (NASDAQ:GWRS) CEO Compensation Looks Appropriate
Key Insights
- Global Water Resources to hold its Annual General Meeting on 15th of May
- Total pay for CEO Ron Fleming includes US$367.5k salary
- Total compensation is 37% below industry average
- Global Water Resources' EPS grew by 9.8% over the past three years while total shareholder loss over the past three years was 18%
The performance at Global Water Resources, Inc. (NASDAQ:GWRS) has been rather lacklustre of late and shareholders may be wondering what CEO Ron Fleming is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 15th of May. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.
View our latest analysis for Global Water Resources
How Does Total Compensation For Ron Fleming Compare With Other Companies In The Industry?
According to our data, Global Water Resources, Inc. has a market capitalization of US$284m, and paid its CEO total annual compensation worth US$754k over the year to December 2024. That's just a smallish increase of 4.9% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$368k.
On examining similar-sized companies in the American Water Utilities industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$1.2m. This suggests that Ron Fleming is paid below the industry median. Moreover, Ron Fleming also holds US$1.2m worth of Global Water Resources 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$368k | US$350k | 49% |
| Other | US$386k | US$369k | 51% |
| Total Compensation | US$754k | US$719k | 100% |
On an industry level, roughly 27% of total compensation represents salary and 73% is other remuneration. Global Water Resources pays out 49% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Global Water Resources, Inc.'s Growth
Global Water Resources, Inc.'s earnings per share (EPS) grew 9.8% per year over the last three years. In the last year, its revenue changed by just 0.6%.
We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Global Water Resources, Inc. Been A Good Investment?
With a three year total loss of 18% for the shareholders, Global Water Resources, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
The fact that shareholders have earned a negative share price return is certainly disconcerting. The disappointing performance may have something to do with the flat earnings growth. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 3 warning signs for Global Water Resources 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.
Valuation is complex, but we're here to simplify it.
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