Yahoo Finance Shareholders Will Probably Not Have Any Issues With Patterson-UTI Energy, Inc.'s (NASDAQ:PTEN) CEO Compensation
Key Insights
Patterson-UTI Energy will host its Annual General Meeting on 6th of June
Total pay for CEO Andy Hendricks includes US$1.00m salary
Total compensation is similar to the industry average
Over the past three years, Patterson-UTI Energy's EPS grew by 92% and over the past three years, the total shareholder return was 6.6%
CEO Andy Hendricks has done a decent job of delivering relatively good performance at Patterson-UTI Energy, Inc. (NASDAQ:PTEN) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 6th of June. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.
Check out our latest analysis for Patterson-UTI Energy
How Does Total Compensation For Andy Hendricks Compare With Other Companies In The Industry?
Our data indicates that Patterson-UTI Energy, Inc. has a market capitalization of US$4.3b, and total annual CEO compensation was reported as US$8.3m for the year to December 2023. We note that's a decrease of 24% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.
On examining similar-sized companies in the American Energy Services industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$7.1m. This suggests that Patterson-UTI Energy remunerates its CEO largely in line with the industry average. Furthermore, Andy Hendricks directly owns US$16m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.0m | US$1.0m | 12% |
Other | US$7.3m | US$10.0m | 88% |
Total Compensation | US$8.3m | US$11m | 100% |
On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. Patterson-UTI Energy sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Patterson-UTI Energy, Inc.'s Growth
Patterson-UTI Energy, Inc. has seen its earnings per share (EPS) increase by 92% a year over the past three years. Its revenue is up 66% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Patterson-UTI Energy, Inc. Been A Good Investment?
With a total shareholder return of 6.6% over three years, Patterson-UTI Energy, Inc. has done okay by shareholders, but there's always room for improvement. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.
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.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 5 warning signs (and 1 which shouldn't be ignored) in Patterson-UTI Energy we think you should know about.
Important note: Patterson-UTI Energy is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.
