We Discuss Why Geospace Technologies Corporation's (NASDAQ:GEOS) CEO Will Find It Hard To Get A Pay Rise From Shareholders This Year

Simply Wall St
·3 min read

The underwhelming performance at Geospace Technologies Corporation (NASDAQ:GEOS) recently has probably not pleased shareholders. The next AGM coming up on 09 February 2023 will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

See our latest analysis for Geospace Technologies

How Does Total Compensation For Rick Wheeler Compare With Other Companies In The Industry?

According to our data, Geospace Technologies Corporation has a market capitalization of US$65m, and paid its CEO total annual compensation worth US$503k over the year to September 2022. This means that the compensation hasn't changed much from last year. Notably, the salary which is US$350.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the American Energy Services industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$1.3m. In other words, Geospace Technologies pays its CEO lower than the industry median. Moreover, Rick Wheeler also holds US$538k worth of Geospace Technologies stock directly under their own name.

Component

2022

2021

Proportion (2022)

Salary

US$350k

US$305k

70%

Other

US$153k

US$189k

30%

Total Compensation

US$503k

US$495k

100%

On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. Geospace Technologies pays out 70% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

Geospace Technologies Corporation's Growth

Geospace Technologies Corporation has reduced its earnings per share by 48% a year over the last three years. Its revenue is down 5.9% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Geospace Technologies Corporation Been A Good Investment?

Few Geospace Technologies Corporation shareholders would feel satisfied with the return of -64% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for Geospace Technologies you should be aware of, and 1 of them is a bit unpleasant.

Switching gears from Geospace Technologies, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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