The Compensation For Schlumberger Limited's (NYSE:SLB) CEO Looks Deserved And Here's Why

Schlumberger NV +1.86%

Schlumberger NV




Key Insights

  • Schlumberger's Annual General Meeting to take place on 3rd of April
  • Total pay for CEO Olivier Le Peuch includes US$1.55m salary
  • The overall pay is comparable to the industry average
  • Over the past three years, Schlumberger's EPS grew by 92% and over the past three years, the total shareholder return was 106%

It would be hard to discount the role that CEO Olivier Le Peuch has played in delivering the impressive results at Schlumberger Limited (NYSE:SLB) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 3rd of April. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

Check out our latest analysis for Schlumberger

How Does Total Compensation For Olivier Le Peuch Compare With Other Companies In The Industry?

Our data indicates that Schlumberger Limited has a market capitalization of US$79b, and total annual CEO compensation was reported as US$18m for the year to December 2023. Notably, that's an increase of 16% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.6m.

On comparing similar companies in the American Energy Services industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$17m. So it looks like Schlumberger compensates Olivier Le Peuch in line with the median for the industry. What's more, Olivier Le Peuch holds US$61m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component 2023 2022 Proportion (2023)
Salary US$1.6m US$1.6m 8%
Other US$17m US$14m 92%
Total Compensation US$18m US$16m 100%

On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. Schlumberger pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

NYSE:SLB CEO Compensation March 29th 2024

Schlumberger Limited's Growth

Schlumberger Limited has seen its earnings per share (EPS) increase by 92% a year over the past three years. In the last year, its revenue is up 18%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Schlumberger Limited Been A Good Investment?

Boasting a total shareholder return of 106% over three years, Schlumberger Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Schlumberger that investors should be aware of in a dynamic business environment.

Important note: Schlumberger 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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