DEF: Energy Services Sets Annual Meeting, Board & Pay Votes

Energy Services of America Corporation announces its Annual Meeting of Stockholders to vote on director elections, auditor ratification, and executive compensation.

Summary

• The Annual Meeting of Stockholders will be held on February 18, 2026, at 12:00 p.m. local time at the Doubletree by Hilton in Huntington, West Virginia.
• Stockholders will vote on three main proposals: the election of eight directors, the ratification of Urish Popeck & Co., LLC as the independent registered public accounting firm for fiscal year 2026, and an advisory, non-binding vote on executive compensation.
• The Board of Directors recommends a vote FOR all proposed directors, the ratification of the accounting firm, and the advisory vote on executive compensation.
• Stockholders of record as of January 5, 2026, are entitled to vote, with 16,624,181 shares outstanding.
• Net income for fiscal year ended September 30, 2025, was $379,708, a significant decrease from $25,105,010 in 2024, but an increase from $7,401,420 in 2023.
• Total Shareholder Return (TSR) based on an initial $100 investment on September 30, 2022, was $362 by September 30, 2025, up from $332 in 2024 and $142 in 2023.
• Douglas V. Reynolds, President and CEO, received total compensation of $209,000 in 2025, down from $269,371 in 2024.
• Charles P. Crimmel, CFO, received total compensation of $439,225 in 2025, up from $270,800 in 2024.
• The company contributed $1.1 million to the Energy Services of America Staff 401(k) Retirement Savings Plan in fiscal year 2025, compared to $864,000 in 2024.

Sentiment

Score: 4

Explanation: The filing is a routine proxy statement with standard governance proposals. While it highlights positive aspects of corporate governance and increasing TSR, the significant year-over-year decline in net income for fiscal year 2025 is a notable negative. The overall sentiment is slightly negative due to this financial performance dip, despite the positive governance disclosures.

Positives

• The Board of Directors recommends a vote FOR all proposals, indicating unified management support.
• The company maintains a majority of independent directors on its Board, aligning with Nasdaq corporate governance standards.
• The roles of Chief Executive Officer and Chairman of the Board are separated, providing a clear division of responsibilities and oversight.
• An Audit Committee financial expert, Mark S. Prince, is in place, enhancing financial oversight and reporting integrity.
• The company has adopted an Insider Trading Policy and Anti-Hedging Policy to promote compliance with securities laws and regulations.
• The executive compensation philosophy aims to align executive interests with stockholders by rewarding achievement of short-term, long-term, and strategic goals.
• Total Shareholder Return (TSR) has shown consistent growth, increasing from $142 in 2023 to $362 in 2025 based on an initial $100 investment.
• Company contributions to the Energy Services of America Staff 401(k) Retirement Savings Plan increased to $1.1 million in 2025 from $864,000 in 2024, benefiting employees.

Negatives

• Net income for fiscal year 2025 was $379,708, a substantial decrease from $25,105,010 in fiscal year 2024.
• One director, Amy Abraham, attended fewer than 75% of the total board and committee meetings during fiscal year 2025.
• The Nominating Committee and the Compensation Committee do not have written charters, which could impact formal governance procedures.
• The Compensation Committee did not engage a compensation consultant to assist in determining executive and director compensation for fiscal year 2025.
• Douglas V. Reynolds, President and CEO, experienced a decrease in total compensation from $269,371 in 2024 to $209,000 in 2025.
• Marshall T. Reynolds, Chairman and Director, has pledged 280,339 shares of company stock as security for a loan.

Risks

• The advisory vote on executive compensation is non-binding, meaning the Board is not legally obligated to follow stockholder recommendations.
• Proxy holders have discretionary authority to vote shares on other business that may properly come before the Annual Meeting, which could include unforeseen matters.
• The Annual Meeting may be adjourned if there are not sufficient votes for a quorum or to approve any matter, potentially delaying decisions.
• Marshall T. Reynolds has pledged 280,339 shares of company stock as security for a loan, which could have implications if the loan terms are not met.
• The company is evaluating whether to renew an operating lease for facilities in Hurricane, West Virginia, which could lead to changes in operational costs or location.
• SQP and Ventures have jointly provided an unconditional guarantee for $5.0 million of obligations associated with the 1030 Quarrier Street Project, exposing the company to potential liability.

Future Outlook

The Board of Directors is not aware of any additional business to come before the Annual Meeting beyond the stated proposals. The Board and the compensation committee will review the voting results of the advisory vote on executive compensation and consider them when making future decisions regarding executive compensation programs.

Management Comments

• "On behalf of the Board of Directors, we urge you to sign, date and return the enclosed proxy card as soon as possible, even if you currently plan to attend the Annual Meeting. This will not prevent you from voting in person but will ensure that your vote is counted if you are unable to attend the Annual Meeting. Your vote is important, regardless of the number of shares that you own."

Industry Context

Energy Services of America Corporation operates within the energy, infrastructure, and construction services sectors, as evidenced by its subsidiaries like C. J. Hughes (electrical contractor), Tri-State Paving, and involvement in real estate development projects. The company's board members bring diverse experience from commercial printing, banking, energy supply, and cloud technology, reflecting a broad engagement across various industrial and financial segments, particularly within the Appalachian region.

Comparison to Industry Standards

• The compensation committee states it considers compensation surveys prepared by professional firms to determine compensation paid to executives performing similar duties for comparable companies, but no specific comparable companies, projects, or results are detailed in the filing.

Management Changes

Corporate Governance

Related Party Transactions

• A $1.0 million promissory note agreement with Corns Enterprises (member of which is David E. Corns, former President of Tri-State Paving) for the purchase of Tri-State Paving, with $750,000 in principal payments made as of September 30, 2025, at a 3.5% interest rate.
• An operating lease for facilities in Hurricane, West Virginia, with Corns Enterprises at $7,000 per month, with the company evaluating renewal after its initial term.
• SQP (a company subsidiary) made a $156,000 equity investment in 1030 Quarrier Development, LLC (a variable interest entity 25% owned by SQP), and was awarded the construction contract for the associated project.
• SQP and Ventures jointly provided an unconditional guarantee for $5.0 million in loans from United Bank to fund the 1030 Quarrier Street Project.
• C. J. Hughes (a company subsidiary) rents equipment from Construction Specialty Services (CSS), owned by Chuck Austin (President of C. J. Hughes), at rates below those of unaffiliated rental companies, totaling $339,000 in 2025 and $318,000 in 2024.

Stakeholder Impact

• Shareholders are directly impacted by the proposals to be voted on, including the composition of the Board, the independent auditor, and the advisory vote on executive compensation, which influences corporate governance and financial oversight.
• Employees benefit from the company's 401(k) plans, which received increased matching contributions in fiscal year 2025, and the executive compensation philosophy aims to attract and retain top talent.
• Creditors, specifically United Bank and Corns Enterprises, are involved through loans and promissory notes, with the company and its affiliates providing guarantees for significant obligations.
• Customers and suppliers are indirectly impacted by the company's operational stability and strategic decisions, with some related party transactions involving equipment rental and construction contracts.

Next Steps

• Stockholders are requested to vote on the election of eight directors, the ratification of the independent registered public accounting firm, and an advisory vote on executive compensation at the Annual Meeting on February 18, 2026.
• The Board of Directors and the compensation committee will review the results of the advisory vote on executive compensation and consider them in future compensation decisions.
• Stockholders wishing to submit proposals for next year's Annual Meeting proxy materials must do so by September 14, 2026.
• Stockholders intending to engage in a director election contest for the 2027 Annual Meeting must provide notice by December 21, 2026.
• Stockholders must provide advance written notice for other business or nominations to the Board for the next annual meeting between November 20, 2026, and December 20, 2026 (assuming a February 18, 2027 meeting).

Key Dates

Recommendation

The document is a standard proxy statement outlining proposals for the annual meeting, including director elections, auditor ratification, and an advisory vote on executive compensation. While it discloses a substantial decrease in net income for fiscal year 2025 compared to 2024, this information is presented within the context of executive compensation rather than a primary financial report. The company maintains a robust corporate governance framework with a majority of independent directors and established policies. Without further strategic or operational updates, a "hold" recommendation is appropriate as the filing does not present new information that would fundamentally alter the investment thesis, beyond the historical financial performance data.

Keywords

Energy Services of America, Proxy Statement, Annual Meeting, Corporate Governance, Executive Compensation, Director Election, Auditor Ratification, Related Party Transactions, Financial Performance, SEC Filing