Form 4: Select Water Solutions Executive Reports Stock Transactions and Performance Share Unit Acquisition

Brian Szymanski, Chief Accounting Officer of Select Water Solutions, reports the disposition of shares to cover tax obligations and the acquisition of performance share units.

Summary

• On March 5, 2024, Brian Szymanski disposed of 3,552 shares of Class A Common Stock at $8.18 per share to cover tax withholding obligations.
• On March 6, 2024, Szymanski sold 8,080 shares of Class A Common Stock at $8.3301 per share.
• Following these transactions, Szymanski beneficially owns 84,304 shares of Class A Common Stock.
• On February 24, 2024, Szymanski acquired 14,035 Performance Share Units (PSUs).
• Each PSU represents a contingent right to receive one share of Class A common stock, with the number of PSUs vesting dependent on the company's total shareholder return from January 1, 2024, to December 31, 2026.

Sentiment

Score: 6

Explanation: The sentiment is neutral. The transactions are routine and do not indicate any significant positive or negative developments for the company.

Positives

• The acquisition of Performance Share Units incentivizes the executive to drive shareholder value.

Negatives

• The sale of shares by the Chief Accounting Officer could be perceived negatively by some investors, although it is partly due to tax obligations.

Risks

• The vesting of Performance Share Units is contingent on the company's total shareholder return, which is subject to market fluctuations and company performance.
• Executive stock sales can sometimes be interpreted as a lack of confidence in the company's future prospects, although this sale appears to be related to tax obligations.

Future Outlook

The vesting of the Performance Share Units is tied to the company's total shareholder return over a three-year period, incentivizing long-term value creation.

Industry Context

Executive compensation and stock ownership are common practices in publicly traded companies to align management's interests with those of shareholders. Performance-based equity awards, like PSUs, are increasingly used to incentivize specific performance goals.

Comparison to Industry Standards

• Performance Share Units are a common form of executive compensation in the energy and water solutions industries.
• Companies like Halliburton and Schlumberger also utilize performance-based equity awards to incentivize their executives.
• The vesting criteria based on total shareholder return is a standard metric used to align executive compensation with shareholder value creation.

Stakeholder Impact

• The vesting of PSUs based on shareholder return directly impacts shareholders.
• Executive stock transactions can influence investor sentiment.

Key Dates