DEF: Select Water Solutions Sets 2026 Annual Meeting Agenda

Select Water Solutions, Inc. announces its 2026 Annual Meeting of Stockholders to address director elections, auditor ratification, and executive compensation, following a year of strong operational performance and sustainability achievements.

Summary

• The 2026 Annual Meeting of Stockholders is scheduled for Thursday, May 7, 2026, at 1:00 p.m. Central Time, with a record date of March 10, 2026.
• Stockholders will vote on the election of seven director nominees, the ratification of Grant Thornton LLP as the independent registered public accounting firm for fiscal year 2026, and a non-binding, advisory vote to approve Named Executive Officer compensation.
• The company reported 2025 consolidated revenue of $1.41 billion, with Water Infrastructure revenue up 8% year-over-year to $313 million and Chemical Technologies revenue up 19% year-over-year to $308 million.
• Operating cash flow for 2025 was $215 million.
• Produced water recycling volumes increased by 18% in 2025 compared to 2024, with 246.7 million barrels recycled at fixed facilities, outperforming the 2025 target of 211.5 million barrels.
• The company achieved a Total Recordable Incident Rate (TRIR) of 0.36 in 2025, outperforming the target of 0.70, leading to the maximum downward adjustment on its Sustainability-Linked Credit Facility interest rates.
• The executive compensation program for 2025 featured an annual bonus funding level of up to 94.1% of target for Named Executive Officers (NEOs).
• Performance Share Units (PSUs) granted in 2023 based on relative Return on Assets (ROA) vested at 124% of target, while Free Cash Flow (FCF) PSUs vested at 90% of target.
• Douglas J. Wall will not be renominated to the Board, reducing the number of directors to seven effective at the Annual Meeting.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as moderately positive, highlighting strong operational performance, significant growth in key segments, and outperformance in sustainability metrics. However, the notable decline in net income and failure to fully meet financial targets for Adjusted EBITDA and Free Cash Flow temper the overall sentiment.

Positives

• Achieved strong 2025 consolidated revenue of $1.41 billion.
• Water Infrastructure revenue grew 8% year-over-year to $313 million in 2025.
• Chemical Technologies revenue increased 19% year-over-year to $308 million in 2025.
• Increased recycled produced water volumes by 18% in 2025, demonstrating strong environmental performance.
• Outperformed 2025 sustainability targets for TRIR (0.36 vs. 0.70 target) and recycled water (246.7 million barrels vs. 211.5 million barrels target), resulting in maximum downward adjustment to interest rates on the Sustainability-Linked Credit Facility.
• Generated $215 million in operating cash flow in 2025.
• Expanded long-term contract portfolio by over 950,000 acres, securing future business opportunities.
• Executive compensation structure aligns with stockholder interests, with 84% of CEO compensation and 73% of other NEOs' compensation at risk and tied to performance.
• 2023 PSUs based on relative Return on Assets (ROA) vested at 124% of target, indicating strong performance in that metric.
• Maintained a low employee turnover rate of approximately 15% in 2025 for employees with tenure of one year or more, reflecting effective human capital management.

Negatives

• Net income for 2025 was $21.5 million, a significant decrease from $35.5 million in 2024 and $79.2 million in 2023.
• Company-wide financial metric achievement under the Short-Term Incentive Plan for Adjusted EBITDA and Free Cash Flow was below target, leading to lower overall annual incentive payouts for NEOs.
• Free Cash Flow (FCF) PSUs for the 2023-2025 performance period vested at 90% of target, indicating a slight underperformance against FCF goals.
• Individual strategic goal payouts for NEOs were exercised at levels below the approved 20% factor, partly due to the timing of financial contributions from certain projects not meaningfully impacting 2025 results.

Risks

• Forward-looking statements are subject to substantial risks and uncertainties, and actual results could differ materially from expectations.
• Sustainability plans and goals are developing and based on evolving assumptions, with no assurance that any such plan, initiative, projection, goal, commitment, expectation, or prospect can or will be achieved.
• The company's operations are subject to risks identified in its Annual Report on Form 10-K for the year ended December 31, 2025, and other SEC filings.
• Cybersecurity threats are a risk that the Audit Committee oversees.
• Compensation policies and programs are assessed for risk, with the Compensation Committee believing they do not encourage excessive risk-taking, but inherent risks remain.
• Potential for 'excess parachute payments' under Section 280G of the Code in the event of certain terminations or a change in control.
• Payment obligations under the Tax Receivable Agreements are substantial and are direct obligations of the company, not SES Holdings.

Future Outlook

The company's strategy is centered on a recycling-first, infrastructure-led model supported by long-term customer commitments, aiming to deliver operational excellence, enhance safety and environmental performance, and develop sustainable water-management and chemistry solutions. Management expects recycling and reuse to continue growing as a percentage of satisfying water demand in the energy industry and plans to continue organic investment and acquisitions to supplement capabilities. The Board will periodically review the leadership structure and may implement changes as deemed necessary. The next say-on-pay vote is expected at the 2027 Annual Meeting of Stockholders, and approximately $240 million in new infrastructure capital expenditures committed in 2025 are slated for deployment across 2025 and 2026.

Management Comments

• John D. Schmitz, Chairman, President, and CEO, expressed pleasure in inviting stockholders to the 2026 Annual Meeting and thanked them for their continued support.
• The Board unanimously recommends that stockholders cast their vote FOR Proposals 1, 2, and 3.
• The Board expressed sincere appreciation to Mr. Douglas J. Wall for his dedicated service and valuable contributions during his tenure.
• The Compensation Committee believes that the company's compensation policies do not encourage excessive and unnecessary risk-taking.

Industry Context

StockSavvy.ai notes that Select Water Solutions operates in the U.S. energy industry, specifically providing water management and chemical solutions. The company's focus on a 'recycling-first, infrastructure-led model' aligns with broader industry trends towards sustainability and efficiency in oil and gas operations, driven by environmental regulations and customer demand for reduced freshwater use and emissions. The expansion of long-term contracts and infrastructure footprint indicates a strategic move to solidify its market position amidst evolving energy transition discussions, positioning it as a key enabler for more sustainable energy production.

Comparison to Industry Standards

• The company's TRIR of 0.36 in 2025 significantly outperformed its internal target of 0.70, indicating strong safety performance that likely positions it favorably against many industry peers in the oilfield services sector.
• Recycled 246.7 million barrels of produced water at fixed facilities in 2025, exceeding its target of 211.5 million barrels, demonstrating leadership in water stewardship within the energy services industry and aligning with increasing environmental expectations.
• The 18% growth in recycled produced water volumes and 18% increase in treated/conditioned water volumes in 2025 suggest a strong commitment to environmental performance, which is increasingly a competitive differentiator in the energy sector, potentially surpassing the average efforts of some competitors.
• The executive compensation structure, with 84% of CEO pay and 73% of other NEOs' pay at risk, is consistent with best practices in public companies, particularly in the energy sector, aiming to align management incentives with shareholder value creation, comparable to companies like Liberty Energy Inc. or Patterson-UTI Energy, Inc. in its peer group.

Management Changes

Corporate Governance

Legal Proceedings

• The company has implemented a Clean Air Act compliance program in connection with a previously disclosed agreement, supporting its commitment to environmental emissions requirements.

Related Party Transactions

• Aquacore Rental Company LLC (indirectly owned by Cody Ortowski, EVP, and Cole Ortowski, employee): $18.1 million in rentals and $36,000 in sales in 2025.
• Axis Energy Services (owned by John D. Schmitz, Chairman, President, and CEO): $2.3 million in property rental fees and $331,000 in sales in 2025.
• B-29 Ups and Downs, LLC (controlled by John D. Schmitz): $1.2 million for aviation services in 2025.
• Bell Supply Company (controlled by John D. Schmitz): $1.6 million in parts and supplies purchases in 2025.
• Cole Ortowski (brother of Cody Ortowski, EVP): Employed as President, Water Transfer Services, earning $225,000 salary, $143,292 bonus, and equity awards in 2025.
• Merit Advisors, LLC (controlled and partially owned by John D. Schmitz): $2.3 million for appraisal and tax consulting in 2025.
• MyWorkDoc Technologies LLC (owned by John D. Schmitz): $954,000 in charges in 2025.
• Orteq Energy Technologies (indirectly owned by Cody Ortowski and Cole Ortowski): $2.4 million in pump and equipment purchases in 2025.
• United Surface and Minerals LLC (owned by John D. Schmitz and Cody Ortowski): $122,000 in property rental fees in 2025.
• Tax Receivable Agreements with TRA Holders (affiliates of Legacy Owner Holdco, Crestview GP, and Crestview Holdings B) provide for payments of 85% of net cash savings from tax basis increases and net operating losses; no payments were made in 2025.
• A Registration Rights Agreement grants certain Registration Rights Holders (including Legacy Owner Holdco and Crestview Holdings B) rights to participate in future public offerings of Class A common stock.

Stakeholder Impact

• Shareholders: Will vote on key governance matters and executive compensation, with the company's strategy aiming for long-term value creation and executive pay aligned with shareholder returns.
• Employees: Benefit from strong health and safety programs, competitive compensation, talent development initiatives, and the Select Cares Family Fund, contributing to a low turnover rate.
• Customers: Benefit from the company's focus on sustainable water management solutions, reduced operational costs, enhanced efficiency through automation, and expanded long-term contract offerings.
• Environment: Positively impacted by increased produced water recycling, reduced emissions from pipeline use, and the use of environmentally friendly chemicals.
• Communities: Engaged through community outreach, emergency relief funds, and efforts to promote responsible use of natural resources.
• Creditors: The Sustainability-Linked Credit Facility ties interest rates to ESG performance, potentially reducing borrowing costs due to the company's outperformance of sustainability targets.

Next Steps

• Stockholders are to vote on director nominees, auditor ratification, and executive compensation at the Annual Meeting on May 7, 2026.
• The Board will periodically review the company's leadership structure and may implement changes in the future as deemed necessary.
• The company expects to conduct its next say-on-pay vote at the 2027 Annual Meeting of Stockholders.
• Stockholders can submit proposals for the 2027 Annual Meeting by November 24, 2026 (Rule 14a-8) or between January 7, 2027, and February 6, 2027 (per Bylaws).
• Stockholders wishing to submit recommendations for director candidates for the 2027 Annual Meeting must do so by November 24, 2026.
• The 2025 TSR PSUs will be determined based on performance through December 31, 2027.
• Approximately $240 million in new infrastructure capital expenditures committed in 2025 are scheduled for deployment across 2025 and 2026.

Key Dates

Recommendation

The company demonstrates strong operational execution and commitment to sustainability, reflected in revenue growth in key segments and outperformance of ESG targets. However, the significant decline in net income for 2025 and the slight miss on overall financial targets for executive incentives suggest underlying challenges or increased costs that warrant a cautious 'hold' stance. Investors should monitor future earnings reports for improved profitability and sustained financial target achievement.

Keywords

Water Management, Oilfield Services, Proxy Statement, Corporate Governance, Executive Compensation, Sustainability, Energy Industry, Financial Performance, ESG, Produced Water Recycling, TRIR, Free Cash Flow, Adjusted EBITDA, Total Shareholder Return, Director Election, Auditor Ratification