DEF 14A of Core Laboratories Inc. /DE/
Filed Mar 19, 2024 · FY20230000950170-24-033021
INFORMATION ABOUT OUR DIRECTORS AND DIRECTOR COMPENSATION
INFORMATION ABOUT OUR DIRECTORS AND DIRECTOR COMPENSATION
INFORMATION ABOUT OUR DIRECTORS AND DIRECTOR COMPENSATION
| Board of Directors |
INFORMATION ABOUT OUR DIRECTORS AND DIRECTOR COMPENSATION
Set forth below is the biographical information for our Directors who will serve following the 2024 Annual Meeting and their respective committee assignments, including individuals who have been nominated for election as Class III Directors. You may vote for one or both of the nominees, or none of the nominees.
Nominees for Class III Directors (Term to Expire 2027)
Nominees for Class III Directors (Term to Expire 2027)
Lawrence Bruno
Lawrence Bruno • President, Chief Executive Officer and Chairman • Director since 2018 •
Lawrence Bruno
| Mr. Bruno became President of the Company on February 1, 2018, and on January 1, 2019, he also assumed the position of Chief Operating Officer. On May 20, 2020, Mr. Bruno succeeded Mr. David Demshur as the Chairman of the Board and Chief Executive Officer and has led the Company’s global operations for both of its business segments, Reservoir Description and Production Enhancement. Over the last several years, Mr. Bruno has served as a technical spokesperson for many investor presentations and panels in the oil and gas industry and has been instrumental in driving the Company’s technology innovation that will continue to be a critical strength in the years to come. Mr. Bruno previously led the Company’s global reservoir-based laboratories within the Company’s Reservoir Description segment, from July 2015 through January 31, 2018. Mr. Bruno has been in the industry for more than 35 years and with the Company for more than 23 years. | Prior to being named as President of the Petroleum Services division in July 2015, Mr. Bruno was the General Manager of U.S. Rocks from 1999 to July 2015. Prior to joining the Company, he was employed at an oil and gas service company for 14 years before it was acquired by the Company in 1999. Mr. Bruno received a Master’s of Science degree in Geology in 1987 from the University of Houston. Mr. Bruno’s extensive operations and management experience at the Company makes him well-suited to lead the Company as Chief Executive Officer and Chairman of the Board. |
Kwaku Temeng
Kwaku Temeng Director since 2021 • Chairman of the Nominating, Governance, Sustainability and Corporate Responsibility Committee and member of the Compensation Committee •
Kwaku Temeng
| Mr. Temeng retired from Aramco Services Company (“ASC”) in Houston, Texas in May of 2021, where he served as Director of Upstream since 2007. During his tenure, he was responsible for managing Saudi Aramco’s upstream technology and business programs in North America. These included cultivating business relationships, evaluating commercial opportunities, performing analyses of technology trends and best practices, and overseeing technical studies undertaken by commercial laboratories, universities, and technology centers. Prior to his final assignment, Mr. Temeng worked for 14 years with Saudi Aramco in Saudi Arabia where he held a variety of professional, managerial, and advisory positions. He oversaw managing the company’s drilling budget development, coordination of petroleum engineering studies and served as a special advisor to senior management. He was instrumental in developing the framework for Saudi Aramco’s upstream research and development program. In his assignments with Saudi Aramco and ASC, Mr. Temeng combined his knowledge of engineering and economics to direct production planning, budgeting, and technical studies for the world’s largest producing company. He also administered contracts and relationships with all the major oilfield services companies, and in the process has gained great insight from the client perspective into what drives successful relationships between producing companies and service providers. | Before joining Saudi Aramco, Mr. Temeng worked in the U.S. as a petroleum engineer with Exxon Company USA and Mobil Oil Corporation. Mr. Temeng earned a Bachelor’s degree in Ocean Engineering from the Massachusetts Institute of Technology (MIT), a Master of Science, Master of Engineering and Doctorate degrees in Petroleum Engineering from Stanford University. He served as a member of the Stanford University Earth Sciences Advisory Board and the Society of Petroleum Engineers and is licensed as a professional petroleum engineer in the State of California. Mr. Temeng’s experience in the oil and gas industry and expertise in petroleum engineering allow him to provide valuable insight to the Company. |
Continuing Class II Directors (Term to Expire 2025)
Continuing Class II Directors (Term to Expire 2025)
Martha Z. Carnes
Martha Z. Carnes • Director since 2016 • Lead Director and Chairman of the Audit Committee •
Martha Z. Carnes
| Ms. Carnes retired from PricewaterhouseCoopers LLP (“PwC”) in June 2016, where she had a 34-year career with the firm. She was an Assurance Partner serving large, publicly traded companies in the energy industry. Ms. Carnes held a number of leadership positions with PwC including the Houston office Managing Partner. She also served as PwC’s Energy and Mining leader for the United States where she led the firm’s energy and mining assurance, tax and advisory practices. In these roles, she was responsible for leading the design and execution of the market and sector strategies, business development, compensation, professional development, succession planning, and client satisfaction. As an Assurance Partner, Ms. Carnes had vast experience with capital markets activities and was the lead audit partner on some of the largest merger and acquisition transactions completed in the energy sector at that time. Ms. Carnes also served as one of PwC’s Risk Management Partners and was PwC’s United States representative on the firm’s Global Communities Board. She is a certified public accountant. | Since December 2019, she has served as a director of SunCoke Energy, Inc., whose principal businesses are cokemaking and logistics, and is the Chair of the Audit Committee. Since July 2017, Ms. Carnes has also served as a director of Matrix Service Company, a services company that provides engineering, fabrication, infrastructure, construction, and maintenance services primarily to the oil, gas, power, petrochemical, industrial, agricultural, mining and minerals markets, where she chairs the Audit Committee and is a member of the Compensation and Nominations and Governance Committees. She is also a Member Representative for Ohio Valley Midstream, a member managed limited liability corporation engaged in natural gas and natural gas liquids gathering and processing. She is a member of the Board of Trustees at Texas Children’s Hospital where she chairs the Operations, Planning and Philanthropy Committee and serves on the Executive Committee and Audit, Risk and Compliance Committee. Ms. Carnes is also a member of the Board of the Barbara Bush Houston Literacy Foundation where she chairs the Compensation Committee. Her financial expertise and experience in working with and auditing public companies in the energy industry, and her operational experience at PwC, a professional services firm, allow her to provide important insight to the Company. |
Michael Straughen
Michael Straughen Director since 2016 • Chairman of the Compensation Committee and member of the Audit Committee •
Michael Straughen
| Following an extensive career in oilfield services, Mr. Straughen retired from executive office at the end of 2014 and has since held various non-executive positions. Most recently, he served on the board of the Glasgow-based Denholm Energy Services Group, from which he retired in June 2023. He was previously on the board of Glacier Energy Services, an Aberdeen-based offshore services company, until June 2020, on the board of ASCO, an Aberdeen-based logistics support group, until June 2019, and also on the board of GMS PLC, an Abu Dhabi-based, but London-listed, marine services company for three years until the end of 2016. Mr. Straughen’s last executive position was as an Executive Director of John Wood Group PLC, the UK’s leading oilfield services business, from 2007 to the end of 2014, where he served as Chief Executive of the Engineering Division, which had revenues of $1.8 billion and 10,000 employees. His responsibilities included P&L performance, HSSE, resourcing, customer relationships, strategy and growth. As an Executive Director of a publicly traded company, he also had responsibilities for corporate governance. | From 1982 to 2007, he served in various roles, including as Group Managing Director, with AMEC PLC, an international project management and engineering services provider. Mr. Straughen is a Chartered Engineer, has served on various industry bodies and continues to be a mentor to small businesses. His extensive management experience in the oil and gas sector, as well as his diverse background, enable him to provide valuable insight on management, governance, and strategic issues. |
Katherine Murray
Katherine Murray Director since 2022 • Member of the Audit Committee •
Katherine Murray
| Following a 33-year career serving the energy sector as a senior finance executive to large global corporations and as a public accountant, Ms. Murray retired from executive office in 2018. From that time, she has worked as an independent financial consultant and, since January 2024 has served as Chief Financial Officer for The Coalition for the Homeless, a non-profit organization addressing homelessness in Houston and Harris County, Texas. From January 2021 to December 2023, she was Chairman of the Board and served as a member of the Finance and Communications Committees for the Foundation for the Women’s Energy Network, a non-profit organization serving women in energy. From January 2013 until May 2018, Ms. Murray held progressive financial leadership roles at McDermott International, Inc. (“McDermott”), a global provider of engineering, procurement, construction, and installation solutions to the energy industry. Most recently, from 2017 to 2018, she served as Vice President and Regional Chief Financial Officer, Worldwide Finance Operations for McDermott’s global assets and projects group. Her responsibilities included financial reporting, operational accounting, financial planning, tax, and strategic planning. Previously, from 2015 to 2017, she served as Vice President and Treasurer, where she was responsible for implementing strategies to optimize McDermott’s capital structure and cash flows. Through these roles, Ms. Murray gained extensive experience managing lender arrangements and relationships across the globe, including the U.S., Europe, and the Middle East. | From 2016 to 2017, she also worked in Investor Relations for McDermott, and became responsible for optimizing shareholders’ and analysts’ relations and communications, including outreach programs in the U.S. and Europe. Prior to this time, from 1991 to 2012, Ms. Murray held progressive positions at El Paso Corporation (formerly Tenneco Gas, Inc.), a provider of natural gas and related energy products. As Senior Vice President, Tax from 2001 to 2012, she was responsible for over $600 million of annual taxes, and gained significant experience in financial reporting, internal controls, worldwide compliance, tax litigation, entity structuring and financial planning and analysis. She was also a key contributor to El Paso Corporation’s strategic initiatives, including mergers and acquisitions, dispositions and the ultimate $3 billion sale of the business to Kinder Morgan in 2012. Ms. Murray began her career with Arthur Andersen, serving in their energy tax practice, and is a member of the Texas Society of Certified Public Accountants. She earned a Bachelors in Business Administration with a minor in Accounting from the University of St. Thomas. Ms. Murray’s financial expertise and extensive experience working in senior finance roles in large global energy companies, as well as her public accounting experience, allow her to contribute key insights to the Company. |
Continuing Class I Directors (Term to Expire 2026)
Continuing Class I Directors (Term to Expire 2026)
Harvey Klingensmith
Harvey Klingensmith • Director since 2020 • Member of the Nominating, Governance, Sustainability and Corporate Responsibility Committee and the Compensation Committee •
Harvey Klingensmith
| Mr. Klingensmith, a native of Denver, Colorado, retired from executive office at the end of January 2019 after numerous executive leadership positions in the oil and gas industry. Mr. Klingensmith co-founded and served as Chief Executive Officer and Board member of Ajax Resources LLC (“Ajax”), an exploration and production company focused on oil and gas development in the Permian Basin. He served as Chief Executive Officer from its founding in July 2015 until October 2017 and served on the Board until its sale in 2018. As Co-Founder and Chief Executive Officer of Ajax, Mr. Klingensmith was instrumental in successfully putting together the $425 million financing package necessary to start Ajax; recruited key personnel needed to build and run the business; and executed key business initiatives that resulted in production growth from 2,000 to 18,500 barrels of oil equivalent per day and Ajax’s sale to Diamondback Energy for $1.24 billion. Mr. Klingensmith was also President of Wyatt Energy LLC (“Wyatt”), a privately held, independent oil and gas exploration and production company based in Houston, Texas, focused on the identification of and investment in unique opportunities in the oil and gas space, from April 2014 through January 2018. He led this effort simultaneously with his roles at Ajax. | Mr. Klingensmith also co-founded and served as Chief Executive Officer of Spoke Resources Ltd. (“Spoke”), including its predecessor entity Stone Mountain Resources Ltd (“Stone”), from April 2006 through August 2018. Spoke was a large natural gas production company headquartered in Calgary, Alberta, and had its primary producing asset in NE British Columbia before its sale to Surmont Oil and Gas in 2018. During his tenure at Spoke and Stone, Mr. Klingensmith led efforts to raise capital, headed operations and production growth as well as gained experience with financially distressed companies during Stone’s entry into receivership and exit as Spoke before its sale to Surmont Oil and Gas in 2018. Prior to entering the private space Mr. Klingensmith had served as President of El Paso Canada (2002-2004), Senior Vice President Worldwide Exploration for Coastal Oil and Gas (1994-2001), and Vice President of Worldwide Exploration of Maxus Energy (1986-1993). Mr. Klingensmith received dual Bachelor of Science degrees in Geological Engineering and Geophysical Engineering from the Colorado School of Mines in 1975. He is an active member of the Society of Petroleum Engineers, the American Association of Petroleum Geologists and the Society of Exploration Geophysicists. Mr. Klingensmith’s over 44 years of diverse experience in the upstream oil and gas business along with his proven leadership and executive oversight experience make him a valuable addition to our board. |
Curtis Anastasio
Curtis Anastasio Director since 2023 • Member of the Nominating, Governance, Sustainability and Corporate Responsibility Committee • Age: 67
Curtis Anastasio
| Mr. Anastasio retired from executive office in 2013, having spent over 35 years in various leadership positions in the upstream, midstream and downstream sectors of the oil and gas industry. At various stages over the course of his career, Mr. Anastasio has been responsible for supply, trading, transportation, marketing, business development and legal & regulatory affairs. He began his career in the industry in 1988 with Ultramar plc, an integrated oil and gas company with assets principally in the United States, Canada, Latin America, the United Kingdom and Asia Pacific. In a series of acquisitions, Ultramar’s midstream assets were ultimately acquired by NuStar Energy L.P., a publicly traded energy master limited partnership based in San Antonio, Texas. Mr. Anastasio was appointed President and Chief Executive Officer of NuStar in April 2001, leading the company’s initial public offering. He served in that role until his retirement on December 31, 2013. Under Mr. Anastasio’s leadership, NuStar grew from a small business to a Fortune 500 company. NuStar received many awards and recognition during his tenure, including being named by Fortune magazine as one of the 100 Best Companies to Work for in America every year since 2007 and Forbes Magazine’s 100 Most Trustworthy Companies. In 2013, Mr. Anastasio was elected to the San Antonio Business Hall of Fame. Mr. Anastasio presently serves on the boards of two publicly traded companies, both of which are listed on the New York Stock Exchange. From May 2014 until July 2023, he served as the Chairman of GasLog Partners L.P., an international owner, operator and manager of liquefied natural gas carriers, providing support to international energy companies as part of their LNG logistics chain. | As Executive Chairman, he led the company’s initial public offering in May 2014. Mr. Anastasio also serves on the Board and as Chairman of the Audit Committee of Par Pacific Holdings, Inc., an energy company with primary interests in refining, retail and logistics, including a refining, marketing and logistics business in Hawaii, refining and logistics businesses in Washington, Montana and Wyoming and a retail distribution network in the Pacific Northwest. The company also owns an equity interest in a joint venture focused on natural gas production. Finally, Mr. Anastasio serves on the Board and as Chairman of the Audit Committee of The Chemours Company, which was spun out from DuPont in 2015. A multinational specialty chemicals company providing titanium technologies, fluoroproducts and chemical solutions, Chemours ingredients are found in plastics and coatings, refrigeration and air conditioning, mining and oil refining operations and general industrial manufacturing. Mr. Anastasio also served as a director of the Federal Reserve Bank of Dallas for six years from 2014 through 2019. In addition to participating in various volunteer activities, Mr. Anastasio has served as Chairman of the Board of Trustees of the United Way of San Antonio and Bexar County, Chairman of the Alamo Area Council of the Boy Scouts of America, and Chairman of the National Association of Publicly Traded Partnerships. Mr. Anastasio received a Juris Doctorate degree from Harvard Law School in 1981 and a Bachelor of Arts degree, magna cum laude, from Cornell University in 1978. Prior to focusing his career on the oil and gas industry, Mr. Anastasio worked in private practice as a corporate attorney in New York City. |
Curtis Anastasio
| Non-Executive Director Compensation |
Director Compensation
Director Compensation
for Year Ended December 31, 2023
| Name (1) | Fee Earned or Paid in Cash ($) | Stock Awards (2)(3) ($) | Total ($) | | Martha Z. Carnes | 127,500 | 141,288 | 268,788 | | Monique van Dijken Eeuwijk (4) | 43,750 | — | 43,750 | | Harvey Klingensmith | 80,000 | 141,288 | 221,288 | | Katherine A. Murray | 77,500 | 141,288 | 218,788 | | Michael Straughen | 102,500 | 141,288 | 243,788 | | Kwaku Temeng | 86,250 | 141,288 | 227,538 | | Curtis Anastasio (5) | 37,500 | 153,289 | 190,789 |
2024 Non-Executive Director Compensation
2024 Non-Executive Director Compensation Each non-executive Director serving in 2024 shall receive the same level of cash compensation in 2024 as received by Board members in 2023 and described above under “Retainer/Fees” on page 16 of this proxy statement. In addition, effective as of April 1, 2024, we will award each of our non-executive Directors who will continue to serve on the Board after the conclusion of the 2024 Annual Meeting an amount of restricted shares equal to $150,000 based on the closing price of the Company’s stock on January 10, 2024, which was $16.10 rounded upwards to the nearest whole share, which amounts to 9,317 shares. The restricted shares will vest, without performance criteria, at the end of a one-year vesting period that will begin on April 1, 2024 and will end on April 1, 2025. This award will be subject to an agreement to be signed by each recipient.
2024 Non-Executive Director Compensation
| Board Structure |
2024 Non-Executive Director Compensation
The Company has a single-tier board currently consisting of seven directors divided among three classes. Each class is elected for a three-year term such that the term of one class of directors expires at the annual meeting each year. Mr. Bruno currently serves as the Company’s Chief Executive Officer (the “CEO”) and as Chairman of the Board. Given the size of the Company, we believe our stakeholders are well served by having Mr. Bruno hold the Chief Executive Officer role along with being Chairman of the Board and that this is the most effective leadership structure for us at the present time. We also note that within our industry, the common practice is for the same person to hold both positions. We believe this structure has served us well for many years. Ms. Carnes has served as our Lead Director since the 2020 annual meeting. The Lead Director has leadership authority and responsibilities and sets the agenda for, and leads all executive sessions of the independent directors, providing feedback, as appropriate, from those meetings to the Chairman of the Board. Ms. Carnes has served on the Board since 2016. She is deemed to be independent from the Company (according to applicable regulatory standards, as well as by shareholder advisory services such as ISS and Glass-Lewis). In its role providing risk oversight of the Company, the Board oversees our stakeholders’ interest in the long-term health and overall success of the Company and its financial strength, as well as the interests of the other stakeholders of the Company. The Board is actively involved in overseeing risk management for the Company, and each of our Board committees considers the risks within its areas of responsibility. The Board and each of our Board committees regularly discuss with management our major risk exposures, their potential financial impact on us and the steps we take to manage them.
2024 Non-Executive Director Compensation
| Director Independence |
2024 Non-Executive Director Compensation
In connection with determining the independence of each Director of the Company, the Board inquired as to any transactions and relationships between each Director and his or her immediate family and the Company and its subsidiaries, and reviewed and discussed the results of such inquiry. The purpose of this review was to determine whether any such relationships or transactions were material and, therefore, inconsistent with a determination that a Director is independent under the standards set forth by the NYSE. With regard to Messrs. Straughen, Temeng, Klingensmith and Anastasio and Mmes. Carnes and Murray, none have ever held any position with the Company or any of its affiliates apart from their service on the Board and its committees and all qualify as independent under the NYSE Listed Company Manual section 303A.02. As a result of this review, after finding no material transactions or relationships among the following Directors and the Company, the Board affirmatively determined that each of Messrs. Straughen, Temeng, Klingensmith and Anastasio and Mmes. Carnes and Murray, are independent under the applicable standards described above.
2024 Non-Executive Director Compensation
| Board Meetings |
2024 Non-Executive Director Compensation
The Board held four meetings in 2023. All Directors participated in 100% of the 2023 Board meetings. All Directors participated in 100% of the meetings in 2023 of all committees on which he or she serves. Under our Corporate Governance Guidelines, Directors are expected to diligently fulfill their fiduciary duties to the Company, including preparing for, attending and participating in meetings of the Board and the committees of which the Director is a member. In 2023, all Directors participated in the 2023 annual meeting of shareholders. All current board members are expected to attend the 2024 Annual Meeting. Our non-executive Directors meet separately in executive session without any members of management present. The Lead Director is the presiding Director at each such session. If any of our non-executive Directors were to fail to meet the applicable criteria for independence, then our independent Directors would meet separately at least once a year in accordance with the rules of the NYSE.
2024 Non-Executive Director Compensation
| Committees of the Board |
2024 Non-Executive Director Compensation
The Board has three standing committees, the identities, memberships and functions of which are described below. Each Director who is at the time “independent” and who has never served as a director of any affiliate of the Company may be considered for committee assignment at any time during their term, as determined by the Board.
Best Compensation Governance Practices & Policies
| WHAT WE DO | | WHAT WE DO NOT DO | | | | 100% of NEO equity awards are performance-based and at-risk | | No hedging transactions by executive officers or directors | | | Target performance for equity incentive awards set above the median of industry peers | | No significant perquisites | | | Incentive awards based on both absolute and relative performance results, with no guaranteed payouts | | No “single trigger” change in control cash severance benefits | | | Equity award grants subject to three-year performance periods to promote retention | | Company stock may not be margined by executive officers or directors | | | Clawback policy applies to performance-based cash and equity incentive compensation | | | | | Compensation Committee advised by an independent compensation consultant | | |
CEO Realizable Compensation: Aligned with Performance
(1) Mr. Demshur served as CEO of the Company until his retirement in May 2020. Target compensation includes base salary, target annual incentive award, and the grant-date value of performance share units. Realizable compensation includes base salary, actual annual cash incentive paid, and the value of performance share units determined by whether the awards are still outstanding as of the end of the year or have been settled during that year. Any performance share units settled within the five-year period have been adjusted for actual payout percent. Outstanding performance share unit awards have been valued assuming a target payout with the stock price that is applicable at the end of each year.
The Role of the Independent Compensation Consultant
The Role of the Independent Compensation Consultant Our Compensation Committee retains a consultant to provide independent advice on executive compensation matters and to perform specific project-related work. During 2023, the Compensation Committee engaged Meridian Compensation Partners (“Meridian”) to provide information on pay levels and program design for 2023. Meridian reported to and acted at the direction of the Compensation Committee. The Compensation Committee assessed the independence of the firm pursuant to applicable SEC and NYSE rules and concluded that the firm’s work for the Compensation Committee did not raise any conflict of interest for 2023.
Selecting the Peer Group
Selecting the Peer Group The Compensation Committee, with the assistance of Meridian, developed a peer group of companies to be used for compensation comparison purposes (“Compensation Peer Group”). The Compensation Peer Group consists of publicly traded oilfield services companies comparable in size to our Company in terms of annual revenues and the value of ongoing operations. The following companies comprise our Compensation Peer Group used to evaluate the market for NEO compensation for 2023:
Selecting the Peer Group
| Baker Hughes Company | Fugro N.V. | RPC, Inc. | | Champion X Corporation | Helix Energy Solutions Group | TechnipFMC plc | | Dril-Quip Inc. | John Wood Group PLC | TGS-NOPEC Geophysical Company ASA | | Expro Group Holdings N.V. | Oceaneering International | | | Forum Energy Technologies | Oil States International | |
Selecting the Peer Group
The Compensation Committee periodically reviews the composition of our Compensation Peer Group to ensure it remains appropriate. During 2023, the Compensation Committee approved several changes to better align with our current size and in light of our recently completed redomestication from the Netherlands to the U.S. The following companies were used to evaluate the market for NEO compensation for 2024.
Selecting the Peer Group
| Bristow Group Inc. | Helix Energy Solutions Group | TETRA Technologies Inc. | | Champion X Corporation | Oceaneering International | TechnipFMC plc | | Dril-Quip Inc. | Oil States International | Tidewater Inc. | | Expro Group Holdings N.V. | Precision Drilling Corporation | Weatherford International | | Forum Energy Technologies | RPC, Inc. | |
Selecting the Peer Group
| 2023 Compensation Program Details |
Base Salary
Base Salary Base salary is the fixed annual compensation we pay to an executive for performing specific job responsibilities. It represents the minimum income an executive may receive in any given year. We target annual base salaries in the middle range of our Compensation Peer Group for executives having similar responsibilities. The Compensation Committee may adjust salaries based on its annual review of the following factors: • the individual’s experience and background; • the individual’s performance during the prior year; • the benchmark salary data; • the general movement of salaries in the marketplace; and • our financial and operating results. As a result of these factors, a particular executive’s base salary may be above or below the median of our Compensation Peer Group for a given year. The table below shows base salaries for each of our NEOs for the years ending December 31, 2023 and 2022.
Annual Cash Incentives
Annual Cash Incentives All of our NEOs participate in our annual cash incentive plan. Under this plan, each NEO is assigned a target and a maximum bonus expressed as a percentage of his or her base salary. The target award opportunity is established as a percentage of the NEO’s salary based upon a review of the competitive data for that officer’s position, level of responsibility and ability to impact our financial success. The target bonus percentage and maximum bonus percentage for each NEO in 2023 is set forth in the table below.
Annual Cash Incentives
| | | Award Percentages | | | | Name of Executive | Title | Target | | Maximum | | Lawrence Bruno | Chairman, President and Chief Executive Officer | 100% | - | 200% | | Christopher S. Hill | Senior Vice President and Chief Financial Officer | 75% | - | 150% | | Gwendolyn Y. Gresham | Senior Vice President, Corporate Development and Investor Relations | 75% | - | 130% | | Mark D. Tattoli | Senior Vice President, Secretary and General Counsel | 75% | - | 130% |
Annual Cash Incentives
The Compensation Committee has set performance goals that are consistent with the Company’s business strategy and focus on creating long-term shareholder value. Performance is assessed based on the achievement of specific financial measures, safety metrics, operating objectives, and environmental, social and governance goals. The Compensation Committee may also consider individual contributions to performance results. Relative Performance Relative performance requires that NEOs achieve at least median performance among the Compensation Peer Group. The achievement of three different financial performance metrics accounts for 75% of the potential annual cash incentive award.
Annual Cash Incentives
| Metric | Description | Weight | | Revenue | Change in the Company’s annual revenue relative to Compensation Peer Group | 25% | | Operating Margin | The Company’s margins relative to Compensation Peer Group | 25% | | EPS Yield | The Company’s annual EPS Yield (EPS divided by average share price) relative to Compensation Peer Group | 25% |
Annual Cash Incentives
Relative performance is assessed at the end of the year. Bloomberg data is analyzed on a trailing four-quarter period for the Compensation Peer Group for the period ending with the third quarter of the current year. This data is used to determine the Company’s percentile ranking in the Compensation Peer Group for each metric. For each metric, the NEOs can achieve a maximum score of 25 and a threshold score of 12.5 for a ranking between the 100th and the 50th percentile, respectively. Performance below the 50th percentile on any metric results in a score of zero for that metric. For example, if the Company’s ranking for change in revenue compared to the Compensation Peer Group’s change in revenue is at the 75th percentile, then the revenue metric would receive a score of 18.75. Messrs. Bruno and Hill may earn up to 2.0x their target award opportunity, and Ms. Gresham and Mr. Tattoli may earn up to 1.7x their target award opportunity, for each metric in return for the Company finishing first (i.e., at the 100th percentile) in the Compensation Peer Group. Performance below the 50th percentile of the Compensation Peer Group on any metric will result in a zero percent payout for that metric. Payout for performance between the 50th and the 100th percentile for each metric is calculated using straight-line interpolation between the target and maximum award opportunities, as shown in the table below.
Annual Cash Incentives
| Percentile of Compensation Peer Group | Below 50th | 50th | 100th | | Payout as a Multiple of Target Award Opportunity (Messrs. Bruno and Hill) | 0 | 1.0x | 2.0x | | Payout as a Multiple of Target Award Opportunity (Ms. Gresham and Mr. Tattoli) | 0 | 1.0x | 1.7x |
Annual Cash Incentives
Absolute Performance Absolute performance accounts for 25% of the annual incentive award. The Compensation Committee evaluates the Company’s overall performance giving consideration to the Company’s standing relative to its peers as well as year-over-year improvement in the areas of safety and ESG. The Compensation Committee bases its determination primarily on objective third-party reports and may award a maximum score of 25, depending on the Company’s execution in these areas. If the Compensation Committee determines that the Company’s collective performance has declined, it may award as little as zero for this metric. 2023 Results For 2023, our performance results were as follows:
Annual Cash Incentives
| Metric | Weight % | Ranking | Score | Multiple of Target Opportunity | | | | | | | Bruno and Hill | Gresham and Tattoli | | Relative Performance | | | | | | | Revenue | 25% | 23rd percentile | 0.0 | — | — | | Operating Margin | 25% | 79th percentile | 19.6 | 1.6x | 1.4x | | EPS Yield | 25% | 57th percentile | 14.3 | 1.1x | 1.1x | | Absolute Performance | | | | | | | Safety and ESG | 25% | N/A | 25.0 | 2.0x | 1.7x | | Weighted average | | | | 1.2x | 1.1x |
Annual Cash Incentives
As shown, the Company’s percentile ranking at or above the 50th percentile up to the 100th percentile for each performance metric under the plan produces a score between threshold and maximum of 12.5 and 25, respectively. By linear interpolation, the score can be expressed as a multiple of the target award opportunity for each NEO. The contribution to total award for each metric is determined by multiplying (A) the weight percent for each performance metric by (B) the NEO’s target award opportunity by (C) the multiple of target award opportunity for such performance metric, and then summing each such product to obtain the total award earned. The table below reflects the annual cash incentive award earned by the NEOs and approved by the Compensation Committee. However, based upon a broader assessment of the Company’s financial performance and considering affordability, the Chairman of the Board, acting on authority conferred upon him by the Compensation Committee, approved a payout of 35.5% of the NEOs’ earned award.
Annual Cash Incentives
| Name of Executive | Target Award Opportunity (% of salary) | Target Award Opportunity ($) | Award Earned (% of salary) | Award Earned ($) | Award Paid ($) | | Lawrence Bruno | 100% | 886,912 | 118% | 1,045,290 | 371,109 | | Christopher S. Hill | 75% | 348,816 | 88% | 411,105 | 145,954 | | Gwendolyn Y. Gresham | 75% | 305,916 | 80% | 325,589 | 115,584 | | Mark D. Tattoli | 75% | 305,916 | 80% | 325,589 | 115,584 |
Equity Incentive Compensation
Equity Incentive Compensation We currently administer long-term incentive compensation awards through our LTIP. Under the LTIP, our NEOs are eligible to receive performance-based restricted share units. Our Compensation Committee, based on recommendations from our CEO (other than with respect to awards for himself), determines the amount of each NEO’s grant by periodically reviewing competitive market data and each NEO’s long-term past performance, ability to contribute to our future success, and time in the current job. The Compensation Committee considers the risk of losing the executive to other employment opportunities and the value and potential for appreciation in our shares. The number of shares previously granted or vested pursuant to prior grants is not typically a factor in determining subsequent share grants to a NEO. The Compensation Committee considers the foregoing factors together and determines the appropriate amount of the award.
Performance Share Award Program (“PSAP”)
Performance Share Award Program (“PSAP”) PSAP shares vest if we achieve certain performance goals generally over a three-year period, which allows us to compensate our employees as we meet or exceed our business objectives. PSAP Awards Generally Under the PSAP, our NEOs are awarded rights to receive a pre-determined number of shares of common stock if certain performance targets are met at the end of a three-year performance period and as specified in the applicable grant agreement. Awards vest at the end of each three-year performance period.
2023 Performance Share Design Changes
2023 Performance Share Design Changes Over the past several years we have modified our performance share plan design to better align our program with competitive market practices, including: The addition of an absolute total shareholder return (“TSR”) modifier in 2020, intended to reduce above target payout by 50% when absolute TSR is negative over the performance period; and An increase in the maximum payout opportunity from 150% of target to 175% of target, approved by the Compensation Committee in 2022 with effect for awards granted on or after January 1, 2023. For 2023, the Compensation Committee approved an adjustment to the performance standards in our plan, which aligns with typical long-term incentive performance standards among our peers.
2023 Performance Share Design Changes
| | Performance Level Relative to Peers | | | Maximum Payout as | | | Threshold | Target | Maximum | % of Target | | 2022 Award | 50th percentile | 75th percentile | 100th percentile | 150% | | 2023 Award | 35th percentile | 55th percentile | 85th percentile | 175% | | Peer Median Practice | 25th percentile | 50th percentile | 85th percentile | 200% |
2023 Performance Share Design Changes
In evaluating the appropriateness of these changes, the Compensation Committee considered not only how these performance standards align with program design among our peers, but also the following factors: • NEO long-term incentive compensation remains 100% performance-based; • Core Lab is the only member of the peer group where long-term incentive compensation is 100% performance based (the average peer group LTI mix is 56% performance-based vesting and 44% time-based vesting);
2023 Performance Share Design Changes
| Core Lab NEO LTI Mix | Peer Group Average | | | |
2023 Performance Share Design Changes
• Target performance requires that we exceed the median ROIC of the peer group; • Maximum payout of 175% of target aligns more closely with peer practice but remains below peer median practice of paying 200% for maximum performance (72% of peers pay 200% or more at maximum performance); • The new relative performance targets for the LTI structure adheres to our compensation philosophy of providing target pay opportunities that align with the median range of the Company’s peers, allowing executives to earn a payout at target in return for exceeding the median performance of peers; • Our threshold and target performance standards remain higher than the median performance standards among peers who have relative performance metrics in their long-term incentive programs; • Above-target payouts remain subject to reduction for negative absolute TSR performance; and • The executive team has historically demonstrated their alignment with long-term shareholder value creation by voluntarily forfeiting short-term cash awards earned under the annual incentive plan. 2023 PSAP Awards For 2023, the Compensation Committee approved grants with the following performance standards and payout opportunities:
2023 Performance Share Design Changes
| | Threshold | Target | Maximum | | ROIC performance relative to peers | 35th percentile | 55th percentile | 85th percentile | | Percent of PSAPs earned | 50% | 100% | 175% |
2023 Performance Share Design Changes
On February 16, 2023, we made grants of 250,680 restricted performance shares to our current NEOs serving in 2023. The three-year performance period began on January 1, 2023 and will end on December 31, 2025. The PSAP awards to our current NEOs were as follows:
2023 Performance Share Design Changes
| Name of Executive | Target Award (in Shares) | Maximum Award (in Shares) | | Lawrence Bruno | 155,126 | 271,471 | | Christopher S. Hill | 52,718 | 92,257 | | Gwendolyn Y. Gresham | 21,418 | 37,482 | | Mark D. Tattoli | 21,418 | 37,482 |
2023 Performance Share Design Changes
2021 PSAP Awards On February 19, 2021, we made grants of 141,932 restricted performance share units to three of our current NEOs. The three-year performance period began on January 1, 2021 and ended on December 31, 2023. The 2021 PSAP awards to the executives who were NEOs on the grant date were as follows:
2023 Performance Share Design Changes
| Name of Executive (1) | Target Award (in Shares) | 2021 Performance Period ROIC Percentile Rank | Approved Percent of Target Award Earned | Actual Share Earned (2) | | Lawrence Bruno | 94,172 | 81st | 106.25% | 100,058 | | Christopher S. Hill | 33,950 | 81st | 106.25% | 36,072 | | Gwendolyn Y. Gresham | 13,810 | 81st | 106.25% | 14,673 |
2023 Performance Share Design Changes
| (1) Mr. Tattoli became an executive officer in August 2021, after the 2021 PSAP granted in February 2021. | | (2) The Company recorded negative absolute TSR over the three-year performance period. Therefore, the number of shares earned above target was reduced by one-half. |
2023 Performance Share Design Changes
TSR Adjustment Factor Our PSAP awards include a TSR modifier such that the number of shares awarded for performance in excess of the target level of ROIC will be reduced by one-half if absolute TSR over the three-year performance period is negative.
2023 Performance Share Design Changes
| Executive Compensation Policies |
Deferred Compensation Plan
Deferred Compensation Plan Through our subsidiary, Core Laboratories LP, we have adopted a nonqualified deferred compensation plan that permits certain employees, including our NEOs, to elect to defer all or a part of their cash compensation (base, annual incentives and/or commissions) from us until the termination of their status as an employee. Participating employees are eligible to receive a matching deferral under the nonqualified deferred compensation plan that compensates them for contributions they could not receive from us under the 401(k) plan due to the various limits imposed on 401(k) plans by the U.S. federal income tax laws. On April 1, 2023, we fully restored the remaining one-half (equivalent to 2%) of the Deferred Compensation match. Discretionary employer contributions may also be made on behalf of participants in the plan and are subject to discretionary vesting schedules determined at the time of such contributions. Vesting in employer contributions is accelerated upon the death or disability of the participant or a change in control. Discretionary employer contributions under the plan are forfeited upon a participant’s termination of employment to the extent they are not vested at that time. We made discretionary employer contributions to the nonqualified deferred compensation plan on behalf of Messrs. Bruno, Hill, Tattoli and Ms. Gresham in accordance with each executive’s employment agreement, based upon the Company achieving an ROIC performance target measured against the trailing four-quarter period ended on September 30, 2023.
Deductibility of Compensation Over $1 Million
| Employment Agreements and Change in Control Agreements |
Change in Control
Change in Control As part of our normal course of business, we engage in discussions with other companies about possible collaborations and/or other ways in which the companies may work together to further our respective long-term objectives. In addition, many larger, established companies consider companies at similar stages of development to ours as potential acquisition targets. In certain scenarios, the potential for a merger or being acquired may be in the best interests of our stakeholders. We provide severance compensation if certain of our executives’ employment is terminated following a change in control transaction to promote the ability of our senior executives to act in the best interests of our stakeholders even though their employment could be terminated as a result of the transaction.
Termination Without Cause
Termination Without Cause If we terminate the employment of a NEO without cause as defined in their applicable agreements, we would be obligated to continue to pay him or her certain amounts as described in greater detail in “Potential Payments Upon Termination or Change in Control.” We believe these payments are appropriate because the terminated executive is bound by confidentiality, non-solicitation and non-compete provisions covering the two-year period immediately following termination of service and because the Company and each executive have mutually agreed to a severance package that is in place prior to any termination event. This provides us with more flexibility to make a change in senior management if such a change is in the best interests of the Company and our shareholders.
for the Years Ended December 31, 2021, 2022 and 2023
| Name of Executive and Principal Position | Year | Salary (1) ($) | Stock Awards (2) ($) | Non-Equity Incentive Plan Compensation (3) ($) | Change in Post- employment Benefit Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation (4) ($) | Total ($) | | Lawrence Bruno | 2023 | 886,912 | 6,514,988 | 371,109 | — | 215,074 | 7,988,083 | | Chairman, President and | 2022 | 820,000 | 4,873,523 | 527,143 | — | 185,730 | 6,406,396 | | Chief Executive Officer | 2021 | 820,000 | 4,939,861 | 459,889 | — | 328,380 | 6,548,130 | | Christopher S. Hill | 2023 | 465,088 | 2,214,053 | 145,954 | — | 57,759 | 2,882,854 | | Senior Vice President, and | 2022 | 430,000 | 1,653,626 | 207,322 | — | 44,700 | 2,335,647 | | Chief Financial Officer | 2021 | 430,000 | 1,780,872 | 180,871 | — | 91,782 | 2,483,525 | | Gwendolyn Y. Gresham | 2023 | 407,888 | 899,514 | 115,584 | — | 50,718 | 1,473,704 | | Senior Vice President, Corporate | 2022 | 370,000 | 672,680 | 154,607 | — | 39,677 | 1,236,964 | | Development and Investor Relations | 2021 | 370,000 | 724,414 | 134,882 | — | 74,162 | 1,303,458 | | Mark D. Tattoli | 2023 | 407,888 | 899,514 | 115,584 | — | 41,635 | 1,464,621 | | Senior Vice President, Secretary | 2022 | 370,000 | 672,680 | 154,607 | — | 37,834 | 1,235,121 | | and General Counsel | 2021 | 350,000 | 290,979 | 73,796 | — | 35,106 | 749,881 |
for the Years Ended December 31, 2021, 2022 and 2023
| Name of Executive | Year | Core 401(k) Contributions (1) ($) | Nonqualified Deferred Compensation: Company Contributions (2) ($) | Company-Owned Life Insurance (3) ($) | All Other Compensation Total ($) | | Lawrence Bruno | 2023 | 4,309 | 210,334 | 431 | 215,074 | | Christopher S. Hill | 2023 | 5,508 | 52,109 | 142 | 57,759 | | Gwendolyn Y. Gresham | 2023 | 9,768 | 40,765 | 185 | 50,718 | | Mark D. Tattoli | 2023 | 6,521 | 35,000 | 114 | 41,635 |
for the Years Ended December 31, 2021, 2022 and 2023
| Grants of Plan-Based Awards |
Grants of Plan-Based Awards for the Year Ended December 31, 2023
Grants of Plan-Based Awards for the Year Ended December 31, 2023
Grants of Plan-Based Awards for the Year Ended December 31, 2023
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | Grant Date Fair Value of Stock and Option | | Name of Executive | Grant Date | Approval Date | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Awards (2) ($) | | Lawrence Bruno | 2/16/2023 | 2/14/2023 | 886,912 | 1,773,824 | 116,345 | 155,126 | 271,471 | 6,514,988 | | Christopher S. Hill | 2/16/2023 | 2/14/2023 | 348,816 | 697,632 | 39,539 | 52,718 | 92,257 | 2,214,053 | | Gwendolyn Y. Gresham | 2/16/2023 | 2/14/2023 | 305,916 | 530,254 | 16,064 | 21,418 | 37,482 | 899,514 | | Mark D. Tattoli | 2/16/2023 | 2/14/2023 | 305,916 | 530,254 | 16,064 | 21,418 | 37,482 | 899,514 |
Grants of Plan-Based Awards for the Year Ended December 31, 2023
(1) The amounts shown in these columns reflect the potential target and maximum values approved on the date of the awards. The amounts actually paid to the NEOs are reflected in the Summary Compensation Table above. (2) Awards shown are at maximum award values for the 2023 PSAP grants for the NEOs. The following is a discussion of material factors necessary to have an understanding of the information disclosed in the Summary Compensation Table.
Employment Agreements
| Outstanding Equity Awards at Fiscal Year End |
Outstanding Equity Awards
Outstanding Equity Awards
Stock Vested
Stock Vested
for the Year Ended December 31, 2023
| Nonqualified Deferred Compensation Plan |
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation
for the Year Ended December 31, 2023
| Potential Payments Upon Termination or Change in Control |
Nonqualified Deferred Compensation Plan
Nonqualified Deferred Compensation Plan See the Nonqualified Deferred Compensation Table on page 41 and subsequent narrative discussion for a description of the benefits payable to the NEOs under the Nonqualified Deferred Compensation Plan upon death or separation from service and in connection with a change in control.
Pay Ratio Disclosure
Pay Ratio Disclosure Pursuant to Item 402(u) of Regulation S-K, we are required to disclose the ratio of our CEO’s compensation to the annual total compensation of our median employee with respect to fiscal year 2023. We determined that the annual total compensation of our CEO, Mr. Bruno, for 2023 was $7,988,083 for the purpose of the CEO pay ratio calculation. We determined that the median of the annual total compensation from the population of our employees (other than Mr. Bruno) was $44,357; therefore, the ratio of these two amounts is 180 to 1. Please see the Summary Compensation table on page 37 for our CEO’s compensation for 2023. For 2023, if the stock awards were valued at target level, the total annual compensation of our CEO would be $5,414,543 and the pay ratio would be 122 to 1. We prepared a database including the total cash compensation consisting of base salary, allowance, bonus and other cash compensation paid as reflected in our payroll records for our global workforce (other than our CEO) as of November 30, 2023. We annualized the total cash compensation of all our employees, including those hired during 2023. As needed, amounts were converted from local currency to U.S. dollars. We did not include any cost-of-living adjustments and did not apply statistical sampling method. For the median employee we identified from the database, we obtained all other non-cash compensation elements of the median employee to calculate total annual compensation with the same methodology used in the Summary Compensation table in accordance with SEC rules and regulations. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal payroll and employment records, and the methodology described above. SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio for our Company.