DEF 14A of Innovex International, Inc.
Filed Mar 19, 2024 · FY20230001193125-24-071274
Nominee for Class III Director for Three-Year Term to Expire in 2027
Nominee for Class III Director for Three-Year Term to Expire in 2027 The following sets forth information concerning the nominee for election as a director at the annual meeting, including the nominee’s age as of March 11, 2024, position with us, business experience during the past five years and the experiences, qualifications, attributes or skills that caused our Nominating and Governance Committee and the Board to determine that the nominee should serve as directors of the Company.
Nominee for Class III Director for Three-Year Term to Expire in 2027
| AMY B. SCHWETZ | | | Age: 49 Director Since: 2019 Board Committees: • Audit (chair) • Nominating and Governance • Compensation | Ms. Schwetz has been a Class III director of the Company since September 2019. She is chair of the Audit Committee and a member of the Nominating and Governance Committee and the Compensation Committee of the Board of Directors. Ms. Schwetz was appointed Senior Vice President and Chief Financial Officer of Flowserve Corporation, a leading provider of flow control products and services that is NYSE-listed, in February 2020. Prior to that, she was Executive Vice President and Chief Financial Officer of Peabody Energy Corporation, an NYSE-listed global coal company based in St. Louis, Missouri. From 2005 to 2015, she served in various financial management positions at Peabody internationally and in the United States, including as Senior Vice President of Finance and Administration – Australia, Senior Vice President of Finance and Administration – Americas, Vice President of Investor Relations and Vice President of Capital and Financial Planning. Prior to that, she worked for Ernst & Young LLP, an international accounting firm, in its audit practice. Ms. Schwetz holds a Bachelor of Science degree in Accounting from Indiana University. | | Qualifications: Ms. Schwetz was selected to serve as a director due to her executive experience with a publicly-traded company in the energy industry, her international experience and her extensive financial and accounting background. | |
Information Concerning Class I and Class II Directors
Information Concerning Class I and Class II Directors The following sets forth information concerning the Class I and Class III directors whose present terms of office will expire at the 2025 and 2026 annual meetings of stockholders, respectively, including each director’s age as of March 11, 2024, position with us, if any, business experience during the past five years and the experiences, qualifications, attributes or skills that caused our Nominating and Governance Committee and the Board to determine that the nominees should serve as directors of the Company. Class I
Information Concerning Class I and Class II Directors
| TERENCE B. JUPP | | | Age: 64 Director Since: 2012 Board Committees: • Compensation (Chair) • Audit • Nominating and Governance | Mr. Jupp has been a Class I director since November 2012. He is a member of the Audit Committee and the Nominating and Governance Committee and chair of the Compensation Committee of the Board of Directors. Mr. Jupp serves as Managing Director of EIG Global Energy Partners, a global energy investment firm, a position he has held since April 2015. Mr. Jupp has served as Chief Operating Officer of Breakwater Energy, an EIG subsidiary that holds oil and gas interests, since September 2022, and as Chief Operating Officer of MidOcean Energy, an EIG-controlled LNG company, since October 2022. From April 2015 until March 2021, he was the Chief Operating Officer of Harbour Energy Ltd., a company that was owned by EIG and that held and operated upstream and midstream energy assets globally. Earlier in his career, Mr. Jupp was employed by Anadarko Petroleum as Vice President International Operations – Americas/Far East following its acquisition of Kerr-McGee Oil and Gas. While with Kerr-McGee, he served in various management positions domestically and internationally, including as Vice President – International Exploration and Production. Mr. Jupp serves as a director of Maverick Natural Resources, LLC, a private oil and gas company focused on long-lived reserves in the U.S., and previously served as a director of Chrysaor Holdings Limited, a private oil and gas company that was the largest oil and gas producer in the UK North Sea. Mr. Jupp holds a Bachelor of Science degree in petroleum engineering from Texas A&M University. | | Qualifications: Mr. Jupp was selected to serve as a director due to his executive experience with oil and gas exploration companies, including his international experience in the energy industry. | |
Information Concerning Class I and Class II Directors
| CARRI A. LOCKHART | | | Age: 52 Director Since: 2022 Board Committees: • Audit • Nominating and Governance • Compensation | Ms. Lockhart has been a Class I director since March 2022. She is a member of the Audit Committee, the Nominating and Governance Committee, and the Compensation Committee of the Board of Directors. From June 2021 until March 2022, Ms. Lockhart was Executive Vice President of Technology, Digital and Innovation at Equinor ASA. From August 2018 until June 2021, she was Senior Vice President – Development & Production International Portfolio and Partner Operations at Equinor and from May 2016 until August 2018, she was Senior Vice President – Development Production Offshore US (which also included Mexico offshore operations) at Equinor. Prior to joining Equinor in 2016, Ms. Lockhart was employed by Marathon Oil Company for over 20 years in various management, operational and technical positions both domestically and internationally, including as Regional Vice President – Eagle Ford, Regional Vice President – Bakken and Regional Vice President – United Kingdom. Ms. Lockhart also serves as a director of The Williams Companies, Inc., an energy infrastructure company, and Ascent Resources, LLC, an oil and gas company focused on production in the Utica Shale. Ms. Lockhart holds a Bachelor of Science degree in petroleum engineering from Montana Technological University. | | Qualifications: Ms. Lockhart was selected to serve as a director due to her executive experience in energy transition, innovation and digital matters, her executive experience within the oil and gas industry and her international experience. | |
Information Concerning Class I and Class II Directors
| DARRYL K. WILLIS | | | Age: 54 Director Since: 2021 Board Committees: • Audit • Nominating and Governance • Compensation | Mr. Willis has been a Class I director since June 2021. He is member of the Audit Committee, the Nominating and Governance Committee and the Compensation Committee of the Board of Directors. Mr. Willis is Corporate Vice President, Energy of Microsoft Corporation, a position he has held since 2019. From 2018 to 2019, he was Vice President – Oil, Gas and Energy, Google Cloud at Google, Inc. From 1993-2017, he served in various technical, operational and management positions at BP plc internationally and in the United States, including as Senior Vice President of Reservoir Development and Vice President – L48 Onshore Gas at BP America, General Manager of BP Angola, and Vice President – Technology Operations at BP-TNK in Moscow. Mr. Willis also serves as a director of Nine Energy Service, Inc., an NYSE-listed company that provides completion and production services primarily for North American unconventional oil and gas resource development, and the American Bureau of Shipping, a non-profit corporation that provides global classification and assessment services to the marine and offshore industries for vessel design and integrity. Mr. Willis holds a Bachelor of Science degree from Northwestern State University, a Master of Science degree in Geology from the University of New Orleans, and a Master of Science degree in management from the Stanford University Graduate School of Business. | | Qualifications: Mr. Willis was selected to serve as a director due to his executive experience with a Fortune 100 technology company, his executive background within the oil and gas industry and his international experience. | |
Information Concerning Class I and Class II Directors
Class II
Information Concerning Class I and Class II Directors
| JEFFREY J. BIRD | | | Chief Executive Officer Age: 57 Director Since: 2022 | Mr. Bird has been a Class II director and the Chief Executive Officer of the Company since January 2022. Since joining the Company in March 2017 as Vice President and Chief Financial Officer, Mr. Bird has held several executive management positions of increasing responsibility, including as President and Chief Operating Officer. Prior to joining the Company, Mr. Bird was Executive Vice President and Chief Financial Officer of Frank’s International, a provider of engineered tubular services to the oil and gas industry, and prior to that, he was the Vice President of Finance and Chief Financial Officer of Ascend Performance Materials, a provider of chemicals, fibers and plastics in Houston, Texas. Earlier in his career, Mr. Bird served in a variety of finance and operating roles primarily in the industrial manufacturing sector including serving as a division Chief Financial Officer at Danaher Corporation. Mr. Bird holds a BA in Accounting from Cedarville University. | | Qualifications: Mr. Bird was selected to serve as a director because he is our Chief Executive Officer with extensive knowledge of the Company, its operations and people, and he has demonstrated operational and financial knowledge in different industries during his career. | |
Information Concerning Class I and Class II Directors
| JOHN V. LOVOI | | | Chair of the Board Age: 63 Director Since: 2005 Board Committees: • Nominating and Governance (Chair) • Audit • Compensation | Mr. Lovoi has been a Class II director since May 2005 and Chair of the Board since October 2011. He is also chair of the Nominating and Governance Committee and a member of the Audit Committee and the Compensation Committee of the Board of Directors. He is the Managing Partner of JVL Advisors LLC, a private energy investment company established in 2002. From January 2000 to August 2002, Mr. Lovoi was a Managing Director at Morgan Stanley Incorporated, and during this period served as head of the firm’s Global Oil and Gas Research practice and then as head of the firm’s Global Oil and Gas Investment Banking practice. From 1995 to 2000, he was a leading oilfield services and equipment research analyst for Morgan Stanley. Prior to joining Morgan Stanley, he spent two years as a senior financial executive at Baker Hughes and four years as an energy investment banker with Credit Suisse First Boston. Mr. Lovoi also serves as a director of Helix Energy Solutions Group, an energy services company, and as chair of the board of directors of Epsilon Energy, Ltd., an oil and gas company based in Canada. Mr. Lovoi holds a Bachelor of Science degree in chemical engineering from Texas A&M University and an MBA degree from the University of Texas. | | Qualifications: Mr. Lovoi was selected to serve as a director due to his financial expertise and energy industry insight, as well as his experience as a director of other public companies. | |
Director Compensation Table
Director Compensation Table The following table sets forth a summary of the compensation paid to our non-employee directors in relation to 2023:
Director Compensation Table
| Name | Fees Earned or Paid in Cash(1) | Stock Awards (2) (3) | Total | | John V. Lovoi | $185,000 | $163,065 | $348,065 | | Terence B. Jupp | $90,000 | $162,453 | $252,453 | | Steven L. Newman | $75,000 | $158,695 | $233,695 | | Amy B. Schwetz | $95,000 | $150,309 | $245,309 | | Darryl K. Willis | $75,000 | $158,695 | $233,695 | | Carri. A Lockhart | $75,000 | $152,836 | $227,836 |
Director Compensation Table
| (1) Amounts include fees that each director elected to take in the form of restricted stock. Each director taking fees in the form of restricted stock receives his or her award in an amount equal to 125% of the cash equivalent of his or her fees. This 25% incremental value for awards granted in 2023 has been reflected in the column entitled “Stock Awards”. |
Director Compensation Table
| (2) Amounts reflect the aggregate grant date fair value of restricted stock awarded to each of the directors in 2023 with respect to their annual grants under the 2017 Incentive Plan as well as the portion of the restricted stock issued in 2023 in lieu of cash fees representing a 25% incremental value over the foregone cash fees. If a non-employee director elects to receive restricted stock for their fees relating to the fourth quarter of the fiscal year, such shares of restricted stock are granted during the first quarter of the subsequent fiscal year. As such, this column includes restricted stock issued in lieu of fees pertaining to the fourth quarter of 2022 but excludes restricted stock issued in January of 2024 pertaining to foregone fees for the fourth quarter of 2023. |
Director Compensation Table
The aggregate grant date fair values are computed in accordance with FASB ASC 718, “Share-Based Payment” (“ASC 718”), for the following shares of restricted stock granted during 2023 (which reflects the annual equity grant as well as the 25% incremental portion of the quarterly grants as included in the Stock Awards column above):
Director Compensation Table
| Name | Restricted Stock | | John V. Lovoi | 10,483 | | Terence B. Jupp | 10,366 | | Steven L. Newman | 9,662 | | Amy B. Schwetz | 8,076 | | Darryl K. Willis | 8,800 | | Carri. A Lockhart | 8,567 |
Director Compensation Table
Assumptions used in the calculation of these amounts are included in footnote 19 to our audited consolidated financial statements for the fiscal year ended December 31, 2023, included in our Annual Report on Form 10-K filed with the SEC on February 27, 2024.
Director Compensation Table
| (3) The aggregate number of shares of restricted stock outstanding at December 31, 2023, including restricted stock issued in lieu of cash fees pursuant to the director stock compensation program, held by each director is set forth immediately below. |
Director Compensation Table
| Name | Total Restricted Stock | | John V. Lovoi | 15,324 | | Terence B. Jupp | 15,078 | | Carri A. Lockhart | 9,167 | | Steven L. Newman | 13,587 | | Amy B. Schwetz | 12,321 | | Darryl K. Willis | 12,397 |
Purposes of the Executive Compensation Program
| • | align executive compensation with Company and individual performance and appropriate peer group comparisons; |
Purposes of the Executive Compensation Program
| • | produce long-term, positive results for our stockholders; |
Purposes of the Executive Compensation Program
| • | provide market-competitive compensation and benefits that will enable us to attract, motivate and retain a talented workforce. |
Administration of Executive Compensation Program
Administration of Executive Compensation Program Our executive compensation program is administered by the Committee. The specific duties and responsibilities of the Committee are described in this proxy statement under “Corporate Governance Matters — Committees of the Board of Directors — Compensation Committee.” The Committee normally meets each February to determine annual incentive compensation earned during the prior year and to establish performance targets for the current year annual incentive compensation plan. The Committee also normally meets in October to determine any adjustments to base salaries for our executive officers and to award equity-based compensation. The Committee also meets at other times during the year and acts by written consent when necessary or appropriate.
2023 Compensation Highlights
| • | Annual Cash Incentive Compensation; New Safety Metric; Performance Resulting in Bonuses Paid at 74% of Target. The Committee generally retained the 2022 annual cash incentive program design for 2023, with bonuses earned based on Bookings (30% weighting) and Adjusted EBITDA described below (70% weighting); however, the Committee added a safety payout metric that operates to reduce the final payout by up to 10% if the number of reportable incidents for the year exceeds a certain number of incidents based on the Company’s number of incidents in recent years (which historic safety incidents are below industry averages). For 2023, the Committee certified achievement of $40 million of Adjusted EBITDA (resulting in an Adjusted EBITDA Target Multiplier of 83%) and $272 million of Bookings (resulting in a Bookings Target Multiplier of 52%). The Company experienced six recordable safety incidents, which was below the threshold to require any safety modifier adjustment. Such performance yielded a performance multiplier for our annual cash incentive for named executive officers of 74%. |
2023 Compensation Highlights
| • | 2023 Performance Unit Awards; No Change in Peer Group Index. The performance units awarded in October of 2023 may be earned at 0% to 200% of the target number of units granted based on the Company’s relative total stockholder return over the three-year performance period from October 1, 2023 through September 30, 2026, as measured against the VanEck OIH Index constituent companies and the S&P 500 Index. In addition, a negative adjustment factor will be applied to the 2023 Performance Units such that if the Company’s absolute total stockholder return over the three-year performance period is negative, no more than 150% of the target number of units granted may be earned. |
2023 Compensation Highlights
| • | 2020 Performance Units paid at 0%. The Company’s total stockholder return ranked below the 30th percentile of the remaining component companies of the Philadelphia Oil Service Index and the S&P 500 Index over the three-year period from October 1, 2020 through September 30, 2023. Our absolute total stockholder return over such period was -3.92%. As a result, 0% of the 2020 performance units vested in accordance with the award agreements, which illustrates our shareholder and executive alignment. |
Realizable Pay Analysis
| • | Realizable value is defined as the pre-tax value as of September 30, 2023 of all shares of restricted stock and performance units granted between October 1, 2020 and ending on September 30, 2023 with certain assumptions regarding performance units as discussed below. |
Realizable Pay Analysis
| • | For the 2020 performance unit grant, the 0% vesting level, discussed above, is reflected in the chart. |
Realizable Pay Analysis
| • | For performance unit awards for which the performance period is not yet complete (2021 grants and 2022 grants), the value is based on our period-to-date results through September 2023. |
Role of Consultants
Role of Consultants The Committee has the authority to engage a third-party consultant at any time, and has continued to engage Meridian Compensation Partners, LLC (“Meridian”), to provide independent advice on executive compensation and evaluate and recommend appropriate modifications to our compensation program consistent with our program’s objectives. Meridian reports directly to the Committee, which pre-approves the scope of work and the fees charged. The Committee reviewed and assessed Meridian’s independence and performance in order to confirm that it was independent and met all applicable regulatory requirements. In October 2023, at the direction of the Committee, Meridian evaluated the base salary and annual and long-term incentive compensation of our named executive officers. As it had done in prior years for the Committee, Meridian used publicly available data from a peer group of oilfield service companies to assist in that analysis. The peer group data used in October 2023 in relation to compensation for the Company’s named executive officers for 2023 was the same peer group used by Meridian in its October 2022 report to the Committee, and consisted of the following 13 publicly traded oilfield services and equipment companies:
Role of Consultants
| Core Laboratories N.V. | DMC Global Inc. | Expro Group Holdings N.V. | | Forum Energy Technologies, Inc. | Gulf Island Fabrication, Inc. | Helix Energy Solutions Group, Inc. | | Newpark Resources, Inc. | Nine Energy Service, Inc. | Oceaneering International, Inc. | | Oil States International, Inc. | SEACOR Marine Holdings Inc. | TETRA Technologies, Inc. | | Tidewater Inc. | | |
Role of Consultants
This peer group represents a group of companies in the oilfield services industry of comparable size to Dril-Quip based on measures such as enterprise value, revenues, market capitalization and assets. We believe that the use of this group as a reference for evaluating our compensation policies helps align us with our peers and competitors and ensure our compensation program remains competitive when compared to our competition for executive talent. We also believe this group of companies provides a sufficiently large and consistent data set that is generally not subject to wide changes or volatile swings in compensation data. Pursuant to Meridian’s recommendations and its own analysis, the Committee has implemented the compensation program for our named executive officers as further described below.
General
| • | annual incentive compensation in the form of cash bonuses; |
General
| • | long-term stock-based incentive compensation consisting of restricted stock and performance unit awards; and |
General
| (1) Stock Award values calculated using the aggregate grant date fair value of the restricted stock awards and performance unit awards (assuming target performance). |
Annual Cash Incentive Compensation
Annual Cash Incentive Compensation Our annual incentive compensation program provides a cash award that is designed to link each employee’s compensation to the achievement of annual performance objectives for the Company, as well as to recognize the employee’s performance during the year. 2023 Awards. In February 2023, the Committee approved cash incentive compensation criteria under our 2017 Incentive Plan for executive officers for their performance in 2023 (the “2023 Bonus Criteria”). Under the 2023 Bonus Criteria, each executive’s cash incentive compensation award for 2023 performance was calculated based on:
Annual Cash Incentive Compensation
| • | Financial performance metrics comprised of (A) our Adjusted EBITDA for the year (weighted 70%), which is a non-GAAP financial measure calculated as net income excluding income taxes, interest income and expense, depreciation and amortization expense, non-cash gains or losses from foreign currency exchange rate changes, as well as other significant non-cash items and other adjustments for certain charges and credits, and excluding any EBITDA associated with the Great North Wellhead business acquired in 2023, and (B) our Bookings for the year (weighted 30%), which refers to actual annual product bookings; |
Annual Cash Incentive Compensation
| • | A safety performance metric that operates to reduce the final payout received by our executive officers by up to 10% if the number of reportable incidents exceeds a certain number of incidents; and |
Annual Cash Incentive Compensation
| • | the annual cash incentive target amounts for each executive officer, which are set by the Committee. |
Annual Cash Incentive Compensation
In October 2022, after considering market data provided by Meridian, the Committee approved an increase in the annual cash incentive target amounts for Messrs. McClure and Webster from 75% to 80% of base salary and for Mr. Underwood from 50% to 60% of base salary. Mr. Bird’s annual cash incentive target remained unchanged. The Committee set the maximum payout opportunity for each named executive officer at 200% of the officer’s target bonus and the payout for target performance at 100%. At the beginning of 2023, our Chief Executive Officer proposed, and the Committee approved, our budget for 2023, including the Adjusted EBITDA and Bookings targets that would apply under our annual incentive plan. Adjusted EBITDA and Bookings, as set forth below, were chosen by the Committee as the relevant Company financial performance metrics for the 2023 annual cash incentive awards in an effort to focus management on improving operating efficiencies and bookings. Performance below threshold would have resulted in zero payout for the applicable metric. The new safety modifier was added in light of our commitment to improving our HSE policies to minimize safety risks and hazards.
Annual Cash Incentive Compensation
| | Adjusted EBITDA (70% of Annual Cash Incentive Determination) | | | | Adjusted EBITDA | Adjusted EBITDA Bonus Target Multiplier | | Maximum | $60,000,000 | 200% | | Target | $45,000,000 | 100% | | Threshold | $30,000,000 | 50% |
Annual Cash Incentive Compensation
| | Bookings (30% of Annual Cash Incentive Determination) | | | | Bookings(2) | Bookings Multiplier | | Maximum | $378,000,000 | 200% | | Target | $315,000,000 | 100% | | Threshold | $270,000,000 | 50% |
Annual Cash Incentive Compensation
| (1) Adjusted EBITDA is net income excluding income taxes, interest income and expense, depreciation and amortization expense, and adjusted to remove any one-time irregular items, whether gains or losses, including but not limited to stock-based compensation, significant litigation expense, goodwill impairments, asset write-downs, gain on any sale or divestiture of assets or businesses, restructuring costs and foreign exchange gains or losses. |
Annual Cash Incentive Compensation
| (2) Bookings are actual annual product bookings. |
Annual Cash Incentive Compensation
The safety metric for 2023 was set at no more than eight recordable incidents based on a 5-year average of 13.6 incidents per year. The final annual cash incentive payouts are determined using the following formula: Interpolation is used for determining the Adjusted EBITDA and the Bookings Multiplier in the event of achievement between threshold and target or between target and maximum levels. The Committee applies discretion in determining the amount of any bonus reduction in the event that the safety modifier is triggered. The Company achieved 2023 Adjusted EBITDA of $40 million as described above (resulting in an Adjusted EBITDA Target Multiplier of 83%) and 2023 Bookings of $272 million (resulting in a Bookings Target Multiplier of 52%). The Company experienced six recordable safety incidents, which was below the threshold to require any safety modifier adjustment. Such performance yielded a final performance multiplier for our annual cash incentive for named executive officers of 74% and final bonus payouts of $466,200, $248,640, $224,960, and $139,860 for Messrs. Bird, McClure, Webster and Underwood, respectively.
Long-Term Stock-Based Incentive Compensation
Long-Term Stock-Based Incentive Compensation In determining the amount, if any, of long-term incentive awards granted to our named executive officers and our other key employees, the Committee considers numerous factors, including, among others, the following:
Long-Term Stock-Based Incentive Compensation
| • | our financial and operating performance during the relevant period; |
Long-Term Stock-Based Incentive Compensation
| • | the executive’s contribution to our success; |
Long-Term Stock-Based Incentive Compensation
| • | the level of market competition for executives with comparable skills and experience; and |
Long-Term Stock-Based Incentive Compensation
| • | the total amount of long-term incentive awards granted to an executive over the course of his or her career, together with the retentive effect of additional long-term incentive awards. |
Long-Term Stock-Based Incentive Compensation
The Committee determined that it was appropriate to grant each executive officer awards in an equal number of performance units and restricted stock shares to balance the objectives of retention and performance. For 2023, the division of annual awards under our 2017 Incentive Plan between restricted stock and performance units at target was as follows: In October of 2023, after considering the above factors, the Committee approved the target grant values set forth below for Messrs. Bird, McClure, Webster and Underwood.
Long-Term Stock-Based Incentive Compensation
| Name | Restricted Stock Value | Target Performance Unit Value | | Jeffrey J. Bird | $1,250,000 | $1,250,000 | | Kyle F. McClure | $550,000 | $550,000 | | James C. Webster | $500,000 | $500,000 | | Donald M. Underwood | $200,000 | $200,000 |
Long-Term Stock-Based Incentive Compensation
Restricted Stock Grants. The Committee administers restricted stock grants under our 2017 Incentive Plan. The Committee approves the grant of restricted stock at meetings of the Committee, and generally does not grant restricted stock by written consent. The Committee establishes award values for our named executive officers and the total number of shares subject to awards for non-executive employees and delegates to the Chief Executive Officer the distribution of such awards to our non-executive employees. Historically, annual grants of equity compensation have been made on October 28, the anniversary of the closing of our initial public offering. Based on the considerations discussed above under “— Long-Term Stock-Based Incentive Compensation,” the Committee awarded Mr. Bird 54,872 shares of restricted stock, Mr. McClure 24,143 shares of restricted stock, Mr. Webster 21,949 shares of restricted stock and Mr. Underwood 8,779 shares of restricted stock in October 2023. Each grant of restricted stock is scheduled to vest in three equal annual installments on October 28 of each of 2024, 2025 and 2026, subject to the officer’s continued employment through each applicable vesting date. Performance Units. The Committee also elected to grant to each of the named executive officers shares of performance units in October 2023 under the 2017 Incentive Plan. The Committee believes that the performance unit awards align executive performance with stockholder interests and focus the officers on long-term performance as the performance units vest over three-year intervals. Under the performance units, participants may earn from 0% to 200% of their target number of shares based upon the percentile ranking of the Company’s total shareholder return (“TSR”) compared to the TSR of the VanEck OIH Index component companies and the S&P 500 Index, as set forth in the table below. The TSR is calculated over a 3-year period from October 1, 2023 to September 30, 2026. In the event that the Company’s absolute TSR over the 3-year performance period is negative, a reduced percentage payout schedule is applied, as set forth below. Linear interpolation is used to determine payout for performance between achievement levels.
Long-Term Stock-Based Incentive Compensation
| Percentile Ranking | Percentage Earned | Percentage Earned if Absolute TSR is Negative | | 90th percentile or above | 200% | 150% | | 70th percentile | 150% | 125% | | 50th percentile (Target) | 100% | 100% | | 30th percentile | 50% | 50% | | Below 30th percentile | 0% | 0% |
Long-Term Stock-Based Incentive Compensation
Based on the considerations discussed above under “— Long-Term Stock-Based Incentive Compensation,” the Committee awarded Mr. Bird a target grant of 54,872 performance units, Mr. McClure a target grant of 24,143 performance units, Mr. Webster a target grant of 21,949 performance units and Mr. Underwood a target grant of 8,779 performance units.
Other Benefits
Other Benefits We provide our executive officers with other personal benefits that we believe are reasonable and consistent with our overall compensation program. The employment agreements of our named executive officers provide certain benefits upon termination or change-in-control, which are described under “— Potential Payments Upon Termination or Change-in-Control.” We believe these benefits are consistent with those awarded by our peer group and are beneficial in retaining executives. These benefits are also intended to help ensure each named executive officer’s continued full attention to our business needs in the event we were to become the subject of the types of change in control transactions described in the agreements. We seek to provide benefit plans, such as medical, life and disability insurance, in line with market conditions. Executive officers are eligible for the same benefit plans provided to other employees, including insurance plans and supplemental plans chosen and paid for by employees who wish additional coverage. We also typically make contributions to the Dril-Quip, Inc. 401(k) Plan, which is a voluntary and contributory defined contribution plan for eligible employees. We do not have any special insurance plans for executive officers.
Summary Compensation Table
Summary Compensation Table The following table sets forth information regarding the compensation of Mr. Bird, our President and Chief Executive Officer, Mr. McClure, our Vice President — Chief Financial Officer, Mr. Webster, our Vice President — General Counsel and Secretary, and Mr. Underwood, our Vice President — Subsea Products (collectively, the “named executive officers”), for services rendered in all capacities during 2021, 2022 and 2023. Messrs. McClure and Underwood were not named executive officers for 2021 and, accordingly, only their respective 2022 and 2023 compensation is shown.
Summary Compensation Table
| | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) (2) | All Other Compensation ($) (3) | Total ($) | | Jeffrey J. Bird | 2023 | 633,385 | | 2,610,810 | 466,200 | 28,800 | 3,739,195 | | President and Chief | 2022 | 605,589 | | 2,827,526 | 600,000 | 23,292 | 4,056,407 | | Executive Officer | 2021 | 460,000 | | 2,269,282 | 418,600 | 15,600 | 3,163,482 | | Kyle. F, McClure | 2023 | 421,728 | | 1,148,724 | 248,640 | 28,524 | 1,847,616 | | Vice President — Chief | 2022 | 403,726 | 200,000 | 3,193,781 | 300,000 | 21,338 | 4,118,844 | | Financial Officer | | | | | | | | | James C. Webster | 2023 | 383,385 | | 1,044,333 | 224,960 | 28,800 | 1,681,478 | | Vice President — General | 2022 | 363,726 | | 1,130,979 | 270,000 | 23,092 | 1,787,797 | | Counsel and Secretary | 2021 | 360,000 | | 1,106,275 | 245,700 | 15,600 | 1,727,575 | | Donald M. Underwood | 2023 | 317,539 | | 417,705 | 139,860 | 28,302 | 903,406 | | Vice President — Subsea Products | 2022 | 302,795 | | 452,402 | 150,000 | 24,471 | 929,668 |
Summary Compensation Table
| (1) Amounts reflect the aggregate grant date fair value of restricted stock awards and performance unit awards granted in the applicable year as computed in accordance with ASC 718. With respect to performance unit awards, amounts are based on probable achievement level of the underlying performance conditions as of the grant date. Assumptions used in the calculation of this amount are included in footnote 19 to our audited consolidated financial statements for the fiscal year ended December 31, 2023, included in our Annual Report on Form 10-K filed with the SEC on February 27, 2024. The maximum value at the grant date of 2023 performance unit awards assuming the highest level of performance is achieved is as follows: |
Summary Compensation Table
| Name | Year | Maximum Value of Performance Unit Awards ($) | | Jeffrey J. Bird | 2023 | 2,499,968 | | Kyle F. McClure | 2023 | 1,099,955 | | James C. Webster | 2023 | 999,996 | | Donald M. Underwood | 2023 | 399,971 |
Summary Compensation Table
| (2) Amounts shown for each year reflect short-term incentive awards earned with respect to performance in the designated year and paid in the following year. |
Summary Compensation Table
| (3) The amounts shown for 2023 reflect an automobile allowance for each of the named executive officers in the amount of $15,600 and matching contributions to 401(k) accounts, which were $13,200 for Mr. Bird, $12,924 for Mr. McClure, $13,200 for Mr. Webster, and $12,702 for Mr. Underwood in 2023. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table contains information with respect to the grant of plan-based awards during 2023.
Grants of Plan-Based Awards
| | Approval Date | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) (3) | Grant Date Fair Value of Stock and Option Awards (4) | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Jeffrey J. Bird | | | | | | | | | | | | | | | 315,000 | 630,000 | 1,260,000 | | | | | | | | 10/24/2023 | 10/28/2023 | | | | | | | 54,872 | 1,249,984 | | | 10/24/2023 | 10/28/2023 | | | | 27,436 | 54,872 | 109,744 | | 1,360,826 | | Kyle F. McClure | | | 168,000 | 336,000 | 672,000 | | | | | | | | 10/24/2023 | 10/28/2023 | | | | | | | 24,143 | 549,978 | | | 10/24/2023 | 10/28/2023 | | | | 12,072 | 24,143 | 48,286 | | 598,746 | | James C. Webster | | | 152,000 | 304,000 | 608,000 | | | | | | | | 10/24/2023 | 10/28/2023 | | | | | | | 21,949 | 499,998 | | | 10/24/2023 | 10/28/2023 | | | | 10,975 | 21,949 | 43,898 | | 544,335 | | Donald M. Underwood | | | 94,500 | 189,000 | 378,000 | | | | | | | | 10/24/2023 | 10/28/2023 | | | | | | | 8,779 | 199,986 | | | 10/24/2023 | 10/28/2023 | | | | 4,390 | 8,779 | 17,558 | | 217,719 |
Grants of Plan-Based Awards
| (1) The estimated payouts under non-equity incentive plan awards were based on the terms of the 2023 Bonus Criteria. The maximum payout amount (as shown in the Maximum column) was 200% of target for all of our named executive officers. The target payout amount (as shown in the Target column) was 100% of target for all of our named executive officers. The threshold payout amount (as shown in the Threshold column) was 50% of target for all of our named executive officers and is shown here without application of any reduction for the safety metric modifier. The safety metric modifier may result in a decrease of up to 10% of the otherwise applicable payouts. |
Grants of Plan-Based Awards
| (2) Reflects performance unit awards, for which threshold, target and maximum numbers of shares are shown in the columns under Estimated Future Payouts Under Equity Incentive Plan Awards for each officer. The performance unit awards vest based on the Company’s total stockholder return compared to the total stockholder return of the VanEck OIH Index component companies and the S&P 500 Index return over the period from October 1, 2023 to September 30, 2026, with payouts capped at 150% of target if the Company’s absolute total shareholder return for such period is negative. |
Grants of Plan-Based Awards
| (3) The 2023 restricted shares granted on October 28, 2023 vest annually in 33 1/3% increments annually beginning on October 28, 2024. |
Grants of Plan-Based Awards
| (4) Represents the full grant date fair value of the awards calculated in accordance with ASC 718. Assumptions used in the calculation of this amount are included in footnote 19 to our audited consolidated financial statements for the fiscal year ended December 31, 2023, included in our Annual Report on Form 10-K filed with the SEC on February 27, 2024. |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The table immediately below sets forth information concerning the outstanding stock option, restricted stock and performance unit awards held by each named executive officer as of December 31, 2023, with the market value based on the closing price per share of our common stock on December 29, 2023, the last trading day of the year.
Outstanding Equity Awards at Fiscal Year-End
| | Stock Awards | | | | | | Number of Shares of Stock That Have Not Vested | Market Value of Shares of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares That Have Not Vested | | Jeffrey J. Bird | | | | | | | 14,160(a) | $329,503 | | | | | 35,796(b) | $832,973 | | | | | 54,872(c) | $1,276,871 | | | | | | | 24,638(d) | $573,336 | | | | | 53,694(e) | $1,249,459 | | | | | 54,872(g) | $1,276,871 | | Kyle F. McClure | 16,938(a) | $394,147 | | | | | 14,318(b) | $333,180 | | | | | 24,143(c) | $561,808 | | | | | | | 20,630(d) | $480,061 | | | | | 21,477(e) | $499,770 | | | | | 24,143(f) | $561,808 | | James C. Webster | | | | | | | 6,903(a) | $160,633 | | | | | 14,318(b) | $333,180 | | | | | 21,949(c) | $510,753 | | | | | | | 12,011(d) | $279,501 | | | | | 21,477(e) | $499,770 | | | | | 21,949(f) | $510,753 | | Donald M. Underwood | 289(g) | $6,725 | | | | | 2,124(a) | $49,425 | | | | | 5,727(b) | $133,267 | | | | | 8,779(c) | $204,287 | | | | | | | 3,696(d) | $86,000 | | | | | 8,591(e) | $199,913 | | | | | 8,779(f) | $204,287 |
Outstanding Equity Awards at Fiscal Year-End
| (a) These restricted stock awards vest on October 28, 2024. |
Outstanding Equity Awards at Fiscal Year-End
| (b) These restricted stock awards vest in two annual installments on October 28, 2024 and October 28, 2025. |
Outstanding Equity Awards at Fiscal Year-End
| (c) The restricted stock awards vest in one-third increments over a three-year period on October 28 of each of 2024, 2025 and 2026. |
Outstanding Equity Awards at Fiscal Year-End
| (d) The performance unit awards are shown at the threshold level of achievement and vest based on the Company’s total stockholder return compared to the total stockholder return of the Philadelphia Oil Service Index component companies and the S&P 500 Index over the period from October 1, 2021 to September 30, 2024. |
Outstanding Equity Awards at Fiscal Year-End
| (e) The performance unit awards are shown at the target level of achievement and vest based on the Company’s total stockholder return compared to the total stockholder return of the component companies of the VanEck OIH Index and the S&P 500 Index over the period from October 1, 2022 to September 30, 2025. |
Outstanding Equity Awards at Fiscal Year-End
| (f) The performance unit awards are shown at the target level of achievement and vest based on the Company’s total stockholder return compared to the total stockholder return of the component companies of the VanEck OIH Index and the S&P 500 Index over the period from October 1, 2023 to September 30, 2026. |
Outstanding Equity Awards at Fiscal Year-End
| (g) These restricted stock awards vest on May 17, 2024. |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The table immediately below indicates the number and value of stock awards vested during 2023. None of our named executive officers exercised any stock options during 2023.
Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercises (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Jeffrey J. Bird | — | — | 41,139 | 937,146 | | Kyle F. McClure | — | — | 24,096 | 548,906 | | James C. Webster | — | — | 20,349 | 463,550 | | Donald M. Underwood | | | 7,022 | 160,261 |
Potential Payments Upon Termination or Change-in-Control
Potential Payments Upon Termination or Change-in-Control
Jeffrey J. Bird
| Payments Upon Termination | Without Cause and Not During the Change of Control Period | Without Cause or By the Executive for Good Reason and During the Change of Control Period | With Cause; Other than for Good Reason; Due to Death or Disability | | Unpaid Salary and Accrued Vacation Through Date of Termination (1) | $15,103 | $15,103 | $15,103 | | Base Salary Severance Payment (2) | 1,300,000 | 1,950,000 | — | | Pro Rated Cash Incentive Amount (3) | — | 650,000 | — | | Additional Cash Incentive Amount (3) | — | 1,950,000 | — | | Stock Options, Restricted Stock and Performance Unit Vesting (4) | — | 5,954,188 | — | | Continued Insurance Coverage (5) | 36,185 | 55,268 | — | | Total | $1,351,288 | $10,574,559 | $15,103 |
Kyle F. McClure
| Payments Upon Termination | Without Cause and Not During the Change of Control Period | Without Cause or By the Executive for Good Reason and During the Change of Control Period | With Cause; Other than for Good Reason; Due to Death or Disability | | Unpaid Salary and Accrued Vacation Through Date of Termination (1) | $9,991 | $9,991 | $9,991 | | Base Salary Severance Payment (2) | 430,000 | 860,000 | — | | Pro Rated Cash Incentive Amount (3) | — | 344,000 | — | | Additional Cash Incentive Amount (3) | — | 688,000 | — | | Stock Options, Restricted Stock and Performance Unit Vesting (4) | — | 3,178,403 | — | | Continued Insurance Coverage (5) | 17,770 | 36,185 | — | | Total | $457,761 | $5,116,579 | $9,991 |
James C. Webster
| Payments Upon Termination | Without Cause and Not During the Change of Control Period | Without Cause or By the Executive for Good Reason and During the Change of Control Period | With Cause; Other than for Good Reason; Due to Death or Disability | | Unpaid Salary and Accrued Vacation Through Date of Termination (1) | $6,217 | $6,217 | $6,217 | | Base Salary Severance Payment (2) | 400,000 | 800,000 | — | | Pro Rated Cash Incentive Amount (3) | — | 320,000 | — | | Additional Cash Incentive Amount (3) | — | 648,000 | — | | Stock Options, Restricted Stock and Performance Unit Vesting (4) | — | 2,496,987 | — | | Continued Insurance Coverage (5) | 16,091 | 32,767 | — | | Total | $422,308 | $4,295,971 | $6,217 |
Donald M. Underwood
| Payments Upon Termination | Without Cause and Not During the Change of Control Period | Without Cause or By the Executive for Good Reason and During the Change of Control Period | With Cause; Other than for Good Reason; Due to Death or Disability | | Unpaid Salary and Accrued Vacation Through Date of Termination (1) | $5,129 | $5,129 | $5,129 | | Base Salary Severance Payment (2) | 330,000 | 660,000 | — | | Pro Rated Cash Incentive Amount (3) | — | 198,000 | — | | Additional Cash Incentive Amount (3) | — | 396,000 | — | | Stock Options, Restricted Stock and Performance Unit Vesting (4) | — | 946,181 | — | | Continued Insurance Coverage (5) | 16,091 | 32,767 | — | | Total | $351,220 | $2,238,077 | $5,129 |
CEO Pay Ratio
CEO Pay Ratio The table below sets forth comparative information regarding:
CEO Pay Ratio
| • | the annual total compensation of our Chief Executive Officer, Mr. Bird, for the year ended December 31, 2023, determined using the amount reported in the “Total” column of the Summary Compensation Table above; |
CEO Pay Ratio
| • | the median of the annual total compensation of all employees of the Company and its consolidated subsidiaries, excluding our Chief Executive Officer, for the year ended December 31, 2023, determined on the basis described below; and |
CEO Pay Ratio
| • | a ratio comparison of those two amounts, each as determined in accordance with rules prescribed by the SEC. |
CEO Pay Ratio
For purposes of determining the median of the annual total compensation of all employees of the Company and its consolidated subsidiaries, excluding our Chief Executive Officer, for the year ended December 31, 2023, the applicable SEC rules require us to identify the median employee, by using either annual total compensation for all such employees or another consistently applied compensation measure. In identifying the median employee, we:
CEO Pay Ratio
| • | used annual base salary (defined as the fixed portion of each employee’s compensation arrangements and that is paid without regard to our financial or operational performance in a given year) and annual cash incentive, as determined from the Company’s payroll and finance records for the year ended December 31, 2023, as our consistently applied compensation measure; |
CEO Pay Ratio
| • | included the aggregate grant date fair value of equity-based incentive compensation awards; |
CEO Pay Ratio
| • | included all worldwide employees of the Company and its consolidated subsidiaries as of December 31, 2023 (the “Measurement Date”), without regard to their location or compensation arrangements or whether employed on a full-time or part-time basis; |
CEO Pay Ratio
| • | converted annual base salary and annual cash incentive to U.S. dollars using foreign currency exchange rates as of the Measurement Date; |
CEO Pay Ratio
| • | annualized the compensation for any full-time or part-time employees that were hired in 2023 but were not employed by the Company or its consolidated subsidiaries for all of 2023; |
CEO Pay Ratio
| • | did not include any cost-of-living adjustments; and |
CEO Pay Ratio
| • | did not use statistical sampling. |
CEO Pay Ratio
After identifying the median employee based on the process described above, we calculated annual total compensation for that employee using the same methodology we used for determining total compensation for 2023 for our named executive officers as set forth in the Summary Compensation Table.
CEO Pay Ratio
| Chief Executive Officer annual total compensation (A) | $3,739,195 | | Median annual total compensation of all employees (excluding Chief Executive Officer) (B) | $64,553 | | Ratio of (A) to (B) | 58:1 |
CEO Pay Ratio
Given the global distribution of our employee population, we use a variety of pay elements to structure the compensation arrangements of our employees. We believe that the sum of annual base salary, annual cash incentive and the aggregate grant date fair value of equity-based incentive compensation awards is an appropriate, consistently applied compensation measure that provides a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and finance records and the methodology described above. Because the SEC rules for identifying the median employee allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive “compensation actually paid” and certain financial performance of the Company. For further information concerning the Company’s pay for performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to “Executive Compensation — Compensation Discussion and Analysis.”
Pay Versus Performance
| Year | Summary Compensation Table Total for Mr. Bird (1) | Compensation Actually Paid to Mr. Bird (2) | Summary Compensation Table Total for Mr. DeBerry (3) | Compensation Actually Paid to Mr. DeBerry (4) | Average Summary Compensation Table Total for Non-PEO NEOs (5) | Average Compensation Actually Paid to Non-PEO NEOs (6) | Value of Initial Fixed $100 Investment Based On: | | Net Income (9) | | Adjusted EBITDA (10) | | | | | | | | | Total Shareholder Return (7) | Peer Group Total Shareholder Return (8) | | | | | 2023 | $3,739,195 | $2,000,342 | — | | $1,477,500 | $708,151 | $49.61 | $116.80 | | 604,000 | $46,542,000 | | 2022 | $4,056,407 | $3,246,493 | — | | $2,278,770 | $1,928,341 | $57.92 | $114.74 | | 443,000 | $29,973,000 | | 2021 | — | — | $6,083,948 | $(165,868) | $1,734,119 | $(302,041) | $41.95 | $69.75 | ($ | 127,996,000) | $15,229,000 | | 2020 | — | — | $3,985,828 | $585,955 | $2,065,660 | $1,125,211 | $63.14 | $58.11 | ($ | 30,768,000) | $31,707,000 |
Pay Versus Performance
| 1 | The dollar amount reported in this column is the amount reported for Mr. Bird in the “Total” column of our Summary Compensation Table for 2022 and 2023, respectively. |
Pay Versus Performance
| 2 | The dollar amount reported in this column represents the amount of “compensation actually paid” to Mr. Bird, as computed in accordance with Item 402(v) of Regulation S-K and does not reflect the total compensation actually realized or received by Mr. Bird. In accordance with these rules, for 2023, this amount reflects “Total” as set forth in the Summary Compensation Table, adjusted as shown below. Information on the calculation of such amount for 2022 is included in our 2023 Proxy Statement. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. |
Pay Versus Performance
| Compensation Actually Paid to Mr. Bird | 2023 | | 2023 Summary Compensation Table Total | $3,739,195 | | Less, value of Stock Awards reported in 2023 Summary Compensation Table | ($2,610,810) | | Plus, year-end fair value of outstanding and unvested equity awards granted in 2023 | $2,715,615 | | Plus, fair value as of vesting date of equity awards granted and vested in 2023 | — | | Plus (less), change in fair value from December 31, 2022 to December 31, 2023 of outstanding and unvested equity awards granted in prior years | ($1,661,151) | | Plus (less), change in fair value from December 31, 2022 to the vesting date of equity awards granted in prior years that vested in the year | ($182,507) | | Less, December 31, 2022 fair value for any equity awards forfeited in 2023 | — | | 2023 Compensation Actually Paid to Mr. Bird | $2,000,342 |
Pay Versus Performance
| 3 | The dollar amounts reported in this column are the amounts reported for Mr. DeBerry in the “Total” column of our Summary Compensation Table for 2021 and 2020. |
Pay Versus Performance
| 4 | The dollar amounts reported in this column represent the amount of “compensation actually paid” to Mr. DeBerry, as computed in accordance with Item 402(v) of Regulation S-K and do not reflect the total compensation actually realized or received by Mr. DeBerry. Information on the calculation of such amounts is included in our 2023 Proxy Statement. |
Pay Versus Performance
| 5 | The dollar amounts reported in this column represent the average of the amounts reported for the Company’s named executive officers (NEOs) as a group (excluding Mr. Bird in 2023 and 2022 and excluding Mr. DeBerry in 2021 and 2020) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs included for these purposes in each applicable year are as follows: (i) for 2023 and 2022, Messrs. McClure, Webster and Underwood; and (ii) for 2021 and 2020, Messrs. Bird, Kumar and Webster. |
Pay Versus Performance
| 6 | The dollar amounts reported in this column represent the average amount of “compensation actually paid” to the NEOs set forth in footnote 5 for each year, as computed in accordance with Item 402(v) of Regulation S-K. In accordance with these rules, for 2023 these amounts reflect “Total” as set forth in the Summary Compensation Table, adjusted as shown below. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of the grant. Information on the calculation of such amounts for 2020-2022 is included in our 2023 Proxy Statement. |
Pay Versus Performance
| Average Compensation Actually Paid to Non-PEO NEOs | 2023 | | Average 2023 Summary Compensation Table Total | $1,477,500 | | Less, average value of Stock Awards reported in Summary Compensation Table | ($870,254) | | Plus, average year-end fair value of outstanding and unvested equity awards granted in 2023 | $905,189 | | Plus, average fair value as of vesting date of equity awards granted and vested in 2023 | — | | Plus (less), average change in fair value from December 31, 2022 to December 31, 2023 of outstanding and unvested equity awards granted in prior years | ($728,516) | | Plus (less), average change in fair value from December 31, 2022 to the vesting date of equity awards granted in prior years that vested in the year | ($75,768) | | Less, prior year-end fair value for any equity awards forfeited in the year | — | | Average Compensation Actually Paid to Non-PEO NEOs | $708,151 |
Pay Versus Performance
| 7 | Total Shareholder Return (TSR) is calculated by dividing (a) the sum of (i) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (ii) the difference between the Company’s share price at the end of each fiscal year shown and the beginning of the measurement period, and the beginning of the measurement period by (b) the Company’s share price at the beginning of the measurement period. The beginning of the measurement period for each year in the table is December 31, 2019. |
Pay Versus Performance
| 8 | The peer group used for this purpose is the VanEck OIH Index. |
Pay Versus Performance
| 9 | The dollar amounts reported represent the amount of net income (or loss) reflected in the Company’s audited financial statements for the applicable year. |
Pay Versus Performance
| 10 | Adjusted EBITDA is net income excluding income taxes, interest income and expense, depreciation and amortization expense, and adjusted to remove any one-time irregular items, whether gains or losses, including but not limited to stock-based compensation, significant litigation expense, goodwill impairments, asset write-downs, gain on any sale or divestiture of assets or businesses, restructuring costs and foreign exchange gains or losses. |
Description of Certain Relationships between Information Presented in the Pay versus Performance Table
Description of Certain Relationships between Information Presented in the Pay versus Performance Table As described in more detail in the section “Executive Compensation—Compensation Discussion and Analysis ,” the Company’s executive compensation program reflects a variable pay-for-performance philosophy. While the Company utilizes several performance measures to align executive compensation with Company performance, all of those Company measures are not presented in the Pay versus Performance table. Moreover, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with compensation that is actually paid (as computed in accordance with SEC rules) for a particular year. In accordance with SEC rules, the Company is providing the following descriptions of the relationships between information presented in the Pay versus Performance table.