DEF 14A of DNOW Inc., Apr 5, 2024

DEF 14A of DNOW Inc.

Filed Apr 5, 2024 · FY20230001193125-24-087976

Open on EDGAR

  1. Our Director Nominees

    Our Director Nominees

  2. Our Director Nominees

    | Name Occupation | Age | Director Since | Independent | Other Public Boards | AC | CC | ESGN | | Richard Alario Former CEO, Key Energy Services, Inc. | 69 | 2014 | Yes | 1 | | C | M | | Terry Bonno Former Senior Vice President of Industry and Community Relations, Transocean Ltd. | 66 | 2014 | Yes | 1 | M | | M | | David Cherechinsky CEO, DNOW Inc. | 60 | 2020 | No | 0 | | | | | Galen Cobb Former Vice President Industry Relations, Halliburton | 70 | 2014 | Yes | 0 | M | | | | Paul Coppinger Former President of SPM Oil & Gas, a Caterpillar Company | 63 | 2017 | Yes | 0 | | M | C | | Karen David-Green Former Chief Communications, Stakeholder, and Sustainability Officer, Expro Group | 55 | 2023 | Yes | 1 | M | | | | Rodney Eads Former Chief Operating Officer and Executive Vice President, Pride International Inc. | 73 | 2014 | Yes | 0 | C | | | | Sonya Reed Former Senior Vice President and Chief Human Resources Officer, Phillips 66 | 50 | 2021 | Yes | 0 | | M | |

  3. Our Director Nominees

    | AC: Audit Committee CC: Compensation Committee ESGN: Environmental, Social, Governance and Nominating Committee | C: Chair M: Member |

  4. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS At the Company’s inception in 2014, the Board of Directors of DNOW Inc. (the “Board”) was divided into three classes with each class serving a term of three years. In 2020, stockholders approved the declassification of the Board over a three-year period which culminated in 2023. All directors now stand for election for one-year terms if elected at the upcoming annual meeting of stockholders. Richard Alario, Terry Bonno, David Cherechinsky, Galen Cobb, Paul Coppinger, Karen David-Green, Rodney Eads, and Sonya Reed are nominees for directors, each for a one-year term expiring at the Annual Meeting in 2025, or when their successors are elected and qualified. We believe each of the nominees will be able to serve if elected. However, if any nominee is unable to serve, the remaining members of the Board have the authority to nominate another person, elect a substitute, or reduce the size of the Board. Proxies cannot be voted for a greater number of persons than the number of nominees named.

  5. Vote Required for Approval

    | Name | Biography | | Richard Alario (69) First Became a Director in 2014 | Mr. Alario has been a director of the Company since May 2014 and has served as the Company’s Chairman of the Board since April 2021. Mr. Alario served as Interim Chief Executive Officer of the Company from November 2019 until June 2020, and as Executive Vice Chairman on an interim, short-term basis from June 2020 until October 2020. Mr. Alario served as Chief Executive Officer and director of Key Energy Services, Inc., a provider of oilfield services, from 2004 until his retirement in March 2016. Prior to joining Key Energy Services, Mr. Alario was employed by BJ Services Company, an oilfield services company, where he served as Vice President from 2002 after OSCA, Inc. was acquired by BJ Services. Prior to joining BJ Services, Mr. Alario had over 21 years of service in various capacities with OSCA, an oilfield services company, most recently having served as its Executive Vice President. He is also a director of Kirby Corporation, serving as its lead director and chairman of its Environmental, Social, Governance and Nominating Committee, and effective starting April 26, 2024, will serve as their Chairman of the Board. He formerly served as Chairman of the National Ocean Industries Association. | | Terry Bonno (66) First Became a Director in 2014 | Ms. Bonno has been a director of the Company since May 2014. Ms. Bonno provides advisory and consulting services to numerous private companies utilizing her professional expertise in Global business development, commercial and contractual due diligence, Sustainability and Enterprise Risk Management. She has served as a Director of Kodiak Gas Services, a publicly held gas compression company, where she serves as the Chair of the Personnel and Compensation Committee and as a member of the Nominating, Governance, and Sustainability Committee. From 2017 to the successful divestiture to 3i in 2019, Ms. Bonno served as a Director of Tampnet, the largest offshore high-capacity communication network in the world. She also served as a director on energy industry and charity boards. In 2017, she was accepted as an industry expert to serve in an advisory capacity on the National Offshore Safety and Advisory Committee (NOSAC) for a three-year term ending 2020. Ms. Bonno served as Senior Vice President of Industry and Community Relations for Transocean Ltd. from 2017 until her retirement in September 2018. Her responsibilities included leadership in industry forums, community affairs and driving sustainability in the organization. Ms. Bonno previously served as Senior Vice President of Marketing for Transocean Ltd. from 2011 and Vice President Marketing from 2008 with oversight of Transocean’s marketing in 14 countries. Prior to this role, she served in various director and management roles at Transocean Ltd. leading the marketing and contracts efforts for West Africa and the Americas from 2001 until 2008. She served in a Director Marketing and Contracts role for Turnkey Drilling with RBFalcon and Global Marine (a wholly owned subsidiary of Applied Drilling Technology Inc. (ADTI)) from 1993 until 2001, who later became acquired by Transocean Ltd. During her time with Global Marine from 1982 to 1999, she served in various Accounting Management roles. She is also a Certified Public Accountant. | | David Cherechinsky (60) First Became a Director in 2020 | Mr. Cherechinsky has served as President and Chief Executive Officer and been a director of the Company since June 2020. Prior to serving as President and Chief Executive Officer, Mr. Cherechinsky served as the Company’s Senior Vice President and Chief Financial Officer from February 2018 until June 2020. Mr. Cherechinsky previously served as Vice President, Corporate Controller and Chief Accounting Officer from February 2014 until February 2018. Mr. Cherechinsky served as Vice President—Finance for NOV’s distribution business group from 2003, and as Vice President—Finance for NOV’s Distribution & Transmission business segment from 2011, until the Company’s spin-off in May 2014. He previously served NOV starting in 1989 in various corporate roles, including internal auditor, credit management and business analyst, and is a CPA. | | Galen Cobb (70) First Became a Director in 2014 | Mr. Cobb has been a director of the Company since May 2014. Mr. Cobb recently served as Vice President Industry Relations for Halliburton since 2002 until his retirement in 2022 where he was responsible for Halliburton’s industry relations global activities, energy trade policy issues, executive client relations, and trade organization oversight. He worked for Halliburton for over forty years serving in various executive management positions in operations, marketing, sales and business development. From 1991 to 1994, he was Director CIS and China with oversight in establishing Halliburton’s presence and operations in these emerging markets. Later, he was named Director Executive Sales and Business Development with expanded responsibilities for the worldwide development and promotion of Halliburton’s services and products. |

  6. Vote Required for Approval

    | Name | | | Paul Coppinger (63) First Became a Director in 2017 | Mr. Coppinger has been a director of the Company since December 2017. Mr. Coppinger was the President of SPM Oil & Gas, a Caterpillar Company (formerly the Oil & Gas Division of the Weir Group PLC which was acquired by Caterpillar in February 2021) from 2014 until his retirement in 2022. From 2012 to 2014, Mr. Coppinger served as President, Pressure Pumping, for the Weir Group, and from 2011 to 2012 as President of Weir SPM. Prior to that, Mr. Coppinger was Group President of the Energy Segment of CIRCOR International, Inc. from 2001 to 2011. Mr. Coppinger is Chairman Emeritus of the Energy Workforce & Technology Council (formerly the Petroleum Equipment & Services Association) and served on its Board of Directors from 2007 to 2019. | | Karen David-Green (55) First Became a Director in 2023 | Ms. David-Green has been a director of the company since 2023. Ms. David-Green has over 30 years of experience in senior leadership positions on Wall Street and as a corporate executive for multinational companies. Her skillset encompasses capital market transactions, demand generation, risk/reputation management, data analytics, business and cultural transformation, scaling businesses in a highly cyclical environment, cybersecurity, go-to-market strategies and energy transition and sustainability. She previously held key positions in the Executive Leadership Team at Expro Group N.V. and Weatherford International plc where she served as the former Chief Marketing, Stakeholder, Investor Relations, Communications and Sustainability Officer. During her tenure at Weatherford from 2010-2020, Ms. David-Green played instrumental roles as Chief Marketing Officer, Sr. Vice President of Stakeholder Engagement, President of the Weatherford Foundation, Inc., Chair of the Sustainability Leadership Council, and Executive Member of the Disclosure and Global Business Continuity and Planning Committees. She is also a former Senior Wall Street equity research analyst. Notably, she previously led the energy service equity research franchise at Oppenheimer & Co. Inc. and Crédit Agricole where she was responsible for providing financial forecasts to clients globally. Ms. David-Green is an Independent Director for PHX Energy Services Inc. where she serves on the Audit and Compensation and Human Resources Committees. She is Directorship Certified by the National Association of Corporate Directors (NACD) and NACD Certified in Cybersecurity Oversight. | | Rodney Eads (73) First Became a Director in 2014 | Mr. Eads has been a director and Chair of the Audit Committee of the Company (commencing this position May 2014). Mr. Eads has served as President of Eads Holdings, LLC, a wholly owned private investment firm (commencing 2009) and is an active investor in early-stage companies. Mr. Eads has provided advisory and due diligence services for numerous private equity entities, with deep expertise in Enterprise Risk Management and Crisis Management. He has provided Expert Witness services for several international arbitration cases in the $150M-$250M claim range. He is a NACD Certified Director, and since 2019 has served on the NACD TriCities Board (Houston, Austin, San Antonio). During the last 5 years he has been an active participant in the Southwest Audit Committee Network. Mr. Eads served as a director from 2010 to 2015 for private equity owned Nautronix UK Limited. Mr. Eads previously served as Chief Operating Officer and Executive Vice President of Pride International Inc. (NYSE) from 2006 until 2009, where he was responsible for safety, environmental, and regulatory compliance for offshore operations and South American and eastern hemisphere land assets operating in 15 countries. He also managed a public company spin-off in 2009 of Seahawk Drilling Company. He served as Senior Vice President of Worldwide Operations for Diamond Offshore Drilling Inc. (NYSE) from 1997 until 2006, with responsibility for safety, environmental, and regulatory compliance in 12 countries. From 1977 to 1997, he served in several executive and operations management positions with Exxon Corporation, primarily in international assignments spanning 11 countries, providing engineering, business planning and project analysis, and compliance for safety, environmental, and regulatory requirements. Mr. Eads has managed global workforces as large as 14,000 employees, managed operating budgets of $1B per year, and capital projects exceeding $3B. | | Sonya Reed (50) First Became a Director in 2021 | Ms. Reed has been a director of the Company since August 2021. Ms. Reed is a former executive officer of Phillips 66 where she served as the Senior Vice President and Chief Human Resources Officer from 2015 until 2023. In this capacity she also had accountability for corporate communications, including internal and external messaging, branding, social media and philanthropy. From 2011 to 2015, Ms. Reed was with General Cable, where she last served as Executive Vice President, Chief Human Resources Officer. Ms. Reed began her career at Zurich Financial Services, where she held several positions of increasing responsibility, the last of which was Vice President of Human Resources of their Latin American business. Throughout her career Ms. Reed both lived and worked domestically and internationally, had accountability across multiple countries and administered her role in both English and Spanish (of which she is fluent). Her skillset encompasses executive compensation, succession |

  7. Compensation Committee

    | • | approve and evaluate all compensation of directors and executive officers, including salaries, bonuses, and compensation plans, policies, and programs of the Company; and |

  8. BOARD OF DIRECTORS

    BOARD OF DIRECTORS

  9. General Overview

    General Overview DNOW Inc.’s executive compensation program is administered by the Compensation Committee of the Board of Directors. The Compensation Committee establishes specific compensation levels for the Company’s executive officers and administers the Company’s long-term incentive award plans. The Compensation Committee’s primary objective regarding executive compensation is to design and implement a compensation program that will attract and retain the best available individuals to serve on the Company’s executive team and properly incentivize those executives to achieve both the Company’s short-term and long-term financial and operational goals. To this end, the Compensation Committee strives to provide compensation packages for key executives that generally offer compensation opportunities in the median range of the companies in its designated peer group as described below. Data sources reviewed by the Compensation Committee and its independent compensation consultants include industry survey groups, national survey databases, proxy disclosures and general trend data, which are updated annually. The Compensation Committee reviews all elements of executive compensation both separately and in the aggregate. The major components of the executive compensation program for 2023 were base salary, participation in the Company’s annual cash incentive (bonus) plan, and the grant of restricted stock and performance-based restricted stock awards (long-term incentives). Participants The following is a list of our named executive officers by name and position, as of December 31, 2023:

  10. General Overview

    | What DNOW Does ✔ | What DNOW Does NOT Do • | | ✔ Pay for Performance | × No gross-up payments to cover excise taxes or perquisites | | ✔ Long-term incentives linked to stock price appreciation and company financial performance | × No Guaranteed Annual or Multi-Year Bonuses | | | × No Repricing of Underwater Stock Options | | ✔ Annual Cash Incentive and Long-Term Incentives are subject to the Company’s clawback policy | × No significant compensation in the form of perquisites for executives | | ✔ Bonus payments to executives under the annual cash incentive program are capped at a certain percentage of the executive’s base salary | × No pledging of our shares by executive officers or directors | | ✔ Long-term incentive awards do not fully vest until a minimum of three years after the grant | | | ✔ Varied performance metrics under short-term and long- term incentive plans | | | ✔ Double Trigger Provisions for Change in Control | | | ✔ Independent Compensation Consultant Reports Directly to the Compensation Committee | | | ✔ Fully independent Compensation Committee | | | ✔ Benchmark pay relative to the market and review the designated peer group used for market benchmarking on an annual basis | | | ✔ Robust Stock Ownership Guidelines for Executives and Directors including minimum holding requirements for board members and executive officers | | | ✔ Mitigate Undue Risk in Compensation Programs | |

  11. General Overview

    | What We Have Heard From Investors | Changes We Have Made | | Disclose performance metric targets for the annual short-term incentive plan | We have provided the specific performance metric targets for our annual short-term incentive plan, along with detail as to how these metrics were determined and set, thereby providing enhanced disclosure on our annual short-term incentive plan. For more information, see our discussion under “Components of Compensation—Annual Incentive Award”. | | Long-term incentive award program needs to have more weighting on performance-based vehicles and metrics | The performance-based share awards comprise 50% of the long-term incentive award program for the Company’s executives. For more information, see our discussion under “Components of Compensation—Long-Term Incentive Compensation”. | | Greater reliance on performance-based measures relative to a peer group, such as total shareholder return | In the performance-based share awards, total shareholder return relative to the peer group is 50% of the performance-based share awards. For more information, see our discussion under “Components of Compensation—Long-Term Incentive Compensation”. | | Avoid duplication between metrics used for the short-term incentive program and the long-term incentive program | EBITDA and working capital were previously the two measures used in both the short-term incentive program and the long-term incentive program. Beginning in 2019, in the long-term incentive program, we have removed working capital as a measure and replaced it with return on capital employed (ROCE). The EBITDA metric is generally considered by our shareholders to be the most important financial metric for the Company’s performance to be measured by, which is why it remained as a performance measure in both the short-term incentive program and the long-term incentive program (though the weighting of the EBITDA metric was reduced in the long-term incentive program). For more information, see our discussion under “Components of Compensation—Long-Term Incentive Compensation”. | | Review the compensation peer group to confirm operational alignment and appropriate size | Annual evaluation which this year led to the addition of one company to our peer group and elimination of one company based on qualitative and quantitative similarity. The TSR peer group was modified in the same manner as well. For more information, see our discussion under “Competitive Positioning”. | | Ensure directors and named executive officers have a meaningful consistent amount of Company stock | Instituted ownership requirements where officers must have a minimum of three times their annual base salary and directors have five times their annual retainer. For more information, see our discussion under “Stock Ownership Guidelines for Executives.” |

  12. Compensation Philosophy

    Compensation Philosophy The Company believes that compensation should be directly linked to performance and the creation of long-term value for our stockholders. The Company achieves this by providing a mix of base salary with short-term and long-term incentives ensuring that compensation opportunities are measured by a variety of time-based targets to balance both our near-term and long-term strategic goals. The Company’s compensation program places a strong emphasis on performance driven annual and long-term incentives to align the executive’s interests with stockholder value. The annual and long-term incentives are calculated and paid based primarily on financial measures of profitability and stockholder value creation. Executives of the Company are incentivized to increase the Company’s profitability and stockholder return and to optimize the Company’s financial performance in order to earn a major portion of their compensation package. The Company seeks to structure a balance between achieving strong short-term annual results and ensuring the Company’s long-term success and viability. The Company wants each of its executives to balance their focus between the Company’s day-to-day operational performance and the Company’s long-term goals and strategies. To reinforce the importance of balancing these perspectives, the Company’s executives are provided both short and long-term incentives. Components of DNOW’s Compensation Program There are no compensation policy differences among the individual executives in 2023. While more senior officers, such as the Chief Executive Officer, receive higher compensation consistent with their increased responsibilities, changes to executive compensation were made in alignment with market movements and to maintain the principal approach of positioning executives within the market median. These changes and differences are reviewed and considered annually by the Compensation Committee in connection with the compensation analysis performed by its independent consultant.

  13. Compensation of the Chief Executive Officer

    Compensation of the Chief Executive Officer The Compensation Committee determines the compensation of the Chief Executive Officer based on competitive peer group data, leadership, meeting operational goals, executing the Company’s business plan, tenure and years of experience, and achieving certain financial results. Components of the Chief Executive Officer’s compensation for 2023 were consistent with those for executive officers as described above and included base salary, participation in the annual incentive plan, as well as the grant of restricted stock and performance share awards. Through its annual evaluation of the Chief Executive Officer’s base salary level, the Compensation Committee reviews the compensation level of Chief Executive Officers of each of the companies in the designated peer group and considers the Chief Executive Officer’s individual performance and success in achieving the Company’s strategic objectives. The Compensation Committee establishes goals and objectives for the Chief Executive Officer for each fiscal year. For 2024, Mr. Cherechinsky’s performance as Chief Executive Officer will be measured in three key areas of the Company that align with DNOW’s strategic goals: (1) Fueling the Future by winning the market and pursuing sustainable growth, (2) Delighting the Customer by being our customers’ most trusted partner, and (3) Inspiring One Another by fostering an inclusive, people-first culture. The specific goals within these three areas were set based on a determination of prioritizing the Chief Executive Officer’s efforts on those specific areas and responsibilities that would have the greatest impact on the Company and included the following:

  14. Compensation of the Chief Executive Officer

    | ● | championing DNOW’s long-term strategy to focus on increasing shareholder value and make DNOW synonymous with leading Energy Evolution solutions for our customers; |

  15. Competitive Positioning

    Competitive Positioning Because of the goals and objectives for executive compensation, the Company believes each element of compensation should be properly designed, as well as be competitive with the marketplace, to incentivize its executives and attract and retain talented executives. As part of its process to establish compensation levels for the Company’s named executive officers, the Compensation Committee compares each of the major elements of compensation (base salary, annual bonus, and long-term incentives) for each of its named executive officers against the median compensation provided to comparable executive officers at companies in a designated peer group. When analyzing peer group data, the Compensation Committee does not establish a specific numeric range around the median data points which it considers reasonable or acceptable. Rather, in setting compensation for any particular named executive officer, the Compensation Committee considers any variance from the median, taking into account other factors as discussed below, and determines whether such variance is appropriate. If the Compensation Committee determines that any variance is unwarranted, the Compensation Committee will make appropriate adjustments to the compensation levels. In September 2023, the Compensation Committee requested that its independent compensation consultant NFP Compensation Consulting (“NFPCC”), formerly known as Longnecker & Associates, review its designated peer group against which the Company’s named executive officers’ compensation is compared and provide recommendations on the ongoing peer group framework. The designated peer group is comprised of companies of similar size, companies in the equipment and services industry with an emphasis on serving the energy industry, and companies in the peer group of its closest competitors, as well as companies for which the Company competes for management talent. After reviewing the peer group and NFPCC’s analysis and recommendations, the Compensation Committee approved the following peer group of 16 companies to form the Company’s current designated peer group. One previous peer company (NexTier Oilfield Solutions) was removed due to that peer company being involved in an anticipated merger, while one new peer company (ProPetro Holding Corp.) was added to the peer group (as it met the reasonable size parameters as discussed above and had some general similarity in business industry and/or operations to the Company). The Compensation Committee recognized that the designated members of the peer group were within reasonable size parameters (generally 0.5 times to 3 times the Company’s revenues, assets, EBITDA and/or market capitalization) and were generally similar to the Company in terms of industry and/or operations.

  16. Competitive Positioning

    | Applied Industrial Technologies, Inc. | Kaman Corp. | Oceaneering International, Inc. | | DXP Enterprises, Inc. | Kennametal, Inc. | ProPetro Holding Corp | | Flowserve Corp. | Kirby Corporation | RPC, Inc. | | Global Industrial Company | Liberty Oilfield Services | Select Energy Services, Inc. | | GMS Inc. | MRC Global Inc. | | | H&E Equipment Services | MSC Industrial Direct Co. Inc. | |

  17. Competitive Positioning

    Separately, the Compensation Committee engaged NFPCC in September 2023 to conduct its annual competitive review of executive compensation for the Company’s named executive officers relative to its peer companies, as well as to analyze internal pay equity based on the peer group approved by the Compensation Committee. NFPCC analyzed and compared each position’s responsibilities and job title to develop competitive market data. Its executive compensation review covered the following elements of compensation: base salaries, annual bonuses (realizable), and equity compensation (realizable). NFPCC generated data on the components of the Company’s compensation program compared to the market 25th percentile, market 50th percentile, and market 75th percentile of the designated peer group. Based on the compiled data and the comparisons prepared by NFPCC, the Compensation Committee, in consultation with the Company and NFPCC, determined that the total direct compensation for the Company’s named executive officers relative to the designated peer group was generally positioned around the 50th percentile range of the peer group.

  18. Components of Compensation

    Annual Incentive Award The objectives of the Company’s annual cash incentive plan are to incentivize performance to achieve the Company’s corporate growth and profitability goals, encourage smart investments and prudent employment of capital, encourage efficient and optimal cash flow management, and provide competitive compensation packages to attract and retain management talent. The Company’s annual incentive plan is designed to reward its employees in line with the financial achievements of the Company on an annual basis. Most corporate exempt employees of the Company, including the named executive officers, were eligible to participate in the Company’s annual incentive plan in 2023, aligning a portion of each employee’s cash compensation with the Company’s performance. When the Company achieves strong financial results, its executives are rewarded well through its annual incentive plan. The Company believes this structure helps keep the executives properly motivated to continue helping the Company achieve strong results year over year. The Company’s annual incentive plan has two independent pre-determined metrics to measure the Company’s success and payouts under such plan: (1) working capital as a percentage of revenue (“Working Capital”) and (2) EBITDA excluding other costs percentage (“EBITDA”). These metrics were chosen to align management’s incentives with DNOW’s strategic goals, which have been extensively communicated to DNOW’s shareholders. Working capital is defined as current assets (excluding cash) less current liabilities (excluding short-term borrowings) and is directly aligned with DNOW’s strategic approach to capital allocation. This metric incentivizes executive officers to focus on DNOW’s liquidity, operational efficiency and short-term financial health. EBITDA means earnings before interest, taxes, depreciation, and amortization. EBITDA excluding other costs (referred to as “EBITDA” within this document) is reconciled in the Company’s 2023 Form 10-K to the most comparable GAAP financial measure and excludes the impact of certain other amounts and is not calculated in accordance with GAAP. EBITDA is directly aligned with DNOW’s strategic goal to optimize operations. This metric incentivizes executive officers to focus on DNOW’s core operations and the overall health of its business. Our shareholders consider both of these metrics to be very important to them in judging the Company’s overall performance.

  19. Components of Compensation

    | Performance Levels | Payout Level | | Below Entry | No Payout | | Entry | 50% of Target Payout | | Target | 100% of Target Payout | | Maximum | 200% of Target Payout |

  20. Components of Compensation

    If the Company’s EBITDA or Working Capital is less than the entry level threshold, then there is no payout in that fiscal year for that performance metric portion of the annual incentive. Results falling between the stated thresholds of entry, target, and maximum will result in an interpolated, or sliding scale payout. Effective February 2020, the Company added a threshold condition that the Company needed to achieve at least the Company’s entry level EBITDA before any bonus payout would be payable under either performance metric. For 2023, the chief executive officer’s participation level was 100% and the other executive officers’ participation levels were between 65-80%. These participation level percentages are based on each executive’s level of responsibility for the Company’s financial performance.

  21. Components of Compensation

    The Compensation Committee believes the use of two separate metrics, EBITDA and Working Capital, as the designated performance objectives under the annual incentive plan best align with the interests of the Company’s stockholders and the Company’s executive officers. The “target” objective is set based on the Company’s operating and financial plan for that given year, which is thoroughly prepared and reviewed by the Company each year based on projected industry market conditions for that year and the operating budgets announced by companies in the industry. This plan and the “target” objective are fully reviewed and vetted by the Compensation Committee as well as the Company’s full Board of Directors. The “target” objective is thus set at a level that the Company believes is challenging to meet but achievable if the Company properly and efficiently executes on its operational plan and market conditions are positive and favorable during the year. The “minimum” and “maximum” level of EBITDA and Working Capital under the incentive plan are set based off of the “target” objective. The Compensation Committee believes this objective, formulaic measure allows the “minimum” objective to be set at a level that the Company can achieve even if market conditions are not as favorable. The “minimum” objective serves to motivate the Company’s executives to continue to work towards executing the Company’s operational plan if market conditions, which are generally outside the control of the Company, are not as favorable as originally projected. The Compensation Committee believes this objective, formulaic measure allows the “maximum” objective to be set at a level that would be extremely challenging for the Company to achieve. The Compensation Committee believes that, for the “maximum” objective to be achieved, a combination of market conditions being much more favorable than initially forecasted and the Company executing its operational plan in a highly efficient manner would need to occur. Depending on prevailing and forecasted market conditions from year to year, the EBITDA and Working Capital metric levels (entry, target, and maximum) may be reduced or increased from one year to the next. However, metric levels are not subject to change or adjustment during an active performance year. Any such reduction in metric levels from year to year does not mean the rigor of the annual cash incentive program has been reduced or lessened. Given that market conditions may be projected to be stronger in certain years (and performance is greater in those years) and weaker in other years (and performance is less in those years), as supported by the cyclical nature of certain of the industries the Company serves, the Compensation Committee and the Company take those factors into consideration when setting these metric levels on an annual basis to ensure, irrespective of the actual metric levels for a given year, that the Company’s annual cash incentive program maintains the same level of rigor each year in order to achieve an incentive payout. As a result of our shareholders conveying to the Company the importance of the EBITDA metric as the most important key metric in which they measure the Company’s financial performance, it is also used as a portion of the Company’s performance-based share awards (it comprises 25% of such performance-based share awards, where such awards comprise 50% of the overall equity value provided to executives). The EBITDA metric in the annual incentive plan is measured over a one-year performance period, while the EBITDA metric in the long-term incentive plan is measured over a three-year performance period, providing some differentiation between the usage of such metric across both plans as market conditions, competition, and other factors may substantially vary over time. 2023 DNOW Inc. Annual Incentive Plan In February 2023, the Compensation Committee approved the structure of the 2023 DNOW Inc. Annual Incentive Plan with a 70% weighted to the EBITDA metric and the remaining 30% weighted to the Working Capital metric. The Compensation Committee approved the greater weighting to the EBITDA metric because the EBITDA metric is generally considered by the Company’s shareholders to be the most important financial metric for which the Company is measured. Also, as the Company has achieved greater historical success with the Working Capital metric, the Compensation Committee chose to incentivize better Company performance by having an increased weighting to the EBITDA metric. With respect to the EBITDA performance metric, the Compensation Committee approved the EBITDA performance metrics at 4.75%, 7% and 9% for the entry, target, and maximum levels for 2023, an increase year over year. The Compensation Committee believed that these EBIDTA metrics were consistent with prevailing market conditions and reasonable projections for 2023 as the Target EBITDA level was higher than the maximum threshold level set for the Company in 2022, which the Company exceeded. The Compensation Committee also kept the threshold condition that the Entry EBITDA level be achieved by the Company in 2023 before any bonus payout would be payable under either performance metric. With respect to the working capital metric, the Compensation Committee approved the working capital metrics at 20%, 17% and 14% for the entry, target and maximum levels, respectively which were in line with market conditions and expectations as the costs of inventory and warehouse, selling, and administrative charges were expected to increase to align with the overall aim of growing the business and EBITDA in 2023.

  22. Components of Compensation

    NOTE: To increase the difficulty level of achieving the working capital metric, percentages are reduced (i.e., lower working capital percentages indicate higher achievement by the Company). Payouts are determined by metric under the Company’s annual incentive plan using the following formula: The following examples calculate an annual incentive award payment for Mr. Cherechinsky showing entry level achievement, target level achievement, and maximum level achievement under the Company’s 2023 annual incentive plan under the EBITDA and Working Capital performance metrics..

  23. Components of Compensation

    | Metric | Achievement | Achievement as a % of Target | Weighted Payout (%) | | EBITDA (70%) | 7.9% | 146% | 102% | | Working Capital (30%) | 16.7% | 111% | 33% |

  24. Components of Compensation

    Thus, based on the Company’s financial results in 2023, bonus payments were made to the Company’s named executive officers, as follows: David Cherechinsky - $1,289,099, Mark Johnson - $542,779, Raymond Chang - $496,751, Kelly Munson - $412,512, and Rocio Surratt - $242,554. Long-Term Incentive Compensation The primary purpose of the Company’s long-term incentive compensation is to focus its executive officers on a longer-term perspective on the Company’s financial successes and their contributions in their managerial responsibilities. This component of an executive officer’s compensation directly links the officers’ interests with those of the Company’s stockholders. In addition, long-term incentives encourage management to focus on the Company’s long-term development and prosperity in addition to profitability and optimal cash flow. This program helps balance long-term versus short-term business objectives, reinforcing that one should not be achieved at the expense of the other. The Company’s long-term incentive compensation program also serves to help the Company attract and retain management talent. The Company grants time-based restricted stock and performance-based share awards to the Company’s key executives based on competitive grants within the industry and based on the level of long-term incentives appropriate for the competitive long-term compensation component of total compensation. Such executives are eligible to receive restricted stock and performance share awards annually with other key employees of the management team who were eligible to receive equity grants on a discretionary basis. Eligibility for an award does not ensure receipt of an award. Starting with the 2022 long-term equity incentive grants to its executives, the long-term equity incentive program has been comprised of the following:

  25. Components of Compensation

    | • | 50% time-based restricted stock |

  26. Components of Compensation

    This change was to ensure that 50% of the Company’s long-term incentive awards to its executives were purely performance based from the previous allocation which was equal in stock options, time-based restricted stock, and performance-based share awards. As explained in more detail below, the Company decided to eliminate stock option grants from its 2022 long-term incentive compensation. Elimination of Stock Options in 2022 Since the Company’s inception in 2014, the Company granted stock options to its key employees in the first quarter of the year. The Compensation Committee bore the responsibility of approving any Company stock option grants with the exercise price for the option grant being based on the Company’s closing stock price on the date of grant. The goal of the stock option component was to provide a compensation program that was competitive within the industry while directly linking a significant portion of the executive’s compensation to the enhancement of stockholder value. The ultimate value of any stock option was based solely on the increase in value of the shares of the Company’s common stock over the grant price. Accordingly, stock options would have value only if the Company’s stock price appreciated from the date of grant. Additionally, the option holder must remain employed during the period required for the option to “vest”, thus providing an incentive for an option holder to remain employed by the Company. However, in many cases, stock options can be seen as an inefficient means of attracting, retaining, and motivating a company’s executives and employees based on the variations and instability of a Company’s stock price due to reasons outside of a Company’s control and which are not truly indicative of a Company’s financial stability and performance. Stock options also have been discontinued by a number of the Company’s peer group members. As a result, the Compensation Committee, based on a recommendation from NFPCC, decided to eliminate stock option grants from the 2022 DNOW Inc. Long-Term Incentive Plan moving forward, resulting in a split of 50% restricted stock and 50% performance share awards. The elimination of stock options does not decrease the projected compensation of the executives of the Company, but only modifies the components of the long-term equity incentive program to more directly link to the financial performance of the Company even if the Company’s stock price falls below the price on the date of grant. Performance-Based Share Awards vs. Time Based Restricted Stock The goal of the performance-based share award program is to provide a compensation program that is also competitive within the industry while directly linking a significant portion of the executive’s compensation to the financial performance of the Company for a three-year period. The performance-based share awards received by the executives have value only if the Company’s designated financial performance objectives are met and exceeded. Additionally, the holder must also remain employed during the three-year period required for the award to “vest”, thus providing an additional incentive for the executive to remain employed by the Company. This at-risk component of compensation focuses executives on achieving strong financial performance for the Company over the long-term. The goal of time-based restricted stock award grants is to serve as a key retention tool for the Company to retain its executives and key employees. The restricted stock awards will have value to the executive even if the Company’s stock price falls below the price on the date of grant, provided that the executive remains employed during the full three-year period required for the award to “vest”. The Company believes that its equity incentive grants must be sufficient in size and duration to provide a long-term performance and retention incentive for executives and to increase their interest in the appreciation of the Company’s stock and achievement of positive financial results, both in absolute terms and relative to its peers. The Company believes that restricted stock and performance award grants at a competitive level, with certain vesting requirements, are an effective way of promoting the long-term nature of its business while also being used as a retention tool for its executives. The Company’s long-term incentive compensation program is focused on employees who will have a greater impact on the direction and long-term results of the Company by virtue of their roles and responsibilities. Restricted stock award grants and performance award grants must be reviewed and approved by the Compensation Committee. The Compensation Committee, Company management, and NFPCC each believe it is important that a portion of the equity grants include a grant based on the satisfaction of specified performance conditions to determine vesting of that particular grant. After consultation with Company management and NFPCC, the Compensation Committee established three separate performance metrics to be used for vesting of the performance share awards for executives. The Compensation Committee believed that the performance measures they established would serve to motivate the Company’s executives to deliver results aligned with the interests of Company stockholders. The performance share awards can be earned by the executives only by performance against established goals and vest three years from the grant date. Starting with the 2019 long-term equity incentive grants to its executives, the performance share awards have been divided into three separate performance metrics:

  27. Components of Compensation

    | • | Making award payouts based on multiple measures/metrics; |

  28. Components of Compensation

    | • | Encouraging long-term oversight of growth and goal accomplishments; and |

  29. Components of Compensation

    | • | Providing an earn-out structure with a threshold and maximum payout with varying levels of performance to incentivize performance. |

  30. Components of Compensation

    For the 2023 performance shares awards, with respect to the EBITDA performance metric, the Compensation Committee approved the EBITDA performance metrics at 4.75%, 7% and 9% for the entry, target and maximum levels, respectively. With respect to the return on capital employed metric, the Compensation Committee approved the metrics of 6%, 10% and 20% for the entry, target, and maximum levels, respectively. These metric targets were updated to better reflect prevailing and future expected market and business conditions during the performance period, as well as factoring in past Company results and future budgeted Company results. The setting of the “entry”, “target” and “maximum” levels follow the same philosophy the Company uses in setting these levels under its annual cash incentive plan. For more information, see “Components of Compensation – Annual Incentive Award.”

  31. Components of Compensation

    | 2023- 2025 Levels | Payout % | Percentile Rank vs. Designated Peer Group (TSR) | Actual EBITDA Performance | Actual Return on Capital Employed (ROCE) Performance | | Maximum | 200% | 75th percentile or greater | 9% or higher | 20% or higher | | Target | 100% | 50th percentile | 7% | 10% | | Entry | 50% | 25th percentile | 4.75% | 6% | | No Payout | 0% | Less than 25th percentile | Less than 4.75% | Less than 6% |

  32. Components of Compensation

    | 2021-2023 Levels | Payout % | Percentile Rank vs. Designated Peer Group (TSR) (50%) | Actual EBITDA Performance (25%) | Actual Return on Capital Employed (ROCE) Performance (25%) | | Maximum | 200% | 75th percentile or greater | 5% or higher | 5% or higher | | Target | 100% | 50th percentile | 2.5% | 3% | | Entry | 50% | 25th percentile | 0% | 1.5% | | No Payout | 0% | Less than 25th percentile | Less than 0% | Less than 1.5% |

  33. Components of Compensation

    | Metric | Performance Result 2021-2023 | Payout % | | TSR | 33.3% percentile | 66% | | EBITDA | 5.7421% | 200% | | ROCE | 14.2147% | 200% |

  34. Components of Compensation

    2023-2025 Annual and Long-Term Incentive Programs On February 20, 2023, the Compensation Committee approved the grant of restricted stock awards, and performance share awards to its executive officers pursuant to the NOW Inc. Long-Term Incentive Plan for the 2023-2025 performance period, as follows:

  35. Components of Compensation

    | Name | Shares of Restricted Stock (3 Years) (#) | Performance Awards (Target # of Shares) | | David Cherechinsky | 115,385 | 115,385 | | Mark Johnson | 26,923 | 26,923 | | Raymond Chang | 26,923 | 26,923 | | Kelly Munson | 19,231 | 19,231 | | Rocio Surratt | 9,615 | 9,615 |

  36. 2024 Annual and Long-Term Incentive Programs

    2024 Annual and Long-Term Incentive Programs On February 21, 2024, the Compensation Committee approved the terms and structure of the 2024 DNOW Inc. Annual Incentive Plan, based on two component metrics consistent with the weighting of the 2023 annual incentive plan with the EBITDA metric at 70% with the remaining 30% weighting to the Working Capital metric. On February 21, 2024, the Compensation Committee also approved the terms and structure of the 2024 Long-Term Incentive grants to the Company’s executives. The terms of such grants are generally consistent with those described under “Long-Term Incentive Compensation” above. The specific terms of the 2024 Annual and Long-Term Incentive Programs, including specific performance metrics and grant amounts, will be disclosed in next year’s proxy along with other 2024 executive compensation details.

  37. Compensation Consultant Independence

    Compensation Consultant Independence In connection with its engagement of NFPCC, the Compensation Committee considered various factors bearing upon NFPCC’s independence including, but not limited to, the amount of fees received by NFPCC from the Company as a percentage of NFPCC’s total revenue, NFPCC’s policies and procedures designed to prevent conflicts of interest, and the existence of any business or personal relationship that could impact NFPCC’s independence. After reviewing these and other factors, the Compensation Committee determined that NFPCC was independent and that its engagement did not present any conflicts of interest. NFPCC also determined that it was independent from management and confirmed this to the Compensation Committee. In furtherance of maintaining the independence of the Compensation Committee’s compensation consultant, the Compensation Committee has the sole authority to retain or terminate NFPCC.

  38. Employment Contracts, Termination of Employment, and Change-in-Control Arrangements

    Employment Contracts, Termination of Employment, and Change-in-Control Arrangements

  39. Cherechinsky, Johnson, Chang, Munson, and Surratt

    | • | long-term disability; |

  40. Cherechinsky, Johnson, Chang, Munson, and Surratt

    or if the employment relationship is terminated by the employee for Good Reason, the employee is entitled to receive a multiplier of their then current base salary (for Mr. Cherechinsky 3 times his current base salary, for Messrs. Johnson and Chang 2.5 times, and for Ms. Munson and Ms. Surratt 1.5 times). The executives are also entitled to an amount equal to the total of the employer matching contributions under the Company’s 401(k) Plan and Supplemental Plan as well as continued participation in the Company’s welfare and medical benefit plans. Further, any restricted stock held by the executive, not already vested, will be 100% vested. Under the agreements, termination for “Good Reason” means:

  41. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control The employment agreements detailed above require the Company to provide compensation to the named executive officers in the event of a termination of employment or change in control of the Company. The Company’s Compensation Committee believes the payment and benefit levels provided upon termination or change of control should correspond to the level of responsibility and risk assumed by the named executive officer. The Compensation Committee recognizes that it is not likely that the Company’s named executive officers would be retained by an acquirer in the event of a change of control. As a result, the Compensation Committee believes that a certain amount of cash compensation, along with immediate vesting of all unvested equity compensation, is an appropriate and sufficient incentive for the named executive officers to remain employed with the Company, even if a change of control were imminent. It is believed that these benefit levels should provide the Company’s named executive officers with reasonable financial security so that they could continue to make strategic decisions that benefit the future of the Company. The amount of compensation payable to each named executive officer as of December 31, 2023 in each situation is listed in the tables below.

  42. Executive Benefits and Payments Upon Termination (1)

    Executive Benefits and Payments Upon Termination (1)

  43. Executive Benefits and Payments Upon Termination (1)

    | Name and Principal Position | Base Salary | Continuing medical benefits | Retirement Contribution and Matching | Value of Unvested Stock Options | Value of Unvested Restricted Stock | Value of Unvested Performance Awards | Outplacement Services | Total ($) | | (a) | (b) (2) | (c) | (d) | (e)(3) | (f)(3) | (g) (4) | (h) (5) | (j) (6) | | David Cherechinsky President & Chief Executive Officer | $2,850,000 | $41,400 | $134,001 | $77,035 | $4,160,757 | $5,250,273 | $142,500 | $12,655,966 | | Mark Johnson Senior Vice President & Chief Financial Officer | $1,250,000 | $0 | $59,391 | $17,731 | $992,447 | $1,268,281 | $75,000 | $3,662,850 | | Raymond Chang VP, General Counsel, & Secretary | $1,144,000 | $324,549 | $57,752 | $11,525 | $895,921 | $1,075,196 | $68,640 | $3,577,583 | | Kelly Munson Chief Administrative and Information Officer | $570,000 | $41,400 | $42,316 | $9,752 | $663,590 | $815,289 | $57,000 | $2,199,347 | | Rocio Surratt VP– Finance and Corporate Controller | $412,500 | $0 | $26,540 | $4,433 | $324,895 | $393,845 | $41,250 | $1,203,463 |

  44. Executive Benefits and Payments Upon Termination (1)

    | (1) The following table describes the potential payments upon an involuntary not for cause termination or change in control of the Company as of December 31, 2023. This assumes the employment relationship is terminated by the Company for any reason other than voluntary termination, termination for cause, death, or disability, or if the employment relationship is terminated by the executive for “Good Reason”, as of December 31, |

  45. Executive Benefits and Payments Upon Termination (1)

    | 2023. Termination by the executive for “Good Reason” means a material diminution of any duties inconsistent with his or her current position or any action by the Company that results in a diminution in the executive’s position, authority, duties or responsibilities; a failure by the Company to comply with the terms of the executive’s employment agreement; or the requirement of the executive to relocate from where he or she was employed as of the date of the employment agreement. |

  46. Executive Benefits and Payments Upon Termination (1)

    | (2) The named executive officers have the following base salary multipliers of their then current base salaries: Cherechinsky – 3 times, Johnson – 2.5 times, Chang – 2.5 times, Munson – 1.5 times, Surratt – 1.5 times. For purposes of this analysis, the named executive officers had the following base salaries as of December 31, 2023: Cherechinsky- $950,000; Johnson - $500,000; Chang - $457,600; Munson - $380,000; Surratt - $275,000. |

  47. Executive Benefits and Payments Upon Termination (1)

    | (3) The value of unvested stock options, restricted stock, and performance share awards is based on the share price of $11.32, the Company’s closing stock price on December 31, 2023. Unvested restricted stock, performance share awards, and unvested stock options for each named executive officer are listed below. |

  48. Executive Benefits and Payments Upon Termination (1)

    | a. | Cherechinsky: Unvested stock options include 66,071 from 2021 grant at $10.26/share. Unvested restricted stock includes 96,248 shares from 2021 grant, 155,925 shares from 2022 grant, and 115,385 shares from 2023 grant. Unvested performance share awards include 192,495 shares from 2021 grant, 155,925 shares from 2022 grant, and 115,385 from 2023 grant. |

  49. Executive Benefits and Payments Upon Termination (1)

    | b. | Johnson: Unvested stock options include 16,727 options from 2021 grant at $10.26/share. Unvested restricted stock includes 24,366 shares from 2021 grant, 36,383 shares from 2022 grant, and 26,923 shares from 2023 grant. Unvested performance share awards include 48,733 shares from 2021 grant, 36,383 shares from 2022 grant, and 26,923 shares from 2023 grant. |

  50. Executive Benefits and Payments Upon Termination (1)

    | c. | Chang: Unvested stock options include 10,873 options from 2021 grant at $10.26/share. Unvested restricted stock includes 15,839 shares from 2021 grant, 36,383 shares from 2022 grant, and 26,923 shares from 2023 grant. Unvested performance share awards include 31,676 shares from 2021 grant, 36,383 shares from 2022 grant, and 26,923 shares from 2023 grant. |

  51. Executive Benefits and Payments Upon Termination (1)

    | d. | Munson: Unvested stock options include 9,200 options from 2021 grant at $10.26/share. Unvested restricted stock includes 13,402 shares from 2021 grant, 25,988 shares from 2022 grant, and 19,231 shares from 2023 grant. Unvested performance share awards are 26,803 shares from 2021 grant, 25,988 shares from 2022 grant, and 19,231 shares from 2023 grant. |

  52. Executive Benefits and Payments Upon Termination (1)

    | e. | Surratt: Unvested stock options include 4,182 options from 2021 grant at $10.26/share. Unvested restricted stock includes 6,092 shares from 2021 grant, 12,994 shares from 2022 grant, and 9,615 shares from 2023 grant. Unvested performance share awards are 12,183 shares from 2021 grant, 12,994 shares from 2022 grant, and 9,615 shares from 2023 grant. |

  53. Executive Benefits and Payments Upon Termination (1)

    | (4) For purposes of this analysis, we have assumed that the performance share awards vest at target (100%). |

  54. Executive Benefits and Payments Upon Termination (1)

    | (5) Executives are also entitled to outplacement services valued at not more than 15% of base salary. For purposes of this analysis, we valued the outplacement services at 15% of base salary. |

  55. Executive Benefits and Payments Upon Termination (1)

    | (6) In the event of: |

  56. Executive Benefits and Payments Upon Termination (1)

    | • | a Company termination of the executive’s employment for cause; |

  57. Executive Benefits and Payments Upon Termination (1)

    | • | the executive’s voluntary termination of his employment with the Company (not for “Good Reason”); or |

  58. Executive Benefits and Payments Upon Termination (1)

    | • | the executive’s employment with the Company is terminated due to his death or disability; |

  59. Executive Benefits and Payments Upon Termination (1)

    no extra benefits are payable by the Company to the executive as a result of any such events, other than accrued obligations and benefits owed by the Company to the executive (such as base salary through the date of termination and their outstanding balance in the Company’s 401(k) Plan and Supplemental Plan). In the event termination is not for cause, the executive would also be entitled to receive an amount equal to 50% of their base salary.

  60. Summary Compensation Table

    Summary Compensation Table

  61. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compens- ation ($)(4) | Change in Pension Value and Nonqual- ified Deferred Compen- sation Earnings ($) | All Other Compen- sation ($)(5) | Total ($) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | | David Cherechinsky President & Chief Executive Officer | 2023 2022 2021 | $947,116 $797,116 $650,000 | - - - | $3,331,165 $3,232,886 $3,309,101 | - - $996,734 | $1,289,099 $1,421,822 $1,032,646 | - - - | $13,038 $11,077 - | $5,580,418 $5,462,901 $5,988,481 | | Mark Johnson Senior Vice President & Chief Financial Officer | 2023 2022 2021 | $499,038 $448,750 $385,000 | - - - | $777,267 $754,352 $837,732 | - - $252,340 | $542,779 $639,820 $489,316 | - - - | $13,200 $12,200 - | $1,832,284 $1,855,122 $1,964,388 | | Raymond Chang VP, General Counsel, & Secretary | 2023 2022 2021 | $457,262 $439,462 $412,000 | $50,000 - - | $777,267 $754,352 $544,539 | - - $164,018 | $496,751 $625,602 $523,631 | - - - | $13,200 $12,200 - | $1,794,480 $1,831,616 $1,644,188 |

  62. Summary Compensation Table

    | Kelly Munson Chief Administrative and Information Officer | 2023 2022 2021 | $378,750 $313,269 $225,000 | - - - | $555,199 $538,827 $460,760 | - - $138,784 | $412,512 $447,874 $285,964 | - - - | $15,150 $10,904 - | $1,361,611 $1,310,874 $1,110,508 | | Rocio Surratt VP – Finance and Corporate Controller | 2023 2022 2021 | $274,038 $223,750 $160,000 | - - - | $277,585 $269,423 $209,434 | - - $63,084 | $242,554 $259,927 $165,223 | - - - | $10,962 $8,654 - | $805,139 $761,754 $597,741 |

  63. Summary Compensation Table

    | (1) The Compensation Committee approved a bonus be paid to Mr. Chang as a result of his successful management of two litigation matters in 2023 that were not ordinary or routine to the operations of the business where the Company was seeking damages. |

  64. Summary Compensation Table

    | (2) The amounts reported in this column represent the aggregate grant date fair value of stock awards granted in the relevant year compiled in accordance with FASB Topic 718, excluding forfeiture estimates. Refer to the Company’s 2023 Annual Report on Form 10-K, for all relevant valuation assumptions used to determine the grant date fair value of the stock awards included in this column. On February 19, 2023, the Named Executive Officers were granted shares of performance-based share awards, which are included in this column in the table above. The grants vest on the third anniversary of the date of grant, contingent on performance against three separate, independently established goals. For a more detailed discussion, see the section titled “Long-Term Incentive Compensation”. For the performance-based share awards, the value as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures, based upon the probable outcome of such conditions were as follows: Mr. Cherechinsky - $1,831,160; Mr. Chang - $427,268; Mr. Johnson - $427,268; Ms. Munson - $305,196; and Ms. Surratt - $152,590. For the performance-based share awards, the value as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures, assuming that the highest level of performance conditions will be achieved were as follows: Mr. Cherechinsky - $3,000,010; Mr. Chang - $699,998; Mr. Johnson - $699,998; Ms. Munson - $500,006; and Ms. Surratt - $249,990. The amounts reported in this column represent the aggregate grant date fair value of option awards granted in the relevant year compiled in accordance with FASB ASC Topic 718, excluding forfeiture estimates. Refer to the Company’s 2023 Annual Report on Form 10-K, for all relevant valuation assumptions used to determine the grant date fair value of option awards included in this column. |

  65. Summary Compensation Table

    | (3) Beginning in 2022, the Company eliminated stock options from its DNOW Inc. Annual Incentive Plan. |

  66. Summary Compensation Table

    | (4) Starting in 2015, the Named Executive Officers have participated in the DNOW Inc. Annual Incentive Plan. For further information, see the section titled “Annual Incentive Award”. |

  67. Summary Compensation Table

    | (5) The amounts include cash contributions under the Company’s 401(k) Plan and under the Supplemental Plan, both defined contribution plans. On April 1, 2020, the Company announced that it would suspend all Company contributions to the 401(k) and Supplemental Plans effective May 1, 2020. The Company reinstated company contributions at the rate of $1.00 per $1.00 employee contribution for the first 4% of the employee’s salary effective the first pay cycle of 2022. |

  68. Grants of Plan Based Awards

    Grants of Plan Based Awards The following table provides information concerning stock options, restricted stock, and performance share awards granted to Named Executive Officers during the fiscal year ended December 31, 2023.

  69. Grants of Plan-Based Awards

    Grants of Plan-Based Awards

  70. Grants of Plan-Based Awards

    | Name | Grant Date | Estimated Possible 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 (#) | Grant Date Fair Value of Stock Awards (3) (l) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | | David Cherechinsky | 2/20/ 2023 | $475,000 | $950,000 | $1,900,000 | 57,692 | 115,385 | 230,770 | 115,385 | $3,331,165 | | Mark Johnson | 2/20/ 2023 | $200,000 | $400,000 | $800,000 | 13,461 | 26,923 | 53,846 | 26,923 | $777,267 | | Raymond Chang | 2/20/ 2023 | $183,040 | $366,080 | $732,160 | 13,461 | 26,923 | 53,846 | 26,923 | $777,267 | | Kelly Munson | 2/20/ 2023 | $152,000 | $304,000 | $608,000 | 9,615 | 19,231 | 38,462 | 19,231 | $555,199 | | Rocio Surratt | 2/20/ 2023 | $89,375 | $178,750 | $357,500 | 4,807 | 9,615 | 19,230 | 9,615 | $277,585 |

  71. Grants of Plan-Based Awards

    | (1) Represents the range of possible payouts under our 2023 annual incentive compensation plan. |

  72. Grants of Plan-Based Awards

    | (2) On February 20, 2023, each of the Named Executive Officers was granted performance-based share awards, which are reflected in the “Estimated Future Payouts Under Equity Incentive Plan Awards” column in the table above. The performance share awards can be earned by the executives only by performance against established goals and vest three years from the grant date. The performance share awards are divided into three independent parts that are subject to these three separate performance metrics: 50% with a TSR goal, 25% with an EBITDA goal and 25% with a return on capital employed goal (ROCE). For a more detailed discussion, see the section titled “Long Term Incentive Compensation.” |

  73. Grants of Plan-Based Awards

    | (3) Assumptions made in calculating the value of option and restricted stock awards are further discussed in Item 15. Exhibits and Financial Statement Schedules – Notes to Consolidated Financial Statements, Note 19, of the Company’s Form 10-K for the fiscal year ended December 31, 2023. |

  74. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End

  75. Outstanding Equity Awards at Fiscal Year-End

    | | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | | David Cherechinsky | 10,565 | | | $31.433 | 2/26/24 | | | | | | | 29,470 | | | $20.64 | 2/21/24 | | | | | | | 123,881 | | | $9.90 | 2/20/25 | | | | | | | 27,593 | | | $15.30 | 2/19/26 | | | | | | | 57,929 | | | $9.53 | 2/21/27 | | | | | | | 132,142 | 66,071 (2) | | $10.26 | 2/23/28 | | | | | | | | | | | | | | 96,248 (3) | $1,089,527 | | | | | | | | | | 192,495 (4) | $2,179,043 | | | | | | | | | | 155,925 (5) | $1,765,071 | | | | | | | | | | 155,925 (6) | $1,765,071 | | | | | | | | | | 115,385 (7) | $1,306,158 | | | | | | | | | | 115,385 (8) | $1,306,158 |

  76. Outstanding Equity Awards at Fiscal Year-End

    | | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | | Raymond Chang | 15,093 | | | $31.433 | 2/26/24 | | | | | | | 51,572 | | | $20.64 | 2/21/24 | | | | | | | 93,284 | | | $9.90 | 2/20/25 | | | | | | | 20,778 | | | $15.30 | 2/19/26 | | | | | | | 43,621 | | | $9.53 | 2/21/27 | | | | | | | 21,745 | 10,873 (2) | | $10.26 | 2/23/28 | | | | | | | | | | | | | | 15,839 (3) | $179,297 | | | | | | | | | | 31,676 (4) | $358,572 | | | | | | | | | | 36,383 (5) | $411,856 | | | | | | | | | | 36,383 (6) | $411,856 | | | | | | | | | | 26,923 (7) | $304,768 | | | | | | | | | | 26,923 (8) | $304,768 | | Mark Johnson | 3,018 | | | $31.433 | 2/26/24 | | | | | | | 13,000 | | | $20.64 | 2/21/24 | | | | | | | 47,015 | | | $9.90 | 2/20/25 | | | | | | | 10,472 | | | $15.30 | 2/19/26 | | | | | | | 21,985 | | | $9.53 | 2/21/27 | | | | | | | 33,454 | 16,727 (2) | | $10.26 | 2/23/28 | | | | | | | | | | | | | | 24,366 (3) | $275,823 | | | | | | | | | | 48,733 (4) | $551,658 | | | | | | | | | | 36,383 (5) | $411,856 | | | | | | | | | | 36,383 (6) | $411,856 | | | | | | | | | | 26,923 (7) | $304,768 | | | | | | | | | | 26,923 (8) | $304,768 |

  77. Outstanding Equity Awards at Fiscal Year-End

    | | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | | | 3,018 | | | $31.433 | 2/26/24 | | | | | | | 5,250 | | | $20.64 | 2/21/24 | | | | | | | 6,666 | | | $9.90 | 2/20/25 | | | | | | Kelly Munson | 3,965 | | | $15.30 | 2/19/26 | | | | | | | 20,985 | | | $9.53 | 2/21/27 | | | | | | | 18,400 | 9,200 (2) | | $10.26 | 2/23/28 | | | | | | | | | | | | | | 13,402 (3) | $151,711 | | | | | | | | | | 26,803 (4) | $303,410 | | | | | | | | | | 25,988 (5) | $294,184 | | | | | | | | | | 25,988 (6) | $294,184 | | | | | | | | | | 19,231 (7) | $217,695 | | | | | | | | | | 19,231 (8) | $217,695 | | Rocio Surratt | 8,364 | 4,182 (2) | | $10.26 | 2/23/28 | | | | | | | | | | | | | | 6,092 (3) | $68,961 | | | | | | | | | | 12,183 (4) | $137,912 | | | | | | | | | | 12,994 (5) | $147,092 | | | | | | | | | | 12,994 (6) | $147,092 | | | | | | | | | | 9,615 (7) | $108,842 | | | | | | | | | | 9,615 (8) | $108,842 |

  78. Outstanding Equity Awards at Fiscal Year-End

    | (1) Calculations based upon the closing price ($11.32) of the Company’s common stock on December 31, 2023. |

  79. Outstanding Equity Awards at Fiscal Year-End

    | (2) 2021 Stock Option Grant – Stock options vest in thirds with vesting dates of 2/23/2022, 2/23/2023, 2/23/2024. |

  80. Outstanding Equity Awards at Fiscal Year-End

    | (3) 2021 Restricted Stock Award – The Grant vests 100% on the third anniversary of the date of grant. |

  81. Outstanding Equity Awards at Fiscal Year-End

    | (4) 2021 Performance Share Award Grant – The performance shares awards can be earned by the executives only by performance against established goals and vest three years from the grant date. The performance share awards are divided into three, independent parts that are subject to these three separate performance metrics: 50% with a TSR goal, 25% with an EBITDA goal and 25% with a ROCE (return on capital employed) goal. |

  82. Outstanding Equity Awards at Fiscal Year-End

    | (5) 2022 Restricted Stock Award – The Grant vests 100% on the third anniversary of the date of grant. |

  83. Outstanding Equity Awards at Fiscal Year-End

    | (6) 2022 Performance Share Award Grant – The performance share awards can be earned by the executives only by performance against established goals and vest three years from the grant date. The performance share awards are divided into three independent parts that are subject to these three separate performance metrics: 50% with a TSR goal, 25% with an EBITDA goal, and 25% with a ROCE (return on capital employed) goal. |

  84. Outstanding Equity Awards at Fiscal Year-End

    | (7) 2023 Restricted Stock Award – The Grant vests 100% on the third anniversary of the date of grant. |

  85. Outstanding Equity Awards at Fiscal Year-End

    | (8) 2023 Performance Share Award Grant – The performance share awards can be earned by the executives only by performance against established goals and vest three years from the grant date. The performance share awards are divided into three independent parts that are subject to these three separate performance metrics: 50% with a TSR goal, 25% with an EBITDA goal, and 25% with a ROCE (return on capital employed) goal. |

  86. Outstanding Equity Awards at Fiscal Year-End

    The following table provides information on the amounts received by the Named Executive Officers during 2023 upon exercise of stock options or vesting of stock awards.

  87. Option Exercises and Stock Vested

    Option Exercises and Stock Vested

  88. Option Exercises and Stock Vested

    | Name | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | (a) | (b) | (c) | (d) | (e) | | David Cherechinsky | 0 | $0 | 59,633 | $740,642 | | Raymond Chang | 0 | $0 | 44,904 | $557,708 | | Mark Johnson | 0 | $0 | 22,631 | $281,077 | | Kelly Munson | 0 | $0 | 21,253 | $263,962 | | Rocio Surratt | 0 | $0 | 0 | $0 |

  89. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation

  90. Nonqualified Deferred Compensation

    | Name | Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($)(3) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) | | (a) | (b) | (c) | (d) | (e) | (f) | | David Cherechinsky | $0 | $0 | $800 | - | $17,020 | | Raymond Chang | $0 | $0 | ($7,663) | - | $38,463 | | Mark Johnson | $0 | $0 | ($9,979) | - | $61,628 | | Kelly Munson | $37,875 | $2,041 | $4,906 | - | $44,822 | | Rocio Surratt | $0 | $0 | $0 | - | $0 |

  91. Nonqualified Deferred Compensation

    | (1) Executive contributions were from the executive’s salary and are included in the Summary Compensation Table under the “Salary” column. |

  92. Nonqualified Deferred Compensation

    | (2) Registrant contributions are included in the Summary Compensation Table under the “All Other Compensation” column. |

  93. Nonqualified Deferred Compensation

    | (3) Aggregate earnings reflect the returns of the investment funds selected by the executives and are not included in the Summary Compensation Table. |

  94. Pay Ratio

    Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the median annual total compensation of our worldwide employee population and the annual total compensation of Mr. Cherechinsky, our President and Chief Executive Officer (our “CEO”). For 2023, our last completed fiscal year:

  95. Pay Ratio

    | • | the median of the estimated annual total compensation of all employees of our company (other than our CEO), was $70,035; and |

  96. Pay Ratio

    | • | the annual total compensation of our CEO was $5,580,418. |

  97. Pay Ratio

    Based on this information, for 2023, our Chief Executive Officer’s annualized total compensation was approximately 79.6 times that of the median of the annual total compensation of all employees. To identify the median of the estimated annual total compensation of all our employees, as well as to determine the annual total compensation of the “median employee,” the methodology and the material assumptions, adjustments, and estimates that we used were as follows: 1. As permitted under the SEC rules, in order to identify our median employee, we used a consistently applied compensation measure of estimated ‘total cash compensation’ earned from January 1, 2023 to December 31, 2023. We used December 31, 2023 for our employee listing and annualized total cash compensation for those permanent employees who commenced work during 2023. We did not adjust the size of our employee population or make any cost-of-living adjustments when identifying our median employee. 2. In calculating the estimated annual total compensation of the median employee and CEO, we identified and included the elements of such compensation in accordance with the requirement of Item 402(c)(2)(x) of Regulation S-K. 3. We believe the pay ratio disclosed above is a reasonable estimate calculated in accordance with SEC rules, based on our records and the methodology described above. The SEC rules for identifying the median employee and calculating the pay ratio allow companies to use a variety of methodologies and apply various assumptions. The application of various methodologies can result in significant differences in the results reported by SEC reporting companies. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio we report above.

  98. 2023 Pay vs Performance Disclosure

    2023 Pay vs Performance Disclosure

  99. Tabular Pay vs. Performance Disclosures

    Tabular Pay vs. Performance Disclosures (1)

  100. Tabular Pay vs. Performance Disclosures

    | Year | Summary Compensation Table Total for PEO 1 | Compensation Actually Paid to PEO 1 (2) | Summary Compensation Table Total for PEO 2 | Compensation Actually Paid to PEO 2 (2) | | Average Summary Compensation Table Total for Non-PEO NEOs | Average Compensation Actually Paid for Non-PEO NEOs (2) | Value of Fixed $100 Investment Based On: | | Net Income (Loss) | | EBITDA Excluding Other Costs (4) | | | | | | | | | | | DNOW Total Shareholder Return (3) | PHLX Oil Service Sector Index Total Shareholder Return (3) | | | | | | 2023 | $5,580,418 | $3,130,263 | — | | — | $1,448,379 | $1,035,809 | $101 | $115 | | 135,000,000 | | 184,000,000 | | 2022 | $5,462,901 | $10,850,759 | — | | — | $1,439,842 | $2,421,547 | $113 | $113 | | 128,000,000 | | 175,000,000 | | 2021 | $5,988,481 | $5,474,012 | — | | — | $1,329,206 | $1,291,068 | $76 | $70 | | 5,000,000 | | 45,000,000 | | 2020 | $1,274,988 | $90,220 | $675,231 | ($ | 537,929) | $519,014 | $133,931 | $64 | $58 | ($ | 427,000,000) | ($ | 47,000,000) |

  101. Tabular Pay vs. Performance Disclosures

    | (1) Mr. Cherechinsky served as our principal executive officer for the full year for each of 2023, 2022, and 2021 and for a portion of 2020 (“PEO 1”). Mr. Alario served as our principal executive officer for a portion of 2020 (“PEO 2”). For each of 2023, 2022, 2021, and 2020, our non-PEO named executive officers included Mr. Johnson, Mr. Chang, Ms. Munson, and Ms. Surratt. |

  102. PEOs Compensation Actually Paid Calculation Detail

    PEOs Compensation Actually Paid Calculation Detail

  103. PEOs Compensation Actually Paid Calculation Detail

    | | Year | | | | | | | | | Compensation Element | 2020 (PEO 1) | | 2021 (PEO 1) | 2022 (PEO 1) | 2023 (PEO 1) | | 2020 (PEO 2) | | | SCT Reported Total Compensation | | 1,274,988 | $5,988,481 | $5,462,901 | | 5,580,418 | | 675,231 | | Aggregate SCT Reported Equity Compensation (-) | | 706,204 | $4,305,835 | $3,232,886 | | 3,331,165 | | 0 | | Year-End Fair Value of Awards Granted During the FY & Outstanding (+) | | 509,175 | $3,548,758 | $5,111,796 | | 2,543,085 | | 0 | | Year-Over-Year Change in Fair Value of Awards Granted During Prior FY & Outstanding (+) | ($ | 647,694) | $53,500 | $3,436,810 | ($ | 1,654,346) | | 0 | | Vesting Date Fair Value of Awards Granted & Vested During the Covered FY (+) | | 0 | $0 | $0 | | 0 | | 0 | | Year-Over-Year Change in Fair Value of Awards Granted During Prior FY & Vesting During Covered FY (+) | ($ | 340,044) | $189,108 | $72,138 | ($ | 7,729) | ($ | 1,213,160) | | Compensation Actually Paid Determination | | 90,220 | $5,474,012 | $10,850,759 | | 3,130,263 | ($ | 537,929) |

  104. Non-PEO NEOs Average Compensation Actually Paid Calculation Detail

    Non-PEO NEOs Average Compensation Actually Paid Calculation Detail

  105. Non-PEO NEOs Average Compensation Actually Paid Calculation Detail

    | | Year | | | | | | | Compensation Element | 2020 | | 2021 | 2022 | 2023 | | | SCT Reported Total Compensation | | 519,014 | $1,329,206 | $1,439,842 | | 1,448,379 | | Aggregate SCT Reported Equity Compensation (-) | | 263,181 | $667,673 | $579,239 | | 596,830 | | Year-End Fair Value of Awards Granted During the FY & Outstanding (+) | | 189,733 | $550,281 | $915,878 | | 455,634 | | Year-Over-Year Change in Fair Value of Awards Granted During Prior FY & Outstanding (+) | ($ | 189,765) | $20,191 | $626,032 | ($ | 267,774) | | Vesting Date Fair Value of Awards Granted & Vested During the Covered FY (+) | | 0 | $0 | $0 | | 0 | | Year-Over-Year Change in Fair Value of Awards Granted During Prior FY & Vesting During Covered FY (+) | ($ | 121,870) | $59,063 | $19,034 | ($ | 3,600) | | Compensation Actually Paid Determination | | 133,931 | $1,291,068 | $2,421,547 | | 1,035,809 |

  106. Non-PEO NEOs Average Compensation Actually Paid Calculation Detail

    | (2) Equity compensation fair value calculated based on assumptions determined in accordance with FASB ASC Topic 718. |

  107. Non-PEO NEOs Average Compensation Actually Paid Calculation Detail

    | (3) For each of 2023, 2022, 2021 and 2020, total shareholder return for the Company and the peer group was calculated as the yearly percentage change in cumulative total shareholder return based on a deemed fixed investment of $100 at market close on December 31, 2019. The yearly percentage change in cumulative total shareholder return was measured as the quotient of (a) the sum of (i) the cumulative amount of dividends for the period from December 31, 2019 through and including the last day of the covered fiscal year (the “Measurement Period”), assuming dividend reinvestment, plus (ii) the difference between stock price per share at the end and the beginning of the Measurement Period, divided by (b) stock price per share at the beginning of the Measurement Period. For purposes of this pay versus performance disclosure, our peer group consists of the PHLX Oil Service Sector Index. For purposes of calculating the Peer Group total shareholder return, the returns of each component issuer of the group were weighted according to the respective issuers’ stock market capitalization at the beginning of the Measurement Period. Because fiscal years are presented in the table in reverse chronical order (from top to bottom), the table should be read from bottom to top for purposes of understanding cumulative returns over time. |

  108. Non-PEO NEOs Average Compensation Actually Paid Calculation Detail

    | (4) EBITDA excluding other costs (referred to as “EBITDA” within this document) is reconciled in the Company’s 2023 Form 10-K to the most comparable GAAP financial measure. This financial measure excludes the impact of certain other amounts and is not calculated in accordance with GAAP. |

  109. Non-PEO NEOs Average Compensation Actually Paid Calculation Detail

    The following graphical comparisons provide descriptions of the relationships between certain figures included in the Pay Versus Performance table for each of 2023, 2022, 2021, and 2020, including: comparisons between (i) the compensation actually paid to the PEOs and the average compensation actually paid to our non-PEO NEOs,(ii) each of Total Shareholder Return, Net Income and EBITDA Excluding Other Costs; and (iii) a comparison between our cumulative total shareholder return and the total shareholder return of the PHLX Oil Service Sector Index.

  110. Non-PEO NEOs Average Compensation Actually Paid Calculation Detail

    | * In all three charts above, 2020 includes the aggregate compensation actually paid for Mr. Cherechinsky (PEO 1) and Mr. Alario (PEO 2). Since Mr. Cherechinsky was the only PEO in Fiscal Years 2021, 2022, and 2023, those years reflect only his compensation actually paid. |

  111. Non-PEO NEOs Average Compensation Actually Paid Calculation Detail

    The following table lists the most important performance measures that we believe represent the most important performance measures used to link compensation actually paid to our PEO and non-PEO NEOs for 2023 to our performance: EBITDA Excluding Other Costs Net Working Capital (NWC) Return on Capital Employed (ROCE) Relative TSR (rTSR) See the “Compensation Discussion & Analysis” above and published in our prior proxy statements for additional detail on executive compensation actions.

  112. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION Directors who are employees of the Company do not receive compensation for serving on the Board of Directors. The following table sets forth the compensation paid by the Company to its non-employee members of the Board of Directors for the year ended December 31, 2023.

  113. Director Compensation

    Director Compensation

  114. Director Compensation

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | All Other Compensation ($) | Total ($) | | (a) | (b) | (c)(1) | (d) | (e) | | Richard Alario | $160,625 | $191,007 | - | $351,632 | | Terry Bonno | $114,875 | $125,002 | - | $239,877 | | Galen Cobb | $106,000 | $125,002 | - | $231,002 | | Paul Coppinger | $136,625 | $125,002 | - | $261,627 | | James Crandell (2) | $52,250 | - | - | $52,250 | | Karen David- Green (3) | $45,000 | $125,002 | | $170,002 | | Rodney Eads | $118,500 | $125,002 | - | $243,502 | | Sonya Reed | $95,875 | $125,002 | | $220,877 |

  115. Director Compensation

    | (1) The aggregate number of outstanding shares of restricted stock as of December 31, 2023 for each director are as follows: Mr. Alario – 19,814; Ms. Bonno – 12,967; Mr. Cobb – 12,967; Mr. Coppinger – 12,967; Ms. David-Green – 12,967; Mr. Eads – 12,967; and Ms. Reed – 12,967. Award price is based on the value of the shares on the date of grant and is subject to fluctuation based on share price variance. |

  116. Director Compensation

    | (2) Mr. Crandell retired from the DNOW Board of Directors effective May 24, 2023. |

  117. Director Compensation

    | (3) Ms. David-Green was appointed to the DNOW Board of Directors on March 27, 2023. |