DEF 14A of Sandridge Energy Inc
Filed May 6, 2024 · FY20230001193125-24-131316
What vote is required to approve the election of directors?
What vote is required to approve the election of directors? As described in the Company’s Bylaws, a majority of the votes cast at the Annual Meeting must be cast “FOR” the election of a director nominee in order for such director to be elected to our Board. In the election of directors, you may either vote “FOR” a nominee, “AGAINST” a nominee or “ABSTAIN” from voting. You may not cumulate your votes in the election of directors. If you “ABSTAIN” from voting with respect to one or more director nominees, your vote will have no effect on the election of such nominees.
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS
BOARD NOMINEES
BOARD NOMINEES The Nominating and Governance Committee and the Board have determined to nominate Messrs. Firestone, Frates, Lipinski, Read and Ms. Dunlap to serve on the Board at the Annual Meeting. The Nominating and Governance Committee and the Board believe the nominees possess the qualities desirable in individual directors and contribute to the skills and experiences desired for the Board as a whole. If elected, each nominee would serve a term expiring at the close of our 2025 annual meeting or until his or her successor is duly elected. Our Board contemplates that each of the nominees will be able to serve if elected. Each of the Board’s nominees has consented to serve as a nominee, to serve as a director if elected and to be named as a nominee in this Proxy Statement. However, if at the time of the Annual Meeting, a nominee becomes unable to serve or for good cause will not serve, the discretionary authority provided in the proxies solicited by the Board may be used to vote for a substitute or substitutes who may be recommended by the Nominating and Governance Committee and whom the Board may propose to replace such nominee. The Board has no reason to believe that any substitute nominee or nominees will be required.
DIRECTOR BIOGRAPHICAL INFORMATION
DIRECTOR BIOGRAPHICAL INFORMATION At the Annual Meeting, stockholders are being asked to reelect Messrs. Firestone, Frates, Lipinski, Read and Ms. Dunlap. The Board unanimously recommends that stockholders vote FOR each of the nominees named above.
DIRECTOR BIOGRAPHICAL INFORMATION
| Jonathan Frates Age: 41 Director since June 2018 | | | Mr. Frates has served as an independent Director and Chairman of the Board since June 2018 and currently serves as a member of the Compensation Committee and the Nominating and Governance Committee. Mr. Frates has been Investment Director of Vision One Management Partners L.P., an investment firm, since August 2022. Mr. Frates previously served as Managing Director and Head of Family Office of Daughters Capital Corp., a single-family office focused on private and public equity investing, from July 2021 through July 2022. Mr. Frates previously served as Managing Director at Icahn Enterprises L.P., a diversified holding company engaged in a variety of businesses, from November 2015 through July 2021. Prior to joining Icahn Enterprises, Mr. Frates served as a Senior Business Analyst at First Acceptance Corp. and as an Associate at its holding company, Diamond A Ford Corp. Mr. Frates began his career as an Investment Banking Analyst at Wachovia Securities LLC. Mr. Frates has served as a director of Herc Holdings, Inc., an industrial equipment rental supply company, since August 2019. Mr. Frates previously served as Chairman of the Board of VIVUS, Inc., a biopharmaceutical company, from Dec 2020 until July 2021; Chairman of the Board of Viskase Companies, Inc., a meat casing company, from March 2016 until July 2021; a director of American Railcar Industries, Inc., a railcar manufacturing company, from March 2016 until December 2018; a director of CVR Refining, LP, a downstream energy limited partnership from April 2016 until January 2019; a director of Ferrous Resources Limited, an iron ore mining company in Brazil, from December 2016 until July 2019; a director of CVR Partners, LP, a nitrogen fertilizer company, from April 2016 until July 2021; and a director of CVR Energy, Inc., a diversified holding company engaged in the petroleum refining and nitrogen fertilizer manufacturing, from March 2016 until July 2021. Carl C. Icahn has a controlling or non-controlling stake in all of the above-listed companies. Mr. Frates received a BBA from Southern Methodist University and an MBA from Columbia Business School. | QUALIFICATIONS Mr. Frates’ strong financial background and experience as an analyst qualifies him to serve on the Board. |
DIRECTOR BIOGRAPHICAL INFORMATION
| Nancy Dunlap Age: 71 Director Since: October 2022 | | | Ms. Dunlap has served as an independent Director since October 2022 and currently serves as Chair of the Nominating and Governance Committee and as a member of the Audit Committee and Compensation Committee. She has served since 1999 as the private counsel and head/Chairman of the private family office of Jon S. Corzine, former New Jersey Governor and United States Senator. Ms. Dunlap has served as a director of Icahn Enterprises G.P. Inc., the general partner of Icahn Enterprises L.P., since April 2021. Ms. Dunlap was previously a director of CVR Refining, LP, an independent downstream energy limited partnership, from July 2018 to February 2019. Ms. Dunlap received a Juris Doctor from St. John’s University School of Law and a Bachelor of Arts from the University of Denver. | QUALIFICATIONS Ms. Dunlap’s significant business and leadership experience in the energy, financial and government sectors make her well qualified to serve on the Board. |
DIRECTOR BIOGRAPHICAL INFORMATION
| Jaffrey “Jay” A. Firestone Age: 67 Director since: May 2021 | | | Mr. Firestone has served as an independent Director since May 2021 and currently serves as a member of the Compensation Committee and Audit Committee. Mr. Firestone has served as Chairman and Chief Executive Officer at Prodigy Pictures Inc., a producer of film, television and cross-platform media since 2006. Previously, Mr. Firestone established Fireworks Entertainment in 1996 to produce, distribute and finance television programs and feature films. In 1998, Fireworks Entertainment was acquired by CanWest Global Communications Corporation and Mr. Firestone was named chairman and chief executive officer and oversaw the company’s Los Angeles and London based television operations as well as its Los Angeles feature film division, Fireworks Pictures. In addition, Mr. Firestone oversaw the company’s interest in New York based IDP Distribution, an independent distribution and marketing company formed by Fireworks Entertainment in 2000 as a joint venture with Samuel Goldwyn Films and Stratosphere Entertainment. Mr. Firestone has served on the board of directors for the Academy of Canadian Cinema and Television and the Academy of Television Arts and Sciences International Council in Los Angeles. Mr. Firestone has led two initial public offerings. Mr. Firestone has been a director of Enzon Pharmaceuticals, Inc. since June 2022, a director of CVR Energy, Inc. since January 2020 and previously served as a director of Voltari Corporation, a commercial real estate company, from July 2011 through September 2019. Mr. Firestone obtained a degree in commerce from McMasters University. | QUALIFICATIONS Mr. Firestone has extensive experience in dealing with financial reporting, which, in addition to his past service on other boards, enables him to advise our board on a range of matters including financial matters. |
DIRECTOR BIOGRAPHICAL INFORMATION
| John “Jack” Lipinski Age: 73 Director since June 2018 | | | Mr. Lipinski has served as an independent Director since June 2018, and currently is a member of the Audit Committee and Nominating and Governance Committee. Mr. Lipinski served as Chief Executive Officer and President and a Director of CVR Energy, Inc. (“CVR Energy”) from 2007 to 2017, as well as Chief Executive Officer and President and a Director of the general partner of CVR Refining, L.P. from its inception in 2012 until 2017 and Executive Chairman of the general partner of CVR Partners, L.P. from 2011 to 2017. CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in CVR Refining and CVR Partners. Prior to the formation of CVR Energy, Mr. Lipinski served as Chief Executive Officer and President of Coffeyville Resources, LLC from 2005 to 2007. Mr. Lipinski has more than 40 years of experience in the petroleum refining and nitrogen fertilizer industries. He began his career with Texaco, Inc. In 1985, Mr. Lipinski joined The Coastal Corporation, eventually serving as Vice President of Refining with overall responsibility for Coastal’s refining and petrochemical operations. Upon the merger of Coastal with El Paso Corporation in 2001, Mr. Lipinski was promoted to Executive Vice President of Refining and Chemicals, where he was responsible for all refining, petrochemical, nitrogen-based chemical processing and lubricant operations, as well as the corporate engineering and construction group. He left El Paso in 2002 and became an independent management consultant. In 2004, Mr. Lipinski became a Managing Director and Partner of Prudentia Energy, an advisory and management firm. Mr. Lipinski previously served on the board of Limetree Bay Refinery and Terminal, a private company, from 2019 to 2020. Mr. Lipinski also previously served on the board of directors of Chesapeake Energy Corporation, an oil and gas exploration and production company, from 2014 until 2016, and Cheniere Energy, Inc., an energy company primarily engaged in liquefied natural gas-related businesses, from August 2017 until May 2018. CVR Energy, CVR Refining and CVR Partners are each indirectly controlled by Carl C. Icahn. Mr. Icahn also has or previously had noncontrolling interests in each of Cheniere and Chesapeake. Mr. Lipinski graduated from Stevens Institute of Technology with a B.E. in Chemical Engineering. He received a J.D. from Rutgers University School of Law. | QUALIFICATIONS Mr. Lipinski’s more than forty years of experience in the petroleum refining and nitrogen fertilizer industries, including extensive experience in the role of public company president and CEO, as well as his service on public and private company boards, make him well qualified to serve on the Board. |
DIRECTOR BIOGRAPHICAL INFORMATION
| Randolph C. Read Age: 71 Director since: June 2018 | | | Mr. Read has served as an independent Director of our Company since June 2018 and currently serves as Chairman of the Audit Committee, Chairman of the Compensation Committee and is a member of the Nominating and Governance Committee. Mr. Read has been President and Chief Executive Officer of Nevada Strategic Credit Investments, LLC since 2009. Mr. Read has served since November 2018 as an independent manager/director and Chairman of the Board of Managers of New York REIT Liquidating LLC, a successor to New York REIT, Inc., a publicly traded (NYSE) real estate investment trust, where Mr. Read served as an independent director from December 2014 to November 2018, including as Chairman of its Board of Directors from June 2015 to November 2018. Mr. Read has served as an independent Chairman of the Board of Enzon Pharmaceuticals, Inc. since August 2020. Mr. Read previously served as an independent director of Luby’s Inc. from August 2019 to August 2021. Mr. Read has previously served as President of a variety of other companies and has previously served on a number of public and private company boards. Mr. Read is admitted as a Certified Public Accountant and has an M.B.A. in Finance from the Wharton Graduate School of the University of Pennsylvania and a B.S. from Tulane University. | QUALIFICATIONS Mr. Read’s significant business experience as a director and an executive officer of entities in a variety of industries, as well as capital markets, governance, and operations experience, in addition to his knowledge, financial expertise and leadership qualities and roles, make him well qualified to serve on the Board. |
Director Compensation
Director Compensation Following our annual meeting in 2023, the compensation policies for our non-employee directors were modified to increase fees paid for service on the Board and its committees and the value of annual restricted stock grants. Comparing the 2022-2023 director compensation program to the 2023-2024 program, aggregate non-employee compensation payable to the Chairman of the Board was increased from $112,500 to $225,000, and aggregate compensation payable to other non-employee directors was increased from $87,500 to $175,000, excluding in all cases additional retainers paid for service on committees. This modification of our compensation policies for our non-employee directors was intended to return our non-employee directors to the compensation levels they historically received prior to the COVID-19 pandemic as well as to retain and attract non-employee directors. The following table sets forth the total compensation earned by our non-employee directors for the fiscal year ended December 31, 2023.
Director Compensation
| Name | Fees Earned or Paid in Cash | Stock Awards(a) | All Other Compensation(b) | Total | | Jonathan Frates | $67,691 | $150,009 | $2,166 | $219,866 | | Jaffrey “Jay” Firestone | $30,316 | $150,009 | $2,166 | $182,491 | | John “Jack” Lipinski | $32,076 | $150,009 | $2,166 | $184,251 | | Randolph C. Read | $50,285 | $150,009 | $2,166 | $202,460 | | Nancy Dunlap | $36,653 | $150,009 | $2,166 | $188,828 |
Director Compensation
| (a) Reflects aggregate grant date fair value of the shares of restricted stock granted to non-employee directors on June 14, 2023, which vest on the earlier of the first anniversary of the grant date or the day immediately preceding the Company’s next annual meeting of stockholders. The grant date fair value is calculated in accordance with Financial Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718. These amounts do not necessarily correspond to the actual value that will be recognized by our non-employee directors. The assumptions used by the Company in calculating the amounts related to restricted stock are incorporated by reference to Note 15 of the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”). As of December 31, 2023, Messrs. Frates, Firestone, Lipinski, and Read and Ms. Dunlap each held 10,831 unvested shares of restricted stock. |
Director Compensation
| (b) Represents the dollar value of dividends accrued on stock awards granted in 2023 to each of our non-employee directors. |
Non-Executive Director Compensation Policies
Non-Executive Director Compensation Policies Our current non-employee director compensation structure consists of the following elements:
Non-Executive Director Compensation Policies
| • | Annual Cash Retainer |
Non-Executive Director Compensation Policies
| • | Non-executive Chairman, Committee Chair and Committee Member Retainers |
Non-Executive Director Compensation Policies
| • | Annual Equity Retainer |
Non-Executive Director Compensation Policies
Information about our former and current non-employee director compensation structure is described in more detail below. Non-employee directors receive reimbursement for expenses related to attending meetings of the Board and its committees. In 2023, directors received negligible reimbursements as all meetings were held virtually.
ADVISORY VOTE ON COMPENSATION AND USE OF STOCKHOLDER FEEDBACK
| | Fixed | Variable | | | | | | | Long-Term Incentive Program | | | | Base Salary | Annual Incentive Program | Performance Share Units (PSUs): 33.3% weighting | Restricted Stock Units (RSUs): 66.6% weighting | | What? | Cash | | Stock | | | When? | Annual | Annual | 1-year performance period | Three tranches vesting over a 3-year period | | How? Measures, Weightings, & Payouts | Market conditions, as well as individual performance, scope of responsibility, analysis of individual’s compensation, and business performances | Multi-metric performance scorecard consisting of: financial and operational metrics (5% health, safety & environmental goals, 20% drilling and completion CAPEX, 25% base production within CAPEX, 25% lease operating expenses, and 25% adjusted general and administrative expenses) + Individual Performance Rating | Three annual target ranges of the following performance metrics: Adjusted General & Administrative Expense, Lease Operating Expenses, and Total Production AND Capital Expenditures | Value delivered through long-term stock price performance upon vesting | | Why? | Attract and retain talent | Motivate executives by linking variable cash compensation to key annual performance goals tied to business performance | Rewards sustainable performance that delivers long-term value to stockholders, drives ownership mentality and aligns the interests of executives with those of stockholders | Promotes retention of key talent, drives ownership mentality and reinforces the link between the interests of executives and those of stockholders | | For More Detail | page 23 | page 23 | page 25 | |
SHORT-TERM INCENTIVES
SHORT-TERM INCENTIVES Annual Incentive Program The purpose of the 2023 annual incentive program was to motivate executives by linking variable cash compensation to key annual performance goals tied to business performance. Pursuant to such 2023 annual incentive program, ultimate payments were made to named executive officers by reference to a weighted scorecard comprised of five performance metrics tied to business strategy and an individual performance rating, which may be further subject to the discretion of the Compensation Committee. The payment made to each executive is a function of the sum of the executive’s base salary multiplied by the executive’s target award opportunity for the year (expressed as a percentage of base salary), which is then multiplied by the weighted score, expressed as a percentage, based on the Company’s total scorecard performance, and adjusted based on the executive’s individual performance rating also a percentage, and which in no event will adjust the award above the maximum award payable to the executive based on the weighted score resulting from the Company’s total scorecard performance. Each Company financial performance metric is weighted, with the performance thresholds and payout ranges shown in the table below. Each of the five performance metrics can be achieved at Threshold (50%), Target (100%) or Maximum (150%) or a value determined using linear interpolation if performance falls between Threshold and Target or Target and Maximum. For each performance metric, if achievement is less than the threshold level, the financial performance factor for that metric will be zero. No financial performance factor for any performance metric can exceed the maximum percentage shown below. The five performance metrics for 2023 were weighted as follows:
SHORT-TERM INCENTIVES
| Metric(1) | Description & Purpose | Weighting | Threshold (50%) | Target (100%) | Maximum (150%) | | Health, Safety & Environmental Goals(2) | • Based on number of safe days worked, total recordable incidents, moving vehicle incidents and spill volumes • Health, safety and achievement of environmental goals is a priority of the Company and its culture | 5% | 2 of 4 Metrics | 4 of 4 Metrics | Plus “Stretch” on 2 Metrics | | Drilling and Completion CAPEX | • Based on net capital used for Drilling and Completion activities for a five well program of the Company • Metric intended to increase Company’s revenue and sustainability | 20% | $19.0 million | $16.5 million | $14.0 million | | Base Production within CAPEX | • Based on hydrocarbon production on a million barrels of oil equivalent basis (“MMBoe”) assuming no ethane rejection and non-Drilling and Completion capital expenditures are within the range established for capital expenditures for the fiscal year • Metric intended to increase Company’s revenue | 25% | 5.3 MMBoe | 5.9 MMBoe | 6.5 MMBoe | | Lease Operating Expense | • Based on operating expense necessary to rent and maintain production wells and related equipment • Metric intended to minimize costs in order to maximize cash flows from operations | 25% | $48.0 million | $43.0 million | $38.0 million | | Adjusted General and Administrative Expenses | • Based on administrative expense necessary to support corporate responsibilities and strategy • Metric intended to incentivize administrative cost reduction measures in order to maximize EBITDA and cash flows from operations | 25% | $11.0 million | $9.5 million | $8.0 million |
SHORT-TERM INCENTIVES
| (1) These financial measures are non-GAAP financial measures. Adjusted General and Administrative Expense is equal to the Company’s General and Administrative Expense less stock-based compensation. Please see our 2023 Form 10-K for a discussion of how Lease Operating Expense, Total Production and CAPEX are calculated. Health, Safety & Environmental Goals is not a financial measure. |
SHORT-TERM INCENTIVES
| (2) Health, Safety & Environmental Goals was selected as a qualitative metric to reinforce the Company’s priorities of minimizing incidents, environmental releases and maximizing the safety of our employees, service providers, assets and equipment, and to recognize continued efforts to achieve these priorities. The metrics are achievable at Threshold, Target or Maximum, with an opportunity for “stretch” metrics to further incentivize performance and overall safety. The Company met all four increased, or “stretch”, safety metrics for 2023, therefore, the performance factor was achieved at 150% for 2023 as shown in the table directly below. |
SHORT-TERM INCENTIVES
The Company’s 2023 performance in relation to the 2023 annual incentive program’s targets resulted in the following performance against such metrics:
SHORT-TERM INCENTIVES
| Metric | Weighting | Threshold (50%) | Target (100%) | Maximum (150%) | Result | Performance Factor | Weighting Score | | Health, Safety & Environmental Goals | 5% | 2 of 4 Metrics | 4 of 4 Metrics | Plus “Stretch” on 2 Metrics | 4 of 4, Plus 4 | 150% | 7.5% | | Drilling and Completion CAPEX | 20% | $19.0 million | $16.5 million | $14.0 million | $18.1 million | 67% | 13.5% | | Base Production within CAPEX | 25% | 5.3 MMBoe | 5.9 MMBoe | 6.5 MMBoe | 6.2 MMBoe | 121% | 30.3% | | Lease Operating Expense | 25% | $48.0 million | $43.0 million | $38.0 million | $41.9 million | 111% | 27.8% | | Adjusted General and Administrative Expenses | 25% | $11.0 million | $9.5 million | $8.0 million | $8.8 million | 124% | 30.9% | | | | | | | TOTAL: | | 110.0% |
SHORT-TERM INCENTIVES
Mr. Pranin had an annual target opportunity for 2023 of 55% of his base salary. Mr. Brown initially had an annual target opportunity for 2023 of 30% of his base salary, which was increased to 40% of his base salary following his promotion to Senior Vice President, Chief Financial Officer. Prior to his departure, Mr. Gamoudi had an annual target opportunity for 2023 of 50% of his base salary; however, pursuant to his resignation in September 2023, his eligibility for an award under the 2023 annual incentive program was forfeited. Based on each named executive’s target opportunity for 2023, the Company’s performance relative to the metrics outlined above and resulting performance factor weighting score, and the application of each named executive officer’s individual performance rating for 2023, the final amounts paid to our continuing named executive officers pursuant to the 2023 annual incentive program were $186,365 to Mr. Pranin and $78,608 to Mr. Brown. The final amount paid to Mr. Brown for 2023 reflects his prorated award based on the increase to his target bonus opportunity in 2023 in connection with his promotion to Senior Vice President, Chief Financial Officer.
LONG-TERM INCENTIVES
LONG-TERM INCENTIVES Long-Term Incentive Program (“LTIP”) The purpose of long-term incentives is to align executives’ compensation with the interests of stockholders, encourage retention by employing stock consideration that vests over three years, and reward long-term operational and financial performance.
2023 LTIP DESIGN
2023 LTIP DESIGN 2023 LTIP Target Opportunities Each of our named executive officers has a target opportunity expressed as a percentage of the named executive officer’s annual base salary. The target opportunity is split amongst two LTIP components: two-thirds time-vested RSUs and one-third PSUs. 2023 LTIP Components
2023 LTIP DESIGN
| • | RSUs: RSUs represent two-thirds of the 2023 target LTIP value and are intended to retain key employees and align our named executive officers’ compensation with stockholders’ interests through long-term stock ownership. The RSUs generally vest in three equal annual installments, generally subject to each named executive officer’s continued service through each such vesting date. |
2023 LTIP DESIGN
| • | PSUs: PSUs represent one-third of the 2023 target LTIP value and are intended to motivate participants, including our NEOs, to deliver strong performance on an annual basis. Performance metrics applicable to the PSUs are established for the performance period, which is a one-year period that is a calendar year. The PSUs generally vest at the end of the one-year performance period, assuming the applicable performance metrics are achieved. If the performance goals are not achieved, the PSUs are forfeited. |
2023 LTIP PERFORMANCE METRICS
2023 LTIP PERFORMANCE METRICS The PSUs granted in 2023 are earned based on the Company’s achievement of two of the three annual target ranges for the performance metrics as set forth in the below table, and failure to do so results in cancellation and forfeiture of the award. Annual target ranges for 2023, and actual performance results relative to those metrics for 2023, are set forth in the below table.
2023 LTIP PERFORMANCE METRICS
| Metric(1) | Annual Target Ranges | Result | | Adjusted General and Administrative Expense | $8 Million - $11 Million | $8.8 Million | | Lease Operating Expense | $38 Million - $48 Million | $41.9 Million | | Total Production AND Capital Expenditures (CAPEX) | 5.3 – 6.5 MMBoe and $26 Million - $35 Million | 6.2 MMBoe |
2023 LTIP PERFORMANCE METRICS
| (1) These financial measures are non-GAAP financial measures. Adjusted General and Administrative Expense is equal to the Company’s General and Administrative Expense less stock-based compensation. Please see our 2023 Form 10-K for a discussion of how Lease Operating Expense and Total Production and CAPEX are calculated. |
2023 LTIP PERFORMANCE METRICS
Such metrics were selected for the 2023 LTIP in order to reinforce pay for performance and are the most significant factors to the Company’s achievement of its financial and operational goals.
2023 LTIP RESULTS
2023 LTIP RESULTS For 2023, Mr. Pranin had an annual target opportunity under the LTIP of 50% of his base salary and Mr. Brown had an annual target opportunity of 25% of his base salary. Prior to his departure, Mr. Gamoudi had an annual target opportunity under the LTIP for 2023 of 50% of his base salary; however, pursuant to his resignation in September 2023, his eligibility for an award under the 2023 LTIP was forfeited. Based on the Company’s performance relative to the performance metrics established for 2023, the PSUs granted to Mr. Pranin (3,538) and to Mr. Brown (1,010), respectively, on April 5, 2023, were deemed earned and fully vested on March 28, 2024. One-Time Equity Award In recognition of Mr. Brown’s promotion to Senior Vice President, Chief Financial Officer, of the Company effective September 27, 2023, the Company made a one-time grant of 25,000 restricted stock units to Mr. Brown on November 14, 2023. These restricted stock units, which were granted under the Omnibus Incentive Plan, vest in approximately equal installments on each of the first three anniversaries of the grant date, generally subject to Mr. Brown’s continued service through each such vesting date. This long-term equity grant was intended to further align Mr. Brown’s compensation with the interests of stockholders and encourage retention of a key employee.
EMPLOYMENT ARRANGEMENTS
EMPLOYMENT ARRANGEMENTS The Company does not maintain formal agreements with its continuing named executive officers. While the Company has not entered into formal letter agreements with Messrs. Pranin or Brown, the terms and conditions of their employment generally provide that they are entitled to an annual base salary (as described above in “2023 Executive Compensation – Base Salary”), which could be increased or decreased at the discretion of the Board, and are eligible to participate in the same benefit programs, as may be in effect from time to time, available to other senior management employees of the Company generally. Our named executive officers have entered into award agreements describing their long-term incentives as described above under “2023 Executive Compensation – Long-Term Incentives – Long-Term Incentive Program”. Pursuant to the terms of the LTIP, in order to receive payments related to their long-term incentives, participants, including named executive officers, must have returned their executed copies of the Company’s confidentiality agreement, among others, and acknowledged their understanding of the Company’s policies consistent with the Company’s practices and procedures. In order to be eligible to participate in the annual incentive program as described above under “2023 Executive Compensation – Short Term Incentives” employees, including the named executive officers, must return executed code of conduct, conflict of interest, and clawback policies to the Company.
SEVERANCE
SEVERANCE The Company maintains the SandRidge Energy, Inc. Severance Pay Plan (the “Severance Plan”), effective January 1, 2021, for the benefit of certain eligible employees, including Messrs. Pranin and Brown. The purpose of the Severance Plan is to help retain qualified employees, maintain a stable work environment, and provide economic security by providing benefits to eligible employees, including the named executive officers, in the event of an involuntary termination without Cause, as further described in the Severance Plan and below in “Potential Payments upon Termination and Change in Control”. Because Mr. Gamoudi resigned, he was not entitled to severance payments under the terms of the Severance Plan. In addition to the Severance Plan, named executive officers may also be eligible for certain payments under the 2023 annual incentive program, LTIP, Omnibus Incentive Plan and certain equity award agreements, in the event of certain qualifying terminations, in each case, in the Compensation Committee’s sole and absolute discretion. Each named executive officer’s respective severance benefits are described in greater detail and quantified in the “Potential Payments Upon Termination or Change in Control” section below. 2023 Named Executive Officer Departure On September 7, 2023, Mr. Gamoudi notified the Board of his resignation effective September 27, 2023, to pursue other opportunities. Mr. Gamoudi did not resign as a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Mr. Gamoudi was not eligible for any severance payments under the Severance Plan and the Compensation Committee did not exercise discretion to counteract forfeiture of any annual cash bonus Mr. Gamoudi may have been eligible for under the 2023 annual incentive program. Mr. Gamoudi forfeited any of his stock awards that were not vested as of his resignation date.
RISK ASSESSMENT
RISK ASSESSMENT Our compensation program for executives is not designed to encourage excessive risk taking. In that regard, payouts under the annual incentive program are capped at 150% of target, while the performance share under the LTIP is 100% of target, or else forfeited if performance goals are not achieved. In addition, all long-term incentives include extended vesting periods.
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| Name and Principal Position(a) | Year | Salary | Stock Awards(c) | Options Awards(d) | Non-equity Incentive Plan Compensation(e) | All Other Compensation(f) | Total | | Grayson Pranin | 2023 | $343,269 | $162,500 | $261,260 | $186,365 | $46,067 | $999,461 | | President, Chief Executive Officer and Chief Operating Officer | 2022 | $325,000 | $162,512 | - | $211,250 | $21,644 | $720,406 | | | 2021 | $296,250 | $1,070,510 | $1,497,629 | $154,047 | $19,702 | $3,038,138 | | Brandon Brown(b) | 2023 | $206,323 | $421,359 | - | $78,608 | $27,474 | $733,764 | | Senior Vice President, Chief Financial Officer | | | | | | | | | Salah Gamoudi | 2023 | $243,520 | $157,509 | - | - | $21,367 | $422,396 | | Former Executive Vice President, Chief Financial Officer and Chief Accounting Officer | 2022 | $311,538 | $150,002 | - | $204,750 | $20,644 | $686,934 | | | 2021 | $293,847 | $125,005 | - | $182,942 | $19,702 | $621,496 |
Summary Compensation Table
| (a) Mr. Brown was appointed Senior Vice President and Chief Financial Officer following Mr. Gamoudi’s resignation effective September 27, 2023 and previously held the roles of Vice President of Accounting since March 2023 and Corporate Controller from June 2020 to March 2023. Mr. Gamoudi departed the Company effective September 27, 2023. |
Summary Compensation Table
| (b) Because Mr. Brown was not a named executive officer prior to 2023, only his 2023 compensation information is reported in this table. |
Summary Compensation Table
| (c) The stock awards shown in this column reflect the aggregate grant date fair value of restricted stock units, which vest over three years, and performance share units, which vest upon achievement of applicable performance conditions, calculated in accordance with FASB ASC Topic 718, Compensation-Stock Compensation. These amounts do not necessarily correspond to the actual value that will be realized by our named executive officers. The assumptions used by the Company in calculating the amounts related to restricted stock units and performance share units are incorporated by reference to Note 15 of the consolidated financial statements included in the 2023 Form 10-K. See “Long-Term Incentives” on page 25 for additional details. Mr. Gamoudi resigned from employment with the Company, effective as of September 27, 2023, and, accordingly, forfeited his outstanding equity awards, including his 2023 LTIP opportunity. See “2023 Named Executive Officer Departure” on page 27 for more information. |
Summary Compensation Table
| (d) Amounts reported in this column for 2023 represent the aggregate incremental fair value increase based on the extension of the expiration date of Mr. Pranin’s options originally granted February 4, 2020, and determined as of June 22, 2023, the date the expiration date of such options was extended, in accordance with FASB ASC Topic 718. The expiration date of Mr. Pranin’s options was extended by 30 days pursuant to the February 4, 2020 award agreement due to the original expiration date falling within a period of trading restrictions. The change in value (the difference in spread multiplied by the number of shares underlying each option) between the original expiration date and the exercise date is $2,000. The option award shown in this column for 2021 vests over five years and reflects the aggregate grant date fair value of nonqualified stock options calculated in accordance with FASB ASC Topic 718, Compensation-Stock Compensation. This amount does not necessarily correspond to the actual value that will be realized by Mr. Pranin, and the assumptions used by the Company in calculating the amount related to such option award are incorporated by reference to Note 15 of the consolidated financial statements included in the 2023 Form 10-K. The Company did not grant any stock options in 2023 or 2022. |
Summary Compensation Table
| (e) Amounts disclosed in the Non-Equity Incentive Plan Compensation column represent amounts earned in the reported year under the Company’s annual cash incentive program. See “Short-Term Incentives” on page 23 for additional information about the Company’s short-term incentives. Mr. Gamoudi resigned from employment with the Company effective as of September 27, 2023, and, accordingly, forfeited payment of any award he may have earned under the Company’s annual cash incentive program for 2023. See “2023 Named Executive Officer Departure” on page 28 for more information. |
Summary Compensation Table
| (f) All 2023 Other Compensation provided to our named executive officers includes: |
Summary Compensation Table
| Name and Principal Position | Life Insurance Premiums | Company Matching Contributions to 401(k) Plan | Dividend Equivalents(1) | Total | | Grayson Pranin | | | | | | President, Chief Executive Officer and Chief Operating Officer | $120 | $22,596 | $23,351 | $46,067 | | Brandon Brown | | | | | | Senior Vice President, Chief Financial Officer | $180 | $20,632 | $6,662 | $27,474 | | Salah Gamoudi | | | | | | Former Executive Vice President, Chief Financial Officer and Chief Accounting Officer | $79 | $21,288 | - | $21,367 |
Summary Compensation Table
| (1) Amounts reported in this column represent dividend equivalents that accrued with respect to restricted stock units and performance share units granted in 2023 at the same time as dividends are paid on the Company’s common stock. The dollar amount of these dividend equivalents is not paid unless and until the underlying equity awards vest and are paid. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table sets forth information about each grant of an award made to our 2023 named executive officers during 2023:
Grants of Plan-Based Awards
| | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards ($)(a) | | | Estimated Possible Payouts Under Equity Incentive Plan Awards (#) | | | | Name | Type of Award | Grant Date | Threshold | Target | Maximum | Target(b) | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards(c) | | Grayson Pranin | AIP | | $96,250 | $192,500 | $288,750 | - | - | - | | | RSU(d) | 4/5/2023 | | | | | 7,076 | $108,334 | | | PSU | 4/5/2023 | - | - | - | 3,538 | - | $54,167 | | Brandon Brown | AIP | | $35,726 | $71,452 | $107,178 | - | - | - | | | RSU(d) | 4/5/2023 | | | | - | 2,018 | $30,896 | | | PSU | 4/5/2023 | - | - | - | 1,010 | - | $15,463 | | | RSU(e) | 11/14/2023 | - | - | - | - | 25,000 | $375,000 | | Salah Gamoudi | AIP | | $83,750 | $167,500 | $251,250 | - | - | $- | | | RSU(d) | 4/5/2023 | - | - | - | - | 6,858 | $104,996 | | | PSU | 4/5/2023 | - | - | - | 3,430 | - | $52,513 |
Grants of Plan-Based Awards
| (a) These amounts represent cash awards under the 2023 annual incentive program. These amounts assume performance of each metric under the 2023 annual incentive program is achieved at 50% each (Threshold), 100% each (Target) and 150% each (Maximum). See “Short-Term Incentives” on page 23 for more information. No minimum is guaranteed in the event that thresholds are not achieved. Under the 2023 annual incentive program, the target annual incentive opportunity for the named executive officers was based on a percentage of base salary, which is 55% for Mr. Pranin, an increase from 30% to 40% of base salary for Mr. Brown based on his promotion to Senior Vice President, Chief Financial Officer effective September 27, 2023 (and with his award prorated based on such increase), and 50% for Mr. Gamoudi. Mr. Gamoudi resigned from employment with the Company effective as of September 27, 2023, and, accordingly, forfeited his eligibility for a cash award under the 2023 annual incentive program. See “2023 Named Executive Officer Departure” on page 28 for more information. |
Grants of Plan-Based Awards
| (b) This column reflects performance share units granted under the 2023 LTIP. The 2023 LTIP provides for only a single payout level and no threshold or maximum payout. Mr. Gamoudi resigned from employment with the Company effective as of September 27, 2023, and, accordingly, forfeited his outstanding equity awards, including equity awards granted under the 2023 LTIP. See “2023 Named Executive Officer Departure” on page 28 for more information. |
Grants of Plan-Based Awards
| (c) Please see Note 15 of the consolidated financial statements included in the 2023 Form 10-K for the assumptions made in determining values. |
Grants of Plan-Based Awards
| (d) The restricted stock unit awards represent time-based awards granted under the 2023 LTIP which vest in approximately equal installments on each of the first three anniversaries of the applicable grant dates, generally subject to the named executive officer’s continued service through each such vesting date. Mr. Gamoudi resigned from employment with the Company effective as of September 27, 2023, and, accordingly, forfeited his outstanding equity awards, including equity awards granted under the 2023 LTIP. See “2023 Named Executive Officer Departure” on page 28 for more information. |
Grants of Plan-Based Awards
| (e) In recognition of Mr. Brown’s promotion to Senior Vice President, Chief Financial Officer, the Company made a one-time grant of restricted stock units to Mr. Brown on November 13, 2023. This award vests in approximately equal installments on each of the first three anniversaries of the applicable grant dates, generally subject to Mr. Brown’s continued service through each vesting date. |
NARRATIVE TO SUMMARY COMPENSATION AND GRANTS OF PLAN-BASED AWARDS TABLES
NARRATIVE TO SUMMARY COMPENSATION AND GRANTS OF PLAN-BASED AWARDS TABLES
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table reflects all outstanding equity awards held by each of our named executive officers as of December 31, 2023:
Outstanding Equity Awards at Fiscal Year-End
| | | Option Awards | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(a) | Number of Securities Underlying Unexercised Options (#) Unexercisable(a) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested ($)(b) | Market Value of Shares or Units of Stock That Have Not Vested ($)(c) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(d) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(c) | | Grayson Pranin | 2/26/2021 | - | - | - | - | 4,990 | 68,213 | - | - | | | 8/27/2021 | 100,000 | 150,000 | 9.58 | 8/27/2031 | - | - | - | - | | | 8/27/2021 | - | - | - | - | 33,333 | 455,662 | - | - | | | 3/15/2022 | - | - | - | - | 5,346 | 73,080 | - | - | | | 4/5/2023 | - | - | - | - | 7,076 | 96,729 | - | - | | | 4/5/2023 | - | - | - | - | - | - | 3,538 | 48,364 | | Brandon Brown | 2/26/2021 | - | - | - | - | 1,830 | 25,016 | - | - | | | 3/15/2022 | - | - | - | - | 1,480 | 20,232 | - | - | | | 4/5/2023 | - | - | - | - | 2,018 | 27,586 | - | - | | | 4/5/2023 | - | - | - | - | - | - | 1,010 | 13,807 | | | 11/14/2023 | - | - | - | - | 25,000 | 341,750 | - | - | | Salah Gamoudi(e) | | - | - | - | - | - | - | - | - |
Outstanding Equity Awards at Fiscal Year-End
| (a) The option awards granted to Mr. Pranin on August 27, 2021 vest and become exercisable in equal installments on each of the first five anniversaries of the applicable grant date, subject to continued service with the Company through each such vesting date, and the regular term of each option expires on the tenth anniversary of the applicable grant date. |
Outstanding Equity Awards at Fiscal Year-End
| (b) The amounts reported in this column represent the following outstanding awards of restricted stock units granted under the Omnibus Incentive Plan to Messrs. Pranin and Brown, respectively, as follows: (i) Mr. Pranin: February 26, 2021, August 27, 2021, March 15, 2022 and April 5, 2023; (ii) Mr. Brown: February 26, 2021, March 15, 2022, April 5, 2023 and November 14, 2023. Each award vests in equal installments on each of the first, second and third anniversaries of the grant date, generally subject to named executive officer’s continued service through each such vesting date. |
Outstanding Equity Awards at Fiscal Year-End
| (c) Valuations are based on $13.67 per share, which was the last trading price for a share of the Company’s common stock on the NYSE on December 29, 2023. |
Outstanding Equity Awards at Fiscal Year-End
| (d) The amounts reported in this column represent performance share units granted to Messrs. Pranin and Brown on April 5, 2023 with a one-year performance period commencing on January 1, 2023 and ending on December 31, 2023. These awards fully vested following the Compensation Committee’s review and approval after the end of the performance period based on achievement of the long-term performance goals (described under “Long-Term Incentive Program” on page 25). |
Outstanding Equity Awards at Fiscal Year-End
| (e) Mr. Gamoudi resigned from employment with the Company on September 7, 2023, and, accordingly, forfeited his outstanding equity awards. See “2023 Named Executive Officer Departure” on page 28 for more information. |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table sets forth the equity awards that vested for each of our named executive officers during 2023.
Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#)(a) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Grayson Pranin | 25,000 | 339,456 | 60,066 | 926,791 | | Brandon Brown | - | - | 9,204 | 142,203 | | Salah Gamoudi | - | - | 78,380 | 1,265,570 |
Option Exercises and Stock Vested
| (a) Upon the exercise of his option awards and sale to cover applicable withholding obligations, Mr. Pranin received a net number of 10,999 shares. |
Pension Benefits
Pension Benefits We do not maintain any defined benefit pension plans.
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation We do not maintain any nonqualified deferred compensation arrangements.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control As discussed under “Compensation Discussion and Analysis – Severance” above, named executive officers may be entitled to certain amounts upon termination of employment under the Severance Plan. The table below and narrative discussion thereunder show estimates of the compensation payable to each of our named executive officers under the Severance Plan upon their termination of employment with the Company based on the applicable termination trigger under the Severance Plan. All amounts are calculated as if the named executive officer had terminated employment effective December 31, 2023. The actual amounts due to any one of the named executive officers upon termination of employment can only be determined at the time, and depending on the circumstances, of the termination. There can be no assurance that a termination would produce the same or similar results as those described below if it occurs on any other date, or if any assumption is not, in fact, correct. As Mr. Gamoudi resigned from employment with the Company effective as of September 27, 2023, pursuant to the terms of the Severance Plan, Mr. Gamoudi did not receive severance under the Severance Plan in connection with his resignation. See “2023 Named Executive Officer Departure” on page 27 for additional information.
Potential Payments Upon Termination or Change in Control
| Named Executive Officer and Triggering Event | Cash Severance | Total Termination Benefits | | Grayson Pranin | | | | • Involuntary Termination without Cause | $175,000 | $175,000 | | Brandon Brown | | | | • Involuntary Termination without Cause | $30,000 | $30,000 | | Salah Gamoudi | | | | • Resignation | - | - |
Narrative to Potential Payments upon Termination or Change in Control
Narrative to Potential Payments upon Termination or Change in Control Pursuant to the Severance Plan, eligible employees, including named executive officers, are entitled to receive severance in the form of salary continuation if they are involuntarily terminated without Cause (as defined in the Severance Plan). The Severance Plan does not provide for treatment of equity awards. Employees, including named executive officers, are not entitled to severance, or continuing severance payments, if their employment terminates due to retirement, resignation, failure to report for work, death, disability, temporary layoff or if terminated for Cause. Under the Severance Plan, a named executive officer’s severance payments are calculated based on the named executive officer’s weekly base salary amount, before any reductions for employee benefits contributions, multiplied by the number of weeks provided for under the Severance Plan based on the named executive officer’s tenure with the Company. For named executive officers, such payment period would range from 6 weeks if the named executive officer has been employed by the Company for 90 consecutive days up to a maximum of 26 weeks, depending on number of years of service. Pursuant to the Severance Plan, Mr. Brown would be eligible for six weeks of severance if involuntarily terminated by the Company without Cause. While Mr. Pranin is a participant in the Severance Plan, his salary continuation was increased to 26 weeks pursuant to a separate agreement with the Company. In order to be eligible to receive severance, the named executive officer must remain employed as an eligible employee under the Severance Plan through the date of termination designated in writing by the administrator and fulfill the normal responsibilities of his position without any decline in performance. Receipt of severance payments is subject to the named executive officer’s execution and non-revocation of a general release of claims. Mr. Gamoudi resigned from employment with the Company effective as of September 27, 2023. As resignation is not a severance trigger pursuant to the terms of the Severance Plan, Mr. Gamoudi did not receive severance under the Severance Plan in connection with his resignation. See “2023 Named Executive Officer Departure” on page 27 for additional information. Executives, including the named executive officers, are generally not eligible for payment or continued or accelerated vesting of equity awards under the 2023 annual incentive program, LTIP, Omnibus Incentive Plan and applicable equity award agreements, in the event of a termination for any reason, including in the event of a change in control, unless otherwise determined by the Compensation Committee or the Board, as applicable, in its sole discretion.
Pay Ratio
Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2012, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of the Company’s employees and the annualized total compensation of Grayson Pranin, our Chief Executive Officer, for 2023:
Pay Ratio
| Median Employee total annual compensation | $96,406 | | Total Compensation of our CEO | $999,461 | | Ratio of CEO to Median Employee compensation | 10.4 to 1 |
Pay Ratio
This pay ratio is a reasonable estimate calculated in good faith, in a manner consistent with Item 402(u) of Regulation S-K, based on our payroll and employment records and the methodology described below. To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee and our Chief Executive Officer, we took the following steps:
Pay Ratio
| • | We determined that, as of December 31, 2023, our employee population consisted of 101 individuals (excluding our Chief Executive Officer), with all of these individuals located in the United States. This population consisted of our full-time employees, as we do not have part-time, temporary or seasonal workers. We selected December 31, 2023, as our identification date for determining our median employee. We used a consistently applied compensation measure to identify our median employee by comparing the amount of total salary (which for non-exempt employees included overtime pay). We identified our median employee by consistently applying this compensation measure to all of our employees included in our analysis. We did not make any cost of living adjustments in identifying the median employee. After we identified our median employee, we combined all of the elements of such employee’s compensation for the 2023 year in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $96,406. With respect to the annual total compensation of our Chief Executive Officer, we used the amount reported in the “Total” column of our 2023 Summary Compensation Table included in this proxy statement. |
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE In August 2022, the SEC released the final version of its pay versus performance disclosure rules as mandated under the Dodd-Frank Wall Street Reform and Consumer Protection Act, and other official guidance issued thereunder, which became effective starting with the fiscal year ended December 31, 2022. The final rules were codified under Item 402(v) of Regulation S-K (along with other official guidance issued, “PvP disclosure rules”) and require the Company to provide the following tabular and narrative disclosures.
Pay Versus Performance
Pay Versus Performance In accordance with the PvP disclosure rules, the below sets forth the following for the previous three years (i) the total compensation set forth in the Summary Compensation Table (“SCT”) for the individuals serving as CEO (i.e., PEO) and the Company’s non-CEO Named Executive Officers; (ii) the total “compensation actually paid” (as determined in accordance with the PvP disclosure rules) for the CEOs and non-CEO Named Executive Officers; (iii) the Company’s cumulative TSR (“Cumulative TSR”); Cumulative TSR for the Company’s selected peer group; (iv) Net Income; and (v) Total Production.
Pay Versus Performance
| Year (a) (1) | SCT Total for PEO (Pranin) (b) | Compensation Actually Paid to PEO (Pranin) (c) (2) | SCT Total for PEO (Geisler) (b) | Compensation Actually Paid to PEO (Geisler) (c) (2) | Average SCT Total for Non-PEO Named Executive Officers (d) | Average Compensation Actually Paid to Non-PEO Named Executive Officer (e) (2) | Value of Initial Fixed $100 Investment Based on: Total Shareholder Return (f) | Value of Initial Fixed $100 Investment Based on: Peer Group Total Shareholder Return (g) (3) | Net Income (h) (thousands) | Total Production (i) (thousands) (Mboe/d) | | 2023 | $999,461 | $(43,931) | $- | $- | $578,080 | $343,546 | $512 | $292 | $60,857 | $16.9 | | 2022 | $720,406 | $3,825,191 | - | - | $686,934 | $1,835,875 | $549 | $292 | $242,168 | $17.7 | | 2021 | $3,038,138 | $3,880,808 | $234,945 | $(1,558,386) | $621,496 | $2,155,812 | $337 | $185 | $116,738 | $18.6 |
Pay Versus Performance
| (1) Mr. Grayson Pranin served as PEO during all three covered years and Mr. Carl F. Geisler, Jr. served as PEO during part of 2021. Since Mr. Pranin served as PEO during part of 2021 following Mr. Geisler’s separation from the Company, Mr. Salah Gamoudi was the only Non-PEO Named Executive Officer for 2021 and 2022. For 2023, the Non-PEO Named Executive Officers are Mr. Brandon Brown and Mr. Gamoudi. |
Pay Versus Performance
| (2) Represents Compensation Actually Paid (“CAP”) for our PEOs and Non-PEO Named Executive Officers, as computed in accordance with the PvP disclosure rules. The dollar amounts do not reflect the amounts of compensation ultimately earned or realized by our Named Executive Officers during the covered years. |
Pay Versus Performance
| (3) The selected peer group is the S&P 500 Oil and Gas Exploration & Production Select Industry Index, which is the peer group used by the Company for purposes of Item 201(e) of Regulation S-K. |
Pay Versus Performance
CAP is determined by taking the “Total” column amount from the SCT for each covered fiscal year and adjusting as follows for our PEOs (Pranin and Geisler) and Non-PEO Named Executive Officers:
Pay Versus Performance
| Adjustments to Determine CAP for PEO (Pranin) | | | | | Covered Fiscal Year | 2023 | 2022 | 2021 | | SCT Total for PEO (Pranin) | $999,461 | $720,406 | $3,038,138 | | Pension Adjustments (i) | | | | | Subtract “Change in Actuarial Present Value” reported in the SCT for the covered fiscal year | - | - | - | | Add pension value attributable to the covered fiscal year’s “service cost” | - | - | - | | Add pension value attributable to the entire “prior service cost” of benefits granted (or credit for benefits reduced) in a plan amendment made in the covered fiscal year attributable to prior service periods | - | - | - | | Equity Adjustments (ii) | | | | | Subtract fair value (as of grant date) reported in the “Stock Awards” and “Option Awards” columns in the SCT for the covered fiscal year | $(162,500) | $(162,512) | $(2,568,139) | | Add fair value (as of end of year) of equity awards granted during the covered fiscal year that remain unvested as of year end | $(145,093) | $204,854 | $2,974,717 | | Add fair value (as of vesting date) of equity awards granted during the covered fiscal year that vest during the covered year | - | - | - | | Add/Subtract the change in fair value from the prior year-end to the covered fiscal year-end for equity awards granted in prior fiscal years that remain outstanding and unvested at the end of the covered fiscal year | $(1,225,926) | $1,984,613 | $323,604 | | Add/Subtract the change in fair value from the prior year-end to vesting date for equity awards granted in prior fiscal years that vested during the covered fiscal year | $(96,133) | $1,077,830 | $112,488 | | Subtract fair value (as of end of prior year) for equity awards granted in prior fiscal years that were forfeited during the covered fiscal year | - | - | - | | Add incremental fair value (as of modification date) of equity awards modified during the covered fiscal year | $261,260 | - | - | | Add dividends or other earnings paid on equity awards during the covered fiscal year prior to vesting date of award that are not otherwise included in the total compensation for the covered fiscal year | - | - | - | | TOTAL ADJUSTMENTS | $(1,043,392) | $3,104,785 | $842,670 | | CAP | $(43,931) | $3,825,191 | $3,880,808 |
Pay Versus Performance
| Adjustments to Determine CAP for PEO (Geisler) | | | | | Covered Fiscal Year | 2023 | 2022 | 2021 | | SCT Total for PEO (Geisler) | - | - | $234,945 | | Pension Adjustments (i) | | | | | Subtract “Change in Actuarial Present Value” reported in the SCT for the covered fiscal year | - | - | - | | Add pension value attributable to the covered fiscal year’s “service cost” | - | - | - | | Add pension value attributable to the entire “prior service cost” of benefits granted (or credit for benefits reduced) in a plan amendment made in the covered fiscal year attributable to prior service periods | - | - | - | | Equity Adjustments (ii) | | | | | Subtract fair value (as of grant date) reported in the “Stock Awards” and “Option Awards” columns in the SCT for the covered fiscal year | - | - | - | | Add fair value (as of end of year) of equity awards granted during the covered fiscal year that remain unvested as of year end | - | - | - | | Add fair value (as of vesting date) of equity awards granted during the covered fiscal year that vest during the covered year | - | - | - | | Add/Subtract the change in fair value from the prior year-end to the covered fiscal year-end for equity awards granted in prior fiscal years that remain outstanding and unvested at the end of the covered fiscal year | - | - | | | Add/Subtract the change in fair value from the prior year-end to vesting date for equity awards granted in prior fiscal years that vested during the covered fiscal year | - | - | $273,334 | | Subtract fair value (as of end of prior year) for equity awards granted in prior fiscal years that were forfeited during the covered fiscal year | - | - | $(2,066,665) | | Add incremental fair value (as of modification date) of equity awards modified during the covered fiscal year | - | - | - | | Add dividends or other earnings paid on equity awards during the covered fiscal year prior to vesting date of award that are not otherwise included in the total compensation for the covered fiscal year | - | - | - | | TOTAL ADJUSTMENTS | $- | $- | $(1,793,331) | | CAP | $- | $- | $(1,558,386) |
Pay Versus Performance
| Adjustments to Determine CAP for Non-PEO Named Executive Officer (Brown) | | | | | Covered Fiscal Year | 2023 | 2022 | 2021 | | SCT Total for Non-PEO NEO | $733,764 | - | - | | Pension Adjustments (i) | | | | | Subtract “Change in Actuarial Present Value” reported in the SCT for the covered fiscal year | - | - | - | | Add pension value attributable to the covered fiscal year’s “service cost” | - | - | - | | Add pension value attributable to the entire “prior service cost” of benefits granted (or credit for benefits reduced) in a plan amendment made in the covered fiscal year attributable to prior service periods | - | - | - | | Equity Adjustments (ii) | | | | | Subtract fair value (as of grant date) reported in the “Stock Awards” and “Option Awards” columns in the SCT for the covered fiscal year | $(421,358) | - | - | | Add fair value (as of end of year) of equity awards granted during the covered fiscal year that remain unvested as of year end | $(383,143) | - | - | | Add fair value (as of vesting date) of equity awards granted during the covered fiscal year that vest during the covered year | - | - | - | | Add/Subtract the change in fair value from the prior year-end to the covered fiscal year-end for equity awards granted in prior fiscal years that remain outstanding and unvested at the end of the covered fiscal year | $(11,122) | - | - | | Add/Subtract the change in fair value from the prior year-end to vesting date for equity awards granted in prior fiscal years that vested during the covered fiscal year | $(14,541) | - | - | | Subtract fair value (as of end of prior year) for equity awards granted in prior fiscal years that were forfeited during the covered fiscal year | - | - | - | | Add incremental fair value (as of modification date) of equity awards modified during the covered fiscal year | - | - | - | | Add dividends or other earnings paid on equity awards during the covered fiscal year prior to vesting date of award that are not otherwise included in the total compensation for the covered fiscal year | - | - | - | | TOTAL ADJUSTMENTS | $(63,878) | - | - | | CAP | $669,886 | - | - |
Pay Versus Performance
| Adjustments to Determine CAP for Non-PEO Named Executive Officer (Gamoudi) | | | | | Covered Fiscal Year | 2023 | 2022 | 2021 | | SCT Total for Non-PEO NEO | $422,396 | $686,934 | $621,496 | | Pension Adjustments (i) | | | | | Subtract “Change in Actuarial Present Value” reported in the SCT for the covered fiscal year | - | - | - | | Add pension value attributable to the covered fiscal year’s “service cost” | - | - | - | | Add pension value attributable to the entire “prior service cost” of benefits granted (or credit for benefits reduced) in a plan amendment made in the covered fiscal year attributable to prior service periods | - | - | - | | Equity Adjustments (ii) | | | | | Subtract fair value (as of grant date) reported in the “Stock Awards” and “Option Awards” columns in the SCT for the covered fiscal year | $(157,509) | $(150,002) | $(125,005) | | Add fair value (as of end of year) of equity awards granted during the covered fiscal year that remain unvested as of year end | - | $189,084 | $260,988 | | Add fair value (as of vesting date) of equity awards granted during the covered fiscal year that vest during the covered year | - | - | - | | Add/Subtract the change in fair value from the prior year-end to the covered fiscal year-end for equity awards granted in prior fiscal years that remain outstanding and unvested at the end of the covered fiscal year | - | $510,850 | $981,331 | | Add/Subtract the change in fair value from the prior year-end to vesting date for equity awards granted in prior fiscal years that vested during the covered fiscal year | $(69,242) | $599,009 | $417,002 | | Subtract fair value (as of end of prior year) for equity awards granted in prior fiscal years that were forfeited during the covered fiscal year | $(178,440) | - | - | | Add incremental fair value (as of modification date) of equity awards modified during the covered fiscal year | - | - | - | | Add dividends or other earnings paid on equity awards during the covered fiscal year prior to vesting date of award that are not otherwise included in the total compensation for the covered fiscal year | - | - | - | | TOTAL ADJUSTMENTS | $(405,191) | $1,148,941 | $1,534,316 | | CAP | $17,205 | $1,835,875 | $2,155,812 |
Pay Versus Performance
| (i) We do not sponsor or maintain any defined benefit pension plans and therefore no adjustments were made related to pension value. |
Pay Versus Performance
| (ii) The fair value or incremental fair value of all incentive equity awards is determined in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, generally using the same assumptions used in determining the grant date fair value of our equity awards reflected in the “Summary Compensation Table;” provided, in order to properly value the option awards using the Black-Scholes model we use for such grant date fair value, we made appropriate adjustments to the grant date assumptions to reflect changes in the historical and implied stock price volatility, expected life (including adjustments for the time that lapsed between grant date and valuation date), dividend yield and risk-free interest rates as of each measurement date. The value of outstanding performance-based awards in the covered fiscal year is based upon the probable outcome of the performance conditions as of the last day of the fiscal year. |
Pay Versus Performance
| (3) Amounts reflected in these columns represent the Company’s Cumulative TSR for each measurement period from December 31, 2020 through December 31, 2022. Dividends are assumed to be reinvested. The resulting amounts assume that $100 was invested on December 31, 2020 in our common stock. |
Pay Versus Performance
All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent the Company specifically incorporates such information by reference.