DEF 14A of Mammoth Energy Services, Inc.
Filed Apr 28, 2025 · FY20240001679268-25-000021
What stockholder vote is required to elect our director nominees?
What stockholder vote is required to elect our director nominees? Our amended bylaws require that each director be elected by a majority of votes cast with respect to that director in an uncontested election (where the number of nominees is the same as the number of directors to be elected). In a contested election (where the number of nominees exceeds the number of directors to be elected), the plurality voting standard governs the election of directors. Under the plurality standard, the number of nominees equal to the number of directors to be elected who receive more votes than the other nominees are elected to the Board, regardless of whether they receive a majority of the votes cast. Whether an election is contested or not is determined as of the day before we first mail our meeting notice to stockholders. This year’s election was determined to be an uncontested election, and the majority vote standard will apply. Under our director resignation policy, each director submits an advance, contingent, irrevocable resignation that the Board may accept if the director fails to be elected through a majority vote in an uncontested election. In that situation, the nominating and corporate governance committee would make a recommendation to the Board about whether to accept or reject the resignation. The Board will act on the nominating and corporate governance committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days after the date the election results are certified. The Board will nominate for election or re-election as director, and will elect as directors to fill vacancies and new directorships, only candidates who agree to tender the form of resignation described above. If a nominee who was not already serving as a director fails to receive a majority of votes cast at the annual meeting, that the nominee will not serve on the Board unless and until elected by our stockholders.
What if a nominee is unable or unwilling to serve?
What if a nominee is unable or unwilling to serve? That is not expected to occur. If it does, shares represented by proxies will be voted for a substitute nominated by the Board.
How are directors compensated?
How are directors compensated? Members of the Board who are also officers or employees of the Company do not receive compensation for their services as directors. Our non-employee directors are entitled to receive an annual retainer in the amount of $60,000, plus an additional annual payment of $20,000 for the chairperson and $15,000 for each other member of the audit committee and $15,000 for the chairperson and $10,000 for each other member of the compensation committee and nominating and corporate governance committee, with such amounts paid in quarterly installments. We also provided our non-employee directors with equity compensation under our 2024 Equity Incentive Plan (the “2024 Plan”), as additional compensation and incentive. On the date of each annual meeting of stockholders, each of our non-employee directors receives an annual equity award with a value of $100,000 that vests on the earlier of the first anniversary of the grant date or the next annual meeting of stockholders. For a more detailed description of director compensation and benefits, see “2024 Director Compensation” included elsewhere in this proxy statement.
How often did the Board meet in 2024?
How often did the Board meet in 2024? The Board held one in-person meeting and eight virtual meetings during the year ended December 31, 2024. Each director attended all of the meetings of the Board and the meetings of the committees on which he served. During 2024, our non-management directors met in executive sessions five times.
Election of Directors and Director Biographies
Election of Directors and Director Biographies
Who are this year’s nominees?
Who are this year’s nominees? The directors standing for election this year to hold office until the 2026 Annual Meeting of Stockholders and until each such director’s successor is elected are:
Who are this year’s nominees?
| Name | Age | Title | | Arthur Amron | 68 | Chairman of the Board | | Corey Booker | 49 | Director | | Paul Jacobi | 58 | Director | | James Palm | 80 | Director |
Who are this year’s nominees?
| | Arthur Amron, age 68. Arthur Amron has served as a director of the Company since January 2019 and as the Chairman of the Board since June 2019. Since January 1, 2024, Mr. Amron has been a Special Limited Partner of Wexford Capital LP, an SEC-registered investment advisor. Until December 31, 2023, Mr. Amron was a Partner and the General Counsel of Wexford. He joined Wexford as General Counsel in 1994 and became a Partner in 1999. During the time he was employed by Wexford, Mr. Amron actively participated in various private equity transactions, particularly in the bankruptcy and restructuring areas, and served on the boards and creditors’ committees of a number of public and private companies in which Wexford has held investments. Mr. Amron has served on the board of | | directors of Nephros, Inc., a public commercial stage medical device company, since September 2007. From 1991 to 1994, Mr. Amron was an Associate at Schulte Roth & Zabel LLP, specializing in corporate and bankruptcy law and, from 1984 to 1991, Mr. Amron was an Associate at Debevoise & Plimpton LLP specializing in corporate litigation and bankruptcy law. Mr. Amron holds a J.D. from Harvard University and a B.A. in Political Theory from Colgate University and is an inactive member of the New York Bar. We believe Mr. Amron’s legal training and extensive transactional experience, including in mergers and acquisitions, private equity investments and financing transactions, as well as his experience serving on boards of directors of other public companies qualify him for service as a member of our board of directors. | |
Who are this year’s nominees?
| | Dr. Corey Booker, age 49. Dr. Corey Booker has served as a director of the Company since August 2020. Dr. Booker is the founder, and since November 2012 has served as the Chief Executive Officer, of Bedside LLC (formerly OnPulse, LLC), a healthcare management services company designed to improve patient health through advocacy, care coordination, communication and increased patient health literacy. In addition to his career at Bedside LLC, Dr. Booker practiced medicine as a maternal fetal specialist at Duke University Hospital from October 2012 to June 2017. Dr. Booker has served on the board of directors of HarborPath Inc., or HarborPath, a non-profit patient assistance program | | providing specialty pharmacy gap coverage to patients in need of high cost medication, since July 2018. At HarborPath, Dr. Booker also heads the finance committee and leads a special task force aimed at introducing the organization’s proprietary software to commercial customers. Dr. Booker holds a Doctor of Medicine degree from Creighton University where he served as a Washington Health Policy Fellow at the National Committee for Quality Assurance. Dr. Booker received a Master’s degree in Clinical Informatics from the Fuqua School of Business at Duke University. We believe that Dr. Booker's senior executive experience and extensive board service qualify him to serve on our board of directors. | |
Who are this year’s nominees?
| | Paul Jacobi, age 58. Paul Jacobi has served as a director of the Company since July 2020. Since 1996, Mr. Jacobi has served in various positions at Wexford, and is currently a managing director responsible for Wexford’s private equity energy investments. From 1995 to 1996, Mr. Jacobi worked for Moody’s Investors Services as an analyst covering the investment banking and asset management industries. From 1993 to 1995, Mr. Jacobi was employed by Kidder Peabody & Co. as a senior financial analyst in the investment banking group. From 1988 to 1993, Mr. Jacobi worked for KPMG Peat Marwick as an audit manager in the financial services practice. Since July 2019, Mr. Jacobi has served as a | | director of Mako Mining Corp, a public gold mining, development and exploration company. Mr. Jacobi also has been a director of Grizzly Oil Sands ULC, a private oil sands development company, since December 2016. Mr. Jacobi holds a Bachelor of Science degree in accounting from Villanova University and is a Certified Public Accountant. We believe Mr. Jacobi’s background in finance, accounting and private equity energy investments, as well as his executive management skills developed as part of his career with Wexford, its portfolio companies and other financial institutions qualify him to serve on our board of directors. | |
Who are this year’s nominees?
| | James Palm, age 80. James Palm has served as a director of the Company since June 2017. Mr. Palm served as a director of Gulfport Energy Corporation, or Gulfport, from February 2006 and as Chief Executive Officer of Gulfport from December 2005, in each case until his retirement in February 2014. Prior to joining Gulfport, Mr. Palm pursued oil and gas investments primarily in Oklahoma, the Texas Panhandle and Kansas as the manager and owner of Crescent Exploration, LLC, a company he founded in 1995. Mr. Palm was previously a long-term member of the Industry Advisory Committee of the Oklahoma Corporation Commission. From October 2001 through October 2003, Mr. Palm served as the | | Chairman of the Oklahoma Energy Resources Board. From 1997 through 1999, Mr. Palm served as the President of the Oklahoma Independent Petroleum Association. Mr. Palm has a Lean Six Sigma Green Belt. Mr. Palm received a Bachelor of Science degree in Mechanical Engineering in 1968, and a Master’s in Business Administration in 1971, both from Oklahoma State University. We believe that Mr. Palm’s experience in the oil and natural gas industry, as well as his prior management experience, qualifies him for service as a member of our board of directors. | |
Nominating Process For Directors, Director Qualifications and Review of Director Nominees
Nominating Process For Directors, Director Qualifications and Review of Director Nominees The nominating and corporate governance committee is comprised of three non-employee directors, each of whom is independent under Nasdaq listing rules. As provided by the nominating and corporate governance committee’s charter, our nominating and corporate governance committee identifies, investigates and recommends to the Board candidates with the goal of creating a balance of knowledge, experience and diversity. Potential directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the interests of our stockholders. In addition to reviewing a candidate’s background and accomplishments, candidates for director nominees are reviewed in the context of the current composition of the Board and the evolving needs of our stockholders’ businesses. We also require that at least a majority of our directors meet the independence standards under the Nasdaq listing rules. Four out of the five directors currently serving on the Board meet these independence standards. We also require that our directors who serve on the Board’s committees meet the independence standards applicable to such committees under the Nasdaq listing rules. The Board desires to have members on the Board that reflect a range of talents, ages, skills and expertise, particularly in the areas of accounting and finance, management, leadership and energy industry sufficient to provide sound and prudent guidance with respect to our interests. Our nominating and corporate governance committee is committed to continuing improvement and seeks to create a Board composition that is diverse, balanced and aligned with the evolving needs of the Company. We require that the members of the Board be able to dedicate the time and resources sufficient to ensure the diligent performance of their duties on our behalf, including attending all meetings of the Board and applicable committee meetings. In accordance with its charter, the nominating and corporate governance committee periodically reviews the criteria for the selection of directors to serve on the Board and recommends any proposed changes to the Board’s for approval. The nominating and corporate governance committee will consider stockholder nominations for director candidates upon written submission of such recommendation to our Corporate Secretary along with, among other things, the nominee’s qualifications and certain biographical information regarding the nominee, such nominee’s written consent to serving as a director if elected and being named in the proxy or information statement and certain information regarding the status of the stockholder submitting the recommendation, all in the manner required by our amended bylaws and the applicable rules and regulations promulgated under the Exchange Act. Following verification of the stockholder status of persons proposing candidates, recommendations will be aggregated and considered by the Board at a regularly scheduled or special meeting. If any materials are provided by a stockholder in connection with the nomination of a director candidate, such materials will be forwarded to the Board. The nominating and corporate governance committee may also review materials provided by professional search firms or other parties in connection with a nominee who is not proposed by a stockholder. In evaluating such nominations, the Board will seek to achieve a balance of knowledge, experience and diversity on the Board. The Board uses the same criteria for evaluating candidates nominated by stockholders as it does for those proposed by current Board members, professional search firms and other persons. After completing its evaluation, the Board approves the final slate of director nominees. The Board, based on the recommendation of the nominating and corporate governance committee, approved the director nominees submitted for election at this Annual Meeting. Each nominee brings a strong and unique background and set of skills to the Board, giving the Board as a whole competence and experience in a variety of areas, including corporate governance and Board service, executive management, oil and natural gas industry, accounting and finance and risk assessment and management. Specifically, in nominating the candidates for election at this Annual Meeting, the Board considered their qualifications, skills, professional experience, diversity and other information discussed in each of the nominees’ individual biographies set forth beginning on page 6 above and, with respect to director nominees that are identified in this proxy statement as independent under the Nasdaq listing rules and other applicable rules and regulations for purposes of serving on the Board and its committees, as applicable, any material relationships of each such director nominee with the Company and its consolidated subsidiaries and, with respect to Mr. Jacobi, his employment relationship with Wexford. Our amended bylaws require that each director be elected by a majority of votes cast with respect to that director in an uncontested election. This year’s election was determined to be an uncontested election, and the majority vote standard will apply. Under our director resignation policy, each director submits an advance, contingent, irrevocable resignation that the Board may accept if the director fails to be elected through a majority vote in an uncontested election. As discussed above, Mr. Smith is not seeking re-election. The nominating and corporate governance committee is actively conducting a search to identify a new director nominee.
Executive Summary
| | Element | Description | Purpose | | Fixed | Base Salary | Delivered in cash and evaluated each year based on peer company and survey market data | Provide competitive cash compensation to attract and retain key executive talent | | Variable | Annual Bonus | If awarded, delivered in cash based on the committee’s evaluation of company and individual performance | Motivate and reward our executives to achieve key short-term financial and operation objectives | | | Long-term Incentives | Restricted stock units, which are periodically awarded and typically vest over a three- or four- year period | Reward creation of long-term stockholder value, encourage long-term retention of executives and align long-term interests of executive with stockholders |
Executive Summary
| What We Do | What We Don’t Do | | Seek alignment of interests of our executive officers with those of our stockholders by providing a portion of compensation in the form of periodic grants of long-term equity awards in the form of restricted stock units, which typically vest over a three- or four-year period | NO liberal share recycling in our equity incentive plan | | Emphasize performance in any bonus award | No dividends or dividend equivalents payable on unvested equity awards under the 2024 Equity Incentive Plan submitted to stockholders for approval | | Provide a competitive compensation package focused on retaining, motivating and incentivizing top executive talent | NO guaranteed bonuses for NEOs | | Review, on a regular basis, share utilization and dilution when granting equity awards | NO written employment agreements for NEOs | | Annual advisory “say-on-pay” vote | NO severance agreements, except for change in control and death and disability provisions in our equity award agreements | | Adopted a comprehensive executive incentive compensation clawback policy that allows for the recoupment and/or forfeiture of certain executive officer incentive compensation and complies with the Nasdaq listing rules and Rule 10D-1 under the Exchange Act | NO repricing of underwater stock options | | Engage an external, independent compensation advisor to conduct competitive benchmarking to align the Company’s compensation program with prevailing market practices | Limited perquisites for NEOs | | Each member of our compensation committee meets the independence requirements under the Nasdaq listing rules and SEC rules | NO tax gross-ups on perquisites | | Require substantial stock ownership by our non-employee directors | NO hedging of our securities by our NEOs or directors | | Adopted a majority voting bylaw provision for uncontested director elections | No pledging of our securities by our NEOs or directors | | Committed to identifying, correcting and preventing health, safety and environmental, or HSE, hazards that could adversely affect our employees, contractors, customers or the general public | NO pension or supplemental executive retirement plans to our current executive officers (except for a our broad-based 401(k) plan) | | Focused on enhancing sustainability of our operations and commitment to our community | NO director overboarding |
Determining Executive Compensation
Determining Executive Compensation Our Executive Compensation Policy Our general compensation policy is guided by several key principles: •designing competitive total compensation programs to enhance our ability to attract and retain knowledgeable and experienced senior management level employees; •motivating employees to deliver outstanding financial performance and meet or exceed general and specific business, operational and individual objectives; •setting compensation and incentive levels relevant to the market in which the employee provides service; and •periodically providing a portion of the total compensation to our named executive officers in equity (rather than cash), vesting over a three- or four-year period, thus increasing an alignment of interests between our senior management level employees and our stockholders and retention of our top executive talent. The Role of Our Compensation Committee The compensation committee of the Board is primarily responsible for establishing, implementing and monitoring our compensation programs, including those applicable to our named executive officers. In particular, the compensation committee’s current role is to oversee, on behalf of the Board, our compensation and benefit plans and policies, review and approve incentive compensation and equity based plans (including establishing, reviewing and approving performance-based cash incentive bonuses and equity grants to our executive officers and directors, as may be applicable) and establish, review and approve annually all compensation decisions relating to our NEOs, including those with respect to employment arrangements, performance targets, severance arrangements, change in control provisions and any special supplemental benefits. The compensation committee takes action at least annually to address executive compensation programs, approve compensation levels, consider performance targets, review management performance and administer our equity-based and other compensation plans. The compensation committee operates in accordance with its charter, which sets forth the committee’s powers and responsibilities described in more detail under the heading “Committees of the Board of Directors.” The Role of Our Compensation Consultant In March 2024, our compensation committee engaged Meridian Compensation Partners, LLC, or Meridian, to conduct a compensation analysis of compensation practices for our named executive officers and to assist the compensation committee in establishing market place compensation levels for such executives for 2024. Meridian was also engaged by the compensation committee to conduct the compensation analysis for 2025. The compensation committee considered any potential conflicts of interest with each compensation consultant and determined that there were no such conflicts of interest. The committee will continue to monitor Meridian’s independence going forward. The Role of Our Chief Executive Officer Our compensation committee evaluates our Chief Executive Officer based on the Company performance criteria described above, his leadership roles as a member of the Board and as our lead representative to the investment community and other related criteria. His total compensation package is ultimately determined by the compensation committee based upon this evaluation and upon input from the compensation consultant, reflecting our Chief Executive Officer’s performance, our Company performance, competitive industry practices and the terms of his employment. Each year, our Chief Executive Officer evaluates each of the other NEOs and makes compensation recommendations to the compensation committee. In developing his recommendations, the Chief Executive Officer considers each NEO’s individual performances as well as his contribution to the Company performance. Our Peer Group and Survey Data The compensation committee annually reviews the compensation of our NEOs relative to the peer group utilized by the compensation committee, based on market information provided by our compensation consultant. The information provided by Meridian for 2024 compensation decisions made at the beginning of 2024 reflects compensation data from a peer group of publicly-traded companies and from market surveys. The peer group consists of 19 companies in the oilfield services industry and the industrial/infrastructure industry, reflecting our unique composition. The peer group utilized by the compensation committee in 2024 was similar to the one utilized in 2023, with an adjustment to reflect changing circumstances in the industry, including acquisitions. The peer group is used to understand and evaluate how certain NEO’s total direct compensation compares with the total direct compensation provided to individuals in similar roles in the peer group of publicly-traded companies. Our compensation committee uses a combination of peer group proxy data and survey data in determining the compensation for our NEOs. The committee does not target a specific level of compensation relative to the market data, however the committee does consider each element of each NEO’s compensation relative to the market median. The peer group utilized by the compensation committee for 2024 compensation and performance decisions made at the beginning of 2024 is set forth below:
Determining Executive Compensation
| 2024 Compensation Peer Group | | | | Argan, Inc. | Nine Energy Services, Inc. | Solaris Oilfield Infrastructure, Inc. | | Cactus, Inc. | Northwest Pipe Company | Sterling Infrastructure, Inc. | | Dril-Quip, Inc. | Primoris Services Corp. | Team, Inc. | | Great Lakes Dredge & Dock Corp. | ProPetro Holding Corp. | U.S. Silica Holdings, Inc. | | Gulf Island Fabrication, Inc. | RPC, Inc. | VSE Corporation | | IES Holdings, Inc. | Select Energy Services, Inc. | | | MYR Group Inc. | Smart Sand, Inc. | |
Other Elements of Compensation
Other Elements of Compensation 401(k) Plan We have a retirement savings plan in which our named executive officers currently participate. The retirement plan is a tax qualified 401(k) plan that covers all eligible employees including the named executive officers. Prior to October 9, 2015, we made a safe harbor contribution equal to 3% of each eligible employee’s gross annual compensation for the prior calendar year, subject to certain limitations provided by our 401(k) plan and Internal Revenue Service regulations. The safe harbor contributions were made regardless of employee’s deferrals into the plan. All safe harbor contributions made by us on behalf of an eligible employee were 100% vested when contributed. We also have the ability to make an additional, discretionary contribution that is allocated based on each eligible employee’s gross annual compensation for the prior calendar year, but did not make any discretionary contributions in 2016 and 2017. Effective January 1, 2018, we reinstated matching contributions of up to 3% of an eligible employee’s compensation. Termination and Change of Control Benefits We do not have written employment agreements or change in control agreements with our Chief Executive Officer and Chief Financial Officer, except that the terms of their respective restricted stock unit awards provide for the acceleration and vesting of such awards upon termination in connection with the change of control of the Company and upon such executive’s death or disability. For a description of our oral agreements with our NEOs, see “—Terms of Employment” above. Additional information regarding termination and change of control benefits for our NEOs, see “Termination and Change of Control Benefits” below. Perquisites and Other Personal Benefits The Company provides certain limited perquisites and other personal benefits that we believe to be reasonable and consistent with our overall compensation program to better enable us to attract and retain competent executives for key positions. The committee considers and periodically reviews the levels of perquisites and other personal benefits in establishing the total compensation of our NEOs. During 2024, our NEOs received minimal perquisites that provide value to our business in the form of gym membership dues and 401(k) plan contributions.
Equity Compensation Plan Information
Equity Compensation Plan Information The following table summarizes information about our equity compensation plan as of December 31, 2024:
Equity Compensation Plan Information
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans | | Equity compensation plans approved by security holders | | | | | 2016 Equity Incentive Plan | 116,666 | N/A | — | | 2024 Equity Incentive Plan | 139,280 | N/A | 1,860,720 | | | 255,946 | | 1,860,720 |
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE We qualify as a “smaller reporting company,” as defined in Item 10(f)(1) of Regulation S-K. The following table provides information concerning compensation of our named executive officers for the fiscal years ended December 31, 2024 and 2023. During 2024, we did not have any other executive officers or persons performing similar functions.
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Bonus(1) ($) | Stock Awards ($) | All Other Compensation(2) ($) | Total ($) | | Arty Straehla, Chief Executive Officer | 2024 | $700,000 | $70,000 | $— | $10,350 | $780,350 | | | 2023 | $700,000 | $480,000 | $— | $9,900 | $1,189,900 | | Mark Layton, Chief Financial Officer and Secretary | 2024 | $444,038 | $50,000 | $— | $10,350 | $504,388 | | | 2023 | $350,000 | $330,000 | $— | $9,900 | $689,900 |
SUMMARY COMPENSATION TABLE
(1)The 2024 amounts for Messrs. Straehla and Layton consist of discretionary cash bonuses paid in March 2024 in recognition of their contributions towards collections of accounts receivable from PREPA during 2024. The 2023 amounts for Messrs. Straehla and Layton consist of discretionary cash bonuses paid in January 2024 in recognition of their contributions towards collections of accounts receivable from PREPA during 2023. (2)The amounts for each of Messrs. Straehla and Layton consist of 401(k) plan contributions of $10,350 for 2024 and $9,900 for 2023.
OUTSTANDING EQUITY AWARDS AT FISCAL 2024 YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL 2024 YEAR-END There were no equity awards outstanding for Messrs. Straehla and Layton at December 31, 2024. Mr. Lancaster had 50,000 restricted stock units outstanding at December 31, 2024, 25,000 of which vested on March 1, 2025 and 25,000 of which are scheduled to vest on March 1, 2026.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE The following table provides information concerning total compensation paid to our Chief Executive Officer, also known as Principal Executive Officer (PEO), during the fiscal years ended December 31, 2024 and 2023. Total compensation and compensation actually paid is provided our other named executive officer (NEO). We qualify as a smaller reporting company, as defined in Item 10(f)(1) of Regulation S-K. All information provided under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for Non-PEO NEO | Average Compensation Actually Paid to Non-PEO NEO(3) | Value of Fixed $100 Investment Based on Total Shareholder Return (“TSR”) | Net Loss ($ in thousands) | | 2024 | $780,350 | $780,350 | $504,388 | $504,388 | $165 | $(207,326) | | 2023 | $1,189,900 | $1,986,150 | $689,900 | $996,150 | $245 | $(3,163) |
PAY VERSUS PERFORMANCE
(1)Mr. Straehla was the Company’s PEO for each of the 2024 and 2023 fiscal years. (2)The amounts disclosed reflect the adjustments listed in the tables below to the amounts reported in the Summary Compensation Table for PEO:
PAY VERSUS PERFORMANCE
| Year | Less: Grant Date Value of Equity Awards | Plus: Change in Value of Awards Granted During the Current Year | Plus: Vesting Date Value of Awards that Vested During the Year | Plus: Year-Over-Year Change in Fair Value of Unvested Awards | Plus: Change in Value of Awards Vesting During the Current Year | Total Adjustments | | 2024 | $— | $— | $— | $— | $— | $— | | 2023 | $— | $— | $1,803,750 | $— | $(1,007,500) | $796,250 |
PAY VERSUS PERFORMANCE
(3)For each of the 2024 and 2023 fiscal years, Mr. Layton was the Company’s only non-PEO NEO. The amounts disclosed reflect the adjustments listed in the tables below to the amounts reported in the Summary Compensation Table for our Non-PEO NEO:
PAY VERSUS PERFORMANCE
| Year | Less: Grant Date Value of Equity Awards | Plus: Change in Value of Awards Granted During the Current Year | Plus: Vesting Date Value of Awards that Vested During the Year | Plus: Year-Over-Year Change in Fair Value of Unvested Awards | Plus: Change in Value of Awards Vesting During the Current Year | Total Adjustments | | 2024 | $— | $— | $— | $— | $— | $— | | 2023 | $— | $— | $693,750 | $— | $(387,500) | $306,250 |
Analysis of the Information Presented in the Pay Versus Performance Table
Analysis of the Information Presented in the Pay Versus Performance Table Our company has not historically utilized net income or net loss as a performance measure for our executive compensation program due to the capital intensive nature of our business. We consider Adjusted EBITDA, which is discussed under “Executive Compensation—Executive Summary—2024 Performance Highlights” above and reconciled in Annex A to this proxy statement, as a more meaningful performance measure when assessing compensation of our named executive officers. As a smaller reporting company, we are not required to include Adjusted EBITDA in the pay versus performance table. From 2023 to 2024, our net loss increased and the Compensation Actually Paid to our PEO and Non-PEO NEO decreased between those years to correlate with the Company’s performance. Further, our TSR decreased from 2023 to 2024 and the Compensation Actually Paid to our PEO and Non-PEO NEO also declined to correlate with the decrease in our TSR.
2024 DIRECTOR COMPENSATION
2024 DIRECTOR COMPENSATION The following table contains information with respect to 2024 compensation of our directors who served in such capacity during that year, except that the 2024 compensation of the director who is also our named principal executive officer is disclosed in the 2024 Summary Compensation Table above.
2024 DIRECTOR COMPENSATION
| Name | Board & Committee Retainer Fees | Stock Awards(1) ($) | All Other Compensation ($) | Total ($) | | Arthur Amron | $60,000 | $100,000 | $— | $160,000 | | Corey Booker | $75,000 | $100,000 | $— | $175,000 | | Paul Jacobi(2) | $85,000 | $100,000 | $— | $185,000 | | James Palm | $95,000 | $100,000 | $— | $195,000 | | Arthur Smith | $100,000 | $100,000 | $— | $200,000 |
2024 DIRECTOR COMPENSATION
(1)The amounts shown reflect the grant date fair value of restricted stock units granted determined in accordance with FASB ASC Topic 718, based on the grant date closing price of our common stock on The Nasdaq Global Select Market. See Note 18 to our consolidated financial statements for the fiscal year ended December 31, 2024, included in our Annual Report on Form 10-K, filed with the SEC on March 7, 2025. As of December 31, 2024, each director listed in the table had an unvested award of 27,856 restricted stock units, which will vest on June 11, 2025. (2)As required under the terms of his employment with Wexford, Mr. Jacobi’s restricted stock units and cash compensation earned in his capacity as a member of the Board in 2024 were assigned to Wexford. Beginning on January 1, 2025, Mr. Jacobi will receive any compensation earned in his capacity as a member of the Board.
Director Compensation
Director Compensation Our non-employee directors are entitled to receive an annual retainer in the amount of $60,000, plus an additional annual payment of $20,000 for the chairperson and $15,000 for each other member of the audit committee and $15,000 for the chairperson and $10,000 for each other member of the compensation committee and nominating and corporate governance committee, with such amounts paid in quarterly installments. We also provide our non-employee directors with equity compensation under the 2024 Plan as additional compensation and incentive. On the date of each annual meeting of stockholders, our non-employee directors receive an annual equity award with a value of $100,000 that vest on the earlier of the first anniversary of the grant date or the next annual meeting of stockholders. We provide liability insurance for our directors and officers. In addition, our certificate of incorporation sets forth limitations on our directors’ liability to our stockholders. Further, our amended bylaws contain indemnification and advancement of expenses provisions for the benefit of our directors and officers. We are also party to a customary indemnification agreement with each of our executive officers and directors. The compensation committee has adopted stock ownership and retention guidelines for our non-employee directors. These guidelines were adopted to encourage our non-employee directors to have a meaningful stake in the Company, which encourages a focus on our long-term success, aligns directors’ interests with the interests of our stockholders and further promotes our commitment to sound corporate governance. Under the stock ownership and retention guidelines, each of our non-employee directors must own an amount of our common stock equal in four times his annual cash compensation. Non-employee directors are given a five-year transition period to come into full compliance with the guidelines.
Adjusted EBITDA
Adjusted EBITDA Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDA as net loss before depreciation, depletion, amortization and accretion, gains on disposal of assets, net, impairment of goodwill, stock based compensation, interest expense and financing charges, net, other income, net (which is comprised of interest on trade accounts receivable and certain legal expenses) and provision for income taxes, further adjusted to add back interest on trade accounts receivable. We exclude the items listed above from net loss in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industries depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net loss or cash flows from operating activities as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. We believe that Adjusted EBITDA is a widely followed measure of operating performance and may also be used by investors to measure our ability to meet debt service requirements. The following table provides a reconciliation of Adjusted EBITDA to the GAAP financial measure of net loss for periods indicated (in thousands):
Adjusted EBITDA
| | Twelve Months Ended | | | | December 31, | | | | 2024 | 2023 | | Net loss | $(207,326) | $(3,163) | | Depreciation, depletion, amortization and accretion expense | 25,079 | 45,110 | | Gains on disposal of assets, net | (4,014) | (6,041) | | Impairment of goodwill | — | 1,810 | | Stock based compensation | 875 | 1,345 | | Interest expense and financing charges, net | 25,204 | 16,196 | | Other expense (income), net | 64,621 | (42,015) | | (Benefit) provision for income taxes | (11,204) | 12,297 | | Interest on trade accounts receivable | (60,686) | 45,440 | | Adjusted EBITDA | $(167,451) | $70,979 |