DEF 14A of Liberty Energy Inc., Mar 7, 2024

DEF 14A of Liberty Energy Inc.

Filed Mar 7, 2024 · FY20230001999371-24-003271

Open on EDGAR

  1. PROPOSAL 1 — ELECTION OF THREE CLASS II DIRECTORS TO A THREE-YEAR TERM EXPIRING AT THE 2027 ANNUAL MEETING OF STOCKHOLDERS

    PROPOSAL 1 — ELECTION OF THREE CLASS II DIRECTORS TO A THREE-YEAR TERM EXPIRING AT THE 2027 ANNUAL MEETING OF STOCKHOLDERS Our Board currently consists of nine (9) directors. In accordance with the terms of our Amended and Restated Certificate of Incorporation (as amended, the “Amended and Restated Certificate of Incorporation”) and Second Amended and Restated Bylaws (as amended, the “Second Amended and Restated Bylaws”), our Board is divided into three classes: Class I, Class II and Class III, with each class serving staggered three-year terms. Upon the expiration of the term of a class of directors, directors in that class will be eligible to be elected for a new three-year term at the annual meeting of stockholders in the year in which their term expires. Each director elected to the Board will hold office until his or her successor has been elected and qualified or until the earlier of their death, resignation, disqualification or removal. The current members of the classes of our Board are divided as follows: ♦Class II (term expires in 2024): Ken Babcock, Audrey Robertson, and Christopher A. Wright ♦Class III (term expires in 2025): Peter A. Dea, William F. Kimble, and James R. McDonald ♦Class I (term expires 2026): Simon Ayat, Gale A. Norton, and Cary D. Steinbeck To be elected, director nominees must receive a plurality of the votes cast by the holders of the shares entitled to vote in the election of directors at the Annual Meeting. Nonetheless, pursuant to our Corporate Governance Guidelines, in an uncontested election, any director nominee who receives a greater number of “WITHHOLD” votes than votes “FOR” his or her election (a “Majority Withheld Vote”) is required to tender his or her resignation to the Chair of the Nominating and Governance Committee within seven days following certification of the stockholder vote. The Nominating and Governance Committee must recommend to the Board whether to accept the resignation offer within 60 days of receiving the offer of resignation. The Board is required to consider and act on the recommendation within 30 days following receipt of the recommendation. Unless otherwise instructed, the proxy holders will vote the proxies received by them for the three (3) director nominees named below, all of whom are presently directors of the Company. In the event that any nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee who shall be designated by the present Board to fill the vacancy, unless the size of the Board is reduced. The proxies cannot be voted for a greater number of persons than the number of nominees named in this proxy statement. It is not expected that any nominee will be unable or will decline to serve as a director. Biographical information regarding each nominee is set forth below, as well as a summary of the experiences, qualifications, attributes or skills that caused the Board to determine that each nominee should serve as a director of the Company. Each nominee’s experience is evaluated in determining the overall composition of the Board.

  2. NOMINEES FOR ELECTION AS CLASS II DIRECTORS TO A THREE-YEAR TERM EXPIRING AT THE 2027 ANNUAL MEETING OF STOCKHOLDERS

    NOMINEES FOR ELECTION AS CLASS II DIRECTORS TO A THREE-YEAR TERM EXPIRING AT THE 2027 ANNUAL MEETING OF STOCKHOLDERS

  3. NOMINEES FOR ELECTION AS CLASS II DIRECTORS TO A THREE-YEAR TERM EXPIRING AT THE 2027 ANNUAL MEETING OF STOCKHOLDERS

    | KEN BABCOCK | | | | Age: 67 | Key Areas of Experience | | | Director Since: 2018 INDEPENDENT | •Technology/Cybersecurity •Senior Management Experience (CEO/CFO) •Oilfield Services | •Mergers & Acquisitions •Marketing/Sales •HR/Compensation | | Mr. Babcock is currently the Chief Executive Officer of Abaco Energy Technologies LLC (“Abaco”), a private Houston-based portfolio company of Riverstone Holdings LLC, an energy-focused private equity firm (“Riverstone”), that was formed in 2013 to focus on opportunities in manufacturing and services related to North American drilling, completion, and production, and associated infrastructure. Prior to joining Abaco, Mr. Babcock was the President and Chief Executive Officer of Titan Specialties, Ltd. (“Titan”) from 2008 until its sale to Hunting PLC in September 2011. Following the sale, Mr. Babcock remained at Titan until June 2012. Prior to joining Titan, from 2005 until 2008, Mr. Babcock served as President and Chief Executive Officer of International Logging, Inc. (“ILI”) where he took a narrowly-focused mud logging company of over 300 employees to a diverse well site services organization of over 1,800 employees spread over 60 countries in a little over two years. Prior to joining ILI, Mr. Babcock was Director of Strategic Sales at Baker Hughes INTEQ and Vice President of Business Development at Noble Technology Services. Mr. Babcock began his career with EXLOG in 1980. Mr. Babcock has a Bachelor of Science in Geology from Florida State University. We believe that Mr. Babcock’s strong business leadership experience qualifies him for service on our Board. | | |

  4. NOMINEES FOR ELECTION AS CLASS II DIRECTORS TO A THREE-YEAR TERM EXPIRING AT THE 2027 ANNUAL MEETING OF STOCKHOLDERS

    | AUDREY ROBERTSON | | | | Age: 43 | Key Areas of Experience | | | Director Since: 2021 | •Exploration and Production •Corporate Finance/Capital Markets •Senior Management Experience (CEO/CFO) | •Public Accounting •Mergers & Acquisitions •Investor Relations •Risk Management | | Ms. Robertson is a co-founder of Franklin Mountain Energy, LLC, a private oil and gas company operating in the Permian Basin, and serves as its Executive Vice President of Finance and prior to that was Chief Financial Officer from September 2018 to January 2023. She also served as a co-founder and Managing Partner of Copper Trail Partners, LLC, a private equity platform based in Denver from November 2017 until December 2021. From 2005 to 2016, she served as a Partner and Senior Managing Director at Kayne Anderson Capital Advisors. Prior to that time, she was an investment banker with Goldman Sachs & Co. Ms. Robertson was a Director of Bonanza Creek Energy, LLC and served on both the audit and compensation committees from January 2020 until November 2021 and served on the board of directors of Extraction Oil and Gas, LLC from September 2019 to January 2021 where she served on the audit committee. She is a member of the Board of Directors of the New Mexico Oil and Gas Association and serves on the Finance and Governance sub-committees. She has served on the boards of several private companies and not-for-profit organizations. She holds a Bachelor of Science degree in Applied Economics and Management from Cornell University and a Master of Accounting degree from the University of Southern California. We believe that Ms. Robertson’s significant experience in the oil and gas exploration and production industry and accounting credentials qualify her for service on our Board. | | | | CHRISTOPHER A. WRIGHT | | | | Age: 59 | Key Areas of Experience | | | Director Since: 2018 | •Exploration and Production •Technology/Cybersecurity •Senior Management Experience (CEO/CFO) •Oilfield Services | •Mergers & Acquisitions •ESG •Marketing/Sales •HR/Compensation •Investor Relations | | Mr. Wright has served as our Chief Executive Officer since December 2016 and as the Chief Executive Officer of our predecessor company since its founding in 2011. Mr. Wright is the Executive Chairman of Liberty Resources LLC, an oil and natural gas exploration and production company focused in the Williston Basin, and was the Chief Executive Officer from its formation in September 2010 until March 2017. Mr. Wright founded Pinnacle Technologies, a company that developed and commercialized tiltmeter and microseismic fracture mapping and served as Chief Executive Officer of Pinnacle Technologies from 1992 to 2006. From 2000 to 2006, Mr. Wright served as Chairman of Stroud Energy, Inc., a shale natural gas producer. From October 2021 to December 2023, Mr. Wright served on the board of directors of Accretion Acquisition Corp. Mr. Wright also serves on the board of directors for Urban Solution Group, a private company, and the Federal Reserve Bank of Kansas City, Denver Branch. Mr. Wright has a Bachelor of Science in Mechanical Engineering from the Massachusetts Institute of Technology (“MIT”) and conducted graduate work in electrical engineering at both the University of California-Berkeley and MIT. We believe that Mr. Wright’s experience leading our growth as our Chief Executive Officer and his extensive experience in the hydraulic fracturing services industry qualifies him for service on our Board. | | |

  5. NOMINEES FOR ELECTION AS CLASS II DIRECTORS TO A THREE-YEAR TERM EXPIRING AT THE 2027 ANNUAL MEETING OF STOCKHOLDERS

    The election of directors requires the affirmative vote of a plurality of the votes cast by the holders of the shares of Common Stock entitled to vote at the election. If you submit a signed proxy card but do not give voting instructions as to how your shares of Common Stock should be voted, your shares will be voted in accordance with the recommendations of our Board stated in this Proxy Statement. Neither abstentions nor broker non-votes will have any effect on the outcome of voting on director elections. THE BOARD RECOMMENDS VOTING “FOR” THE ELECTION OF EACH CLASS II DIRECTOR NOMINEE.

  6. DIRECTORS CONTINUING IN OFFICE

    DIRECTORS CONTINUING IN OFFICE

  7. DIRECTORS CONTINUING IN OFFICE

    | PETER A. DEA | | | | Age: 70 | Key Areas of Experience | | | Director Since: 2018 INDEPENDENT | •Exploration and Production •Senior Management Experience (CEO/CFO) •Mergers & Acquisitions | •ESG •HR/Compensation •Investor Relations •Corporate Governance | | Mr. Dea has been the Executive Chairman of Confluence Resources LP (“Confluence”) since September 2016. Mr. Dea has served as the President and Chief Executive Officer of Cirque Resources LP (“Cirque”) since May 2007. Both Confluence and Cirque are private oil and gas companies. From November 2001 through August 2006, Mr. Dea was President and Chief Executive Officer and a director of Western Gas Resources, Inc. (“Western Gas”). Mr. Dea joined Barrett Resources Corporation (“Barrett”) in November 1993 and served as Chief Executive Officer and director from November 1999 and as Chairman from February 2000 through August 2001. Western Gas and Barrett were public oil and gas companies. Prior to that, Mr. Dea served in several geologic positions with Exxon Company, U.S.A. Mr. Dea currently serves as the Chairman of the Board of Ovintiv Inc. and has served as a director of Antero Midstream Corporation since the closing of its simplification transaction in March 2019. Prior to the simplification, Mr. Dea served as a director of the general partner of Antero Midstream GP LP beginning in April 2018. Mr. Dea has a Bachelor of Arts in Geology from Western State Colorado University and a Masters of Science in Geology from the University of Montana. Mr. Dea also attended the Harvard Business School, Advanced Management Program. We believe that Mr. Dea’s extensive oil and gas exploration and production experience and involvement in state and national energy policies qualify him for service on our Board. | | | | WILLIAM F. KIMBLE | | | | Age: 64 | Key Areas of Experience | | | Director Since: 2018 INDEPENDENT | •Public Accounting •Mergers & Acquisitions •Legal/Regulatory | •Corporate Governance •Risk Management •Technology/Cybersecurity | | Mr. Kimble has served on our Board since the initial public offering of our Common Stock (the “IPO”) and as Lead Director since October 2018. From 2009 until his retirement in 2015, Mr. Kimble served as the Office Managing Partner for the Atlanta office and Managing Partner - Southeastern United States at KPMG LLP (“KPMG”), one of the largest audit, tax and advisory services firms in the world. Mr. Kimble was also responsible for moderating KPMG’s Audit Committee Institute and Audit Committee Chair Sessions. Until his retirement, Mr. Kimble had been with KPMG or its predecessor firm since 1986. During his tenure with KPMG, Mr. Kimble also held numerous senior leadership positions, including Global Chairman of Industrial Markets. Mr. Kimble served as KPMG’s Energy Sector Leader for ten (10) years and was the executive director of KPMG’s Global Energy Institute. Mr. Kimble serves on the board of directors and is the chair of the audit committee of Northern Oil and Gas, Inc. Mr. Kimble also served on the board of directors, the special committee, and was chair of the audit committee of DCP Midstream, LP from June 2015 until October 2023. Mr. Kimble has a Bachelor of Accounting and Business Administration from Southern Methodist University. We believe that Mr. Kimble’s extensive accounting background and his experience as a director of public companies qualify him for service on our Board. | | | | JAMES R. MCDONALD | | | | Age: 45 | Key Areas of Experience | | | Director Since: 2020 INDEPENDENT | •Technology/Cybersecurity •Oilfield Services | •Marketing/Sales •Investor Relations | | Mr. McDonald has been Senior Vice President of Investor Relations for Schlumberger (“SLB”), an international oilfield services and technology company, since April 2023. Previously, he served as President Americas Land of SLB, overseeing onshore operations in North and South America, from June 2020 to April 2023. Previously, he served as President of Well Services running SLB’s global stimulation, coiled tubing intervention, cementing and offshore vessel operations. In addition, Mr. McDonald held multiple leadership roles in line management, operations, quality and safety, and business development at SLB over the past 21 years. His assignments spanned North and South America, North Africa and the Middle East in both land and offshore environments that included unconventional and deep water. Mr. McDonald graduated from the Massachusetts Institute of Technology with a degree in chemical engineering. He is actively engaged within the energy industry and community, and currently serves on the Board of Directors of Permian Strategic Partnership, the Energy Workforce and Technology Council, and he is on the Upstream and Service Supply and Technology Committees of the American Petroleum Institute. Mr. McDonald was initially nominated to serve on our Board by SLB pursuant to a stockholders agreement that is no longer in effect. We believe Mr. McDonald’s extensive experience in the oilfield services industry qualifies him for service on our Board. | | |

  8. DIRECTORS CONTINUING IN OFFICE

    | SIMON AYAT | | | | Age: 69 | Key Areas of Experience | | | Director Since: 2020 INDEPENDENT | •Corporate Finance/Capital Markets •Senior Management Experience (CEO/CFO) •Oilfield Services •Mergers & Acquisitions •Legal/Regulatory | •Corporate Governance •ESG •HR/Compensation •Investor Relations •Risk Management | | Mr. Ayat served as Senior Strategic Advisor to the Chief Executive Officer for SLB from January 2020 until January 2022. From March 2007 until January 2020, he served as the Executive Vice President and Chief Financial Officer of SLB. Mr. Ayat has held several financial and operational positions in SLB, where he commenced his career in 1982. He was based in Paris, Houston and Dallas, as well as in the Middle East and Far East regions, serving as group treasurer, controller, Geomarket manager for Indonesia and drilling regional vice president for Asia Pacific. Mr. Ayat is also a member of the board of directors of Tenaris S.A., a manufacturer of pipes and related services for energy and industrial applications. He is a French and Lebanese citizen. Mr. Ayat was initially nominated to serve on our Board by SLB pursuant to a stockholders agreement that is no longer in effect. We believe Mr. Ayat’s extensive experience in the oilfield services industry and as the Chief Financial Officer of a publicly traded oilfield services company with international operations qualifies him for service on our Board. | | | | GALE A. NORTON | | | | Age: 69 | Key Areas of Experience | | | Director Since: 2019 INDEPENDENT | •Legal/Regulatory •Corporate Governance | •ESG | | Ms. Norton has been the President of Norton Regulatory Strategies, a consulting firm, since 2011. From 2007 to 2010, she served as General Counsel, Unconventional Oil, of Royal Dutch Shell, an international oil and natural gas company (“Shell”). Prior to joining Shell, Ms. Norton served as the Secretary of the Interior of the United States under President George W. Bush from 2001 until 2006 and as the Attorney General of the State of Colorado from 1991 until 1999. Ms. Norton is a director of American Transmission Company, a private company in the electric utility industry and she has been a Governance Fellow of the National Association of Corporate Directors. Ms. Norton holds Bachelor of Arts and Juris Doctorate degrees from the University of Denver. We believe that Ms. Norton’s experience as Attorney General of the State of Colorado and Secretary of the Interior of the United States qualifies her for service on our Board. | | | | CARY D. STEINBECK | | | | Age: 52 | Key Areas of Experience | | | Director Since: 2018 INDEPENDENT | •Exploration and Production •Mergers & Acquisitions | •Corporate Finance/Capital Markets | | Mr. Steinbeck has been a Managing Director at Shea Ventures, an investment firm, since October 2014. From 2007 to 2014, he served as a Managing Director at Oakmont Corporation, an investment firm. Mr. Steinbeck is a member of the board of directors of Liberty Resources LLC and served on the board of directors of Accretion Acquisition Corp. from October 2021 to December 2023. Mr. Steinbeck is a Chartered Financial Analyst® charterholder and has a Bachelor of Arts in Economics from the University of California, Santa Barbara, and a Master of Business Administration from the University of Southern California. We believe that Mr. Steinbeck’s experience in the private equity industry, energy sector investing experience, extensive board participation and understanding of financial markets provide valuable insights for our Company and qualify him for service on our Board. | | |

  9. 2023 Compensation Overview

    2023 Compensation Overview The Compensation Committee recommended, and the Board approved, the following compensation-related actions for our Named Executive Officers for fiscal year 2023, further detailed below: •Base Salaries: The 2023 base salaries for each Named Executive Officer other than Messrs. Stock and Wright were increased in response to marketplace pay increases. •Annual Incentive Awards: The bonus target criteria for annual incentive awards was the same used in 2022 based on the achievement of specific Company performance objectives. •Long-Term Incentive Compensation: The long-term incentive compensation included both time-based awards, vesting ratably over a three-year period, and performance-based awards, with three-year cliff vesting.

  10. Compensation Best Practices

    | | What We Do | | What We Don’t Do | | ✓ | Determine annual incentive compensation with the majority of the potential payment based upon the achievement of pre-established performance goals | x | No excise tax gross ups | | | | x | No single-trigger severance | | | | x | No excessive perquisites | | ✓ | Generally target the market median for total compensation | x | No short-term or speculative trading of Company stock | | ✓ | Use an independent compensation consultant | x | No re-pricing of incentive awards | | ✓ | Hold regular executive sessions of the Compensation Committee without management present | x x | No supplemental retirement plans No guaranteed bonuses or uncapped incentives | | ✓ | Base a portion of the long-term incentives upon our performance relative to peers | | | | ✓ | Apply Stock Ownership Guidelines for executive officers and most Board members | | | | ✓ | Manage incentive compensation overpayment risk through compensation recovery/clawback policy | | |

  11. Process for Setting Compensation and Role of Compensation Consultant

    Process for Setting Compensation and Role of Compensation Consultant At the beginning of each year, the Compensation Committee engages an independent executive compensation consulting firm in order to provide independent and objective market compensation data, conduct compensation analysis, recommend plan design changes and advise on compensation related risks. The Compensation Consultant (as defined below) acts solely on behalf of the Compensation Committee and not on behalf of the Company’s management team. During 2023, the Compensation Committee engaged NFP Compensation Consulting as such compensation consultant (the “Compensation Consultant”). The Compensation Consultant compiles compensation surveys for review by the Compensation Committee and management. After review of the Compensation Consultant’s surveys, management provides recommendations of compensation for our Named Executive Officers to the Compensation Committee. Such recommendations are generally based upon the guidance of the Compensation Consultant and the performance of our management as a team. The Compensation Committee then reviews management’s recommendation with the ability to ask questions of both management and the Compensation Consultant and may conduct an executive session as needed to discuss compensation. Previously, the Compensation Committee and Board collectively have had the final authority to make all decisions regarding compensation. In January 2022, the Board approved amendments to the Compensation Committee charter that authorize the Compensation Committee to make recurring and other compensation decisions without separate Board approval, providing the Compensation Committee with additional autonomy. The Compensation Consultant also assists the Compensation Committee with the determination of our Peer Group, as defined and described below, and design of our annual incentive program and long-term incentive awards. Using the independence factors established by the SEC and the NYSE, the Compensation Committee determined that the Compensation Consultant’s work did not raise any conflicts of interest, and they are considered an independent consulting firm.

  12. Competitive Market Position and Peer Group

    Competitive Market Position and Peer Group To further emphasize the alignment between Company performance and executive pay and to ensure compensation is competitive, for 2023 the Compensation Committee generally targeted the 50th percentile for total compensation (base salary and short-term and long-term incentives) for the named executive officers as a group, as reflected by various sources of compensation data (collectively, “Market Data”). The Market Data provided to the Compensation Committee by the Compensation Consultant includes compensation information from our Peer Group as well as other broad-based compensation survey sources selected by the Compensation Consultant. Although the Compensation Committee used the Market Data to inform its decisions regarding the form and amount of compensation provided to our Named Executive Officers in 2023, the Compensation Committee also considered other factors such that the compensation provided to our Named Executive Officers is not exclusively reflective of the Market Data. For purposes of setting 2023 compensation, the peer group companies (our “Peer Group”) used by the Compensation Consultant and the Compensation Committee included the following companies:

  13. Competitive Market Position and Peer Group

    | NOV Inc. | Flowserve Corporation | | Weatherford International plc | Helmerich & Payne, Inc. | | Patterson-UTI Energy, Inc. | ChampionX Corporation | | NexTier Oilfield Solutions Inc. | Valaris Limited | | Cactus, Inc. | Oceaneering International, Inc. | | Gates Industrial Corporation plc | |

  14. Competitive Market Position and Peer Group

    Our Peer Group was selected based on companies that broadly represent related drilling, oilfield services and manufacturing businesses and are of reasonably comparable size to the Company based on revenue, market capitalization and other financial metrics. While some of these companies have different revenues or market capitalizations, these companies represent the market in which we most directly compete for qualified professionals. As a whole, our Peer Group reflects companies with related operations, of reasonably similar size, and with which we compete for talent.

  15. Objectives of Compensation

    Objectives of Compensation The goal of the Company’s compensation program is to help attract and retain qualified executive talent and to strengthen the alignment between executives and stockholders’ interests, enhancing stockholder value. To achieve this goal, the Compensation Committee’s decisions are guided by the following principles: provide a competitive compensation package; relate compensation to the performance of the Company and the individual; and align employee objectives with the objectives of stockholders by encouraging executive stock ownership. In order to achieve these objectives, the Compensation Committee has created a compensation package that combines fixed and variable cash compensation with equity-based compensation. The Company’s compensation program for executive officers consists of the following items: *base salary; *performance-based annual incentive payments under the Company’s Long-Term Incentive Plan (“LTIP”), which in 2023 were based upon the Company’s adjusted pre-tax earnings per share (“Adjusted Pre-Tax EPS”), return on capital employed (“ROCE”), the Company’s adjusted ROCE (ROCE revised to a standardized calculation as described herein) (“Adjusted ROCE”) as compared to the Adjusted ROCE of a peer group of companies (such comparison, “Comparative ROCE”) and personal performance; *long-term equity awards under our LTIP, consisting of both time-based and performance-based restricted stock units; and *matching contributions under the Liberty Oilfield Services 401(k) Savings Plan. The Compensation Committee structures executive total direct compensation to emphasize performance through the annual incentive program and long-term incentives. The Compensation Committee believes that the compensation mix should strike a balance promoting long-term returns without motivating or rewarding excessive or inappropriate risk-taking.

  16. Annual Incentive Award

    Annual Incentive Award In 2023, based on the analysis provided by the Compensation Consultant and the recommendation of the Compensation Committee, the Board established performance metrics and hurdles for our 2023 annual incentive awards that are focused on the results of adjusted Pre-Tax EPS, ROCE and Comparative ROCE. The Compensation Consultant recommended, and the Compensation Committee approved, maintaining an element of discretion in the annual incentive for our Named Executive Officers in order to provide the Compensation Committee the flexibility to respond to specific events that are relevant to each Named Executive Officer’s performance during the year. No payout percentage would be earned for a metric if the actual Company performance of that metric was below the threshold level set for that metric below. Payouts for performance between threshold, target and maximum would have been calculated using straight line interpolation. The overall payout amount for each Named Executive Officer is capped at 200% of each Named Executive Officer’s target incentive award. The performance metrics, their related thresholds and weightings and actual performance for the year ended December 31, 2023 are set forth in the table below:

  17. Annual Incentive Award

    | Performance Metric | Weighting | Threshold (50% Payout) | Target (100% Payout) | Maximum (200% Payout) | Actual Performance | Earned Payout Percentage of Annual Incentive Award | | Adjusted Pre-Tax EPS(1) | 25% | $1.09 | $4.71 | $6.52 | $4.44 | 96.3% | | ROCE(2) | 25% | 13% | 46% | 60% | 42.8% | 95.1% | | Comparative ROCE(3) | 30% | See Comparative ROCE Chart below | | | 1 of 10(4) | 200% | | Discretionary | 20% | N/A | N/A | N/A | 30% | 30% |

  18. Annual Incentive Award

    (1)Adjusted Pre-Tax EPS is equal to the Company’s 2023 Adjusted EBITDA (calculated as presented in the Company’s Annual Report on Form 10-K), minus interest expense, depreciation and amortization, divided by basic weighted average shares outstanding for 2023. (2)ROCE is equal to the Company’s 2023 Adjusted EBITDA (calculated as presented in the Company’s Annual Report on Form 10-K), minus depreciation and amortization, divided by the simple average of capital (debt and equity) employed at December 31, 2023 and 2022. (3)Comparative ROCE is determined by comparing the Company’s Adjusted ROCE, which is equal to the Company’s 2023 income before taxes and loss (gain) on remeasurement of liability under tax receivable agreements, plus interest expense and stock-based compensation expense, and ranking it against the Adjusted ROCE of the 2023 peer group, as further detailed below. (4)Comparative ROCE Peer Group data estimated on a consistent basis with Company and based on public data as of February 28, 2024. In 2023, our Named Executive Officers continued to work and build on the success achieved in 2022, after recovering from the challenges experienced in 2020 and 2021 due to the COVID-19 pandemic and the integration of the Schlumberger acquisition. The Company achieved record levels of revenue, net income and Adjusted EBITDA in 2023, despite softening market conditions in the second half of 2023. In the view of the Compensation Committee, the Company faced these softening conditions better than several of its competitors. Given these facts and the rate of performance in 2023 on Adjusted Pre-Tax EPS, ROCE and Comparative ROCE financial metrics, the Compensation Committee approved a 30% payout on the 2023 discretionary incentive opportunity for all Named Executive Officers. The same rate of payout on the discretionary portion was awarded for each executive officer to recognize the collaborative team effort utilized to obtain these results. The target incentive for each Named Executive Officer and the 2023 annual incentive payout for each Named Executive Officer is set forth below. Target incentive levels were increased in 2023 from 8 to 20% depending on the individual officer in order to better align targeted total cash compensation with the 50th percentile of the Peer Group.

  19. Annual Incentive Award

    | Name | Target Annual Incentive (% of Base Salary) | Target Annual Incentive ($) | Performance Achievement Level (% of Target) | Actual 2023 Annual Incentive Payout | | Christopher A. Wright | 155.5% | $1,000,000 | 137.9% | $1,378,500 | | Michael Stock | 135.5% | $580,000 | 137.9% | $799,530 | | Ron Gusek | 133.2% | $630,000 | 137.9% | $868,455 | | R. Sean Elliott | 107.1% | $450,000 | 137.9% | $620,325 | | Ryan T. Gosney | 111.1% | $350,000 | 137.9% | $482,475 |

  20. Annual Incentive Award

    Comparative ROCE is determined by comparing and ranking the Company’s Adjusted ROCE against the Adjusted ROCEs of a group of peer companies (such peer group, the “ROCE Peer Group”). Our Adjusted ROCE and the ROCE Peer Group Adjusted ROCEs for a calendar year are calculated and then ranked in order of highest to lowest, with the highest Adjusted ROCE being ranked 1 of 10, and the lowest Adjusted ROCE ranked 10 of 10. The amount of the target award paid for this metric is then based on our numerical ranking against the ROCE Peer Group as follows, with the use of linear interpolation to determine the exact amount of payout (the “ROCE Ranking Matrix”):

  21. Annual Incentive Award

    | Comparative ROCE | | | Ranking of Company Adjusted ROCE against ROCE Peer Group | Payout Percentage of Target Award | | 1 of 10 | 200% | | 2 of 10 | 175% | | 3 of 10 | 150% | | 4 of 10 | 125% | | 5 of 10 | 100% | | 6 of 10 | 75% | | 7 of 10 | 50% | | 8 of 10 | 0% | | 9 of 10 | 0% | | 10 of 10 | 0% |

  22. Annual Incentive Award

    The ROCE Peer Group is reviewed and set each year, provided that the Compensation Committee reserves the right to recommend, and the Board to make, substitutions and revisions to the ROCE Peer Group throughout the year. While some companies in the ROCE Peer Group may overlap with companies in Peer Group, the focus of the ROCE Peer Group is to provide a metric by which the effectiveness of capital deployment can be measured. Accordingly, the ROCE Peer Group focuses more particularly on other companies that have capital needs that are similar to those of the Company. The Peer Group tends to focus and include companies based on the relative size of the peers based on metrics such as revenue and market capitalization. The ROCE Peer Group also utilizes the S&P 500 to provide a broader measure of the effectiveness of deployment of capital across various industries. The 2023 ROCE Peer Group consists of the following companies and indices. Initially, the Compensation Committee included NexTier Oilfield Solutions Inc. in the 2023 ROCE Peer Group. Given the merger of NexTier into Patterson-UTI Energy Inc. in the second half of 2023 and in accordance with the terms established for the Annual Incentive Program, the Compensation Committee replaced NexTier with the PHLX Oil Service Sector Index (“OSX”) in October 2023. Similar to the rationale for using the S&P 500, the Committee believes that that the OSX index also provides a broad measure of the effectiveness of the deployment of capital across the oilfield services industry.

  23. Annual Incentive Award

    | Helmerich & Payne, Inc. | OSX Index | | Oil States International, Inc. | Patterson-UTI Energy, Inc. | | ProPetro Holding Corp. | RPC, Inc. | | S&P 500 Index | Nine Energy Service, Inc. | | Halliburton Company | |

  24. Annual Incentive Award

    Our Company Adjusted ROCE for 2023 was 42.8%, which ranked 1 of 10 against the ROCE Peer Group for 2023 based on public data as of February 28, 2024, resulting in a weighted payout percentage for the Comparative ROCE component of the annual incentive award equal to 200.0%.

  25. Long-Term Incentive Compensation

    Long-Term Incentive Compensation We maintain the LTIP in order to incentivize individuals providing services to us or our affiliates. In 2023, following recommendations by the Compensation Consultant and our Compensation Committee, our Board granted both time-based and performance-based restricted stock units (“RSUs”), each which represent the right to receive shares of our Class A Common Stock following the applicable vesting period. The Compensation Committee has considered the use of other forms of equity awards, including restricted stock and stock options, and ultimately determined to use RSUs given that they have a less dilutive effect than stock options and do not require the issuance of actual shares of Class A Common Stock unless and until vesting conditions are met. For 2023, the grant date value of RSUs for the Named Executive Officers as a group was initially set at approximately the 50th percentile based on Market Data. The Compensation Committee and our Board determined that a combination of time-based and a performance-based vesting approach was appropriate given the Company’s desire to provide our Named Executive Officers with a long-term retention-focused award that also aligns the interests of our Named Executive Officers with those of our stockholders while at the same time furthering the Company’s pay-for-performance philosophy. For 2023, one-half of the RSUs awarded to Messrs. Wright, Stock and Gusek vest ratably over a three-year period, and one-half vests at the end of a three-year performance period based on the Company’s performance against a ROCE Peer Group. Messrs. Elliott and Gosney received RSU awards with similar time and performance-based vesting conditions for 2023, except that 67% of these awards were time-based, and 33% were performance-based. Performance-based RSUs provide the Named Executive Officer the right to receive an amount ranging from 0% to 200% of the target performance-based RSUs granted based on the Company’s Comparative ROCE performance during the three-year performance period, subject to the continued employment of the Named Executive Officer. To determine the Company’s Comparative ROCE, Adjusted ROCE will be calculated for the Company and each entity in the ROCE Peer Group, as described above under “Elements of Compensation—Annual Incentive Award,” for each applicable year. After the end of the three-year performance period, the Adjusted ROCE calculations of each entity for each year shall be averaged in order to obtain an average Adjusted ROCE calculation for the entire three-year period. The entities in the ROCE Peer Group will be arranged (highest to lowest) by their averaged Adjusted ROCE, excluding the Company. The Company’s percentile rank will be interpolated between the entity with the next highest average Adjusted ROCE and the entity with the next lowest average Adjusted ROCE. The Company’s percentile rank will then be used to determine the payout percentage of the target performance-based RSU by using the ROCE Ranking Matrix set forth above. The chart below shows the Company’s Comparative ROCE rank for 2021, 2022, and 2023, resulting in an award payout of 178% of target for the performance-based RSUs that were awarded to Named Executive Officers in January 2021 and vest on April 1, 2024:

  26. Long-Term Incentive Compensation

    | Year | Company Adjusted ROCE Percentage | Ranking of Company Adjusted ROCE against ROCE Peer Group | | 2021 | -11.7% | 9 of 10 | | 2022 | 34.0% | 3 of 10 | | 2023 | 42.9% | 1 of 10 | | 3-year average | 21.8% | 2 of 10 |

  27. Employment, Severance and Change in Control Agreements

    Employment, Severance and Change in Control Agreements The Company has entered into a change in control agreement with each of Mr. Elliott and Mr. Gosney (the “Change in Control Agreements”). No such change of control agreements have been entered into with the Company’s other Named Executive Officers, as the value of the vested equity interests in the Company that such officers acquired prior to the time of the IPO would likely provide adequate benefits in the event of a change in control transaction. Each Change in Control Agreement provides severance benefits in the event the executive officer’s employment is terminated without cause or the executive officer resigns for good reason within 18 months following a change in control, as described in more detail below under “Potential Payments Upon Termination or Change in Control—Change in Control Agreements.” The benefits provided to the executive officer in the Change in Control Agreements were primarily based on the recommendation of the Compensation Consultant and Peer Group median data provided at the time the Change in Control Agreements were executed. We have not entered into any other employment, severance or change in control agreements with any of our Named Executive Officers.

  28. Summary Compensation Table

    Summary Compensation Table The following table summarizes the compensation awarded to, earned by or paid to Principal Executive Officer (“PEO”) and our other Named Executive Officers for the fiscal years ended December 31, 2023, 2022, 2021.

  29. Summary Compensation Table

    | Name & Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(1) | All Other Compensation ($)(3) | Total ($) | | Christopher A. Wright Chairman of the Board & Chief Executive Officer | 2023 2022 | 638,231 612,000 | 300,000 360,000 | 3,590,569 3,406,258 | 1,078,500 1,350,927 | 20,800 18,300 | 5,628,100 5,747,485 | | | 2021 | 612,000 | 180,000 | 3,801,972 | 0 | 17,400 | 4,611,372 | | Michael Stock Chief Financial Officer & Treasurer | 2023 2022 | 424,923 408,000 | 174,000 200,000 | 1,609,575 1,526,949 | 625,530 750,515 | 20,800 18,300 | 2,854,828 2,903,764 | | | 2021 | 408,000 | 100,000 | 1,689,762 | 0 | 17,400 | 2,215,162 | | Ron Gusek President | 2023 2022 | 469,462 443,538 | 189,000 220,000 | 1,609,575 1,526,949 | 679,455 825,567 | 20,800 18,300 | 2,968,292 3,034,354 | | | 2021 | 408,000 | 200,000 | 1,689,762 | 0 | 17,400 | 2,315,162 | | R. Sean Elliott Chief Legal Officer & Corporate Secretary | 2023 2022 | 416,923 394,954 | 135,000 150,000 | 996,456 945,531 | 485,325 562,886 | 20,800 18,300 | 2,054,504 2,071,671 | | | 2021 | 367,200 | 144,000 | 1,662,426 | 0 | 17,400 | 2,191,026 | | Ryan T. Gosney Chief Accounting Officer | 2023 2022 | 312,692 296,215 | 105,000 120,000 | 619,062 587,291 | 377,475 450,309 | 20,800 5,891 | 1,435,029 1,459,706 | | | 2021 | 275,400 | 81,000 | 1,020,111 | 0 | 16,524 | 1,393,035 |

  30. Summary Compensation Table

    (1)The amounts reported in the “Non-Equity Incentive Plan Compensation” column reflect the portion of the annual incentive payouts related to achievement of the Company-wide performance metrics. The portion of the annual incentive payouts related to the discretionary component are reported in the “Bonus” column. (2)The amounts shown do not reflect compensation actually received by the Named Executive Officer. Rather, amounts set forth in the “Stock Awards” column represent the aggregate grant date fair value of time-based and performance-based restricted stock unit awards computed in accordance with FASB ASC Topic 718 for financial statement reporting purposes by the Company with respect to restricted stock units. A discussion of the assumptions used in this valuation with respect to awards made in fiscal year 2023 may be found in Note 10 to the Company’s financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Performance-based awards are included based on the assumption that they will vest at 100% of the target award, since actual vesting will not be determined until the end of the performance period. (3)For the Named Executive Officers, amounts reported in the “All Other Compensation” column for 2023 reflect discretionary matching contributions earned by each Named Executive Officer pursuant to the Company’s 401(k) plan and a holiday bonus that was paid in an equal amount to all Company employees.

  31. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table provides information for each of our Named Executive Officers regarding plan-based awards granted during fiscal year 2023.

  32. Grants of Plan-Based Awards

    | Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | Grant Date Fair Value of Stock Awards ($)(4) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Christopher A. Wright | | 400,000 | 800,000 | 1,600,000 | | | | | | | | 2/8/2023 | | | | 57,394 | 114,788 | 229,576 | | 1,795,284 | | | 2/8/2023 | | | | | | | 114,788 | 1,795,284 | | Michael Stock | | 232,000 | 464,000 | 928,000 | | | | | | | | 2/8/2023 | | | | 25,729 | 51,457 | 102,914 | | 804,787 | | | 2/8/2023 | | | | | | | 51,457 | 804,787 | | Ron Gusek | | 252,000 | 504,000 | 1,008,000 | | | | | | | | 2/8/2023 | | | | 25,729 | 51,457 | 102,914 | | 804,787 | | | 2/8/2023 | | | | | | | 51,457 | 804,787 | | R. Sean Elliott | | 180,000 | 360,000 | 720,000 | | | | | | | | 2/8/2023 | | | | 10,513 | 21,025 | 42,050 | | 328,831 | | | 2/8/2023 | | | | | | | 42,687 | 667,625 | | Ryan T. Gosney | | 140,000 | 280,000 | 560,000 | | | | | | | | 2/8/2023 | | | | 6,531 | 13,062 | 26,124 | | 204,290 | | | 2/8/2023 | | | | | | | 26,520 | 414,773 |

  33. Grants of Plan-Based Awards

    (1)The amounts shown in these columns reflect the potential threshold, target and maximum payouts with respect to the performance-based financial metrics approved under the 2023 annual incentive awards. The amounts reflected herein do not include amounts that may be earned with respect to the discretionary component of the 2023 annual incentive awards. (2)The amounts shown in these columns reflect the potential threshold, target and maximum number of performance-based RSU awards granted to the Named Executive Officers during fiscal year 2023. (3)The amounts shown in this column reflect time-based vesting RSU awards granted to the Named Executive Officers during fiscal year 2023. (4)The amounts shown in this column do not reflect compensation actually received by the Named Executive Officer. Rather, amounts set forth herein represent the aggregate grant date fair value of time-based and performance-based RSUs computed in accordance with FASB ASC Topic 718 for financial statement reporting purposes in fiscal year 2023 by the Company. A discussion of the assumptions used in this valuation with respect to awards made in fiscal year 2023 may be found in Note 10 to the Company’s financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

  34. Outstanding Equity Awards at 2023 Fiscal Year-End

    Outstanding Equity Awards at 2023 Fiscal Year-End The following table reflects information regarding outstanding equity-based awards held by our Named Executive Officers as of December 31, 2023, which consist of time-based RSU awards and performance-based RSU awards.

  35. Outstanding Equity Awards at 2023 Fiscal Year-End

    | Name | Stock Awards | | | | | | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(8) | | Christopher A. Wright | 48,819 91,714 114,788(1) (2) (3) | 885,577 1,663,692 2,082,254 | | | | | | | 292,910 275,142 229,576(5) (6) (7) | 5,313,387 4,991,076 4,164,509 | | Michael Stock | 21,697 41,114 51,457(1) (2) (3) | 393,584 745,808 933,430 | | | | | | | 130,182 123,340 102,914(5) (6) (7) | 2,361,501 2,237,388 1,866,860 | | Ron Gusek | 21,697 41,114 51,457(1) (2) (3) | 393,584 745,808 933,430 | | | | | | | 130,182 123,340 102,914(5) (6) (7) | 2,361,501 2,237,388 1,866,860 | | R. Sean Elliott | 17,990 34,115 42,687(1) (2) (3) | 326,339 618,846 774,342 | | | | | | | 148,214 50,408 42,050(5) (6) (7) | 2,688,602 914,401 762,787 | | Ryan T. Gosney | 11,039 21,190 26,520(1) (2) (3) | 200,247 384,387 481,073 | | | | | | | 90,948 31,310 26,124(5) (6) (7) | 1,649,797 567,963 473,889 |

  36. Outstanding Equity Awards at 2023 Fiscal Year-End

    (1)These RSUs granted on January 20, 2021 vest on April 1, 2024, so long as the applicable Named Executive Officer remains employed through such date. (2)These RSUs granted on January 18, 2022 vest in one-half increments on each of April 1, 2024 and April 1, 2025, so long as the applicable Named Executive Officer remains employed through such dates. (3)These RSUs granted on February 8, 2023 vest in one-third increments on each of April 1, 2024, April 1, 2025 and April 1, 2026, so long as the applicable Named Executive Officer remains employed through such dates. (4)Amounts in this column reflect the value of unvested time-based RSU awards held by the Named Executive Officers, calculated based on the closing price of our Class A Common Stock on December 29, 2023 of $18.14. (5)These performance-based RSUs granted on January 20, 2021 will vest on April 1, 2024, subject to achievement of the Comparative ROCE performance metrics and the applicable Named Executive Officer’s continued employment through such date. As of December 31, 2023, the performance-based RSUs granted on January 20, 2021 were trending above target, and in accordance with the SEC rules, are reflected in this table at maximum, therefore, the performance-based RSUs may actually vest at a lower amount than reflected in this column. (6)These performance-based RSUs granted on January 18, 2022 will vest on April 1, 2025, subject to achievement of the Comparative ROCE performance metrics and the applicable Named Executive Officer’s continued employment through such date. As of December 31, 2023, the performance-based RSUs granted on January 18, 2022 were trending above target, and in accordance with the SEC rules, are reflected in this table at maximum, therefore, the performance-based RSUs may actually vest at a lower amount than reflected in this column. (7)These performance-based RSUs granted on February 8, 2023 will vest on April 1, 2026, subject to achievement of the Comparative ROCE performance metrics and the applicable Named Executive Officer’s continued employment through such date. As of December 31, 2023, the performance-based RSUs granted on February 8, 2023 were trending above target, and in accordance with the SEC rules, are reflected in this table at maximum, therefore, the performance-based RSUs may actually vest at a lower amount than reflected in this column. (8)Amounts in this column reflect the value of unvested performance-based RSU awards held by the Named Executive Officers reported in the preceding column calculated based on the closing price of our Class A Common Stock on December 29, 2023 of $18.14.

  37. Option Exercises and Stock Vested

    Option Exercises and Stock Vested The following table reflects the value received by each Named Executive Officer on the vesting of restricted stock awards and RSU awards during fiscal year 2023. None of our Named Executive Officers held stock option awards during the 2023 year.

  38. Option Exercises and Stock Vested

    | Name | Stock Awards | | | | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Christopher A. Wright | 369,202 | 4,729,478 | | Michael Stock | 164,266 | 2,104,247 | | Ron Gusek | 164,266 | 2,104,247 | | R. Sean Elliott | 94,378 | 1,208,982 | | Ryan T. Gosney | 58,123 | 744,556 |

  39. Option Exercises and Stock Vested

    (1)The amounts in this column reflect the value of the shares in the preceding column based on the closing price of our Class A Common Stock of $12.81 on April 1, 2023, the applicable vesting date, including the value of any shares withheld for tax withholding purposes.

  40. Pension Benefits and Nonqualified Deferred Compensation

    Pension Benefits and Nonqualified Deferred Compensation We do not maintain and our Named Executive Officers do not participate in any defined benefit pension plan or nonqualified deferred compensation plan.

  41. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control

  42. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION We have adopted a non-employee director compensation program that is applicable to each of our non-employee directors. The Compensation Consultant also conducted an analysis of market-competitive total director compensation (annual retainers, meeting fees and equity awards) using our Peer Group as a comparative metric. Pursuant to this program, during 2023 each non-employee director was entitled to receive the following compensation for their service on our Board: *A cash retainer of $100,000 per year, payable quarterly in arrears; *An additional cash retainer of $20,000 per year, payable quarterly in arrears if such non-employee director serves as the chairperson of our Audit Committee; *An additional cash retainer of $15,000 per year, payable quarterly in arrears if such non-employee director serves as the chairperson of our Compensation Committee; *An additional cash retainer of $10,000 per year, payable quarterly in arrears if such non-employee director serves as the chairperson of a Nominating and Governance Committee; *An additional cash retainer of $20,000 per year, payable quarterly in arrears if such non-employee director serves as the Lead Director of the Company; and *Either: (a)annual equity-based compensation in the form of RSUs with an aggregate grant date value of $162,000, subject to the terms of the LTIP and the award agreement pursuant to which such award is granted. The award shall be subject to a 12-month vesting period, unless otherwise determined by the Board. The annual grant is automatically made on January 2nd of each year, using the 30-day average closing price of the Company’s Class A Common Stock prior to the date of grant to determine the number of units to be granted; (b)an additional cash payment of $100,000 per year, payable quarterly in arrears; or (c)a charitable cash donation by the Company of $100,000 per year, payable quarterly in arrears, to an organization designated by the director and that is qualified under Section 501(c)(3) of the Internal Revenue Code, provided that the organization must be independent of the director and reasonably acceptable to the Compensation Committee. Effective as of January 1, 2024, our non-employee director compensation program was updated to (i) increase the amount of the grant date value for equity-based compensation from $162,000 to $175,000 and (ii) add an annual cash retainer for members of Board committees that do not serve as Chairperson in the following amounts: Audit Committee: $10,000; Compensation Committee: $7,500 and Nominating and Governance Committee: $5,000. These changes were made by the Compensation Committee and ratified by the Board in October 2023 in response to a recommendation from the Compensation Consultant in order to better align with marketplace practices. Each non-employee director shall be given an opportunity to elect whether they would like to receive item (a), (b) or (c) above prior to the beginning of each year. If a non-employee director joins the Board or otherwise becomes eligible for director compensation during the course of a calendar year, the director will be allowed to make such election upon joining or becoming eligible. If a non-employee director joins the Board during the course of a calendar year, the director will be entitled to receive a prorated RSU award (if so elected) for that year, which shall vest over the remaining portion of the year, unless otherwise determined by the Board. All annual cash payments, including the charitable cash contribution option if elected, shall be prorated for partial years of service or eligibility. In addition, each non-employee director is reimbursed for out-of-pocket expenses incurred in connection with attending Board and committee meetings. The table below sets forth the compensation our non-employee directors received for the fiscal year ended December 31, 2023.

  43. DIRECTOR COMPENSATION

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($) | Total ($) | | Simon Ayat | 100,000 | 149,781 | — | 249,781 | | Ken Babcock | 100,000 | 149,781 | — | 249,781 | | Peter A. Dea | 115,000 | 149,781 | — | 264,781 | | William F. Kimble | 140,000 | 149,781 | — | 289,781 | | James R. McDonald | — | — | 100,000(2) | 100,000(2) | | Gale A. Norton | 110,000 | 149,781 | — | 259,781 | | Audrey Robertson | 100,000 | 149,781 | — | 249,781 | | Cary D. Steinbeck | 100,000 | 149,781 | — | 249,781 |

  44. DIRECTOR COMPENSATION

    (1)The amounts shown do not reflect compensation actually received by the directors. Rather, amounts set forth in the Stock Awards column represent the aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718 for financial statement reporting purposes in fiscal year 2023 by the Company with respect to restricted stock units. A discussion of the assumptions used in this valuation with respect to awards made in fiscal year 2023 may be found in Note 10 to the Company’s financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. As of December 31, 2023, Messrs. Ayat, Babcock, Dea, Kimble and Steinbeck and Ms. Norton and Ms. Robertson each held 10,259 unvested RSUs. (2)The Company has agreed to make up to $100,000 in charitable donations to organizations designated by Mr. McDonald in connection with his 2023 Board service. As of February 21, 2024, no donations have been designated and therefore no payments have been made by us.

  45. CEO PAY RATIO

    CEO PAY RATIO As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Christopher A. Wright, our Chief Executive Officer (our “CEO”). For 2023, our last completed fiscal year: *The total compensation of our median employee was $112,613, as calculated pursuant to the same methodology as that used to determine pay for our CEO in the Summary Compensation Table included above; and *The total compensation of our CEO, as reported in the Summary Compensation Table included above, was $5,628,100. *Based on this information, for 2023 the ratio of the total compensation of our CEO to the median employee total compensation was reasonably estimated to be 50 to 1. The pay ratio set forth above is a reasonable estimate calculated in a manner consistent with SEC rules based on our human resources systems of record and the methodology described below. Because the SEC rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio that we report above, as other companies may have different employment and compensation practices, different types of workforce, and operate in different countries, and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. To identity 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 CEO, we took the following steps: ✓We determined that, as of December 11, 2023, our employee population excluding our CEO consisted of approximately 5,500 individuals with all of these individuals located in the United States and Canada. This population consisted of our full-time, part-time and temporary employees who received Company benefits, as we do not have seasonal workers. We selected December 11, 2023 as our identification date for determining our median employee because it enabled us to make such identification in a reasonably efficient and economic manner, as this is the date of the last period worked during the year for which payment was made to employees in 2023. ✓We used a consistently applied compensation measure to identify our median employee by comparing the amount of compensation as reported to the Internal Revenue Service on Form W-2 for 2023 for US employees and the amount of compensation as reported to the Canadian Revenue Agency on T4 Statement of Renumeration Paid for 2023 for Canadian employees. ✓We identified our median employee by consistently applying this compensation measure to all of our employees included in our analysis. Since all of our employees, including our CEO, are located in the United States and Canada, we did not make any cost of living adjustments in identifying the median employee. Our median employee for 2023 was a full-time, salaried employee working as a maintenance crew leader with annual compensation of $106,546 set forth on such employee’s Form W-2 for 2023. ✓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 $112,613. The differences between such employee’s taxable compensation reported on Form W-2 for 2023 of $106,546 and the employee’s annual total compensation calculated pursuant to Regulation S-K include the following adjustments: (i) modification from bonuses paid during 2023 to bonuses earned during 2023, if needed, (ii) addition of contributions made by the employee and by the Company on the employee’s behalf to our 401(k) plan for 2023, if any, (iii) addition of the costs of tax deductible employee group health plan premiums and employee contributions to tax deductible flexible spending accounts, if any and (iv) subtraction of other taxable compensation including compensation for provided housing or transportation and that attributable to group term life, short-term and long-term disability benefits, if applicable. ✓With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 2023 Summary Compensation Table included in this Proxy Statement and incorporated by reference under Item 11 of Part III of our Annual Report on Form 10-K for the year ended December 31, 2023.

  46. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE

  47. Pay Versus Performance Table for 2023

    Pay Versus Performance Table for 2023

  48. Pay Versus Performance Table for 2023

    | Year | Summary Compensation Table Total for PEO ($)(1) | Compensation Actually Paid to PEO ($)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(3) | Average Summary Compensation Actually Paid to Non-PEO NEOs ($)(4) | Value of Initial Fixed $100 Investment Based On: | | Net Income (Loss) (in Thousands) ($)(6) | Adjusted ROCE(7) | | | | | | | Company TSR ($) | Peer Group TSR ($)(5) | | | | 2023 | 5,628,100 | 9,819,996 | 2,328,163 | 3,919,083 | 169.06 | 115.11 | 556,317 | 42.9% | | 2022 | 5,747,485 | 12,201,790 | 2,367,374 | 4,567,954 | 147.11 | 112.94 | 399,602 | 34.0% | | 2021 | 4,611,372 | 3,946,524 | 2,028,596 | 1,738,700 | 88.85 | 69.94 | (179,244) | -10.3% | | 2020 | 3,310,114 | 2,493,998 | 1,218,682 | 909,552 | 94.44 | 57.93 | (115,583) | -13.9% |

  49. Pay Versus Performance Table for 2023

    (1)The dollar amounts reported are the amounts of total compensation reported for Christopher A. Wright (our Chairman/CEO) for each corresponding year in the “Total” column of the Summary Compensation Table provided above. (2)The dollar amounts reported represent the amount of “compensation actually paid” to Mr. Wright, as computed in accordance with Item 402(v) of SEC Regulation S-K. The dollar amounts reported do not reflect the actual amount of compensation earned by or paid to Mr. Wright during the applicable year. In accordance with the requirements of Item 402(v) of SEC Regulation S-K, the following adjustments were made to Mr. Wright’s total compensation for each year to determine the compensation actually paid to Mr. Wright:

  50. Pay Versus Performance Table for 2023

    | Year | Reported Summary Compensation Table Total for PEO ($) | Deduct Fair Value of Equity Awards Reported in Summary Compensation Table ($) | Add Year-End Fair Value of Equity Awards Granted in Current Year ($) | Add (Deduct) Change in Fair Value at Year End of Unvested Equity Awards Granted in Prior Years ($) | Add (Deduct) Change in Fair Value of Equity Awards Vested in Current Year ($) | Compensation Actually Paid to PEO ($) | | 2023 | 5,628,100 | (3,590,569) | 4,164,509 | 4,410,269 | (792,313) | 9,819,996 | | 2022 | 5,747,485 | (3,406,258) | 4,405,023 | 3,612,975 | 1,842,565 | 12,201,790 | | 2021 | 4,611,372 | (3,801,972) | 2,841,227 | 99,171 | 196,725 | 3,946,524 | | 2020 | 3,310,114 | (2,876,014) | 3,082,298 | (209,920) | (812,480) | 2,493,998 |

  51. Pay Versus Performance Table for 2023

    (3)The dollar amounts reported represent the average of the amounts reported for our NEOs as a group (excluding Mr. Wright) in the “Total” column of the Summary Compensation Table provided above. The NEOs (excluding Mr. Wright) included for purposes of calculating the average amounts in each applicable year are Messrs. Stock, Gusek, Elliott and Gosney. (4)The dollar amounts reported represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Wright), as computed in accordance with Item 402(v) of SEC Regulation S-K. The NEOs (excluding Mr. Wright) included for purposes of calculating the average amounts in each applicable year are Messrs. Stock, Gusek, Elliott and Gosney. The dollar amounts reported do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Wright) during the applicable year. In accordance with the requirements of Item 402(v) of SEC Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Wright) for each year to determine the compensation actually paid:

  52. Pay Versus Performance Table for 2023

    | Year | Reported Average Summary Compensation Table Total for Non-PEO NEOs ($) | Deduct Fair Value of Equity Awards Reported in Summary Compensation Table ($) | Add Year-End Fair Value of Equity Awards Granted in Current Year ($) | Add (Deduct) Change in Fair Value at Year End of Unvested Equity Awards Granted in Prior Years ($) | Add (Deduct) Change in Fair Value of Equity Awards Vested in Current Year ($) | Average Compensation Actually Paid to Non-PEO NEOs ($) | | 2023 | 2,328,163 | (1,208,667) | 1,401,868 | 1,667,331 | (269,613) | 3,919,083 | | 2022 | 2,367,374 | (1,146,682) | 1,482,906 | 1,259,414 | 604,943 | 4,567,954 | | 2021 | 2,028,596 | (1,515,516) | 1,132,550 | 22,787 | 70,282 | 1,738,700 | | 2020 | 1,218,682 | (957,726) | 1,026,420 | (68,658) | (309,165) | 909,552 |

  53. Pay Versus Performance Table for 2023

    (5)The peer group selected for each listed year consists of the OSX. We also use this peer group for purposes of the Stock Performance Graph set forth in “Item 5 - Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” of our Annual Report on Form 10-K for the year ended December 31, 2023. (6)The dollar amounts reported represent the amount of net income (loss) (in thousands) attributable to Liberty Energy Inc. in our audited consolidated financial statements for the applicable year. (7)Adjusted ROCE is equal to the Company’s 2023 income before taxes and loss (gain) on remeasurement of liability under tax receivable agreements, plus interest expense and stock-based compensation expense, divided by the simple average of capital (debt and equity) employed at December 31, 2023 and 2022. We rank our Adjusted ROCE against those of the ROCE Peer Group to determine Comparative ROCE, which is used as a metric to determine a portion of annual incentive compensation and the vesting of performance-based RSU awards. While we use numerous financial and non-financial performance measures for the purpose of evaluating performance for our compensation programs, we have determined that our Adjusted ROCE is the financial performance measure that, in our assessment, represents the most important performance measure (that is not otherwise required to be disclosed in this table) used by us to link compensation actually paid to our NEOs for the most recently completed fiscal year, to our performance.

  54. Analysis of Information in Pay Versus Performance Table

    Analysis of Information in Pay Versus Performance Table As described in more detail in “Compensation Discussion and Analysis” above, our executive compensation program includes variable components in the form of annual incentive compensation and long-term incentive awards. While we utilize several performance measures to align executive compensation with our performance, all of those measures are not presented in the “Pay Versus Performance Table for 2023.” Moreover, we generally seek to incentivize long-term performance and, therefore, do not specifically align our performance measures with compensation that is actually paid (as computed in accordance with SEC regulations) for a particular year. In accordance with SEC regulations, we are providing the following descriptions of the relationships between information presented in the “Pay Versus Performance Table for 2023.”

  55. Compensation Actually Paid and Cumulative TSR

    Compensation Actually Paid and Cumulative TSR As demonstrated by the following graph, the amount of compensation actually paid to Mr. Wright and the average amount of compensation actually paid to our NEOs as a group (excluding Mr. Wright) is generally aligned with our cumulative TSR over the three years presented in the “Pay Versus Performance Table for 2023.” The alignment of compensation actually paid with our cumulative TSR over the period presented is because a significant portion of the compensation actually paid to our NEOs is comprised of equity awards. For each of the three years presented in the “Pay Versus Performance Table for 2023,” our cumulative TSR exceeded that of peers contained in the OSX stock index. The following table details our cumulative TSR in comparison to the OSX cumulative TSR for each of the measurement periods (determined in accordance with SEC regulations).

  56. Compensation Actually Paid and Net Income (Loss)

    Compensation Actually Paid and Net Income (Loss) As demonstrated by the following table, the amount of compensation actually paid to Mr. Wright and the average amount of compensation actually paid to other NEOs as a group (excluding Mr. Wright) is generally aligned with our net income (loss) over the three years presented in the “Pay Versus Performance Table for 2023.” While we do not use net income (loss) as a performance measure in the overall executive compensation program, the measure of net income (loss) is correlated with the measures of Pre-Tax EPS and ROCE, which we do use in setting goals for annual incentive compensation, and Comparative ROCE, which we use both in setting goals for annual incentive compensation and the vesting of performance-based RSU awards.

  57. Compensation Actually Paid and Adjusted ROCE

    Compensation Actually Paid and Adjusted ROCE As demonstrated by the following table, the amount of compensation actually paid to Mr. Wright and the average amount of compensation actually paid to our other NEOs as a group (excluding Mr. Wright) is generally aligned with our Adjusted ROCE over each of the three years presented in the “Pay Versus Performance Table for 2023.”

  58. Interest of Directors and Executive Officers

    Interest of Directors and Executive Officers All members of our Board and all of our executive officers are eligible for awards under the A&R LTIP and, thus, have a personal interest in the approval of the A&R LTIP.