| DATE AND TIME: | | | VIRTUAL MEETING SITE | | | RECORD DATE | |
12:00 p.m., Central time | | | www.virtualshareholdermeeting.com/HP2024 | | | You may vote if you were a | ||
|
1437 South Boulder AvenueTulsa, Oklahoma 74119
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Notice is hereby given that the Annual Meeting of Stockholders (the “Annual Meeting”) of Helmerich & Payne, Inc. (the "Company"“Company”), will be held at Boulder Towers, H&P Conference Center, Eleventh Floor, 1437 South Boulder Avenue, Tulsa, Oklahoma, at 12:00 noon, Tulsa time, on Tuesday, March 6, 2018, for the following purposes:
| Proposal | | | | | |||||||||
| 1 | | | To elect as Directors the 11 nominees named in the attached proxy statement to serve until the Annual Meeting of Stockholders in 2025 | | | FOR each nominee | | ||||||
| • Delaney Bellinger • Belgacem Chariag • Kevin G. Cramton • Randy A. Foutch | | | • Hans Helmerich • Elizabeth Killinger • John W. Lindsay • José R. Mas | | | • Thomas A. Petrie • Donald F. Robillard, Jr. • John D. Zeglis | | ||||||
| 2 | | | To ratify the appointment of Ernst & Young LLP as our independent auditors for our fiscal year ending September 30, 2024 | | | FOR | | ||||||
| 3 | | | To cast an advisory vote to approve the compensation of our named executive officers disclosed in the attached proxy statement | | | FOR | | ||||||
| 4 | | | To consider and vote to approve the Helmerich & Payne, Inc. 2024 Omnibus Incentive Plan | | | FOR | | ||||||
| | | | To consider and transact any other business which may come before the meeting or any adjournment thereof | |
| | | | | | By Order of the Board of Directors, | | |
| | | | | ||||
| | | | William H. Gault Corporate Secretary | | |||
| Tulsa, Oklahoma January 17, 2024 | | | | | | | |
| IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON FEBRUARY 27, 2024 | |
| The proxy statement and our 2023 Annual Report to Stockholders are available at www.proxyvote.com. | |
| 2024 Proxy Statement | | | 1 | |
| DATE AND TIME: | | | | VIRTUAL MEETING SITE | | | | RECORD DATE | |
| Tuesday, February 27, 2024 12:00 p.m., Central time | | | | www.virtualshareholdermeeting.com/HP2024 | | | | You may vote if you were a stockholder of record as of the close of business on January 2, 2024. | |
| Proposal | | | Board Voting Recommendation | | |||||||||
| 1 | | | The election of the 11 nominees as Directors: | | | FOR each nominee | | ||||||
| • Delaney Bellinger • Belgacem Chariag • Kevin G. Cramton • Randy A. Foutch | | | • Hans Helmerich • Elizabeth Killinger • John W. Lindsay • José R. Mas | | | • Thomas A. Petrie • Donald F. Robillard, Jr. • John D. Zeglis | | ||||||
| 2 | | | The ratification of the appointment of Ernst & Young LLP as our independent auditors for our fiscal year ending September 30, 2024 | | | FOR | | ||||||
| 3 | | | The advisory vote to approve the compensation of our named executive officers disclosed in this proxy statement | | | FOR | | ||||||
| 4 | | | The vote to approve the Helmerich & Payne, Inc. 2024 Omnibus Incentive Plan | | | FOR | |
| | Our Board of Directors recommends that you vote your shares FOR the 11 Director nominees identified under Proposal 1, and FOR Proposals 2, 3, and 4. | | |
| 2 | | | 2024 Proxy Statement | |
| OUR PURPOSE | | | Improving lives through efficient and responsible energy. | |
| WHAT WE DO | | | We safely provide performance-driven drilling solutions. | |
| OUR VALUES | | | Our values reflect who we are and the way we interact with one another, our customers, partners, and shareholders | |
| | | Actively C.A.R.E.: We treat one another with respect. We care about each other. We are committed to Controlling and Removing Exposures for ourselves and others. | | |
| | | Service Attitude: We do our part and more for those around us. We consider the needs of others and provide solutions to meet their needs. | | |
| | | Innovative Spirit: We constantly work to improve and try new approaches. We make decisions with the long-term view in mind. | | |
| | | Teamwork: We listen to one another and work toward a common goal. We collaborate to achieve results and focus on success with our customers and shareholders. | | |
| | | Do the Right Thing: We are honest and transparent. We tackle tough situations and speak up when needed. | |
| 4 | | | 2024 Proxy Statement | |
| | | | Director | | | Age | | | Director since | | | Independent | | | Current Committee Composition | | | Other Current Public Company Boards | | ||||||
| Audit | | | Human Resources | | | Nominating & Corporate Governance | | ||||||||||||||||||
| | | DELANEY M. BELLINGER Retired Vice President and Chief Information Officer, Huntsman Corporation | | | 65 | | | July 2018 | | | | | ● | | | | | | ● | | | None | | ||
| | | BELGACEM CHARIAG Former Chairman, President, and Chief Executive Officer, Ecovyst, Inc. | | | 61 | | | August 2021 | | | | | | | | ● | | | ● | | | Harbour Energy PLC. | | ||
| | | KEVIN G. CRAMTON Operating and Executive Partner, HCI Equity Partners | | | 64 | | | March 2017 | | | | | ● | | | | | | ● | | | None | | ||
| | | RANDY A. FOUTCH Retired Chairman and Chief Executive Officer, Laredo Petroleum, Inc. | | | 72 | | | March 2007 | | | | | | | | ● | | | Chair | | | None | | ||
| | | HANS HELMERICH Chairman of the Board, Helmerich & Payne, Inc. | | | 65 | | | March 1987 Chairman since 2012 | | | | | | | | | | | | | | | Coterra Energy Inc. | | |
| | | ELIZABETH R. KILLINGER Executive Vice President, NRG Home, NRG Energy, Inc. | | | 54 | | | July 2023 | | | | | ● | | | | | | ● | | | None | | ||
| | | JOHN W. LINDSAY President and Chief Executive Officer, Helmerich & Payne, Inc. | | | 63 | | | September 2012 | | | | | | | | | | | | | | | Arcosa, Inc. | | |
| | | JOSÉ R. MAS Chief Executive Officer, MasTec, Inc. | | | 52 | | | March 2017 | | | | | | | | ● | | | ● | | | MasTec, Inc. | | ||
| | | THOMAS A. PETRIE Retired Chairman, Petrie Partners, LLC | | | 78 | | | June 2012 | | | | | | | | Chair | | | ● | | | None | | ||
| | | DONALD F. ROBILLARD, JR. President, Robillard Consulting, LLC; Retired Director, Executive Vice President, Chief Financial Officer and Chief Risk Officer, Hunt Consolidated | | | 72 | | | June 2012 | | | | | Chair | | | | | | ● | | | Cheniere Energy, Inc. | | ||
| | | JOHN D. ZEGLIS Retired Chief Executive Officer and Chairman of the Board, AT&T Wireless Service, Inc. | | | 76 | | | March 1989 | | | | | ● | | | | | | ● | | | None | |
| 2024 Proxy Statement | | | 5 | |
| | Director Skills and Experiences | | | | Delaney M. Bellinger | | | | Belgacem Chariag | | | | Kevin G. Cramton | | | | Randy A. Foutch | | | | Hans Helmerich | | | | Elizabeth R. Killinger | | | | John W. Lindsay | | | | José R. Mas | | | | Thomas A. Petrie | | | | Donald F. Robillard, Jr. | | | | John D. Zeglis | | | | # of Directors | | |
| | Accounting and finance | | | | ● | | | | | | | | ● | | | | ● | | | | | | | | ● | | | | | | | | ● | | | | ● | | | | ● | | | | ● | | | | 8 | | |
| | Corporate governance | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | 10 | | |
| | Diverse industries | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | | | | | | | | | ● | | | | | | | | ● | | | | ● | | | | 8 | | |
| | Engineering | | | | ● | | | | ● | | | | | | | | ● | | | | | | | | | | | | ● | | | | ● | | | | ● | | | | | | | | | | | | 6 | | |
| | Executive leadership | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | 11 | | |
| | Global business | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | 10 | | |
| | Health, Safety & Environmental | | | | ● | | | | ● | | | | ● | | | | | | | | ● | | | | | | | | ● | | | | ● | | | | | | | | | | | | ● | | | | 7 | | |
| | Information Technology | | | | ● | | | | | | | | ● | | | | ● | | | | | | | | ● | | | | | | | | | | | | | | | | | | | | | | | | 4 | | |
| | Investment, private equity and capital markets | | | | | | | | | | | | ● | | | | ● | | | | ● | | | | | | | | | | | | ● | | | | ● | | | | ● | | | | | | | | 6 | | |
| | Legal | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ● | | | | 1 | | |
| | Oil and gas industry | | | | ● | | | | ● | | | | | | | | ● | | | | ● | | | | | | | | ● | | | | | | | | ● | | | | ● | | | | | | | | 7 | | |
| | Public company board experience | | | | | | | | ● | | | | ● | | | | ● | | | | ● | | | | | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | 9 | | |
| | Risk management | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | | | | | ● | | | | ● | | | | 10 | | |
| | Strategic planning | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | ● | | | | 11 | | |
| | Board Self-Identification* | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Gender | | | | F | | | | M | | | | M | | | | M | | | | M | | | | F | | | | M | | | | M | | | | M | | | | M | | | | M | | | | | | |
| | Race/Ethnicity | | | | W | | | | MEA | | | | W | | | | W | | | | W | | | | W | | | | W | | | | H | | | | W | | | | W | | | | W | | | | | | |
| 6 | | | 2024 Proxy Statement | |
| Board Composition and Independence | | | | Board and Committee Practices | | | | Stockholder Rights | |
| • 100% independent committees • 9 of our 11 directors are independent • Separation of Chair and CEO roles • Strong independent Lead Director, elected by independent directors • Regular executive sessions provided for Board members • Significant interaction with senior management and access to other employees | | | | • Director orientation and continuing education • 96.5% attendance at Board and committee meetings in fiscal 2023 • Commitment to include candidates who reflect diverse backgrounds, including diversity of gender and race in search for new director candidates • Active Board oversight of strategy, risk management, and sustainability program • Stock ownership guidelines | | | | • Single class of stock with equal voting rights • Annual elections for directors • Majority voting standard for uncontested director elections • Proxy access for stockholders • Active stockholder engagement | |
| | Board of Directors | | | ||||||
| | • Oversees the Company’s processes for identifying and managing the significant risks facing the Company • Reviews the Company’s significant risks and the responsibilities of management and the Board’s committees in assisting the Board in its risk oversight | | | • Evaluates Board processes and performance and the overall effectiveness of the Board • Oversees climate-related risks and opportunities and the Company’s strategy, policies and performance related to environmental, health and safety, corporate social responsibility and sustainability matters | | | • Reviews and approves business plans, major strategies, and financial objectives • Monitors strategic and business risks ◦ drilling business ◦ technology solutions ◦ markets ◦ capital investments | | |
| Audit Committee • Reviews processes and policies with respect to risk assessment and risk management, including our enterprise risk management program • Reviews risks associated with financial performance, internal and external audit functions, legal and tax contingencies, cybersecurity, and physical security | | | | Human Resources Committee • Establishes compensation performance goals intended to drive behavior that does not encourage or result in material risk of adverse consequences to the Company or its stockholders • Reviews compensation risk assessments • Reviews compensation clawback policies • Reviews and monitors compliance with stock ownership guidelines • Reviews risks, strategies, and policies related to human capital management | | | | Nominating & Corporate Governance Committee • Oversees Director succession planning, including efforts to mitigate risks associated with loss of expertise and leadership at the Board level • Oversees Director independence, effectiveness, and organization • Assesses management succession planning and corporate governance practices • Develops and implements H&P’s corporate governance principals • Reviews investor relations matters | | |
| 2024 Proxy Statement | | | 7 | |
| Drilling Segment Operating Revenue | | |||
| North America Solutions | | | International Solutions | |
| $2,519M | | | $212.5M | |
| 40.9% year-over-year increase | | | 56.2% year-over-year increase | |
| Offshore Gulf of Mexico | | |||
| $130M | | |||
| 3.8% year-over-year increase | |
| Contracted Drilling Rig Fleet (Sept. 30 of FY) | | | Average Active Rigs(1) | |
| | | |
| 8 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | 9 | |
| 10 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | 11 | |
| 12 | | | 2024 Proxy Statement | |
| AUDIT COMMITTEE | |
| Members: Donald F. Robillard, Jr. (Chair); Delaney M. Bellinger; Kevin G. Cramton; Elizabeth R. Killinger; John D. Zeglis | |
| PRIMARY RESPONSIBILITIES • assist the Board in fulfilling its independent and objective oversight responsibilities of financial reporting and internal financial and accounting controls of the Company • monitor the qualifications, independence, and performance of our independent registered public accounting firm AUDIT COMMITTEE REPORT AND CHARTER • The Audit Committee Report is provided below under “Proposal 2 — Ratification of Appointment of Independent Auditors” • The Board has adopted a written charter for the Audit Committee, which is available on our website at www.helmerichpayne.com/corporate-governance-information QUALIFICATIONS/INDEPENDENCE • The Board has determined Messrs. Cramton and Robillard are “audit committee financial experts” as defined by the Securities and Exchange Commission (“SEC”) • The Board has also determined that all Audit Committee members are “financially literate” as contemplated by the rules of the New York Stock Exchange (“NYSE”) • All members of the Audit Committee are independent | |
| HUMAN RESOURCES COMMITTEE | |
| Members: Thomas A. Petrie (Chair); Randy A. Foutch; Belgacem Chariag; José R. Mas | |
| PRIMARY RESPONSIBILITIES • evaluate the performance of our executive officers • review and make decisions regarding compensation of our executive officers • make recommendations regarding compensation of non-employee members of our Board • review and make recommendations or decisions regarding incentive compensation and equity-based compensation COMPENSATION COMMITTEE REPORT AND HUMAN RESOURCES COMMITTEE CHARTER • The Compensation Committee Report is provided below under “Compensation Committee Report” • The Board has adopted a written charter for the Human Resources Committee, which is available on our website at www.helmerichpayne.com/corporate-governance-information QUALIFICATIONS/INDEPENDENCE • All members of the Human Resources Committee are independent | |
| 2024 Proxy Statement | | | 13 | |
| NOMINATING AND CORPORATE GOVERNANCE COMMITTEE | |
| Members: Randy A. Foutch (Chair); Delaney M. Bellinger; Belgacem Chariag; Kevin G. Cramton; Elizabeth R. Killinger; José R. Mas; Thomas A. Petrie; Donald F. Robillard, Jr.; John D. Zeglis | |
| PRIMARY RESPONSIBILITIES • identify and recommend to the Board the selection of director nominees for each Annual Meeting of Stockholders or for any vacancies on the Board • make recommendations to the Board regarding the adoption or amendment of corporate governance principles applicable to the Company • assist the Board in developing and evaluating potential candidates for executive positions and generally overseeing management succession planning NOMINATING AND CORPORATE GOVERNANCE CHARTER • The Board has adopted a written charter for the Nominating and Corporate Governance Committee, which is available on our website at www.helmerichpayne.com/corporate-governance-information QUALIFICATIONS/INDEPENDENCE. • All members of the Nominating and Corporate Governance Committee are independent | |
| 14 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | 15 | |
| 16 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | 17 | |
| Helmerich & Payne, Inc. Attention: Corporate Secretary 1437 South Boulder Avenue, Suite 1400 Tulsa, Oklahoma 74119 | |
| 18 | | | 2024 Proxy Statement | |
| | | at least a majority of the Directors serving at any time on the Board are independent, as defined under the rules of the NYSE and applicable law; | | |
| | | all Audit Committee members are independent and satisfy the financial literacy requirements required for service on the Audit Committee under the rules of the NYSE; and | | |
| | | at least some of the independent Directors have experience as senior executives of a public or substantial private company. | |
| 2024 Proxy Statement | | | 19 | |
| 20 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | 21 | |
| | | Delaney M. Bellinger | | |||||||
| Age: 65 | | | Director Since: 2018 | | | Committees: Audit Nominating and Corporate Governance | | |||
| Career Highlights | | |||||||||
| Ms. Bellinger served as the Vice President and Chief Information Officer for Huntsman Corporation, a global manufacturer and marketer of differentiated chemicals, from 2016 to 2018. Prior to her role at Huntsman, she was the Chief Information Officer for EP Energy Corp., an exploration and production company, from 2012 to 2015. Before joining EP Energy, she was the Chief Information Officer for YUM! Brands, Inc., a multinational restaurant company, from 2000 to 2010. | | |||||||||
| Ms. Bellinger serves on the board of Texas TicKids, a non-profit organization that enhances children’s lives by allowing them to fill unused event seats. | | |||||||||
| Other Public Company Boards (within the past five years): | | |||||||||
| • None | | |||||||||
| Key Qualifications and Expertise | | |||||||||
| Ms. Bellinger brings to the Board executive leadership, information technology, complex global business operations, and oil and gas industry experience through her service as chief information officer of large multinational companies and a company in the oil and gas industry. | |
| 22 | | | 2024 Proxy Statement | |
| | | Belgacem Chariag | | |||||||
| Age: 61 | | | Director Since: 2021 | | | Committees: Human Resources Nominating and Corporate Governance | | |||
| Career Highlights | | |||||||||
| Mr. Chariag served as President and Chief Executive Officer of Ecovyst, Inc. (formerly PQ Group Holdings), a global provider of specialty catalysts, materials, chemicals, and services, from August 2018 to April 2022 and as Chairman of the Board of Ecovyst from December 2019 to April 2022. He also served as a director and Chairman of the Board of Ecovyst’s, Zeolyst International, a joint venture of Ecovyst and Shell Catalyst & Technologies that produces zeolite powders, catalysts, and absorbents, from 2018 to April 2022. Mr. Chariag served as Chief Global Operations Officer for Baker Hughes Company, a worldwide energy technology company, from July 2017 to January 2018, as President Global Operations from May 2016 to June 2017, Chief Integration Officer from December 2014 to April 2016, President Global Products and Services from October 2013 to December 2014, and President Eastern Hemisphere from May 2009 to September 2013. Prior to joining Baker Hughes, Mr. Chariag held a variety of leadership and management roles for Schlumberger Limited, a global oilfield services company, including serving as Vice President of Health, Safety, Environment, and Security. | | |||||||||
| Mr. Chariag is the co-founder and serves on the board of Tunisian Talents United, a non-profit organization that identifies, attracts, develops and mentors Tunisia’s greatest young talents and potential future leaders. | | |||||||||
| Other Public Company Boards (within past five years) • Harbour Energy, Plc. (2023 – present) • Ecovyst, Inc. (2019 – 2022) | | |||||||||
| Key Qualifications and Expertise | | |||||||||
| Mr. Chariag brings to the Board executive leadership, strategic planning, and global business operations experience through his service as a chairman and chief executive officer of an international public company and his tenure as an executive at other global companies. He also brings a deep knowledge of health, safety, and environmental matters through his leadership position in that area at a large global oilfield services company. | |
| 2024 Proxy Statement | | | 23 | |
| | | Kevin G. Cramton | | |||||||
| Age: 64 | | | Director Since: 2017 | | | Committees: Audit Nominating and Corporate Governance | | |||
| Career Highlights | | |||||||||
| Mr. Cramton has been an executive partner of HCI Equity Partners, a private equity firm, since 2019, having previously served as operating partner from 2016 to 2019. From 2019 to 2023, he served as Chairman of the Board and Chief Executive Officer of Tribar Technologies, Inc., a designer and manufacturer of automotive trim components. He previously served as Executive Chairman of the Board of Atlantix Global Systems, an information technology decommissioning and services company, from 2016 to 2017. Mr. Cramton served from 2012 to 2015 as the Chief Executive Officer of Cardone Industries, a re-manufacturer of automotive aftermarket components. He served as Chief Executive Officer of Revstone Industries, LLC, a designer and manufacturer of automotive components from 2011 to 2012, and as Managing Director of RHJ International (Ripplewood Holdings), a publicly traded, investment holding company, from 2007 to 2011. Prior to joining RHJ International, Mr. Cramton held various roles of increasing responsibility at Ford Motor Company, including Director, Corporate Business Development, with responsibilities for Ford’s merger and acquisition activity. | | |||||||||
| Other Public Company Boards (within past 5 years) | | |||||||||
| • Apeiron Capital Investment Corp. (2021 – 2023) | | |||||||||
| Key Qualifications and Expertise | | |||||||||
| Mr. Cramton brings to the Board executive leadership, risk management, accounting and finance, and private equity and capital markets experience as well as diverse industries perspective through his service as a chief executive officer of companies engaged in the design and manufacture of automotive components and his service as an executive of investment and private equity firms. | |
| 24 | | | 2024 Proxy Statement | |
| | | Randy A. Foutch | | |||||||
| Age: 72 | | | Director Since: 2007 | | | Committees: Human Resources Nominating and Corporate Governance (C) | | |||
| Career Highlights | | |||||||||
| In 2006, Mr. Foutch founded Laredo Petroleum, Inc. (now known as Vital Energy, Inc.), a publicly traded, Permian basin focused oil and natural gas exploration and production company, where he served as Chief Executive Officer from 2006 to 2019 and as a Director and Chairman of the Board until 2020. He also founded and served in executive roles with the oil and natural gas exploration companies Colt Resources Corp., Latigo Petroleum, Inc., and Lariat Petroleum, Inc. prior to their sales. Mr. Foutch served as a Director of Bill Barrett Corporation, a publicly traded oil and natural gas exploration company, from 2006 to 2011, MacroSolve, Inc., a provider of mobile data and video business solutions, from 2006 to 2008, and Cheniere Energy, Inc., a producer and exporter of liquified natural gas in the United States, from 2013 to 2015. Mr. Foutch is a member of the advisory board of Pattern Computer, LLC, a developer of machine learning and artificial intelligence engines for complex data analytics applications. He also serves as an independent Director of Galileo Holdco 1 Limited, a company specializing in liquification, natural gas compression and re-gasification modular systems and technologies, and is a member of the board of Citizen Energy, a private oil and natural gas company focused on developing horizontal play concepts in the onshore region of the United States. Mr. Foutch currently provides strategic consulting services to one of the largest family offices in the United States and previously provided consulting services to Warburg Pincus, a large global private equity firm. Mr. Foutch is an active member of the National Association of Corporate Directors and is Directorship Certified®. | | |||||||||
| Mr. Foutch is a member of the National Petroleum Council, a federally chartered committee that advises the Secretary of Energy with respect to oil and natural gas matters. He also serves on the MD Anderson Cancer Center Board of Visitors and the boards of the C.M. Russell Museum and the National Museum of Wildlife Art. Mr. Foutch is a recipient of the EY Entrepreneur of the Year Award and the American Association of Petroleum Public Service Award. | | |||||||||
| Other Public Company Boards (within past five years) | | |||||||||
| • Laredo Petroleum, Inc. (2006 – 2020) | | |||||||||
| Key Qualifications and Expertise | | |||||||||
| Mr. Foutch brings to the Board executive leadership, private equity and capital markets, risk management, and strategic planning experience, as well as deep insights into the oil and natural gas industry, as a founder, executive officer, and director of large energy companies. | |
| 2024 Proxy Statement | | | 25 | |
| | | Hans Helmerich | | |||||||
| Age: 65 | | | Director Since: 1987 Chairman Since: 2012 | | | Committees: None | | |||
| Career Highlights | | |||||||||
| Mr. Helmerich has been a Director of the Company since 1987 and Chairman of the Board since 2012. He served as Chief Executive Officer of the Company from 1989 to 2014 and President from 1987 to 2012. Mr. Helmerich also served as a Director of Northwestern Mutual Life Insurance Company, a financial planning, life insurance, investment services company, from 2006 to 2020. | | |||||||||
| In 2023, Mr. Helmerich was inducted into the Hart Energy Hall of Fame. | | |||||||||
| Other Public Company Boards | | |||||||||
| • Coterra Energy, Inc. (2021 – present) | | |||||||||
| • Cimarex Energy Co. (2002 – 2021) | | |||||||||
| Key Qualifications and Expertise | | |||||||||
| Mr. Helmerich brings to the Board executive leadership, risk management, diverse industries, and global business experience as well and deep oil and gas industry experience through his 25 years as the Company’s Chief Executive Officer and his service on other boards. He also brings proven strategic planning experience, demonstrated by the Company’s innovation, significant growth, and positive performance under his leadership. | |
| 26 | | | 2024 Proxy Statement | |
| | | Elizabeth R. Killinger | | |||||||
| Age: 54 | | | Director Since: 2023 | | | Committees: Audit Nominating and Corporate Governance | | |||
| Career Highlights | | |||||||||
| Ms. Killinger has served as Executive Vice President, NRG Home, of NRG Energy, Inc. since 2016. NRG’s Home division provides residential power and gas services to millions of customers through multiple brands and channels in the United States and Canada. Ms. Killinger has over 30 years of domestic and international experience in the energy and services industries, including 20 years with NRG and its predecessors. Prior to joining NRG, Ms. Killinger spent a decade providing strategy, management and systems consulting to energy, oilfield services, and retail distribution companies across the U.S. and Europe. | | |||||||||
| Ms. Killinger serves on the Board of Directors of Texas Dow Employees Credit Union and the Energy Advisory Board and the Board of the Bauer Business School at the University of Houston. She also serves on the boards of directors of several non-profit organizations, including the Greater Houston Partnership, a non-profit organization focused on economic development of the Greater Houston area, and Junior Achievement of Southeast Texas, a non-profit organization that provides experiential educational programs to K-12 students. | | |||||||||
| Other Public Company Boards (within past five years) | | |||||||||
| • None | | |||||||||
| Key Qualifications and Expertise | | |||||||||
| Ms. Killinger brings to the Board executive leadership, risk management, information technology, and strategic planning knowledge and experience as an executive of a large residential power and gas services company and through her tenure providing management and systems consulting services to the energy, oilfield services, and retail distribution industries. | |
| 2024 Proxy Statement | | | 27 | |
| | | John W. Lindsay | | |||||||
| Age: 63 | | | CEO Since: 2014 President Since: 2012 | | | Committees: None | | |||
| Career Highlights | | |||||||||
| Mr. Lindsay has served as President of the Company since 2012 and Chief Executive Officer of the Company since 2014. He has also been a Director of the Company since 2012. Mr. Lindsay joined the Company in 1987 and has served in various positions of increasing responsibility, including President and Chief Operating Officer of the Company from 2012 to 2014, Executive Vice President and Chief Operating Officer of the Company from 2010 to 2012, Executive Vice President, U.S. and International Operations of Helmerich & Payne International Drilling Co., from 2006 to 2010, and Vice President, U.S. Land Operations from 1997 to 2006. | | |||||||||
| Other Public Company Boards (within past five years) | | |||||||||
| • Arcosa, Inc. (2018 – present) | | |||||||||
| Key Qualifications and Expertise | | |||||||||
| Mr. Lindsay brings to the Board executive leadership, strategic planning, and environmental, health and safety experience, as well as deep knowledge and experience in the oil and gas industry through his 35-year career and leadership positions with the Company. He also provides management a representative on the Board with extensive knowledge of the Company’s operations as the Board oversees management’s strategy, planning and performance. | |
| 28 | | | 2024 Proxy Statement | |
| | | José R. Mas | | |||||||
| Age: 52 | | | Director Since: 2017 | | | Committees: Human Resources Nominating and Corporate Governance | | |||
| Career Highlights | | |||||||||
| Mr. Mas has served as the Chief Executive Officer of MasTec, Inc., a large public infrastructure services provider operating primarily throughout North America across a range of industries, since 2007, and as a member of its Board of Directors since 2001. He served as MasTec’s President from 2007 to 2010, Vice Chairman of the Board of Directors and Executive Vice President – Business Development from 2001 to 2007, and led MasTec’s Communications Service Operation from 1999 to 2001. Mr. Mas joined MasTec, Inc. in 1992. | | |||||||||
| Mr. Mas received the EY National Entrepreneur of the Year award in 2011 and 2012. | | |||||||||
| Other Public Company Boards | | |||||||||
| • MasTec, Inc. (2001 – present) | | |||||||||
| • American Virtual Cloud Technologies, Inc. (2017 – 2020) | | |||||||||
| Key Qualifications and Expertise | | |||||||||
| Mr. Mas brings to the Board executive leadership, diverse industries, private equity and capital markets, risk management, and strategic planning experience through his service as a chairman and chief executive officer of a large public company. | |
| 2024 Proxy Statement | | | 29 | |
| | | Thomas A. Petrie | | |||||||
| Age: 78 | | | Director Since: 2012 | | | Committees: Human Resources (C) Nominating and Corporate Governance | | |||
| Career Highlights | | |||||||||
| Mr. Petrie served as Chairman of Petrie Partners, LLC, an investment banking firm that offers financial advisory services to the oil and gas industry, from 2012 to 2023. In 1989, he co-founded Petrie Parkman & Co., a firm specializing in investment banking services for the oil and gas industry, and served as its Chairman and Chief Executive Officer from 1989 to 2006. Mr. Petrie served as a Vice Chairman of Merrill Lynch from 2006 to 2009 and as Vice Chairman of Bank of America from 2009 to 2012. Mr. Petrie has been an active advisor on more than $250 billion of energy-related mergers and acquisitions. | | |||||||||
| Mr. Petrie serves on the Board of Trustees of the Denver Art Museum and the Board of Directors of the C.M. Russell Museum. In 2023, Mr. Petrie was inducted into the Hart Energy Hall of Fame. | | |||||||||
| Other Public Company Boards (within past five years) | | |||||||||
| • None | | |||||||||
| Key Qualifications and Expertise | | |||||||||
| Mr. Petrie brings to the Board executive leadership, global business, and oil and gas industry experience as well as extensive experience in strategic planning and private equity and capital markets through his executive positions at investment banking and advisory firms. | |
| 30 | | | 2024 Proxy Statement | |
| | | Donald F. Robillard, Jr. | | |||||||
| Age: 72 | | | Director Since: 2012 | | | Committees: Audit (C) Nominating and Corporate Governance | | |||
| Career Highlights | | |||||||||
| Mr. Robillard served as a Director and the Executive Vice President, Chief Financial Officer, and Chief Risk Officer of Hunt Consolidated, Inc. (“Hunt”), a private international holding company with interests in oil and gas exploration and production, refining, real estate development, private equity investments, and ranching, from 2015 to 2017. In 2020, Mr. Robillard joined the Board of RRH Corporation, the holding company for all Hunt subsidiaries. Mr. Robillard joined Hunt in 1983, serving in domestic and international accounting positions of increasing responsibility, and was elected Senior Vice President and Chief Financial Officer in 2007. He also served as Chief Executive Officer and Chairman of ES Xplore, LLC, a direct hydrocarbon indicator company and subsidiary of Hunt, from 2016 to 2017. Mr. Robillard formed Robillard Consulting, LLC, an oil and gas advisory firm, in 2018. Mr. Robillard has served as an independent Director of Galileo Holdco 1 Limited since 2020. | | |||||||||
| Mr. Robillard is a Certified Public Accountant and a member of Financial Executives International. He also serves on the Advisory Board of The Institute for Excellence in Corporate Governance at the University of Texas at Dallas. Mr. Robillard is also an active member of the National Association of Corporate Directors and is Directorship Certified®. | | |||||||||
| Other Public Company Boards (within past five years) | | |||||||||
| • Cheniere Energy, Inc. (2014 – present) | | |||||||||
| Key Qualifications and Expertise | | |||||||||
| Mr. Robillard brings to the Board executive leadership, global business, private equity and capital markets, risk management, oil and gas industry, and strategic planning experience, as well as extensive experience in finance and accounting through his service as a chief financial and risk officer of a large private company in the energy sector and his service on the board of directors of a large public energy company. | |
| 2024 Proxy Statement | | | 31 | |
| | | John D. Zeglis | | |||||||
| Age: 76 | | | Director Since: 1989 | | | Committees: Audit Nominating and Corporate Governance | | |||
| Career Highlights | | |||||||||
| Mr. Zeglis served as Chief Executive Officer and Chairman of the Board of AT&T Wireless Services, Inc., a wireless telecommunications carrier, from 1999 to 2004. He served as President of AT&T Corporation, a global provider of telecommunications and technology services, from December 1997 to July 2001, Vice Chairman from June 1997 to November 1997, General Counsel and Senior Executive Vice President from 1996 to 1997, and Senior Vice President and General Counsel from 1986 to 1996. Mr. Zeglis has served on the Board of Directors for the The Duchossois Group, a privately-held, family business, since 2010. | | |||||||||
| Other Public Company Boards (within past five years) | | |||||||||
| • None | | |||||||||
| Key Qualifications and Expertise | | |||||||||
| Mr. Zeglis brings to the Board executive leadership, diverse industries, global business, and risk management experience as well as extensive legal expertise and experience through his service a chief executive officer and general counsel of large telecommunications providers. | |
| 32 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | 33 | |
| 34 | | | 2024 Proxy Statement | |
| Helmerich & Payne, Inc. 1437 South Boulder Avenue Suite 1400 Tulsa, Oklahoma 74119 | |
| 2024 Proxy Statement | | | 35 | |
| Role | | | Quarterly Retainer ($) | | |||
| Chairman of the Board (Mr. Helmerich) | | | | | 37,500 | | |
| Each Other Non-Employee Director | | | | | 25,000 | | |
| Lead Director | | | | | 6,250 | | |
| Audit Committee Chair | | | | | 7,500 | | |
| Human Resources Committee Chair | | | | | 3,750 | | |
| Nominating and Corporate Governance Committee Chair | | | | | 3,750 | | |
| Each Member of the Audit Committee | | | | | 1,250 | | |
| Non-Employee Director Annual Restricted Stock Grant | | | Intended Value on the Date of Grant ($) | | |||
| Chairman of the Board | | | | | 270,000 | | |
| Other Non-Employee Directors | | | | | 180,000 | | |
| 36 | | | 2024 Proxy Statement | |
| Name | | | Fees Earned or Paid in Cash(1) ($) | | | Stock Awards(2) ($) | | | All Other Compensation(3) ($) | | | Total ($) | | ||||||||||||
| Delaney M. Bellinger | | | | | 105,000 | | | | | | 179,967 | | | | | | 8,662 | | | | | | 293,629 | | |
| Belgacem Chariag | | | | | 100,000 | | | | | | 179,967 | | | | | | 8,662 | | | | | | 288,629 | | |
| Kevin G. Cramton | | | | | 105,000 | | | | | | 179,967 | | | | | | 8,662 | | | | | | 293,629 | | |
| Randy A. Foutch | | | | | 140,000 | | | | | | 179,967 | | | | | | 8,662 | | | | | | 328,629 | | |
| Hans Helmerich | | | | | 150,000 | | | | | | 269,972 | | | | | | 12,993 | | | | | | 432,965 | | |
| Elizabeth R. Killinger(4) | | | | | 44,226 | | | | | | 120,317 | | | | | | 1,646 | | | | | | 166,189 | | |
| José R. Mas | | | | | 100,000 | | | | | | 179,967 | | | | | | 8,662 | | | | | | 288,629 | | |
| Thomas A. Petrie | | | | | 115,000 | | | | | | 179,967 | | | | | | 8,662 | | | | | | 303,629 | | |
| Donald F. Robillard, Jr. | | | | | 135,000(5) | | | | | | 179,967 | | | | | | 8,662 | | | | | | 323,629 | | |
| Edward B. Rust, Jr(6) | | | | | 26,250 | | | | | | — | | | | | | 4,591 | | | | | | 30,841 | | |
| Mary M. VanDeWeghe(6) | | | | | 25,000 | | | | | | — | | | | | | 2,296 | | | | | | 27,296 | | |
| John D. Zeglis | | | | | 105,000 | | | | | | 179,967 | | | | | | 8,662 | | | | | | 293,629 | | |
| 2024 Proxy Statement | | | 37 | |
| Name | | | Aggregate Number of Unvested Shares or Stock Units Outstanding as of September 30, 2023(#)(1) | | | Aggregate Option Awards Outstanding as of September 30, 2023(#)(2) | | ||||||
| Delaney M. Bellinger | | | | | 4,197(3) | | | | | | 2,926 | | |
| Belgacem Chariag | | | | | 4,197(4) | | | | | | — | | |
| Kevin G. Cramton | | | | | 4,197(4) | | | | | | 12,613 | | |
| Randy A. Foutch | | | | | 4,197(3) | | | | | | 37,659 | | |
| Hans Helmerich | | | | | 6,296(4) | | | | | | 48,860 | | |
| Elizabeth R. Killinger(5) | | | | | 3,394(4) | | | | | | — | | |
| José R. Mas | | | | | 4,197(4) | | | | | | 12,613 | | |
| Thomas A. Petrie | | | | | 4,197(4) | | | | | | 37,659 | | |
| Donald F. Robillard, Jr. | | | | | 4,197(3) | | | | | | 37,659 | | |
| Edward R. Rust | | | | | — | | | | | | 37,659 | | |
| Mary M. VanDeWeghe | | | | | — | | | | | | — | | |
| John D. Zeglis | | | | | 4,197(4) | | | | | | 37,659 | | |
| 38 | | | 2024 Proxy Statement | |
| At the Annual Meeting, 11 Directors are to be elected for terms of one year each. One Director has joined the Board of Directors since our last Annual Meeting of Stockholders. Ms. Elizabeth Killinger, who was appointed to the Board of Directors on June 30, 2023 and will stand for election at the 2024 Annual Meeting, was identified by a third-party search firm engaged by the NCG Committee to assist in identifying potential Directors. All of the other incumbent Directors are standing for re-election. All nominees have agreed to be named in this proxy statement and have indicated a readiness to continue to serve if elected. The NCG Committee has determined that each of the nominees qualifies for election under its criteria for evaluation of directors and has recommended that each of the candidates be nominated for election. If any nominee becomes unable to serve prior to the Annual Meeting, shares represented by proxy may be voted for a substitute designated by the Board of Directors, unless a contrary instruction is noted on the proxy. The Board of Directors has no reason to believe that any of the nominees will become unavailable. As detailed under “Additional Information Concerning the Board of Directors — Director Independence” below, the Board of Directors has affirmatively determined that each of the nominees, other than Messrs. Helmerich and Lindsay, qualifies as “independent” as that term is defined under the rules of the NYSE and the SEC, as well as our Corporate Governance Guidelines. | | | Board Recommendation The Board unanimously recommends a vote FOR each of the persons nominated by the Board. | |
| 2024 Proxy Statement | | | 39 | |
| The Audit Committee has appointed the firm of Ernst & Young LLP as the independent registered public accounting firm (“independent auditors”) to audit our financial statements for fiscal 2024. A proposal will be presented at the Annual Meeting asking the stockholders to ratify this appointment. The firm of Ernst & Young LLP has served us in this capacity since 1994. Representatives of Ernst & Young LLP will be present at the Annual Meeting and will have the opportunity to make a statement if they so desire and to respond to appropriate questions. If stockholders do not ratify the appointment of Ernst & Young LLP as the independent auditors to audit our financial statements for fiscal 2024, the Audit Committee will consider the voting results and evaluate whether to select a different independent auditor. Although ratification is not required by Delaware law, our Certificate of Incorporation, or our By-laws, we are submitting the selection of Ernst & Young LLP to our stockholders for ratification as a matter of good corporate governance. Even if the selection of Ernst & Young LLP is ratified, the Audit Committee may select different independent auditors at any time during the year if it determines that such a change would be in the best interests of the Company and our stockholders. | | | Board Recommendation The Board unanimously recommends a vote FOR the ratification of Ernst & Young LLP as our independent auditors for fiscal 2024. | |
| 40 | | | 2024 Proxy Statement | |
| | | | Years Ended September 30, | | |||||||||
| | | | 2023 | | | 2022 | | ||||||
| Audit Fees(1) | | | | $ | 2,369,065 | | | | | $ | 2,240,294 | | |
| Audit-Related Fees(2) | | | | | 354,300 | | | | | | 266,715 | | |
| Tax Fees(3) | | | | | 182,522 | | | | | | 219,879 | | |
| All Other Fees | | | | | — | | | | | | — | | |
| Total | | | | $ | 2,905,887 | | | | | $ | 2,726,888 | | |
| 2024 Proxy Statement | | | 41 | |
| 42 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | 43 | |
| NEO | | | JOHN W. LINDSAY, 63 President and Chief Executive Officer, since March 2014 Director, since September 2012 Prior Positions • President and Chief Operating Officer from September 2012 to March 2014 • Executive Vice President and Chief Operating Officer from 2010 to September 2012 • Executive Vice President, U.S. and International Operations of Helmerich & Payne International Drilling Co. from 2006 to September 2012 • Vice President of U.S. Land Operations of Helmerich & Payne International Drilling Co. from 1997 to 2006 | |
| NEO | | | MARK W. SMITH, 53 Senior Vice President and Chief Financial Officer, since December 2019 Prior Positions • Vice President and Chief Financial Officer from June 2018 to December 2019 • Chief Financial Officer Designate from May 2018 to June 2018 • Senior Vice President and Chief Financial Officer of Atwood Oceanics, Inc., an offshore drilling company, from June 2015 to October 2017 • Vice President, Chief Accounting Officer of Atwood Oceanics, Inc. from May 2014 to June 2015 • Vice President, Corporate Services of Atwood Oceanics, Inc. from 2011 to May 2014 | |
| NEO | | | CARA M. HAIR, 47 Senior Vice President, Corporate Services and Chief Legal and Compliance Officer, since December 2020 Prior Positions • Vice President, Corporate Services and Chief Legal and Compliance Officer from August 2017 to December 2020 • Vice President, General Counsel and Chief Compliance Officer from March 2015 to August 2017 • Deputy General Counsel from June 2014 to March 2015 • Senior Attorney from January 2013 to June 2014 • Attorney from 2006 to January 2013 | |
| NEO | | | JOHN R. BELL, 53 Senior Vice President, International and Offshore Operations of Helmerich & Payne International Holdings since December 2020 Prior Positions • Vice President, International and Offshore Operations of Helmerich and Payne International Holdings, from August 2017 to December 2020 • Vice President, Corporate Services from January 2015 to August 2017 • Vice President of Human Resources from March 2012 to January 2015 • Director of Human Resources from 2002 to March 2012 | |
| 44 | | | 2024 Proxy Statement | |
| NEO | | | MICHAEL P. LENNOX, 43 Senior Vice President, U.S. Land Operations of Helmerich & Payne International Drilling Co. since December 2020 Prior Positions • Vice President, U.S. Land Operations of Helmerich & Payne International Drilling Co. from August 2017 to December 2020 • District Manager of Helmerich & Payne International Drilling Co. from 2012 to August 2017 | |
| | | RAYMOND JOHN (“TREY”) ADAMS III, 38 Senior Vice President of Digital Operations, Sales, & Marketing since December 2020 Prior Positions • Vice President of Digital Operations, Sales, & Marketing of Helmerich & Payne Technologies from September 2020 to December 2020 • Vice President of Helmerich & Payne Technologies, LLC, from July 2018 to September 2020 • Integration Manager of Motive Drilling Technologies, Inc. and Magnetic Variation Services, subsidiaries of the Company, from June 2017 to June 2018 • District Manager of Helmerich & Payne International Drilling Co., from 2015 to June 2017 | | |
|
| 2024 Proxy Statement | | | 45 | |
| 46 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | 47 | |
| Officers | | | Title | |
| John W. Lindsay | | | President and Chief Executive Officer | |
| Mark W. Smith | | | Senior Vice President and Chief Financial Officer | |
| Cara M. Hair | | | Senior Vice President, Corporate Services and Chief Legal and Compliance Officer | |
| John R. Bell | | | Senior Vice President, International and Offshore Operations of Drilling Subsidiary | |
| Michael P. Lennox | | | Senior Vice President, U.S. Land Operations of Drilling Subsidiary | |
| 48 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | 49 | |
| | The primary goals of our executive compensation program are to: • align the interests of our executives with those of our stockholders; • attract, retain, and motivate qualified executives; and • link our executives’ pay with their performance and execution of the Company’s strategy. | | |
| What We Do | | | What We Do Not Do | | ||||||
| | | We pay our named executive officers a significant portion of their target compensation in the form of performance-based compensation which varies based on Company performance. | | | | | We do not have employment contracts with our named executive officers. | | ||
| | | We maintain robust clawback policies that go beyond the minimum requirements of NYSE listing standards. | | | | | We do not revise performance-based incentives to pay out in the event that the Company falls short of its performance goals. | | ||
| | | The Committee engages in a multi-step compensation setting process for our named executive officers, including reviewing market and survey data sourced from a peer group of companies, the oil and gas industry, and the market more generally. | | | | | We do not provide tax gross-ups to our named executive officers. | | ||
| | | We emphasize long-term equity incentives and utilize caps on potential incentive payouts. | | | | | We do not maintain compensation programs that we believe motivate misbehavior or excessive risk-taking by employees. | | ||
| | | We have modest post-employment benefits and included double trigger change in control provisions in all equity awards. | | | | | We do not permit our named executive officers, other employees, or Directors to hedge, pledge, or use margin accounts related to the Company’s stock. | | ||
| | | We maintain stock ownership and retention guidelines intended to align management and stockholder interests. | | | | | ||||
| | | The Committee retains an independent compensation consultant for the purpose of advising on executive compensation practices. | | | | | | | |
| 50 | | | 2024 Proxy Statement | |
| Chief Executive Officer Target Total Direct Compensation | | | Average Named Executive Officer (excl. CEO) Target Total Direct Compensation | |
| | | |
| 2024 Proxy Statement | | | 51 | |
| Peer Group Companies | | |||
| Baker Hughes Company | | | Oil States International, Inc. | |
| ChampionX Corporation | | | Patterson-UTI Energy, Inc. | |
| Expro Group Holdings N.V. | | | Precision Drilling Corporation | |
| Helix Energy Solutions Group, Inc. | | | ProPetro Holding Corp. | |
| Nabors Industries Ltd. | | | RPC, Inc. | |
| NOV Inc. | | | TechnipFMC plc | |
| Oceaneering International, Inc. | | | Transocean Ltd. | |
| | | | Market Capitalization (at September 30, 2023)(1) ($) | | | Enterprise Value (at September 30, 2023)(1) ($) | | | Revenue (TTM from September 30, 2023)(1) ($) | | |||||||||
| Peer Company Maximum | | | | | 35,661 | | | | | | 38,659 | | | | | | 24,576 | | |
| Peer Company Median | | | | | 2,559 | | | | | | 3,502 | | | | | | 2,502 | | |
| Peer Company Minimum | | | | | 535 | | | | | | 665 | | | | | | 776 | | |
| Helmerich & Payne, Inc. | | | | | 4,192 | | | | | | 4,444 | | | | | | 2,844 | | |
| | | | 58th Percentile | | | 55th Percentile | | | 57th Percentile | |
| 52 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | 53 | |
| Executive | | | 2023 ($)(1) | | | 2022 ($)(1) | | | Percent Increase | | |||||||||
| John W. Lindsay | | | | | 1,108,800 | | | | | | 1,056,000 | | | | | | 5.0% | | |
| Mark W. Smith | | | | | 560,000 | | | | | | 530,450 | | | | | | 5.6% | | |
| Cara M. Hair | | | | | 515,000 | | | | | | 490,000 | | | | | | 5.1% | | |
| John R. Bell | | | | | 450,000 | | | | | | 410,000 | | | | | | 9.8% | | |
| Michael P. Lennox | | | | | 440,000 | | | | | | 390,000 | | | | | | 12.8% | | |
| 54 | | | 2024 Proxy Statement | |
| | | | Threshold as a % of Base Salary (50% of Target) | | | Target as a % of Base Salary (100%) | | | Reach as a % of Base Salary (200% of Target) | | |||||||||
| Chief Executive Officer | | | | | 60% | | | | | | 120% | | | | | | 240% | | |
| Chief Financial Officer | | | | | 50% | | | | | | 100% | | | | | | 200% | | |
| Corporate Services, Chief Legal & Compliance Officer | | | | | 50% | | | | | | 100% | | | | | | 200% | | |
| Other Named Executive Officers | | | | | 45% | | | | | | 90% | | | | | | 180% | | |
| 2024 Proxy Statement | | | 55 | |
| Financial Performance | | ||||||||||||||||||||||||||||||||||||||||||
| Performance Measure | | | Threshold ($MM) | | | Target ($MM) | | | Reach ($MM) | | | Actual ($MM) | | | Percent of Target Payout Earned | | | Times Weighting | | | Calculated Payout Factor | | |||||||||||||||||||||
| Annual Measures | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Drilling Services Revenue | | | | | 2,834 | | | | | | 3,114 | | | | | | 3,277 | | | | | | 2,863 | | | | | | 55.18% | | | | | | 20.00% | | | | | | 11.04% | | |
| Modified Cash Flow(1) | | | | | 905 | | | | | | 1,104 | | | | | | 1,267 | | | | | | 961 | | | | | | 64.07% | | | | | | 35.00% | | | | | | 22.42% | | |
| Capital Returned to Stockholders(2) | | | | | 157 | | | | | | 207 | | | | | | 247 | | | | | | 449 | | | | | | 200.00% | | | | | | 15.00% | | | | | | 30.00% | | |
| Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 70.00% | | | | | | 63.46% | | |
| 56 | | | 2024 Proxy Statement | |
| | Operational and Strategic | | | ||||||||||||||||||||
| | Performance Measure | | | | Target | | | | Performance | | | | Target Payout Earned | | | | Weight | | | | Times Weighting | | |
| | Safety (with fatality override)(1) | | | | Provide training on H&P’s LifeBelts to reestablish the LifeBelts as a core part of our prevention of SIF exposures | | | | Global workshops offered and attended by front-line rig site leaders and a 98% completion rate on e-learning training for assigned personnel | | | | 200%(4) | | | | 15% | | | | 30% | | |
| Reduce the rate of serious injuries or fatalities (“SIFs”) incidents(2) involving a LifeBelt(3) breakdown by 15% | | | | ~40% reduction fiscal year over fiscal year | | | |||||||||||||||||
| | Strategic Objectives | | | | Implement engine automation (HMI start/stop) on 75 of our rigs by end of fiscal 2023 | | | | 131% of target met with Driller’s Select(5) engine management automation implemented on 98 of our rigs | | | | 200% | | | | 15% | | | | 30% | | |
| Achieve a completion rate of 98% for new specific training focused on the reduction of GHG emissions from our operations | | | | 101% of target met with over 99% of assigned employee completion | | | |||||||||||||||||
| Satisfy growing customer demand for more technology automation | | | | Average technology product application usage per rig per day rose 28% fiscal year over fiscal year Successfully launched four new technology and automation products in fiscal 2023 | | | |||||||||||||||||
| Establish operating model to enable efficient and effective support of international growth | | | | Developed and deployed a smaller optimized international entry and support model and improved global processes and strategic foreign assignee programs | | | |||||||||||||||||
| Successful start-up of new international operations | | | | Established operations in Australia, drilling two wells; the second well was drilled 40% faster than previous contractor Secured a contract for a rig in Saudi Arabia Established a hub office in the United Arab Emirates with business development and administrative services functions to pursue regional growth opportunities Delivered a rig to the United Arab Emirates (“UAE”) for regional opportunities | | | |||||||||||||||||
| Establish DE&I framework for international employees | | | | Global framework created and deployed to align DE&I objectives as locally relevant and globally consistent | | | |||||||||||||||||
| Continue to integrate DE&I concepts into H&P’s talent management programs | | | | Integrated DE&I concepts into internship, on-boarding, organizational health, field leadership coaching, organizational health training, and employee survey programs | | |
| 2024 Proxy Statement | | | 57 | |
| Executive | | | Base Salary ($) | | | Target Bonus Opportunity as % of Salary | | | STI Plan Payout Factor | | | Total STI Plan Award ($) | | ||||||||||||
| John W. Lindsay | | | | | 1,108,800 | | | | | | 120% | | | | | | 123.46% | | | | | | 1,642,709 | | |
| Mark W. Smith | | | | | 560,000 | | | | | | 100% | | | | | | 123.46% | | | | | | 691,376 | | |
| Cara M. Hair | | | | | 515,000 | | | | | | 100% | | | | | | 123.46% | | | | | | 635,819 | | |
| John R. Bell | | | | | 450,000 | | | | | | 90% | | | | | | 123.46% | | | | | | 500,013 | | |
| Michael P. Lennox | | | | | 440,000 | | | | | | 90% | | | | | | 123.46% | | | | | | 488,902 | | |
| 58 | | | 2024 Proxy Statement | |
| NEO | | | Target Equity Grant as % of Base Salary (%) | | | Target Value ($) | | ||||||
| John W. Lindsay | | | | | 500 | | | | | | 5,280,000 | | |
| Mark W. Smith | | | | | 300 | | | | | | 1,591,350 | | |
| Cara M. Hair | | | | | 300 | | | | | | 1,470,000 | | |
| John R. Bell | | | | | 300 | | | | | | 1,230,000 | | |
| Michael P. Lennox | | | | | 300 | | | | | | 1,170,000 | | |
| PSU Peer Group | | |||
| Archrock, Inc. | | | Nabors Industries Ltd. | |
| Baker Hughes Company | | | NOV Inc. | |
| Bristow Group Inc. | | | Oceaneering International, Inc. | |
| ChampionX Corporation | | | Oil States International, Inc. | |
| Core Laboratories N.V. | | | Patterson-UTI Energy, Inc. | |
| DMC Global Inc. | | | ProPetro Holding Corp. | |
| Dril-Quip, Inc. | | | RPC, Inc. | |
| Halliburton Company | | | Schlumberger Limited | |
| Helix Energy Solutions Group, Inc. | | | U.S. Silica Holdings, Inc. | |
| 2024 Proxy Statement | | | 59 | |
| The Company’s TSR Percentile Ranking Relative to the Applicable Peer Group | | | Vested Percentage of the Subject PSUs (%) | | | The Company’s Performance Category | | |||
| Greater than or Equal to 85th Percentile | | | | | 200 | | | | Maximum Performance | |
| Equal to 75th Percentile | | | | | 150 | | | | | |
| Equal to 65th Percentile | | | | | 125 | | | | | |
| Equal to 55th Percentile | | | | | 100 | | | | Target Performance | |
| Equal to 45th Percentile | | | | | 75 | | | | | |
| Equal to 35th Percentile | | | | | 50 | | | | Threshold Performance | |
| Less than 35th Percentile | | | | | 0 | | | | Below Threshold Performance | |
| NEO | | | 2023 Target PSUs Awarded(1) | | | 2023 Grant Date Value ($) | | | 2022 Target PSUs Awarded(2) | | | 2022 Grant Date Value ($) | | | 2021 Target PSUs Awarded(3)(4) | | | 2021 Grant Date Value ($) | | ||||||||||||||||||
| John W. Lindsay | | | | | 48,616 | | | | | | 2,639,904 | | | | | | 76,559 | | | | | | 2,306,186 | | | | | | 101,285 | | | | | | 2,306,250 | | |
| Mark W. Smith | | | | | 14,651 | | | | | | 795,566 | | | | | | 23,505 | | | | | | 708,043 | | | | | | 31,099 | | | | | | 708,125 | | |
| Cara M. Hair | | | | | 13,534 | | | | | | 734,914 | | | | | | 20,539 | | | | | | 618,698 | | | | | | 27,174 | | | | | | 618,750 | | |
| John R. Bell | | | | | 11,324 | | | | | | 614,905 | | | | | | 18,165 | | | | | | 547,186 | | | | | | 24,034 | | | | | | 547,250 | | |
| Michael P. Lennox | | | | | 10,770 | | | | | | 584,828 | | | | | | 16,271 | | | | | | 490,131 | | | | | | 21,528 | | | | | | 490,188 | | |
| 60 | | | 2024 Proxy Statement | |
| NEO | | | 2021 PSUs Earned | | | Market Value as of Dec. 31, 2023 ($) | | ||||||
| John W. Lindsay | | | | | 52,982 | | | | | | 1,919,008 | | |
| Mark W. Smith | | | | | 16,268 | | | | | | 589,227 | | |
| Cara M. Hair | | | | | 14,214 | | | | | | 514,831 | | |
| John R. Bell | | | | | 12,572 | | | | | | 455,358 | | |
| Michael P. Lennox | | | | | 11,261 | | | | | | 407,873 | | |
| TSR(1) | | | | | 52.3% | | | | | | | | |
| NEO | | | Shares of Restricted Stock Granted in Dec. 2022 | | | Grant Date Value ($) | | ||||||
| John W. Lindsay | | | | | 59,126 | | | | | | 2,639,976 | | |
| Mark W. Smith | | | | | 17,820 | | | | | | 795,663 | | |
| Cara M. Hair | | | | | 16,461 | | | | | | 734,984 | | |
| John R. Bell | | | | | 13,773 | | | | | | 614,964 | | |
| Michael P. Lennox | | | | | 13,101 | | | | | | 584,960 | | |
| 2024 Proxy Statement | | | 61 | |
| 62 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | 63 | |
| 64 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | 65 | |
| Name and Principal Position | | | Year | | | Salary(1) ($) | | | Stock Awards(2) ($) | | | Non-Equity Incentive Plan Compensation(3) ($) | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings(4) ($) | | | All Other Compensation(5) ($) | | | Total ($) | | |||||||||||||||||||||
| John W. Lindsay, President and Chief Executive Officer | | | | | 2023 | | | | | | 1,094,586 | | | | | | 5,279,880 | | | | | | 1,642,709 | | | | | | — | | | | | | 578,788 | | | | | | 8,595,963 | | |
| | | 2022 | | | | | | 1,088,269 | | | | | | 4,612,431 | | | | | | 1,854,204 | | | | | | — | | | | | | 445,969 | | | | | | 8,000,873 | | | |||
| | | 2021 | | | | | | 1,025,000 | | | | | | 5,321,503 | | | | | | 1,750,444 | | | | | | 11,527 | | | | | | 359,836 | | | | | | 8,468,309 | | | |||
| Mark W. Smith, Senior Vice President and Chief Financial Officer | | | | | 2023 | | | | | | 552,046 | | | | | | 1,591,229 | | | | | | 691,376 | | | | | | — | | | | | | 190,937 | | | | | | 3,025,588 | | |
| | | 2022 | | | | | | 546,692 | | | | | | 1,416,167 | | | | | | 762,058 | | | | | | — | | | | | | 141,495 | | | | | | 2,866,412 | | | |||
| | | 2021 | | | | | | 515,000 | | | | | | 1,633,942 | | | | | | 719,584 | | | | | | — | | | | | | 104,948 | | | | | | 2,973,474 | | | |||
| Cara M. Hair, Senior Vice President, Corporate Services and Chief Legal and Compliance Officer | | | | | 2023 | | | | | | 508,270 | | | | | | 1,469,898 | | | | | | 635,819 | | | | | | — | | | | | | 164,220 | | | | | | 2,778,207 | | |
| | | 2022 | | | | | | 480,077 | | | | | | 1,237,439 | | | | | | 703,946 | | | | | | — | | | | | | 114,277 | | | | | | 2,535,739 | | | |||
| | | 2021 | | | | | | 450,000 | | | | | | 1,427,722 | | | | | | 523,969 | | | | | | — | | | | | | 101,265 | | | | | | 2,502,956 | | | |||
| John R. Bell, Senior Vice President, International and Offshore Operations, Drilling Subsidiary | | | | | 2023 | | | | | | 439,232 | | | | | | 1,229,870 | | | | | | 500,013 | | | | | | | | | | | | 161,249 | | | | | | 2,330,364 | | |
| | | 2022 | | | | | | 422,538 | | | | | | 1,094,425 | | | | | | 523,570 | | | | | | | | | | | | 104,151 | | | | | | 2,144,684 | | | |||
| | | 2021 | | | | | | 398,000 | | | | | | 1,262,744 | | | | | | 463,421 | | | | | | 8,343 | | | | | | 92,927 | | | | | | 2,225,435 | | | |||
| Michael P. Lennox, Senior Vice President, US Land Operations of Drilling Subsidiary | | | | | 2023 | | | | | | 426,539 | | | | | | 1,169,788 | | | | | | 488,902 | | | | | | — | | | | | | 142,589 | | | | | | 2,227,818 | | |
| | | 2022 | | | | | | 395,981 | | | | | | 980,319 | | | | | | 498,030 | | | | | | — | | | | | | 112,212 | | | | | | 1,986,542 | | | |||
| | | 2021 | | | | | | 356,500 | | | | | | 1,131,066 | | | | | | 415,100 | | | | | | — | | | | | | 85,013 | | | | | | 1,987,679 | | |
| John W. Lindsay | | | $6,599,760 | | | Mark W. Smith | | | $1,988,916 | | | Michael P. Lennox | | | $1,462,071 | |
| Cara M. Hair | | | $1,837,286 | | | John R. Bell | | | $1,537,264 | | | | | | | |
| 66 | | | 2024 Proxy Statement | |
| John W. Lindsay | | | $16,500 | | | Mark W. Smith | | | $16,857 | | | Michael P. Lennox | | | $15,313 | |
| Cara M. Hair | | | $16,500 | | | John R. Bell | | | $16,500 | | | | | | | |
| John W. Lindsay | | | $131,276 | | | Mark W. Smith | | | $49,375 | | | Michael P. Lennox | | | $29,152 | |
| Cara M. Hair | | | $34,300 | | | John R. Bell | | | $31,429 | | | | | | | |
| John W. Lindsay | | | $329,450 | | | Mark W. Smith | | | $100,520 | | | Michael P. Lennox | | | $70,680 | |
| Cara M. Hair | | | $88,717 | | | John R. Bell | | | $77,675 | | | | | | | |
| John W. Lindsay | | | $15,571 | | | Mark W. Smith | | | $9,974 | | | Michael P. Lennox | | | $5,882 | |
| Cara M. Hair | | | $7,154 | | | John R. Bell | | | $9,500 | | | | | | | |
| 2024 Proxy Statement | | | 67 | |
| Name | | | Grant Date | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units(3) (#) | | | Grant Date Fair Value of Stock Awards(4) ($) | | |||||||||||||||||||||||||||||||||||||||
| Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold (#) | | | Target (#) | | | Maximum (#) | | |||||||||||||||||||||||||||||||||||||||
| John W. Lindsay | | | | | | | | | | | 665,280 | | | | | | 1,330,560 | | | | | | 2,661,120 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 12/9/2022 | | | | | | | | | | | | | | | | | | | | | | | | 18,231 | | | | | | 48,616 | | | | | | 121,540 | | | | | | | | | | | | 2,639,904 | | | |||
| | | 12/9/2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 59,126 | | | | | | 2,639,976 | | | |||
| Mark W. Smith | | | | | | | | | | | 280,000 | | | | | | 560,000 | | | | | | 1,120,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 12/9/2022 | | | | | | | | | | | | | | | | | | | | | | | | 5,493 | | | | | | 14,651 | | | | | | 36,627 | | | | | | | | | | | | 795,566 | | | |||
| | | 12/9/2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 17,820 | | | | | | 795,663 | | | |||
| Cara M. Hair | | | | | | | | | | | 257,500 | | | | | | 515,000 | | | | | | 1,030,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 12/9/2022 | | | | | | | | | | | | | | | | | | | | | | | | 5,075 | | | | | | 13,534 | | | | | | 33,835 | | | | | | | | | | | | 734,914 | | | |||
| | | 12/9/2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 16,461 | | | | | | 734,984 | | | |||
| John R. Bell | | | | | | | | | | | 202,500 | | | | | | 405,000 | | | | | | 810,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 12/9/2022 | | | | | | | | | | | | | | | | | | | | | | | | 4,246 | | | | | | 11,324 | | | | | | 28,310 | | | | | | | | | | | | 614,905 | | | |||
| | | 12/9/2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 13,773 | | | | | | 614,964 | | | |||
| Michael P. Lennox | | | | | | | | | | | 198,000 | | | | | | 396,000 | | | | | | 792,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 12/9/2022 | | | | | | | | | | | | | | | | | | | | | | | | 4,038 | | | | | | 10,770 | | | | | | 26,925 | | | | | | | | | | | | 584,828 | | | |||
| | | 12/9/2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 13,101 | | | | | | 584,960 | | |
| 68 | | | 2024 Proxy Statement | |
| Executive | | | Option Awards | | | Stock Awards | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grant Date | | | Number of Securities Underlying Unexercised Options Exercisable (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested(3) ($) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4) (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3) ($) | | |||||||||||||||||||||||||||||||||||||||
| RSAs(1) | | | PSUs(2) | | | RSAs | | | PSUs | | |||||||||||||||||||||||||||||||||||||||||||||||||||
| John W. Lindsay | | | | | 12/3/2013 | | | | | | 62,500 | | | | | | 79.67 | | | | | | 12/3/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 12/2/2014 | | | | | | 112,000 | | | | | | 68.83 | | | | | | 12/2/2024 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 11/30/2015 | | | | | | 185,000 | | | | | | 58.25 | | | | | | 11/30/2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 12/5/2016 | | | | | | 96,594 | | | | | | 81.31 | | | | | | 12/5/2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 12/4/2017 | | | | | | 185,811 | | | | | | 58.43 | | | | | | 12/4/2027 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 11/04/2019 | | | | | | | | | | | | | | | | | | | | | | | | 15,554 | | | | | | | | | | | | 655,757 | | | | | | | | | | | | | | | | | | | | | |||
| | | 12/11/2020 | | | | | | | | | | | | | | | | | | | | | | | | 30,374 | | | | | | 53,833 | | | | | | 1,280,568 | | | | | | 2,269,599 | | | | | | 74,902 | | | | | | 3,157,868 | | | |||
| | | 12/10/2021 | | | | | | | | | | | | | | | | | | | | | | | | 61,822 | | | | | | 29,575 | | | | | | 2,606,416 | | | | | | 1,246,882 | | | | | | 67,009 | | | | | | 2,825,099 | | | |||
| | | 12/9/2022 | | | | | | | | | | | | | | | | | | | | | | | | 59,126 | | | | | | | | | | | | 2,492,752 | | | | | | | | | | | | 50,533 | | | | | | 2,130,471 | | | |||
| Mark W. Smith | | | | | 5/1/2018 | | | | | | 23,915 | | | | | | 68.90 | | | | | | 5/1/2028 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 11/4/2019 | | | | | | | | | | | | | | | | | | | | | | | | 4,781 | | | | | | | | | | | | 201,567 | | | | | | | | | | | | | | | | | | | | | |||
| | | 12/11/2020 | | | | | | | | | | | | | | | | | | | | | | | | 9,326 | | | | | | 16,528 | | | | | | 393,184 | | | | | | 696,820 | | | | | | 22,998 | | | | | | 969,596 | | | |||
| | | 12/10/2021 | | | | | | | | | | | | | | | | | | | | | | | | 18,982 | | | | | | 9,078 | | | | | | 800,281 | | | | | | 382,728 | | | | | | 20,573 | | | | | | 867,358 | | | |||
| | | 12/9/2022 | | | | | | | | | | | | | | | | | | | | | | | | 17,820 | | | | | | | | | | | | 751,291 | | | | | | | | | | | | 15,228 | | | | | | 642,012 | | | |||
| Cara M. Hair | | | | | 12/2/2014 | | | | | | 5,000 | | | | | | 68.83 | | | | | | 12/2/2024 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 11/30/2015 | | | | | | 31,000 | | | | | | 58.25 | | | | | | 11/30/2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 12/5/2016 | | | | | | 19,026 | | | | | | 81.31 | | | | | | 12/5/2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 12/4/2017 | | | | | | 38,851 | | | | | | 58.43 | | | | | | 12/4/2027 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 11/4/2019 | | | | | | | | | | | | | | | | | | | | | | | | 3,968 | | | | | | | | | | | | 167,291 | | | | | | | | | | | | | | | | | | | | | |||
| | | 12/11/2020 | | | | | | | | | | | | | | | | | | | | | | | | 8,149 | | | | | | 14,442 | | | | | | 343,562 | | | | | | 608,875 | | | | | | 20,095 | | | | | | 847,205 | | | |||
| | | 12/10/2021 | | | | | | | | | | | | | | | | | | | | | | | | 16,586 | | | | | | 7,934 | | | | | | 699,266 | | | | | | 334,497 | | | | | | 17,977 | | | | | | 757,910 | | | |||
| | | 12/9/2022 | | | | | | | | | | | | | | | | | | | | | | | | 16,461 | | | | | | | | | | | | 693,996 | | | | | | | | | | | | 14,067 | | | | | | 593,065 | | | |||
| John R. Bell | | | | | 12/3/2013 | | | | | | 8,500 | | | | | | 79.67 | | | | | | 12/3/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 12/2/2014 | | | | | | 22,500 | | | | | | 68.83 | | | | | | 12/2/2024 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 11/30/2015 | | | | | | 41,000 | | | | | | 58.25 | | | | | | 11/30/2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 12/5/2016 | | | | | | 22,485 | | | | | | 81.31 | | | | | | 12/5/2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 12/4/2017 | | | | | | 43,919 | | | | | | 58.43 | | | | | | 12/4/2027 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 11/4/2019 | | | | | | | | | | | | | | | | | | | | | | | | 3,627 | | | | | | | | | | | | 152,914 | | | | | | | | | | | | | | | | | | | | | |||
| | | 12/11/2020 | | | | | | | | | | | | | | | | | | | | | | | | 7,208 | | | | | | 12,774 | | | | | | 303,889 | | | | | | 538,552 | | | | | | 17,773 | | | | | | 749,310 | | | |||
| | | 12/10/2021 | | | | | | | | | | | | | | | | | | | | | | | | 14,670 | | | | | | 7,017 | | | | | | 618,487 | | | | | | 295,837 | | | | | | 15,899 | | | | | | 670,302 | | | |||
| | | 12/9/2022 | | | | | | | | | | | | | | | | | | | | | | | | 13,773 | | | | | | | | | | | | 580,670 | | | | | | | | | | | | 11,770 | | | | | | 496,223 | | | |||
| Michael P. Lennox | | | | | 11/30/2015 | | | | | | 8,400 | | | | | | 58.25 | | | | | | 11/30/2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 12/4/2017 | | | | | | 35,012 | | | | | | 58.43 | | | | | | 12/4/2027 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 11/4/2019 | | | | | | | | | | | | | | | | | | | | | | | | 3,246 | | | | | | | | | | | | 136,851 | | | | | | | | | | | | | | | | | | | | | |||
| | | 12/11/2020 | | | | | | | | | | | | | | | | | | | | | | | | 6,456 | | | | | | 11,442 | | | | | | 272,185 | | | | | | 482,395 | | | | | | 15,920 | | | | | | 671,187 | | | |||
| | | 12/10/2021 | | | | | | | | | | | | | | | | | | | | | | | | 13,140 | | | | | | 6,284 | | | | | | 553,982 | | | | | | 264,933 | | | | | | 14,242 | | | | | | 600,443 | | | |||
| | | 12/9/2022 | | | | | | | | | | | | | | | | | | | | | | | | 13,101 | | | | | | | | | | | | 552,338 | | | | | | | | | | | | 11,194 | | | | | | 471,939 | | |
| 2024 Proxy Statement | | | 69 | |
| Grant Date | | | Vesting Schedule | |
| 11/04/2019 | | | fully vest on 11/04/2023 | |
| 12/11/2020 | | | fully vest on 12/11/2023 | |
| 12/10/2021 | | | ratably on each of the following dates: 12/10/2023, 12/10/2024 | |
| 12/9/2022 | | | ratably on each of the following dates: 12/9/2023, 12/9/2024, 12/9/2025 | |
| Grant Date | | | Vesting Schedule | |
| 12/11/2020 | | | fully vest on 12/31/2023 | |
| 12/10/2021 | | | fully vest on 12/31/2024 | |
| | | | Stock Awards | | |||||||||
| Name | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($)(1) | | ||||||
| John W. Lindsay | | | | | 180,029 | | | | | $ | 8,724,361 | | |
| Mark W. Smith | | | | | 54,983 | | | | | $ | 2,664,733 | | |
| Cara M. Hair | | | | | 46,566 | | | | | $ | 2,253,617 | | |
| John R. Bell | | | | | 42,256 | | | | | $ | 2,046,781 | | |
| Michael P. Lennox | | | | | 37,832 | | | | | $ | 1,832,451 | | |
| 70 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | 71 | |
| Name | | | Plan Name | | | Number of Years Credited Service (#) | | | Present Value of Accumulated Benefit ($)(1) | | | Payments During Last Fiscal Year ($) | | |||||||||
| John W. Lindsay | | | Pension Plan | | | | | 36 | | | | | | 386,253 | | | | | | — | | |
| Supplemental Pension Plan | | | | | 36 | | | | | | 62,469 | | | | | | — | | | |||
| John R. Bell | | | Pension Plan | | | | | 25 | | | | | | 45,286 | | | | | | — | | |
| Name | | | Executive Contributions for FY 2023(1)(3) ($) | | | Registrant Contributions for FY 2023(1)(4) ($) | | | Aggregate Earnings in Last FY(2) ($) | | | Aggregate Withdrawals/ Distributions ($) | | | Aggregate Balance at Last FYE(3) ($) | | |||||||||||||||
| John W. Lindsay | | | | | 275,862 | | | | | | 131,276 | | | | | | 386,769 | | | | | | 380,629 | | | | | | 3,320,296 | | |
| Mark W. Smith | | | | | 62,171 | | | | | | 49,375 | | | | | | 31,647 | | | | | | — | | | | | | 416,742 | | |
| Cara M. Hair | | | | | 35,579 | | | | | | 34,300 | | | | | | 72,605 | | | | | | 37,695 | | | | | | 452,954 | | |
| John R. Bell | | | | | 33,959 | | | | | | 31,429 | | | | | | 43,209 | | | | | | 53,243 | | | | | | 354,831 | | |
| Michael P. Lennox | | | | | 63,223 | | | | | | 29,152 | | | | | | 44,836 | | | | | | — | | | | | | 395,446 | | |
| John W. Lindsay | | | $3,016,837 | | | Mark W. Smith | | | $324,374 | | | Michael P. Lennox | | | $171,349 | |
| Cara M. Hair | | | $309,542 | | | John R. Bell | | | $326,292 | | | | | | | |
| 72 | | | 2024 Proxy Statement | |
| Name | | | Severance(1) ($) | | | Bonus(2) ($) | | | Continued Benefits(3) ($) | | | Outplacement Services(4) ($) | | | Stock Award Accelerated(5) ($) | | | Total ($) | | ||||||||||||||||||
| John W. Lindsay | | | | | 8,889,012 | | | | | | 1,854,204 | | | | | | 376,439 | | | | | | 7,500 | | | | | | 18,665,412 | | | | | | 29,792,567 | | |
| Mark W. Smith | | | | | 2,644,115 | | | | | | 762,058 | | | | | | 176,302 | | | | | | 7,500 | | | | | | 5,704,838 | | | | | | 9,294,813 | | |
| Cara M. Hair | | | | | 2,437,893 | | | | | | 703,946 | | | | | | 127,890 | | | | | | 7,500 | | | | | | 5,045,666 | | | | | | 8,322,895 | | |
| John R. Bell | | | | | 1,947,140 | | | | | | 523,570 | | | | | | 156,894 | | | | | | 7,500 | | | | | | 4,406,183 | | | | | | 7,041,287 | | |
| Michael P. Lennox | | | | | 1,876,060 | | | | | | 498,030 | | | | | | 142,486 | | | | | | 7,500 | | | | | | 4,006,254 | | | | | | 6,530,330 | | |
| 2024 Proxy Statement | | | 73 | |
| In accordance with Section 14A of the Exchange Act and the related rules of the SEC, the Company is requesting stockholder approval, on an advisory basis, of the compensation of the Company’s named executive officers as disclosed in this proxy statement. The Human Resources Committee has overseen the development of a compensation program that is described more fully in the “Compensation Discussion and Analysis” section of this proxy statement, including the related compensation tables and narrative. Our compensation program is designed to attract and retain qualified executives who are critical to the successful implementation of our strategic business plan. Further, we believe that our compensation program promotes a performance-based culture and aligns the interests of executives with those of stockholders by linking a substantial portion of compensation to the Company’s performance. It balances short-term and long-term compensation opportunities to ensure that the Company meets short-term objectives while continuing to produce value for our stockholders over the long-term. The Company believes that its compensation program is appropriate and has served to accomplish the goals mentioned above. In deciding how to vote on this proposal, the Board urges you to consider the “Compensation Discussion and Analysis” section of this proxy statement. For the reasons discussed, the Board recommends a vote in favor of the following resolution: | | | | Board Recommendation The Board unanimously recommends a vote FOR approval, on an advisory basis, of the compensation of the Company’s named executive officers as disclosed in this proxy statement. | |
| “Resolved, that the stockholders of the Company approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed pursuant to the SEC’s compensation disclosure rules (which disclosure includes the Compensation Discussion and Analysis, the compensation tables and the related narrative disclosure contained in the proxy statement).” | | | | | |
| As an advisory vote, this proposal is not binding on the Company. However, the Human Resources Committee, which is responsible for designing and administering the Company’s executive compensation program, values the opinions expressed by stockholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for named executive officers. Our Board currently holds advisory votes on executive compensation on an annual basis and, unless the Board changes this policy the next such vote after the 2024 Annual Meeting will be held at our 2025 annual meeting of stockholders. | | | | | |
| 74 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | 75 | |
| | | | | | | Value of Initial Fixed $100 Investment Based On:(4) | | | | | |||||||||||||||||||||||||||||||||||||||
| Year | | | Summary Compensation Table Total for CEO(1) | | | Compensation Actually Paid to CEO(2) | | | Average Summary Compensation Table Total for Non-CEO NEOs(3) | | | Average Compensation Actually Paid to Non-CEO NEOs(2)(3) | | | H&P TSR | | | OSX Index TSR | | | Net Income (Loss) $MM | | | Modified Cash Flow $MM(5) | | ||||||||||||||||||||||||
| 2023 | | | | $ | 8,595,963 | | | | | $ | 8,407,218 | | | | | $ | 2,590,494 | | | | | $ | 2,527,013 | | | | | $ | 324 | | | | | $ | 340 | | | | | $ | 434 | | | | | $ | 961(6)(7)(8) | | |
| 2022 | | | | $ | 8,000,873 | | | | | $ | 15,453,934 | | | | | $ | 2,383,344 | | | | | $ | 4,315,514 | | | | | $ | 271 | | | | | $ | 215 | | | | | $ | 7 | | | | | $ | 448(6)(9) | | |
| 2021 | | | | $ | 8,468,309 | | | | | $ | 11,856,697 | | | | | $ | 2,422,386 | | | | | $ | 3,230,514 | | | | | $ | 195 | | | | | $ | 203 | | | | | $ | (326) | | | | | $ | 102(7)(10) | | |
| 76 | | | 2024 Proxy Statement | |
| Year | | | SCT Total for CEO | | | Minus SCT Change in Pension Value for CEO | | | Minus SCT Equity for CEO | | | Plus EOY Fair Value of Equity Awards Granted During Fiscal Year that are Outstanding and Unvested at EOY | | | Plus (Minus) Change from prior EOY to current EOY in Fair Value of Awards Granted in Any Prior Fiscal Year that are Outstanding and Unvested at EOY | | | Plus (Minus) Change in Fair Value From Prior EOY to Vesting Date of Awards Granted in Any Prior Fiscal Year that Vested During the Fiscal Year | | | CEO CAP | | |||||||||||||||||||||
| 2023 | | | | $ | 8,595,963 | | | | | $ | 0 | | | | | $ | 5,279,880 | | | | | $ | 4,090,335 | | | | | $ | (1,511,400) | | | | | $ | 2,512,200 | | | | | $ | 8,407,218 | | |
| 2022 | | | | $ | 8,000,873 | | | | | $ | 0 | | | | | $ | 4,612,431 | | | | | $ | 7,775,011 | | | | | $ | 4,536,801 | | | | | $ | (246,320) | | | | | $ | 15,453,934 | | |
| 2021 | | | | $ | 8,468,309 | | | | | $ | 11,527 | | | | | $ | 5,321,503 | | | | | $ | 5,827,051 | | | | | $ | 2,472,070 | | | | | $ | 422,297 | | | | | $ | 11,856,697 | | |
| Year | | | Average SCT Total for Non- CEO NEOs | | | Minus Average SCT Change in Pension Value for Non-CEO NEOs | | | Minus Average SCT Equity for Non- CEO NEOs | | | Plus EOY Average Fair Value of Equity Awards Granted During Fiscal Year that are Outstanding and Unvested at EOY | | | Plus (Minus) Average Change from prior EOY to current EOY in Fair Value of Awards Granted in Any Prior Fiscal Year that are Outstanding and Unvested at EOY | | | Plus (Minus) Average Change in Fair Value from Prior EOY to Vesting Date of Awards Granted in Any Prior Fiscal Year that Vested During the Fiscal Year | | | Average Non-CEO NEO CAP | | |||||||||||||||||||||
| 2023 | | | | $ | 2,590,494 | | | | | $ | 0 | | | | | $ | 1,365,196 | | | | | $ | 1,057,639 | | | | | $ | (387,779) | | | | | $ | 631,855 | | | | | $ | 2,527,013 | | |
| 2022 | | | | $ | 2,383,344 | | | �� | | $ | 0 | | | | | $ | 1,182,088 | | | | | $ | 1,992,587 | | | | | $ | 1,153,124 | | | | | $ | (31,453) | | | | | $ | 4,315,514 | | |
| 2021 | | | | $ | 2,422,386 | | | | | $ | 2,086 | | | | | $ | 1,363,869 | | | | | $ | 1,493,438 | | | | | $ | 598,180 | | | | | $ | 82,465 | | | | | $ | 3,230,514 | | |
| Most Important Performance Measures | |
| Modified Cash Flow | |
| Absolute TSR | |
| ROIC | |
| 2024 Proxy Statement | | | 77 | |
| 78 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | 79 | |
| 80 | | | 2024 Proxy Statement | |
| New shares being authorized under the 2024 Plan | | | | | 250,000 | | |
| Shares remaining for grant under the A&R 2020 Plan (which will become available under the 2024 Plan, if approved)(1) | | | | | 1,985,005 | | |
| Stock options outstanding(2) | | | | | 1,912,989 | | |
| Weighted average exercise price | | | $63.55 | | |||
| Weighted average remaining contractual life of stock options | | | | | 2.57 | | |
| Restricted shares outstanding (unvested)(3) | | | | | 1,358,685 | | |
| Performance share units outstanding(4) | | | | | 2,023,832 | | |
| Total number of shares available for awards under the 2024 Plan if this proposal is approved | | | | | 2,235,005 | | |
| 2024 Proxy Statement | | | 81 | |
| | | | Fiscal Year 2023 | | | Fiscal Year 2022 | | | Fiscal Year 2021 | | | Average | | ||||||||||||
| Total Shares Granted During Fiscal Year(1) | | | | | 723,383 | | | | | | 957,106 | | | | | | 994,676 | | | | | | 891,722 | | |
| Basic Weighted Average Common Shares Outstanding | | | | | 102,447,000 | | | | | | 105,891,000 | | | | | | 107,818,000 | | | | | | 105,385,333 | | |
| Burn Rate (A / B) | | | | | 0.71% | | | | | | 0.90% | | | | | | 0.92% | | | | | | 0.85% | | |
| Term | | | Description | |
| Plan Term | | | The 2024 Plan, if approved by our stockholders, will expire on January 15, 2034 (unless terminated earlier by the Board in accordance with the 2024 Plan), but any awards outstanding at the time of such expiration or termination will continue in effect in accordance with their terms. | |
| Eligibility for Grants | | | All employees of the Company and its affiliates (including all officers), as well as all non-employee directors and consultants of the Company and its affiliates, are eligible to participate in the 2024 Plan. The 2024 Plan’s administrator will select in its discretion those individuals who will be granted awards under the 2024 Plan (those selected to participate are called “participants” in this Proposal). As of January 15, 2024, there were approximately 6,321 employees, approximately 634 consultants and 10 non-employee directors who would have been eligible to participate in the 2024 Plan. | |
| Awards Available | | | • ISOs and Nonqualified Stock Options; • Stock Appreciation Rights; • Restricted Shares and Restricted Share Units; • Share Bonuses; • Other Share-Based Awards; and • Cash Awards | |
| 82 | | | 2024 Proxy Statement | |
| Type of Shares Authorized | | | The common shares, par value U.S. $0.10 per share, of the Company are authorized for issuance under the 2024 Plan. As of January 12, 2024, the closing price per share of the Company’s common stock on the New York Stock Exchange was $33.93. Shares issued under the 2024 Plan may, in whole or in part, be authorized but unissued shares or shares that will have been or may be reacquired by the Company in the open market, in private transactions or otherwise. No fractional shares will be issued or delivered pursuant to the 2024 Plan. The plan administrator will determine whether cash, other awards, or other property will be issued or paid in lieu of fractional shares or whether fractional shares or any rights thereto will be forfeited or otherwise eliminated. | |
| Plan Administration | | | The 2024 Plan will be administered by the Board, or if the Board does not administer the Plan, a committee of the Board that complies with the applicable requirements of Section 16 of the Exchange Act and any other applicable legal or stock exchange listing requirements (the Board or such committee is sometimes called the “plan administrator” in this proposal). The initial plan administrator will be the Human Resources Committee. The plan administrator may interpret the 2024 Plan and may prescribe, amend and rescind rules and make all other determinations necessary or desirable for the administration of the 2024 Plan. Without limiting the foregoing paragraph, the plan administrator will have the authority to, among other things, (i) select those individuals who will receive awards under the 2024 Plan, (ii) determine whether and to what extent awards will be granted to participants, (iii) determine the number of shares to be covered by each award granted under the 2024 Plan, (iv) determine the terms and conditions, not inconsistent with the terms of the 2024 Plan, of each award granted under the 2024 Plan, (v) determine fair market value in accordance with the 2024 Plan, (vi) determine duration and purpose of leaves of absence that may be granted to participants without constituting a termination of employment or service; (vii) determine the impact of leaves of absence or changes in employment or service status on awards; (viii) adopt, alter or repeal administrative rules, guidelines or practices, (ix) prescribe, amend and rescind rules and regulations relating to sub-plans under the 2024 Plan for foreign jurisdictions and (x) construe and interpret the terms and provisions of the 2024 Plan and any award issued under the 2024 Plan (and any award agreement relating thereto), and to otherwise supervise the administration of the 2024 Plan and to exercise all powers and authorities either specifically granted under the 2024 Plan or necessary and advisable in the administration of the 2024 Plan. To the extent permitted by applicable law, the Board may, by resolution, authorize one or more employees of the Company to do one or both of the following on the same basis as (and as if the employee for such purposes were) the plan administrator: (i) designate individuals to receive awards and (ii) determine the size and terms and conditions of any such awards. However, the Board may not delegate such responsibilities to any executive officer for awards granted to any individual who is an executive officer, a non-employee director or a more than 10% beneficial owner of any class of the Company’s equity securities, and the resolution providing for such authorization must set forth the total number of common shares the | |
| 2024 Proxy Statement | | | 83 | |
| | | | executive officer may grant during any period. Any such delegate must report periodically to the Board (or applicable committee thereof) regarding the nature and scope of the awards granted pursuant to such delegated authority | |
| | | | All decisions made by the plan administrator pursuant to the provisions of the 2024 Plan will be final, conclusive and binding on all persons, including the Company and the participants. | |
| Share Counting | | | • The following shares will not be added to the number of shares authorized for issuance under the 2024 Plan: (i) shares exchanged or withheld as payment in connection with the exercise of an Option or SAR or the payment of any purchase price with respect to any other award; (ii) shares exchanged or withheld to satisfy tax withholding obligations with respect to awards; (iii) shares subject to SARs that are not issued in connection with stock settlement on exercise thereof; and (iv) shares reacquired by the Company on the open market (or otherwise) using the cash proceeds of Option exercises. • If any shares subject to an award granted under the 2024 Plan or granted under the A&R 2020 Plan as of January 2, 2024, are forfeited, cancelled, exchanged or surrendered or if such award otherwise terminates or expires without a distribution of shares to the participant (including by virtue of cash settlement), the shares with respect to such award will, to the extent of any such forfeiture, cancellation, exchange, surrender, termination or expiration, again be available (or be made available) for awards under the 2024 Plan. Any such shares that are subject to “full value” awards under the A&R 2020 Plan will be added back as two shares for each share made available under the award, consistent with the terms of the A&R 2020 Plan. Shares underlying awards that can only be settled in cash will not be counted against the aggregate number of shares available for awards under the 2024 Plan. • Upon the exercise of any award granted in tandem with any other awards, the unexercised tandem award will be cancelled to the extent of the number of shares as to which the related award is exercised and such number of shares will no longer be available for awards under the 2024 Plan. | |
| Non-Employee Director Awards | | | The total compensation paid to any one non-employee director during any grant year will not exceed $700,000 including the aggregate fair market value on the date of grant of shares subject to awards granted under the 2024 Plan and any cash compensation paid or payable (whether under or outside the 2024 Plan). This limit will be determined without regard to amounts paid to a non-employee director during or for any period in which such individual was an employee or consultant, and any severance and other payments paid to a non-employee director for such director’s prior or current service other than serving as a director will not be taken into account in applying this limit. | |
| 84 | | | 2024 Proxy Statement | |
| Repricing Prohibited; No Reload Options | | | Unless approved by our stockholders or otherwise specifically provided under the 2024 Plan in connection with any equitable adjustment upon a change in control, the Company may not reprice or cancel and regrant any award at a lower exercise, base or purchase price or cancel any award with an exercise, base or purchase price in exchange for cash, property or other awards. Reload options are also prohibited under the 2024 Plan. | |
| Effect of Termination of Service | | | Unless otherwise provided in an applicable award agreement: (i) if a participant’s employment with the Company, a subsidiary or an affiliate terminates as a result of death, disability, or retirement, the participant (or personal representative in the case of death) will be entitled to exercise all or any part of any (A) vested ISO for a period of up to three months from such date of termination (one year in the case of death or disability in lieu of the three-month period), or (B) a vested SAR or vested nonqualified stock option during the remaining term of such SAR or nonqualified stock option; (ii) if a participant’s employment terminates for any other reason, the participant will, except where an award is subject to a clawback or recoupment provision of applicable law or an award agreement, be entitled to exercise all or any part of any vested Option or SAR for a period of up to three months from the date of termination. In no event will any Option or SAR be exercisable past the term established in the award agreement. Any vested Option or SAR which is not exercised will expire upon the earlier of (i) the period described in the foregoing provisions or other applicable date provided in the award agreement or (ii) the expiration of its term. Unless otherwise accelerated or where an award agreement or the plan administrator provides for continued vesting after termination of employment, all unvested awards will be forfeited upon termination of employment. | |
| Special Provisions for Options | | |||
| General Description | | | Awards may be in the form of Options, which are rights to purchase a specified number of shares of common stock at a specified price not less than that of the fair market value of a share of common stock on the date of grant. An Option may be either an ISO or a nonqualified stock option. | |
| Number Granted | | | As determined by the plan administrator. | |
| Per-Share Exercise Price | | | Not less than the fair market value of a share of Company common stock on the grant date (other than in the case of substitute awards upon an equitable adjustment). The fair market value for this purpose is the closing price of our common stock as reported on the New York Stock Exchange on the grant date (or, if such date is not a trading day, on the last preceding date that was a trading day). | |
| Vesting and Exercise Periods | | | As determined by the plan administrator, subject to the 2024 Plan’s one-year minimum vesting condition and any exceptions thereto. However, the term of Options may not exceed ten years. | |
| 2024 Proxy Statement | | | 85 | |
| Exercise Methods | | | Options may be exercised in whole or in part by giving written notice of exercise to the Company specifying the number of whole shares to be purchased, accompanied by payment in full of the aggregate exercise price of the shares so purchased in cash or its equivalent, as determined by the plan administrator. As determined by the plan administrator, in its sole discretion, with respect to any Option or category of Options, payment in whole or in part may also be made (i) by means of consideration received under any cashless exercise procedure approved by the plan administrator (including the withholding of shares otherwise issuable upon exercise), (ii) in the form of unrestricted shares already owned by the participant which have a fair market value on the date of surrender equal to the aggregate exercise price of the shares as to which the Option is exercised, (iii) any other form of consideration approved by the plan administrator and permitted by applicable law or (iv) any combination of the foregoing. | |
| Incentive Stock Options (ISOs) | | | All of the shares available for grant under the 2024 Plan may be made subject to ISOs. ISOs must satisfy requirements prescribed by the Code to qualify for special tax treatment. | |
| Dividends and Distributions | | | Dividends and distributions are not permitted to be paid on the shares subject to outstanding Options. | |
| Special Provisions for SARs | | |||
| General Description | | | Awards may be in the form of SARs, which are rights to receive a payment, in cash or shares of common stock, equal to the fair market value or other specified value of a number of shares on the rights exercise date over a specified strike price not less than the fair market value of a share of common stock on the date of grant. SARs may be granted alone or in conjunction with any Option granted under the 2024 Plan. | |
| Form of Settlement | | | SARs may be paid in shares, cash or a combination of shares and cash, as determined by the plan administrator. | |
| Exercise | | | Upon exercise of a SAR, the SAR grantee will receive an amount equal to the excess of the fair market value of the shares on the date the exercise election is received by the Company, over the base price of the SAR on the date of grant (which may not be less than the fair market value of the shares on the date of grant) multiplied by the number of shares with respect to which the SAR is exercised. | |
| Number Granted | | | As determined by the plan administrator. | |
| Dividends and Distributions | | | Dividends and distributions may not be paid on the shares subject to outstanding SARs. | |
| Vesting and Exercise Periods | | | As determined by the plan administrator, subject to the 2024 Plan’s one-year minimum vesting condition and any exceptions thereto. However, the term of SARs may not exceed ten years. | |
| 86 | | | 2024 Proxy Statement | |
| Special Provisions for Restricted Shares and Restricted Share Units | | |||
| General Description | | | Awards may also be in the form of grants of common stock or units denominated in common stock, including Restricted Shares and Restricted Share Units, that in each case, are subject to the terms and conditions as the plan administrator prescribes (which may include performance vesting conditions). Restricted Shares constitute actual shares of common stock that remain subject to forfeiture until the vesting conditions thereon lapse. Restricted Share Units constitute awards valued by reference to shares of common stock which become payable in shares of common stock and/or cash when the vesting conditions thereon lapse. | |
| Number Granted | | | As determined by the plan administrator. The plan administrator will determine the purchase price, if any. | |
| Lapse of Restrictions | | | All restrictions imposed under the Restricted Shares or Restricted Share Units lapse upon the expiration of the restricted period if the applicable vesting conditions have been met. Upon the lapse of restrictions, Restricted Shares become unrestricted shares of common stock and Restricted Share Units become payable (although payouts can be made on or after the vesting of the Restricted Share Units depending on the terms and conditions of such award and subject to the requirements of Section 409A of the Code). Payouts of Restricted Share Units may be in the form of shares of common stock, cash or any combination of shares and cash as determined by the plan administrator. | |
| Stockholder Rights | | | Except as otherwise provided in an award agreement, participants generally have the rights of a stockholder of the Company with respect to Restricted Shares during the applicable restricted period, including the right to vote such shares and to receive dividends on such shares. Participants generally do not have the rights of a stockholder with respect to shares subject to Restricted Share Units during the restricted period; provided, however, that an amount equal to dividends declared during the restricted period with respect to the number of shares covered by Restricted Share Units may, to the extent set forth in an award agreement, be provided to the participant upon settlement of the Restricted Share Units. | |
| Shares Bonuses, Other Share-Based Awards and Cash Awards | | | Share Bonuses (fully vested share awards), Other Share-Based Awards (awards denominated in shares other than those described above, including dividend equivalents) and Cash Awards (awards solely payable in cash) may be granted in the amounts and on the terms and conditions as the plan administrator determines. The plan administrator will determine the purchase price, if any. | |
| 2024 Proxy Statement | | | 87 | |
| 88 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | 89 | |
| 90 | | | 2024 Proxy Statement | |
In accordancelater calendar year. As a result, compensation paid to such individuals, whether under the 2024 Plan or otherwise, in excess of $1 million per year will not be deductible by the Company to the extent Section 162(m) of the Code applies to the payment.
| 2024 Proxy Statement | | | 91 | |
| Our Board has adopted the Helmerich & Payne, Inc. 2024 Omnibus Incentive Plan, subject to stockholder approval, and unanimously recommends a vote FOR approval of the Helmerich & Payne, Inc. 2024 Omnibus Incentive Plan. | |
| 92 | | | 2024 Proxy Statement | |
| Plan Category | | | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | | | Weighted-average exercise price of outstanding options, warrants and rights (b) | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | | |||||||||
| Equity compensation plans approved by security holders(1) | | | | | 2,910,427 | | | | | $ | 65.08(2) | | | | | | 5,539,588(3) | | |
| Equity compensation plans not approved by security holders(4) | | | | | — | | | | | | — | | | | | | — | | |
| Total | | | | | 2,910,427 | | | | | | | | | | | | 5,539,588 | | |
| 2024 Proxy Statement | | | 93 | |
| Name and Address of Beneficial Owner | | | Title of Class | | | Amount and Nature of Beneficial Ownership | | | Percent of Class | | ||||||
| BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | | | Common Stock | | | | | 17,591,785(1) | | | | | | 17.6% | | |
| The Vanguard Group, Inc. 100 Vanguard Blvd. Malvern, PA 19355 | | | Common Stock | | | | | 11,865,323(2) | | | | | | 11.9% | | |
| State Farm Mutual Automobile Insurance Company One State Farm Plaza Bloomington, IL 61710 | | | Common Stock | | | | | 8,257,200(3) | | | | | | 8.3% | | |
| AllianceBernstein L.P 1345 Avenue of the Americas New York, NY 10105 | | | Common Stock | | | | | 5,394,766(4) | | | | | | 5.4% | | |
| 94 | | | 2024 Proxy Statement | |
| Directors and Named Executive Officers | | | Title of Class | | | Amount and Nature of Beneficial Ownership(1) | | | Percent of Class(2) (%) | | ||||||
| Hans Helmerich | | | Common Stock | | | | | 2,149,791(3)(4)(5)(6) | | | | | | 2.15 | | |
| John W. Lindsay | | | Common Stock | | | | | 1,084,429(4)(5)(6)(9) | | | | | | 1.08 | | |
| John R. Bell | | | Common Stock | | | | | 270,278(4)(5)(6)(9) | | | | | | | | |
| Cara M. Hair | | | Common Stock | | | | | 213,232(4)(5)(9) | | | | | | | | |
| Mark W. Smith | | | Common Stock | | | | | 145,353(4)(5)(9) | | | | | | | | |
| Michael P. Lennox | | | Common Stock | | | | | 133,852(4)(5)(9) | | | | | | | | |
| John D. Zeglis | | | Common Stock | | | | | 88,890(4)(5) | | | | | | | | |
| Thomas A. Petrie | | | Common Stock | | | | | 68,464(4)(5)(8) | | | | | | | | |
| Randy A. Foutch | | | Common Stock | | | | | 59,397(4)(8) | | | | | | | | |
| Donald F. Robillard, Jr. | | | Common Stock | | | | | 43,570(4)(8) | | | | | | | | |
| Kevin G. Cramton | | | Common Stock | | | | | 38,785(4)(5) | | | | | | | | |
| José R. Mas | | | Common Stock | | | | | 38,785(4)(5) | | | | | | | | |
| Belgacem Chariag | | | Common Stock | | | | | 12,575(5) | | | | | | | | |
| Delaney M. Bellinger | | | Common Stock | | | | | 6,595(4)(8) | | | | | | | | |
| Elizabeth R. Killinger | | | Common Stock | | | | | 3,394(5) | | | | | | | | |
| All Directors and Executive Officers as a Group (16 persons) | | | Common Stock | | | | | 4,426,644(7) | | | | | | 4.38 | | |
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Your vote is important! Whether or not you expect to be present at the Annual Meeting, please vote as promptly as possible so that we may be assured of a quorum to transact business. You may vote by using the Internet or telephone, or by signing, dating and returning the proxy mailed to those who receive paper copies of this proxy statement. If you attend the Annual Meeting, you may revoke your proxy and vote in person.
Important Notice Regarding the Availability of Proxy Materialsfor the Stockholder Meeting to be held on March 6, 2018
This proxy statement and our 2017 Annual Report to Stockholders are available atwww.proxyvote.com.
1437 South Boulder AvenueTulsa, Oklahoma 74119
General Information
As a stockholder of Helmerich & Payne, Inc., you are invited to attend the Annual Meeting of Stockholders on March 6, 2018 (the "Annual Meeting") and vote on the items of business described in this proxy statement. The proxy is being solicited by and on behalf of the Board of Directors of Helmerich & Payne, Inc., and will be voted at the Annual Meeting. Throughout this proxy statement, Helmerich & Payne, Inc. is referred to as the "Company," "we," "our" or "us."
Important Notice of Electronic Availability of Materials
Annual Meeting Information
Our Annual Meeting will be held at Boulder Towers, H&P Conference Center, Eleventh Floor, 1437 South Boulder Avenue, Tulsa, Oklahoma, at 12:00 noon, Tulsa time, on Tuesday, March 6, 2018, unless adjourned or postponed. Directions to the meeting can be obtained by calling our Investor Relations department at 918-742-5531.
17, 2024.
Items of Business atMeeting online.
The Items of business scheduled to be voted on
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Board Recommendation on Voting
Our Board of Directors recommends thatMeeting Website
other information about the Company, and elect to view future proxy statements and annual reports online instead of receiving paper copies in the mail.
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the proposal. We urge you to promptly provide voting instructions to your broker to ensure that your shares are voted on all of the proposals, even if you plan to attend the Annual Meeting.
“street name,” you must follow the instructions of the broker or other organization holding your shares to revoke your voting instructions.
number of shares voted AGAINST that Director. AbstentionsAs a result, abstentions and broker non-votes will not affect the outcome of the election of Directors. Any Director who receives a greater number of votes AGAINST his or her election than votes FOR such election shallwill tender his or her resignation to the Board of Directors in accordance with our Corporate Governance Guidelines. The Nominating and Corporate Governance Committee will consider the resignation and recommend to the Board of Directors whether to accept or reject the resignation. The Board of Directors will consider all factors it deems relevant, make a determination, and publicly disclose its decision within 120 days following the date of the Annual Meeting.
vote AGAINST Proposals 2, 3, and 4.
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The cost
stock.
Security Ownership of Certain Beneficial Owners
The following table sets forth those persons or groups who, to our knowledge, beneficially own more than 5% of our common stock, the number of shares beneficially owned by each, and the percentage of outstanding stock so owned, as of December 8, 2017. At the close of business on December 8, 2017, there were 108,844,165 issued and outstanding shares of our common stock.
Security Ownership
The following table sets forth the total number of shares of common stock beneficially owned by each of the present Directors and nominees, our Chief Executive Officer ("CEO") and all other executive officers named in the Summary Compensation Table, and all Directors and executive officers as a group, and the percent of the outstanding common stock so owned by each as of December 8, 2017.
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PROPOSAL 1ELECTION OF DIRECTORS
At the Annual Meeting ten Directors are to be elected for terms of one year each. Messrs. Cramton and Mas, who were appointed to the Board of Directors on March 1, 2017 and will stand for election at the Annual Meeting, were identified by a third-party search firm engaged by the Nominating and Corporate Governance Committee to assist in identifying potential Directors. All other incumbent Directors are standing for re-election. All nominees have agreed to be named in this proxy statement and have indicated a readiness to continue to serve if elected. Materials
The information that follows, including principal occupation or employment for the past five or more years and a summary of each individual's experience, qualifications, attributes or skills that have led to the conclusion that each individual should serve as a Director in light of our current business and structure, is furnished with respect to each Director nominee.
Director Nominees
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH OF THE PERSONS NOMINATED BY THE BOARD.
The Board has adopted Corporate Governance Guidelines to address significant corporate governance issues. The guidelines, as well as our Amendedrules that permit companies and Restated Certificate of Incorporation and By-Laws, all Board committee charters, our Code of Business Conduct and Ethics, applicable to all our Directors, officers, and employees, the Code of Ethics for Principal Executive Officer and Senior Financial Officers, the Related Person Transaction Policies and Procedures, the Foreign Corrupt Practices Act Compliance Policy, certain Audit Committee Practices, and our Sustainability Statement are available on our website,www.hpinc.com, under the "Governance" section. The information on our website is not incorporated by reference in this proxy statement. A printed copy of the above mentioned documents will be provided without charge upon written request to our Corporate Secretary.
Our Corporate Governance Guidelines provide a framework for our corporate governance initiatives and cover topicsintermediaries, such as director independencebrokers and selection and nomination of director candidates, communication with the Board, Board committee matters, and other areas of import. Certain highlights from our Corporate Governance Guidelines, as well as other corporate governance matters, are discussed below.
Director Independence
Our Corporate Governance Guidelinesbanks, to provide that a majority of the Board must meet the requirements for beingnotice to an independent director under the listing standards of the NYSE and applicable law, including the requirement that the Board affirmatively determine that the Director has no material relationship with us. To guide its determination of whether a Director is independent, the Board has adopted the following categorical standards:
A Director will not be independent if:
In addition, the following commercial and charitable relationships will not be considered material relationships that would impair a director's independence:
A Director who is a member of our Audit Committee will not be independent if such Director: (i) other than in his or her capacity as a member of the Audit Committee, the Board or any other Board committee, accepts directly or indirectly any consulting, advisory or other compensatory fee from
us or any subsidiary (except for retirement benefits to the extent permitted by applicable rules of the SEC); or (ii) is an affiliated person (as defined by the SEC) of us or any subsidiary. Similarly, in affirmatively determining the independence of any Director who will serve on the Human Resources Committee, the Board considers all factors specifically relevant to determining whether a Director has a relationship to the Company which is material to that Director's ability to be independent from management in connection with the duties of a Human Resources Committee member, including, but not limited to: (i) the source of compensation of such Director, including any consulting, advisory or other compensatory fee paid by the Company to such Director; and (ii) whether such Director is affiliated with the Company, a subsidiary of the Company or an affiliate of a subsidiary of the Company.
Generally, relationships not addressed by the NYSE rules or otherwise described above will not cause an otherwise independent Director to be considered not independent. For relationships that do not fall within the categories delineated above, the Directors who are otherwise independent under the guidelines will determine whether a relationship is material and, therefore, whether the Director would be independent.
In determining the independence of Ms. Marshall and Messrs. Cramton, Foutch, Mas, Petrie, Robillard, Rust, and Zeglis, the Board of Directors considered (i) State Farm Mutual Automobile Insurance Company's ownership of our common stock, and (ii) that Mr. Zeglis is a director of State Farm Mutual Automobile Insurance Company. The Board of Directors also considered that the Company, through its wholly owned subsidiaries, provides or provided in 2017 drilling or other services to Hunt Oil Company and Laredo Petroleum, Inc. Until his retirement in January of 2017, Mr. Robillard was a director of Hunt Oil Company (as well as an officer and director of parent company, Hunt Consolidated, Inc.). Mr. Foutch is an officer and director of Laredo Petroleum, Inc. Payments made to the Company's subsidiaries by those entities have not exceeded two percent of the consolidated gross revenues of such entities during any applicable fiscal year.
After applying the standards set forth above in our Corporate Governance Guidelines, the Board determined that Ms. Marshall and Messrs. Cramton, Foutch, Mas, Petrie, Robillard, Rust and Zeglis, our current, non-employee directors, had no material relationship with the Company and that each is independent under our categorical standards and the requirements of the NYSE and applicable law.
Director Identification, Evaluation, and Nomination
General Principles and Procedures. We are of the view that the continuing service of qualified incumbents promotes stability and continuity in the boardroom, contributing to the Board's ability to work as a collective body, while giving us the benefit of familiarity and insight into our affairs that our Directors have accumulated during their tenure. Accordingly, the process for identifying nominees reflects our practice of re-nominating incumbent Directors who continue to satisfy the Nominating and Corporate Governance Committee's ("Committee") criteria for membership on the Board and the eligibility requirements of our By-laws, whom the Committee believes continue to make important contributions to the Board, and who consent to continue their service on the Board.
In general, and as more fully outlined in the Corporate Governance Guidelines, in considering candidates for election at annual meetings of stockholders, the Committee will:
If the Committee determines that (i) an incumbent Director consenting to re-nomination continues to be qualified and has satisfactorily performed his or her duties as Director during the preceding term, and (ii) there exist no reasons, including considerations relating to the composition and functional needs of the Board as a whole, why in the Committee's view the incumbent should not be re-nominated, then the Committee will, absent special circumstances, propose the incumbent Director for re-election.
The Committee will identify and evaluate new candidates for election to the Board where it identifies a need to do so, including for the purpose of filling vacancies or a decision of the Directors to expand the size of the Board. The Committee will solicit recommendations for nominees from persons that the Committee believes are likely to be familiar with qualified candidates. The Committee may also determine to engage a professional search firm to assist in identifying qualified candidates.
As to each recommended candidate that the Committee believes merits consideration, the Committee will:
Based on all available information and relevant considerations, the Committee will select and recommend to the Board a candidate who, in the view of the Committee, is most suited for membership on the Board.
Stockholder Recommendations. The Committee considers recommendations for Director candidates submitted by holders of our shares entitled to vote generally in the election of Directors. Candidates for Director who are properly recommended by our stockholders will be evaluated in the same manner as any other candidate for Director. In addition, the Committee may consider the number of shares held by the recommending stockholder and the length of time such shares have been held.
For each annual meeting of stockholders, the Committee will accept for consideration only one recommendation from any stockholder or affiliated group of stockholders. The Committee will only consider recommendations of nominees for Director who satisfy the minimum qualifications prescribed by our Corporate Governance Guidelines and the eligibility requirements of our By-laws. For a stockholder recommended candidate to be considered by the Committee, the stockholder recommendation must be submitted in writing before our fiscal year-end to our Corporate Secretary at our headquarters address, 1437 South Boulder Avenue, Tulsa, Oklahoma 74119, and must include the reasons for the recommendation, a description of the candidate's qualifications and the candidate's written consent to being considered as a Director nominee, together with a statement of the number of shares of our stock beneficially owned by the stockholder making the recommendation and by any other supporting stockholders (and their respective affiliates). The Committee may require the stockholder submitting the recommendation or the recommended candidate to furnish such other information as the Committee may reasonably request.
Stockholder Nominations. Our By-laws provide that stockholders meeting certain requirements may nominate persons for election to the Board of Directors if such stockholders comply with the procedures set forth in our By-laws. For more information on stockholder nominations, see Stockholder Proposals and Nominations on page 48.
Director Qualification Standards
All persons nominated to serve as one of our Directors should possess the following minimum qualifications more fully discussed in our Corporate Governance Guidelines. Specifically, all candidates:
The Committee will also ensure that:
Our Corporate Governance Guidelines also provide, in lieu of a formal diversity policy, that as part of the nomination process, the Committee will consider diversity in professional background, experience, expertise, perspective, age, gender, and ethnicity with respect to Board composition as a whole. With respect to diversity, we place particular emphasis on identifying candidates whose experiences and talents complement and augment those of other Board members with respect to matters of importance to the Company. We attempt to balance the composition of the Board to promote comprehensive consideration of issues. Our current Board composition achieves this through widely varying levels and types of business and industry experience among current Board members. We monitor the composition and functioning of our Board and Committees through both an annual review of our Corporate Governance Guidelines and a self-evaluation process undertaken each year by our Directors.
The foregoing qualification attributes are only threshold criteria, however, and the Committee will also consider the contributions that a candidate can be expected to make to the collective functioning of the Board based upon the totality of the candidate's credentials, experience, and expertise, the composition of the Board at the time, and other relevant circumstances.
Board Leadership Structure
The Company's By-laws provide that, in general, any two or more offices may be heldstockholders by the same person, including the offices of Chairman of the Board ("Chairman") and CEO. The Board believes
that this flexibility in the allocation of the responsibilities of these two roles is beneficial and enables the Board to adapt the leadership function to changing circumstances. Mr. Hans Helmerich currently is the Chairman of the Board of the Company. Mr. Helmerich has served as a Director since 1987 and became the Chairman in 2012. He served as the Company's CEO from 1989 until his retirement in March 2014. He also was the President from 1987 to 2012. Mr. Helmerich, who has nearly 25 years of successful experience as CEO and possesses in-depth knowledge of the Company, its operations and the evolving drilling and energy industry, has been responsible for the general supervision, direction and control of the Company's business and affairs. Under Mr. Helmerich's leadership, the Company experienced steady growth in earnings and market share and became the leading land driller in the United States. Mr. Helmerich retired from the position of CEO on March 5, 2014. Following retirement, Mr. Helmerich also provided consulting services to the Company for a three-year period that ended February 28, 2017. Mr. John W. Lindsay is the Company's current President and succeeded Mr. Helmerich as CEO on March 5, 2014. Since joining the Company in 1987 as a drilling engineer, Mr. Lindsay has served in various management positions. Mr. Lindsay was appointed Executive Vice President, U.S. and International Operations in 2006 for the Company's wholly-owned subsidiary, Helmerich & Payne International Drilling Co., and became Executive Vice President and Chief Operating Officer of the Company in 2010. In 2012, Mr. Lindsay was promoted to President and Chief Operating Officer and was appointed to the Company's Board of Directors. Mr. Lindsay brings to the Board and the Company significant leadership, knowledge and experience in the contract drilling industry. The Board believes at this time that the interests of all stockholders will be best served by the leadership model described above that contemplates a separated Chairman and CEO. The combined experience and knowledge of Messrs. Helmerich and Lindsay in their respective roles of Chairman and CEO will provide the Board and the Company with continuity of leadership that has enabled the Company's success.
In addition, the Board has demonstrated its commitment and ability to provide independent oversight and management. We believe that the most effective board structure is one that emphasizes board independence and ensures that the board's deliberations are not dominated by management. With the exception of Messrs. Helmerich and Lindsay, our Board is composed entirely of independent Directors. Each of our standing Board committees is comprised of only independent Directors. Further, while the Board does not currently have a lead independent Director, it has appointed a presiding, independent Director for each executive session of the Board when it meets without management. Mr. Randy A. Foutch presently serves as the presiding, independent Director. While the Board believes this practice provides for independent leadership without the need to designatedelivering a single lead director, the Board may examine in the future whether the appointment of a lead Director would enhance the Board's effectiveness. Our Board's oversight of risk management (discussed below) has had no effect onnotice to those stockholders. This procedure is referred to as “householding.” We do not household our leadership structure to date.
Board Meeting Attendance
There were four regularly scheduled and two special meetings of the Board held during fiscal 2017. We require each Director to make a diligent effort to attend all Board and Committee meetings as well as the Annual Meeting of the Stockholders. All of our then sitting Directors attended the 2017 Annual Meeting of the Stockholders. During fiscal 2017, no incumbent Director attended fewer than 75% of the aggregate of the total number of meetings of the Board and its committees of which he or she was a member.
Board Committees
Messrs. Cramton, Foutch, Robillard (Chairman) and Rust are members of the Audit Committee. The Board has adopted a written charter for the Audit Committee. The primary functions of the Audit Committee are to assist the Board in fulfilling its independent and objective oversight responsibilities of
financial reporting and internal financial and accounting controls of the Company and to monitor the qualifications, independence, and performance of our independent registered public accounting firm. The Board has determined that Messrs. Kevin G. Cramton, Randy A. Foutch, Donald F. Robillard, Jr. and Edward B. Rust, Jr. are "audit committee financial experts" as defined by the SEC. The Board has also determined that all Audit Committee members are "financially literate" as contemplated by the rules of the NYSE. During the fiscal year ended September 30, 2017, the Audit Committee held twelve meetings.
Ms. Marshall and Messrs. Mas, Petrie and Zeglis (Chairman) are members of the Human Resources Committee (which functions as our compensation committee). The Board has adopted a written charter for the Human Resources Committee. The primary functions of the Human Resources Committee are to evaluate the performance of our executive officers, to review and make decisions regarding compensation of our executive officers and make recommendations regarding compensation of non-employee members of our Board, and to review and make recommendations or decisions regarding incentive compensation and equity-based compensation plans. The Human Resources Committee may not delegate any of its authority to other persons or committees. During the fiscal year ended September 30, 2017, the Human Resources Committee held four meetings.
Ms. Marshall and Messrs. Cramton, Foutch (Chairman), Mas, Petrie, Robillard, Rust, and Zeglis are members of the Nominating and Corporate Governance Committee. The Board has adopted a written charter for the Nominating and Corporate Governance Committee. The primary functions of the Committee are to identify and to recommend to the Board the selection of Director nominees for each annual meeting of stockholders or for any vacancies on the Board, to make recommendations to the Board regarding the adoption or amendment of corporate governance principles applicable to us, and to assist the Board in developing and evaluating potential candidates for executive positions and generally oversee management succession planning. During the fiscal year ended September 30, 2017, the Nominating and Corporate Governance Committee held four meetings.
The non-management Directors, in fiscal 2017, met in executive session without management, prior to four regularly scheduled Board meetings. Mr. Foutch was presiding Director for all executive sessions.
Transactions with Related Persons, Promoters and Certain Control Persons
The Company has adopted written Related Person Transaction Policies and Procedures. The Audit Committee is responsible for applying such policies and procedures. The Audit Committee reviews all transactions, arrangements, or relationships in which the aggregate amount involved will or may be expected to exceed $120,000 in any fiscal year, the Company is a participant, and any related person has or will have a direct or indirect material interest. In general, a related person is any Company executive officer, Director, or nominee for election as a Director, any greater than 5 percent beneficial owner of our common stock, and immediate family members of any of the foregoing.
The Audit Committee applies the applicable policies and procedures by reviewing the material facts of all interested transactions that require the Audit Committee's approval and either approves, ratifies or disapproves of the entry into the interested transaction, subject to the exceptions described below. Any member of the Audit Committee who is a related person with respect to a transaction under review may not vote with respect to the approval or ratification of the transaction. In determining whether to approve or ratify an interested transaction, the Audit Committee takes into account, among other factors it deems appropriate, the nature of the related person's interest in the interested transaction, the material terms of the interested transaction including whether the interested transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances, the materiality of the related person's direct or indirect interest in the interested transaction, the materiality of the interested transaction to us, the impact of
the interested transaction on the related person's independence (as defined in our Corporate Governance Guidelines and the New York Stock Exchange listing standards), and the actual or apparent conflict of interest of the related person participating in the transaction (as contemplated under our Code of Business Conduct and Ethics). The following transactions are deemed to be pre-approved under the applicable policies and procedures: (i) Director and executive officer compensation otherwise required to be disclosed in our proxy statement, (ii) transactions where all of our stockholders receive proportional benefits, (iii) certain banking related services, and (iv) transactions available to our employees generally. There are no related person transactions required to be reported in this proxy statement.
Compensation Committee Interlocks and Insider Participation
During fiscal 2017, the members of our Human Resources Committee were Ms. Marshall and Messrs. Mas, Petrie and Zeglis. None of the Committee members has ever been an officer or employee of the Company or any of our subsidiaries and none has an interlocking relationship requiring disclosure under applicable SEC rules. Additionally, none of the Committee members had any relationship requiring disclosure by the Company under the SEC's rules requiring disclosure of certain relationships and related-party transactions.
Communication with the Board
The Board has established several means for employees, stockholders, and other interested persons to communicate their concerns to the Board. If the concern relates to our financial statements, accounting practices or internal controls, the concern may be submitted in writing to the Chairperson of the Audit Committee in care of our Corporate Secretary at our headquarters address. If the concern relates to our governance practices, business ethics, or corporate conduct, the concern may be submitted in writing to the Chairperson of the Nominating and Corporate Governance Committee in care of our Corporate Secretary at our headquarters address. If the concern is intended for the non-management presiding Director or the non-management Directors as a group, the concern may be submitted in writing to such presiding Director or group in care of our Corporate Secretary at our headquarters address. If the employee, stockholder, or other interested person has an unrelated concern or is unsure as to which category his or her concern relates, he or she may submit it in writing to the Board or any one of the Directors in care of our Corporate Secretary at our headquarters address. Our headquarters address is 1437 South Boulder Avenue, Tulsa, Oklahoma 74119.
Each communication intended for any management or non-management Director(s) or for the entire Board and received by the Corporate Secretary which is related to our operations will be promptly forwarded to the specified party.
The Board's Role in Risk Management
The Audit Committee reviews and discusses with management the Company's processes and policies with respect to risk assessment and risk management, including the Company's enterprise risk management program. In addition, the Company's risk oversight process involves the Board receiving information from management on a variety of matters, including operations, legal, regulatory, finance and strategy, as well as information regarding any material risks associated with each matter. The full Board (or the appropriate Board committee, if the Board committee is responsible for the oversight of the matter) receives this information through updates from the appropriate members of management to enable it to understand and monitor the Company's risk management practices. When a Board committee receives an update, the chairperson of the relevant Board committee reports on the discussion to the full Board during the Board committee reports portion of the next Board meeting. This enables the Board and the Board committees to coordinate the risk oversight role.
Compensation Risk Assessment
Management has undertaken a review of our compensation programs and practices applicable to all employees, including executive officers, in order to assess the risks presented by such programs and practices. Management analyzed the likelihood and magnitude of potential risks, focusing on program elements that may create risk, including pay mix and amount, performance metrics and goals, the balance between annual and long-term incentives, the terms of equity and bonus awards, and change-in-control arrangements. The review also took into account mitigating features associated with our compensation programs and practices which include elements such as capped payouts levels for both annual bonuses and equity grants under the Company's stock plan, the Human Resources Committee's authority to exercise negative discretion over bonus payouts, stock ownership guidelines aligning the interests of executive officers with stockholders, claw-back provisions contained in stock plan award and other agreements, the use of multiple performance measures, and multi-year vesting schedules for equity awards.
The findings of the risk assessment are discussed with the Human Resources Committee and the full Board. Based on the assessment, we have determined that our compensation programs and practices applicable to all employees, including executive officers, are aligned with the interests of stockholders, appropriately reward pay for performance, and are not reasonably likely to have a material adverse effect on the Company.
Corporate Responsibility — Sustainability
We are committed to long-term sustainability. We define sustainability as making the right business decisions that integrate profitability with high standards of corporate governance and ethics, health and safety, stewardship of the environment, employee engagement and a commitment to the communities in which we operate. We believe that sustainability is an integral component of our commitment to operational excellence worldwide. Our sustainability commitment is reflected in our Sustainability Statement which can be accessed electronically under the "Governance" section of our website atwww.hpinc.com. You may also request the Sustainability Statement in print from our Corporate Secretary at our headquarters address set forth above.
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
Summary
In 2014, our industry experienced a severe decline in oil prices, the effects of which are still apparent today. Oil prices exceeded $100 per barrel in July of 2014 and dropped to below $30 per barrel in January and February of 2016. This overall decline in prices caused the industry active rig count in the United States to plummet from a high of over 1,800 rigs to below 400 rigs in early 2016. In the second half of fiscal 2016 oil prices rebounded modestly from observed lows but generally remained below $50 per barrel. In fiscal 2017, oil prices continued to seesaw around the $50 per barrel mark and generally remained below $55 per barrel. As a result, the United States active rig count began to slowly increase again and gain some momentum in fiscal 2016 and 2017. Nevertheless, at the close of fiscal 2017, the United States active rig count had only risen to approximately half of the activity high observed in 2014. In addition, spot dayrate pricing and average rig margins, though improved, remained significantly depressed in fiscal 2017 relative to 2014.
As a result of these difficult market conditions, we reported a net loss of $128 million ($1.20 per diluted share) from operating revenues of $1.8 billion for fiscal 2017, only our second annual loss in over 50 years. Nevertheless, fiscal 2017 witnessed the largest ramp up of U.S. land rig activity our history, which more than doubled even in the face of oil price uncertainty and volatility. We began fiscal 2017 with 95 rigs running in U.S. land and closed the year with 197 rigs after reactivating 102 FlexRigs® while upgrading 91of those to super-spec capacity. Our Family of Solutions® with over 2000
rig years of FlexRig experience has allowed us to provide the right rig for the customer and enabled us to grow our U.S. land market share to approximately 20% (compared to approximately 15% in 2014). Further, during fiscal 2017, our strong balance sheet and strong liquidity position allowed us to pay dividends of approximately $2.80 per share of common stock. In addition, our three and five-year total stockholder return ranked in the 88th and 96th percentile, respectively, relative to our peers within our Compensation Peer Group (defined and discussed below).
For fiscal 2015, we did not pay bonuses in the midst of the industry downturn despite reporting net income of $422 million. No bonuses were paid because we did not achieve the threshold level of performancenotice with respect to our corporate performance criteria.stockholders of record. However, for fiscal 2016, we did pay our CEOif you hold your shares in street name, your intermediary, such as a broker or bank, may rely on householding and other named executive officers partial bonuses. The bonuses paid were significantly below target level bonuses because we only achieved the threshold level of performanceyou may receive a single notice if you share an address with respectanother stockholder. Once you have received notice from your broker that they will be householding materials to one of our three fiscal 2016 corporate performance criteria. For fiscal 2017, we paid our CEO and other named executive officers bonuses that were modestly above target level bonuses because we (i) exceeded the threshold level of performance with respect to two of our three fiscal 2017 corporate performance criteria (EPS and ROIC), (ii) exceeded our reach level of performance with respect to our third corporate performance criteria (EBITDA), and (iii) achieved favorable results with respect to certain strategic objectives (discussed below under "2017 Executive Compensation Components — Bonus"). The bonuses paidyour address, householding will continue until you are reported in both the "Bonus" and "Non-Equity Incentive Plan Compensation" columns of the Summary Compensation Table on page 32.
In light of prevailing industry conditions and other considerations, our CEO and other named executive officers did not receive base salary adjustments for calendar 2016. For calendar 2017, our CEO and other named executive officers (with one exception) received base, market-driven salary adjustments of 10%. One named executive officer received a 15% base salary adjustment due to the fact that the individual's salary was significantly below the market median for similarly positioned officers. In fiscal 2017, our CEO and other named executive officers were also awarded non-qualified stock options and restricted stock as shown in the Grants of Plan-Based Awards in Fiscal 2017 table on page 34.
Compensation Process, Philosophy and Objectives
The Human Resources Committee (the "Committee") has the responsibility for establishing, implementing and monitoring our executive compensation program. All compensation decisions relating to our CEO, Chief Financial Officer and the other executive officers identified in the Summary Compensation Table ("named executive officers") are made by the Committee. For purposes of deciding upon named executive officer compensation, the Committee generally meets quarterly throughout the fiscal year to review and approve corporate goals and objectives with respect to named executive officer compensation, consider trends in executive compensation, monitor our compensation structure relative to peer companies, track our progress with respect to approved corporate performance bonus criteria, and perform other duties as set forth in the Committee's charter. At the Committee meeting in Novembernotified otherwise or December following the end of each fiscal year, the Committee meets to consider and determine bonus compensation for the completed fiscal year and salary adjustments and equity-based compensation awards. During this meeting, the Committee also considers executive bonus plan performance objectives for the next fiscal year and recommends same for approval by the Board. Generally, the types of compensation and benefits paid to our named executive officers are the same as those provided to other key employees. We do not offer employment contracts to our named executive officers and there are no material individual differences in compensation policies and decisions for these executives.
The objectives of our executive compensation program are to compensate executives in a manner that advances the interests of the stockholders while ensuring that we are able to attract, retain and reward qualified executives. To that end, we have designed our executive compensation program to
reward the achievement of short- and long-term corporate goals that enhance stockholder value. The Committee monitors both performance and compensation to ensure that we maintain our ability to attract, retain and reward qualified executives and that compensation paid to our executives remains competitive relative to compensation paid to executives of competitor companies. Our compensation elements consist of:
We believe the Company should have the ability to recover compensation paid to executive officers and key employees under certain circumstances. As a result, we have two policies addressing recoupment of bonus and equity compensation from executive officers and certain other key employees. The following is a summary of those policies:
Role of Executive Officers in Compensation
The Committee annually evaluates the performance of the CEO and other named executive officers and determines their compensation in light of the objectives of our compensation program. The CEO provides an annual assessment of his performance and the performance of the other named executive officers. The CEO, with the assistance of the Vice President, Corporate Services, provides to the Committee data, analysis, and suggested base salary adjustments and equity compensation for the other named executive officers. This input from management is considered by the Committee when making its compensation decisions. The Vice President, Corporate Services also reviews the compensation consultant's annual draft of its compensation analysis (discussed below) and provides comments for the consultant's consideration. She also attends Committee meetings and provides requested information to the Committee. Except for discussing individual performance objectives with the CEO, the other named executive officers do not otherwise play a role in their own compensation decisions.
Role of Compensation Consultant
Pay Governance, the Committee's independent compensation consultant, provides reports to the Committee throughout each year containing research, market data, survey information, and information regarding trends and developments in executive compensation. At the Committee's request, Pay
Governance advises the Committee on all principal aspects of executive compensation including the competitiveness of program design and award values. Pay Governance ordinarily provides the Committee, on an annual basis, with a final written executive compensation analysis with respect to the named executive officers. The written analysis generally addresses, among other things, the following:
The Committee generally reviews the compensation of the named executive officers in late November or early December following the end of a particular fiscal year. During calendar 2017, Pay Governance attended two meetings and produced reports that were considered in three Committee meetings.
The Committee's compensation consultant periodically provides the Committee with a written director compensation analysis. The Committee reviews the analysis and determines whether to recommend to our Board a compensation increase for non-employee directors. The executive officers do not play a role in determining or recommending the amount or form of director compensation.
Pay Governance reports directly to the Committee although they may meet with management from time to time to gather information or to obtain management's perspective on executive compensation matters. The Committee has the sole authority under its Charter to retain, at our expense, or terminate the compensation consultant at any time. In addition, the Committee may conduct or authorize investigations of matters within its scope of responsibilities and may retain, at our expense, independent counsel or other advisors as it deems necessary.
The Committee has considered the independence of Pay Governance in light of SEC rules and NYSE listing standards. The Committee requested and received a letter from Pay Governance addressing its independence, including the following factors:
The Committee discussed these considerations, including the fact that Pay Governance providestime, you no additional services to the Company or management. The Committee concluded that there was no conflict of interest present and that Pay Governance provided the Committee with appropriate assurances and confirmation of its independent status as the Committee's advisor.
Effect of Stockholder Say-on-Pay Vote on Executive Compensation Decisions
The Committee has reviewed the voting results from the advisory vote on executive compensation (commonly known as a say-on-pay proposal) conducted at our 2017 annual meeting of stockholders. At this meeting, approximately 96% of the votes cast on the say-on-pay proposal were in favor of our
named executive officers' compensation as disclosed in the proxy statement for that meeting. The Committee determined that, given the very high level of support, no changes to our executive compensation policies and decisions were necessary based on the voting results from our 2017 annual meeting of stockholders.
Our stockholders vote on a say-on-pay proposal each year. In the event there is any significant vote against the compensation of our named executive officers as disclosed in the proxy statement, the Committee will consider the concerns of the stockholders in future executive compensation decisions.
Determining Executive Compensation
In making compensation decisions, the Committee compares each element of compensation against a peer group of publicly-traded contract drilling and oilfield service companies (collectively "Compensation Peer Group") and against published survey data. The Compensation Peer Group consists of companies that are representative of the types of companies that we compete against for talent. The companies currently included in our Compensation Peer Group are as follows:
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The Committee also uses survey data to assist in compensation decisions, including those instances in which a named executive officer's position or duties do not match the position or duties of Compensation Peer Group executives. This survey data includes oilfield services, energy, and general industry data. The surveys used are as follows:
The Committee sets target total direct compensation for named executive officers to generally approximate the median level of compensation paid to similarly situated executives of the companies comprising the Compensation Peer Group. Variations to this objective may occur as dictated by corporate performance, experience level, internal considerations, nature of duties, market factors, and retention issues. At the time the Committee makes compensation decisions, it uses prior fiscal year peer data and available survey data. As such, the data used by the Committee provides peer compensation comparisons on a historical basis which does not reflect the most recent year over year increase in peer compensation. Therefore, when the Committee annually sets compensation for our named executive officers, that compensation generally lags the current median of peer compensation. Similarly, the percentile ranking for total direct compensation (discussed below) could generally be overstated as well because such rankings are derived from dated peer compensation data.
A significant portion of total compensation is variable based on corporate performance and relative stockholder return. The Committee considers individual performance during its annual review of base salary and equity awards. However, no specific individual performance criteria or guidelines are used by the Committee as a controlling factor in the Committee's ultimate judgment and final decision. In deciding on the type and amount of executive compensation, the Committee focuses on both current pay and the opportunity for future compensation. The Committee does not have a specific formula for
allocating each element of pay, but instead bases the allocation on peer and survey data and the Committee's judgment.
In December of 2016 (i.e., fiscal 2017), the Committee began utilizing an award mix of 50% stock options and 50% time-based restricted stock which the Committee believes has the effect of aligning the interests of executives with stockholders. For more information on our rationale for the use of stock options and restricted stock as components of total compensation, see the discussion of Stock Options and Restricted Stock below on pages 26 and 27.
Equity awards are calculated based on an executive's base pay and the value of our common stock. Under this methodology, in fiscal 2017, the Committee limited the value of annual equity awards to 440% of the CEO's base salary and 275% of the base salary of the other named executive officers. The Committee arrived at those values in an effort to approximate the median level of such compensation paid to similarly situated executives of the companies comprising the Compensation Peer Group. To determine the actual number of stock option shares awarded to a named executive officer, the dollar value of the award is divided by the applicable Black-Scholes value. In determining the Black-Scholes value, the Committee uses an average price for our common stock over a 10-day trading period ending on the Friday before the week that stock option awards are considered by the Committee. Exceptions to our long-term incentive compensation policy have occurred and may occur in the future as dictated by retention considerations and market factors.
2017 Executive Compensation Components
The principal components of compensation for named executive officers for the fiscal year ended September 30, 2017, are described below.
Base Salary
We provide named executive officers and other employees with a base salary to compensate them for services rendered during the fiscal year. Base salaries of named executive officers are targeted to generally approximate the median level of base salaries of similarly situated executives of companies included in the Compensation Peer Group. If base salaries of our named executive officers consistently fall below such median level, then the Committee will consider market adjustments to base salaries. Salary levels are typically considered annually as part of our review process as well as upon a promotion. Although named executive officers generally receive the same percentage salary increase applicable to office-based employees, the named executive officers may receive greater increases as a result of market adjustments, changes in duties or retention considerations. Salary adjustments for 2017 are discussed above under the Summary section beginning on page 19.
Bonus
The annual bonus plan for executive officers ("Bonus Plan") is a cash incentive plan for calculation of annual non-equity incentive-based compensation. These cash incentive awards are designed to reward short-term performance and achievement of strategic goals. Combined salaries and target bonus levels are intended to generally approximate the median of the Compensation Peer Group's combined salary and annual bonus levels.
The Bonus Plan is structured to be funded at an amount equal to 1% of our earnings before interest, taxes, depreciation, and amortization ("EBITDA"). This funding pool is allocated 40% to the CEO and 15% is allocated to each of the other four named executive officers. Notwithstanding the size of the funding pool, no bonus in excess of $5,000,000 may be paid to any executive officer under the Bonus Plan. In addition, each named executive officer is assigned a threshold, target and reach bonus
award opportunity expressed as a percentage of base salary. These bonus award opportunities are as follows and do not include the potential bonus adjustment described below:
| Threshold | Target | Reach | |||||||
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Chief Executive Officer | 40 | % | 100 | % | 130 | % | ||||
Other Named Executive Officers | 25 | % | 75 | % | 100 | % |
An executive officer's bonus opportunity is based upon three weighted corporate performance criteria. These performance criteria and their weightings are: earnings per share (35%); return on invested capital (35%); and EBITDA (30%). At the beginning of each fiscal year, the Committee establishes (and recommends for approval by the full Board) the Bonus Plan funding structure and allocation among the named executive officers, as well as the assignment of a threshold, target, and reach objective for each performance criterion. The target objective is established based upon the operating and capital budget approved by the Board. Once the target objective is established, the threshold objective is generally adjusted 30% below and the reach objective is generally adjusted 30% above the target objective. However, on occasion we adjust the threshold and reach objectives by more than 30% when in the Committee's judgment a wider spread is more meaningful, appropriate and/or fair to our stockholders and named executive officers. Actual fiscal year financial results are compared to plan objectives in order to determine the amount of any executive officer bonus. If actual financial results fall between the threshold and target or the target and reach objectives, then bonuses are proportionately increased as a result of the threshold or target objective being exceeded. Notwithstanding the other provisions of the Bonus Plan, the Committee has the right to reduce or eliminate any bonus due a named executive officer based upon the Committee's determination of individual performance, and the Committee has the discretion to adjust performance criteria during a fiscal year if, for example, the initially-established performance criteria are rendered unrealistic in light of circumstances beyond the control of the Company and its management. No adjustments were made to the corporate performance criteria during fiscal 2017.
The approved corporate performance criteria for fiscal 2017 were:
| Threshold | Target | Reach | |||||||
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Earnings Per Share | $ | (1.56 | ) | $ | 0.00 | $ | 1.56 | |||
Return on Invested Capital | (3.2 | )% | 0.0 | % | 3.2 | % | ||||
EBITDA | $ | 197,960,000 | $ | 282,800,00 | $ | 367,640,000 |
The bonus, if any, is then subject to being increased or decreased by up to 100% based on the Committee's overall assessment of our rig utilization, dayrates, market share, stockholder returns relative to both the returns of our U.S. land drilling peers within the Compensation Peer Group and all companies within our peer group, and our performance with respect to implementation of certain Company strategic initiatives that may vary from year to year (collectively, "strategic objectives"). No specific criteria or objectives are used by the Committee when assessing performance with respect to these strategic objectives. Whether the bonus of a named executive officer is increased or decreased by up to 100% is primarily dependent upon the Committee's judgment as to the named executive officer's success in positively affecting the strategic objectives.
Within this framework, the Committee determined that the fiscal 2017 threshold objectives of earnings per share and return on invested capital had been exceeded. Further, the Committee determined that the EBITDA reach objective had been exceeded in fiscal 2017. In light of the Company's performance with respect to our three corporate performance criteria, the Committee determined that our bonus award structure would generate bonuses of 77% of base salary for our CEO and 56% for our other named executive officers, which are below the target bonus percentages noted above.
However, the Committee also determined that our CEO and other named executive officers had achieved favorable results with respect to certain strategic objectives. In addition to those listed above, strategic objectives that were considered in the evaluation of whether to increase or decrease bonuses included the following:
After consideration of same, the Committee determined that the annual bonus for the CEO and the other named executive officers, as a group, be increased by 50%. After application of the 50% bonus modifier our CEO's bonus was set at 116% of base salary, slightly above our 100% target bonus, and similarly the other named executive officers bonuses were set at 84% of base salary, slightly above our 75% target bonus. Please refer to the "Bonus" and "Non-Equity Incentive Plan Compensation" columns of the Summary Compensation Table on page 32 for actual bonuses paid.
Long-Term Equity Incentive Compensation
The Helmerich & Payne, Inc. 2016 Omnibus Incentive Plan (the "2016 Plan") was approved by our stockholders at the 2016 Annual Meeting of Stockholders. The 2016 Plan governs all stock-based awards granted on or after March 2, 2016, and the 2005 and the 2010 Long-Term Incentive Plans govern stock-based awards granted under such plans prior to March 2, 2016. The 2016 Plan allows the Committee to design stock-based compensation programs to encourage growth of stockholder value and allow key employees and non-employee Directorslonger wish to participate in the long-term growthhouseholding and profitability of the Company. Approximately 220 employees (including the named executive officers) and non-employee Directors receive stock-based awards on an annual basis. Equity award levels are determined based on market data, and vary among participants based on their positions.
Under the 2016 Plan, the Committee may grant nonqualified stock options, restricted stock awards, cash awards, stock appreciation rights and other awards to selected employees and non-employee Directors. Also, the Committee may grant incentive stock options to selected employees under such Plan. To date, the Committee has only awarded non-qualified stock options and time-vested restricted stock to participants. A total of 6,600,000 shares of common stock have been authorized for award under the 2016 Plan. With the exception of new employees or non-employee Directors, the Committee only approves annual stock-based awards at its meeting in late November or early December after the end of each fiscal year. The Committee selected this time period for review of executive compensation since it coincides with executive performance reviews and allows the Committee to receive and consider final fiscal year financial information. Newly hired employees or appointed Directors may be considered for stock-based awards at the time they join the Company. Exceptions to this policy may occur as dictated by retention considerations or market factors.
Stock Options
We fundamentally believe that stock optionsare performance based. Stock options are inextricably linked to the creation of stockholder value and, therefore, stockholders' interests since they only generate value for executives when we create valuefor stockholders. This is evidenced by the fact that at the close of fiscal 2017, over half of our outstanding stock option awards were under water due to the impact significantly reduced oil prices have had in our industry and on our stock price. As
discussed above, today we utilize an award mix of 50% stock options and 50% time-based restricted stock. Consequently, we believe that 50% of our long-term incentive awards are performance based.
The grant date for all stock options is the date the Committee approves the grant. The Committee does not make equity grants in anticipation of the release of material non-public information and does not time the release of such information based on equity award grant dates. The Committee has never approved a backdated stock option grant.
The exercise price for all option grants, as provided by the 2016 Plan, is the closing price on the date of grant. Such Plan also prohibits repricing of stock option awards.
The options granted by the Committee are typically set to vest at a rate of 25% per year over the first four years of a ten-year option term. Prior to the exercise of an option, the holder has no rights as a stockholder with respect to the shares subject to the option.
The number and grant date fair value of non-qualified stock options awarded to the named executive officers in fiscal 2017 are shown in the Grants of Plan-Based Awards in Fiscal 2017 table on page 34. In making these awards, the Committee applied the methodology discussed above and considered individual and corporate performance and the value of equity awards made by competitors.
Restricted Stock
There is competitive pressure in the oil and gas drilling industry to attract and retain qualified executives and other employees whose knowledge and skill-set provide us with a competitive advantage. We believe that it is important to include restricted stock awards as a component of our long-term equity incentive compensation. In short, we believe that awards of restricted stock have a strong retentive effect and help ensure that our compensation packages remain competitive relative to our peers who, from time to time, may desire or attempt to lure away our top talent. Since 2009, the Committee has annually awarded time-vested restricted stock to the named executive officers and other key employees. Generally, all employee restricted stock awards are structured to vest at a rate of 25% per year beginning on the first anniversary of the date of grant. During the restriction period, the participant receives quarterly payments from us equal to quarterly dividends and has the right to vote restricted shares. Unvested restricted stock is forfeited if the participant leaves the Company and is not retirement eligible.
The number of shares of restricted stock awarded to the named executive officers in fiscal 2017 are shown in the Grants of Plan-Based Awards in Fiscal 2017 table on page 34. In making these awards, the Committee applied the methodology discussed above and considered the retentive effect of these awards in light of a competitive business climate, individual and corporate performance and the value and type of equity awards made by competitors.
Total Direct Compensation for 2017
With the exception of Ms. Hair and Messrs. Stauder and Bell, the following reflects the percentile ranking of how fiscal 2017 total direct compensation (i.e., base salary, bonus and equity awards) for the named executive officers compares to the total direct compensation of executives of the Compensation Peer Group:
With regard to Ms. Hair and Messrs. Stauder and Bell, there was insufficient peer group data to provide a meaningful percentile ranking.
Retirement
Pension Plans
Prior to October 1, 2003, most full-time employees, including certain named executive officers, participated in our qualified Employees Retirement Plan ("Pension Plan"). Certain named executive officers also participated in our non-qualified Supplemental Pension Plan. Effective October 1, 2003, we revised both the Pension Plan and the Supplemental Pension Plan to close the plans to new participants and reduced benefit accruals for current participants through September 30, 2006, at which time benefit accruals were discontinued and the plans frozen.
The fiscal 2017 year-end present value of accumulated benefits for each of the named executive officers is shown in the Pension Benefits for Fiscal 2017 table on page 38.
Savings Plans
Savings plans are designed to help employees, especially long-service employees, save and prepare for retirement. We sponsor a qualified and supplemental savings plan as described below.
Qualified Plan
Our 401(k)/Thrift Plan ("Savings Plan") is a tax-qualified savings plan pursuant to which most employees paid in U.S. dollars, including the named executive officers, are able to contribute to the Savings Plan on a before tax basis the lesser of up to 100% of their annual compensation or the dollar limit prescribed annually by the Internal Revenue Service ("IRS"). We match 100% of the first 5% of cash compensation that is contributed to the Savings Plan subject to IRS annual compensation limits ($270,000 for 2017). All employee contributions are immediately vested and matching contributions are subject to a six-year graded vesting schedule.
Supplemental Savings Plan
In addition to the Savings Plan, the named executive officers and certain other eligible employees can participate in the Supplemental Savings Plan, which is a non-qualified savings plan. Pursuant to the Supplemental Savings Plan, a participant can contribute between 1% and 40% of the participant's cash compensation to the Supplemental Savings Plan on a before tax basis. If the participant has not received the full Company match of the first 5% of pay in the Savings Plan, then the balance of the match could be contributed to the Supplemental Savings Plan. The Nonqualified Deferred Compensation for Fiscal 2017 table on page 39 contains additional Supplemental Savings Plan information for the named executive officers.
Other Benefits
The named executive officers are provided with other benefits, including perquisites, that the Company and the Committee believe are reasonable. The Committee annually reviews the levels of these benefits provided to the named executive officers. The compensation associated with these benefits is included in the "All Other Compensation" column of the Summary Compensation Table on page 32 and a brief explanation of these benefits is shown in footnote 7 to such table. A more detailed explanation of our aircraft policy is provided below.
Company Aircraft
With the approval of the CEO, our aircraft may be used by the named executive officers and other employees for business purposes. Since many of our operations and offices are in remote locations, our aircraft provide a more efficient use of employee time and improved flight times than are available
commercially. Our aircraft also provide a more secure traveling environment where sensitive business issues may be discussed.
The Chairman and CEO positions are each allocated 10 hours personal use of our aircraft annually without reimbursement to us. The time attributable to attendance at board meetings of publicly held companies will not be counted against the 10 hour limitation. Any personal use in excess of this allotment will only be permitted under extraordinary circumstances. With the approval of the CEO, the other named executive officers are permitted personal use of our aircraft, without reimbursement to us, only under extraordinary circumstances.
For tax purposes, imputed income is assessed to each named executive officer for his or his guest's personal travel based upon the Standard Industrial Fare Level of such flights during the calendar year.
Executive Officer and Director Stock Ownership Guidelines
Because the Board believes in linking the interests of management and stockholders, the Board has adopted stock ownership guidelines for the named executive officers. Our Executive Stock Ownership Guidelines specify a number of shares that our named executive officers must accumulate and hold within five years of the later of the adoption of the guidelines or the appointment of the individual as a named executive officer. The CEO is required to own shares having a value of five times base salary, and the other named executive officers are required to own shares having a value of two times base salary. The Board has adopted a similar policy applicable to Directors requiring ownership of shares having a value equal to two times annual compensation.
Trading, Hedging and Pledging Policies
Our Insider Trading Policy prohibits all directors, officers and employees from engaging in short-term (i.e., short-swing trading) or speculative transactions involving Company stock. Our Insider Trading Policy prohibits the purchase or sale of puts, calls, options and other derivative securities based on Company stock. Our Insider Trading Policy also prohibits short sales, margin accounts, hedging transactions, pledging of Company stock as collateral and, except for Rule 10b5-1 trading plans as noted below, standing orders placed with brokers to sell or purchase Company stock.
Our Insider Trading Policy prohibits our directors, officers and employees from purchasing or selling Company stock while in possession of material, non-public information. As such, and in addition to our pre-clearance procedures, our directors, executive officers and certain other employees are prohibited from buying or selling Company stock during our earnings periods (which begin on the first day of the month following the close of a fiscal quarter and ends after the second full trading day following the release of the Company's earnings). However, we do permit our directors and employees to adopt and use Rule 10b5-1 trading plans. This allows directors and employees to sell and diversify their holdings in Company stock over a designated period by adopting pre-arranged stock trading plans at a time when they are not aware of material nonpublic information concerning the Company, and thereafter sell shares of Company stock in accordance with the terms of their stock trading plans without regard to whether or not they are in possession of material nonpublic information about the Company at the time of the sale.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code generally limits to $1 million annually the federal income tax deduction that a publicly held corporation may claim for compensation payable to certain of its respective current and former executive officers, but that deduction limitation historically did not apply to performance-based compensation that met certain requirements. As part of the tax reform legislation passed in December 2017, Section 162(m) was amended, effective for taxable years beginning after December 31, 2017, to expand the scope of executive officers subject to the deduction
limitation and also to eliminate the performance-based compensation exception, though the exception generally continues to be available on a "grandfathered" basis to compensation payable under a written binding contract in effect on November 2, 2017.
In determining compensation for our executive officers, the Human Resources Committee considers the extent to which the compensation is deductible, including the effect of Section 162(m). In prior years, the Human Resources Committee generally sought to structure our executive incentive compensation awards so that they qualified as performance-based compensation exempt from the Section 162(m) deduction limitation where doing so was consistent with our compensation objectives, but it reserved the right to award nondeductible compensation and often did so. Our Human Resource Committee continues to evaluate the changes to Section 162(m) and their significance to our compensation programs, but in any event its primary focus in its compensation decisions will remain on most productively furthering our business objectives and not on whether compensation is deductible. Our Human Resources Committee has not at this time made any significant changes to our executive compensation program in response to the tax code changes.
Potential Payments Upon Change-in-Control or Termination
Change-in-Control
We have entered into change-in-control agreements with the named executive officers and certain other key employees. These agreements are entered into in recognition of the importance to us and our stockholders of avoiding the distraction and loss of key management personnel that may occur in connection with rumored or actual change-in-control of the Company. These agreements contain a "double" trigger provision whereby no benefits will be paid to an executive unless both a change-in-control has occurred and the executive's employment is terminated after a change-in-control. We believe this arrangement appropriately balances our interests and the interests of executives since we make no payments unless a termination of employment occurs.
More specifically, if we actually or constructively terminate a named executive officer's employment within 24 months after a change-in-control other than for cause, disability, death, or the occurrence of a substantial downturn, or if any of the named executive officers terminates his employment for good reason within 24 months after a change-in-control (as such terms are defined in the change-in-control agreement), any unvested benefits under our Supplemental Savings Plan and Supplemental Pension Plan and any options or restricted stock granted to any of the named executive officers will fully vest and we will be required to pay or provide:
provided that the payments and benefits will be provided only if a named executive officer executes and does not revoke a release of claims in the form attached to the change-in-control agreement. No tax gross-ups are provided on payments made under these agreements. These agreements are automatically renewed for successive two-year periods unless terminated by us.
For more information regarding post-termination payments that we may be required to make to named executive officers in the event of a change-in-control, see the Potential Payments Upon Change-in-Control table on page 39.
Our 2005 and 2010 long-term equity compensation plans contain a provision whereby all stock options and restricted stock will automatically become fully vested and immediately exercisable in the event of a change-in-control, as defined in such plans. This provision was included in all equity plans in order to be consistent with market practice at the time the plans were approved by stockholders. However, similar to our change-in-control agreements, our 2016 Omnibus Incentive Plan contains a "double" trigger provision whereby stock options and restricted stock will vest in the event of a change-in-control and the executive's employment is subsequently terminated. The potential value of the acceleration of vesting of stock options and restricted stock upon a change-in-control is reflected in columns 6 and 7 of the Potential Payments Upon Change-in-Control table on page 39.
Other Termination Payments
The Supplemental Pension Plan and Supplemental Savings Plan described on page 28 and quantified in the Pension Benefits for Fiscal 2017 and Nonqualified Deferred Compensation for Fiscal 2017 tables on pages 38 and 39 provide for potential payments to named executive officers upon termination of employment for other than change-in-control.
Compensation Committee Report
The Human Resources Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis ("CD&A") required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Human Resources Committee recommended to the Board that the CD&A be included in this proxy statement. This report is provided by the following Directors, who comprise the Human Resources Committee:
The following table includes information concerning compensation paid to or earned by our named executive officers listed in the table for the fiscal years ended September 30, 2017, 2016 and 2015.
Name and Principal Position | Year | Salary ($) (1) | Bonus ($) (2) | Stock Awards ($) (3) | Option Awards ($) (4) | Non-Equity Incentive Plan Compensation ($) (5) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (6) | All Other Compensation ($) (7) | Total ($) | |||||||||||||||||||
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John W. Lindsay, | 2017 | 904,327 | 349,823 | 1,857,527 | 2,165,637 | 699,648 | 17,582 | 236,408 | 6,230,952 | |||||||||||||||||||
President and Chief | 2016 | 840,865 | 229,750 | 1,019,375 | 2,427,200 | 229,750 | 150,461 | 194,681 | 5,092,082 | |||||||||||||||||||
Executive Officer | 2015 | 832,115 | — | 929,205 | 1,835,680 | — | 11,743 | 97,952 | 3,706,695 | |||||||||||||||||||
Juan Pablo Tardio, | 2017 | 478,375 | 136,849 | 592,018 | 690,267 | 273,696 | 641 | 82,479 | 2,254,325 | |||||||||||||||||||
Vice President and | 2016 | 445,000 | 92,146 | 302,900 | 734,720 | 92,146 | 5,622 | 64,532 | 1,737,066 | |||||||||||||||||||
Chief Financial | 2015 | 441,250 | — | 282,203 | 565,455 | — | 1,683 | 30,635 | 1,321,226 | |||||||||||||||||||
Officer | ||||||||||||||||||||||||||||
Robert L. Stauder, | 2017 | 463,838 | 130,128 | 562,990 | 656,368 | 260,258 | 80,340 | 88,268 | 2,242,190 | |||||||||||||||||||
Senior Vice President | 2016 | 431,288 | 87,622 | 291,250 | 708,480 | 87,622 | 34,025 | 89,423 | 1,729,710 | |||||||||||||||||||
and Chief Engineer, | 2015 | 423,000 | — | 440,512 | 364,678 | — | 9,648 | 27,735 | 1,265,573 | |||||||||||||||||||
Drilling Subsidiary | ||||||||||||||||||||||||||||
John R. Bell, | 2017 | 349,375 | 99,945 | 432,407 | 504,114 | 199,891 | 1,115 | 30,284 | 1,617,131 | |||||||||||||||||||
Vice President, | 2016 | 325,000 | 67,298 | 233,000 | 537,920 | 67,298 | 8,494 | 48,076 | 1,287,086 | |||||||||||||||||||
International and | 2015 | 316,750 | — | 189,283 | 368,775 | — | 2,905 | 21,520 | 899,233 | |||||||||||||||||||
Offshore Operations, Drilling Subsidiary | ||||||||||||||||||||||||||||
Cara M. Hair, | 2017 | 305,938 | 88,413 | 365,895 | 426,563 | 176,826 | — | 47,744 | 1,411,379 | |||||||||||||||||||
Vice President, | 2016 | 275,000 | 56,944 | 174,750 | 406,720 | 56,944 | — | 30,251 | 1,000,609 | |||||||||||||||||||
Corporate Services and Chief Legal Officer |
officers. The bonus award opportunities and financial measures and financial measure weightings for determining bonus amounts for fiscal 2017 are described in the CD&A beginning on page 24.
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2017
As described on pages 24 through 27 of the CD&A, we provide incentive award opportunities to executives, designed to reward both short-term and long-term business performance, and create a close alignment between incentive compensation and stockholders' interests. The following table provides information on non-equity incentive plan awards and restricted stock and stock options granted in fiscal 2017 to each of our named executive officers. Although the grant date fair value is shown in the table for these stock and option awards, there can be no assurance that these values will actually be realized during the terms of these grants.
| | | | | | | | All Other Stock Awards: Number of Shares of Stock or Units (#) (2) | | | | |||||||||||||||||||||||
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| | | | | | | | All Other Option Awards: Number of Securities Underlying Options (#) (3) | | Grant Date Fair Value of Stock and Option Awards ($) (5) | ||||||||||||||||||||||||
| | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards | Exercise or Base Price of Option Awards ($/Sh) (4) | ||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold ($) | Target ($) | Maximum ($) | |||||||||||||||||||||||||||
John W. Lindsay | 363,000 | 907,500 | 1,179,750 | |||||||||||||||||||||||||||||||
12/5/2016 | 96,594 | 81.31 | 2,165,637 | |||||||||||||||||||||||||||||||
12/5/2016 | 22,845 | 1,857,527 | ||||||||||||||||||||||||||||||||
Juan Pablo Tardio | 122,375 | 367,125 | 489,500 | |||||||||||||||||||||||||||||||
12/5/2016 | 30,788 | 81.31 | 690,267 | |||||||||||||||||||||||||||||||
12/5/2016 | 7,281 | 592,018 | ||||||||||||||||||||||||||||||||
Robert L. Stauder | 116,366 | 349,099 | 465,465 | |||||||||||||||||||||||||||||||
12/5/2016 | 29,276 | 81.31 | 656,368 | |||||||||||||||||||||||||||||||
12/5/2016 | 6,924 | 562,990 | ||||||||||||||||||||||||||||||||
John R. Bell | 89,375 | 268,125 | 357,500 | |||||||||||||||||||||||||||||||
12/5/2016 | 22,485 | 81.31 | 504,114 | |||||||||||||||||||||||||||||||
12/5/2016 | 5,318 | 432,407 | ||||||||||||||||||||||||||||||||
Cara M. Hair | 79,063 | 237,188 | 316,250 | |||||||||||||||||||||||||||||||
12/5/2016 | 19,026 | 81.31 | 426,563 | |||||||||||||||||||||||||||||||
12/5/2016 | 4,500 | 365,895 |
OUTSTANDING EQUITY AWARDS AT FISCAL 2017 YEAR-END
The following table provides information on the current holdings of stock option awards and restricted stock awards by the named executive officers at September 30, 2017. This table includes exercisable and unexercisable option awards and unvested restricted stock awards, and such awards are reflected in each row below on an award-by-award basis. The vesting schedule for each grant that has not fully vested is shown following this table. For additional information about the option awards and stock awards, see the description of such awards in the CD&A on pages 26 and 27.
| | Option Awards | Stock Awards | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (7) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||||||||||
John W. Lindsay | 12/4/2007 | 25,000 | 35.105 | 12/4/2017 | |||||||||||||||||||||||||
12/2/2008 | 65,000 | 21.065 | 12/2/2018 | ||||||||||||||||||||||||||
12/1/2009 | 45,000 | 38.015 | 12/1/2019 | ||||||||||||||||||||||||||
12/7/2010 | 21,000 | 47.935 | 12/7/2020 | ||||||||||||||||||||||||||
12/6/2011 | 34,000 | 59.76 | 12/6/2021 | 1,500 (2) | 78,165 | ||||||||||||||||||||||||
12/4/2012 | 54,500 | 54.18 | 12/4/2022 | ||||||||||||||||||||||||||
12/3/2013 | 46,875 | 15,625 (1) | 79.67 | 12/3/2023 | 2,625 (3) | 136,789 | |||||||||||||||||||||||
12/2/2014 | 56,000 | 56,000 (1) | 68.83 | 12/2/2024 | 6,750 (4) | 351,742 | |||||||||||||||||||||||
11/30/2015 | 46,250 | 138,750 (1) | 58.25 | 11/30/2025 | 13,125 (5) | 683,943 | |||||||||||||||||||||||
12/05/2016 | 96,594 (1) | 81.31 | 12/05/2026 | 22,845 (6) | 1,190,453 | ||||||||||||||||||||||||
Juan Pablo Tardio | 12/6/2011 | 9,000 | 59.76 | 12/6/2021 | 750 (2) | 39,083 | |||||||||||||||||||||||
12/3/2013 | 16,500 | 5,500 (1) | 79.67 | 12/3/2023 | 875 (3) | 45,596 | |||||||||||||||||||||||
12/2/2014 | 17,250 | 17,250 (1) | 68.83 | 12/2/2024 | 2,050 (4) | 106,826 | |||||||||||||||||||||||
11/30/2015 | 42,000 (1) | 58.25 | 11/30/2025 | 3,900 (5) | 203,229 | ||||||||||||||||||||||||
12/05/2016 | 30,788 (1) | 81.31 | 12/05/2026 | 7,281 (6) | 379,413 | ||||||||||||||||||||||||
Robert L. Stauder | 12/3/2013 | 12,750 | 4,250 (1) | 79.67 | 12/3/2023 | 1,062 (3) | 55,341 | ||||||||||||||||||||||
12/2/2014 | 11,124 (1) | 68.83 | 12/2/2024 | 3,200 (4) | 166,752 | ||||||||||||||||||||||||
11/30/2015 | 40,500 (1) | 58.25 | 11/30/2025 | 3,750 (5) | 195,413 | ||||||||||||||||||||||||
12/05/2016 | 29,276 (1) | 81.31 | 12/05/2026 | 6,924 (6) | 360,810 | ||||||||||||||||||||||||
John R. Bell | 12/4/2007 | 10,000 | 35.105 | 12/4/2017 | |||||||||||||||||||||||||
12/2/2008 | 13,000 | 21.065 | 12/2/2018 | ||||||||||||||||||||||||||
12/1/2009 | 9,000 | 38.015 | 12/1/2019 | ||||||||||||||||||||||||||
12/7/2010 | 5,500 | 47.935 | 12/7/2020 | ||||||||||||||||||||||||||
12/6/2011 | 6,000 | 59.76 | 12/6/2021 | ||||||||||||||||||||||||||
12/4/2012 | 10,000 | 54.18 | 12/4/2022 | ||||||||||||||||||||||||||
12/3/2013 | 6,375 | 2,125 (1) | 79.67 | 12/3/2023 | 1,125 (3) | 58,624 | |||||||||||||||||||||||
12/2/2014 | 11,250 | 11,250 (1) | 68.83 | 12/2/2024 | 1,374 (4) | 71,599 | |||||||||||||||||||||||
11/30/2015 | 10,250 | 30,750 (1) | 58.25 | 11/30/2025 | 3,000 (5) | 156,330 | |||||||||||||||||||||||
12/05/2016 | 22,485 (1) | 81.31 | 12/05/2026 | 5,318 (6) | 277,121 | ||||||||||||||||||||||||
Cara M. Hair | 12/6/2011 | 750 | 59.76 | 12/6/2021 | |||||||||||||||||||||||||
12/4/2012 | |||||||||||||||||||||||||||||
12/3/2013 | 250 (3) | 13,028 | |||||||||||||||||||||||||||
12/2/2014 | 2,500 | 2,500 (1) | 68.83 | 12/2/2024 | 750 (4) | 39,083 | |||||||||||||||||||||||
11/30/2015 | 7,750 | 23,250 (1) | 58.25 | 11/30/2025 | 2,250 (5) | 117,248 | |||||||||||||||||||||||
12/05/2016 | 19,026 (1) | 81.31 | 12/05/2026 | 4,500 (6) | 234,495 |
OPTION EXERCISES AND STOCK VESTED IN FISCAL 2017
The following table provides additional information about stock option exercises and shares acquired upon the vesting of stock awards, including the value realized, during the fiscal year ended September 30, 2017, by the named executive officers.
| Option Awards | Stock Awards | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (1) | |||||||||
John W. Lindsay | 48,000 | 2,198,938 | 14,125 | 1,106,311 | |||||||||
Juan Pablo Tardio | 36,000 | 935,169 | 5,013 | 393,695 | |||||||||
Robert L. Stauder | 44,501 | 969,352 | 11,537 | 914,685 | |||||||||
John R. Bell | — | — | 5,313 | 418,905 | |||||||||
Cara M. Hair | — | — | 1,625 | 126,256 |
PENSION BENEFITS FOR FISCAL 2017
The Pension Benefits table below sets forth the fiscal 2017 year-end present value of accumulated benefits payable to each of our named executive officers under our Pension Plan and the Supplemental Pension Plan. Effective October 1, 2003, we revised both the Pension Plan and the Supplemental Pension Plan to close the plans to new participants and reduced benefit accruals for current participants through September 30, 2006, at which time benefit accruals were discontinued and the plans frozen.
The pension benefit under our Pension Plan for time periods prior to October 1, 2003, is calculated pursuant to the following formula:
Compensation × 1.5% = Annual Pension Benefit.
The pension benefit for the period commencing October 1, 2003, through September 30, 2006, is calculated as follows:
Compensation × 0.75% = Annual Pension Benefit.
Pension benefits are determined based on compensation received throughout a participant's career. "Compensation" includes salary, bonus, vacation pay, sick pay, Section 401(k) elective deferrals, and Section 125 "cafeteria plan" deferrals. The Pension Plan benefit formulas are the same for all employees. Therefore, retirement benefits for executives are calculated in the same manner as for other employees.
A normal retirement benefit is available under our Pension Plan if the employee retires at age 65 with at least 5 years of credited service or is otherwise fully vested. The "normal retirement date" is the first day of the month coincident with or next following the later of (i) normal retirement age (age 65) and (ii) the fifth anniversary of the employee's participation in the Plan.
An employee can take early retirement once he has reached age 55 and has completed at least 10 years of credited service. The amount of the early retirement benefit payment is reduced if the employee retires prior to age 62 and immediately begins receiving payments. The reduction in the annual benefit amount is 6% for each year (1/2 of 1% for each month) the employee's early retirement benefit payments start prior to age 62. The Pension Plan provides unreduced benefits for early retirement after the employee reaches age 62 and has at least 10 years of credited service. The benefit after age 62 is calculated the same as a benefit at age 65.
A vested benefit is available if the employee terminates employment before early or normal retirement and has 5 or more years of credited service. However, the employee may elect to start receiving a benefit as early as age 55 if he had 10 years of credited service. In this situation, the monthly amount will be less than what the employee would receive had he waited until age 65 since the benefit will be actuarially reduced to cover a longer period of time for payment. The actuarial reduction of the early deferred vested pension is greater than the reduction for early retirement immediately following termination of employment. However, if the employee qualified for the more favorable reduction factors at the time he leaves the Company, the benefit is based on those factors.
The employee may choose among alternative forms of retirement income payment after he becomes eligible to retire on his normal retirement date or early retirement date, as the case may be. Optional forms of payment include a single life annuity (which is an unreduced monthly pension for the rest of the employee's life), a Joint & Survivor Annuity (which is a reduced monthly pension during the employee's lifetime with payments, depending on the employee's election, of 50%, 75%, or 100% of the monthly pension continuing to the employee's spouse for the rest of the spouse's life), a guaranteed certain benefit option (which is a reduced monthly pension with payments guaranteed for 10 years and if the employee dies before the end of this period, his beneficiary will receive the payments through the end of this period) or a lump-sum (a one-time only lump sum payment, based on the present value of the monthly benefits that would have been expected to be paid for the retiree's lifetime — no survivor benefits are payable under this option).
The Supplemental Pension Plan benefit payable to the employee is the difference between the monthly amount of our Pension Plan benefit to which the employee would have been entitled if such benefit were computed without giving effect to the limitations on benefits imposed by application of Sections 415 and 401(a)(17) of the Internal Revenue Code, and the monthly amount actually payable to the employee under our Pension Plan at the applicable point in time. The benefit amount is computed as of the employee's date of termination with the Company in the form of a straight life annuity payable over the employee's lifetime (calculated in the same manner as the Pension Plan) assuming payment was to commence at the employee's normal retirement date. The employee will be paid in the form of a lump sum payment or an annual installment payable over a period of two to 10 years as designated by the employee. The employee's form of payment election under the Pension Plan will not affect the payment form under the Supplemental Pension Plan. Payment under the Supplemental Pension Plan will commence within 30 days of the later of the first business day of the seventh month following the employee's separation from service or the age (between age 55 and 65) specified on the
employee's election form. However, in the event of death, payment will be paid within 30 days of the date of death.
Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) (1) | Payments During Last Fiscal Year ($) | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
John W. Lindsay | Pension Plan | 31 | 344,698 | — | ||||||||
Supplemental Pension Plan | 31 | 55,749 | — | |||||||||
Juan Pablo Tardio | Pension Plan | 17 | 31,825 | — | ||||||||
Supplemental Pension Plan | 17 | — | — | |||||||||
Robert L. Stauder | Pension Plan | 34 | 286,190 | — | ||||||||
Supplemental Pension Plan | 34 | 847 | — | |||||||||
John R. Bell | Pension Plan | 20 | 42,475 | — | ||||||||
Supplemental Pension Plan | 20 | — | — | |||||||||
Cara M. Hair (2) | Pension Plan | — | — | — | ||||||||
Supplemental Pension Plan | — | — | — |
Mr. Lindsay and Mr. Stauder are currently eligibleprefer to receive a reduced early retirement benefit upon terminationseparate copy of employment. Messrs. Tardiothe notice, or if you are receiving multiple copies of the notice and Bell would be eligiblewish to receive a benefit anytime after attaining age 55 upononly one, please notify your broker. Stockholders who currently receive multiple notices at their termination of employment. Depending on their age at termination, theyaddress and would be eligiblelike to receive either a reduced early retirement benefit or an actuarially reduced early deferred vested benefit on or after age 55.
NONQUALIFIED DEFERRED COMPENSATION FOR FISCAL 2017
Pursuant to our Supplemental Savings Plan, a participant can contribute between 1% and 40% of a participant's combined base salary and bonus to the Plan on a before-tax basis. If the participant has not received the full Company match of the first 5% of pay in the qualified Savings Plan, then the balance of the match will be contributed to the Supplemental Savings Plan. With the exception of one stable value fund, the investment fund selections are identical in both the qualified Savings Plan and the Supplemental Savings Plan. Unless previously distributed according to the terms of a scheduled in-service withdrawal, a participant's account will become payable at the time and in the form selected by the participant upon the earlier to occur of a participant's separation from service, a participant's disability, a change-in-control or the participant's death. A participant may select payment in the form of a single lump sum payment or annual installment payments payable over a period of two to 10 years.
The following Nonqualified Deferred Compensation table summarizes the named executive officers' compensation for fiscal 2017 under our Supplemental Savings Plan.
Name | Executive Contributions in Last FY ($) (1) | Registrant Contributions in Last FY ($) (1) | Aggregate Earnings in Last FY ($) (2) | Aggregate Withdrawals / Distributions ($) | Aggregate Balance at Last FYE ($) (3) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
John W. Lindsay | 103,095 | 76,858 | 137,409 | 133,415 | 1,410,765 | |||||||||||
Juan Pablo Tardio | 66,267 | 28,180 | 6,414 | — | 1,078,718 | |||||||||||
Robert L. Stauder | 31,954 | 26,574 | 128,053 | — | 708,411 | |||||||||||
John R. Bell | 10,202 | 15,674 | 26,140 | 30,594 | 148,766 | |||||||||||
Cara M. Hair | 10,768 | 13,229 | 3,665 | — | 42,905 |
POTENTIAL PAYMENTS UPON CHANGE-IN-CONTROL
The following table shows potential pre-tax payments to our named executive officers under existing agreements in the event of a change-in-control, assuming a September 30, 2017 termination date and using the closing price ($52.11) of our common stock on September 29, 2017 (since the New York Stock Exchange was closed on September 30, 2017). Any payments due under the agreements are to be paid in a lump sum within 30 days after an executive's employment termination date. In addition, in the event of a change-in-control without termination of employment our named executive officers would be entitled to all of the amounts reflected in the column captioned "Stock Options" and, with respect to restricted stock, the amounts reflected in the column captioned "Restricted Stock" after reducing same by the value attributed to the restricted stock award granted on December 5, 2016 under out 2016 Omnibus Incentive Plan. See footnote 7 below for additional information on restricted stock.
Name | Salary and Bonus ($) (1) | Bonus ($) (2) | Vacation Pay ($) (3) | Continued Benefits ($) (4) | Outplacement Services ($) (5) | Stock Options ($) (6) | Restricted Stock ($) (7) | Non-qualified Plans ($) (8) | Total ($) | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
John W. Lindsay | 4,537,500 | 907,500 | 29,667 | 227,517 | 5,000 | 3,165,000 | 2,441,093 | 1,466,514 | 12,779,791 | |||||||||||||||||||
Juan Pablo Tardio | 1,713,250 | 367,125 | 13,414 | 124,947 | 5,000 | — | 774,146 | 1,078,718 | 4,076,600 | |||||||||||||||||||
Robert L. Stauder | 1,629,128 | 349,099 | 25,958 | 126,802 | 5,000 | — | 778,315 | 709,258 | 3,623,560 | |||||||||||||||||||
John R. Bell | 1,251,250 | 268,125 | 8,250 | 98,505 | 5,000 | 723,453 | 563,674 | 148,766 | 3,067,023 | |||||||||||||||||||
Cara M. Hair | 1,106,875 | 237,188 | 9,122 | 60,340 | 5,000 | — | 403,853 | 42,905 | 1,865,283 |
DIRECTOR COMPENSATION IN FISCAL 2017
Mr. Helmerich, as Chairman of the Board, receives a quarterly retainer of $37,500. Each non-employee Director receives a quarterly retainer of $25,000. The Audit Committee chair receives a quarterly retainer of $3,750. The Human Resources Committee and Nominating and Corporate Governance Committee chairs each receive a quarterly retainer of $2,500. In addition, each member of the Audit Committee receives a quarterly retainer of $1,250. In addition to quarterly retainers, each non-employee Director (other than the Chairman of the Board) received in fiscal 2017 restricted stock and an option to purchase shares of our common stock pursuant to the Helmerich & Payne, Inc. 2016 Omnibus Incentive Plan which had a combined value of approximately $180,000 on the date of grant. The Chairman of the Board received in fiscal 2017 restricted stock and options to purchase shares of our common stock with a combined value of approximately $270,000. All non-employee Directors are reimbursed for expenses incurred in connection with the attending of Board or Committee meetings. Employee Directors do not receive compensation for serving on the Board.
The Directors may participate in our Director Deferred Compensation Plan ("Plan"). Each Director participating in the Plan may defer into a separate account maintained by us, all or a portion of such Director's cash compensation paid by us for services as a Director. A Director may select between two deemed investment alternatives, being an interest investment alternative and a stock unit investment alternative. The interest investment alternative provides for the payment of interest on deferred amounts in the Director's account at a rate equal to prime plus one percent. Under the stock unit investment alternative, we credit the Director's account with a number of stock units determined by dividing the Director's deferred compensation amount by the fair market value of a share of our common stock on the compensation deferral date. The Director's account is also credited with any dividends that would have been paid by us had the Director held actual shares of our common stock. The account balance attributable to the stock unit investment alternative may increase or decrease depending upon fluctuations in the value of our common stock and the distribution of dividends. The stock units credited to a Director's account are used solely as a device for the determination of the amount of cash payment to be distributed to the Director under the Plan. No Director is entitled to a distribution of actual shares of our common stock or to any other stockholder rights with respect to the
stock units credited under the Plan. Except for emergency withdrawals and a change-in-control event (as defined in the Plan), the deferred cash amounts in a Director's account are not paid until he or she ceases to be a Director. The Plan does not create a trust and the participating Directors would be general unsecured creditors of the Company. Since employee Directors do not receive compensation for serving on the Board, only non-employee Directors are able to participate in the Plan. The Plan is interpreted and administered by the Human Resources Committee of the Board.
Name | Fees Earned or Paid in Cash ($) (4) | Stock Awards ($) (6) | Option Awards ($) (6) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation ($) (5) | Total ($) | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Kevin G. Cramton (1) | 78,750 | — | 91,997 | — | — | 1,837 | 172,584 | |||||||||||||||
Randy A. Foutch | 115,000 | 92,124 | 107,392 | — | — | 2,379 | 316,895 | |||||||||||||||
Hans Helmerich (2) | 150,000 | 138,146 | 161,088 | — | — | 184,124 | 633,358 | |||||||||||||||
Paula Marshall | 100,000 | 92,124 | 107,392 | — | — | 2,379 | 301,895 | |||||||||||||||
José R. Mas (1) | 75,000 | — | 91,997 | — | — | 1,837 | 168,834 | |||||||||||||||
Thomas A. Petrie | 100,000 | 92,124 | 107,392 | — | — | 2,379 | 301,895 | |||||||||||||||
Donald F. Robillard, Jr. | 120,000 | 92,124 | 107,392 | — | — | 2,379 | 321,895 | |||||||||||||||
Edward B. Rust, Jr. (3) | 105,000 | 92,124 | 107,392 | — | 4,104 | 2,379 | 310,999 | |||||||||||||||
John D. Zeglis | 110,000 | 92,124 | 107,392 | — | — | 2,379 | 311,895 |
award-by-award basis. With the exception of options granted during fiscal 2017, all options vested on the date of grant and expire ten years following the grant date. Options granted in fiscal 2017 vest on the one-year anniversary of the grant date. Also, note that while not reflected in the table below, at September 30, 2017, all Directors (with the exception of Messrs. Helmerich, Cramton and Mas) held 1,133 restricted shares that were granted on December 5, 2016 and vest on the one-year anniversary of said grant date. At September 30, 2017, Mr. Helmerich held 1,699 restricted shares that were granted on December 5, 2016 and also vest on the one-year anniversary of the date of grant. Finally, at September 30, 2017, Messrs. Cramton and Mas held 1,312 restricted shares that were granted on March 1, 2017 and vest on the one-year anniversary of the date of grant. The Directors in the table below presently (as of December 8, 2017) hold the number of shares of restricted stock as set forth in the footnotes to the Security Ownership of Management table beginning on page 5.
OUTSTANDING EQUITY AWARDS AT FISCAL 2017 YEAR-END
| Option Awards | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | ||||||||||||
Kevin G. Cramton | — | — | — | — | — | ||||||||||||
Randy A. Foutch | 12/1/2009 | 2,349 | — | 38.015 | 12/1/2019 | ||||||||||||
12/7/2010 | 1,902 | — | 47.935 | 12/7/2020 | |||||||||||||
12/6/2011 | 2,980 | — | 59.76 | 12/6/2021 | |||||||||||||
12/4/2012 | 4,078 | — | 54.18 | 12/4/2022 | |||||||||||||
12/3/2013 | 5,086 | — | 79.67 | 12/3/2023 | |||||||||||||
12/2/2014 | 7,851 | — | 68.83 | 12/2/2024 | |||||||||||||
11/30/2015 | 12,561 | — | 58.25 | 11/30/2025 | |||||||||||||
12/5/2016 | — | 4,790 | 81.31 | 12/5/2026 | |||||||||||||
Hans Helmerich | 12/4/2007 | 110,000 | — | 35.105 | 12/4/2017 | ||||||||||||
12/2/2008 | 120,000 | — | 21.065 | 12/2/2018 | |||||||||||||
12/1/2009 | 80,000 | — | 38.015 | 12/1/2019 | |||||||||||||
12/7/2010 | 40,000 | — | 47.935 | 12/7/2020 | |||||||||||||
12/6/2011 | 62,000 | — | 59.76 | 12/6/2021 | |||||||||||||
12/4/2012 | 83,000 | — | 54.18 | 12/4/2022 | |||||||||||||
12/2/2014 | 11,777 | — | 68.83 | 12/2/2024 | |||||||||||||
11/30/2015 | 18,841 | — | 58.25 | 11/30/2025 | |||||||||||||
12/5/2016 | — | 7,185 | 81.31 | 12/5/2026 | |||||||||||||
Paula Marshall | 12/4/2007 | 3,823 | — | 35.105 | 12/4/2017 | ||||||||||||
12/2/2008 | 4,122 | — | 21.065 | 12/2/2018 | |||||||||||||
12/1/2009 | 2,349 | — | 38.015 | 12/1/2019 | |||||||||||||
12/7/2010 | 1,902 | — | 47.935 | 12/7/2020 | |||||||||||||
12/6/2011 | 2,980 | — | 59.76 | 12/6/2021 | |||||||||||||
12/4/2012 | 4,078 | — | 54.18 | 12/4/2022 | |||||||||||||
12/3/2013 | 5,086 | — | 79.67 | 12/3/2023 | |||||||||||||
12/2/2014 | 7,851 | — | 68.83 | 12/2/2024 | |||||||||||||
11/30/2015 | 12,561 | — | 58.25 | 11/30/2025 | |||||||||||||
12/5/2016 | — | 4,790 | 81.31 | 12/5/2026 | |||||||||||||
José R. Mas | — | — | — | — | — | ||||||||||||
Thomas A Petrie | 6/6/2012 | 1,208 | — | 47.29 | 6/6/2022 | ||||||||||||
12/4/2012 | 4,078 | — | 54.18 | 12/4/2022 | |||||||||||||
12/3/2013 | 5,086 | — | 79.67 | 12/3/2023 | |||||||||||||
12/2/2014 | 7,851 | — | 68.83 | 12/2/2024 | |||||||||||||
11/30/2015 | 12,561 | — | 58.25 | 11/30/2025 | |||||||||||||
12/5/2016 | — | 4,790 | 81.31 | 12/5/2026 | |||||||||||||
Donald F. Robillard, Jr. | 12/4/2012 | 4,078 | — | 54.18 | 12/4/2022 |
| Option Awards | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | ||||||||||||
12/3/2013 | 5,086 | — | 79.67 | 12/3/2023 | |||||||||||||
12/2/2014 | 7,851 | — | 68.83 | 12/2/2024 | |||||||||||||
11/30/2015 | 12,561 | — | 58.25 | 11/30/2025 | |||||||||||||
12/5/2016 | — | 4,790 | 81.31 | 12/5/2026 | |||||||||||||
Edward B. Rust, Jr. | 12/4/2007 | 3,823 | — | 35.105 | 12/4/2017 | ||||||||||||
12/2/2008 | 4,122 | — | 21.065 | 12/2/2018 | |||||||||||||
12/1/2009 | 2,349 | — | 38.015 | 12/1/2019 | |||||||||||||
12/7/2010 | 1,902 | — | 47.935 | 12/7/2020 | |||||||||||||
12/6/2011 | 2,980 | — | 59.76 | 12/6/2021 | |||||||||||||
12/4/2012 | 4,078 | — | 54.18 | 12/4/2022 | |||||||||||||
12/3/2013 | 5,086 | — | 79.67 | 12/3/2023 | |||||||||||||
12/2/2014 | 7,851 | — | 68.83 | 12/2/2024 | |||||||||||||
11/30/2015 | 12,561 | — | 58.25 | 11/30/2025 | |||||||||||||
12/5/2016 | — | 4,790 | 81.31 | 12/5/2026 | |||||||||||||
John D. Zeglis | 12/4/2007 | 3,823 | — | 35.105 | 12/4/2017 | ||||||||||||
12/2/2008 | 4,122 | — | 21.065 | 12/2/2018 | |||||||||||||
12/1/2009 | 2,349 | — | 38.015 | 12/1/2019 | |||||||||||||
12/7/2010 | 1,902 | — | 47.935 | 12/7/2020 | |||||||||||||
12/6/2011 | 2,980 | — | 59.76 | 12/6/2021 | |||||||||||||
12/4/2012 | 4,078 | — | 54.18 | 12/4/2022 | |||||||||||||
12/3/2013 | 5,086 | — | 79.67 | 12/3/2023 | |||||||||||||
12/2/2014 | 7,851 | — | 68.83 | 12/2/2024 | |||||||||||||
11/30/2015 | 12,561 | — | 58.25 | 11/30/2025 | |||||||||||||
12/5/2016 | — | 4,790 | 81.31 | 12/5/2026 |
Summary of All Existing Equity Compensation Plans
The following chart sets forth information concerning our equity compensation plans as of September 30, 2017.
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 (excluding securities reflected in column (a)) | |||
---|---|---|---|---|---|---|
| (a) | (b) | (c) | |||
Equity compensation plans approved by security holders | 3,278,338 (1) | $56.4085 | 5,623,909 (3) | |||
Equity compensation plans not approved by security holders (2) | — | — | — | |||
Total | 3,278,338 | $56.4085 | 5,623,909 |
PROPOSAL 2RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee has appointed the firm of Ernst & Young LLP as the independent registered public accounting firm ("independent auditors") to audit our financial statements for fiscal year 2018. A proposal will be presented at the Annual Meeting asking the stockholders to ratify this appointment. The firm of Ernst & Young LLP has served us in this capacity for many years.
Representatives of Ernst & Young LLP will be present at the Annual Meeting and will have the opportunity to make a statement if they so desire and to respond to appropriate questions. In the event the stockholders do not ratify the appointment of Ernst & Young LLP as the independent auditors to audit our financial statements for fiscal year 2018, the Audit Committee will consider the voting results and evaluate whether to select a different independent auditor.
Although ratification is not required by Delaware law, our articles or our By-laws, we are submitting the selection of Ernst & Young LLP to our stockholders for ratification as a matter of good corporate governance. Even if the selection of Ernst & Young LLP is ratified, the Audit Committee may select different independent auditors at any time during the year if it determines that such a change would be in the best interests of the Company and our stockholders.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION OF ERNST & YOUNG LLP AS OUR INDEPENDENT AUDITORS FOR FISCAL 2018.
Audit Fees
The following table sets forth the aggregate fees and costs paid to Ernst & Young LLP during the last two fiscal years for professional services rendered to us:
| Years Ended September 30, | ||||||
---|---|---|---|---|---|---|---|
| 2017 | 2016 | |||||
Audit Fees (1) | $ | 1,707,249 | $ | 2,198,147 | |||
Audit-Related Fees (2) | 145,701 | 465,620 | |||||
Tax Fees (3) | 190,088 | 343,926 | |||||
| | | | | | | |
Total | $ | 2,043,038 | $ | 3,007,693 | |||
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The Audit Committee reviews and pre-approves audit and non-audit services performed by our independent registered public accounting firm as well as the fee charged for such services. Pre-approval is generally provided for up to one year, is detailed as to the particular service or category of service, and is subject to a specific budget. The Audit Committee may also pre-approve particular services on a case-by-case basis. The Audit Committee may delegate pre-approval authority for such services to one or more of its members, whose decisions are then presented to the full Audit Committee at its next scheduled meeting. For fiscal 2016 and 2017, all of the audit and non-audit services provided by our independent registered public accounting firm were pre-approved by the Audit Committee in
accordance with the Audit Committee Charter. In its review of all non-audit service fees, the Audit Committee considers among other things, the possible effect of such services on the auditor's independence.
Audit Committee Report
The Audit Committee of the Board of Directors is composed of four Directors and operates under a written charter adopted by the Board of Directors. All members of the Audit Committee meet the independence standards set forth in our Corporate Governance Guidelines as well as the listing standards of the NYSE and the applicable rules of the SEC. Three members of the Audit Committee meet the "audit committee financial expert" requirements under applicable SEC rules. The Audit Committee charter is available on our website atwww.hpinc.com under the "Governance" section. The Audit Committee reviews the adequacy of and compliance with such charter annually.
Our management is responsible for, among other things, preparing our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP"), establishing and maintaining internal controls over financial reporting and evaluating the effectiveness of such internal controls over financial reporting. Our independent registered public accounting firm is responsible for auditing our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board ("PCAOB"), and for expressing an opinion on the conformity of the financial statements with GAAP. Our independent registered public accounting firm is also responsible for auditing our internal controls over financial reporting in accordance with such standards and for expressing an opinion on our internal controls over financial reporting.
The Audit Committee assists the Board of Directors in fulfilling its responsibility to oversee management's implementation of our financial reporting process and the audits of our consolidated financial statements and our internal controls over financial reporting. In this regard, the Audit Committee meets periodically with management, our internal auditor and our independent registered public accounting firm. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm. As part of fulfilling this responsibility, the Audit Committee engages in an annual evaluation of, among other things, our independent registered public accounting firm's qualifications, competence, integrity, expertise, performance, independence and communications with the Audit Committee, and whether our independent registered public accounting firm should be retained for the upcoming year's audit. The Audit Committee discusses with the Company's internal auditor and our independent registered public accounting firm the overall scope and plans for their respective audits. The Audit Committee meets with the Company's internal auditor and our independent registered public accounting firm, with and without management present, to discuss the resultsrequest “householding” of their examinations,communications should contact their evaluations of the Company's internal controls, and the overall quality of the Company's financial reporting. The Audit Committee reviews significant audit findings together with management's responses thereto. The Audit Committee performs other activities throughout the year, in accordance with the responsibilities of the Audit Committee specified in the Audit Committee charter.
In its oversight role, the Audit Committee reviewed and discussed our audited consolidated financial statements and our internal controls over financial reporting with management and with Ernst & Young LLP ("E&Y"), our independent registered public accounting firm for fiscal 2017. Management and E&Y indicated that our consolidated financial statements as of and for the year ended September 30, 2017 were fairly stated in accordance with GAAP and that our internal controls over financial reporting were effective as of September 30, 2017. The Audit Committee discussed with E&Y and management the significant accounting policies used and significant estimates made by management in the preparation of our audited consolidated financial statements, and the overall quality, not just the acceptability, of our consolidated financial statements and management's financial
reporting process. The Audit Committee and E&Y also discussed any issues deemed significant by E&Y or the Audit Committee, including the matters required to be discussed pursuant to PCAOB Auditing Standard 1301, the rules of the SEC and other applicable regulations.
E&Y has provided to the Audit Committee written disclosures and the letter required by applicable requirements of the PCAOB regarding the independent registered public accounting firm's communications with the audit committee concerning independence, and the Audit Committee discussed with E&Y the firm's independence. The Audit Committee also concluded that E&Y's provision of other permitted non-audit services to us and our related entities is compatible with E&Y's independence.
Based on its review of the audited financial statements and the various discussions noted above, the Audit Committee recommended to our Board that the audited financial statements be included in our Annual Report on Form 10-K for our fiscal year ended September 30, 2017, filed with the SEC.
PROPOSAL 3ADVISORY VOTE ON EXECUTIVE COMPENSATION
The Company is requesting stockholder approval, on an advisory basis, of the compensation of the Company's named executive officers as disclosed in this proxy statement. The Human Resources Committee of the Board has overseen the development of a compensation program that is described more fully in the Executive Compensation Discussion and Analysis section of this proxy statement, including the related compensation tables and narrative. Our compensation program is designed to attract and retain qualified executives who are critical to the successful implementation of our strategic business plan. Further, we believe that our compensation program promotes a performance-based culture and aligns the interests of executives with those of stockholders by linking a substantial portion of compensation to the Company's performance. It balances short-term and long-term compensation opportunities to ensure that the Company meets short-term objectives while continuing to produce value for our stockholders over the long-term. The Company believes that its compensation program is appropriate and has served to accomplish the goals mentioned above. In deciding how to vote on this proposal, the Board urges you to consider the Executive Compensation Discussion and Analysis beginning on page 19 of this proxy statement.
For the reasons discussed, the Board recommends a vote in favor of the following resolution:
"Resolved, that the stockholders of the Company approve, on an advisory basis, the compensation of the Company's named executive officers as disclosed pursuant to the SEC's compensation disclosure rules (which disclosure includes the Compensation Discussion and Analysis, the compensation tables and the related narrative disclosure contained in the proxy statement)."
As an advisory vote, this proposal is not binding on the Company. However, the Human Resources Committee, which is responsible for designing and administering the Company's executive compensation program, values the opinions expressed by stockholders in their vote on this proposal, and will consider the outcome of the vote when making future compensation decisions for named executive officers.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF THE COMPANY'S NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.
2019 Annual Meeting
Our annual meeting for 2019 will be held Wednesday, March 6, 2019.
19, 2024 and comply with the requirements of Rule 14a-8 under the Exchange Act.
19, 2024.
| 2024 Proxy Statement | | | 99 | |
November 29, 2024.
to:
| Helmerich & Payne, Inc. Attention: Corporate Secretary 1437 South Boulder Avenue, Suite 1400 Tulsa, Oklahoma 74119 | |
| 2024 Proxy Statement | | | A-1 | |
Forof 20% or more of either (1) the fiscal year ended September 30, 2017,then outstanding shares of common stock of the Company (the “
| A-2 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | A-3 | |
| A-4 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | A-5 | |
| A-6 | | | 2024 Proxy Statement | |
Executive Officers
| 2024 Proxy Statement | | | A-7 | |
| A-8 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | A-9 | |
| A-10 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | A-11 | |
| A-12 | |
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2024 Proxy Statement | ||
Dated:
| 2024 Proxy Statement | | | A-13 | |
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| 2024 Proxy Statement | | | A-15 | |
| A-16 | | | 2024 Proxy Statement | |
| 2024 Proxy Statement | | | A-17 | |