UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant x☒ Filed by a party other than the registrant ¨☐
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| Preliminary Proxy Statement | ||
| CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE14A-6(E)(2)) | ||
| Definitive Proxy Statement | ||
| Definitive Additional Materials | ||
| Soliciting Material Pursuant toSection 240.14a-12 |
HELIX ENERGY SOLUTIONS GROUP, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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March 24, 201527, 2018
Dear Shareholder:
You are cordially invited to join us for our 20152018 Annual Meeting of Shareholders to be held on Thursday, May 7, 201510, 2018 at 10:008:30 a.m. at Helix Energy Solutions Group, Inc.’s corporate office, 3505 West Sam Houston Parkway North, Suite 400, Houston, Texas 77043.Beginning at 9:30 a.m., employees and officers will be available to provide information about 2014 developments.
The materials following this letter include the formal Notice of Annual Meeting of Shareholders and the proxy statement. The proxy statement describes the business to be conducted at the meeting, including the election of three directors;two directors, the ratification of the selection of Ernst & YoungKPMG LLP as our independent auditorsregistered public accounting firm for the 20152018 fiscal year;year, and the approval on anon-binding advisory basis of the 20142017 compensation of our named executive officers.At the meeting, we will also report on industry matters of current interest to our shareholders, and you will have an opportunity to meet with some of our directors and officers.
We have elected to furnish proxy materials to our shareholders on the Internet pursuant to rules adopted by the Securities and Exchange Commission. We believe that our election pursuant to these rules enableenables us to provide you with the information you need, while making delivery more efficient, more cost effective and friendlier to the environment. In accordance with these rules, we have sent a Notice of Availability of Proxy Materials to each of our shareholders.
Whether you own a few or many shares of our stock, it is important that your shares be represented. Regardless of whether you plan to attend the Annual Meeting in person, please take a moment now to vote your proxy over the Internet, by telephone, or if this statement was mailed to you, by completing and signing the enclosed proxy card and promptly returning it in the envelope provided. The Notice of Annual Meeting of Shareholders on the inside cover of this proxy statement includes instructions on how to vote your shares.
The officers and directors of Helix appreciate and encourage shareholder participation. We look forward to seeing you at the Annual Meeting.
Sincerely,
Owen Kratz
President and Chief Executive Officer
Important notice regarding the availability of proxy materials
for the Annual Meeting of Shareholders to be held on May 7, 201510, 2018
The Helix Energy Solutions Group, Inc. 2018 Proxy Statement and Annual Report to Shareholders (including our Annual Report onForm 10-K10-K) for the
fiscal year ended December 31, 20142017 are available electronically at
www.Helixesg.com/annualmeeting
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HELIX ENERGY SOLUTIONS GROUP, INC.
OF SHAREHOLDERS
DATE: | Thursday, May | |
TIME: | ||
PLACE: | Helix Energy Solutions Group, Inc.’s Corporate Office | |
| 3505 West Sam Houston Parkway North, Suite 400 | ||
| Houston, Texas 77043 | ||
ITEMS OF BUSINESS: | 1. To elect | |
2. To ratify the selection of | ||
3. To approve, on anon-binding advisory basis, the | ||
4. To consider any other business that may properly be considered at the Annual Meeting or any adjournment thereof. | ||
RECORD DATE: | You may vote at the Annual Meeting if you were a holder of record of our common stock at the close of business on March | |
VOTING BY PROXY: | In order to avoid additional solicitation expense to us, please vote your proxy as soon as possible, even if you plan to attend the Annual Meeting. Shareholders of record can vote by one of the following methods: | |
1. CALL | ||
2. GO TO THE | ||
3. IF PRINTED PROXY MATERIALS WERE MAILED TO YOU, MARK, SIGN, DATE AND RETURN your proxy card in the enclosed postage-paid envelope. If you are voting by telephone or the Internet, please do not mail your proxy card. | ||
| IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE MEETING OF SHAREHOLDERS TO BE HELD ON MAY | The proxy statement and | |
| By Order of the Board of Directors, | ||
 | ||
| Alisa B. Johnson | ||
Executive Vice President, General Counsel and Corporate Secretary | ||
Houston, Texas March 27, 2018 | ||
YOUR VOTE IS IMPORTANT | ||
(i)
HELIX ENERGY SOLUTIONS GROUP, INC.
3505 West Sam Houston Parkway North, Suite 400
Houston, Texas 77043
PROXY STATEMENT
ANNUAL MEETINGOF SHAREHOLDERS
TOBE HELD MAY7, 2015 HELD MAY 10, 2018
The Board of Directors of Helix Energy Solutions Group, Inc., a Minnesota corporation that is referred to herein as “Helix,” the “Company,” “we,” “us,”“us” or “our,” is soliciting your proxy to vote at the 20152018 Annual Meeting of Shareholders (“Annual(the “Annual Meeting”) on Thursday, May 7, 2015.10, 2018. This proxy statement contains information about the items being voted on at the Annual Meeting and information about Helix. Please read it carefully.
The Annual Meeting will be held at Helix Energy Solutions Group, Inc.’s corporate office, 3505 West Sam Houston Parkway North, Suite 400, Houston, Texas 77043. The Board of Directors of Helix (the “board”“Board”) has set March 9, 201512, 2018 as the record date for the Annual Meeting. There were 105,909,633148,079,552 shares of Helix’s common stock outstanding on the record date.
If you attend the Annual Meeting, please note that you may be asked to present valid picture identification. Cameras, recording devices and other electronic devices may not be permitted at the meeting other than those operated by Helix or its designees.
As permitted by the Securities and Exchange Commission (“SEC”) rules, we are making this proxy statement and our 20142017 Annual Report to Shareholders available to our shareholders electronically via the Internet. On or about March 24, 2015,27, 2018, we intend to mail to our shareholders a Notice of Internet Availability of Proxy Materials (“Notice”). The Notice contains instructions on how to vote online, by telephone or, in the alternative, how to request a paper copy of the proxy materials and a proxy card. By providing the Notice and access to our proxy materials via the Internet, we are lowering the costs and reducing the environmental impact of ourthe Annual Meeting.
 | HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 1 |
| 1. | Why am I receiving these materials? |
We are providing these proxy materials to you in connection with our Annual Meeting, to be held on Thursday, May 7, 201510, 2018 at 10:008:30 a.m. at Helix’s corporate office, 3505 West Sam Houston Parkway North, Suite 400, Houston, Texas 77043, and all reconvened
reconvened meetings after adjournments thereof. As a shareholder of Helix, you are invited to attend the Annual Meeting and are entitled and requested to vote on the proposals described in this proxy statement.
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 1
| 2. | What proposals will be voted on at the Annual Meeting? |
Three matters are currently scheduled to be voted on at the Annual Meeting.
| 1. | First is the election of |
| 2. | Second is the ratification of the selection by our Audit Committee of |
| Committee believe such is in the best interest of Helix and its shareholders). |
| 3. | Third is the approval, on anon-binding advisory basis, of the |
Although we do not expect any other items of business, we will also consider other business that properly comes before the Annual Meeting or any adjournment thereof in accordance with Minnesota law and ourBy-laws. The ChairChairman of the Annual Meeting may refuse to allow the presentation of a proposal or a nomination for the boardBoard from the floor of the Annual Meeting if the proposal or nomination iswas not properly submitted.
| 3. | Who may vote at the Annual Meeting? |
The boardBoard has set March 9, 201512, 2018 as the record date for ourthe Annual Meeting. Owners of Helix common stock whose shares are recorded directly in their name in our stock register (shareholders of record) at the close of business on March 9, 201512, 2018 may vote their shares on the matters to be acted upon at the Annual Meeting. Shareholders who, as of March 9, 2015,12, 2018, hold shares of our common stock in “street name,” that is, through an
account with a broker, bank or other nominee, may direct the holder of record how to vote their shares at the Annual Meeting by following the instructions youthey will receive from the holder of record for this purpose. You are entitled to one vote for each share of common stock you held on the record date on each of the matters presented at the Annual Meeting.
| 2 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| GENERAL INFORMATION |
| 4. | How does the |
Voting Item | Our Board’s Voting | Voting Standard to (assuming a quorum is present) | Treatment of: | |||||
Abstentions | Broker Non-Votes | |||||||
1. Election of Directors | “FOR” each nominee | Plurality Voting Standard: The two nominees receiving the greatest number of votes cast | “Withhold authority” or abstentions not counted as votes cast and as such have no effect(a) | Not counted as votes cast and as such have no effect; brokers may not vote on this proposal absent instructions | ||||
2. Ratification of Public Accounting Firm | “FOR” | Majority of Votes Cast: Votes that shareholders cast “for” must exceed the votes that shareholders cast “against” | Counted as votes “against” | Not counted as votes cast and as such have no effect; brokers may vote without restriction on this proposal | ||||
3. Advisory Approval of the | “FOR” | Majority of Votes Cast: Votes that shareholders cast “for” must exceed the votes that shareholders cast “against” | Counted as votes “against” | |||||
| (a) | If any nominee receives a greater number of “withhold authority” |
| (b) | Because this shareholder vote is advisory, the vote will not be binding on the |
2 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
| 5. | If I received a notice in the mail regarding Internet availability of the proxy materials instead of a paper copy of the proxy materials, why was that the case? |
We are using the “notice and access” process permitted by the SEC to distribute proxy materials to certain shareholders. This process allows us to post proxy materials on a designated website and notify shareholders of the availability of the proxy materials on that website. As such, we are furnishing to most of our shareholders proxy materials, including this proxy statement and our 20142017 Annual Report to Shareholders, by providing access to those documents on the Internet for most shareholders instead of mailing paper copies. The Notice, which is
being mailed to most of our shareholders, describes how
to access and review all of the proxy materials on the Internet. The Notice also describes how to vote via the Internet. If you would like to receive a paper copy by mail or an electronic copy bye-mail of ourthe proxy materials, you should follow the instructions in the Notice for requesting those materials. Your accessing your proxy material on the Internet and your request to receive your future proxy materials bye-mail will save us the cost of printing and mailing documents to you and will reduce the impact on the environment.environment
| 6. | Can I vote my shares by filling out and returning the Notice of |
No. The Notice identifies the matters to be voted on at the Annual Meeting, but you cannot vote by marking the Notice and returning it.
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 3 |
| GENERAL INFORMATION |
| 7. | How do I vote my shares and obtain directions to the Annual Meeting? |
YouIf you are a shareholder of record, you may either vote your shares in person at the Annual Meeting or designate another person to vote the shares you own. That other person is called a “proxy,” and you may vote your shares by means of a proxy using one of the following methods of voting if you are a shareholder of record:voting:
The instructions for these three methods of voting your shares are set forth on the Notice (which immediately follows the Table of Contents) and also on the proxy card. If you return your signed proxy card but do not mark the boxes showing how you wish to vote, your shares will be voted as recommended by our board.Board. The giving of sucha proxy does not affect your right to vote in person if you attend the Annual Meeting.
Directions to the Annual Meeting can be obtained atwww.Helixesg.com/annualmeeting or by calling (888) 345-2347.888.345.2347.
| 8. | Am I a shareholder of record? |
Shareholder of RecordRecord.. If your shares are registered directly in your name with our transfer agent, Wells Fargo Bank, N.A.,EQ Shareowner Services, (“Well Fargo”), you are considered a shareholder“shareholder of recordrecord” with respect to those shares and the Notice is being sent directly to you by Wells Fargo.EQ Shareowner Services. As a shareholder of record, you may vote in person at the Annual Meeting or vote by proxy. To vote your shares at the Annual Meeting you should bring proof of identification. Whether or not you plan to attend the Annual Meeting, we urge you to vote via the Internet, by telephone, or by completing,marking, signing, dating and returning the proxy card.
Beneficial Owner. If however, like most shareholders of Helix, you hold your shares in “street name” through a broker, bank or other nominee rather than directly in
your own name, you are considered the beneficial owner of those shares, and the Notice is being forwarded to you by your broker, bank or other nominee as the record holder. If you are a beneficial owner, you may appoint proxies and vote as provided by that broker, bank or other nominee. The availability of telephone or Internet voting will depend upon the voting process of theyour broker, bank or other nominee. You should follow the
voting directions provided by your broker, bank or other nominee. If you provide specific voting instructions in accordance with the directions provided by your broker, bank or other nominee, your shares will be voted by suchthat party as you have directed. The organization that holds your
shares, however, is considered to be the shareholder of record for purposes of voting at the Annual Meeting.
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 3
Accordingly, you may vote shares held in “street name” at the Annual Meeting only if you (a) obtain a signed “legal proxy” from the record holder (broker,(your broker, bank or other nominee) giving you the right to vote the shares, and (b) provide an account statement or letter from that nomineethe record holder showing that you were the beneficial owner of the shares on the record date. If your shares are not
registered in your name and you plan to attend the Annual Meeting and vote your shares in person, you should contact your broker, bank or other nominee in whose name your shares are registered to obtain from your broker, bank or other nominee as record holder a proxy executed in your favor and bring it to the Annual Meeting.
| 9. | May I change my vote? |
Yes, if you are a shareholder of record, you may change your vote and revoke your proxy by:
If you hold shares in “street name,” you must follow the procedures required by the holdershareholder of record – your broker, bank or other nominee – to revoke or change a proxy. You should contact the shareholder of record directly for more information on these procedures.
| 4 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| GENERAL INFORMATION |
| 10. | What is a quorum? |
A majority of Helix’s outstanding common shares as of the record date must be present at the Annual Meeting in order to hold the meeting and conduct business. This is called a quorum. Shares are counted as present at the Annual Meeting if a shareholder:
Proxies received but marked as abstentions or withholding authority if any, and brokernon-votes will be included in the calculation of the number of shares considered to be present at the meeting for quorum purposes.
| 11. | What are brokernon-votes and abstentions? |
If you are the beneficial owner of shares held in “street name” by a broker, bank or other nominee,name,” then theyour broker, bank or other nominee, as shareholder of record, is required to vote those shares in accordance with your instructions. IfHowever, if you do not give instructions to the broker, bank or other nominee, then it will have discretion to vote the shares with respect to “routine” matters, such as the ratification of the selection of an independent registered public accounting firm, but will not be permitted to vote with respect to “non-routine”“non-routine” matters, such as the election of directors and the approval, on anon-binding advisory basis, of the 20142017 compensation of our named executive officers.
Accordingly, if you do not instruct your broker, bank or other nominee on how to vote your shares with respect to these non-routine matters, your shares will be brokernon-votes with respect to those proposals.
An abstention is a decision by a shareholder to take a neutral position on a proposal being submitted to shareholders at a meeting. Taking a neutral position through an abstention is considered a vote cast on a proposal being submitted at a meeting as described in the response to question 4 above.
| 12. | How many shares can vote? |
On the record date, there were 105,909,633148,079,552 shares of Helix common stock outstanding and entitled to vote at the Annual Meeting, held by approximately 28,70014,000 beneficial owners.
These shares are the only securities
entitled to vote at the Annual Meeting. Each holder of a share of common stock is entitled to one vote for each share held.held on the record date.
4 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
| 13. | What happens if additional matters are presented at the Annual Meeting? |
Other than the election of three Class II directors, the ratification of the selection of Ernst & Young LLP as our independent auditors for the 2015 fiscal year and an advisory, non-binding approval of the 2014 compensation of our named executive officers,matters noted in response to question 2 above, we are not aware of any other business to be acted upon at the Annual Meeting.
If you grant a proxy, other than the proxy held by the shareholder of record if you are the beneficial owner and
hold your shares in “street name,” the persons named as proxy holders will have the discretion to vote your shares on any additional matters properly presented for a vote at the meeting or any adjournment thereof in accordance with Minnesota law and ourBy-laws.
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 5 |
| GENERAL INFORMATION |
| 14. | What if I don’t give specific voting instructions? |
Shareholders of Record. If you are the shareholder of record and you return a signed proxy card but do not indicate how you wish to vote, then your shares will be voted in accordance with the recommendations of our boardBoard on all matters presented in this proxy statement and as the proxy holders may determine in their discretion regarding any other matters properly presented for a vote at the Annual Meeting. If you indicate a choice with respect to any matter to be acted upon on your proxy card, the shares will be voted in accordance with your instructions.
Beneficial Owners. If you are a beneficial owner and hold your shares in “street name” and do not provide your broker, bank or other nominee with voting instructions, theyour broker, bank or other nominee will determine if it has the discretionary authority to vote on the particular matter.
Under applicable rules, brokers, bankersbanks and other nominees have the discretion to
vote on “routine” matters, such as the ratification of the selection of an independent registered public accounting firm, but do not have discretion to vote on “non-routine”“non-routine” matters, such as the election of directors and the approval, on anon-binding advisory basis, of the 20142017 compensation of our named executive officers.
Your vote is especially important. If your shares are held by a broker, bank or other nominee, your broker, bank or other nominee cannot vote your shares for (1) the election of directors and (2) the approval, on anon-binding advisory basis, of the 20142017 compensation of our named executive officers unless you provide voting instructions.officers. Therefore, please promptly instruct your broker, bank or other nominee regarding how to vote your shares regarding these matters.
| 15. | Is my vote confidential? |
Proxy cards, proxies delivered by Internet or telephone, ballots and voting tabulations that identify individual shareholders are mailed or returned directly to Wells FargoEQ Shareowner Services as the independent inspector of election
election and handled in a manner that protects your voting privacy. As the independent inspector of election, Wells FargoEQ Shareowner Services will count the votes.
| 16. | May shareholders ask questions at the Annual Meeting? |
Yes. During the Annual Meeting shareholders may ask questions or make remarks directly related to the matters being voted on. In order toTo ensure an orderly meeting, we ask that shareholders direct questions and comments to the Chairman. In order to provide this opportunity to every shareholder who wishes to speak,
the Chairman may limit each shareholder’s remarks to two minutes. In addition, beginning at 9:30 a.m., ourcertain employees and officers will be available at the meeting to provide information about 20142017 developments and to answer questions of more general interest regarding Helix.
| 17. | What does it mean if I receive more than one proxy card? |
It means you hold shares registered in more than one account. To ensure that all your shares are voted, please follow the instructions and vote the shares represented by each such card.proxy card that you receive. To avoid this situation in the future, we encourage you to
have all accounts
registered in the same name and address whenever possible. For shares held directly by you, you can do this by contacting our transfer agent, Wells Fargo,EQ Shareowner Services, at (800) 468-9716.800.468.9716.
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 5
| Who will count the votes? |
We have hired a third party, Wells Fargo,EQ Shareowner Services, to judge the voting, be responsible for determining whether or not a quorum is present, and tabulate votes cast by proxy or in person at the Annual Meeting.
| 6 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| GENERAL INFORMATION |
| 19. | Who will bear the cost for soliciting votes for the Annual Meeting? |
We will bear all expenses in conjunction with the solicitation of proxies, including the charges of brokerage houses and other custodians, nominees or fiduciaries for forwarding documents to beneficial owners; provided, however,owners. However, we will not bear any costs
related to an individual
shareholder’s use of the Internet or telephone to cast their vote. Proxies may be solicited by mail, in person, or by telephone or by facsimile, by certain of our officers, directors and regular employees, without extra compensation.
| 20. | How do I find out the results of the Annual Meeting? |
Preliminary voting results will be announced at the Annual Meeting and posted on our website underInvestor Relations atwww.Helixesg.com. The final
The final voting results will be reported in a Current Report onForm 8-K filed in accordance with SEC rules.
| 21. | Whom should I call with other questions? |
If you have additional questions about this proxy statement or the Annual Meeting, or would like additional copies of this proxy statement or our 20142017 Annual Report to Shareholders (including our Annual Report on
Report on Form 10-K), please contact the Corporate Secretary, Helix Energy Solutions Group, Inc., 3505 West Sam Houston Parkway North, Suite 400, Houston, Texas 77043, telephone: (281) 618-0400.281.618.0400.
| 22. | How may I communicate with Helix’s Board of Directors? |
Interested partiesShareholders may send communications in care of the Corporate Secretary, Helix Energy Solutions Group, Inc., 3505 West Sam Houston Parkway North, Suite 400, Houston, Texas 77043. Please indicate
Please indicate whether your message is for our boardBoard as a whole, or a particular group or committee of directors, our Chairman of the Board or ananother individual director.
| 23. | When are shareholder proposals for the |
All shareholder proposals must be submittedin writing to the Corporate Secretary, Helix Energy Solutions Group, Inc., 3505 West Sam Houston Parkway North, Suite 400, Houston, Texas 77043. Any shareholder who intends to present a proposal at the 20162019 Annual Meeting of Shareholders must deliver the proposal to us so that it is received no later than November 25, 2015,27, 2018, to have the proposal included in our proxy materials for that meeting. Shareholder proposals must also meet other requirements of the Securities Exchange Act of 1934, as amended (“Exchange(the “Exchange Act”), to be eligible for inclusion.
In addition, ourBy-laws permit shareholders to propose business to be considered and to nominate directors for election by the shareholders. To propose business or to nominate a director at the 20162019 Annual Meeting of Shareholders, shareholders must deliver a notice to Helix’s Corporate Secretary prior to February 7, 20169, 2019, setting forth the name of the nominee and all information required to be disclosed in solicitations of proxies or otherwise required pursuant to Regulation 14A under the Exchange Act together with such person’s written consent to serve as a director if elected.
6 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 7 |
PROPOSAL 1: ELECTION OF DIRECTORS
ThreeTwo directors are to be elected at the Annual Meeting. The boardBoard has proposed threetwo nominees, T. William Porter, Anthony TripodoOwen Kratz and James A. Watt, to stand for election as Class II directors to the board to serve a three-year term untilexpiring at the Annual Meeting of Shareholders in 20182021 or, if at a later date, until their successors are elected and qualified. Mr. PorterKratz and Mr. Watt are currently serving as Class II directors.
The nominees have agreed to be named in this proxy statement and have indicated a willingness to continue to serve if elected. The Corporate Governance and Nominating Committee of the boardBoard has determined that each of the nominees qualifies for election under its criteria for the evaluation of directors and has nominated the candidates for election. If a nominee becomes unable to serve before the election, the shares represented by proxies may be voted for a substitute designated by the board,Board, unless a contrary instruction is indicated on the proxy card. The boardBoard has no reason to believe that anyeither of the nominees will become unavailable.unable to serve. The boardBoard has affirmatively determined that Mr. Porter and Mr. Watt qualifyqualifies as “independent” as that term is defined under NYSE Rule 303A and applicable rules promulgated byunder the SEC.Exchange Act.
Unless otherwise instructed, the persons named as proxies will vote all proxies received FOR the election of each person named as nominee below as a Class II director for a term of three years, until the Annual Meeting of Shareholders in 20182021 or, if at a later date, until his respective successor is elected and qualified. There is no cumulative voting in the election of directors and the Class II directors will be elected by a plurality of the votes cast at the Annual Meeting.
In the section below, we provide the name and biographical information about each of the Class II director nominees and each other member of the board. Board.
Age and other information in the director’s biographical information are as of March 9, 2015.12, 2018. Information about the number of shares of our common stock beneficially owned by each director as of March 9, 201512, 2018 appears below under the heading “Share Ownership Information – Management–Management Shareholdings” on page 52.58.
There are no family relationships among any of our directors, nominees for director or executive officers.
Board of Directors Recommendation
The boardBoard recommends that you vote “FOR” the nominees to the Board of Directors set forth in this Proposal 1.
Vote Required
Election of each director requires the affirmative vote of holders of a plurality of the shares of common stock present or represented and entitled to votevoting on the proposal at the Annual Meeting. This means the threetwo nominees receiving the greatest number of votes cast by the holders of our common stock entitled to vote on the matter will be elected as directors.
Under the Corporate Governance Guidelines for the board,Board, any of the nominees for director who receives a greater number of “withhold authority” than votes “for” votes for his or her election is required to promptly tender his or her resignation. That resignation is to be considered by the Corporate Governance and Nominating Committee, which is to make its recommendation to the full board.Board. The boardBoard is to act upon the committee’s recommendation within 90 days of the shareholder vote, and the board’sBoard’s decision (and if the boardBoard should decline to accept the resignation, the reasons therefor) will be disclosed in a Current Report onForm 8-K.
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 7
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| PROPOSAL 1: ELECTION OF DIRECTORS |
Information about Nominees for Class II DirectorsDirectors:
| Owen Kratz | Director since | ||
President and Chief Executive Officer | Age 63 | |||
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Helix Energy Solutions Group, Inc. | ||||
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8 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
Information about Continuing Directors
Class I Directors Term Expiring in 2016:
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Mr. Kratz is President and Chief Executive Officer of Helix. He was named Executive Chairman in October of 2006 and served in that capacity until February 2008 when he resumed the position of President and Chief Executive Officer. He | ||||
| James A. Watt | Director since 2006 | ||
President and Chief Executive Officer | Age 68 | |||
Warren Resources, Inc. | ||||
Mr. Watt has served as a director since July of 2006. In November of 2015, Mr. Watt became Chief Restructuring Officer, President and CEO and a director of Warren Resources, Inc. In June of 2016, Warren Resources filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas. In October of 2016, Warren Resources completed its reorganization and emerged from Chapter 11 bankruptcy protection. At that time, Mr. Watt became and continues as President, CEO and a director of the private domestic onshore oil and gas exploration and development company. Mr. Watt was CEO, President and a director of Dune Energy, Inc., an oil and gas exploration and development company from April of 2007 until September of 2015. Mr. Watt served as Chairman and Chief Executive Officer of Maverick Oil and Gas, Inc., an independent oil and gas exploration and production company from August of 2006 until March of 2007. He was the Chief Executive Officer of Remington Oil and Gas Corporation from February of 1998 and the Chairman of Remington from May of 2003 until Helix acquired Remington in July of 2006. Mr. Watt also served on Remington’s Board of Directors from September of 1997 to July of 2006. Mr. Watt served as a director of Pacific Energy Resources, Ltd. from May of 2006 until January of 2010. Mr. Watt served on the board of Bonanza Creek Energy, Inc. from August of 2012 until April of 2017. He graduated from Rensselaer Polytechnic Institute with a Bachelor of Science in physics. As a result of his professional experiences, Mr. Watt possesses particular knowledge and experience in oil and gas exploration and production and the risks and volatile economic conditions inherent in that industry. Mr. Watt also possesses knowledge in the leadership of complex organizations and other areas related to the operation of a major corporation that strengthen the Board’s collective qualifications, skills and experience. | ||||
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 9 |
| PROPOSAL 1: ELECTION OF DIRECTORS |
Information about Continuing Directors
Class I Directors Term Expiring in 2019:
 | John V. Lovoi | Director since 2003 | |||
Managing Partner, JVL Partners | Age 57 | ||||
Mr. Lovoi has served as a director since February of 2003. He is a founder and Managing Partner of JVL Partners, a private oil and gas investment partnership. Mr. Lovoi served as head of Morgan Stanley’s global oil and gas investment banking practice from 2000 to 2002 and was a leading oilfield services and equipment research analyst for Morgan Stanley from 1995 to 2000. Prior to joining Morgan Stanley in 1995, he spent two years as a senior financial executive at Baker Hughes and four years as an energy investment banker with Credit Suisse First Boston. Mr. Lovoi also serves as Chairman of the Board of Directors of Dril-Quip, Inc., a provider of offshore drilling and production equipment to the global oil and gas | |||||
| Jan Rask | Director since 2012 | |||
Independent Investor | Age 62 | ||||
Mr. Rask has served as a director since August of 2012. He has been an independent investor since July of 2007. Since August of 2017, Mr. Rask has been a director of Borr Drilling Limited, which owns and operates a fleet ofjack-up rigs for international drilling. Mr. Rask was President, Chief Executive Officer and Director of TODCO from July of 2002 to July of 2007. Mr. Rask was Managing Director, Acquisitions and Special Projects, of Pride International, Inc., a contract drilling company, from September of 2001 to July of 2002. From July of 1996, Mr. Rask was President, Chief Executive Officer and a director of Marine Drilling Companies, Inc., a contract drilling company, until the acquisition of Marine Drilling Companies, Inc. by Pride International, Inc. Mr. Rask served as President and Chief Executive Officer of Arethusa(Off-Shore) Limited from May of 1993 until the acquisition of Arethusa(Off-Shore) Limited by Diamond Offshore Drilling, Inc. in May of 1996. Mr. Rask joined Arethusa Offshore, (ASE) Limited’s principal operating subsidiary in 1990 as its President and Chief Executive Officer. Mr. Rask holds a Bachelor of Economics and Business Administration from the Stockholm School of Economics and Business Administration. Mr. Rask has worked in the shipping and offshore industry for approximately 30 years and has held a number of positions of progressive responsibility in finance, chartering and operations. Mr. Rask possesses particular knowledge and experience in the offshore oil and gas contract drilling industry. Mr. Rask also has extensive knowledge in international operations, leadership of complex organizations and other aspects of operating a major corporation that strengthen the | |||||
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 9
| 10 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| PROPOSAL 1: ELECTION OF DIRECTORS |
Class III Directors Term Expiring in 2017:2020:
 | Nancy K. Quinn | Director since 2009 | ||
Independent Energy Consultant | Age 64 | |||
Ms. Quinn has served as a director since February of 2009. Ms. Quinn has been an independent energy consultant since July of 1996 and resides in Key Biscayne, Florida. Ms. Quinn provides senior financial and strategic advice, primarily to clients in the energy and natural resources industries. Ms. Quinn has worked in the financial industry for over 30 years, specializing in financial restructuring, strategic advice, and mergers and acquisitions for a broad range of energy and natural resource companies. Ms. Quinn gained extensive experience in independent exploration and production, as well as in diversified natural gas and oilfield service sectors, while holding leadership positions at such firms as PaineWebber Incorporated and Kidder, Peabody & Co. Incorporated, as well as energy industry private equity investment and mergers and acquisitions experience in a senior advisory role with Beacon Group. Ms. Quinn currently serves as a director and chair of the | ||||
| William L. Transier | Director since 2000 | |||
Energy Executive | Age 63 | ||||
Mr. Transier has served as a director since October | |||||
10 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 11 |
Our boardBoard currently consists of sevensix members and, in accordance with ourBy-laws, is divided into three classes of similar size. The members of each class are elected to serve a three-year term with the term of office of each class ending in successive years. The Class I, II
and III directors are currently serving until the later of the Annual Meeting in 2016, 20152019, 2018 and 2017,2020, respectively, and their respective successorsuccessors being elected and qualified. There are currently two directors
in Class III and Class II and three directors in Class I. The board has approved an increase in the size of the board from seven to eight effective immediately prior to the Annual Meeting. Upon the conclusion of the Annual Meeting, in the event that all director nominees are elected, our board will consist of eight members with three directors each in Class I, and Class II and two directors in Class III.
The boardBoard has established guidelines that it follows in matters of corporate governance. A complete copy of the Corporate Governance Guidelines for the Board of Directors is available on our website, which is locatedcan be found atwww.Helixesg.com, underInvestor Relations, by clickingGovernance. According to the governance guidelines, the boardBoard is vested with all powers
necessary for the management and
administration of Helix’s business operations. Although not responsible for ourday-to-day operations, the boardBoard has the responsibility to oversee management, provide strategic direction, provide counsel to management regarding the business of Helix, and to be informed, investigate and act as necessary to promote our business objectives.
Board of Directors Independence and Determinations
The boardBoard has affirmatively determined that the following members of the boardMessrs. Lovoi, Rask, Transier and Watt, and Ms. Quinn qualify as “independent” as that term is defined under NYSE Rule 303A and applicable rules promulgated under the Exchange Act: Messrs. Lovoi, Porter, Rask, Transier and Watt, and Ms. Quinn.Act. In making this determination, the boardBoard has concluded that none of these directors has a relationship with Helix which,that, in the opinion of the board,Board, is material and would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. TheOur only currentnon-independent management director is Mr. Kratz, our President and Chief Executive Officer. Accordingly, a majority of the members of our boardBoard are independent, as required by NYSE Rule 303A. This independence determination is analyzed annually to promote arms-
lengtharms-length oversight. In making the determination regarding
independence the boardBoard reviewed the NYSE Rule 303A criteria for independence in advance of the first meeting of the boardBoard in 2015.2018. In connection with its determination, the boardBoard gathered information with respect to each boardBoard member individually regarding potential transactions and relationships between Helix and its directors, including the existence of certain ongoing transactions, if any, entered into between Helix and certainother entities of which our directors serve as officers or directors. Each director also completed a questionnaire, which included questions about his or her relationship with Helix. None of these transactions or relationships were deemed to affect the independence of the applicable director, nor did they exceed the thresholds established by NYSE rules.
Selection of Director Candidates
The boardBoard is responsible for selecting candidates for boardBoard membership and for establishing the criteria to be used in identifying potential candidates. The boardBoard delegates the screening and nomination process to the Corporate Governance and Nominating Committee.
For more information on the director nomination process, including the current selection criteria, see “Corporate Governance and Nominating Committee” starting on page 16.17.
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 11
| 12 | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| CORPORATE GOVERNANCE |
Board of Directors Qualification,Qualifications, Skills and Experience
We are an international offshore energy services company that provides specialty services to the offshore energy industry, with a focus on well intervention and robotics operations. We believe our boardBoard should be composed of individuals with sophistication and experience in the substantive areas that impact our business. We believe experience, qualifications, or skills in one or more of the following areas to be most important: offshore oil fieldoilfield services, oil and gas exploration and production, international operations, accounting and finance,
strategic planning, investor
relations, legal/regulatorygovernance matters, leadership and administration of complex organizations, management of risk, corporate governance and other areas related to the operation of a major international corporation (whether social, cultural, industrial or operational). We believe that all of our current boardBoard members possess the professional and personal qualifications necessary for boardBoard service, and have the described noteworthy attributes in their biographies under “Election of Directors” onpages 8-10.9-11.
In July of 2017, the Board appointed its former Lead Director, Mr. Transier, to serve as its independent Chairman of the Board. The Corporate Governance and Nominating Committee periodically reviews and recommends to the Board appropriate Board leadership structure.
Pursuant to the terms of our Corporate Governance Guidelines adopted by the board,Board, any shareholder or other interested party wishing to send written communications to any one or more of Helix’s directors may do so by sending them in care of our Corporate Secretary at Helix’s corporate office. All such
All such communications will be forwarded to the intended recipient(s). All such communications should indicate whether they contain a message for the boardBoard as a whole, or a particular group or committee of directors, our Chairman or ananother individual director.
Code of Business Conduct and Ethics
In addition to the Corporate Governance Guidelines, in 2003 we adopted a written Code of Business Conduct and Ethics that applies to all of our directors, officers and employees, including our executive officers. At that time we also established a Code of Ethics for Chief Executive and Senior Financial Officers whichthat is currently applicable to our Chief Executive Officer, Chief Financial Officer, ChiefPrincipal Accounting Officer or Corporate Controller, and Vice President – Internal Audit. We have posted a current copy of both codes on our website, which is located atwww.Helixesg.com, underInvestor Relations, then by
clickingGovernance. In addition, we intend to
post on our website all disclosures that are required by law or NYSE listing standards concerning any amendments to, or waivers of, any provision of the Code of Business Conduct and Ethics. The Code of Business Conduct and Ethics, the Code of Ethics for Chief Executive and Senior Financial Officers and the Corporate Governance Guidelines are available free of charge in print upon request sent to the Corporate Secretary at Helix Energy Solutions Group, Inc., 3505 West Sam Houston Parkway North, Suite 400, Houston, Texas 77043.
Attendance at the Annual Meeting
The members of the board holdBoard holds a regular meeting immediately preceding and/or immediately after each year’s Annual Meeting of Shareholders. Therefore, members of our boardBoard generally attend Helix’s Annual Meetings of Shareholders.
The boardBoard encourages its members
to attend the Annual Meeting, but does not have a written policy regarding attendance at the meeting. SixAll members of the boardBoard attended the 20142017 Annual Meeting of Shareholders.
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 13 |
| CORPORATE GOVERNANCE |
In February of 2017, the Corporate Governance and Nominating Committee adopted a mandatory retirement policy for directors such that no person may be a director
nominee to serve for a term if during the applicable term he or she would reach the age of 75.
Directors’ Continuing Education
The boardBoard encourages all members to attend director education programs appropriateif they believe attendance will enable them to their individual backgrounds in orderperform better and to stay abreast of developments in corporate governancerecognize and “best practices” relevanteffectively deal with issues as they arise. To assist
to their contribution tomembers’ continuing education, Helix is a member of the boardNational Association of Corporate Directors and their specific committee assignments. In addition, from time to time Helix will present programs regarding topical matters to the board.Board.
12 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
Selection of Chairman and Chief Executive Officer
The board does not have a formal policy with respect to whether the Chief Executive Officer (“CEO”) should also serve as chairman of the board. The board currently combines the role of chairman of the board and the role of CEO. Mr. Kratz has served as chairman of the board and CEO from 1998 to 2006 and again since 2008. The board believes this structure is optimal for us because it allows one person to speak for and lead Helix and demonstrates to our employees, suppliers, customers and other stakeholders that we are under strong leadership, with a single person setting the tone and having the primary responsibility for managing our operations. Combining the chairman and the CEO roles fosters clear accountability, effective decision-making, and alignment on corporate strategy. Having a single leader also eliminates the potential for confusion and duplication of efforts. However, the board periodically reviews its leadership structure. The board, through the Compensation Committee, evaluates the CEO on an annual basis.
The board believes that independent oversight of management is an important component of an effective board of directors. Members of the board play an
important role in determining the agenda for many board and committee meetings and often request specific agenda items and information as part of their oversight role. The board does not have a specific presiding director, but Mr. Porter, in his role as chairman of the Corporate Governance and Nominating Committee, presides as the chair of each executive session of the board unless the particular topic of the applicable executive session dictates that another independent director serve as the chair of the meeting, typically the chairman of the committee responsible for the particular topic. In the case of an executive session of the independent directors held in connection with a meeting of a committee of the board, the chairman of the particular committee will preside as chair.
We believe that having a combined CEO and chairman, coupled with a substantial majority of independent, experienced directors, key board committees comprised entirely of independent directors, and strong and effective corporate governance guidelines, provides the right leadership structure for Helix and its shareholders at this time.
The boardBoard has overall responsibility for risk oversight with a focus on the most significant risks facing Helix. Our management identifies and prioritizes riskrisks associated with our business. Each prioritized risk is assigned to a boardbusiness, which are discussed at Board and/or committee or the full board for oversight.meetings as appropriate. The boardBoard focuses on our general risk management strategy and the most significant risks to Helix, and ensures that appropriate risk mitigation strategies are implemented by our management. The boardBoard is also informed of particular risks in connection with its general oversight and approval of corporate matters.
The boardBoard delegates to the Audit Committee oversight of much of our risk management process. Among its duties, the Audit Committee regularly reviews with management:
The board’sBoard’s risk oversight process builds upon management’s risk assessment and mitigation processes. Our management is responsible for theday-to-day management of Helix including the management of risk. Our finance, legal (which includes compliance, human resources, contracts and risk managementinsurance functions) and internal audit departments serve as the primary
monitoring and testing function for company policies and procedures, and manage theday-to-day oversight of our risk management strategy. This oversight includes identifying, evaluating and addressing potential risks that may exist at the
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 13
enterprise, strategic, financial, operational, compliance and reporting levels.
Management regularly reports on each such riskthese risks to the Board and/or its relevant committee or the board.committee. Additional review and reporting of risks is conducted as needed or as requested by the board Board and/or its relevant committee. Our committees also consider and address risk as they perform their respective committee responsibilities. All committees report to the full boardBoard as appropriate, including when a matter rises to the level of a material risk.
In addition to reports from the committees, the boardBoard receives presentations throughout the year from various departmentsmembers of management that include discussion of significant risks as necessary and appropriate,
including any risks associated with proposed transactions. At each boardBoard meeting, the chairman andour CEO addresses matters of particular importance or concern, including any significant areas of risk that require boardBoard attention, whether commercial, operational, legal, regulatory or other type of risk.
Additionally, the boardBoard reviews our short-term and long-term strategies, including consideration of significant risks facing Helix and the impact of such risks.
We believe that our risk management proceduresresponsibilities, processes and responsibilitiesprocedures are an effective approach for addressing the risks facing Helix and that our boardBoard structure supports this approach.
.
| 14 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| CORPORATE GOVERNANCE |
Meetings of the Board and Committees
The boardBoard currently has, and appoints members to, three standing committees: the Audit Committee, the Compensation Committee, and the Corporate Governance and Nominating Committee. Each committee acts under the terms of a written charter, copies of which are available aton our website, which is located atwww.Helixesg.com, underInvestor Relations, then by clickingGovernance. A copy of each charter is available free of charge upon request to the Corporate Secretary at Helix Energy Solutions Group, Inc., 3505 West Sam Houston Parkway North, Suite 400, Houston, Texas 77043. In 2013 a Special Committee
was formed to assess whether to pursue a shareholder derivative claim. As the claim was dismissed by the court in 2014, the Special Committee is no longer in existence. The following table summarizes the membership of the boardBoard and each of its committees as well as the number of times each met during the year ended December 31, 2014.2017. Members were elected to the boardBoard based upon the recommendation of the Corporate Governance and Nominating Committee followed by a vote of the full board.Board. Each member of each of these committees is independent as defined by the applicable NYSE and SEC rules.
| Name | Board | Audit | Compensation | Corporate and Nominating | Special | Board | Audit | Compensation | Corporate Governance and Nominating | |||||||||
Mr. Kratz | Chair | — | — | — | — | Member | — | — | — | |||||||||
Mr. Lovoi | Member | Member | Chair | — | Member | Member | Member | Member | — | |||||||||
Mr. Porter | Member | Member | — | Chair | Chair | Member | Member | — | Member | |||||||||
Ms. Quinn | Member | Member | — | Member | Member | Member | Chair | — | Member | |||||||||
Mr. Rask | Member | — | Member | Member | Member | Member | — | Member | Chair | |||||||||
Mr. Transier | Member | Chair | Member | — | Member | Chair | Member | Member | Member | |||||||||
Mr. Tripodo(2) | Member | — | — | — | ||||||||||||||
Mr. Watt | Member | — | Member | Member | Member | Member | — | Chair | Member | |||||||||
Number of Meetings in 2014 | ||||||||||||||||||
Number of Meetings in 2017 | ||||||||||||||||||
Regular | 4 | 7 | 4 | 4 | 0 | 5 | 6 | 5 | 5 | |||||||||
Special | 5 | 0 | 1 | 0 | 1 | 8 | 0 | 4 | 0 | |||||||||
(2) Mr. Tripodo resigned from the Board effective December 31, 2017.
14 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
During the year ended December 31, 2014,2017, the boardBoard held a total of ninethirteen meetings. EachEvery director who served for all of 2017 attended 75% or more of the total
meetings of the boardBoard held during 2017, and
each director attended 75% or more of the total meetings of the committees on which such director served.
Executive Sessions of the Directors
Non-management directors meet in regularly scheduledregular executive sessions following boardBoard and committee meetings without any members of management being present and at which only those directors who meet the independence standards of the NYSE are present, provided however, that committees diddo periodically meet with individual members of management by invitation, including the CEO, during executive session. Mr. Porter presided as the chair of each executive
sessionThe independent Chairman and, prior to the Chairman’s election in July of 2017, the Lead Director, presides at executive sessions of the board unless the particular topic of the applicable executive session dictated that another independent director serve as the chair of the meeting, typically the chairman of the committee responsible for the particular topic.directors. In the case of an executive session of the independent directors held in connection with a meeting of a committee of the board,Board, the chairmanchair of the applicable committee presides as chair.
The Audit Committee is composed of four threenon-employee independent directors, Mr. Transier, Chairman, Mr. directors: Ms. Quinn, Chair, and Messrs. Lovoi Mr. Porter and Ms. Quinn,Transier, each of whom meets the
independence and financial literacy requirements as defined in the applicable NYSE and SEC rules. The Audit Committee is appointed by the boardBoard to assist the board
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 15 |
| CORPORATE GOVERNANCE |
Board in fulfilling its oversight responsibility to theour shareholders, potential shareholders, the investment community and others relating to: (i) the integrity of our financial statements, (ii) the effectiveness of our internal control over financial reporting, (iii) our compliance with applicable legal and regulatory requirements, (iii)(iv) the performance of our internal audit function and independent registered public accounting firm and (iv)(v) the independent registered public accounting firm’s qualifications and independence. Among theits duties, of the Audit Committee, all of which are more specifically described in the Audit Committee charter, which was most recently amended in December 2014,of 2017, the Audit Committee:
quarterly financial statements, including disclosures made in management’s discussion and analysis and in our earnings press releases; |
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 15
Audit Committee Independence
The boardBoard has affirmatively determined that all members of the Audit Committee (i) are considered “independent” as defined under NYSE Rule 303A and
(ii) meet the
criteria for independence set forth in Exchange ActRule 10A-3(b)(1).
Designation of Audit Committee Financial Expert
The boardBoard has determined that each of the membersmember of the Audit Committee is financially literate and that Mr. Transier and Ms. Quinn are “audit committee financial experts,” as that term is defined in the rules promulgated by the SEC pursuant to the Sarbanes-OxleySarbanes-
Oxley Act of 2002, and have financial management expertise as required by the NYSE listing rules.
For more information regarding the Audit Committee, please refer to the “Report of the Audit Committee” on page 22.24.
The Compensation Committee is composed of fournon-employee independent directors: Mr. Lovoi, Chairman,Watt, Chair, and Messrs. Lovoi, Rask Transier and Watt.Transier. The Compensation Committee is appointed by the boardBoard to discharge the board’sBoard’s responsibilities relating to compensation of our executive officers. The Compensation Committee has the responsibilities described in the Compensation Committee charter including the overall responsibility for reviewing, evaluating and approving Helix’s executive officer compensation plans, policies, programs and agreements (to the extent such agreements are
considered necessary or appropriate by the Compensation Committee), plans, policies and programs.. The Compensation Committee is also responsible for reviewing and recommending to the boardBoard whether the “Compensation Discussion and Analysis” should be included in our proxy statement and for performing such other functions as the boardBoard may assign to the Compensation Committee from time to time, includingtime. The Compensation Committee has the responsibility to:
| 16 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| CORPORATE GOVERNANCE |
Corporate Governance and Nominating Committee
The Corporate Governance and Nominating Committee is composed of fournon-employee independent non-employee directors: Mr. Porter, Chairman,Rask, Chair, Ms. Quinn, Mr. RaskTransier and Mr. Watt. The Corporate Governance and Nominating Committee is appointed by the boardBoard to take a leadership role in shaping the corporate governance and business standards of our board
Board and Helix. The Corporate Governance and Nominating Committee identifies individuals qualified to become boardBoard members, consistent with criteria approved by the board,Board, oversees the organization of the boardBoard to discharge the board’sBoard’s duties and responsibilities properly and efficiently, and identifies best practices and recommends corporate governance principles,
16 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
including giving proper attention and effective responses to shareholder concerns regarding corporate governance.
The Corporate Governance and Nominating Committee has the responsibilities specifically described in the Corporate Governance and Nominating Committee charter and the Corporate Governance Guidelines, including the responsibility to:
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 17 |
Special Committee CORPORATE GOVERNANCE
A Special Committee of the board was formed in 2013 and was comprised of our six independent, non-employee directors: Mr. Porter, Chairman, Messrs. Lovoi, Rask, Transier and Watt, and Ms. Quinn, for the purpose of considering whether it was in our best interest to pursue the claims alleged in connection with the Shareholder Derivative Complaint styledLucas v. Kratz, et al., Cause No. 2012-26160 in the District Court of Harris County, Texas. The Special Committee
evaluated and rejected the plaintiff’s demand to pursue certain claims against various present and former directors and executive officers of Helix related to the 2010 compensation of Helix’s then executive officers as not being, in the judgment of the Special Committee, in the best interest of Helix or our shareholders. The Shareholder Derivative Complaint was dismissed with prejudice in 2014 and, as such, the Special Committee is no longer in existence.
Process for Director Nominations –— Shareholder Nominees
The policy of the Corporate Governance and Nominating Committee is to consider properly submitted shareholder nominations for candidates for membership on the boardrecommendations of director nominees by shareholders as described below under “Identifying and Evaluating Nominees for Directors.” In evaluating these nominations, the Corporate Governance and Nominating Committee seeks to achieve a balance of knowledge, experience and capability on the board and to address the membership criteria set forth below under “Director Qualifications and Diversity.” Any shareholder nominations proposedrecommendations for director nominees for consideration by the Corporate Governance and Nominating Committee should include the nominee’s
name and qualifications for boardBoard membership and should be addressed to the Corporate Secretary, Helix Energy Solutions Group, Inc., 3505 West Sam Houston Parkway North, Suite 400, Houston, Texas 77043. In addition, ourBy-laws permit shareholders to nominate
directors for consideration at an annual shareholder meeting. However, in order to be considered at this year’s Annual Meeting, nominations were required to be received by us prior to the date of this proxy statement.
Neither the Corporate Secretary nor the Corporate Governance and Nominating Committee received any recommendations for director nominees from any shareholder or group of shareholders during 2017 or to date in 2018. As such, Mr. Kratz and Mr. Watt are the only directors standing for election at the Annual Meeting.
Shareholders may nominate persons for election to the boardBoard to be considered at next year’s Annual Meeting of Shareholders in accordance with the procedure on page 55.60.
Director Qualifications and Diversity
The Corporate Governance and Nominating Committee has established certain criteria with respect to the desired skills and experiencesexperience for prospective boardBoard members, including those candidates recommended by the committee and those properly nominated by shareholders. The board,Board, with the assistance of the Corporate Governance and
Nominating Committee, selects potential new boardBoard members using criteria and priorities established from time to time. Desired personal qualifications for director nominees include industry knowledge, intelligence, insight, practical wisdom based on experience, the highest professional and personal ethics and values, leadership skills, integrity, strength of character and commitment. Nominees should also
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 17
have broad experience at the policy-making level in business and possess a familiarity with complex business organizations and one or more of our business lines or those of our customers. Nominees should have the independence necessary to make an unbiased evaluation of management performance and effectively carry out their oversight responsibilities and be committed to enhancing shareholder value. Nominees should have sufficient time to carry out their duties. Their service on other boards of public companies should be limited to a number that permits them, given their individual circumstances, to perform
responsibly all director duties to Helix and our shareholders. Specifically, in accordance with our Corporate Governance Guidelines for the Board of Directors, they may not serve on the boards of more than four public companies other than Helix or, if the director is the CEO of Helix or equivalent of another public company, on the boards of more than two public companies other than Helix. Each director must represent the interests of all shareholders.
Although the Corporate
Governance and Nominating Committee does not have a formal policy regarding boardBoard diversity, it does view diversity expansively and has determined that it is desirable for the boardBoard to have a variety of different viewpoints, professional experiences, educational backgrounds and skills, and considers these types of diversity and background considerationsattributes in its selection process. The composition, skills and needs of the boardBoard change over time and will be considered in determining desirable candidates for any specific opening on the board.Board. The Corporate Governance and Nominating Committee in consideringevaluating a potential nominee will conduct its search for the best candidate for the boardBoard seat on anon-discriminatory basis.
| 18 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| CORPORATE GOVERNANCE |
Identifying and Evaluating Nominees for Directors
The Corporate Governance and Nominating Committee utilizes a variety of methods for identifying and evaluating nominees for director. The Corporate Governance and Nominating Committee regularly assesses the appropriate size of the board,Board, and whether any vacancies on the boardBoard are expected, due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Corporate Governance and Nominating Committee considers various potential candidates for director. Candidates may come to the attention of the Corporate Governance and Nominating Committee through current boardBoard members, professional search firms, shareholders or other persons.parties. These candidates are evaluated at regular or special meetings of the Corporate Governance and Nominating Committee, and may be considered at any point during the year.
As described above, the Corporate Governance and Nominating Committee considers properly submitted recommendations of director nominees by shareholders.
shareholder nominations for candidates for the board. Following verification of the shareholder status of persons proposing candidates,director nominees, recommendations are considered by the Corporate Governance and Nominating Committee at a regularly scheduled meeting, which is generally the first or second meeting prior to the issuance of the proxy statement for our Annual Meeting of Shareholders. If any materials are provided by a shareholder in connection with the nominationshareholder’s recommendation of a director candidate,nominee, those materials are forwarded to the Corporate Governance and Nominating Committee.
The Corporate Governance and Nominating Committee may also review materials provided by current Board members, professional search firms or other parties in connection with a nominee who iswas not proposed bypursuant to a shareholder.shareholder recommendation. In evaluating those nominations, the Corporate Governance and Nominating Committee seeks to achieve a balance of knowledge, experience and capability on the board.
Sources for New Nominees
Messrs. Porter, Tripodo and Watt are the only directors standing for election at the Annual Meeting. Neither the Corporate Secretary nor the Corporate Governance and Nominating Committee received any
recommendations for director candidates from any shareholder or group of shareholders during 2014 or to date in 2015.Board.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee was during fiscal year 2014,2017 an officer or employee of Helix or any of our subsidiaries, or was formerly an officer of Helix or any of our subsidiaries, or had any relationships requiring disclosure by us under Item 404 of RegulationS-K under the Exchange Act.
During 2014,2017, no executive officer of Helix served as (1) a member of the compensation committee (or other board committee performing equivalent functions) of another
another entity, one or more of whose executive officers served on the Compensation Committee of our board,Board, (2) a director of another entity, one or more of whose executive officers served on the Compensation Committee of our boardBoard or (3) a member of the compensation committee (or other board committee performing equivalent functions) of another entity, one or more of whose executive officers served as a member of our board.Board.
18 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 19 |
20142017 Director Compensation Table
The following table provides compensation that was earned or paid during theone-year period ended December 31, 20142017 for each member who served on our Board during all or part of our board.2017.
| Name(1) | Fees Earned or Paid in Cash(2)(3) | Stock Awards(4)(5) | Option Awards(6) | All Other Compensation | Total | Fees Earned or
| Stock Awards(4)(5)
| All Other
| Total
| |||||||||||||||||||||||
John V. Lovoi | $
| -0-
|
| $350,313 | $-0- | $-0- | $350,313 | $-0- | $342,810 | $-0- | $342,810 | |||||||||||||||||||||
T. William Porter | $
| 117,250
|
| $200,000 | $-0- | $-0- | $317,250 | $45,500 | $175,000 | $-0- | $220,500 | |||||||||||||||||||||
Nancy K. Quinn | $
| 113,750
|
| $200,000 | $-0- | $-0- | $313,750 | $149,000 | $175,000 | $-0- | $324,000 | |||||||||||||||||||||
Jan Rask | $
| -0-
|
| $335,938 | $-0- | $-0- | $335,938 | $-0- | $355,001 | $-0- | $355,001 | |||||||||||||||||||||
William L. Transier | $
| 29,000
|
| $330,625 | $-0- | $-0- | $359,625 | $262,850 | $175,000 | $-0- | $437,850 | |||||||||||||||||||||
James A. Watt | $ | 108,750 | $200,000 | $-0- | $-0- | $308,750 | $148,750 | $175,000 | $-0- | $323,750 | ||||||||||||||||||||||
| (1) | Mr. Porter resigned from the Board effective March 31, 2017. The vesting of his 37,598 unvested shares was accelerated by the Compensation Committee on that date. Messrs. Kratz |
| (2) | The annual retainer fee for each member of the |
| (3) | In this column we are required to report all fees earned or paid to directors during |
| (4) | Amounts shown in this column |
| (5) | The grant date fair value of the restricted stock awarded with respect to the year ended December 31, |
| Name | Date of Grant | Number of Shares | Grant Date Fair Value | Date of Grant
| Number of Shares
| Grant Date Fair Value
| |||||||||||||||||||||||||
Mr. Lovoi | December 5, 2013 January 2, 2014 April 1, 2014 July 1, 2014 October 1, 2014 January 5, 2015 | (a)(b)(b)(b)(b)(b) | | 8,893 1,443 1,373 986 1,346 1,368 | | | $200,000 $33,438 $31,563 $25,938 $29,687 $29,687 | | December 2, 2016 | (a) | 15,780 | $175,000 | |||||||||||||||||||
| January 3, 2017 | (b) | 4,854 | $42,812 | ||||||||||||||||||||||||||||
| April 3, 2017 | (b) | 3,660 | $28,438 | ||||||||||||||||||||||||||||
| July 3, 2017 | (b) | 7,037 | $39,689 | ||||||||||||||||||||||||||||
| October 2, 2017 | (b) | 3,594 | $26,560 | ||||||||||||||||||||||||||||
| January 2, 2018 | (b) | 4,020 | $30,311 | ||||||||||||||||||||||||||||
Mr. Porter | December 5, 2013 | (a) | 8,893 | $200,000 | December 2, 2016 | (a) | 15,780 | $175,000 | |||||||||||||||||||||||
Ms. Quinn | December 5, 2013 | (a) | 8,893 | $200,000 | December 2, 2016 | (a) | 15,780 | $175,000 | |||||||||||||||||||||||
Mr. Rask | December 5, 2013 January 2, 2014 April 1, 2014 July 1, 2014 October 1, 2014 January 5, 2015 | (a)(b)(b)(b)(b)(b) | | 8,893 1,281 1,237 1,081 1,119 1,138 | | | $200,000 $29,688 $28,438 $25,937 $29,687 $29,688 | | December 2, 2016 | (a) | 15,780 | $175,000 | |||||||||||||||||||
| January 3, 2017 | (b) | 5,102 | $45,000 | ||||||||||||||||||||||||||||
| April 3, 2017 | (b) | 4,344 | $33,753 | ||||||||||||||||||||||||||||
| July 3, 2017 | (b) | 6,981 | $39,373 | ||||||||||||||||||||||||||||
| October 2, 2017 | (b) | 4,060 | $30,003 | ||||||||||||||||||||||||||||
| January 2, 2018 | (b) | 4,227 | $31,872 | ||||||||||||||||||||||||||||
Mr. Transier | December 5, 2013 April 1, 2014 July 1, 2014 October 1, 2014 January 5, 2015 | (a)(b)(b)(b)(b) | | 8,893 1,441 1,330 1,417 1,440 | | | $200,000 $33,125 $35,000 $31,250 $31,250 | | December 2, 2016 | (a) | 15,780 | $175,000 | |||||||||||||||||||
Mr. Watt | December 5, 2013 | (a) | 8,893 | $200,000 | December 2, 2016 | (a) | 15,780 | $175,000 | |||||||||||||||||||||||
| (a) | Represents the annual equity grant made in December of 2016 for |
| (b) | Represents the payment of retainer and |
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 19
| 20 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| DIRECTOR COMPENSATION |
Additionally, on December 4, 2014,7, 2017, each of thenon-employee directors was issued 8,63223,548 shares of restricted stock having a value of $200,000$150,000 representing their annual grant for future boardBoard service.
As of December 31, 2014,2017, unvested restricted stock held by eachnon-employee director who served during all or part of 2017 is as follows:
| Name | Shares of Unvested Restricted Stock Outstanding(a) | |||
Mr. Lovoi | 84,547 | |||
Mr. Porter | 0 | |||
Ms. Quinn | 43,538 | |||
Mr. Rask | 83,930 | |||
Mr. Transier | 43,538 | |||
Mr. Watt | 43,538 |
| (a) |
|
|
Summary of Director Compensation and Procedures
Ournon-employee director compensation structure has three components: (1) director retainer and fees (meetings and unanimous consents), (2) equity-based compensation currently in the form of restricted stock awards, and (3) reimbursement of reasonable expenses related to attending boardBoard and committee meetings. Were-evaluate director compensation on an annual basis based on the compensation of directors by companies in our peer group. group and other relevant facts and circumstances.
In 2014, the2017, allnon-employee directors (other than Mr. Kratz who is a Helix employee) received an annual director’s retainer of $55,000.
In July of 2017, our Lead Director was appointed by the Board to serve as its independent Chairman. Prior to his appointment to the chairmanship on July 18, 2017, our Lead Director also received an annual lead director retainer fee of $55,000,$25,000 (which in 2017 was prorated up to the date of the new appointment). The Compensation Committee determined that beginning on the date of his appointment as Chairman of the Board, this board member is to receive an independent chairman’s retainer of $195,000 per year (which for 2017 was prorated from the date of the new appointment). The retainer for the Chairman of the Board was based both on peer company data for annual retainers fornon-executive chairmen, as well as the complexity and $1,500 per board meeting for attending eachnumber of four regularly scheduled quarterlyissues facing the Board in a difficult market and the frequency of meetings and other Board deliberations during a prolonged challenging business environment.
In addition, each special board meeting.committee chair received an annual committee chair retainer fee: $15,000 for the Chair of the
Audit Committee, $10,000 for the Chair of the Compensation Committee and $5,000 for the Chair of the Corporate Governance and Nominating Committee.
With respect to fees,non-employee directors received $1,500 for each Board meeting attended and for each consent executed after reviewing the subject of the consent. For committees on which an outside director serves, the directorcommittee service in 2017, each committee member received a fee of $1,500 for each committee meeting attended. In addition, the chairman ofattended and each committee received an annual committee chairman retainer fee: $15,000 for the Chairman of the Audit Committee, $10,000 for the Chairman of the Compensation Committee and $5,000 for the Chairman of the Corporate Governance and Nominating Committee. consent executed.
We also paid the reasonableout-of-pocket expenses incurred by eachnon-employee director in connection with attending the meetings of the boardBoard and any boardBoard committee.
Since January 1, 2005,non-employee directors have had the option of taking boardBoard and committee fees (but not expenses) in the form of restricted stock, pursuant to the terms of our 2005 Plan for grants after May 10, 2005, and our 1995 Long Term Incentive Plan, as amended (the “1995 Plan”) for grants on or before
May 10, 2005.Plan. An election to take fees in the form of cash or stock is made by a directorour directors prior to the beginning of the subject fiscal year.year (and if no election is made, fees will be paid in cash). Directors taking fees in the form of restricted stock receive an award for service during a quarter on or about the first business day of the next quarter in an amount equal to 125% of the cash equivalent of his or her fees, with the number of shares determined by the closing stock price on the last trading day of the fiscal quarter for which the fees were earned. These awards fully vest two years after the first day of the year in which the grant is made. For fiscal year 2014, Messrs. Lovoi Rask and TransierRask elected to take boardBoard and committee fees paid in 2017 in the form of restricted stock. Messrs.(Messrs. Lovoi and
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 21 |
| DIRECTOR COMPENSATION |
Rask and Transier have also elected to take boardBoard and committee fees in the form of restricted stock for 2015.2018.)
Upon joining the boardBoard and on the date of each regularly scheduled December boardBoard meeting thereafter, a director receives a grant of restricted stock. These grants are made pursuant to the terms of the 2005 Plan and for yearssince 2012 and prior to 2012the 2017 awards, vested ratably over five years,three years. For 2015 and vest ratably over three years2016 the annual equity grant had a value of $175,000, which represented a reduction in value from prior years’ grants of $200,000 to reflect the smaller relative size of Helix in terms of revenue and market capitalization. At its December 2016 meeting the Compensation Committee determined
that for grants in 20122017 the annual equity grant’s value would be further reduced by $25,000 (to $150,000) and thereafter.would have a vesting term of one year to align more closely with how our peer group compensates independent directors. All grants are subject to immediate vesting on the occurrence of a Change in Control (as defined in the 2005 Plan). The grant of stock options is not currently an element of director compensation.
Our CEO doesand our former Executive Vice President and Senior Advisor did not receive any cash or equity compensation for histheir service on the boardBoard in addition to the compensation payable for histheir service as an employeeemployees of Helix.
20 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
| 22 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
In accordance with our Audit Committeeits charter, our Audit Committee is responsible for reviewing and approving the terms and conditions of all related partyrelated-party transactions. The Audit Committee has adopted a written statementStatement of policyPolicy with respect to related party transactions.Related Party Transactions. It is our written policy to approve and enter into transactions only when the board,Board, acting through the Audit Committee, determines that a transaction with a related party is in, or not inconsistent with, the best interests of Helix and our shareholders. The Audit Committee will consider all relevant facts and circumstances available to the Audit Committee to determine whether the related partyrelated-party transaction is in, or not inconsistent with, our best interests, including the benefits to us, the impact on a director’s independence if the related party is a director or a party related to a director, the availability of other sources for the product or services, the terms of the transaction and the terms available from unrelated third parties. The policy covers any transaction, arrangement or relationship in which we are a participant and in which
a related party has a direct or
indirect interest, other than transactions available to all employees generally or transactions involving less than $5,000. A “related party” includes any person that served as a senior officer or director inof Helix during the last fiscal year, a person that beneficially owns more than 5% of any class of our outstanding voting securities, and a person that is an immediate family member of either of the foregoing or an entity that is controlled by any of the foregoing.
During 20142017 Helix was not a party to aany transaction or series of transactions in which the amount involved did or may exceed $120,000 in which any of our directors or executive officers, any holder of more than 5% of our common stock, or any member of the immediate family of any of these persons, had or will have a direct or indirect material interest, other than the compensation arrangements (including with respect to equity compensation) described in “Executive Compensation” above.below.
Audit CommitteePre-Approval Policies and Procedures
The Audit Committee has adopted procedures forpre-approving certain all audit, review and attest engagements, and permissiblenon-audit services providedto be performed by the independent registered public accounting firm. These procedures include reviewing a budget for audit and permissiblenon-audit services. The budget includes a description of, and a budgeted amount for, particular categories of audit and permissiblenon-audit services that are recurring in nature and therefore anticipated at the time the budget is submitted. During the year, circumstances may arise such that it becomes necessary to engage the independent registered public accounting firm for services in excess of those contemplated by the budget or for additional services. The Audit Committee charter includes specificpre-approval procedures with respect totax-related services.
The Audit Committee charter delegatespre-approval authority in certain circumstances to the Chair of the
Audit Committee, approval is requiredprovided the Chair reports any approvals to exceed the budget amount for a particular category of audit or permissible non-audit services and to engage the independent registered public accounting firm for any audit or permissible non-audit services not included in the budget.Audit Committee at its next meeting. For bothall types ofpre-approval, the Audit
Committee considers whether these services are consistent with the SEC rules regarding auditor independence.
The Audit Committee charter includes specific pre-approval procedures with respect to tax-related services. The Audit Committee charter delegates pre-approval authority in certain circumstances to the Chairman of the Audit Committee. The Audit Committee periodically monitors the services rendered and actual fees paid to the independent registered public accounting firm to ensure that these services are within the parameters approved by the Audit Committee. None of the fees in 20142017 were for services approved by the Audit Committee pursuant to thede minimis exception in paragraph (c)(7)(i)(c) ofRule 2-01 ofRegulation S-X.
All fiscal year 20142017 professional services by KPMG LLP and Ernst & Young LLP werepre-approved.
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 21
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 23 |
The Audit Committee has reviewed and discussed the audited financial statements of the Company for the year ended December 31, 20142017 with management, our internal auditors and Ernst & YoungKPMG LLP. In addition, the Committee has discussed with Ernst & YoungKPMG LLP, the independent registered public accounting firm for the Company, the matters required to be discussed under Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 16,1301,Communications with Audit Committees(AS 16)1301). The Sarbanes-Oxley Act of 2002 requires certifications by the Company’s chief executive officer and chief financial officer in certain of the Company’s filings with the Securities and Exchange Commission (SEC). The Committee discussed the review of the Company’s reporting and internal controls undertaken in connection with these certifications with the Company’s management and independent registered public accounting firm. The Committee also reviewed and discussed with the Company’s management and independent registered public accounting firm management’s report and Ernst & YoungKPMG LLP’s report on internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. The Audit Committee has further periodically reviewed such other matters as it deemed appropriate, including other provisions of the Sarbanes-Oxley Act of 2002 and rules adopted or proposed to be adopted by the SEC and the NYSE.
The Committee also has received the written disclosures and the letter from Ernst & YoungKPMG LLP regarding the auditor’s independence pursuant to the applicable requirements of the Public Company Accounting Oversight Board Ethics and Independence Rule 3526, and it has reviewed, evaluated and discussed the written disclosures with that firm and its independence from the Company. The Committee also has discussed with management of the Company and the independent registered public accounting firm such other matters and received such assurances from them as it deemed appropriate.
Based on the foregoing review and discussions and relying thereon, the Committee recommended to the Company’s Board of Directors the inclusion of the Company’s audited financial statements for the year ended December 31, 20142017 in the Company’s Annual Report onForm 10-K for such year filed with the SEC.
Members of the Audit Committee:
William L. Transier, Chairman Nancy K. Quinn, Chair
John V. Lovoi
T. William Porter
Nancy K. QuinnL. Transier
| This report is not deemed to be incorporated by reference in any filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates this report by reference. |
22 HELIX ENERGY SOLUTIONS GROUP, INC.ê 201524 2018 Proxy Statement HELIX ENERGY SOLUTIONS GROUP, INC.
| PROPOSAL 2: | RATIFICATION OF INDEPENDENT REGISTERED PUBLIC | |
| ACCOUNTING FIRM |
Ernst & YoungKPMG LLP (”KPMG”) served as our independent registered public accounting firm in 2017 providing auditingaudit and financialfinancing services in 2014 and has acted as such since their engagementappointment in fiscal yearMay of 2016. Ernst & Young LLP (“EY”) served in that capacity from 2002 until their dismissal in May of 2016. No dispute or disagreement existed on any issue between Helix and will continue to provide such services during fiscal year 2015. EY.
Our Audit Committee has the authority to retain, oversee, evaluate and terminate theour independent registered public accounting firm. Pursuant to such authority, the Audit Committee has appointed Ernst & Young LLP,KPMG, an independent registered public accounting firm, as auditors to examine the financial statements of Helix for the fiscal year ending December 31, 2015,2018, and to perform other appropriate accounting services.
Although ourBy-laws do not require that shareholders ratify the appointment of Ernst & Young LLPKPMG as our outside auditors,independent registered public accounting firm, the boardBoard has determined to submit the selection of KMPG for ratification by the shareholders. If the shareholders do not ratify the appointment of Ernst & Young LLP,KPMG, the adverse vote will be considered as a direction to the Audit Committee to consider selecting other auditors for the next fiscal year. However, because of the difficulty and expense of making any substitution of auditors after the beginning of the current fiscal year, it is contemplated that the appointment for the fiscal year ending December 31, 20152018 will be permitted to stand unless the Audit Committee finds other reasons for making a change. It is understood that even if the selection of Ernst & Young LLPKPMG is ratified, the Audit Committee, in its discretion, may direct the appointment of a new independent registered public accounting firm at any time during the year if the Audit Committee feels that such a change would be in the best interests of Helix and our shareholders.
We expect that representatives of Ernst & Young LLPKPMG will be present at the Annual Meeting and will have the opportunity to make a statement if they desire to do so. They will also be available to respond to appropriate questions.
Fees for professional services provided by our independent registered public accounting firm in each of the last two fiscal years in each of the following categories were:
| 2014 | 2013 | |||||||||||||||
|
|
|
| |||||||||||||
| (In Thousands) | ||||||||||||||||
Audit Fees(1) | $ | 2,018 | $ | 2,238 | ||||||||||||
Audit-Related Fees(2) | 2 | 2 | ||||||||||||||
Tax Fees(3) | 55 | 178 | ||||||||||||||
All Other Fees | 8 | -0- | ||||||||||||||
|
|
|
| |||||||||||||
Total | $ | 2,083 | $ | 2,418 | ||||||||||||
|
|
|
| |||||||||||||
| 2017 | 2016 | |||||||||||||||||||||||||||||||
| (In Thousands) | ||||||||||||||||||||||||||||||||
| KPMG | EY | KPMG | EY | |||||||||||||||||||||||||||||
Audit Fees(1) | $ | �� | 1,687 | $ | 61 | $ | 1,549 | $ | 872 | |||||||||||||||||||||||
| Audit-Related Fees(2) | 0 | 0 | 0 | 2 | ||||||||||||||||||||||||||||
Tax Fees(3) | 36 | 73 | 0 | 119 | ||||||||||||||||||||||||||||
| All Other Fees(4) | 0 | 0 | 170 | 0 | ||||||||||||||||||||||||||||
Total | $ | 1,723 | $ | 134 | $ | 1,719 | $ | 993 | ||||||||||||||||||||||||
| (1) | Audit fees include fees related to the following services: the annual consolidated financial statement audit (including required quarterly reviews), subsidiary audits, audit of internal controls over financial reporting, and consultations relating to the audit or quarterly reviews. |
| (2) | Audit-related fees |
| (3) | Fees are primarily related to tax compliance work in the United States, Norway, Brazil, Singapore, the United Kingdom, Egypt, India |
| (4) | Other fees were for services performed prior to KPMG’s appointment in May of 2016. None of these were for financial information systems design and implementation. |
The Audit Committee considers whether the provision of the foregoing services is compatible with maintaining the auditor’sregistered public accounting firm’s independence and has concluded that the foregoingnon-audit services andnon-audit-related services did not adversely affect the independence of Ernst & Young LLP.KPMG.
Board of Directors Recommendation
The boardBoard recommends that you vote “FOR” the ratification of the selection of Ernst & Young LLPKPMG as Helix’s independent registered public accounting firm set forth in this Proposal 2.
Vote Required
The ratification of Ernst & Young LLPKPMG requires the affirmative vote of holders of a majority of the shares of common stock present or represented and votingentitled to vote on the proposal at the Annual Meeting.
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 23
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 25 |
COMPENSATION DISCUSSION AND ANALYSIS
Introduction
This Compensation Discussion and Analysis (“CD&A”) describes our 2014Helix’s 2017 executive compensation program, including how our Compensation Committee made 2017 compensation decisions, and the level and elements of 2017 compensation for our principal executive officer, principal financial officer and the two other named executive officers in 2014. In 2014 we had only four executive officers; accordingly, they were alsoeach of our “named executive officers.” Those individuals were:officers” (“NEOs”). For 2017, our NEOs consisted of our Chief Executive Officer, Chief Financial Officer, and three other highest paid executive officers, and are as follows:
Effective May 11, 2015, Mr. Chamblee will resign from Helix and Scotty Sparks, currentlyAnthony Tripodo, our former Executive Vice President –Commercial and Strategic Development, will be promotedSenior Advisor (and during the first part of 2017 prior to Mr. Staffeldt’s promotion to the position of chief financial officer, our Executive Vice President –Operations, and Chief Financial Officer).
The Compensation Committee encourages you to read this CD&A carefully and consider it when conducting your “say on pay” vote on the 2017 compensation of our NEOs. Although this is anon-binding advisory vote, the Compensation Committee considers the outcome when determining future compensation practices and levels.
For example, in response to the 80% favorable vote in 2016 on executive compensation, and certain comments made by shareholder’ advisory services as well as an
institutional shareholder the Compensation Committee made changes for 2017 in how a portion of long-term performance based incentive compensation payout will become an executive officerbe determined; these changes involved setting more stringent requirements for payout of Helix.Performance Share Units (“PSUs”).(1)
| (1) | Specifically, the minimum threshold to trigger any payout was raised from Helix’s total shareholder return being at the 20th percentile of its peers to the 30th percentile; the performance level to earn a maximum payout was raised from Helix’s total shareholder return being at the 80th percentile of its peers to the 90th percentile; and quintile based payouts was eliminated in favor of linear interpolation so that NEOs can no longer earn a set percentage payout regardless of where Helix’s total shareholder return falls within. |
Our CD&A is divided into the following sections:
| A. | Executive Summary |
Page 26
| B. |
Page 30
| C. |
Page 33
| D. |
Page 35
| E. |
Page 41
| F. |
Page 41
We areHelix is an international offshore energy company that provides specialty services to the offshore energy industry, with acompany. Our focus is on well intervention and robotics operations. We provide services primarily conduct operationsin deepwater in the U.S. Gulf of Mexico, North Sea, Brazil, Asia Pacific and West Africa regions.
WithA precipitous decline in oil prices beginning in 2014 with lower prices continuing through 2017 has affected oil and gas operators and consequently their service providers. During the past several years, our customers have significantly reduced their operational and capital spending on offshore projects, reducing demand (and therefore rates) for our services. Additionally, drilling rigs have become a source of competition in the well intervention market, which further creates additional downward pressure on day rates. Although the market
saw some oil price recovery in 2016 and 2017, which generally benefited financial results within the sector, oil company spending remained at relatively low levels.
Although our revenue and EBITDA improved in 2017 from 2016 levels, 2017 was yet another challenging year for Helix and the services sector as a whole; the industry has not improved significantly from the downturn and our stock price at the end of 2017 was approximately 15% lower than it was at the end of 2016. We believe that our stock price continues to be reflective of general industry conditions over a prolonged period, including an uncertain outlook on the timing and prospects for a recovery, as well as only a modest improvement (on an absolute basis) in our EBITDA of $378 millionfrom the prior year compared to levels in 2014, which exceeded the EBITDA bonus target metricyears past.
| 26 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| COMPENSATION DISCUSSION AND ANALYSIS |
Because of $344 million, our executive officers earned 119% of their bonus targets (out of a maximum of 133%).
Notwithstanding superior financial performance in 2014, due to the cyclicality of our industry and therefore
fluctuating demand for our services, we areand our commitment to create long-term value for our shareholders, our overall compensation program is performance based, and is focused primarily on the longer term and our overall executiveperformance, although the paid compensation program reflects that, both in terms of the component of our executive officers’NEOs also reflects annual year-over-year financial performance.
The chart below compares the realized compensation that is comprisedof our Chief Executive Officer as well as Helix’s adjusted EBITDA(1) for each of 2014, 2015, 2016 and 2017, and Helix’s stock price at the end of each of 2014, 2015, 2016 and 2017. The realized compensation levels shown include base salary paid in each year, bonuses paid for each year, and payout of long-term incentive compensation that vested after each year (i.e., the value at the time of vesting of restricted stock and PSUs that vested immediately after the overall designyear in question). Helix has not granted stock options since 2004; hence no options vested and our Chief Executive Officer did not exercise any stock options during this four year period.
As the chart illustrates, the compensation for our Chief Executive Officer has been aligned with the financial results of Helix as well as the returns to our shareholders throughout the downturn in our industry that has persisted for the last several years. This is consistent with our pay for performance compensation philosophy of generally paying our executives a base salary at the median level, and allowing them to earn higher levels of short-term incentive and long-term incentive compensation only when warranted by our financial results and stock price performance. In general our compensation programs are working as they should, and evidence our commitment to pay our executives for financial performance and to align our compensation programs with our financial results both over the short and longer term.
(1) Adjusted EBITDA is anon-GAAP financial measure. For a reconciliation of these amounts to each year’s respective reported net income (loss), see“Non-GAAP Financial Measures” onpages 31-32 of our short-term and long-term programs.
The chart below reflects our total shareholder return overAnnual Report onForm 10-K for the three-year period of 2012 through 2014 compared to the peer group selected by our Compensation Committee for benchmarking purposes.year ended December 31, 2017, filed on February 23, 2018.
(1) The realized compensation levels shown include base salary paid in each year, bonuses payable for each year, and payout of long-term incentive compensation that vested after each year (i.e., the value at the time of vesting of any restricted stock, PSUs and cash long-term incentive awards that vested immediately after the year in question).
(2) Value of time-vesting restricted stock vesting immediately after the applicable year.
(3) Value of PSU payout (if any), which was determined by our three-year stock performance compared to that of our peer group companies (as set forth in the applicable award agreement), vesting immediately after the applicable year.
24 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 27 |
| COMPENSATION DISCUSSION AND ANALYSIS |
The chart below reflects(4) Value of cash long-term incentive awards, the payout of which was determined by how our adjusted EBITDA (in millions) from continuing operations forstock price at the end of a vesting period compares to a “base stock price” determined at grant date, paid out (if at all) immediately after the applicable year.
(5) Represents closing price at the end of the last trading day of each of the three years ended December 31, 2014,(1).
| Our compensation philosophy is to compensate our executive officers commensurately with both the financial and stock performance of Helix. The Compensation Committee believes that overall, as the above chart demonstrates with respect to our Chief Executive Officer, NEO compensation in 2017, as in the prior several preceding years, was aligned with Helix’s financial and stock performance. | The following charts show the breakdown of the elements of 2017 executive compensation that was awarded by | |
|
| |
With respect to our 2017 executive compensation program, because we expected industry conditions to remain challenging in 2017, the Compensation Committee determined to maintain total targeted compensation (i.e., base salary, bonus target and long-term incentive award values) at the same levels as 2016 for all NEOs other than Mr. Staffeldt. (At the time Mr. Staffeldt was promoted to the 2017 EBITDA saw an improvement from 2016 (2017 EBITDA was $107.2 million compared to $89.5 million in 2016). Our 2017 bonus program was based on the sole metric of EBITDA, which was viewed as the | Despite the improvement in EBITDA in 2017, our stock price at the end of 2017 ($7.54) was 14.5% lower than it was at the end of 2016 ($8.82). This was reflected in the payout of performance based long-term incentive compensation after the end of 2017 – despite the original grant date value being the same for the awards that vested at the end of 2016 and 2017, the value of the PSUs that vested at the end of 2017 decreased by 9% from the value of the PSUs that vested at the end of 2016, and equated to 17% of the value of the PSUs at the date of the grant. The overall design of the 2017 NEO compensation programs, in which short-term incentive payouts are based on annual adjusted EBITDA and long-term incentive payouts on stock performance (on both an absolute basis and as compared to our peers), demonstrates our compensation philosophy of supporting the alignment of executive management and shareholder interests, both during times of industry booms and industry stress. | |
| 28 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| COMPENSATION DISCUSSION AND ANALYSIS |
For 2014,Specifically, for 2017:
which has triggered aggressive cost cutting measures byoriginal grant date value, reflecting the industry. Thus, the design of our 2015 short-term (annual bonus) incentive program reflects financial performance metrics as well as a significant “stretch” elementdecline in our executives’ target bonuses to align our executives with our shareholders during timesstock price since the grant date of industry stress. The committee also modified the long-term incentive program for 2015 to increasingly align executive compensation with the long-term interestsawards (January of our shareholders.
Key Features of Our Executive Compensation Program
| Key Features of Our Executive Compensation Program | ||||||
What We Do | What We Don’t Do | |||||
| ||||||
✓Substantial focus on performance-based pay
✓Balance of short- and long-term incentives
✓Use formulaic annual bonus structure
✓Align executive compensation with shareholder returns through long-term incentives |
| |||||
| ✓Retain an independent external compensation consultant | |||||
| ✓ Consider peer group benchmarks when establishing compensation | |||||
| ✓Robust stock ownership guidelines for our Section 16 officers and our directors | |||||
| ✓ Allow pledging of stock only if certain stringent quantitative requirements are met (including the amount of stock being pledged) and the transaction is also approved by the Board considering a variety of factors ✓Maintain a strong risk management program, which includes monitoring the effect of our compensation programs on risk taking |
| ||||
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 25
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 29 |
| COMPENSATION DISCUSSION AND ANALYSIS |
In 2014, we sought an advisory vote from our shareholders regarding our executive officer compensation for 2013 and received a 96% favorable “say-on-pay” vote. The Compensation Committee considered the positive results of the advisory vote in completing its annual review of the compensation packages provided to our executive officers, and in
general continued for 2014 the performance-based measures instituted in 2012. The Compensation Committee will continue to consider the outcome of our “say-on-pay” votes and our shareholder views when making future compensation decisions for our executive officers.
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Participants inB. EXECUTIVE COMPENSATION PROCESS
The executive compensation process is led by the Decision Making ProcessCompensation Committee, which has overall responsibility for reviewing, evaluating and approving Helix’s executive compensation policies, plans, programs and agreements. Our management provides input on performance and achievements, and an independent compensation consultant provides competitive market data and advises the Compensation Committee on program design.
The following summarizes the allocation of responsibilities associated with our executive officer compensation program:
Participants in Compensation Process | ||||
Compensation Committee (comprised of four independent directors) | •Determines program principles and •Determines short-term incentive •Determines design of long-term incentive •Determines all levels of compensation for •Reviews and approves payouts under performance-based short-term and long-term incentive programs for our executive •Considers all other arrangements, policies and practices related to our executive officer compensation program such as employment agreements, change in control arrangements, stock ownership policies, and our policies regarding hedging and pledging •Does not delegate any of its functions or authority to management •Has exclusive authority to retain and terminate any independent compensation • Oversees aspects of our compensation arrangements affecting our executive officers as well as ournon-executive employees, such as our Employees’ 401k Savings Plan and our Employee Stock Purchase Plan | |||
Independent Compensation Consultant |
| •Retained by, and performs work at the direction and under the supervision of, the Compensation •Provides advice, research and analytical services on subjects such as trends in executive compensation, executive officer compensation program design, peer and industry data, •Reviews and reports on Compensation Committee materials, participates in Compensation Committee meetings, and communicates with the Compensation Committee Chair between •Provides no services to Helix other than those provided directly to or on behalf of the Compensation | ||
Management | •CEO recommends base salary, short-term incentive •CEO provides information on Helix’s and •CEO provides the Compensation Committee a performance assessment of each executive | |||
26 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy StatementIn most years, the Compensation Committee compares the total compensation for each NEO position to the compensation paid by companies in our peer group for similar positions, as set forth in our peer companies’ proxy statements for the prior year. An independent compensation consultant provides the Compensation Committee with peer group data for this purpose; however, the data is used only as a benchmark. For 2017 compensation, the Compensation Committee used Meridian Compensation Partners, LLC (“Meridian”)
as its independent consultant. In engaging Meridian, the Compensation Committee received information from Meridian in order for the Compensation Committee to make a determination that Meridian was independent from Helix’s management, including information responsive to six specifically listed factors set forth in the NYSE’s rule requiring that compensation committees consider factors relevant to a consultant’s independence before engagement of the consultant.
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| COMPENSATION DISCUSSION AND ANALYSIS |
In general, and consistent with a performance based compensation philosophy, the Compensation Committee seeks to ensure that executive base pay falls close to the median of the peer group, with an opportunity to earn upside in performance-based compensation that could potentially bring our executives’ total compensation closer to the 75th percentile. Notably, this is possible only during periods of favorable financial and stock price performance. Within these percentile ranges, the exact compensation level for each NEO varies based on the individual’s role in Helix, his or her experience, and his or her contribution to our success.
The Compensation Committee’s independent compensation consultant:
For 2017, given the persistence of depressed industry conditions and the Compensation Committee’s decision to keep compensation levels consistent with 2016 levels, the Compensation Committee commissioned Meridian to perform only a survey of key trends and compensation actions taken by peer companies during this period; it did not seek more specific data on peer-company compensation by position. Meridian’s survey included a general summary of disclosed actions by peer companies with respect to 2016 compensation, and the consultant’s expectations regarding peer company compensation decisions for 2017.
For 2017, the peer group was used only for purposes of calculating relative TSR with respect to the 2017 PSU awards, and was not used to benchmark any other aspect of executive compensation. The peer group of companies used for 2017 PSU Awards were the same as the 2016 peer group with the exception that Dril-Quip, Inc. was not included in the 2017 peer company group but was included in the 2016 peer group, and Frank’s International N.V. was included in the 2017 peer group but was not included in the 2016 peer group.
Data for peer-group companies identified in 2017 PSU Award Agreements for TSR comparison purposes is shown below.
2016 Peer Group Data
| ||||||||||||
| Company | Ticker Symbol | Revenue(1) | Market Cap(2) | EBITDA(1)(3) | TSR (%) 1 Year(4) | TSR (%) 2 Year (4) | ||||||
| ($ in millions) | ||||||||||||
Atwood Oceanics, Inc.(5) | ATW | $976 | $851 | $555 | -41% | -79% | ||||||
Diamond Offshore Drilling, Inc. | DO | $1,525 | $2,428 | $707 | -16% | -51% | ||||||
Forum Energy Technologies, Inc. | FET | $588 | $2,096 | -$66 | 77% | 6% | ||||||
Frank’s International N.V. | FI | $488 | $2,738 | -$2 | -24% | -21% | ||||||
GulfMark Offshore, Inc. | GLF | $124 | -- | -$2 | -- | -- | ||||||
Hornbeck Offshore Services, Inc. | MDR | $224 | $263 | $49 | -27% | -71% | ||||||
McDermott International, Inc. | MDR | $2,636 | $1,783 | $297 | 121% | 154% | ||||||
Oceaneering International, Inc. | OII | $2,272 | $2,766 | $326 | -22% | -49% | ||||||
Oil States International, Inc. | OIS | $694 | $2,004 | $45 | 43% | -20% | ||||||
Rowan Companies plc | RDC | $1,843 | $2,370 | $963 | 11% | -17% | ||||||
TETRA Technologies, Inc. | TTI | $1,929 | $2,462 | $203 | 48% | 45% | ||||||
Tidewater, Inc. | TDW | $979 | -- | $212 | -- | -- | ||||||
75th Percentile | $1,865 | $2,454 | $383 | 46% | 0% | |||||||
Median | $978 | $2,233 | $207 | -2% | -21% | |||||||
25th Percentile | $563 | $1,839 | $33 | -23% | -50% | |||||||
Helix Energy Solutions Group, Inc. | HLX | $488 | $1,063 | $81 | 68% | -59% | ||||||
HLX Percentile Rank | 18% | 14% | 38% | 85% | 18% | |||||||
(1) Revenue and EBITDA are representative of FY16.
(2) Market Cap is displayed as of 12/31/2016.
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| COMPENSATION DISCUSSION AND ANALYSIS |
(3) Other companies may calculate their measures of EBITDA and Adjusted EBITDA differently from the way Helix does, which may limit their usefulness as comparative measures. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for, but instead are supplemental to, income from operations, net income or other income data prepared in accordance with GAAP.
(4) TSR data is collected as of each company’s respective fiscal year end.
(5) Atwood Oceanics was acquired by Ensco in 2017. As a result, Atwood was replaced by Noble Corporation.
We believe these companies were appropriate for measuring our relative TSR performance for the 2017 PSU awards because each company:
Our Compensation PhilosophyTax and ObjectivesAccounting Considerations
Helix is an international offshore energy company that provides specialty servicesThe Compensation Committee and management consider the accounting and tax impacts of various compensation elements when designing our executive compensation programs and making other compensation decisions. These considerations, however, are secondary to meeting the overall objectives of the executive compensation programs.
Prior to the offshore energy industry,Tax Cut and Jobs Act (the “Act”) that was signed into law in December 2017, Section 162(m) of the Internal Revenue Code of 1986, as amended, placed a limit of $1 million on the amount ofnon-performance-based compensation, as described in Section 162(m) and related regulations, that may be deducted by Helix in any year with a focus on well intervention and robotics operations. We operaterespect to the NEOs’ compensation other than that of the Chief Financial Officer. Pursuant to the Act, all compensation (other than certain grandfathered arrangements) in a very cyclical industry becauseexcess of volatility$1 million will benon-deductible, including compensation that formerly
qualified as performance-based compensation that could be deducted under prior law.
For 2017 (and prior years), the philosophy of the Compensation Committee was to take into account the potential application of Section 162(m) in its compensation decisions, including the pricegrant of oil and gas and thereforelong-term incentive compensation awards, but that it may approve compensation that exceeds the demand$1 million limit in order to ensure competitive levels of compensation for our services. Ourexecutive officers. The Compensation Committee does not let deductibility drive its compensation decisions, and as a result, certain compensation paid to the NEOs may not have been deductible by Helix for tax purposes. The Compensation Committee will continue to take into account all applicable facts and circumstances in exercising its business model and growth strategy require highly qualified, experienced and technically proficient executive officers who can still operate effectively in both a positive and negative industry environment. Thus, we relyjudgment with respect to appropriate compensation plan design.
| 32 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| COMPENSATION DISCUSSION AND ANALYSIS |
C. COMPENSATION PHILOSOPHYAND OBJECTIVES
Helix’s compensation program is based on the philosophy that the interests of our executive officersmanagement team should be aligned with those of our shareholders, and that our executives should be incentivized and rewarded for performance that advances business goals and the creation of sustainable value. The overall compensation program is designed to developachieve four key objectives: attracting and executeretaining qualified executives, supporting our business strategy in a way that maximizesand the creation of long-term value, for our shareholders through the fluctuations of a cyclical industry. aligning management’s and shareholders’ interests, and discouraging excessive risk-taking.
Our compensation philosophyprogram reflects the realities of the competitive market in which we operate, as well as the characteristics of our business environment. As an international offshore energy services company providing specialty services to the offshore energy industry, Helix operates in cyclical business climates. Demand for our services is affected by the volatility in the price of oil and gas. Implementing our business model and strategy in this business environment requires input from highly qualified, experienced and technically proficient executive officers. We rely on our executive officers to operate effectively in both negative and positive industry environments. They are charged with being able to develop and execute Helix’s business strategy to achieve maximum value for shareholders through all fluctuations of the business. The Compensation Committee and management believe that our compensation programs closely alignbelieves the executive officers with our shareholders and helpcompensation program helps us attract, retain and motivate qualified, experienced and technically proficient executive officers throughthroughout a range of business cycles.
Our executive compensation programs areprogram is principally designed to reward our named executive officers bothNEOs for the achievement of short-term financial goals and the longer termlonger-term goal of increasing total shareholder return,return. The Committee also ensures that the compensation program encourages executives to achieve short-term financial objectives while at the same time avoiding the encouragement ofdiscouraging them from taking unnecessary or excessive risk-taking.risks.
We strive to pay base salaries for our executives at the median level compared to our peers, and to allow our executives to earn higher levels of short-term and long-term compensation only when our financial performance and shareholder returns warrant compensation at those higher levels. Our named
executive officers’compensation program allows our NEOs the opportunity to earn total compensation is comprised of a mix of base salary, annual short-term cash incentive (bonus) awards(salary, bonus and long-term incentive awardspayout) towards the upper end of the range of total peer group compensation (around the 75th percentile, although there are variations by position) only when our financial and share price returns reflect superior performance. We believe that this is appropriate for 2014 included cash performance awards, performance-based equity awardsour cyclical industry environment. This philosophy has been reflected over the last several years, as graphically illustrated in the chart on page 27.
The Compensation Committee believes that both the structure and time-vested restricted stock.results of our 2017 executive compensation reflect our financial results and shareholder return during the current cycle for our industry.
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 33 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Our
The following table summarizes the objectives of Helix’s executive compensation program was designed uponand the following principles:particular compensation practices and elements that support each objective.
Objective | Practice | |
| Attract, retain and motivate executives through range of cycles | • Retain independent consultant for advice on competitive landscape Target compensation at competitive market levels, yet allow executives to earn total compensation at the top of the range only when financial and share price return reflect superior performance • Consider each executive’s roles and responsibilities | |
| Advance business strategy and long-term value creation | • Balance short- and long-term performance incentives with heavier emphasis on the longer term • Reward based on overall Helix performance, implementation by NEOs of business plans, and achievement of annual financial objectives and stock price performance | |
| Align management and shareholder interests | • Establish and enforce stock ownership guidelines • Pay out long-term incentive performance based compensation based on sustained stock performance • Consider shareholder views in establishing pay policies and levels | |
| Discourage excessive risk-taking | • Substantial portion of total compensation is“at-risk” • Significant portion of“at-risk” compensation is cliff-vesting • Maintain stock-ownership guidelines • Maintain prohibition of hedging and stringent limitations on pledging of stock |
Consideration of Risk
Our compensation programs areprogram is balanced and primarily focused on the long term.term, which is consistent with our strategy and business model. The greatest amount of compensation can be achieved through consistent, superior performance over sustained periods of time. In addition, significant amounts of compensation are usually paid out over time, specifically the long-term incentive awards. These awards which currently havevest over a
three-year vesting period. This provides incentivesperiod and 50% of 2017 awards are cliff-vesting (i.e., vest 100% at the end of the applicable performance period). These practices, along with stock ownership guidelines and a policy prohibiting NEOs from hedging and limiting NEOs pledging Helix stock, incentivize executives to manage Helix for the longer term, while avoidingdiscouraging them from taking excessive risk-takingrisk in the short term.
The elements of compensation are balanced among base salary, annual short-term cash incentive (bonus) opportunity, and long-term incentive awards. We have determined that our current forms of long-term stock-based incentive compensation are more appropriate than stock options to encourage management to take only the appropriate level of risk in order to create sustained shareholder value over the long term.
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 27
Competitive Benchmarking Process
Each year, including 2014, the Compensation Committee compares the total compensation for each position occupied by our executive officers to the compensation paid by companies in our peer group for similar positions, as set forth in our peer companies’ proxy statements for the prior year. The independent compensation consultant provides the Compensation Committee with market data for this purpose; however, the market data is only used as a benchmark. Generally, the Compensation Committee seeks to ensure that executive compensation falls between the 25th and 75th percentiles of the market data for each individual, but individual positioning varies based on the individual’s role within our organization, his or her experience and his or her contribution to our success.
The Compensation Committee’s independent compensation consultant proposes companies to be included in our peer group. The independent compensation consultant may consult with management to ensure that the most appropriate companies are included. The Compensation Committee then reviews and approves the peer group for the applicable compensation year, as it deems appropriate.
In August 2013, following a discussion with a report from the independent compensation consultant, the Compensation Committee selected a peer group for benchmarking 2014 compensation consisting of the following companies, which was the same peer group used in 2013:
Fiscal Year End 2013 Peer Group Data(1)
| Company | Ticker Symbol | Revenue(2) | Market Cap(2) | Enterprise Value(2) | ||||
| ($ in millions) | ||||||||
Atwood Oceanics, Inc. | ATW | $1,103 | $3,420 | $4,603 | ||||
Dril-Quip, Inc. | DRQ | $ 872 | $4,473 | $4,092 | ||||
GulfMark Offshore, Inc. | GLF | $ 455 | $1,280 | $1,743 | ||||
Hercules Offshore, Inc. | HERO | $ 858 | $1.042 | $1,899 | ||||
Hornbeck Offshore Services, Inc. | HOS | $ 548 | $1,775 | $2,288 | ||||
McDermott International, Inc. | MDR | $2,659 | $2.167 | $1,960 | ||||
Oceaneering International, Inc. | OII | $3,287 | $8,535 | $8,472 | ||||
Oil States International, Inc. | OIS | $1,883 | $5,610 | $5,842 | ||||
Rowan Companies, Inc. | RDC | $1,579 | $4,393 | $5,393 | ||||
Superior Energy Services, Inc. | SPN | $4,402 | $4,244 | $5,815 | ||||
TETRA Technologies, Inc. | TTI | $ 909 | $ 975 | $1,290 | ||||
Tidewater Inc. | TDW | $1,396 | $2,939 | $4,339 | ||||
25th Percentile | $ 869 | $1,651 | $1,945 | |||||
Median | $1,249 | $3,180 | $4,216 | |||||
75th Percentile | $2,077 | $4,413 | $5,498 | |||||
Helix Energy Solutions Group, Inc. | HLX | $ 877(3) | $2,452 | $2,541 | ||||
HLX Percentile Rank | 33% | 42% | 42% | |||||
(1) Data Source: S&P Compustat
(2) Revenue, Market Cap & Enterprise Value as of FYE 2013
(3) Excludes revenues of $48.8 million associated with our former oil and gas exploration and production business, a discontinued operation.
28 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
We believe these companies were appropriate for the purpose of compensation benchmarking for 2014 because:
In August 2014, the Compensation Committee modified the above peer group of companies used to benchmark 2013 and 2014 compensation (deleting Dril-Quip, Inc., McDermott International, Inc., and Superior Energy Services, Inc., and adding FMC Technologies, Inc., Diamond Offshore Drilling, Inc., and Forum Energy Technologies, Inc.) for purposes of benchmarking 2015 compensation, to better reflect Helix’s current operations.
Tax ConsiderationsStock Ownership Guidelines
The Compensation CommitteeWe have implemented stock ownership guidelines for our Section 16 officers and management considerindependent directors. These covered persons have five years to accumulate the accounting and tax effectsequity necessary to comply with the guidelines from the later of various compensation elements when designing our executive compensation plans and making other compensation decisions. These considerations, however, are secondary to meeting(1) the overall objectivesdate of adoption of the executive compensation program.guidelines (February of 2011) or (2) the date upon which they become subject to the guidelines. The forms of equity ownership that can be used to satisfy the guidelines include shares of our common stock owned directly, shares of our common stock owned indirectly (e.g., by a spouse or a trust), and time-vested restricted stock. The ownership guidelines are as follows:
The value of an individual’s holdings is based on the average of the Internal Revenue Codeclosing price of 1986, as amended, places a limitshare of $1,000,000 onour common stock for the amountprevious calendar year. There are penalties fornon-compliance, which may include the retention of non-performance-baseda portion of a participant’s vested shares or the participant receiving grants of equity in lieu of cash compensation as described in Section 162(m) and related regulations, thatuntil compliance is achieved; waivers may be deducted by granted for certain hardship issues. Currently, all directors are in compliance with the ownership guidelines, and all Section 16 officers are in compliance other than Mr. Staffeldt and Mr. Wagner, our new Executive Vice President and Chief Commercial Officer, who became Section 16 officers in 2015 and 2018, respectively, and who are both within the five-year window in which to achieve compliance.
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| COMPENSATION DISCUSSION AND ANALYSIS |
Hedging and Pledging Policy
Helix considers it inappropriate for any director, officer or employee to enter speculative transactions in our stock. Therefore, we have a policy that prohibits the purchase or sale of puts, calls or options based on our securities, or the short sale of our securities. Directors, officers and other employees may not purchase Helix securities on margin. The policy prohibits the hedging of our stock and puts discrete stringent limitations around the ability to pledge Helix stock.
Because much of the net worth and compensation of our executives consists of Helix stock, our executives may prefer to pledge stock as collateral for a loan rather than selling Helix stock to meet cash needs. However, any year with respectsignificant sale of that collateral into the market may have adverse consequences (at least in the short term) on our stock price. Accordingly, Helix’s policy provides that directors and officers may pledge our stock only if the pledged stock does not exceed:
In addition, every pledging transaction must be specifically approved by the Board. In assessing a potential pledging transaction, the Board may consider any factors it deems appropriate and relevant, including whether the indebtedness secured by the pledged stock isnon-recourse, whether the director or officer has other assets to satisfy the loan, whether the stock pledged was purchased (as opposed to granted as compensation other thanby Helix), and any mechanisms in the pledge transaction that are in place to avoid undesirable transactions in Helix’s securities.
At this time, there are no outstanding pledges of our stock by any of our directors or officers.
that of
D. 2017 EXECUTIVE COMPENSATION COMPONENTS
During fiscal 2017, the Chief Financial Officer. Although the Compensation Committee may take into account the potential application of Section 162(m) in its compensation decisions, including the grant of long-term incentive compensation awards, it may approve compensation that exceeds the $1,000,000 limit in order to ensure competitive levelsprimary components of compensation for our executive officers. As a result, certain compensation paid to the named executive officers may not be deductible by us for tax purposes. The Compensation Committee does not let deductibility drive its compensation decisions.
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 29
Overview
During fiscal 2014, the primary elements of compensation for our named executive officers included:
We use each element of compensation to satisfy one or more of our stated compensation objectives. The Compensation Committee’s goal is to achieve the appropriate balance between short-term cash rewards for achievement of annual financial performance targets and long-term financial incentives to promote the achievement of both annual and long-term financial goals. Also for 2014sustained value over the short-term incentive program was restructured from that of prior years. In our prior years’ bonus programs, there was only a maximum target up to which the executives could receive alonger term.
The following table sets forth the total target 2017 compensation for each NEO, broken out by base salary, bonus based on performancetarget and value of the applicable metrics. The 2014 program is more closely aligned with other companies’ programslong-term incentive awards at grant date. Other than for Mr. Staffeldt, who was promoted in setting the executives’ target bonuses as a lower percentageJune of their base salaries than our prior bonus programs, with an opportunity to earn additional bonus amounts, up to a maximum amount, if Helix’s performance exceeds the target levels for the various metrics. Each metric has an entry point such that performance below that point results in2017, there were no bonus payout for that metric.changes from 2016 levels.
Named Executive Officer 2017 Compensation Summary
| ||||||||||||||||||||
Named Executive Officer | 2017 Base Salary | 2017 Bonus Target | Transaction- Based Bonus | 2017 Long-Term Incentive Award | Total Target Direct Compensation | |||||||||||||||
Owen Kratz | $700,000 | $1,050,000 | $3,200,000 | $4,950,000 | ||||||||||||||||
Anthony Tripodo | 480,000 | 576,000 | 1,500,000 | 2,556,000 | ||||||||||||||||
Scotty Sparks | 375,000 | 375,000 | 1,075,000 | 1,825,000 | ||||||||||||||||
Alisa B. Johnson | 360,000 | 360,000 | 1,050,000 | 1,770,000 | ||||||||||||||||
Erik Staffeldt (1) | 350,000 | 245,000 | $50,000 | 300,000 | 945,000 | |||||||||||||||
Below sets forth(1) Mr. Staffeldt’s salary and bonus target shown above reflects the amounts determined by the Compensation Committee for Mr. Staffeldt in the position of Senior Vice President and Chief Financial Officer, beginning on June 5, 2017 when he was promoted to that position. In connection with that promotion, the Compensation Committee increased both Mr. Staffeldt’s base pay from $245,000 to $350,000 and his bonus target direct compensationfrom 50% of his base pay to 70% of his base pay, allpro-rated for each2017 based on the position held by Mr, Staffeldt during various parts of our namedthe year. Thus, for the entirety of 2017, Mr. Staffeldt’s salary on a blended basis was $306,000, and his bonus target on a blended basis was $142,100. Prior to becoming an executive officers for 2014:officer inmid-2017, Mr. Staffeldt received aone- time payment in connection with his working on several capital raising transactions. Mr. Staffeldt’s 2017 long-term incentive award was made in January of 2017 and therefore does not reflect hismid-year promotion.
| Named Executive Officer | 2014 Base Salary | 2014 Short-Term Award | Annual Long- Term Incentive Award | Total Direct Compensation | ||||||||||||
Owen Kratz | $ | 700,000 | $ | 1,050,000 | $ | 3,000,000 | $ | 4,750,000 | ||||||||
Anthony Tripodo | 480,000 | 576,000 | 1,500,000 | 2,556,000 | ||||||||||||
Clifford V. Chamblee | 400,000 | 480,000 | 1,075,000 | 1,955,000 | ||||||||||||
Alisa B. Johnson | 360,000 | 360,000 | 1,050,000 | 1,770,000 | ||||||||||||
30 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 35 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Following is a more detailed discussion of each element of our NEOs’ 2017 compensation.
Base Salary Determination
In establishing base salaries for our executive officers, the Compensation Committee considers a number of factors including theincluding:
NEO base salary is generally set for our named executive officers at the regularly scheduled December meeting of our Compensation Committee in the preceding year. There
were no increases to 2017 base salaries in 2014 from 2013 and 20122016 levels for any of our named executive officersNEOs other than for Mr. Chamblee, whoseStaffeldt, who became our Senior Vice President and Chief Financial Officer on June 5, 2017, at which point his base salary was increased for 2014 due to development in his role, as well as and peer group data forincreased. Following are the position. Set forth below are theNEOs’ base salaries for 2014, 20132016 and 2012:2017:
Base Salaries for 2017 and 2016
|
Base Salaries for 2017 and 2016
| |||||||||||||||||||
| Named Executive Officer | 2014 Base Salary | 2013 Base Salary | 2012 Base Salary | Percent Increase | 2016 Base Salary | 2017 Base Salary | Percent Increase | |||||||||||||
Owen Kratz(1) | $ | 700,000 | $ | 700,000 | $ | 700,000 | 0.0% | $700,000 | $700,000 | 0.0% | ||||||||||
Anthony Tripodo | 480,000 | 480,000 | 480,000 | 0.0% | 480,000 | 480,000 | 0.0% | |||||||||||||
Clifford V. Chamblee | 400,000 | 380,000 | 380,000 | 5.3% | ||||||||||||||||
Scotty Sparks | 375,000 | 375,000 | 0.0% | |||||||||||||||||
Alisa B. Johnson | 360,000 | 360,000 | 360,000 | 0.0% | 360,000 | 360,000 | 0.0% | |||||||||||||
Erik Staffeldt (3) | 245,000 | 350,000 | 42.9% | |||||||||||||||||
| (1) | Annual base salary for Mr. Kratz has remained unchanged since 2008. |
| (2) | Annual base salaries for Mr. Tripodo and Ms. Johnson have remained unchanged since 2012. |
| (3) | Mr. Staffeldt’s annual base salary for 2016 reflected his then role as Vice-President – Finance and Accounting. Mr. Staffeldt’s base salary was increased on June 5, 2017 when he was promoted from that position to become our Senior Vice President and Chief Financial Officer. Mr. Staffeldt’s 2017 base salary set forth above, as well as the percentage increase from his 2016 base salary, reflect the base annual salary determined by the Committee for his new role, which new base salary began upon hismid-year promotion. Mr. Staffeldt’s salary for 2017 on a prorated (blended) basis was $306,000, which blended salary constitutes a 25% increase from his 2016 base salary level. |
Short-Term Cash Incentive (Bonus) Program
Our annual short termshort-term cash incentive (bonus) program consists of a cash bonus opportunity designed to reward our employees, including our executive officers, for the achievement of certain corporate financial goals in a given year. Bonuses, if earned, are typically paid in March of the year following the applicable performance year. As in the past several years, the executive bonus plan was the same as the bonus plan for all onshore employees.
The bonus target for each executive officer is a percentage of his or her salary. Bonus targets are generally established at either the December meeting of the Compensation Committee in the prior year at the same time base salary and long-term incentive awards are determined, and bonus metrics are generally established at either the December meeting of the Compensation
Committee in the prior year or duringat the Compensation Committee’s first regular meeting of the applicable year. The
In February of 2017, the Compensation Committee approved the 2017 short-term incentive program for Helix’s executive officers. Because the Committee anticipated that industry conditions for 2017 would continue to be similar to those of 2015 and 2016, the Compensation Committee, as it did in those previous years, used only one financial metric to determine bonus payouts: adjusted EBITDA. In years prior multiple financial metrics were used to determine bonus payout (e.g., for 2014, program setsEBITDA, capital expenditure levels and return on capital). In light of the executivecontinuing industry conditions that began with the drop in oil prices several years ago, and the importance of utilization of our business assets, the Compensation Committee believed that achieving target adjusted EBITDA was again the
officers’
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| COMPENSATION DISCUSSION AND ANALYSIS |
key financial objective for Helix and its shareholders, and thus should be the sole metric for determining bonus payout. In February of 2017, the Compensation Committee approved the 2017 Short-Term Incentive Program for Helix’s executive officers, including entry level, target bonuses at a lower percentage of base salary than the 2013 and prior years’ programs, with an opportunitymaximum bonus that could be earned by each executive officer, and adjusted EBITDA targets that had to be met to earn additionala bonus amounts, upat each of those levels.
Set forth below are the 2017 EBITDA targets:
| 2017 Adjusted EBITDA | Bonus Payout as % of Target | |
| $156 million | Maximum | |
| $130 million | Target | |
| $104 million | Threshold |
Prior to a maximum amount, if Helix’s performance exceeds the target levels for the various metrics. The calculation of any bonus payout when performance for a metric fallsbeing payable, the threshold level of adjusted EBITDA was required to be achieved. The amount of bonus earned between levelsthreshold and target level, and between target and maximum level, is madecalculated on a linear basis. For 2014,
Also for 2017, as for prior years, even if target adjusted EBITDA were achieved, the Compensation Committee determined that for any bonus to be paid out, a pool of funds (called the “incremental profit pool”) consisting of 50% of adjusted EBITDA over the threshold adjusted EBITDA level had to be available for payout, and would be allocated among our onshore employees, including executive officers based on their bonus targets. The adjusted EBITDA target for 2017 (required to be met before an incremental profit pool would start to accumulate for purpose of paying bonuses) was $104 million.
The 2017, the threshold, target and maximum bonus opportunity for each named executive officer was as follows:
| Named Executive Officer | Threshold Level as a Percent of Salary | Target Opportunity as a Percent of Salary | Maximum Opportunity as a Percent of Salary | |||
Owen Kratz | 100% | 150% | 200% | |||
Anthony Tripodo | 80% | 120% | 160% | |||
Clifford V. Chamblee | 80% | 120% | 160% | |||
Alisa B. Johnson | 75% | 100% | 133% | |||
The Compensation Committee adopted three financial performance metrics for the 2014 short-term cash incentive (bonus) program for our named executive officers.
Set forth below is the weight given to each of the three financial performance metrics, the percentage of target achieved and the percentage of the target bonus earned for 2014.
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 31
| Metric | Weight | Achievement of Target | | 2014 Bonus | | |||||||||
EBITDA(1) | 75% | X | 116% | = | 87% | |||||||||
Return on Capital(2) | 15% | X | 133% | = | 20% | |||||||||
Maintenance of CAPEX(3) | 10% | X | 119% | = | 12% | |||||||||
|
|
|
|
|
| |||||||||
Overall Performance | 100% | 119% |
| Named Executive Officer | Threshold Level | Target | Maximum
| |||
Owen Kratz | $700,000 | $1,050,000 | $1,400,000 | |||
Anthony Tripodo | 384,000 | 576,000 | 768,000 | |||
Scotty Sparks | 281,000 | 375,000 | 487,500 | |||
Alisa Johnson | 270,000 | 360,000 | 479,000 | |||
Erik Staffeldt1 | 141,047 | 193,550 | 257,422 |
| (1) |
The following are the 2017 bonus targets and actual payouts for each NEO. Because the adjusted EBITDA exceeded the threshold level and a pool was available for payout(1), like our other onshore employee participants in Helix’s 2017 bonus program, our executive officers were each paid a bonus at 40.7% of target bonus, in the amounts set forth below:
Short-Term Bonus: Target v. Actual
| ||||||||
Named Executive Officer | Target | Actual | ||||||
Owen Kratz | $1,050,000 | $427,350 | ||||||
Anthony Tripodo | 576,000 | 234,432 | ||||||
Scotty Sparks | 375,000 | 152,625 | ||||||
Alisa B. Johnson | 360,000 | 146,520 | ||||||
Erik Staffeldt2 | 193,550 | 78,941 | ||||||
| (1) | Adjusted EDITDA was calculated to exclude the impacts of the acceleration of time-vested restricted stock to two directors who left the Board during 2017. |
| (2) |
Bonuses are typically paid in March of the year following the applicable performance year.
• EBITDA Targets
Set forth below are certain EBITDA targets that were approved by the Compensation Committee to evaluate 2014 performance with respect to this financial metric and the actual performance achieved.
The targets were based on a variety of factors including the overall Helix budget approved by the board and market guidance.
EBITDA Targets ($ in millions) | ||||||||||||
Actual
| Metric
| Achievement
| ||||||||||
| $275 | < | 0 | % | |||||||||
| $275 | ³ | 80 | % | |||||||||
| $344 | ³ | 100 | % | |||||||||
| $378 | 116 | % | ||||||||||
| $ | 413 | ³ | 120 | % | ||||||||
• Return on Capital Targets
Set forth below are certain return on capital targets that were approved by the Compensation Committee to evaluate 2014 performance with respect to this
financial metric and the actual performance achieved. The targets were based on a variety of factors including discussions with the board.
32 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 37 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Return on Capital Targets | ||||||
Actual
| Metric
| Achievement
| ||||
| 11% | < | 0% | ||||
| 11% | ³ | 67% | ||||
| 12% | ³ | 100% | ||||
| 13% | ³ | 133% | ||||
| 14.75% | 133% | |||||
• Maintenance of CAPEX Spending within Board Approved Levels
This metric measure isCompared to the maintenanceprior year for which none of CAPEX spending withinHelix’s management team earned any bonus as the amounts approved bythreshold adjusted EBITDA level was not met, for 2017 the boardNEOs earned 40.7% of their bonus targets based on the improved financial performance for the subject bonus year. For 2014, if CAPEX spending was lower than budgeted CAPEX, then the named executive officers would earn a percentage of this component (10% of total bonus target amount) equal toThe 2017
bonus program and payout of bonus amounts for 2017 demonstrates the weighted average of the EBITDA and return on capital achievement of their respective targets. As the weighted average of the EBITDA and return on capital targets for 2014 was 119% and CAPEX spending was lower than budgeted CAPEX, 119% of this metric was earned.Compensation Committee’s commitment to aligning short-term incentive compensation with Helix’s shorter term financial goals.
• Bonus Levels and Amounts Paid
Set forth below are the 2014 bonus targets and the actual bonuses paid (in March 2015) to each named executive officer, which were 119% of target:
Named Executive Officer
|
| Target
|
|
| Actual
|
| ||
Owen Kratz | $1,050,000 | $1,249,500 | ||||||
Anthony Tripodo | 576,000 | 685,440 | ||||||
Clifford V. Chamblee | 480,000 | 571,200 | ||||||
Alisa B. Johnson | 360,000 | 428,400 |
Long-Term Incentive Awards
The Compensation Committee believes that equity-based incentive awards serve to align the economic interests of our executive officers with those of our shareholders. We believe that our restricted stock awards, combined with our 2014 long-term cash performance awards and performance share unitPSU awards (the payout of which areis based on our stock price),TSR over a three-year performance period compared to that of our peer group) provide proper incentives to avoid excessive risk taking while increasing long-term shareholder value. We also believe that these awards are an important retention tool
retention tool with respect to our employees, including our named executive officers.
In determining the value of each named executive officer’sNEO’s long-term incentive award, the Compensation Committee typically reviews the peer group data provided by the independent compensation consultant, historical awards and the CEO’s recommendation regarding the long-term incentive award for each named executive officer,NEO and makes its determination at its regularly scheduled December meeting.
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 33
20142017 Long-Term Incentive Awards
As in 2013,Like the 20142015 and 2016 long-term incentive awards to our named executive officers were comprisedNEOs, the 2017 long-term incentive awards consisted of: (1) 25%50% in the form of a performance share unitcliff-vesting PSU award and (2) 50% in the form of a cash performance award, and (3) 25% in a time-vestedtime-vesting restricted stock award. The total valueThus half of the long-term incentive awards for each named executive officer was determinedtotal award is cliff-vesting, and pays out depending on how our TSR compares to that of our peers, as opposed to the absolute price of our own stock (which may be influenced by thegeneral industry or macroeconomic conditions that may exist at various points in time, rather than our own financial performance).
The Compensation Committee determined in December 2013. At that time, the Compensation
Committee determinedof 2016 that the total value of the 2017 long-term incentive award opportunity for our executive officersMr. Kratz, Mr. Tripodo, Mr. Sparks and Ms. Johnson would be the same as the prior year, except for Mr. Chamblee, whoseyear. (Mr. Staffeldt was not an executive officer until June of 2017, and therefore his January 2017 long-term incentive award was increased duedoes not reflect hismid-year promotion to continued development in his role, as well as peer group data for the position.position of Senior Vice President and Chief Financial Officer.) Set forth below are the long-term incentive awards forgranted in January of 2017 to each of the named executive officers granted in January 2014.NEOs.
2017 Long-Term Incentive Awards
|
2017 Long-Term Incentive Awards
| |||||||||||||||
Named Executive Officer
| Performance Share Unit (25%)
| Cash Performance Awards (50%)
| Restricted Stock Awards (25%)
| Total Value of LTI Awards
| PSU Awards (50%) | Restricted Stock Awards (50%) | Total Value of LTI Awards | |||||||||
Owen Kratz | 34,513 | $1,600,000 | 34,513 | $3,200,000 | 181,406 | 181,406 | $3,200,000 | |||||||||
Anthony Tripodo | 16,178 | 750,000 | 16,178 | 1,500,000 | 85,034 | 85,034 | 1,500,000 | |||||||||
Clifford V. Chamblee | 11,594 | 537,500 | 11,594 | 1,075,000 | ||||||||||||
Scotty Sparks | 60,941 | 60,941 | 1,075,000 | |||||||||||||
Alisa B. Johnson | 11,324 | 512,500 | 11,324 | 1,050,000 | 59,524 | 59,524 | 1,050,000 | |||||||||
Erik Staffeldt1
| 17,007 | 17,007 | 300,000 | |||||||||||||
(1) This award was made to Mr. Staffeldt prior to his being promoted in June of 2017 to his current executive position as Senior Vice President and Chief Financial Officer | (1) This award was made to Mr. Staffeldt prior to his being promoted in June of 2017 to his current executive position as Senior Vice President and Chief Financial Officer | |||||||||||||||
2014 Performance Share Unit2017 PSU Awards
In January 2014,of 2017, each named executive officerNEO received a performance share unitPSU award underpursuant to our 2005 Plan. Each unit represents the contingent right to receive at vesting one share of our common stock. These awards are to be paid with out in
shares of ourHelix common stock unless the Compensation Committee determines to make the payment in cash.stock. The performance share unit award vestsPSU awards vest entirely after a three-year period with the final number of shares issued based on our total shareholder returnTSR relative to that of our peersa group of peer companies (as set forth in the applicable
| 38 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| COMPENSATION DISCUSSION AND ANALYSIS |
PSU Award Agreement) over the same three-year period.period). The maximum number of shares that may be issued at vesting is 200% of the number of units
awarded and the minimum is 0. The total shareholder return calculation for the performance share unit award compares Helix’s total shareholder return against the total shareholder return of each company in the 2014 peer group.zero. The total shareholder return formula for the 2017 PSU awards is computed as:
| Ending Price – Beginning Price + Dividends* | = Total Shareholder Return | |
| Beginning Stock Price |
*Dividends, if any paid over the performance period; Beginning Price being the average of closing price of the last 20 trading days of 2016 and the Ending Price being the average closing price of the last 20 trading days of 2019 |
For PSU awards prior to 2017, to measure performance, the ending price –peer companies were grouped into quintiles based on TSR after the beginning price
+ dividends (if any) paid over the performance period / the beginning price, with the beginning price being the average closing price of the last 20 trading days of 2013 and the ending price being the average closing price of the last 20 trading days of 2016.
In calculating our relative total shareholder return, the top performer and bottom performer of the peer group iswere excluded, and Helix was then placed into the remaining peersappropriate quintile based on its TSR which would determine whether payout would be at the 0%, 50%, 100%, 150% or 200%, from lowest to highest quantile.
In December of 2016, when the Compensation Committee determined the 2017 long-term incentive awards for our executive officers and Helix are grouped into quintiles. The quintilesother members of
management, based on commentary from proxy advisory firms and an institutional shareholder, the Committee decided to abandon the quintile concept for the calculation of PSUs earned at vesting. Instead it approved awards whereby payout is calculated on a linear basis between the threshold ranking and the respective amountmaximum ranking. In addition, the threshold required forany payout of PSUs was raised from the performance share unit award earned are set forth below:
Lowest quintile – 0%20th percentile to the 30th percentile, and the threshold for a maximum payout (200% of award earned
Second lowest quintile – 50% of award earned
Middle quintile – 100% of award earned
Second highest quintile – 150% of award earned
Highest quintile – 200% of award earnedPSUs granted) was raised from the 80th percentile to the 90th percentile.
34 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
2014 Cash Performance Awards
In January 2014, each named executive officer received a cash performance award under our 2005 Plan. Our executive officers are granted cash performance awards, the amount of which to be paid out on any vesting date will depend on the performance of our common stock price over the applicable measurement period compared to a “base” stock price determined by the Compensation Committee on the date of the award. The stock price measurement period to determine the annual payout of these share-based cash awards is the last 20 trading days of the year immediately prior to a vesting (the “Average Price”). The base stock price for the long-term incentive cash performance awards granted in 2014 was $26.30, representing 115% of the average closing price of our common stock over the last 20 trading days of 2013. Payment amounts are based on the calculated ratio of the Average Price divided by the base stock price. The purpose of the 115% factor in the base stock price is to require that the stock value
increase by 15% before the award can be earned at its original face value, thus incorporating a significant “stretch factor” in order to further align this component of long-term incentive with the interests of our shareholders. In addition, should the performance of our stock over the relevant period go below 75% of the base stock price, no payout will be made. The long-term incentive cash performance awards granted in 2014 vest ratably on an annual basis over a three-year period, or upon such other events described in the award letters applicable to such awards.
Example of 2015 Payout for 2014 Cash Performance Award: If the award is $3,000, the payout at 100% on each vesting date is $1,000. The cash payment due on the first of such vesting dates is set out below. The example includes the actual average closing price for the last 20 trading days of 2013, $22.87, and therefore a base stock price of $26.30, which is 115% of $22.87.
Average Price on January 2015 Vesting Date
| Potential Payout
| Potential Payout
| ||||
$ 52.60+ | 200% | $ | 2,000.00 | |||
$ 46.03 | 175% | $ | 1,750.00 | |||
$ 39.45 | 150% | $ | 1,500.00 | |||
$ 26.30 | 100% | $ | 1,000.00 | |||
$ 22.88 | 87% | $ | 870.00 | |||
$ 19.73 | 75% | $ | 750.00 | |||
Less than $ 19.73 | 0% | $ | 0.00 | |||
Actual Payout of 2014 Cash Performance Award
The Average Price for the 2014 vesting was $21.85, which resulted in a payout of 83.08% for the first vesting tranche of the 2014 cash performance awards. Set forth below is the actual amount received by each named executive officer:
|
| |
| ||
| ||
| ||
|
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 35
For amounts received in 2014 from the vesting of 2013, 2012, 2011 and 2010 long-term incentive cash performance awards issued pursuant to our 2005 Plan and our 2009 Long-Term Incentive Cash Plan (the
“2009 Plan”), as applicable, see footnote 3 to the Summary Compensation Table under “Executive Compensation.”
20142017 Restricted Stock Awards
In January 2014,of 2017, each named executive officerNEO received a time-vestedtime-vesting restricted stock award underpursuant to our 2005 Plan. The restricted stock awards vest over a three-year period inone-third increments on each anniversary of the date of grant.
Perquisites and BenefitsPayouts of Prior Performance-Based Long-Term Incentive Awards
Our named executive officers had long-term incentive awards that vested immediately after the end of 2017 the payout of which was based on the performance of our common stock, i.e., an annual vesting for each of the 2015, 2016 and 2017 restricted stock awards, and the cliff-vesting of the 2015 PSU awards.
With respect to the last vesting of the 2015 restricted stock awards, the value of the stock at vesting (based on a 2017 year end closing price of $7.54) was 35% of the value of those shares at grant date (based on a 2014 year end closing price of $21.70), reflecting the market deterioration that occurred subsequent to 2014. The annual vesting of shares granted under the 2016 awards was 143% of the original grant date value of those
shares, and the annual vesting of shares granted under the 2017 awards was 85% of the original grant date value of those shares.
As described above, forpre-2017 PSU awards, payout at vesting is determined by in which quintile our TSR Falls, with the quintiles based on the TSR of our peer group companies over a three-year performance period.
With respect to the cliff-vesting of the 2015 PSU awards at the end of the performance period ending December 31, 2017, Helix’s three-year TSR fell into the second to lowest quintile (after removing the top and bottom performer), and therefore 50% of the granted PSUs was earned by our executive officers. This award was settled in cash based on our closing stock price on
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 39 |
| COMPENSATION DISCUSSION AND ANALYSIS |
December 31, 2017. Because in addition to only 50% of the units being earned Helix’s stock price declined during the three-year performance period, the value
earned by each executive was 17% of the grant date value.
Perquisites and Benefits
Our NEOs are not entitled to any benefits that are not otherwise available to all of our employees. In this regard it should be noted that weWe do not provide pension arrangements, free or subsidized post-retirement health coverage or similar benefits for our named executive officers.NEOs.
We offer a variety of health and welfare and retirement programs to all eligible employees. TheHelix’s executive officers are eligible for the same benefit programs on the same basis as the rest of our U.S. employees. Our health and welfare programs include medical, pharmacy, dental, vision, life insurance and accidental death and disability insurance. In addition, we offer a
retirement program intended to supplement our employees’
personal savings and social security. Our retirement program for our U.S. employees, including our executive officers, consists solely of our Helix Energy Solutions Group, Inc. Employees RetirementEmployees’ 401(k) Savings Plan, which is aPlan. At their meetings in February of 2016, the Compensation Committee and the Board resolved to suspend Helix’s discretionary matching contributions to our employees’ 401(k) plan. With respectaccounts for an indefinite period. Prior to all employees who participate in our 401(k) plan,that time, Helix currently matchesmatched 75% (which was increased from 50% effective January 1, 2014) of the employee’s participating employees’pre-tax contributions up to 5%five percent of the employee’semployees’ compensation subject to contribution limits. All of our named executive officers participatedexcept for Mr. Sparks participate in our 401(k) plan and received matching funds in 2014.plan. Our health and insurance plans are the same for all employees.
2015 Long-Term Incentive ProgramSeverance and Short-Term Incentive ProgramChange in Control Arrangements
In December 2014, the Compensation Committee determined to change the structure of the long-term incentive program. As described above, composition of long-term incentive awards to our executive officers that has been in place since 2012 consisted of (i) 50% in a performance-based cash long-term incentive award vesting pro-rata over three years, the payout of which is to be measured by the performance of Helix’s stock year over year (i.e., vesting date price compared to a base price), (ii) 25% in cliff-vesting performance share units, the payout of which is measured by the performance of Helix’s stock relative to its peer group over the three-year vesting period and (iii) 25% in an award of time-vested restricted stock, vesting pro-rata over three years. In reviewing the program in connection with its 2015 determinations, the Compensation Committee determined to focus more of the performance-based long-term incentive awards on the performance of our stock compared to our peer group (rather than a year-over-year comparison to our own stock price, which could potentially lead to a result that is mostly reflective of general market conditions at the time of vesting), in that the operating performance
of Helix and its executive officers is more accurately gauged by the relative performance of our stock price compared to that of our peers.
The Compensation Committee also determined that more of the long-term incentive awards granted to our executive officers should be cliff-vesting (in the prior years’ programs, cliff-vesting awards only constituted 25% of the total long-term incentive awards). In that connection, the Compensation Committee determined to change the structure of performance-based long-term incentive awards to our executive officers to one form of performance-based award: a cliff-vesting award the payout of which is based on our stock performance compared to that of our peer group, and to eliminate the pro-rata vesting cash performance award the payout of which is based on a year-over-year comparison with respect to our own stock price. This structural change also simplifies the long-term incentive program by moving to only one form of performance-based long-term incentive awards,i.e., performance share units, and to only two forms of long-term incentive awards.
36 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
Thus, for 2015 the long-term incentive award program was changed from the 2014 (and prior years’) program consisting of 50% cash performance awards, 25% cliff-vesting performance share units and 25% restricted stock, to a program consisting of 50% cliff-vesting performance share units and 50% restricted stock.
In February 2015, the Compensation Committee approved the 2015 Short-Term Incentive Program for Helix’s executive officers, including entry level, target and maximum bonuses that can be earned by each
executive officer, which incorporates a significant “stretch” element in light of the current condition of the service market due to industry reaction to the precipitous drop in oil prices. To simplify and reflect the financial performance drivers for 2015, the Compensation Committee retained only one financial metric: EBITDA targets. As such, the return on capital metric and the maintenance of CAPEX spending within board approved levels metric were deleted, and the EBITDA targets metric was increased from 75% weighting to 100%.
We believe that the competitive marketplace for executive talent and our desire to retain our executive officers require us to provide our executive officers with certain severance benefits. In addition, we believe that the interests of our shareholders are served by having limited change in control benefits for executive officers who would be integral to the success of, and are most likely to be impacted by, a change in control. Each of our named executive officersNEOs with the exception of Mr. ChambleeSparks and Mr. Staffeldt, who were not executive officers at the time, executed an amended and restated employment agreementsagreement in November of 2008. Mr. ChambleeSparks executed an employment agreement in May 2011of 2015 in connection with his promotion to an executive officer position and Mr. Staffeldt executed an employment agreement in June of 2017 in connection with his promotion to an executive officer position. In order to reflect evolving corporate governance standards, Mr. Chamblee’s agreement doesSparks’s and Mr. Staffeldt’s employment agreements do not have “gross-up”,a“gross-up,” or excise tax protection, provisions.provision.
The employment agreements with our named executive officersNEOs contain severance benefits in the
event the executive’s employment is terminated by Helix “Without Cause” or
the executive terminates his or her employment for “Good Reason”,Reason,” as those terms are defined in the agreements. The employment agreements generally contain benefits payable to the executive officer if the executive officer terminates his or her employment for “Good Reason” or is terminated without “Cause”“Without Cause” within atwo-year period following a ���Change“Change in Control.” We believe the provision of these benefits to be reasonable and customary within our peer group. For more information regarding the severance and change in control benefits, please refer to “Employment Agreements and Change in Control Provisions.”
In February of 2012, the Compensation Committee adopted a policy that prohibits any future employment agreements with executive officers from containing “single trigger” change in control provisions, or “gross-up”,“gross-up,” or excise tax protection, provisions. With the departure of Mr. Tripodo at the end of 2017, none of our executive officers’ employment agreements have a “single trigger” for payout of severance benefits in the event of a change of control.
We have implemented stock ownership guidelines for our Section 16 officers and non-employee directors. These covered persons have five years from the later of (1) the date of adoption of the guidelines in February 2011 or (2) the date upon which they become subject to the guidelines to accumulate the equity necessary to comply with the guidelines. The forms of equity ownership that can be used to satisfy the guidelines include shares of our common stock owned directly, shares of our common stock owned indirectly (e.g., by a spouse or a trust) or time-vested restricted stock.
The ownership guidelines are as follows:
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 37
| 40 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| COMPENSATION |
E. 2017 SAYON PAY VOTEAND FREQUENCY
In 2017 we sought an advisory vote from our shareholders regarding our 2016 executive officer compensation and received a 96% favorable “say on pay” vote.
For 2017 compensation, similarly to 2016 compensation, the Compensation Committee continued to:
The valueIn addition, for 2017 the Compensation Committee imposed more stringent stock performance metrics for the payout of an individual’s holdingsPSU awards (such that payout is determined by linear calculation between the threshold and the maximum performance levels rather than by quintiles, and the bar has been raised with respect to stock performance requirements to earn at the threshold and the maximum payout levels).
Also as a result of the 2017 shareholder advisory vote on the frequency of holding anon-binding shareholder vote on executive compensation, based on the averagevote of the closing price of a share78% of our common stock forshareholders, the previous calendar year. There are penalties for non-compliance; however waivers may be
made for certain hardship issues. Currently, eachBoard determined that Helix will hold an annual vote to approve the compensation of our directors and Section 16 officers is in compliance with the ownership guidelines.NEOs.
The Compensation Committee and management of Helix believe that the Company’s 2017 executive compensation:
Helix considers it inappropriateAppropriately reflects Helix’s financial performance for any director, officer or employee to enter into speculative transactions in our stock. Therefore, we have a policy that prohibits the purchase or sale of puts, calls or options based on our securities, or the short sale of our securities. Directors, officers and other employees may not purchase our securities on margin. In May 2014, the Compensation Committee further clarified the policy to provide that hedging of our stock is prohibited, and to put discrete limitations around the ability to pledge Helix stock. Although we acknowledge that corporate executives, much of whose net worthyear as well as compensation consistslonger-term stock performance
meeting certain quantitative requirements (the pledged stock does not exceed: 25% of the director’s or officer’s total holdings, 2% of Helix’s outstanding securities and 200% of Helix’s average daily trading volume over the three months prior to the transaction), and obtaining board approval for any specific transaction. The board may consider any factors it deems appropriate and relevant, including whether the indebtedness is non-recourse, whether the director or officer has other assets to satisfy the loan, whether the stock pledged was purchased (as opposed to granted as compensation by Helix), and any mechanisms in the pledge transaction that are in place to avoid undesirable transactions in Helix’s securities.
Mr. Kratz is the only director or officer that has entered into a pledging transaction, which met the pledging limitations of the policy and was approved by the board.
We believe that our overall executive compensation mix and levels are appropriate and provide a direct link to enhancingenhance shareholder value achieving our
principles of our compensation philosophy and objectives, which include attracting, motivating and retainingretain the key talent needed to ensure Helix’slong-term success.
For these reasons, the Board recommends that shareholders vote to approve the 2017 compensation for Helix’s NEOs.
COMPENSATION COMMITTEE REPORTF. COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors has reviewed and discussed the above Compensation Discussion and Analysis with management. Based on this review and discussion, the Compensation Committee recommended to the Board that this Compensation Discussion and Analysis be included in this proxy statement.
THE COMPENSATION COMMITTEE:THE COMPENSATION COMMITTEE:
James A. Watt, Chair
John V. Lovoi Chairman
Jan Rask
William L. Transier
James A. Watt
38 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 41 |
The executive officers of Helix are as follows:
Name | Age | Position | ||||||||
Owen Kratz | 63 | President, Chief Executive Officer and Chairman of the Board | ||||||||
Erik Staffeldt | 46 | Senior Vice President and Chief Financial Officer | ||||||||
Scotty Sparks | 44 | Executive Vice President and Chief Operating Officer | ||||||||
Alisa B. Johnson | 60 | |||||||||
| ||||||||||
| ||||||||||
| Executive Vice President, General Counsel and Corporate Secretary | |||||||||
Geoffrey C. Wagner | 39 | Executive Vice President and Chief Commercial Officer | ||||||||
Anthony Tripodo | 65 | Former Executive Vice President and Senior Advisor |
Owen Kratz is President and CEOChief Executive Officer of Helix. He was named Executive Chairman in October of 2006 and served in that capacity until February of 2008 when he resumed the position of President and CEO.Chief Executive Officer. He was appointed Chairman of the Board in May of 1998 and served as Helix’s CEOChief Executive Officer from April of 1997 until October of 2006. Mr. Kratz served as President from 1993 until February of 1999, and has served as a Directordirector of Helix since 1990. He served as Chief Operating Officer from 1990 through 1997. Mr. Kratz joined Helix in 1984 and held various offshore positions, including saturation diving supervisor, and management responsibility for client relations, marketing and estimating. From 1982 to 1983, Mr. Kratz was the owner of an independent marine construction company operating in the Bay of Campeche. Prior to 1982, he was a superintendent for Santa Fe and various international diving companies, and a diver in the North Sea. From February of 2006 to December of 2011, Mr. Kratz was a member of the Board of Directors of Cal Dive International, Inc., a publicly-tradedpublicly traded company whichthat was formerly a subsidiary of Helix. Mr. Kratz has a Bachelor of Science degree from State University of New York (SUNY).
Erik Staffeldt was appointed Senior Vice President and Chief Financial Officer of Helix in June of 2017. Mr. Staffeldt oversees Helix’s finance, treasury, accounting, tax, information technology and corporate planning functions. Since joining Helix in July of 2009 as Assistant Corporate Controller, Mr. Staffeldt has served as Director – Corporate Accounting from August of 2011 until March of 2013, Director of Finance from March of 2013 until February of 2014, Finance and Treasury Director from February of 2014 until July of 2015, and Vice President – Finance and Accounting from July of 2015 until June of 2017. Mr. Staffeldt was also designated as Helix’s “principal accounting officer” for purposes of the Securities Act of 1933, the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder in July of 2015. Mr. Staffeldt served in various financial and accounting capacities prior to joining Helix and has over 22 years of experience in the energy industry. Mr. Staffeldt is a graduate of the University of Notre Dame with a BBA in Accounting and an MBA from Loyola University in New Orleans, and is a Certified Public Accountant.
Scotty Sparks is Executive Vice President and Chief Operating Officer of Helix, having joined Helix in 2001. He served as Executive Vice President – Operations of Helix from May of 2015 until February of 2016. From October of 2012 until May of 2015, he was Vice President – Commercial and Strategic Development of Helix. He has also served in various positions within Helix’s robotics subsidiary, Canyon Offshore, Inc., including as Senior Vice President from 2007 to September of 2012. Mr. Sparks has over 27 years of experience in the subsea industry, including Operations Manager and Vessel Superintendent at Global Marine Systems and BT Marine Systems.
Alisa B. Johnson has served as Executive Vice President, General Counsel and Corporate Secretary of Helix since November of 2008, and joined Helix as Senior Vice President, General Counsel and Corporate Secretary in September of 2006. Ms. Johnson oversees the legal, human resources, and contracts and insurance functions. Ms. Johnson has been involved with the energy industry for over 27 years. Prior to joining Helix, Ms. Johnson worked for Dynegy Inc. for nine years, at which company she held various legal positions of increasing responsibility, including Senior Vice President and Group General Counsel – Generation. From 1990 to 1997, Ms. Johnson held various legal positions at Destec Energy, Inc., and prior to that Ms. Johnson was in private law practice. Ms. Johnson received her Bachelor of Arts degree Cum Laude from Rice University and her law degree Cum Laude from the University of Houston.
| 42 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| EXECUTIVE OFFICERS OF HELIX |
Geoffrey C. Wagner is Executive Vice President and Chief Commercial Officer. Mr. Wagner joined Helix in January of 2018. Prior to joining Helix, he worked in a consulting capacity with Blackhill Partners from September to December of 2017. Prior to that time, he served in various capacities for Atwood Oceanics, Inc., an offshore drilling contractor, as Vice President, Strategic Planning from August of 2016 until August of 2017, Vice President, Technical Services and Supply Chain from August of 2015 until August of 2016, Vice President, Marketing and Business Development from October of 2012 until August of 2015, and Director, Marketing and Business Development from March of 2010 until October of 2012. He served from January of 2005 to March of 2010 in management positions of increasing responsibility with Transocean, prior to which he was employed by SeaRiver Maritime, Inc., an ExxonMobil company, that owns and operates vessels providing maritime transportation of petroleum and chemical products. Mr. Wagner holds an MBA from the Jones Graduate School of Business at Rice University and an undergraduate degree in Marine Engineering and Nautical Science from the United States Merchant Marine Academy at Kings Point, New York.
Anthony Tripodoserved as a director and officer of Helix until his retirement and resignation on December 31, 2017. At the time of his resignation Mr. Tripodo was electedExecutive Vice President and Senior Advisor of Helix. From June of 2008 until June of 2017, Mr. Tripodo served as Executive Vice President and Chief Financial Officer of Helix on June 25, 2008. Mr. Tripodo oversees theoverseeing Helix’s finance, treasury, accounting, tax, information technology and corporate planning functions. Mr. Tripodo wasserved as a director of Helix from May 7, 2015 until December 31, 2017 and from February of 2003 until June 2008, and has been nominated to serve as a director.of 2008. Prior to joining Helix, Mr. Tripodo was the Executive Vice President and Chief Financial Officer of Tesco Corporation. From 2003 through the end of 2006, he was a Managing Director of Arch Creek Advisors LLC, a Houston based investment banking firm. From 1997 to 2003, Mr. Tripodo was Executive Vice President of Veritas DGC, Inc., an international oilfield service company specializing in geophysical services, including serving as Executive Vice President, Chief Financial Officer and Treasurer of Veritas from 1997 to 2001. Previously, Mr. Tripodo served 16 years in various executive capacities with Baker Hughes, including serving as Chief Financial Officer of both the Baker Performance Chemicals and Baker Oil Tools divisions. Mr. Tripodo also has served as a director of three publicly-tradedpublicly traded companies in the oilfield services industry in addition to his prior service as a director of Helix. He graduated Summa Cum Laude with a Bachelor of Arts degree from St. Thomas University (Miami). Mr. Tripodo is a nominee standing for election as a Class II director.
Clifford V. Chamblee has been Executive Vice President and Chief Operating Officer of Helix since February 2013. He served as Executive Vice President — Contracting Services of Helix from May 2011 until February 2013. He joined Helix in its robotics subsidiary, Canyon Offshore, Inc. (Canyon), in 1997. Mr. Chamblee served as President of Canyon from 2006 until 2011. Prior to becoming President of Canyon, Mr. Chamblee held several positions with increasing responsibilities at Canyon managing the operations of the company including as Senior Vice President and Vice President Operations from 1997 until 2006. Mr. Chamblee has been involved in the robotics industry for over 32 years. From 1988 to 1997, Mr. Chamblee held various positions with Sonsub International, Inc., including Vice President Remote Systems, Marketing Manager and Operations Manager. From 1986 until 1988, he was Operations Manager and Superintendent for Helix (then known as Cal Dive). From 1981 until 1986, Mr. Chamblee held various positions for Oceaneering International/Jered, including ROV Superintendent and ROV Supervisor. Prior to 1981, he was an ROV Technician for Martech International. Mr. Chamblee has announced his resignation from Helix to be effective May 11, 2015.
Alisa B. Johnson joined Helix as Senior Vice President, General Counsel and Secretary of Helix in September 2006 and in November 2008 became Executive Vice President, General Counsel and Corporate Secretary of Helix. Ms. Johnson oversees the legal, human resources and contracts and insurance functions. Ms. Johnson has been involved with the energy industry for over 24 years. Prior to joining Helix, Ms. Johnson worked for Dynegy Inc. for nine years, at which company she held various legal positions of increasing responsibility, including Senior Vice President and Group General Counsel — Generation. From 1990 to 1997, Ms. Johnson held various legal positions at Destec Energy, Inc. Prior to that Ms. Johnson was in private law practice. Ms. Johnson received her Bachelor of Arts degree Cum Laude from Rice University and her law degree Cum Laude from the University of Houston.
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 39
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 43 |
The following table provides a summary of the cash andnon-cash compensation for the years ended December 31, 2014, 20132017, 2016 and 2012,2015, for our named executive officers: (1) the Chief Executive Officer and the Chief Financial Officer and (2) each of the twothree most highly compensated executive officers of Helix during 20142017, other than the Chief Executive Officer orand the Chief Financial Officer.
The table may not reflect the actual
compensation received by the named executive officers for those periods. For example, amounts recorded in the stock awards column reflect the grant date fair market value of the awards at the award date.awards. The actual value of compensation realized by the named executive officer will likely vary from the grant date fair value of any equity award or cash performance award due to stock price fluctuations and/or forfeitures.
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Name and Principal Position | Year | Salary(1) | Bonus | Stock Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total | |||||||
Owen Kratz President and Chief Executive Officer
| 2017 2016 2015
| $700,000 $700,000 $700,000
| $-0- $-0- $-0-
| $4,529,973 $3,768,828 $3,447,755
| $427,350 $-0- $-0-
| $-0- $9,641 $9,938
| $5,657,323 $4,478,469 $4,157,693
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Anthony Tripodo Former Executive Vice President and Senior Advisor
| 2017 2016 2015
| $480,000 $480,000 $480,000
| $-0- $-0- $-0-
| $1,108,281 $1,766,640 $1,616,119
| $234,432 $-0- $-0-
| $-0- $1,189 $9,938
| $1,822,713 $2,247,829 $2,106,057
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Erik Staffeldt Senior Vice President and Chief Financial Officer
| 2017 | $306,000 | $50,000 | $364,970 | $78,941 | $-0- | $799,911 | |||||||
Scotty Sparks Executive Vice President and Chief Operating Officer
| 2017 2016 2015
| $375,000 $370,769 $324,247
| $-0- $-0- $-0-
| $1,307,794 $1,266,084 $ 269,338
| $152,625 $-0- $-0-
| $-0- $-0- $-0-
| $1,835,419 $1,636,853 $ 593,585
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Alisa B. Johnson Executive Vice President, General Counsel and Corporate Secretary
| 2017 2016 2015
| $360,000 $360,000 $360,000
| $-0- $-0- $-0-
| $1,277,385 $1,236,646 $1,131,312
| $146,520 $-0- $-0-
| $-0- $4,370 $9,938
| $1,783,905 $1,601,016 $1,501,250
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| (1) |
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| (2) | Our long-term incentive program was structured such that the awarded value of restricted stock and PSUs was identical, based on the quoted closing market price of $8.82 per share of our common stock on December 31, 2016 for awards made in 2017, $5.26 on December 31, 2015 for awards made in 2016 and $21.70 on December 31, 2014 for awards made in 2015. The total grant value of long-term incentive awards to our named executive officers did not change for the years shown. The amounts shown in this column, however, represent the grant date fair |
No stock options were granted in 2017, 2016 or 2015. The value ultimately realized by each named executive officer may or may not be equal to the FASB ASC Topic 718 determined value.
| 44 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| EXECUTIVE COMPENSATION |
| (3) | The amounts shown in this column reflect the payments made to each named executive officer (a) under Helix’s short-term incentive |
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40 HELIX ENERGY SOLUTIONS GROUP, INC.êBecause the threshold level of adjusted EBITDA was not met, none of our executive officers were paid any short-term incentive (bonus) for 2015 Proxy Statementand 2016. Because the closing price of our stock during the last 20 trading days of 2015 and 2016 fell below the required percentage of the base stock price for a payout of any long-term cash performance awards (50% for the 2011 award and 75% for the 2013 and 2014 awards), none of our executive officers received a payout from these awards after the 2015 and 2016 performance years. No long-term cash performance awards were issued in 2015, 2016 or 2017. In January of 2016, each of the following named executive officers received the following aggregate amounts in cash from their 2013 PSU awards, which were three-year cliff-vesting: Mr. Kratz, $95,566; Mr. Tripodo, $47,784; and Ms. Johnson $33,448. In January of 2017, each of the following named executive officers received the following aggregate amounts in cash from their 2014 PSU awards, which were three-year cliff-vesting: Mr. Kratz, $304,405; Mr. Tripodo, $142,690; and Ms. Johnson $99,878.
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| (4) | The amounts in this column consist of matching contributions by Helix through our Employees’ 401(k) |
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 45 |
| EXECUTIVE COMPENSATION |
The following table sets forth certain information with respect to grants of plan-based awards during the fiscal year ended December 31, 20142017 to each of our named executive officers:
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)(2) | Estimated Future Payouts Under Equity Incentive Plan Awards(5) | All Other Stock Awards: Number of Shares of Stock (Restricted Stock) | Grant Date Fair Value of Stock and Options Awarded(7) | |||||||||||||||||||||||||
| Threshold(3) | Target or Opportunity | Maximum(4) | Threshold | Target | Maximum | |||||||||||||||||||||||||
Owen Kratz | $700,000 | $1,050,000 | $1,400,000 | |||||||||||||||||||||||||||
| 1/2/2014 | $1,120,000 | $1,600,000 | $3,200,000 | $1,600,000 | ||||||||||||||||||||||||||
| 1/2/2014 | 17,257 | 34,513 | 69,026 | $800,011 | ||||||||||||||||||||||||||
| 1/2/2014 | 34,513 | $800,011 | ||||||||||||||||||||||||||||
Anthony Tripodo | $384,000 | $576,000 | $768,000 | |||||||||||||||||||||||||||
| 1/2/2014 | $562,500 | $750,000 | $1,500,000 | $750,000 | ||||||||||||||||||||||||||
| 1/2/2014 | 8,089 | 16,178 | 32,356 | $375,006 | ||||||||||||||||||||||||||
| 1/2/2014 | 16,178 | $375,006 | ||||||||||||||||||||||||||||
Clifford V. Chamblee | $320,000 | $480,000 | $640,000 | |||||||||||||||||||||||||||
| 1/2/2014 | $403,125 | $537,500 | $1,075,000 | $537,500 | ||||||||||||||||||||||||||
| 1/2/2014 | 5,797 | 11,594 | 23,188 | $268,749 | ||||||||||||||||||||||||||
| 1/2/2014 | 11,594 | $268,749 | ||||||||||||||||||||||||||||
Alisa B. Johnson | $270,000 | $360,000 | $479,000 | |||||||||||||||||||||||||||
| 1/2/2014 | $393,750 | $525,000 | $1,050,000 | $525,000 | ||||||||||||||||||||||||||
| 1/2/2014 | 5,662 | 11,324 | 22,648 | $262,490 | ||||||||||||||||||||||||||
| 1/2/2014 | 11,324 | $262,490 | ||||||||||||||||||||||||||||
| Name | Grant Date | Estimated Future Equity Incentive Plan Awards(1) | Estimated Future Payouts Awards(2) | All Other of Shares | Grant Date Fair Value of Stock and Options Awarded(4) | |||||||||||||
Target Bonus Opportunity | Threshold | Target | Maximum | |||||||||||||||
Owen Kratz | $1,050,000 | 60,703 | 181,406 | 362,812 | 181,406 | | $2,929,972 $1,600,001 |
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| 1/3/2017 | ||||||||||||||||||
| 1/3/2017 | ||||||||||||||||||
Anthony Tripodo | $576,000 | 42,517 | 85,034 | 170,068 | 85,034 | | $1,074,830 $750,000 |
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| 1/3/2017 | ||||||||||||||||||
| 1/3/2017 | ||||||||||||||||||
Erik Staffeldt | $193,550 | 8,504 | 17,007 | 34,014 | 17,007 | | $214,968 $150,002 |
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| 1/3/2017 | ||||||||||||||||||
| 1/3/2017 | ||||||||||||||||||
Scotty Sparks | $375,000 | 30,471 | 60,941 | 121,882 | 60,941 | | $770,294 $537,500 |
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| 1/3/2017 | ||||||||||||||||||
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Alisa B. Johnson | $360,000 | 29,762 | 59,524 | 119,048 | 59,524 | | $752,383 $525,002 |
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| 1/3/2017 | ||||||||||||||||||
| 1/3/2017 | ||||||||||||||||||
| (1) |
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| (2) |
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HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 41
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The amounts in these columns represent the estimated |
This column shows the number of time-vested restricted shares granted in |
This column represents the grant date fair value of the time-vested PSU awards and restricted stock awards. No options were granted by Helix in 2017 and no options are currently outstanding. Our long-term incentive program was structured such that the awarded value of restricted stock and |
42 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
| 46 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| EXECUTIVE COMPENSATION |
The following table sets forth certain information with respect to the restricted stock and performance share unitsPSUs granted during or for the fiscal years endingended December 31, 2014, 20132017, 2016 and 20122015 to each of our named executive officers.officers:
| Name and Principal Position | Grant Date | Approval Date |
| | All Other of Stock or Units | Grant Date Fair Market Value of Stock Awards(3) | |||||||||||
Owen Kratz President and Chief Executive Officer | | 1/ 1/ 1/4/2016 1/4/2016 1/2/ 1/2/
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| 12/1/2016 12/1/2016 12/3/2015 12/3/2015 12/4/2014 12/4/2014 | 181,406(1) 181,406(2) 304,183(1) 304,183(2) 73,733(1)
73,733(2) | $2,929,972 $1,600,001 $2,168,825 $1,600,003 $1,847,749 $1,600,006 | |||||||||||
Anthony Tripodo(4) Former Executive Vice President and Senior Advisor |
| 1/3/2017 1/3/2017 1/4/2016 1/4/2016 1/2/2015 1/2/2015 |
| 12/1/2016 12/3/2015 12/3/2015 12/4/2014 12/4/2014 | 85,034(1)
| $ $ $ $ $ $ 749,995 | |||||||||||
Senior Vice President and Chief Financial Officer | 1/3/2017 1/3/2017 | 12/1/2016 12/1/2016 | 17,007(1) 17,007(2) | $ 214,968 $ 150,002 | |||||||||||||
Scotty Sparks Executive Vice President and
| | 1/ 1/ 1/4/2016 1/4/2016 1/2/ 1/2/
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| 12/1/2016 12/1/2016 12/3/2015 12/3/2015 12/4/2014 12/4/2014 | 60,941(1) 60,941(2) 102,186(1) 102,186(2) 5,760(1)
5,760(2) | $ 770,294 $ 537,500 $ 728,586 $ 537,498 $ 144,346 $ 124,992 | |||||||||||
Alisa B. Johnson Executive Vice President, General Counsel and Corporate Secretary |
| 1/3/2017 1/3/2017 1/4/2016 1/4/2016 1/2/2015 1/2/2015 |
| 12/1/2016 12/3/2015 12/3/2015 12/4/2014 12/4/2014 | 59,524(1)
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| (1) | This is the number of |
| (2) | This is a time-vested restricted stock award. The |
| (3) |
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| (4) | Due to Mr. Tripodo’s retirement effective as of December 31, 2017, the Compensation Committee accelerated the vesting of his 191,613 shares of restricted stock. Pursuant to his 2016 and 2017 PSU Award Agreements, he will only vest in the number of units equal to the units originally granted multiplied by a fraction the numerator of which is the number of full months he was employed during the three year performance period and the denominator of which is 36. With respect to Mr. Tripodo’s 2016 PSU award, the number of units that can vest is 95,057 out of the 142,586 originally granted. With respect to Mr. Tripodo’s 2017 PSU award, the number of units that can vest is 28,345 out of the 85,034 originally granted. |
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 43
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 47 |
| EXECUTIVE COMPENSATION |
Outstanding Equity Awards as of December 31, 20142017
The following table includes certain information with respect to the value as of December 31, 20142017 of all unvested restricted stock awards outstanding for each of the named executive officers.
Option Awards(1)
| Stock Awards
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Name and Principal Position | Number of Securities Underlying Unexercised Options | Number of Securities Underlying Unexercised Options | Option Exercise Price | Option Expiration Date | Number of �� Shares or Units of Have Not Vested(2) | Market Value Stock That Have Not Vested(3)(4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(5) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3)(4) | ||||||||||||||||
Exercisable | Unexercisable | |||||||||||||||||||||||
Owen Kratz, President and CEO | -0- | -0- | N/A | N/A |
| 20,203 35,200 15,823 24,225 34,513
| (6) (7) (8) (9) (10)
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| $438,405 $763,840 $343,359 $525,683 $748,932 |
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| 47,468 36,337 34,513 |
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| $1,030,056 $788,513 $748,932 |
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Anthony Tripodo, Executive Vice President and CFO
| -0- | -0- | N/A | N/A |
| 8,754 22,433 7,912 12,113 16,178 | (6) (7) (8) (9) (10) |
| $189,962 $486,796 $171,690 $262,852 $351,063 |
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| 23,734 18,169 16,178 |
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| $507,216 $394,267 $351,063 |
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Clifford V. Chamblee, Executive Vice President and COO
| -0- | -0- | N/A | N/A |
| 2,021 8,644 5,406 8,277 11,594 | (6) (11) (8) (9) (10) |
| $43,856 $187,575 $117,310 $179,611 $251,590 |
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| 16,218 12,415 11,594 |
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| $351,931 $269,406 $251,590 |
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Alisa B. Johnson, Executive Vice President, General Counsel and Corporate Secretary | -0- | -0- | N/A | N/A |
| 7,070 15,708 5,538 8,479 11,324 | (6) (7) (8) (9) (10) |
| $153,419 $340,864 $120,175 $183,994 $245,731 |
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| 16,614 12,718 11,324 |
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| $360,524 $275,981 $245,731 |
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Name and Principal Position | Stock Awards(1) | |||||||||||||||||||
| Number of Shares or Units of Stock That Have Not Vested(2) | Market Value of Shares or Units of Stock That Have | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(5) | Equity Incentive Plan Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3)(4) | |||||||||||||||||
Owen Kratz President and Chief Executive Officer | | 24,578 202,789 181,406 | (6) (8) (10) | | $185,318 $1,529,029 $1,367,801 | | 73,733 304,183 181,406 | (7) (9) (11) | | $555,947 $2,293,540 $1,367,801 | ||||||||||
Anthony Tripodo(12) Former EVP and Senior Advisor | -0- | -0- | | 34,562 142,586 85,034 | (7) (9) (11) | | $260,597 $1,075,098 $641,156 | |||||||||||||
Erik Staffeldt Senior Vice President and Chief Financial Officer | | 1,152 15,843 17,007 | (6) (8) (10) | | $8,686 $119,456 $128,233 | | 3,456 23,764 17,007 | (7) (9) (11) | | $26,058 $179,181 $128,233 | ||||||||||
Scotty Sparks Executive Vice President and Chief Operating Officer | | 1,920 68,124 60,941 | (6) (8) (10) | | $14,477 $513,655 $459,495 | | 5,760 102,186 60,941 | (7) (9) (11) | | $43,430 $770,482 $459,495 | ||||||||||
Alisa B. Johnson Executive Vice President, General Counsel and Corporate Secretary | | 8,065 66,540 59,524 | (6) (8) (10) | | $60,810 $501,712 $448,811 | | 24,194 99,810 59,524 | (7) (9) (11) | | $182,423 $752,567 $448,811 | ||||||||||
| (1) | No options were granted by Helix in |
| (2) | The numbers in this column represent unvested shares of restricted stock as of December 31, |
| (3) | The fair market value is calculated as the product of the closing price on the last business day of |
| (4) | Helix has not paid dividends on its common stock and, as such, no dividends have been made with respect to any outstanding equity awards. |
| (5) | The numbers in this column represent |
| (6) | Restricted shares granted on January 2, 2015, which vest ratably on an annual basis over a three-year period beginning January 2, 2016. |
| (7) | PSUs granted on January 2, 2015, for which the performance period ends on December 31, 2017. |
| (8) | Restricted shares granted on January 4, |
| (9) |
| (10) | Restricted shares granted on January 3, |
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| (11) |
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| (12) |
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44 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
| 48 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| EXECUTIVE COMPENSATION |
Option Exercises and Stock Vested for Fiscal Year 20142017
The following table includes certain information with respect to the options exercised by the named executive officers and with respect to restricted stock vesting for such executive officers during the year ended December 31, 2014.2017.
Name and Principal Position | Option Awards | Stock Awards | ||||||
| Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized on Vesting | |||||
Owen Kratz, President and CEO | -0- | $-0- | 80,195 | $1,852,849 | ||||
Anthony Tripodo, Executive Vice President and CFO | -0- | $-0- | 40,202 | $929,276 | ||||
Clifford V. Chamblee, Executive Vice President and COO | -0- | $-0- | 17,331 | $401,602 | ||||
Alisa B. Johnson, Executive Vice President, General Counsel and Corporate Secretary | -0- | $-0- | 29,280 | $676,571 | ||||
| Option Awards | Stock Awards | |||||||||||||||||||
| Name and Principal Position | Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized on Vesting | ||||||||||||||||
Owen Kratz President and Chief Executive Officer | -0- | $-0- | 137,477 | $1,267,300 | ||||||||||||||||
Anthony Tripodo Former Executive Vice President and Senior Advisor | -0- | $-0- | 256,055 | (1) | $2,038,806 | |||||||||||||||
Erik Staffeldt Senior Vice President and Chief Financial Officer | -0- | $-0- | 9,073 | $84,301 | ||||||||||||||||
Scotty Sparks Executive Vice President and Chief Operating Officer | -0- | $-0- | 35,982 | $335,755 | ||||||||||||||||
Alisa B. Johnson Executive Vice President, General Counsel and Corporate Secretary | -0- | $-0- | 45,110 | $415,836 | ||||||||||||||||
| (1) | In conjunction with Mr. Tripodo’s retirement effective as of December 31, 2017, the Compensation Committee accelerated the vesting of his 191,613 shares of restricted stock. |
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 49 |
| EXECUTIVE COMPENSATION |
The following table includes certain information with respect to theall other compensation received by the named executive officers during the years ended December 31, 2014, 20132017, 2016 and 2012.2015.
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| Name | Year |
Helix Contributions to Retirement and 401(k) Plans(1) | Severance Payments/ Accruals | Total | ||||
Owen Kratz President and Chief Executive Officer
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2017 2016 2015 |
$-0- $9,641 $9,938 |
$-0- $-0- $-0- |
$-0- $9,641 $9,938 | ||||
Anthony Tripodo Former Executive Vice President and Senior Advisor
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2017 2016 2015 |
$-0- $1,189 $9,938 |
$-0- $-0- $-0- |
$-0- $1,189 $9,938 | ||||
Erik Staffeldt Senior Vice President and Chief Financial Officer
| 2017 | $-0- | $-0- | $-0- | ||||
Scotty Sparks Executive Vice President and Chief Operating Officer
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2017 2016 2015 |
$-0- $-0- $-0- |
$-0- $-0- $-0- |
$-0- $-0- $-0- | ||||
Alisa B. Johnson Executive Vice President, General Counsel and Corporate Secretary
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2017 2016 2015 |
$-0- $4,370 $9,938 |
$-0- $-0- $-0- |
$-0- $4,370 $9,938 |
| (1) | The amounts in this column consist of matching contributions by Helix through our Employees’ 401(k) |
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 45
| 50 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| EXECUTIVE COMPENSATION |
Employment Agreements and Change in Control Provisions
Each of our named executive officers has an employment agreement with Helix. Our employment agreements are a component of our overall employment arrangements and as such have the same primary objectives as our compensation program – to be sufficiently competitive to attract and retain executive officers. Payments to be made to any named executive officer under his or her employment agreement as a result of retirement, death, disability, termination for cause, termination by the executive for good reason, involuntary termination by Helix without cause or upon a change in control are based on such named executive officer’s employment agreement. We have historically entered into employment agreements with executive officers contemporaneously with either the executive officer’s initial hiring by us or his or her promotion to an executive officer position. The form of employment agreement contains provisions for the payments described below in order to provide a compensation package that will attract and retain executive officers.
In order to provide consistency among our executive officers, we generally continue to use the same form of employment agreement for multiple years; however, more recently elected or appointed executive officers such as Mr. Chamblee (andSparks and Mr. Sparks when he becomes an executive officer)Staffeldt do not have a “gross-up”“gross-up” provision for excise taxes in their employment agreements. The form of employment agreement wasis reviewed by our management and by the Compensation Committee’s independent compensation consultant to determine whether its provisions wereare consistent with the employment agreements of our peer group. The form of employment agreement is reviewed and approved by the Compensation Committee both for use as a form, and also with respect to the specific terms applicable to each of our executive officers. Although we believe that each company in our peer group understandably has forms of employment agreements that are different from ours, including with respect to specific severance payment provisions, we believe key employment contract provisions covering our executive officers
remain in line with market practice and provide terms designed to attract and retain executive officers.
Pursuant to his employment agreement, Mr. Kratz is entitled to receive a base annual salary, participate in the annual short-term cash incentive (bonus) program, (annual cash bonus), participate in the long-term incentive planprogram and participate in all incentive, bonus and other employee benefit plans made available to Helix’s executive officers. The other named executive officers’ employment agreements have similar terms involving salary, bonus, long-term incentives and benefits (with amounts that vary dueaccording to their responsibilities).
The following information and the table below labeled “Potential Payments upon Certain Events Including Termination after a Change in Control” set forth the amount of payments to each of the named executive officers under certain circumstances and describe certain other provisions of their respective employment agreements. The following assumptions and general principles apply with respect to the following information and table:
Non-Compete Provision
Each named executive officer’s employment agreement provides, among other things, that during the term of the executive officer’s employment and for a period of one year after the termination of the executive officer’s employment with us for any reason, the executive officer shall not engage in a business which engages in the business of providing offshore energy or energy construction services in the Gulf of
Mexico or the oil and gas
exploration and production business in the Gulf of Mexico or other fields in which Helix may own an interest. Each named executive officer also agrees not to solicit any customers with whom he or
she has had contact or any of our employees for a period of one year after the termination of such executive officer’s employment with us for any reason.
46 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 51 |
| EXECUTIVE COMPENSATION |
Termination for Cause or as a Result of Death, Disability or Retirement
Pursuant to the employment agreements between us and our named executive officers, if an executive officer is terminated by us for cause or the named executive officer resigns without “Good Reason,” as defined in his or her employment agreement, then the executive officer shall havehas no further rights under suchthe agreement except to receive base salary for periods prior to the termination and any unpaid cash bonus earned for the prior year. In the event of termination due to the death, disability or retirement of suchthe executive officer, we are obligated to pay to the executive officer’s estate, or other designated party, the executive officer’s salary through the date of such
his or her termination plus any unpaid cash bonus earned for the previous year. Theyear and the cash bonus earned for the year of such termination shall be paid in an amount equal to a prorated portion of the bonus for the period prior to the date of termination. Any prorated bonus will be paid on the same date as the bonus is paid to the other participants (but no later than March 15 of the following year). In the event a named executive officer becomes disabled, suchthe executive officer shall remainremains eligible to receive the compensation and benefits set forth in his or her employment agreement until his or her termination (a period of at least 6six months and up to 12twelve months).
Termination by the Executive Officer
In the event a named executive officer who has an employment agreement with Helix terminates his or her employment without “Good Reason,” upon 30 days’ written notice, pursuant to his or her employment agreement, the named executive officer will remainremains our employee for 30 days and will remainremains subject to, and receivereceives the benefit of, the employment agreement during that time. In the event the named executive officer terminates his or her employment with “Good Reason,” then the named executive officer is entitled to receive an amount equal to the factor set forth below times the named executive officer’s base salary for the year in which the termination occurs. With respect to each named executive officer other than Mr. Tripodo, all equity-based incentive awards that would have vested in accordance with their terms within 12 months of the termination automatically vest. Mr. Tripodo is not
entitled to any additional vesting of his equity-based
incentive awards. The named executive officer also is entitled to receive any unpaid cash bonus earned for the preceding year, paid on the same date as the bonus is paid to the other participants (but no later than March 15 of the year of termination), and the full amount of his or her target bonus for the year of the termination, to be paid at the same time bonuses are paid to the other participants, (butassuming such a bonus is paid, but no later than March 15 of the following year).year. The salary multiple for each named executive officer is set forth below:
• Owen Kratz | 2 times | |
• Anthony Tripodo | 2 times | |
• | 1 times | |
• Scotty Sparks | 1 times | |
• Alisa B. Johnson | 1 times |
Involuntary Termination by Helix
In the event we terminate the employment of a named executive officer who has an employment agreement with Helix for any other reason (other than for “Good Cause” or upon the death, disability or retirement of the named executive officer), then pursuant to his or her employment agreement the named executive officer is entitled to receive an amount equal to the factor set forth below times the named executive officer’s base salary for the year in which the termination occurs. With respect to each named executive officer other than Mr. Tripodo, all equity-based incentive awards that would have vested in accordance with its terms within 12 months of the termination automatically vest. Mr. Tripodo is not entitled to any additional vesting of his equity-based incentive awards. The named executive officer also is entitled to receive any unpaid cash bonus earned for the preceding year, paid no later than March 15 of the year of termination, and the full amount of his or her target bonus for the year of the termination to be paid at the same time bonuses are
paid to the other participants, assuming such a bonus is paid, but no later
than March 15 of the following year. The salary multiple for each named executive officer is set forth below:
• Owen Kratz | 2 times | |
• Anthony Tripodo | 2 times | |
• | 1 times | |
• Scotty Sparks | 1 times | |
• Alisa B. Johnson | 1 times |
In addition, in the event of the termination of any named executive officer for any reason, including involuntary termination, the Compensation Committee has the discretion to determine the amount and timing of any severance payments and benefits that will be offered to the named executive officer. In making suchthat determination, the Compensation Committee takes into consideration the terms of the employment agreement if any, of the named executive officer. The determination has historically been based in part on the named executive
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 47
| 52 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| EXECUTIVE COMPENSATION |
the executive officer’s rights under his or her employment agreement as well as any other factors the Compensation Committee deems to be relevant. Moreover, suchthe determination would depend on a variety of circumstances and factors that cannot be anticipated.
The Compensation Committee has been deliberative in the evaluation and determination of severance benefits currently included in the named executive officers’ employment agreements and any deviationdeviations therefrom are intended to be rare.
Change in Control Provision
With respect to each named executive officer except Mr. Tripodo, pursuant to the terms of theirhis or her employment agreements,agreement, if a named executive officer terminates his or her employment for “Good Reason” or is terminated by us without “Cause” within atwo-year period following a “Change in Control,” in addition to amounts due and payable at the time of such termination, (1) the executive officer is entitled to receive a lump sum payment in an amount equal to the multiple set forth below times suchthe executive officer’s aggregate annual cash compensation (defined as his or her current salary plus cash bonus target), (2) all restricted stock and other equity-based awards held by the executive officer under the 2005 Plan (and its predecessor, the 1995 Plan) and the 2009 Plan, would immediately vest, and (3) the executive officer is entitled to receive a lump sum payment equal to the cost of continuation of health coverage under COBRA for 18 months. For Messrs. Kratz and Tripodo and Ms. Johnson, the agreements provide that if any payment to the named executive officer is subject to any excise tax under Internal Revenue Code Section 4999, a “gross-up”“gross-up” payment would be made to place the executive officer in the same netafter-tax position as would have been the case if no excise tax had been payable. The agreementagreements for Mr. Chamblee (and Mr.Messrs. Staffeldt and Sparks when he becomes an executive officer) doesdo not contain any “gross-up”“gross-up” protections with respect to excise tax. Prior to his retirement at the end of 2017, Mr. Tripodo would receivehave received under his employment agreement the same benefits described above upon a “Change in Control” whether or not his employment is terminated.
• Owen Kratz | 2.99 times | |
• Anthony Tripodo | 2 times | |
• | 2 times | |
• Scotty Sparks | 2 times | |
• Alisa B. Johnson | 2 times |
For purposes of the employment agreements, “Change in Control” is defined as (1) one person or group acquiring stock that gives suchthat person or group control of more than 50% of the value or voting power of Helix, (2) during any12-month period, any person or group obtaining 45% or more of the voting power of Helix, or a majority of the boardBoard being replaced by persons not endorsed by a majority of the existing board,Board, or (3) a change in ownership of a substantial portion of the assets of Helix.Helix during any12-month period. “Cause” means embezzlement or theft, breach of a material provision of the employment agreement, any act constituting a felony or otherwise involving theft, fraud, gross dishonesty or moral turpitude, negligence or willful misconduct, any breach of the executive officer’s fiduciary obligations, a material violation of our policies or procedures or any chemical dependence whichthat adversely affects the performance of the executive officer. “Good Reason” means the material diminution of the executive officer’s base salary, material diminution of his or her authority, duties or responsibilities, a material change in the executive officer’s reporting relationship, a material change in the geographic location at which the executive officer must perform his or her duties, or any action that would constitute a material breach of the employment agreement by Helix.
48 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 53 |
| EXECUTIVE COMPENSATION |
Potential Payments upon Certain Events Including Termination after a Change in Control
The named executive officers would have been eligible to receive the payments set forth below if (a) their employment had been terminated as of December 31, 20142017 for reasons other than a Change in Control or (b) a Change in Control had occurred within three months of the end of 2014.2017:
| O. Kratz | A. Tripodo | C. Chamblee | A. Johnson | |||||||||||||||||||||
Normal and Early Retirement | ||||||||||||||||||||||||
2014 annual cash incentive compensation | $ | 1,400,000 | $ | 768,000 | $ | 640,000 | $ | 478,800 | ||||||||||||||||
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| |||||||||||||||||
Total | $ | 1,400,000 | $ | 768,000 | $ | 640,000 | $ | 478,800 | ||||||||||||||||
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Death | ||||||||||||||||||||||||
2014 annual cash incentive compensation | $ | 1,400,000 | $ | 768,000 | $ | 640,000 | $ | 478,800 | ||||||||||||||||
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| |||||||||||||||||
Total | $ | 1,400,000 | $ | 768,000 | $ | 640,000 | $ | 478,800 | ||||||||||||||||
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Disability(1) | ||||||||||||||||||||||||
2014 annual cash incentive compensation | $ | 1,400,000 | $ | 768,000 | $ | 640,000 | $ | 478,800 | ||||||||||||||||
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Total | $ | 1,400,000 | $ | 768,000 | $ | 640,000 | $ | 478,800 | ||||||||||||||||
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Termination for Cause or | ||||||||||||||||||||||||
Amount Received | $ | -0- | $ | -0- | $ | -0- | $ | -0- | ||||||||||||||||
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Total | $ | -0- | $ | -0- | $ | -0- | $ | -0- | ||||||||||||||||
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Involuntary Termination without Cause | ||||||||||||||||||||||||
2014 annual cash incentive compensation | $ | 1,400,000 | $ | 768,000 | $ | 640,000 | $ | 478,800 | ||||||||||||||||
Multiple of base salary | 1,400,000 | 960,000 | 400,000 | 360,000 | ||||||||||||||||||||
Accelerated vesting of restricted stock(2) | 1,852,849 | -0- | 401,602 | 676,571 | ||||||||||||||||||||
Accelerated Cash Performance Award(3) | 2,872,524 | -0- | 589,036 | 960,624 | ||||||||||||||||||||
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Total | $ | 7,525,373 | $ | 1,728,000 | $ | 2,030,638 | $ | 2,475,995 | ||||||||||||||||
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Termination by Executive for Good Reason | ||||||||||||||||||||||||
2014 annual cash incentive compensation | $ | 1,400,000 | $ | 768,000 | $ | 640,000 | $ | 478,800 | ||||||||||||||||
Multiple of base salary | 1,400,000 | 960,000 | 400,000 | 360,000 | ||||||||||||||||||||
Accelerated vesting of restricted stock(2) | 1,852,849 | -0- | 401,602 | 676,571 | ||||||||||||||||||||
Accelerated Cash Performance Award(3) | 2,872,524 | -0- | 589,036 | 960,624 | ||||||||||||||||||||
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Total | $ | 7,525,373 | $ | 1,728,000 | $ | 2,030,638 | $ | 2,475,995 | ||||||||||||||||
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HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 49
| O. Kratz | A. Tripodo | E. Staffeldt | S. Sparks | A. Johnson | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Normal and Early Retirement | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 annual cash incentive compensation | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Total | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Death | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 annual cash incentive compensation | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Total | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Disability(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 annual cash incentive compensation | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Total | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Termination for Cause or Resignation without Good Reason | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount Received | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Total | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Involuntary Termination without Cause | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 annual cash incentive compensation | $ | 1,050,000 | $ | 576,000 | $ | 350,000 | $ | 375,000 | $ | 360,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Multiple of base salary | 1,400,000 | 960,000 | 350,000 | 375,000 | 360,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accelerated vesting of restricted stock(2) | 1,405,758 | -0- | 111,155 | 424,464 | 461,267 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accelerated PSU Awards(3) | 277,973 | -0- | 13,029 | 21,715 | 91,211 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Total | $ | 4,133,731 | $ | 1,536,000 | $ | 824,184 | $ | 1,196,179 | $ | 1,272,478 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Termination by Executive for Good Reason | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 annual cash incentive compensation | $ | 1,050,000 | $ | 576,000 | $ | 350,000 | $ | 375,000 | $ | 360,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Multiple of base salary | 1,400,000 | 960,000 | 350,000 | 375,000 | 360,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accelerated vesting of restricted stock(2) | 1,405,758 | -0- | 111,155 | 424,464 | 461,267 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accelerated PSU Awards(3) | 277,973 | -0- | 13,029 | 21,715 | 91,211 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Total | $ | 4,133,731 | $ | 1,536,000 | $ | 824,184 | $ | 1,196,179 | $ | 1,272,478 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| O. Kratz | A. Tripodo | C. Chamblee | A. Johnson | O. Kratz | A. Tripodo | E. Staffeldt | S. Sparks | A. Johnson | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in Control | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash severance payment | $ | -0- | $ | 2,112,000 | $ | -0- | $ | -0- | $ | -0- | $ | 2,112,000 | $ | -0- | $ | -0- | $ | -0- | ||||||||||||||||||||||||||||||||||||||||||||||
Accelerated vesting of restricted stock(2) | 2,820,199 | 1,462,338 | 779,899 | 1,044,175 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accelerated Cash Performance Award(3) | 4,916,037 | 2,270,918 | 1,276,013 | 1,616,573 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accelerated Performance Share Unit Award(4) | 5,135,001 | 2,520,715 | 1,754,852 | 1,764,470 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accelerated vesting of restricted stock(4) | 3,082,148 | 1,444,762 | 256,375 | 987,627 | 1,011,333 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accelerated PSU Awards(5) | 6,438,024 | 3,017,825 | 518,858 | 2,091,099 | 2,112,479 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COBRA Coverage | -0- | 21,815 | -0- | -0- | -0- | 17,371 | -0- | -0- | -0- | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Excise tax gross-up | -0- | 2,710,278 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Total | $ | 12,871,237 | $ | 11,098,064 | $ | 3,810,754 | $ | 4,425,218 | $ | 9,520,172 | $ | 6,591,958 | $ | 775,233 | $ | 3,078,726 | $ | 3,123,812 | ||||||||||||||||||||||||||||||||||||||||||||||
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Change in Control with Involuntary Termination without Cause or by Executive for Good Reason | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash severance payment | $ | 5,232,500 | $ | 2,112,000 | $ | 1,760,000 | $ | 1,440,000 | $ | 5,232,500 | $ | 2,112,000 | $ | 1,190,000 | $ | 1,500,000 | $ | 1,440,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Accelerated vesting of restricted stock(2) | 2,820,199 | 1,462,338 | 779,899 | 1,044,175 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accelerated Cash Performance Award(3) | 4,916,037 | 2,270,918 | 1,276,013 | 1,616,573 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accelerated Performance Share Unit Award(4) | 5,135,001 | 2,520,715 | 1,754,852 | 1,764,470 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accelerated vesting of restricted stock(4) | 3,082,148 | 1,444,762 | 256,375 | 987,627 | 1,011,333 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accelerated PSU Awards(5) | 6,438,024 | 3,017,825 | 518,858 | 2,091,099 | 2,112,479 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COBRA Coverage | 17,846 | 21,815 | 7,122 | 26,440 | 14,123 | 17,371 | 27,612 | 17,371 | 14,323 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Excise tax gross-up | 6,284,920 | 2,710,278 | -0- | 1,904,148 | -0- | -0- | -0- | -0- | -0- | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Total | $ | 24,406,503 | $ | 11,098,064 | $ | 5,577,886 | $ | 7,795,806 | $ | 14,766,795 | $ | 6,591,958 | $ | 1,992,845 | $ | 4,596,097 | $ | 4,578,135 | ||||||||||||||||||||||||||||||||||||||||||||||
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| (1) | Named executive officers would continue to earn their base salary plus receive benefits for six months after becoming disabled prior to being terminated. Assuming notice of termination occurred on December 31, |
| 54 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| EXECUTIVE COMPENSATION |
| (2) |
| (3) | Upon an involuntary termination without Cause or a termination by the executive for Good Reason, |
| (4) | These amounts are based upon | $7.54 on December 30, 2017. |
| The |
50 HELIX ENERGY SOLUTIONS GROUP, INC.Helix is a global company that employs over 1,500 people with more than half of our workforce located outside of the U.S. Helix’s compensation and benefits philosophy and the overall structure of our compensation and benefit programs are broadly similar across the organization to encourage and reward all employees who contribute to our success. We strive to ensure the pay of every Helix employee reflects the level of their contributions and responsibilities and is competitive within our peer group. Helix’s ongoing commitment to
pay equity is critical to our success in supporting a diverse workforce with opportunities for all employees to grow, develop and contribute.
Under rules adopted pursuant to the Dodd-Frank Act of 2010, Helix is required to calculate and disclose the total compensation paid to its median paid employee, as well as the ratio of the total compensation paid to the median employee as compared to the total compensation paid to Helix’s CEO. The paragraphs that follow describe our methodology and the resulting CEO pay ratio.
Measurement Date
We identified the median employee using our employee population on November 30, 2017.
ê 2015 Proxy StatementConsistently Applied Compensation Measure (CACM)
Under the relevant rules, we were required to identify the median employee by use of a “consistently applied compensation measure,” or CACM. We chose a CACM that closely approximates the annual total direct compensation of all our employees (excluding our CEO).
Specifically, we identified the median employee by looking at annual base pay and other taxable income. We did not perform adjustments to the compensation paid to part-time employees to calculate what they would have been paid on a full-time basis.
Methodology and Pay Ratio
After applying our CACM methodology, we identified the median employee. Once the median employee was identified, we calculated the median employee’s total annual compensation in accordance with the requirements of the Summary Compensation Table.
Our median employee compensation as calculated using Summary Compensation Table requirements was $90,239. Our CEO’s compensation as reported in the Summary Compensation Table was $5,657,323. Therefore, our CEO to median employee pay ratio is estimated at 63:1. Our median employee’s total
compensation does not include the premiums we paid for health insurance, dental insurance, short-term and long-term disability insurance, the employee assistance program and life AD&D insurance. If we included those amounts for both the median employee and our CEO, our CEO to median employee pay ratio would have been estimated at 54:1.
This information is being provided for compliance purposes. Neither the Compensation Committee nor management of Helix used the pay ratio measure in making compensation decisions.
| 55 |
PROPOSAL 3: APPROVAL, ON ANON-BINDING ADVISORY BASIS, OF THE 2017
COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
Helix is seeking a shareholder vote, on anon-binding advisory basis, on the 20142017 compensation of our named executive officers (commonly referred to as “say-on-pay”“say on pay”). This vote isnon-binding. The Compensation Committee, however, will review the voting results and take them into consideration when making future compensation decisions for our named executive officers.
As described in detail under “Compensation Discussion and Analysis,” our compensation programs are designed to achieve Helix’s goal of attracting, retainingattract, retain and motivatingmotivate executive officers who can develop and execute our business strategy in a way that maximizes value for our shareholders through a range of business cycles, and to align the compensationeconomic interests of our executive officers duringwith those of our shareholders over the full range of those cycles. Shareholders are encouraged to read the “Compensation Discussion and Analysis,” the accompanying compensation tables and the related narrative disclosure to better understand the compensation of our named executive officers.
In deciding how to vote on this proposal, the boardBoard urges you to consider the following factors, which are more fully described in the “Compensation Discussion and Analysis”.Analysis.”
term incentive awards paid out immediately after the end of 2017 was a fraction of the award value on the grant date – the 2015 PSUs paid out at 17% of their original award values; and restricted stock that vested ranged between 35% (the 2015 awards) and 140% (the 2016 awards) of their grant date value. |
This vote is non-binding. Our short-term bonus program continues to be objective and formulaic (composed of one objective financial metric) and continues to be the same for our executive officers and all other onshore employees.
Board of Directors Recommendation
The boardBoard recommends that you vote “FOR” the approval, on anon-binding advisory basis, of the following resolution:
RESOLVED, that the shareholders approve, on anon-binding advisory basis, the 20142017 compensation of Helix’s named executive officers as disclosed in the Compensation Discussion and Analysis section, the accompanying compensation tables and the related narrative disclosure in this proxy statement.
Vote Required
The vote on the 2017 compensation of our named executive compensationofficers is advisory andnon-binding. However, the boardBoard will consider shareholders to have approved our named executive officers’ 2017 compensation if the proposal receives the affirmative “FOR” vote of holders of a majority of the shares of common stock present in person or by proxy at the Annual Meetingrepresented and entitled to vote on the proposal.proposal at the Annual Meeting.
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 51
| 56 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
The following table sets forth information as to all persons or entities known by us to have beneficial ownership, as of March 9, 2015,12, 2018, of more than five percent of the outstanding shares of our common stock other than Mr. Kratz’s beneficial ownership which is set forth below in “Management Shareholdings.” As of March 9, 2015, we had 105,909,63312, 2018, 148,079,552 shares of our common stock were outstanding.
The information set
forth below has been determined in accordance with Rule13d-3 under the Exchange Act on the basis of the most recent information filed with the SEC and furnished to us by the person listed. To our knowledge, except as otherwise indicated below, all shares shown as beneficially owned are held with sole voting power and sole dispositive power.
Name and Address | Shares Beneficially Owned | Percent of Common Shares | ||
BlackRock, Inc. | 18,345,302 (1) | 12.39% | ||
55 East 52nd Street New York, New York | ||||
The Vanguard Group | 13,517,235 | |||
100 Vanguard Blvd. Malvern, Pennsylvania 19355 | ||||
Dimensional Fund Advisors LP | 12,512,097 (3) | 8.45% | ||
Building One 6300 Bee Cave Road Austin, Texas 78746 | ||||
| ||||
|
| (1) | Based solely on Amendment No. 10 to Schedule 13G filed with the SEC by BlackRock, Inc. on January 19, 2018. BlackRock has the sole power to vote 18,018,972 shares of common stock beneficially owned by it and the sole power to dispose of 18,345,302 shares of common stock beneficially owned by it. |
| (2) | Based solely on Amendment No. 5 to Schedule 13G filed with the SEC by The Vanguard Group on February 9, 2018. The Vanguard Group has the sole power to vote 152,255 shares of common stock beneficially owned by it, shared power to vote 18,938 shares of common stock beneficially owned by it, sole power to dispose of 13,354,463 shares of common stock beneficially owned by it and shared power to dispose of 162,772 shares of common stock beneficially owned by it. |
| (3) | Based solely on Amendment No. 6 to Schedule 13G filed with the SEC by |
52 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 57 |
| SHARE OWNERSHIP INFORMATION |
The following table shows the number of shares of common stock beneficially owned as of March 9, 2015,12, 2018, the record date for ourthe Annual Meeting, by our directors and named executive officers, and all directors and named executive officers as a group.
The number of shares beneficially owned by each director or named executive officer is determined by the rules of the SEC, and the information does not necessarily indicate beneficial ownership for any other purpose.
Under suchthose rules, beneficial ownership includes any shares over which the person or entity has sole or
shared voting power or investment power regardless of economic interest, and also any shares that the person or entity can acquire within 60 days of March 9, 201512, 2018 through the exercise of stock options or other rights. The inclusion in the table below of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares. As of March 9, 2015, 105,909,63312, 2018, 148,079,552 shares of our common stock were outstanding. The address of all executive officers and directors is in care of Helix Energy Solutions Group, Inc., 3505 West Sam Houston Parkway North, Suite 400, Houston, Texas 77043.
| Name of Beneficial Owner (1) | Amount of Beneficial Ownership(2) | Of Shares Beneficially be Acquired Within 60 Days by Option Exercise | Percentage of Common Stock Outstanding | |||||||
Owen Kratz(3) | 6,386,343 | -0- | 6.03 | % | ||||||
Anthony Tripodo(4) | 181,775 | -0- | * | |||||||
Clifford V. Chamblee(5) | 77,985 | -0- | * | |||||||
Alisa B. Johnson(6) | 125,577 | -0- | * | |||||||
John V. Lovoi(7) | 112,977 | -0- | * | |||||||
T. William Porter(8) | 84,110 | -0- | * | |||||||
Nancy K. Quinn(9) | 79,395 | -0- | * | |||||||
Jan Rask(10) | 41,817 | -0- | * | |||||||
William L. Transier(11) | 88,220 | -0- | * | |||||||
James A. Watt(12) | 112,215 | -0- | * | |||||||
All executive officers and directors as a group (10 persons) | 7,290,414 | -0- | 6.88 | % | ||||||
Name of Beneficial Owner (1) | | Amount of Beneficial Ownership(2) | Of Shares Beneficially Owned, Amount that may be Acquired Within 60 Days by Option Exercise | Percentage of Common Stock | ||||||||
Owen Kratz(3) | 7,084,134 | -0- | 4.78% | |||||||||
Erik Staffeldt(4) | 88,240 | -0- | * | |||||||||
Scotty Sparks(5) | 206,109 | -0- | * | |||||||||
Alisa B. Johnson(6) | 300,724 | -0- | * | |||||||||
Anthony Tripodo | 173,692 | -0- | * | |||||||||
John V. Lovoi(7) | 206,402 | -0- | * | |||||||||
Nancy K. Quinn(8) | 122,724 | -0- | * | |||||||||
Jan Rask(9) | 164,127 | -0- | * | |||||||||
William L. Transier(10) | 147,400 | -0- | * | |||||||||
James A. Watt(11) | 164,769 | -0- | * | |||||||||
All named executive officers and directors as a group (10 persons) | 8,658,321 | -0- | 5.85% | |||||||||
*Indicates ownership of less than 1% of the outstanding shares of our common stock.
|
| (1) | The persons named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them except as may be otherwise indicated in a footnote. |
| (2) | Amounts include the shares shown in the adjacent column, which are not currently outstanding but are deemed beneficially owned because of the right to acquire them pursuant to options exercisable within 60 days of March |
| (3) | Mr. Kratz disclaims beneficial ownership of 1,000,000 shares included in the above table, which are held by Joss Investments Limited Partnership, an entity of which he is a General Partner. Amount includes |
| (4) | Amount includes |
| (5) | Amount includes |
| (6) | Amount includes |
| (7) | Amount includes |
| (8) | Amount includes |
|
| (9) | Amount includes |
| (10) | Amount includes |
| (11) | Amount includes |
| 58 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
| SHARE OWNERSHIP INFORMATION |
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 53
Section 16(a)16(A) Beneficial Ownership Reporting Compliance
The Exchange Act requires our directors, executive officers and persons who own more than 10% of a registered class of our equity securities, or “reporting persons,” to file with the SEC initial reports of ownership and to report changes in ownership of our common stock. Reporting persons are required by SEC regulations to furnish Helix with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of these reports furnished to us, we believe that all reports required to be filed by reporting persons pursuant to Section 16(a) of the Exchange Act were filed for the year ended December 31, 20142017 on a timely basis, except for one late Form 4 filed on August 21, 2014 for one transaction by Nancy K. Quinn that we inadvertently failed to file timely on her behalf.basis.
EQUITY COMPENSATION PLAN INFORMATION
The table below provides information relating to Helix’s equity compensation plans as of December 31, 2014.2017.
| Plan Category | Number of Securities Options, Warrants | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities for Future Issuance under | 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 Compensation Plans | ||||||||||
| Equity compensation plans approved by security holders(1) | 514,564 | (3) | -0- | 7,308,391 | (4) | 2,893,762 (2) | -0- | 3,052,802(3) | ||||||||
| Equity compensation plans not approved by security holders(2) | -0- | -0- | -0- | |||||||||||||
Equity compensation plans not approved by security holders | -0- | -0- | -0- | |||||||||||||
Total | 514,564 | -0- | 7,308,391 | 2,893,762 | -0- | 3,052,802 | ||||||||||
| (1) | The 2005 Plan |
| (2) |
| As of December 31, |
The cost of this proxy solicitation will be borne by Helix. It is expected that the solicitation will be primarily by mail, telephone and facsimile. We have arranged for Okapi Partners, LLC, 437 Madison Ave., 281212 Avenue of the Americas, 24th Floor, New York, New York 10022,10036, to solicit proxies for a fee of $8,000 plusout-of-pocket expenses. Proxies may also be solicited personally by directors, officers and
other employees of Helix in the ordinary course of business and at nominal cost. Proxy materials will be provided for distribution through brokers, custodians,broker, bank and other nominees or fiduciaries to ownersnominee record holders of our common stock. We expect to reimburse those parties for their reasonableout-of-pocket expenses incurred in connection therewith.
54 HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement
| HELIX ENERGY SOLUTIONS GROUP, INC. | 2018 Proxy Statement | 59 |
| OTHER INFORMATION |
Proposals and Director Nominations for 20162019 Shareholders Meeting
In order for a shareholder proposal (other than for the nomination of directors) to be considered for inclusion in our proxy statement for the 20162019 Annual Meeting of Shareholders, the written proposal must be received by our Corporate Secretary at the address of our principal executive officescorporate office set forth below no later than November 25, 2015.27, 2018. The proposal must comply with SEC regulations regarding the inclusion of shareholder proposals in company-sponsored proxy materials. The persons designated in the proxy card will be granted discretionary authority with respect to any shareholder proposal not submitted to us timely.
With respect to shareholder nominations of directors, a shareholder may propose director candidates for consideration by the Corporate Governance and Nominating Committee of the board.Board. Any recommendations should include the nominee’s name and qualifications for boardBoard membership and should be directed to our Corporate Secretary at the address of our principal executive officescorporate office set forth below. In addition, ourBy-laws permit shareholders to propose business to be considered and to nominate directors
for election by the
shareholders. To propose business to be considered or to nominate a director, the shareholder must deliver a notice to the Corporate Secretary setting forth the business or the name of the nominee and all information required to be disclosed in solicitations of proxies or otherwise required pursuant to Regulation 14A under the Exchange Act together with the person’s written consent to serve as a director if elected. The shareholder providing the proposal or nomination must provide his or her name and address and the class and number of voting securities held by him or her. The shareholder must be a shareholder of record on the day the nomination notice is delivered to us and be eligible to vote for the election of directors at the Annual Meeting of Shareholders. In addition, the shareholder must give timely notice to our Corporate Secretary no later than February 7, 2016.9, 2019. A copy of theBy-laws is available from our Corporate Secretary.
All submissions to, or requests from, the Corporate Secretary should be addressed to our corporate office at 3505 West Sam Houston Parkway North, Suite 400, Houston, Texas 77043.
Some broker, bank and other nominee record holders of our stock may be participating in the practice of “householding.” This means that only one copy of our 20142017 Annual Report to Shareholders and this proxy statement will be sent to shareholders who share the same last name and address. Householding is designed to reduce duplicate mailings and to save printing and postage costs. If you receive a household mailing this year and would like to receive additional copies of our 20142017 Annual Report to Shareholders or this proxy statement, please submit your request in writing to the address set forth below.
Our 20142017 Annual Report to Shareholders (which includes our Annual Report on Form10-K including and financial statements,statements) is available to shareholders of record as of March 9, 2015,12, 2018, together with this proxy statement.
WE WILL FURNISH TO SHAREHOLDERS WITHOUT CHARGE A COPY OF OUR ANNUAL REPORT (INCLUDING THE ANNUAL REPORT ON FORMFORM 10-K) FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014,2017, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, UPON RECEIPT OF WRITTEN REQUEST ADDRESSED TO: CORPORATE SECRETARY, HELIX ENERGY SOLUTIONS GROUP, INC., 3505 WEST SAM HOUSTON PARKWAY NORTH, SUITE 400, HOUSTON, TEXAS 77043 OR BY CALLING (888) 345-2347888.345.2347 AND ASKING FOR THE CORPORATE SECRETARY.
The boardBoard knows of no other matters to be presented at the Annual Meeting. If any other business properly comes before the Annual Meeting or any adjournment thereof, the proxies will vote on that business in accordance with their best judgment.
By Order of the Board of Directors, |
|
| Alisa B. Johnson |
Executive Vice President, General Counsel and Corporate Secretary |
| Helix Energy Solutions Group, Inc. |
| 60 | 2018 Proxy Statement | HELIX ENERGY SOLUTIONS GROUP, INC. | |
HELIX ENERGY SOLUTIONS GROUP, INC.ê 2015 Proxy Statement 55
| ||
 | Helix Energy Solutions Headquarters | |
3505 W. Sam Houston Parkway North, Suite 400 | ||
Houston, Texas 77043 USA | ||
 | Office - 281.618.0400 | |
Fax - 281.618.0500 | ||
www.helixesg.com
  |
Shareowner Services P.O. Box 64945 St.Paul, MN 55164-0945 | |||||||||
Vote by Internet, Telephone or Mail 24 Hours a Day, 7 Days a Week | |||||||
Your phone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card. | |||||||
|
| ||||||
 | INTERNET/MOBILE –www.proxypush.com/hlx Use the Internet to vote your proxy until 12:00 noon (Central Daylight Time) on May | ||||||
 | PHONE – 1-866-883-3382
|
| |||||
| Use a touch-tone telephone to vote your proxy until 12:00 noon (Central Daylight Time) on May | |||||||
 | MAIL– Mark, sign and date your proxy card and return it in the postage-paid envelope provided. | ||||||
If you vote your proxy by Internet or by Telephone, you do NOT need to mail back your Proxy Card. | |||||||
Please detach here
The Board of Directors Recommends a Vote FOR Proposals 1, 2 and 3. | ||||||||||||||||||||||||||||
| 1. |
directors of the Company with terms expiring in 2021: | 01. 02.
| ☐ | FOR all “Class II” nominees (except as indicated below) | ||||||||||||||||||||||||
| WITHHOLD AUTHORITY | ||||||||||||||||||||||||||||
| from ALL nominees | ||||||||||||||||||||||||||||
| (Instructions: To withhold authority to vote for any indicated nominee, write the number(s) of the nominee(s) in the box provided to the right.) | ||||||||||||||||||||||||||||
2. | Ratification of the selection of registered public accounting firm for the fiscal year | ☐ For | ☐ | Against | ☐ |
Abstain | ||||||||||||||||||||||
3. | Approval, on anon-binding advisory basis, of the of our named executive officers. | ☐ For | ☐ | Against | ☐ |
Abstain | ||||||||||||||||||||||
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED ON THE PROXY BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE CLASS II DIRECTORS INDICATED IN PROPOSAL 1, FOR PROPOSALS 2 AND 3, AND IN THE PROXY HOLDER’S DISCRETION ON ANY OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT THEREOF. ABSTENTIONS WILL BE COUNTED TOWARD THE EXISTENCE OF A QUORUM. | ||||||||||||||||||||||||||||
| Address Change? Mark box, sign, and indicate changes below: | Date | |||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Signature(s) in Box | ||||||||||||||||||||||||||||
Please sign exactly as | ||||||||||||||||||||||||||||
HELIX ENERGY SOLUTIONS GROUP, INC.
ANNUAL MEETING OF SHAREHOLDERS
MAY 7, 201510, 2018
3505 West Sam Houston Parkway North
Suite 400
Houston, Texas 77043
| Helix Energy Solutions Group, Inc. 3505 West Sam Houston Parkway North, Suite 400 Houston, Texas 77043 | proxy
| ||
| ||||
This Proxy is Solicited on Behalf of the Board of Directors for the Annual Meeting on May 10, 2018.
The undersigned, having duly received the Notice of Annual Meeting of Shareholders and the Proxy Statement, dated March 27, 2018, hereby appoints Alisa B. Johnson and Kenneth E. Neikirk as Proxies (each with the power to act alone and with the power of substitution and revocation) to represent the undersigned and to vote, as designated below, all shares of Helix Energy Solutions Group, Inc. common stock held of record by the undersigned on March 12, 2018 at the 2018 Annual Meeting of Stockholders to be held on May 10, 2018 at 8:30 a.m. at Helix’s corporate office, 3505 West Sam Houston Parkway North, Suite 400, Houston, Texas 77043, and any adjournments thereof.
The undersigned, having duly received the Notice of Annual Meeting of Shareholders and the Proxy Statement, dated March 24, 2015, hereby appoints Alisa B. Johnson and Kenneth E. Neikirk as Proxies (each with the power to act alone and with the power of substitution and revocation) to represent the undersigned and to vote, as designated below, all shares of Helix Energy Solutions Group, Inc. common stock held of record by the undersigned on March 9, 2015 at the 2015 Annual Meeting of Stockholders to be held on May 7, 2015 at 10:00 a.m. at Helix’s corporate office, 3505 West Sam Houston Parkway North, Suite 400, Houston, Texas 77043, and any adjournments thereof.
See reverse for voting instructions.
NOhedging of our stock
