Based on its consideration ofMs. Sistovaris, the Pay Factors as discussed above in the section entitled “Executive Compensation Decision Making,” the Compensationand Human Capital Committee approved an increase in the 2020 LTI award target values as compared to 2019 LTI award target values for Messrs. Brown and VegasMr. Shafer’s and Ms. Sistovaris. Additionally, the Compensation Committee recommended to the independent members of the Board an increase in the 2020Sistovaris’ LTI award target value as compared to 2019 LTI award target value for Mr. Hamrock. The independent membersby approximately 20% and 18% respectively, driven by an expansion of the Board consideredtheir roles and approved the recommendation of the Compensation Committee. In doing so, the Compensation Committee considered the Pay Factors as discussed above in the Section entitled “Executive Compensation Decision Making.”
In particular, inafter considering increases for Messrs. Brown and Vegas and Ms. Sistovaris, and making its recommendation to the independent members of the Board with respect to Mr. Hamrock, the Compensation Committee considered the Pay Factors and the executives’ sustained strong performance in 2019. With respect to Ms. Sistovaris, the Compensation Committee approved an increase of approximately 13%, taking into account the need to further align hertheir pay with: (i)with the competitive market; (ii)market, the other Named Executive Officers;NEOs, and (iii) the long-term nature of the expectations for her role. No change was made with respect to Ms. Hightman as her LTI award value remained aligned with market levels.their roles.
2020 PSUs Overview.2021 Performance Share Units
PSU Objectives. The 2020objectives of our 2021 PSU grants are to:
■ | Motivate NEOs to achieve critical long-term financial and total shareholder return goals (relative to peers) and achieve critical business imperatives related to safety, environmental and DE&I performance goals |
■ | Align the interests of NEOs with stockholders |
■ | Provide competitive LTI opportunities (when aggregated with RSU grants, which are discussed below) |
PSU Overview. In January 2021, the Compensation and Human Capital Committee approved the grant of PSUs (80%to each of our NEOs. The PSUs provide our NEOs the 2020 target LTI award) are eligible for vesting only if aopportunity to earn shares of our common stock based on achieved results against three-year cumulative NOEPS (weighted 50%) and Relative Total Shareholder Return (RTSR) (weighted 50%) performance trigger is metgoals over a three-year performance period. period, subject to potential adjustment based on achieved results relating to safety, environmental and DE&I goals.
In addition, vesting of the PSUs is tied to the executive’s continued employment through Februarythe end of the vesting period (February 28, 2023,2024), subject to special vesting rules in the event of death, retirement, disability, or a qualifying termination following a change-in-control of the Company prior to the vesting date. Termination for any other reason prior to February 28, 20232024 will result in forfeiture of the 20202021 PSUs.
Threshold measure. A threshold financial trigger of cumulative NOEPS must be met before any PSUs vest and are paid to the Named Executive Officers. If met, then the The number of PSUs that vestearned and are paidvested at the end of the three-year performance period will be settled in a like number of shares of our common stock.
2021 PSU Performance Measures. In January 2021, the Compensation and Human Capital Committee approved the following performance measures and goals to the Named Executive Officers would be used to determine each NEO’s payouts under their respective 2021 PSU grants.
Three-Year Cumulative NOEPS. The three-year cumulative NOEPS financial performance goals were determined based on achievement against goals relating toour three-year financial plan. For the performance measures described below.definition and calculation of NOEPS, see above under 2021 STI Performance Measures.
Three-year cumulative NOEPS. If the NOEPS performance trigger is achieved, 80% of the target PSUs (65% of the 2020 target LTI award) are eligible to vest based on NOEPS performance with our RTSR performance used as a modifier that may reduce or increase the number of PSUs that vest. The Compensation and Human Capital Committee selected this measure because it: (i)it aligns the interests of our Named Executive OfficersNEOs with those of our stockholders;stockholders and (ii)it supports the creation of sustainable stockholder value by growing earnings and providing a strong dividend.
The Compensation and Human Capital Committee selected an NOEPS resultperformance measure for both the 2021 PSU grants and the 2021 STI because the Compensation and Human Capital Committee considers NOEPS to be a core driver of both our short-term and long-term financial performance and stockholder value creation for both the short-term and long-term.
The target three-year cumulative NOEPS performance goal is designed to be achievable with strong management performance over the three-year performance period.
Three-Year Relative Total Shareholder Return (RTSR). Three-year RTSR will generally be calculated as discussed abovedetermined by the annualized growth in the section entitled “2020 STI Performance Measures.”price of a share our common stock, assuming dividends are reinvested, over the period beginning January 1, 2021 and ending on December 31, 2023, compared to a similar calculation for a group of 32 energy services companies that are within our industry or providing similar services to ours or with which we compete for the sale of equity capital, 21 of which are in the Comparator Group.
■ | The Compensation Committee selected an NOEPS performance measure for both the 2020 PSU grants and the 2020 STI because NOEPS is deemed to be a core driver of both our short-term and long-term financial performance and stockholder value creation for both the short-term and long-term
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■ | The three-year cumulative NOEPS goal is based on our three-year financial plan. The target three-year cumulative NOEPS performance goal is designed to be achievable with strong management performance over the three-year performance period
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■ | Three-year cumulative NOEPS results are modified by our RTSR performance. The modifier may reduce or increase by 25% the number of PSUs vested under the NOEPS portion of the 2020 LTI award
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■ | The Compensation Committee selected cumulative NOEPS and RTSR as a modifier because it believes it is important that each executive has personal financial exposure to the performance of our stock and, therefore, is aligned with the financial interests of stockholders
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■ | The 2020 PSUs are designed to enhance pay for performance as payouts are directly linked to our absolute performance with respect to a key financial goal of the Company while retaining a relative performance element through the RSTR modifier |
2020 Customer Value Framework. The Compensation and Human Capital Committee continued its practiceselected this measure because it aligns the interests of supplementingour NEOs with those of our stockholders and it supports the NOEPS measure with additional operational performance measures. If the NOEPS vesting trigger is achieved, the remaining 20%creation of the target PSUs (15% of the 2020 target LTI award) are eligible to vest based on the Company’s successful execution of the Customer Value Framework, with each category of the Customer Value Framework weighted equally.sustainable stockholder value.