On May 7, 2007, the Compensation Committee (the “Committee”) met and made the following recommendations regarding compensation to certain of the Company’s executive officers. The Committee’s recommendations were approved by the Board of Directors in its May 8, 2007 meeting.
2007 Short-term Incentive Target for Mr. McNease
The Company filed a Current Report on Form 8-K dated March 14, 2007 that disclosed the terms of the 2007 short-term incentive compensation plan for the fiscal year 2007. At that time, it was reported that the aggregate inventive target for Mr. McNease, the Company’s Chairman and CEO, was 75% of base salary. The Committee has now completed its review of Mr. McNease’s compensation package and such target has been increased to 100% of base salary.
Long-Term Incentive Compensation Plan for Fiscal 2007
The Committee and the Board approved awards of restricted stock to certain of the Company’s officers under the 2005 Rowan Companies, Inc. Long-Term Incentive Plan (the “LTIP”) and established performance criteria governing the potential award of additional common stock (the “Performance Shares”). Restricted stock awards cliff vest at the end of the third year from the date of grant in the case of Mr. McNease, and ratably over a three-year service period for all other officers.
Name | Title | Shares of Restricted Stock | Restricted Stock Value(1) |
Daniel F. McNease | Chairman, President and Chief Executive Officer | 34,590 | $1,290,899 |
David P. Russell | Executive Vice President - Drilling Operations | 12,477 | $465,642 |
Mark A. Keller | Executive Vice President - Business Development | 10,734 | $400,593 |
John L. Buvens, Jr. | Executive Vice President - Legal | 9,711 | $362,415 |
William H. Wells | Vice President - Finance and Chief Financial Officer | 9,546 | $356,257 |
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| (1) | Amount is based upon the last reported sales price of Rowan's common stock on the NYSE on May 8, 2007 of $37.32. |
The number of Performance Shares ultimately awarded, if any, is contingent upon the Company’s achievement of the following two metrics: (1) 50% will be determined based on total shareholder return over the three-year period ending on May 8, 2010, relative to a peer group of public companies comparable to the Company; and (2) 50 % will be determined based on average annual return on capital employed over the three-year period ending on May 8, 2010 against a goal approved by the Committee and Board. Performance Shares awarded to the individuals listed above can range from zero to 200% of a predetermined target, with the maximum awards as follows: McNease - 74,256 shares, Russell - 26,784 shares, Keller - 23,052 shares, Buvens - 20,844 shares, and Wells - 20,496 shares.
2007 Awards - Non-Employee Directors
On May 8, 2007, certain non-employee directors of the Company received a grant of Restricted Stock Units under the LTIP. The units become fully vested as of the date of the Company’s next annual meeting of stockholders, but are payable in stock or cash only upon termination of service.
Name | | Number of Units | | | Grant - Value (1) |
| Robert G. Croyle | | 3,000 | | $ | 111,960 |
| William T. Fox | | 3,000 | | | 111,960 |
| Sir Graham Hearne | | 3,000 | | | 111,960 |
| John R. Huff | | 3,000 | | | 111,960 |
| Robert E. Kramek | | 3,000 | | | 111,960 |
| Frederick R. Lausen | | 3,000 | | | 111,960 |
| H. E. Lentz | | 3,000 | | | 111,960 |
| Lord Moynihan | | 3,000 | | | 111,960 |
| P. Dexter Peacock | | 3,000 | | | 111,960 |
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| (1) | Amount is based upon the last reported sales price of Rowan's common stock on the NYSE on May 8, 2007 of $37.32. |
The LTIP was filed on Form 8-K on May 10, 2005 and is incorporated herein by reference.
