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Item 5.02
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Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers
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Changes to Executive Compensation Program
On February 6, 2020, the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Superior Energy Services, Inc. (the “Company”) approved certain modifications to the Company’s executive compensation program for 2020.
Under the terms of the Company’s 2016 Incentive Award Plan (the “Plan”), the Committee has broad discretion to grant awards under the Plan and determine the terms and conditions of such awards, in each case subject to the conditions and limitations in the Plan. The types of awards that may be granted under the Plan include stock options, restricted stock units, performance awards, stock appreciation rights, other forms of stock-based awards and cash-based awards. In order to address the importance of retaining and motivating key executives in the Company’s current market conditions, the Committee approved the grant of phantom stock unit awards and cash retention awards in lieu of its historical practice of granting stock options and restricted stock units, respectively, for its executive compensation program for 2020.
Phantom Stock Unit Awards
On February 6, 2020, the Committee approved the grant of phantom unit awards (the “Phantom Stock Units”) in lieu of its historical practice of granting stock options. The Phantom Stock Units are subject to vesting restrictions and the other terms and conditions set forth in a form of award agreement (the “Award Agreement”).
The Phantom Stock Units are scheduled to vest in three annual installments, with one-third vesting on January 15, 2021, one-third vesting on January 15, 2022 and one-third vesting on January 15, 2023. Upon vesting, the Phantom Stock Units will entitle each grantee to a cash payout equal to the fair market value of the Company’s common stock on the vesting date multiplied by the number of Phantom Stock Units held by such grantee that vest on such date.
The number of Phantom Stock Units that were granted to each of the Company’s named executive officers (the “NEOs”) is set forth in the table below.
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Officer
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Phantom Stock Units
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David D. Dunlap (President and Chief Executive Officer)
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198,970
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Westervelt T. Ballard Jr. (Executive Vice President, Chief Financial Officer and Treasurer)
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66,741
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Brian K. Moore (Executive Vice President)
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58,745
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William B. Masters (Executive Vice President and General Counsel)
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50,786
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A. Patrick Bernard (Executive Vice President)
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41,634
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The foregoing description of the Award Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Award Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated into this Item 5.02 by reference.
Cash Retention Awards
On February 6, 2020, the Committee approved the grant of cash retention awards (the “Retention Awards”) to each of the NEOs in lieu of the Company’s historical practice of granting restricted stock units for its executive compensation program for 2020. The value of the Retention Awards made to each of the Company’s NEOs is set forth in the table below.
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Officer
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Retention
Awards
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David D. Dunlap (President and Chief Executive Officer)
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$
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1,062,500
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Westervelt T. Ballard Jr. (Executive Vice President, Chief Financial Officer and Treasurer)
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356,400
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Brian K. Moore (Executive Vice President)
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313,703
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William B. Masters (Executive Vice President and General Counsel)
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271,201
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A. Patrick Bernard (Executive Vice President)
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222,328
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The Retention Awards will vest and be payable to the NEOs in three annual installments, with one-third payable on January 15, 2021, one-third payable on January 15, 2022 and one-third payable on January 15, 2023, provided that such NEO remains continuously employed with the Company.