Item 10. Directors, Executive Officers and Corporate Governance
Board of Directors and Executive Officers
The names of our directors and executive officers, their ages as of April 15, 2023 and certain other information about them are set forth below:
|
|
|
|
|
Name |
|
Age |
|
Position |
Thomas R. Bates, Jr. (1) |
|
73 |
|
Chairman of the Board of Directors |
Nils E. Larsen (1)(2) |
|
52 |
|
Director |
L. Spencer Wells (1)(2) |
|
52 |
|
Director |
Paul A. Gordon (2) |
|
52 |
|
Director |
Ihab Toma |
|
60 |
|
Chief Executive Officer and Director |
Douglas E. Stewart |
|
46 |
|
Chief Financial Officer, General Counsel, Chief Compliance Officer and Secretary |
William L. Thomson |
|
52 |
|
Chief Commercial Officer/Chief Technical Officer |
Linda J. Ibrahim |
|
52 |
|
Chief Accounting Officer and Vice President of Tax |
Derek Massie |
|
62 |
|
Vice President of Human Resources |
(1)Member of our Audit Committee
(2)Member of our Compensation Committee
Board of Directors
Thomas R. Bates, Jr. has served as our Chairman of the Board of Directors of the Company (the “Board of Directors” or the “Board”) since February 10, 2016. Qualifications and Experience: Mr. Bates has over 45 years of operational experience in the oil and gas industry, having held executive leadership positions at several major energy companies. He is currently an adjunct professor and member of the advisory board for the Energy MBA Program at the Neeley School of Business at Texas Christian University in Fort Worth. Mr. Bates joined Lime Rock Management LP, an energy focused private equity firm, as managing director in 2001 and became a senior advisor of the firm in 2010 before retiring in 2013. Mr. Bates previously served as group president at Baker Hughes from 1998 through 2000, chief executive officer at Weatherford-Enterra from 1997 to 1998, and spent 15 years in management positions at Schlumberger, finishing as president of the Anadrill division where he was responsible for the introduction of new drilling products and technologies. Mr. Bates began his career at Shell Oil Company. Through his experience in both energy and oilfield service companies, Mr. Bates provides significant insight into management and corporate strategy, including audit committee matters, that we believe are essential for growing the Company. His experience in private equity provides valuable entrepreneurial insight. Additionally, Mr. Bates has significant experience sitting on compensation and audit committees providing us with insight into corporate governance and other matters. Education: Mr. Bates has a doctorate in mechanical engineering from the University of Michigan. Mr. Bates serves on the Audit Committee.
Directorships for the past five years: SSR Mining, Inc. (Director and Compensation Committee Chairman 2020 to present), TETRA Technologies (2011 to present), Alacer Gold Corporation (2014 to 2020), Independence Contract Drilling (Chairman 2011 to 2020), Tidewater, Inc. (Chairman 2017 to 2019) and Weatherford International PLC (2019 to 2020).
Nils E. Larsen has served as a director of the Company since February 10, 2016. Qualifications and Experience: Mr. Larsen is the Founder and, since 2013, President of SZR Consulting, LLC. SZR Consulting, LLC provides financial and operational advisory and consulting services to companies and investors in a variety of industries including oil and gas, media, sports and industrial services. In addition, from 2013 through 2022, Mr. Larsen acted as an Operating Advisor and Consultant to The Carlyle Group. In this role, his focus was principally in the media industry. Prior to forming SZR Consulting, LLC, Mr. Larsen served in a variety of senior executive positions with Tribune Company from 2008 to 2013, including as the President and Chief Executive Officer of Tribune Broadcasting and as the Co-President of Tribune Company. Before joining Tribune Company, Mr. Larsen was employed by Equity Group Investments, LLC from 1995 to 2008 (serving as a Managing Director from 2001 to 2008), focusing on investments in the media, transportation, energy, industrial manufacturing, retail grocery and member loyalty and rewards sectors. Mr. Larsen resumed a limited role with Equity Group Investments, LLC in 2013 although that relationship is currently no longer substantive. Mr. Larsen started his career at CS First Boston where he focused on the capital requirements and derivative products needs of U.S. financial institutions and non-U.S. based entities. Mr. Larsen has significant governance experience in entities across their lifecycles providing this essential insight to the Company. Education: Mr. Larsen received his A.B. summa cum laude from Bowdoin College. Mr. Larsen serves on the Compensation Committee and as chairman of the Audit Committee.
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Directorships for the past five years: Extreme Reach (2015 to October 2022; Compensation Committee 2018 to October 2022), Liberty Tire Recycling Holdings (Chairman 2015 to May 2021; Compensation Committee 2018 to May 2021), LiveStyle, Inc. (2016 to present), McDermott International Inc. (Lead Director 2020 to June 2021; Chairman June 2021 to present; Chairman of the Compensation Committee 2020 to present; Nominating and Governance Committee 2020 to present), Treehouse REIT (January 2021 to present; Chairman of the Audit Committee January 2021 to present), Noble Trading Resources Holdings Limited (April 2022 to present; Business Risk Oversight Committee April 2022 to present; ESG Committee March 2023 to present), Blackhawk Mining LLC (2018 to October 2019), Esterline Technologies Corporation (2016 to 2019; Audit Committee and Enterprise Risk Committee 2016 to 2019) and Veridiam, Inc. (April 2019 to September 2020; Chairman August 2019 to September 2020).
L. Spencer Wells has served as a director of the Company since February 10, 2016. Qualifications and Experience: Mr. Wells is a founder and, since 2013, has been a Partner of Drivetrain Advisors, a provider of fiduciary services to the alternative investment community, with a particular expertise in restructuring and turnarounds. From 2010 to 2013, Mr. Wells served as a senior advisor and partner with TPG Special Situations Partners where he helped manage a $2.5B portfolio of liquid and illiquid distressed credit investments. Mr. Wells served as a partner at Silverpoint Capital from 2002 to 2009 where he helped manage a $1.3B investment portfolio consisting primarily of stressed and distressed bank loans and bonds focusing on the oil and gas exploration and production, oilfield services, power generation, financial institutions and chemicals industries. He previously served as an analyst on the distressed debt trading desks at Union Bank of Switzerland, Deutsche Bank and Bankers Trust. Mr. Wells’ significant experience in the debt, equity and capital markets provides the Board of Directors with insight into operating the Company following our reorganization plan. Mr. Wells also has significant experience serving on private and public companies’ boards, which gives him insight into matters regarding corporate governance and fiduciary responsibilities. Education: Mr. Wells received his Bachelor of Arts degree from Wesleyan University and his Masters of Business Administration from the Columbia Business School. Mr. Wells serves on the Audit Committee and as the chairman of the Compensation Committee.
Directorships for the past five years: Advanced Emissions Solutions, Inc. (Chairman 2014 to present), Aventine Property Group (Chairman 2021 to present), Drivetrain Advisors LLC (2013 to present), NextDecade Corp (2017 to present), Parker Drilling, Inc. (2019 to present), RMFT Advisors LLC (2013 – present), Samson Resources II LLC (2017 to present), Treehouse REIT, Inc. (January 2019 to present), International Walls, Inc. (2020 to 2022), Vanguard Natural Resources (January 2019 to 2020), Jones Energy, Inc. (2018 to 2019), Affinion Group Holdings, Inc. (Chairman 2015 to 2017), Certus Holdings, Inc. and CertusBank, N.A (2014 to 2016), Global Geophysical Services, Inc. (Chairman 2015 to 2016), Lily Robotics, Inc. (2017), Preferred Proppants LLC (2014 to 2018), Syncora Holdings, Ltd. (2015 to 2016), Telford Offshore Holdings Ltd (2018 to 2020), Roust Corporation (2017), Town Sports International Holdings, Inc. (2015 to 2020) and uBiome Inc. (2019).
Paul A. Gordon has served as a director of the Company since August 7, 2018. Qualifications and Experience: Mr. Gordon is the Head of Capital Markets at Lindsay Goldberg, a New York-based private equity firm. Prior to joining Lindsay Goldberg in 2023, Mr. Gordon was the Founder and Managing Member of Hillspoint Advisors LLC. Hillspoint provides fiduciary services, including board of director representation and strategic advisory, for private and public businesses globally. Hillspoint focuses on driving value-added returns for stakeholders via capital structure optimization, governance, incentive alignment, operational improvement and mergers and acquisitions. Mr. Gordon was previously employed by Anchorage Capital Group, L.L.C. (“Anchorage”) where he served in various positions from 2011 to 2022, most recently as Managing Director and Head of the Portfolio Group where he worked with management and boards of companies where Anchorage was a significant investor. At these companies, Mr. Gordon’s responsibilities included governance, operational oversight and value creation and he served as a board member or board-level advisor for both public and private companies in a broad range of industries. Along with his team, Mr. Gordon worked on a wide spectrum of operational areas focusing on revenue enhancement, cost reduction and other strategic initiatives. Additionally, Mr. Gordon worked directly with these companies on all aspects of debt and equity financing as well as add-on and exit M&A activities. As a credit-trained lender by background, Mr. Gordon was a founding member of Anchorage’s CLO and CBO Investment Committee and worked with the firm’s research and trading teams in the identification, evaluation and portfolio management of loan and bond positions across industries for the firm’s structured credit platform. Prior to joining Anchorage, Mr. Gordon was a Managing Director and Portfolio Manager at S.A.C. Capital Advisors, LLC and began his investing career at Cerberus Capital Management, L.P. Mr. Gordon spent the first part of his professional career in investment banking and leveraged finance. Education: Mr. Gordon received an M.B.A. from the Wharton School of the University of Pennsylvania and a B.A. from Cornell University where he graduated magna cum laude.
Directorships for the past five years: Asterix, Inc. (2018 to present), Chantier Davie Canada Inc. (2020 to present), Covia Holdings LLC (2020 to present), Federal Fleet Services, Inc. (2018 to present), Ideal Standard International Holding S.a.r.l. (2020 to present), Ideal Standard International NV (2020 to present), Ideal Standard International SA (2020 – present), Chemical Transportation Group, Inc. (2016, 2018 to 2021), Great Missouri – Sociedade Imobiliária, Lda. (2020 to 2022), Bestyellow – Sociedade Imobiliária, Lda. (2020 to 2022), Blue Fields – Sociedade Imobiliária, Lda. (2020 to 2022), Carraun Telecom Holdings Limited (2020 to 2022), Juticalpa – Sociedade Imobiliária, Lda. (2020 to 2022), Product Tankers Holdco LLC (2018 to 2022), Yellow Nuance – Sociedade Imobiliária, Lda. (2020 to 2022), CHG Canadian Holdings Inc. (2019 to 2021), CHG Holdings LLC (2019 to 2021), Hoxton (Cayman) Ltd. (2016 to 2020), LS Retail (2020 to 2021), RAM RE Investments LLC (2018 to 2020), WPG Enterprise A LLC (2018 to 2020), and WPG Enterprise SOP LLC (2018 to 2019).
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Ihab Toma has served as a member of the Board of Directors and as Chief Executive Officer of the Company since August 29, 2016. Qualifications and Experience: Mr. Toma has over 37 years of experience in the oilfield industry. From 2014 until 2016, Mr. Toma served as a senior advisor to First Reserve Corporation, a leading global private equity and infrastructure firm exclusively focused on energy. Previously, Mr. Toma served from 2009 until 2013 in various executive capacities at Transocean, as Executive Vice President - Chief of Staff, Executive Vice President - Operations, Executive Vice President - Global Business and Senior Vice President - Marketing and Planning. Prior to his time at Transocean, from 1986 until 2009, Mr. Toma served in multiple capacities at Schlumberger. He served as Vice President, Sales and Marketing for Europe, Africa and Caspian for Schlumberger Oilfield Services from April 2006 to August 2009. From 2000 to 2006, he led Schlumberger’s Information Solutions business in various capacities, including President, Vice President - Sales and Marketing, Vice President – Information Management and Vice President – Europe, Africa and CIS Operations. Mr. Toma began his career with Schlumberger in 1986. Education: Mr. Toma holds a Bachelor of Science degree in Electrical, Electronics and Communications Engineering from Cairo University, Egypt.
Directorships in the past five years: Apex International (January 2019 to Present), 3T/Drilling Systems (UK) Ltd. (June 2015 to present), AGR Group (Vice Chairman from January 2015 to December 2018), Engström & Engstöm (Chairman from May 2014 to May 2017), Fara-Rever (January 2018 to February 2021) and Paradigm Geophysical Corp (October 2013 to April 2018).
On September 13, 2022, at the Company’s annual general meeting of shareholders, the shareholders of the Company elected Messrs. Bates, Larsen, Wells, Gordon, Garcia and Toma as directors of the Company, to hold office until the next annual general meeting of shareholders or until their respective successors are duly elected and qualified or until their earlier death, resignation or removal. On October 24, 2022, Mr. Garcia resigned from the Board of Directors and was not replaced.
Executive Officers
With respect to all of the following officers, references to offices held by such individuals in the following paragraphs are to offices with Vantage Drilling Company prior to the effectiveness of the Company’s Chapter 11 bankruptcy proceedings on February 10, 2016 (if applicable) and to offices with the Company after February 10, 2016.
Ihab Toma has served as a member of the Board of Directors and as Chief Executive Officer of the Company since August 29, 2016. For a brief biography of Mr. Toma, please see above under “Board of Directors.”
Douglas E. Stewart has served as our General Counsel and Corporate Secretary since June 2016, our Chief Compliance Officer since December 12, 2016 and our Chief Financial Officer since May 2020. Mr. Stewart joined the Company from Stallion Oilfield Holdings, Inc., where he served as Executive Vice President, General Counsel and Secretary. Mr. Stewart joined Stallion in June 2007 from Occidental Development Company, a subsidiary of Occidental Petroleum Corporation, where he served in the international business development group. Prior to joining Occidental in January 2007, he practiced corporate finance and securities law, specializing in private equity and mergers and acquisitions, at Vinson & Elkins LLP from September 2001 until December 31, 2006. Mr. Stewart received his Bachelor of Arts degree in Economics and International Studies from Trinity University and his J.D. from the University of Texas School of Law.
William L. Thomson has served as Chief Commercial Officer/Chief Technical Officer since July 2022, and previously served as our Vice President of Marketing & Business Development since June 2016. Prior to that, he served as our Vice President of Technical Services, Supply Chain & Projects from March 2008. Prior to joining us, Mr. Thomson worked for Transocean, and predecessor companies, beginning in 1994, where, in addition to other roles, Mr. Thomson served as Operations Manager – Assets in the United Kingdom sector of the North Sea managing ten semi-submersibles and as Technical Support Manager – Africa. Additionally, Mr. Thomson worked as a project manager responsible for various refurbishments, upgrades and new build jackup projects in shipyards in Africa, Asia, Europe, and the Middle East. Mr. Thomson earned an Honours degree in Naval Architecture and Offshore Engineering from the University of Strathclyde (UK) in 1992 and a PgD in Oil and Gas Law from the Robert Gordon University in 2006.
Linda J. Ibrahim has served as our Vice President of Tax and Governmental Compliance since February 2015, our Chief Accounting Officer since July 2021 and has served the Company in various tax and compliance roles since 2010. Prior to joining the Company, Ms. Ibrahim was employed by Pride International from 2006 to 2010 managing that company’s Western Hemisphere tax functions, PricewaterhouseCoopers LLP from 1999 to 2006 and BDO Seidman from 1997 to 1999, serving clients of these two firms in the energy industry. Ms. Ibrahim holds a Bachelor of Business Administration – Accounting from the University of Houston and is a certified public accountant licensed in the state of Texas.
Derek Massie joined the company in 2017 and has served as our Vice President of Human Resources since January 2018. Prior to joining the Company, Mr. Massie served as Principal Consultant at Dynamic People Strategies Ltd from 2016 to 2017; Principal Consultant at Maxwell Drummond International from 2013 to 2016, conducting executive search assignments and executing human capital projects. Mr. Massie has held senior human resources roles with Rowan Drilling, Seadrill Ltd, Acergy MS Ltd, Aggreko Plc
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and Schlumberger. Mr. Massie is a Fellow of the Chartered Institute of People Development and holds a Masters degree in Business Administration from the Robert Gordon University.
Material Changes in Director Nominations Process
There have not been any material changes to the procedures by which shareholders may recommend nominees to the Board of Directors.
Code of Ethics
We have adopted a Code of Business Conduct and Ethics that applies to all of our directors, officers and employees (the “Code of Conduct and Ethics”). Our Code of Conduct and Ethics is available at www.vantagedrilling.com on the “About Us” page under the link “Our Vision and Values.” We intend to include on our website any amendments to, or waivers from, a provision of the Code of Conduct that applies to our principal executive officer, principal financial officer, or principal accounting officer that relates to any element of the “code of ethics” definition contained in Item 406(b) of Regulation S-K. This Internet address is provided for informational purposes only and is not intended to function as a hyperlink. Our website and the information contained in it or connected to it shall not be deemed to be included or incorporated herein.
Audit Committee
The Audit Committee reviews and recommends to the Board of Directors internal accounting and financial controls and accounting principles and auditing practices to be employed in the preparation and review of our financial statements. In addition, the Audit Committee has authority to engage independent registered public accountants to audit our annual financial statements and determine the scope of the audit to be undertaken by such accountants. The Audit Committee is also charged with reviewing and approving all related party transactions.
Our Audit Committee is comprised of Messrs. Larsen, Bates and Wells, with Mr. Larsen serving as Chairman of the Audit Committee. Messrs. Larsen, Bates and Wells are considered by the Board of Directors to be independent. Each of Messrs. Larsen, Bates and Wells qualifies as an audit committee financial expert as defined in Item 407(d) of Regulation S-K. The Audit Committee operates pursuant to a written charter, which is available at www.vantagedrilling.com on the “About Us” page under the link “Our Vision and Values.” This Internet address is provided for informational purposes only and is not intended to function as a hyperlink. Our website and the information contained in it or connected to it shall not be deemed to be included or incorporated herein.
Item 11. Executive Compensation
Compensation Discussion and Analysis
Our 2022 Named Executive Officers
This Compensation Discussion and Analysis (“CD&A”) focuses on the compensation of our 2022 named executive officers, who were:
Ihab Toma, Chief Executive Officer
Douglas E. Stewart, Chief Financial Officer, General Counsel, Chief Compliance Officer and Corporate Secretary
William L. Thomson, Vice President, Marketing and Business Development
Linda J. Ibrahim, Chief Accounting Officer and Vice President of Tax
Derek Massie, Vice President of Human Resources
Douglas W. Halkett, Chief Operating Officer*
*Mr. Halkett stepped down from his position as Chief Operating Officer, effective as of June 30, 2022, and is expected to remain employed by the Company in a non-officer role through December 31, 2023, in order to assist with the transition.
Compensation Philosophy and Objectives
Our executive compensation program reflects our philosophy that executive officers’ compensation should be closely aligned with the long-term interests of stakeholders and strongly correlated with both company-wide and individual performance. Accordingly, our executive compensation program places an emphasis on performance-based compensation. The key business metrics we have historically considered in establishing targets and measuring the performance of our executive officers have included safety performance and financial performance.
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The objectives of our executive compensation program are to attract, retain and motivate experienced, high-quality professionals to meet the long-term interests of our shareholders and to reward outstanding performance. Many of our competitors are larger and more established offshore drilling companies with greater financial resources. Consistent with our philosophy and objectives, we designed a compensation program which we believe to be competitive with companies with which we compete for talent and have evaluated the mix of compensation between fixed (annual base salary) and performance-based compensation.
The components of our compensation program include:
Annual Base Salary. The fixed cash component of our compensation program is used to attract and retain executives at levels intended to be competitive and to compensate executives for their day-to-day duties and responsibilities.
Annual Cash Incentive Awards. This component of our compensation program is an annual cash incentive opportunity based on our performance relative to the metrics established by the Compensation Committee and the individual executive’s performance measured against his or her individual performance goals.
Time-vested Equity Awards. This component of our compensation program consists of time-vested equity awards that were designed to encourage retention and align the executives’ interest with our stakeholders.
Performance-based Equity Awards. This component of compensation consists of performance-based equity awards that were designed to focus executives’ performance on our business and financial performance which would generate long-term shareholder value.
Special Cash-Based Long-Term Retention Awards. This component of compensation, which was awarded in 2019, consists of a special cash-based retention award issued under the Amended 2016 Management Incentive Plan related to the Petrobras litigation settlement that vests over several years, as described in more detail below. In 2021, the Compensation Committee also approved a special long-term cash award for the executive officers and other key employees, which vests as described in more detail below.
Other Benefits. This component of our compensation program has historically consisted primarily of a match for U.S. participants in a 401(k) plan, car allowances and subsidizing employees on assignments outside their home country (including expatriate housing, schooling, home airfare and foreign taxes).
2022 Compensation Program
Due to the difficulties experienced in the offshore drilling industry during the last few years, and the financial challenges faced with the onset of the COVID-19 pandemic, on March 31, 2020, the named executive officers agreed to 20% reductions in their base salary levels effective April 1, 2020 until June 30, 2020. On July 1, 2020, each named executive officer’s base salary level was restored to levels in effect prior to April 1, 2020. On July 1, 2020, the Company subsequently enacted salary reductions of 10% to the annual base salaries of all our employees, including but not limited to the named executive officers. On June 1, 2022, these 10% reductions were restored to levels in effect prior to April 1, 2020. In addition, independent members of our Board of Directors also agreed to a reduction in annual compensation, which were also restored on June 1, 2022. For more details on this reduction, see "Director Compensation" in this Part III, Item 11.
To address retention concerns and incentivize the named executive officers to focus on short-term goals and objectives, the Compensation Committee determined it was appropriate to continue to operate an annual bonus program for 2022, as discussed in greater detail below. The Compensation Committee determined that it was both reasonable and in the Company’s best interests to provide the named executive officers with this type of compensation opportunity during 2022 in order to ensure that the executives were properly motivated to drive the Company toward its financial objectives.
Role of Compensation Committee
Our Compensation Committee is responsible for determining the compensation of our directors and executive officers as well as establishing our compensation philosophies. The Compensation Committee operates independently of management and annually has the authority to seek advice from advisors as it deems appropriate. The Compensation Committee reviews our compensation program, including the allocation of the respective components of compensation, and operates pursuant to a written charter, which is available at www.vantagedrilling.com on the “About Us” page under the link “Our Vision and Values.” Pursuant to its charter, the Compensation Committee may, in its discretion and to the extent permissible by law, delegate all or a portion of its duties and responsibilities to a subcommittee of the Compensation Committee. The Compensation Committee reviews and approves the compensation and benefits for executive officers of the Company (other than the CEO), and reviews and recommends for approval by the Board the compensation and benefits of the CEO. This Internet address is provided for informational purposes only and is not intended to function as a hyperlink. Our website and the information contained in it or connected to it shall not be deemed to be included or incorporated herein.
From January 2022 through February 2022, our Compensation Committee was comprised of Messrs. Wells, Aubrey and Larsen, with Mr. Garcia being appointed to the Compensation Committee in February 2022 in connection with Mr. Aubrey’s resignation.
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Following the resignation of Mr. Garcia in October 2022, Mr. Gordon was appointed to the Compensation Committee. Our Compensation Committee is currently comprised of Messrs. Wells, Larsen and Gordon, with Mr. Wells serving as Chairman of the Compensation Committee. Messrs. Larsen and Wells are considered by the Board of Directors to be independent.
Role of Benchmarking of Compensation and Peer Group
The Compensation Committee did not establish a peer group in connection with making compensation decisions in respect of 2022 and did not engage in any formal benchmarking in determining 2022 executive compensation. The Compensation Committee may, from time to time, review current practices of similarly-situated, publicly-held companies in the offshore drilling and oilfield services industries when it makes compensation-related decisions. In connection with its review, the Compensation Committee may consider the cash and equity compensation practices of other publicly held companies that are of a similar size, or that directly compete with us in the offshore contract drilling industry, through the review of such companies’ public reports and through other resources.
Role of Compensation Consultant
During 2022, the Compensation Committee did not retain the services of an outside compensation consultant.
Role of Executive Officers in Compensation Decisions
For 2022, no executive officer played a role in determining the amount or form of compensation paid to the Company’s executive officers, other than Mr. Toma, who provided input with respect to the performance goals and applicable target bonus levels (other than his own target bonus level) applicable to the 2022 annual cash incentive program.
Elements of our Compensation Program
As described above, there are typically six primary elements to our executive compensation program—annual base salary, annual cash incentive awards, time-based equity awards, performance-based equity awards, longer-term cash-based retention awards and other benefits. Each of these elements are described in greater detail below.
Annual Base Salary. On March 31, 2020, as part of our efforts to reduce operating and corporate costs in light of the global economic decline and public health crisis resulting from the spread of COVID-19 during 2020, each named executive officer agreed to a 20% reduction in salary effective April 1, 2020 until June 30, 2020. On July 1, 2020, each named executive officer’s base salary level was restored to levels in effect prior to April 1, 2020 and then subsequently reduced by 10% on July 1, 2020. On June 1, 2022, the reductions in base salary were restored to levels in effect prior to April 1, 2020.
The current base salary levels of the named executive officers as of December 31, 2022, are set forth below:
|
|
|
|
|
Position |
|
Annual Salary |
|
Chief Executive Officer |
|
$ |
500,000 |
|
Chief Financial Officer and General Counsel |
|
$ |
285,000 |
|
Chief Commercial Officer/Chief Technical Officer |
|
$ |
285,000 |
|
Chief Accounting Officer and Vice President of Tax |
|
$ |
230,000 |
|
Vice President of Human Resources |
|
$ |
230,000 |
|
Former Chief Operating Officer* |
|
$ |
430,000 |
|
*In connection with his transition, Mr. Halkett continued to receive his annual base salary of $430,000 through December 31, 2022 in connection with his role as Special Advisor to the CEO.
Annual Cash Incentive Awards. To incentivize the named executive officers to focus on short-term goals and objectives, the Compensation Committee determined it was appropriate to approve a performance-based annual bonus program for 2022 (the “2022 Annual Bonus Program”). Under the 2022 Annual Bonus Program, each of the named executive officers had the opportunity to earn a cash payment based on the level of achievement of the following performance goals, each of which was weighted at 33%: (1) certain health and safety objectives, including the Total Recordable Incident Rate, the Lost Time Incidence Rate, the Dropped Object Incidence Rate and reducing hand and finger injuries, (2) Contracts Awarded for Rigs and (3) level of cash and Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) at year end (collectively, the “Operational Goals”). In addition to the portion of 2022 annual bonus payments that were determined based on achievement of the Operational Goals, each of the named executive officers’
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annual bonus payment was based on the achievement of certain strategic goals, which goals and level of achievement was determined based on the Compensation Committee’s discretion. No specific metrics were established in respect to these strategic goals.
At the beginning of 2022, the Compensation Committee established target bonus opportunities for each of the named executive officers, expressed as a percentage of the named executive officer’s annual base salary:
|
|
|
|
|
|
|
|
|
|
|
|
|
Last name |
|
First name |
|
Position |
|
Annual Salary |
|
|
Bonus Target (as percentage of Annual Salary) |
|
Toma |
|
Ihab |
|
Chief Executive Officer |
|
$ |
500,000 |
|
|
|
100 |
% |
Stewart |
|
Douglas |
|
Chief Financial Officer and General Counsel |
|
$ |
285,000 |
|
|
|
75 |
% |
Thomson |
|
William |
|
Vice President Marketing and Business Development |
|
$ |
285,000 |
|
|
|
100 |
% |
Ibrahim |
|
Linda |
|
Chief Accounting Officer and Vice President of Tax |
|
$ |
230,000 |
|
|
|
70 |
% |
Massie |
|
Derek |
|
Vice President of Human Resources |
|
$ |
230,000 |
|
|
|
70 |
% |
Halkett |
|
Douglas |
|
Former Chief Operating Officer |
|
$ |
430,000 |
|
|
|
80 |
% |
The maximum amount payable to each named executive officer under the 2022 Annual Bonus Program is 200% of the applicable named executive officer’s target bonus amount. Up to 100% of each named executive officer’s target bonus opportunity is based on the level of achievement of the Operational Goals, with the ability to earn between 101%-200% of the applicable target annual bonus opportunity based on the level of achievement of our strategic goals. Following the end of the 2022 performance period, the Compensation Committee determined that the level of achievement of the Operational Goals was approximately 84% and the level of achievement of the strategic goals was approximately 63%, resulting in an aggregate level of performance achieved across all performance goals of approximately 147%. As a result, each named executive officer earned approximately 147% of his or her target annual bonus amount for 2022, except for Mr. Stewart and Ms. Ibrahim whose achievement levels were 130% and 126%, respectively, of his or her target annual bonus amount for 2022. For the amounts earned by each of the named executive officers in respect of 2022 performance, see the “Non-Equity Incentive Compensation” column of the 2022 Summary Compensation Table. Under the terms of his transition agreement (as described in more detail below), Mr. Halkett remained eligible to earn his annual bonus payment for 2022 given his continued transitionary role with the Company.
Time-based and Performance-based Equity Awards.
Amended 2016 Management Incentive Plan
On February 10, 2016, the Company’s Board of Directors adopted and approved the Company’s new 2016 Management Incentive Plan (the “2016 MIP”) pursuant to which the Compensation Committee had the ability to grant awards to employees, directors and consultants of the Company, as determined by the Compensation Committee. Pursuant to the 2016 MIP, the Compensation Committee could grant awards in the form of stock options, restricted stock, restricted stock units or other awards of the Company, subject to vesting conditions determined by the Compensation Committee. No grants were made under the 2016 MIP.
On August 9, 2016, the Board of Directors approved an amendment and restatement of the 2016 MIP in order to better align the terms of the 2016 MIP with our overall business strategy and operational performance (the “Amended 2016 MIP”). The Board of Directors also approved form award agreements to be used for grants under the Amended 2016 MIP, including time-based and performance-based restricted stock units to acquire units of our stapled securities. Pursuant to such form award agreements, time-based restricted stock units vest ratably annually over a four-year period, and performance-based restricted stock units vest (if at all) in accordance with a vesting schedule that is based on achievement of a multiple of “total enterprise value” of the Company, as tested on the occurrence of a “qualified liquidity event” or, if later, the seventh anniversary of the date the 2016 MIP became effective.
Messrs. Toma, Stewart, Thomson and Halkett received these awards during 2016, but no additional grants were made to them during 2019, 2020, 2021 or 2022. During 2017, Ms. Ibrahim received 9,848 time-based restricted stock units and 22,976 performance-based restricted stock units and Mr. Massie received 5,001 time-based restricted stock units and 11,671 performance-based restricted stock units on the same terms and conditions described above. During 2018, Mr. Thomson received 1,030 time-based restricted stock units and 2,430 performance-based restricted stock units on the same terms and conditions described above.
In connection with the conversion of the Company’s 1%/12% Step-Up Senior Secured Third Lien Convertible Notes into the Company’s ordinary shares on December 4, 2019, each restricted stock unit was converted into the right to receive approximately 2.868 Company common shares, with a per-share average fair value of $66.26. Following the conversion of the Company’s 1%/12% Step-Up Senior Secured Third Lien Convertible Notes, 963,380 common shares are reserved for issuance under the Amended 2016 MIP. As of December 31, 2022, there were 356,488 shares available for future grant under the Amended 2016 MIP.
On November 18, 2019, following the receipt of proceeds in connection with, and the procurement of a special litigation insurance policy by certain of the Company’s subsidiaries relating to, the Petrobras litigation matter, the Board declared a special cash dividend equal to $40.03 per share of the Company’s common stock (the “Dividend”). The Dividend was paid on December 17, 2019 to holders of record as of the close of business on December 10, 2019. Pursuant to the terms of the applicable award agreements, the named
9
executive officers were entitled to accrue dividend equivalents in respect of the shares of common stock underlying their restricted stock unit awards outstanding when such Dividend was paid. These dividend equivalents are subject to the same vesting and settlement conditions applicable to the underlying restricted stock units, and will be paid at the same time the underlying restricted stock units are settled. As of the date of this filing, all of the named executive officers’ restricted stock units had vested and 108,321 of which have settled.
Pursuant to the terms of the award agreements, in February 2023, the achievement levels of the performance-based restricted stock units granted became eligible to be tested in order to determine the level of vesting achieved. Based on the level of performance, 0% of these performance-based restricted stock units were earned, and these awards were cancelled for no consideration.
Cash-Based Long Term Retention Awards.
On July 19, 2019, following the Company’s receipt of proceeds from an arbitration award issued in connection with the Petrobras litigation matter, the Board of Directors approved the grant of certain cash-based long term retention awards and their related award agreements, also known as the Petrobras Litigation Awards (the “Original Cash-Based Retention Awards”) to executives and other key employees in an aggregate of approximately $19.3 million. The Original Cash-Based Retention Awards were issued under the Amended 2016 MIP Pursuant to the award agreements, commencing on June 21, 2019, at which time the Original Cash-Based Retention Awards were to vest over a four-year period as follows:
•On June 21, 2020, if a full, final and non-appealable judgment had been rendered in the Company’s favor in connection with the Petrobras litigation matter, as determined by the Board of Directors (a “Final Judgment”), then the participant would receive 25% of the Original Cash-Based Retention Awards. In the event of no Final Judgment on or prior to such date, then 1% of such Original Cash-Based Retention Awards would vest and be payable to the participant.
•On June 21, 2021, if a Final Judgment had not been rendered prior to such date, then an additional 1% of the Original Cash-Based Retention Awards would vest while if a Final Judgment had been rendered prior to such date, then an additional amount of the Original Cash-Based Retention Awards reflecting a cumulative of 50% of the Original Cash-Based Retention Awards would vest and be payable to the participant.
•On June 21, 2022, if a Final Judgment had not been rendered prior to such date, then an additional 1% of the Original Cash-Based Retention Awards would vest while if a Final Judgment had been rendered prior to such date, then an additional amount of the Original Cash-Based Retention Awards reflecting a cumulative of 75% of the Original Cash-Based Retention Awards would vest and be payable to the participant.
•On June 21, 2023, if a Final Judgment had not been rendered prior to such date, then an additional 1% of the Original Cash-Based Retention Awards would vest while if a Final Judgment had been rendered prior to such date, then an additional amount of the Original Cash-Based Retention Awards reflecting a cumulative of 100% of the Original Cash-Based Retention Awards would vest and be payable to the participant.
•After June 21, 2023, if a Final Judgment had not been rendered prior to such date, then an additional amount of the Original Cash-Based Retention Awards reflecting a cumulative of up to 100% of the Original Cash-Based Retention Awards would vest on the date of a Final Judgment and be payable to the participant.
Termination. Upon the termination of the participant’s service for any reason, unless otherwise determined by the Compensation Committee, all unvested portions of the Original Cash-Based Retention Awards would be forfeited and canceled with no compensation owed in respect of such amounts to participant.
Change of Control. Upon a qualified liquidity event (as defined in the applicable award agreement), the Board of Directors will have the right, in its sole discretion, to cause any remaining unvested amounts of the Original Cash-Based Retention Awards to vest reflecting a cumulative of up to 100% of the Original Cash-Based Retention Awards.
Other provisions. The agreements relating to the Original Cash-Based Retention Awards contain customary provisions relating to confidentiality, non-competition and non-solicitation.
On September 25, 2019, the Board of Directors amended the terms and conditions of the Original Cash-Based Retention Awards (the “Amended Cash-Based Retention Awards”). The material changes to the Original Cash-Based Retention Awards as reflected in the Amended Cash-Based Retention Awards relate to vesting (as described below) and certain adjustments to the amounts to be awarded:
•Prior to June 21, 2020, upon the earliest to occur: (1) a Final Judgment, (2) the Company’s binding of an insurance policy covering the potential loss or reduction of the proceeds the Company received in connection with the settlement or resolution of the Petrobras litigation matter, as determined by the Board of Directors or (3) the Company’s payment of a special dividend(s) following June 21, 2019, equal in the aggregate to all or a substantial majority of the net proceeds the Company received in connection with the settlement or resolution of the Petrobras litigation matter, as determined by the Board of Directors (each of which constitutes a “Vesting Event”), then 25 % of the Amended Cash-Based Retention Awards would vest and be payable to the participant.
10
•On June 21, 2020, if a Vesting Event had not occurred prior to such date, then 1% of the Amended Cash-Based Retention Awards would vest while if a Vesting Event had occurred prior to such date, then an additional amount of the Amended Cash-Based Retention Awards reflecting a cumulative of 50% of the Amended Cash-Based Retention Awards would vest and be payable to the participant.
•On June 21, 2021 if a Vesting Event had not occurred prior to such date, then an additional 1% of the Amended Cash-Based Retention Awards would vest while if a Vesting Event had been rendered prior to such date, then an additional amount of the Amended Cash-Based Retention Awards reflecting a cumulative of 75% of Amended Cash-Based Retention Awards would vest and be payable to the participant.
•On June 21, 2022, if a Vesting Event had not occurred prior to such date, then an additional 1% of the Amended Cash-Based Retention Awards would vest while if a Vesting Event had been rendered prior to such date, then an additional amount of the Amended Cash-Based Retention Awards reflecting a cumulative of 100% of Amended Cash-Based Retention Awards would vest and be payable to the participant.
•After June 21, 2022, if a Vesting Event had not occurred prior to such date, then an additional amount of the Amended Cash-Based Retention Awards reflecting a cumulative of up to 100% of Amended Cash-Based Retention Awards would vest on the date of the Vesting Event and be payable to the participant.
The provisions relating to termination, change of control, confidentiality, non-competition and non-solicitation were generally unchanged from the Original Cash-Based Retention Awards.
On January 18, 2021, the Compensation Committee approved the grant to the named executive officers (other than the Chief Executive Officer) and certain key employees, and the Board of Directors approved for the Chief Executive Officer, certain additional cash-based long term retention awards on the same terms and conditions as the Amended Cash-Based Retention Awards except that 50% of the amounts vest on June 21, 2021 and the remaining 50% vested on June 20, 2022 (the “2021 Cash-Based Retention Awards”).
As of December 31, 2022, all payments relating to the Amended Cash-Based Retention Awards and the 2021 Cash-Based Retention Awards have been paid. No new long-term cash based payments were awarded during 2022.
Severance and Other Termination Payments
The named executive officers are entitled to receive severance benefits under the terms of their employment agreements. Prior to the effectiveness of our chapter 11 bankruptcy plan on February 10, 2016, Mr. Thomson and Ms. Ibrahim were covered by the Company’s change of control policy. The purpose of the change of control policy was to:
ensure that the actions and recommendations of our senior management with respect to a possible or actual change of control are in the best interests of the company and our shareholders, and are not influenced by their own personal interests concerning their continued employment status after the change of control; and
reduce the distraction regarding the impact of an actual or potential change of control on the personal situation of the named executive officers and other key employees.
In connection with the negotiation of the Amended and Restated Employment Agreements (as defined below) in connection with emergence from chapter 11 bankruptcy, the economic terms of the change of control policy were incorporated into the Amended and Restated Employment Agreements in order to streamline the provision of severance and related benefits with respect to those executives who are party to those employment agreements.
Employment Agreements. Effective as of the effectiveness of our Chapter 11 bankruptcy plan on February 10, 2016, we entered into amended and restated employment agreements (the “Amended and Restated Employment Agreements”) with Messrs. Thomson and Halkett and Ms. Ibrahim, each effective February 10, 2016. The Amended and Restated Employment Agreements provide for certain severance benefits. Pursuant to the Amended and Restated Employment Agreements, upon certain terminations of employment or following a change of control, outstanding equity-based awards granted under the Amended 2016 MIP will be governed by the terms of the Amended 2016 MIP. In connection with their commencement of employment, Messrs. Toma, Stewart and Massie each entered into employment agreements with us that provide for certain severance benefits upon certain terminations of employment (which are described in more detail below). Additionally, certain of our named executive officers may be entitled to additional severance benefits in the event the officer is terminated following a change of control. More detailed information about the employment agreements and the possible payouts under the change of control policy is contained in “Employment Agreements” and “Potential Payments Upon Termination or Change of Control.”
Other Compensation Policies
Other Compensation. We have established and maintain various employee benefit plans, including medical, dental, life insurance and a 401(k) plan. These plans are generally available to all salaried employees and do not discriminate in favor of executive officers or
11
directors. We also provide certain of our executive officers with a limited number of perquisites which we believe are reasonable and competitive with other companies of our size in our industry. For certain executive officers, these include reimbursement for the cost of an annual physical, a car allowance, and/or certain housing expenses, as well as certain expatriate benefits described in more detail below. The amounts paid to each of the Company’s named executive officers in respect of such benefits are shown in the “All Other Compensation” column of the 2022 Summary Compensation Table.
Expatriate benefits. Employees, including the named executive officers, who reside outside of their home country as a result of their job responsibilities receive certain expatriate benefits that we believe are competitive with those of peer companies engaged in significant international operations. For expatriate named executive officers, these perquisites may include paid housing and utilities, a car allowance, an annual home leave flight allowance for the employee and eligible family members, and school tuition expenses for their children. These expatriate benefits phase out over a period of time specified for certain of our international and domestic locations.
Compensation Policies and Risk Management. It is the responsibility of the Compensation Committee to ensure that the Company’s policies and practices related to compensation do not encourage excessive risk-taking behavior. The Compensation Committee believes that its current compensation policies and practices are not reasonably likely to have a material adverse effect on the Company and do not encourage excessive risk-taking behavior.
Tax and Accounting Considerations
Section 162(m) of the Internal Revenue Code places a limit of $1 million per year on the amount of compensation paid to certain of a public company’s executive officers that may be deductible for any single taxable year. The Tax Cuts and Jobs Act, enacted on December 22, 2017, substantially modified Section 162(m) and, among other things, expanded the definition of “public company” to include companies that have reporting obligations under Section 15(d) of the Exchange Act. As a result, for taxable years beginning after December 31, 2017, certain compensation paid by the Company to our “covered employees” (as defined under Section 162(m)) that exceeds $1 million may not be deductible to the Company. The Compensation Committee considered the impact of Section 162(m) in making compensation decisions during 2022, but did not base any of its compensation decisions solely on the applicable tax consequences. The Compensation Committee will continue to monitor the impact of Section 162(m) on the Company’s executive compensation programs.
Summary Compensation Table
The following table shows information concerning the annual compensation for services provided to us by our named executive officers during 2022, 2021 and 2020.
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|
|
|
|
Non-Equity Incentive Plan Compensation |
|
Stock Awards |
|
All Other Compensation |
|
Total Compensation |
|
Name and Principal Position |
Year |
Salary ($) |
|
Bonus ($) (1) |
|
($) (2) |
|
($) (3) |
|
($) (4) |
|
($) |
|
Ihab Toma |
2022 |
|
479,167 |
|
|
1,127,565 |
|
|
736,183 |
|
|
- |
|
|
108,563 |
|
|
2,451,478 |
|
Chief Executive Officer |
2021 |
|
450,000 |
|
|
1,127,565 |
|
|
781,100 |
|
|
- |
|
|
107,028 |
|
|
2,465,693 |
|
|
2020 |
|
450,000 |
|
|
952,565 |
|
|
430,500 |
|
|
- |
|
|
115,835 |
|
|
1,948,900 |
|
Douglas E. Stewart |
2022 |
|
277,467 |
|
|
1,253,207 |
|
|
283,247 |
|
|
- |
|
|
92,967 |
|
|
1,906,888 |
|
Chief Financial Officer, General Counsel and |
2021 |
|
256,500 |
|
|
1,253,207 |
|
|
333,920 |
|
|
- |
|
|
32,951 |
|
|
1,876,578 |
|
Corporate Secretary |
2020 |
|
267,133 |
|
|
1,190,707 |
|
|
184,039 |
|
|
- |
|
|
32,054 |
|
|
1,673,933 |
|
William L. Thomson |
2022 |
|
273,271 |
|
|
348,270 |
|
|
419,624 |
|
|
- |
|
|
54,481 |
|
|
1,095,646 |
|
Chief Commercial Officer/ |
2021 |
|
256,500 |
|
|
348,270 |
|
|
445,227 |
|
|
- |
|
|
54,735 |
|
|
1,104,732 |
|
Chief Technical Officer |
2020 |
|
267,133 |
|
|
285,770 |
|
|
245,385 |
|
|
- |
|
|
50,254 |
|
|
848,542 |
|
Linda J. Ibrahim |
2022 |
|
215,985 |
|
|
216,513 |
|
|
208,708 |
|
|
- |
|
|
24,300 |
|
|
665,506 |
|
Chief Accounting Officer |
2021 |
|
198,000 |
|
|
216,513 |
|
|
240,579 |
|
|
- |
|
|
23,400 |
|
|
678,492 |
|
and Vice President of Tax |
2020 |
|
206,208 |
|
|
190,514 |
|
|
132,594 |
|
|
- |
|
|
23,331 |
|
|
552,647 |
|
Derek Massie |
2022 |
|
212,917 |
|
|
192,699 |
|
|
232,757 |
|
|
- |
|
|
81,874 |
|
|
720,246 |
|
Vice President of |
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|
|
|
|
|
|
|
|
|
|
|
|
Human Resources |
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas W. Halkett |
2022 |
|
412,083 |
|
|
551,283 |
|
|
506,494 |
|
|
- |
|
|
80,920 |
|
|
1,550,780 |
|
Former Chief Operating |
2021 |
|
387,000 |
|
|
551,283 |
|
|
537,397 |
|
|
- |
|
|
80,920 |
|
|
1,556,600 |
|
Officer |
2020 |
|
387,000 |
|
|
476,283 |
|
|
296,184 |
|
|
- |
|
|
86,370 |
|
|
1,245,837 |
|
(1)The amounts shown reflect amounts earned by the named executive officers in respect of vesting of one quarter of awards paid to each named executive officer in respect of the 2022 Vesting Event under the Amended Cash-Based Retention Awards and one half of awards paid to each named executive officer in respect of the 2022 Cash-Based Retention Awards.
12
(2)The amounts shown reflect amounts earned by the named executive officers in respect of performance under the respective year's Annual Bonus Program. These amounts were paid to the named executive officers in a lump sum early in the subsequent year.
(3)No equity-based compensation awards were granted during 2020, 2021 or 2022.
(4)Additional detail for 2022 “All Other Compensation” is provided in the table below:
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|
|
|
Name |
Schooling ($) (i) |
|
Housing ($) |
|
401(k) Contributions ($) |
|
Home Airfare ($) |
|
Vehicle ($) |
|
Other Compensation ($)(ii) |
|
Total ($) |
|
Ihab Toma |
— |
|
|
92,544 |
|
— |
|
|
2,000 |
|
|
11,444 |
|
|
2,575 |
|
|
108,563 |
|
Douglas E. Stewart |
— |
|
|
71,867 |
|
|
1,243 |
|
|
3,208 |
|
|
14,363 |
|
|
2,286 |
|
|
92,967 |
|
William L. Thomson |
|
20,470 |
|
— |
|
|
18,300 |
|
— |
|
|
9,000 |
|
|
6,711 |
|
|
54,481 |
|
Linda J. Ibrahim |
— |
|
— |
|
|
18,300 |
|
— |
|
|
6,000 |
|
— |
|
|
24,300 |
|
Derek Massie |
— |
|
|
70,064 |
|
— |
|
|
2,000 |
|
|
9,809 |
|
— |
|
|
81,874 |
|
Douglas W. Halkett |
— |
|
|
68,021 |
|
— |
|
|
2,000 |
|
|
10,899 |
|
— |
|
|
80,920 |
|
(i)Amount shown consists of approximately $20,000 in respect of school tuition expenses for Mr. Thomson’s children and a related gross up payment of $470.
(ii)Amounts shown for Messrs. Toma, Stewart and Thomson are for payment of tax preparation fees.
Employment Agreements
Effective as of the effectiveness of our Chapter 11 bankruptcy plan on February 10, 2016, we entered into the Amended and Restated Employment Agreements with Messrs. Thomson and Halkett and Ms. Ibrahim, each effective February 10, 2016. The Amended and Restated Employment Agreements supersede the employment agreements such named executive officers had in place with the company prior to February 10, 2016. We entered into the Amended and Restated Employment Agreements primarily for purposes of updating certain terms of our prior arrangements with such named executive officers, including modifications (i) to comply with changes in law, and (ii) to clarify certain terms and definitions.
The term of each of the Amended and Restated Employment Agreements is subject to automatic extension for an additional one-year period on each anniversary of such agreement, unless either party gives notice of non-renewal at least 90 days before the renewal date.
Under the terms of the Amended and Restated Employment Agreements, Messrs. Thomson and Halkett and Ms. Ibrahim are prohibited from competing with us or soliciting any of our customers or employees for a period of time following the termination of his or her employment, the duration of which is based on the circumstances of termination.
On May 10, 2016, we entered into an employment agreement with Mr. Stewart, to be effective on June 9, 2016. His employment agreement has an initial term of one year subject to automatic one-year renewals unless 90 days’ notice is given by either party. On January 1, 2018, we entered into an employment agreement with Mr. Massie, to be effective as of such date. His employment agreement has an initial term of one year, subject to automatic one-year renewals unless 180 days' notice is given by either party.
On August 9, 2016, we entered into an employment agreement with Mr. Ihab Toma in connection with his appointment as Chief Executive Officer of the Company (the “Employment Agreement”), which became effective as of August 29, 2016 (the “Employment Effective Date”). The initial term of the Employment Agreement was two years from the Employment Effective Date, subject to automatic one-year renewals thereafter. The initial two-year term, and any subsequent annual renewal terms, may end earlier in accordance with the terms of the Employment Agreement.
Pursuant to the Employment Agreement, Mr. Toma receives an annual base salary of $500,000, and has the opportunity to earn an annual bonus based on his and/or our achievement of certain performance criteria established by the Compensation Committee. For each fiscal year beginning with our 2017 fiscal year, Mr. Toma’s target annual bonus opportunity will be equal to 100% of his annual base salary (the “Target Annual Bonus”), subject to a maximum annual bonus payout equal to 200% of his base salary. In 2022, Mr. Toma also received a housing allowance of $6,812 per month.
Pursuant to the Employment Agreement, Mr. Toma has agreed to indefinite confidentiality and non-disparagement obligations. The Employment Agreement also provides that Mr. Toma will not compete with us or solicit our customers or employees, in any case during his employment with us or for a period of one year thereafter. This period increases to two years in the case of Mr. Toma’s retirement from the Company and, in the case of the non-competition provision, is also extended to coincide with his continued receipt of severance benefits (for a period of up to two years following the termination of his employment with us).
On March 31, 2020, as part of our efforts to reduce operating and corporate costs in light of the global economic decline and public health crisis resulting from the spread of COVID-19 in 2020, each named executive officer entered into an amendment and waiver
13
to their employment agreement, agreeing to a 20% reduction in salary effective April 1, 2020 until June 30, 2020 and waiving any claim the executive may have to claim “good reason” in connection therewith. The reduction in base salary had no effect on the other terms of the Employment Agreements. On July 1, 2020, each named executive officer’s base salary level was restored to levels in effect prior to April 1, 2020 and then subsequently reduced by 10% on July 1, 2020. On June 1, 2022, these reduced base salary levels were restored to levels in effect prior to April 1, 2020. The reduced base salary levels had no effect on the other terms of the Employment Agreements (for example, severance provisions).
In connection with the conversion of the Company’s 1%/12% Step-Up Senior Secured Third Lien Convertible Notes into the Company’s ordinary shares on December 4, 2019, each restricted stock unit was converted into the right to receive approximately 2.868 Company common shares.
Grants of Plan Based Awards Table
The following table provides information with respect to incentive plan-based awards made during fiscal year 2022 to the named executive officers.
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|
Name |
Grant Date |
Threshold ($) |
|
Target ($) |
|
Maximum ($) |
|
All other stock awards: Number of shares of stock or units (#) (2) |
|
Grant date fair value of stock and option awards ($) (2) |
|
Ihab Toma (1) |
1/1/2022 |
|
- |
|
|
500,000 |
|
|
1,000,000 |
|
|
- |
|
|
- |
|
Douglas E. Stewart (1) |
1/1/2022 |
|
- |
|
|
213,750 |
|
|
427,500 |
|
|
- |
|
|
- |
|
William L. Thomson (1) |
1/1/2022 |
|
- |
|
|
285,000 |
|
|
570,000 |
|
|
- |
|
|
- |
|
Linda J. Ibrahim (1) |
1/1/2022 |
|
- |
|
|
161,000 |
|
|
322,000 |
|
|
- |
|
|
- |
|
Derek Massie (1) |
1/1/2022 |
|
- |
|
|
161,000 |
|
|
322,000 |
|
|
- |
|
|
- |
|
Douglas W. Halkett (1) |
1/1/2022 |
|
- |
|
|
344,000 |
|
|
688,000 |
|
|
- |
|
|
- |
|
(1)Represents the target and maximum amounts payable to each named executive officer under the terms of the 2022 Annual Bonus Program. Pursuant to the terms of the 2022 Annual Bonus Program, no payment in respect of a particular performance goal may be earned unless “threshold” level with respect to that performance goal has been achieved. For any performance that falls between levels (e.g., between threshold and target level, and between target and maximum level), payout amounts are linearly interpolated between the two applicable reference points. For the amounts earned in respect of 2022, see the “Non-Equity Incentive Compensation Plan” column of the 2022 Summary Compensation Table.
(2)No time-based restricted stock units or performance-based restricted stock units were granted during 2022.
Outstanding Equity Awards at Year End
The following table provides information with respect to the status, as of December 31, 2022, of all unvested time-based restricted stock unit awards and performance-based restricted stock unit awards held by each of the named executive officers.
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|
|
|
|
|
|
|
|
|
|
Name |
Number of Shares or Units of Stock That Have Not Vested (1) |
|
Number of Unearned Shares, Units or Other Rights That Have Not Vested (2) |
|
Market or Payout Value of Unearned Shares Units or Other Rights That Have Not Vested ($) (3) |
|
Market Value of Shares or Units of Stock That Have Not Vested |
|
Ihab Toma |
|
- |
|
|
|
|
|
|
- |
|
Ihab Toma |
|
|
|
12,407 |
|
|
179,782 |
|
|
- |
|
Douglas E. Stewart |
|
- |
|
|
|
|
|
|
- |
|
Douglas E. Stewart |
|
|
|
3,446 |
|
|
49,938 |
|
|
- |
|
William L. Thomson |
|
- |
|
|
|
|
|
|
- |
|
William L. Thomson |
|
|
|
2,757 |
|
|
39,953 |
|
|
- |
|
William L. Thomson |
|
- |
|
|
|
|
|
|
- |
|
William L. Thomson |
|
|
|
689 |
|
|
9,985 |
|
|
- |
|
Linda J. Ibrahim |
|
- |
|
|
|
|
|
|
- |
|
Linda J. Ibrahim |
|
|
|
2,298 |
|
|
33,292 |
|
|
- |
|
Derek Massie |
|
- |
|
|
|
|
|
|
- |
|
Derek Massie |
|
|
|
1,167 |
|
|
16,911 |
|
|
- |
|
Douglas W. Halkett |
|
- |
|
|
|
|
|
|
- |
|
Douglas W. Halkett |
|
|
|
5,974 |
|
|
86,562 |
|
|
- |
|
(1)No officers had unvested time-based restricted stock units as of December 31, 2022.
(2)Performance-based restricted stock units granted to our named executive officers vest (if at all) in accordance with a vesting schedule that is based on achievement of a multiple of “total enterprise value” of the Company, as tested on the occurrence of a
14
“qualified liquidity event” or, if later, February 10, 2023. The minimum percentage of performance-based restricted stock units that are eligible at the threshold level of achievement is 10 percent of the total performance-based restricted stock units granted, and the maximum number is 100 percent of the total performance-based restricted stock units granted. For Messrs. Toma, Stewart, Thomson, Massie and Halkett and Ms. Ibrahim, respectively, there were 124,073; 34,464; 34,464, 11,671, 59,739 and 22,976 performance-based restricted stock units eligible to vest as of December 31, 2022. Pursuant to the terms of the award agreements, in February 2023, the achievement levels of the performance-based restricted stock units granted became eligible to be tested in order to determine the level of vesting achieved. Based on the level of performance, 0% of these performance-based restricted stock units were earned, and these awards were cancelled for no consideration.
(3)The market value of unearned performance-based restricted stock units is equal to the number of unvested performance-based restricted that would be eligible to vest as a result of “threshold” level of achievement of the applicable performance criteria (i.e., 10% of the number of performance-based restricted stock units granted) times $14.49, the fair market value of one of our shares on December 31, 2022, based on broker-assisted trade indicators.
Fiscal Year 2022 Stock Vested
The following table contains information about restricted stock units that vested during fiscal year 2022.
|
|
|
|
|
|
|
Name |
Number of Units Acquired on Vesting (#) (1) |
|
Value Realized on Vesting ($) (1) |
|
Ihab Toma |
|
- |
|
|
- |
|
Douglas E. Stewart |
|
- |
|
|
- |
|
William L. Thomson |
|
- |
|
|
- |
|
Linda J. Ibrahim |
|
- |
|
|
- |
|
Derek Massie |
|
- |
|
|
- |
|
Douglas W. Halkett |
|
- |
|
|
- |
|
(1)Per the terms of the award agreements, the time-based restricted stock units granted to the named executive officers during vest 1⁄4 on each of the first four anniversaries of the applicable grant date, but the settlement of the restricted stock units is deferred until the earlier of (i) the seventh anniversary of February 10, 2016 (or, for Mr. Massie and Ms. Ibrahim, the seventh anniversary of the grant date), and (ii) a qualified liquidity event as defined in the Amended 2016 MIP. All time-based restricted stock units vested in prior years. However, no common stock or other property was received by the named executive officers in connection with such vesting event. For Messrs. Toma, Stewart, Thomson and Halkett, all previously vested time-based restricted stock units settled into ordinary shares on February 10, 2023.
Potential Payments Upon Termination or Change of Control
Assuming the employment of any of our named executive officers was to be terminated without cause, for good reason, or constructively terminated without cause, or in the event of a change of control, each as of December 31, 2022, the named executive officer would be entitled to payments in the amounts set forth below:
Termination Without Cause, For Good Reason, or Constructive Termination
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation Type |
|
Ihab Toma |
|
|
Douglas E. Stewart |
|
|
William L. Thomson |
|
|
Linda J. Ibrahim |
|
|
Derek Massie |
|
|
Douglas W. Halkett |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary (1)
|
|
$ |
1,000,000 |
|
|
$ |
285,000 |
|
|
$ |
285,000 |
|
|
$ |
230,000 |
|
|
$ |
230,000 |
|
|
$ |
860,000 |
|
Target Annual Incentive Bonus (1)
. |
|
$ |
1,000,000 |
|
|
$ |
213,750 |
|
|
$ |
285,000 |
|
|
$ |
161,000 |
|
|
$ |
161,000 |
|
|
$ |
688,000 |
|
Accelerated Vesting of Equity Awards (2)
. |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
TOTAL |
|
$ |
2,000,000 |
|
|
$ |
498,750 |
|
|
$ |
570,000 |
|
|
$ |
391,000 |
|
|
$ |
391,000 |
|
|
$ |
1,548,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause, For Good Reason, or Constructive Termination Following a Change of Control |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary (3)
|
|
$ |
1,500,000 |
|
|
$ |
285,000 |
|
|
$ |
570,000 |
|
|
$ |
460,000 |
|
|
$ |
230,000 |
|
|
$ |
1,290,000 |
|
Average Annual Incentive Bonus (3)
. |
|
$ |
1,947,783 |
|
|
$ |
267,069 |
|
|
$ |
740,157 |
|
|
$ |
387,921 |
|
|
$ |
321,507 |
|
|
$ |
1,340,075 |
|
Accelerated Vesting of Equity Awards (4)
. |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
TOTAL |
|
$ |
3,447,783 |
|
|
$ |
552,069 |
|
|
$ |
1,310,157 |
|
|
$ |
847,921 |
|
|
$ |
551,507 |
|
|
$ |
2,630,075 |
|
(1)Reflects payments equal to two years of annual salary and target annual bonus in the case of Messrs. Toma and Halkett, and one year of annual salary and target annual bonus in the case of Messrs. Thomson, Stewart and Massie and Ms. Ibrahim. Messrs. Toma, Stewart, Massie and Halkett are eligible to receive certain statutory severance payments from the Company upon any termination of employment pursuant to local law requirements, which amounts are not shown in the table above. As of December 31, 2022, the estimated amounts are $178,086, $15,031, $74,310 and $146,793 for each of Messrs. Toma, Stewart, Massie and Halkett, respectively.
(2)Pursuant to the applicable award agreements under the Amended 2016 MIP, upon the occurrence of a termination of services for any reason, all unvested time-based restricted stock units will be forfeited and cancelled. As of December 31, 2022, all time-based restricted stock units granted to the named executive officers have vested. Upon a termination by the Company without cause or by the named executive officer for good reason, a pro-rated portion of the performance-based restricted stock units would remain eligible to vest upon the first to occur of a qualified liquidity event or February 10, 2023, based on the multiple of “total enterprise value” of the Company measured as of applicable vesting date. The table above assumes that (based on, and consistent with, accounting opinions received by the Company pursuant to ASC Topic 718), on the applicable vesting date, the multiple of “total enterprise value” would fall below the “threshold” level of achievement, and therefore no value is included in table above in respect of accelerated vesting of performance-based restricted stock units.
(3)Reflects payments equal to three years of annual salary and average annual bonus for Messrs. Toma and Halkett, and one year of salary and average annual bonus for Messrs. Stewart and Massie and two years of salary and average annual bonus for Mr. Thomson and Ms. Ibrahim, payable pursuant to the terms of their respective employment agreements.
(4)Pursuant to the applicable award agreements, time-based restricted stock units granted to the named executive officers during 2016 will vest immediately upon a qualified liquidity event, as defined in the Amended 2016 MIP. As of December 31, 2022, all time-based restricted stock units granted to the named executive officers have vested. If a qualified liquidity event had occurred on December 31, 2022, all of the named executive officers’ performance-based units would have vested based on the multiple of “total enterprise value” of the Company measured as of December 31, 2022. The table above assumes that, as of December 31, 2022 (based on, and consistent with, accounting opinions received by the Company pursuant to ASC Topic 718), the multiple of “total enterprise value” of the Company would have fallen below the “threshold” level of achievement, and therefore no value is included in the table above in respect of accelerated vesting of the performance-based restricted stock units.
Pursuant to the Amended and Restated Employment Agreements for Messrs. Halkett and Thomson and Ms. Ibrahim, and pursuant to Messrs. Stewart’s and Massie’s employment agreement, upon a termination without “cause” or by the executive for “good reason”, other than in connection with a change of control, the named executive officers are eligible to receive severance payments in an amount equal to one-times the sum of the executive officer’s base salary and target annual bonus for the year of termination (two times such amount for Mr. Halkett). If such termination occurs within 6 months prior to, or within 24 months following, a change of control, then these named executive officers are eligible to receive an amount equal to a multiple of the sum of (i) the executive’s annual base salary plus (ii) the executive’s “average bonus amount” (as defined in the employment agreement, and which generally means the average of any annual bonuses paid or payable during the three-year period prior to occurrence of the change of control (but no less than the target annual bonus for any such year)). Such multiple is equal to three for Mr. Halkett, two for Messrs. Thomson and Ms. Ibrahim, and one
16
for Messrs. Stewart and Massie. Cash payments are payable in accordance with the Company’s regular payroll cycle over the applicable severance period, except in the case of a termination in connection with a change of control, in which case the payments are made in a lump sum within sixty days of the termination event. We are not obligated to make any cash payments to these executives if their employment is terminated by us for cause or by the executive without good reason. In the event of an executive’s death, we will pay the executive’s estate an amount equal to his annual base salary, bonus and the value of any equity awards.
During the executive’s employment and for a period of (a) one year following a termination (or, with respect to the non-competition restriction, a period of time not to exceed two years following a termination during which the executive receives any payment of base salary from the Company) without cause, for good reason, constructive termination without cause or a termination in connection with a change of control or (b) two years following a termination due to retirement, the executive cannot work anywhere in the specified geographic region, and directly or indirectly:
(i)perform services for, have any ownership interest in, or participate in any business that engages or participates in a competing business purpose;
(ii)induce or attempt to induce any customer or client or prospective customer or client whom the executive dealt with or solicited while employed by us during the last twelve months of his employment; or
(iii)solicit, attempt to hire, or have any person employed by us work for the executive or for another entity, firm, corporation or individual.
If we terminate Mr. Toma’s employment without “cause” or if Mr. Toma resigns his employment for “good reason” (as those terms are defined in his employment agreement, and in either case, a “Qualifying Termination”), Mr. Toma will be eligible to receive an amount equal to two times the sum of (i) his annual base salary plus (ii) his target annual bonus, payable in equal installments over a two-year period following the termination date. In the event of an “anticipatory termination” within six months prior to a “change of control” (as those terms are defined in the employment agreement) or a Qualifying Termination within two years following a change of control, Mr. Toma will be eligible to receive one year of outplacement assistance and an amount equal to three times the sum of (i) his annual base salary plus (ii) his “average bonus amount” (as defined in the employment agreement, and which generally means the average of any annual bonuses paid or payable during the three-year period prior to occurrence of the change of control (but no less than his target annual bonus for any such year)), payable in equal installments over the three-year period following the termination date. Mr. Toma’s Employment Agreement was amended in March of 2023 in order to align the timing of the payment of his change of control related severance with those of the other named executive officers (i.e., to be paid in a lump sum within 60 days following the termination date. In the event of Mr. Toma’s death or “disability” (as defined in the employment agreement), he will be eligible to receive a pro-rated annual bonus, based on the actual achievement of the applicable performance criteria, and pro-rated for the number of days Mr. Toma was employed with the Company during the Company’s applicable fiscal year. In order to receive any of the severance benefits described above, Mr. Toma must execute a valid release of claims in favor of the Company. The employment agreement provides that Mr. Toma will not compete with us or solicit our customers or employees, in any case during his employment with us or for a period of one year thereafter. This period increases to two years in the case of Mr. Toma’s retirement from the Company and, in the case of the non-competition provision, is also extended to coincide with his continued receipt of severance benefits (for a period of up to two years following the termination of his employment with us).
Transition Agreement with Mr. Halkett
In June of 2022, in connection with his resignation from the role of Chief Operating Officer, Mr. Halkett and the Company entered into a Transition Agreement pursuant to which Mr. Halkett would continue his employment with the Company through December 31, 2022, in a non-executive officer role as Special Advisor to the CEO. During this transitionary period, Mr. Halkett continued to receive his annual base salary and remained eligible to earn his annual bonus for 2022. Following December 31, 2022, Mr. Halkett will continue to provide services to the Company as an employee until the end of the 2023 calendar year (the “Second Transition Period”). During the Second Transition Period, Mr. Halkett received his base salary of $430,000 until March 31, 2023 and will be paid a reduced base salary of $300,000 through the end of 2023, but will not otherwise participate in or be eligible to earn any incentive compensation. Mr. Halkett’s termination of employment is considered a “Retirement” under his Employment Agreement, and he will not be entitled to any severance benefits upon his termination of employment; however, if a change of control occurs prior to December 31, 2023 and Mr. Halkett’s employment is subsequently terminated by the Company “without cause” within 24 months following the change of control date, Mr. Halkett will be entitled to receive a severance payment of $1,903,891, less any statutory leave entitlements, as well as outplacement services for 12 months following his termination of employment, subject to his execution of a general release of claims against the Company.
Director Compensation
Prior to 2020, the Board of Directors had approved compensation for independent board members consisting of $133,333 of annual cash compensation and $66,667 of annual stock awards in the form of restricted stock units. Additionally, each independent board member receives $2,000 for each board or committee meeting attended in-person and $1,000 for each board or committee meeting
17
attended telephonically. The Chairman of the Board of Directors receives an additional $50,000 of annual cash consideration and the Chairman of the Audit Committee and Chairman of the Compensation Committee each receive an additional $10,000 of annual cash consideration. Cash consideration is paid quarterly in arrears.
On March 31, 2020, as part of the Company’s efforts to reduce operating and corporate costs in light of the global economic decline and public health crisis resulting from the spread of COVID-19, each of the independent directors agreed to reduce their annual cash compensation by 20% effective April 1, 2020 until June 30, 2020. On July 1, 2020, the independent directors’ annual cash compensation levels were restored to levels in effect prior to April 1, 2020 and then subsequently reduced by 10% on July 1, 2020. On June 1, 2022, the reduced cash compensation levels were restored to levels in effect prior to April 1, 2020.
In 2022, none of the independent board members received a restricted stock unit award. Rather, in February 2022, the Board granted each of the independent board members in lieu of any restricted stock unit award a cash award equal to $66,667 in respect of their service in 2022, which was paid in February 2023.
The board members currently determined to be independent for purposes of receiving compensation during 2022 were Messrs. Bates, Larsen, and Wells. All of the directors are reimbursed for reasonable, necessary and documented travel, subsistence, and other related expenses incurred in connection with the performance of their official board duties.
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
Fees earned or paid in cash ($)(1) |
|
Stock awards ($)(2) |
|
All other compensation ($) |
|
Total |
|
Thomas Bates |
|
255,778 |
|
|
- |
|
|
- |
|
|
255,778 |
|
Nils E. Larsen |
|
219,444 |
|
|
- |
|
|
- |
|
|
219,444 |
|
L. Spencer Wells |
|
221,444 |
|
|
- |
|
|
- |
|
|
221,444 |
|
Paul A. Gordon |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Richard B. Aubrey III (3) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Manuel A. Garcia (3) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
(1)Includes a cash award equal to $66,667 granted to each of the independent board members in February 2022, in respect of their service in 2022, in lieu of any restricted stock unit award, which was paid in February 2022.
(2)During 2022, none of the independent board members received a restricted stock unit award. As of December 31, 2022, Mr. Bates, Mr. Larsen and Mr. Wells held 509, 205 and 205 unvested restricted stock units each, respectively.
(3)Mr. Aubrey resigned from the Board on February 20, 2022 and Mr. Garcia resigned from the Board on October 24, 2022.
Compensation Committee Report
Notwithstanding anything to the contrary set forth in any of our filings under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, that might incorporate future filings, including this report, in whole or in part, the following Report of the Compensation Committee shall not be deemed to be “Soliciting Material,” is not deemed “filed” with the SEC and shall not be incorporated by reference into any filings under the Securities Act or Exchange Act whether made before or after the date hereof and irrespective of any general incorporation language in such filing except to the extent that we specifically request that the information be treated as soliciting material or specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act.
The Compensation Committee of the Board of Directors has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Amendment to the Form 10-K.
|
|
By the Compensation Committee of the Board of Directors, |
|
L. Spencer Wells, Chair |
Nils E. Larsen |
Paul A. Gordon |
Compensation Committee Interlocks and Insider Participation
None of the current members of our Compensation Committee serves, or has at any time served, as an officer or employee of us or any of our subsidiaries. None of our executive officers has served as a director or member of the Compensation Committee, or other committee serving an equivalent function, of any other entity, one of whose executive officers served as one of our directors or a member of our Compensation Committee.
18
CEO Pay Ratio Disclosure
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees to the annual total compensation of our CEO, Mr. Toma.
We determined that, as of December 31, 2022, our employee population consisted of 514 individuals, not including our CEO. As of such date, approximately 99% of our employee population was located outside of the U.S.
To identify the median employee, we calculated the total cash compensation of each employee for the twelve-month period ended December 31, 2022. Total cash compensation for these purposes included base salary, bonuses and comparable cash elements of compensation in non-U.S. jurisdictions and was calculated using internal payroll records. We did not apply any cost of living adjustments as part of the calculation. We annualized the compensation of all permanent employees who were hired in 2022 but did not work for us or our consolidated subsidiaries for the entire fiscal year, but did not annualize the compensation of any part-time employee. We did not include any independent contractors or leased employees in our determination.
Once we identified the median employee, we calculated all of the elements of such employee’s compensation for the 2022 fiscal year in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in an estimated annual total compensation of $84,863. To calculate the annual total compensation of Mr. Toma, we used the amount reported in the “Total” column of the 2022 Summary Compensation Table included in this Form 10-K/A, which was $2,451,478, resulting in a ratio of the annual total compensation of our CEO to the median of the annual total compensation of our employees of 25 to 1. We believe this pay ratio is a reasonable estimate calculated in a manner consistent with Item 402 of Regulation S-K.
Because the SEC rules for identifying the median of the annual total compensation of our employees and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices, the pay ratio reported by other companies may not be comparable to our pay ratio, as other companies have headquarters in different countries, have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their pay ratios.