Form 4: Core Laboratories Inc. Executive Awarded Performance Shares

Mark Damian Tattoli, SVP, Gen Counsel & Secretary of Core Laboratories Inc., was granted 32,912 performance shares that will vest based on the company's return on invested capital (ROIC) relative to its peer group over a three-year period.

Summary

• Mark Damian Tattoli, a senior executive at Core Laboratories Inc., received an award of 32,912 performance shares on February 13, 2025.
• The shares will vest on January 1, 2028, following a three-year performance period from January 1, 2025, to December 31, 2027.
• Vesting is contingent on Core Laboratories' ROIC performance compared to the Bloomberg Peer Group (BPG).
• 50% of the award vests if the company is in the top 35th percentile of ROIC among the BPG.
• 100% of the award vests if the company is in the top 55th percentile of ROIC among the BPG.
• 175% of the award vests if the company is at or above the 85th percentile of ROIC among the BPG.
• The number of shares vesting will be interpolated on a straight-line basis between the 35th and 55th percentiles and between the 55th and 85th percentiles.
• If the absolute total shareholder return is negative during the performance period, the portion of the award exceeding 100% (up to 175%) will be reduced by one-half.
• The award survives termination of employment due to death, disability, termination by the Company without cause or retirement by the employee upon having reached 62 years of age.

Sentiment

Score: 7

Explanation: The document is neutral to slightly positive. It describes a standard executive compensation practice that aligns management incentives with company performance. The use of ROIC as a performance metric is generally viewed favorably.

Positives

• The performance-based vesting aligns executive compensation with company performance and shareholder value.
• The use of ROIC as a metric encourages efficient capital allocation and investment decisions.
• The performance shares survive termination of employment due to death, disability, termination by the Company without cause or retirement by the employee upon having reached 62 years of age.

Risks

• The actual number of shares that vest is dependent on Core Laboratories' performance relative to its peer group, which is subject to market conditions and competitive pressures.
• Negative total shareholder return could reduce the potential payout of the award.
• The specific composition of the Bloomberg Peer Group (BPG) is not defined in the document, which could impact the comparability of the ROIC results.

Future Outlook

The number of shares that will ultimately vest depends on Core Laboratories' ROIC performance relative to its peer group over the three-year performance period ending December 31, 2027.

Industry Context

Performance-based compensation is a common practice in the oilfield services industry to align executive incentives with shareholder value creation. ROIC is a widely used metric to assess the efficiency of capital allocation and investment decisions.

Comparison to Industry Standards

• Many companies in the oilfield services sector, such as Schlumberger, Halliburton, and Baker Hughes, utilize performance-based equity awards as part of their executive compensation packages.
• These awards often vest based on metrics such as revenue growth, profitability, and return on capital employed (ROCE), which is similar to ROIC.
• The specific performance targets and peer groups vary depending on the company and its strategic objectives.

Stakeholder Impact

• Shareholders: The performance-based compensation structure aims to align management's interests with shareholder value creation.
• Employees: The award may incentivize the executive to drive company performance, which could benefit employees through increased job security and potential bonuses.

Key Dates