Form 4: CFO Johnson's Equity Awards & Vesting at Drilling Tools

Drilling Tools International CFO David Richard Johnson reported new equity grants and vesting of existing awards, including RSUs and PSUs, under the company's 2026 long-term incentive program.

Summary

• David Richard Johnson, Chief Financial Officer of Drilling Tools International Corp (DTI), reported transactions related to his beneficial ownership.
• On February 28, 2026, 30,964 Restricted Stock Units (RSUs) vested and were converted into 30,964 shares of Common Stock.
• Following this vesting, Johnson beneficially owns 76,611 shares of Common Stock directly.
• On February 27, 2026, Johnson was granted 37,336 new RSUs under the Company's 2023 Omnibus Incentive Plan, as part of the 2026 long-term incentive program (2026 LTIP).
• These new RSUs will vest in substantially equal installments on each of the first three anniversaries of the grant date, subject to continued service.
• Also on February 27, 2026, Johnson was granted 112,009 Performance Stock Units (PSUs) under the 2023 Omnibus Incentive Plan and 2026 LTIP.
• The PSUs are subject to performance conditions based on EBITDA, weighted at 100%, with an annual reset over a three-year performance vesting period.
• PSU payout opportunities range from 50% at threshold achievement to 200% at maximum achievement.
• Johnson also holds 380,000 stock options, with two-thirds having vested on the first two anniversaries of the grant date, and the remaining one-third scheduled to vest on February 14, 2024.
• Additionally, Johnson holds 132,375 stock options, all of which are fully vested.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as moderately positive. While a Form 4 primarily reports routine insider transactions, the new equity grants, particularly the performance-based PSUs, signal management's continued alignment with the company's long-term financial goals and shareholder value.

Positives

• The grant of new Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) aligns the Chief Financial Officer's incentives with long-term shareholder value creation.
• The Performance Stock Units (PSUs) are tied to EBITDA performance, indicating a focus on key operational profitability metrics.
• The potential for a 200% payout on PSUs at maximum achievement provides a strong incentive for superior performance.

Future Outlook

The Chief Financial Officer's compensation structure includes future vesting events for Restricted Stock Units (RSUs) over the next three years and Performance Stock Units (PSUs) tied to EBITDA targets over a three-year performance period, indicating a forward-looking incentive framework.

Management Comments

• The reporting person was granted 37,336 RSUs and 112,009 PSUs under the Company's 2023 Omnibus Incentive Plan, pursuant to the 2026 long-term incentive program approved by the Board of Directors.

Industry Context

StockSavvy.ai notes that the granting of Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) to executive officers, with vesting tied to continued service and financial performance metrics like EBITDA, is a standard practice in the oilfield services and equipment industry. This approach aims to align executive compensation with shareholder interests and long-term company performance, a common strategy across publicly traded companies.

Comparison to Industry Standards

• The use of RSUs and PSUs with multi-year vesting schedules and performance conditions (e.g., EBITDA) is consistent with executive compensation practices observed in comparable companies within the energy and industrial services sectors, such as Schlumberger, Halliburton, and Baker Hughes.
• The structure of the 2026 LTIP, including the 50% threshold and 200% maximum payout opportunities for PSUs, falls within the typical range for performance-based equity awards designed to incentivize strong financial results.

Corporate Governance

Stakeholder Impact

• Shareholders: The equity grants, especially performance-based PSUs, aim to align the Chief Financial Officer's interests with shareholder returns, potentially leading to improved company performance.
• Employees: The incentive plan structure may set a precedent for performance-based compensation across other key personnel, fostering a performance-driven culture.

Next Steps

• The newly granted Restricted Stock Units (RSUs) will vest in substantially equal installments on each of the first three anniversaries of the February 27, 2026 grant date.
• The Performance Stock Units (PSUs) will be subject to annual reset and evaluation against EBITDA performance conditions over a three-year vesting period, starting from the February 27, 2026 grant date.

Key Dates

Keywords

Drilling Tools International, DTI, SEC Form 4, Insider Transaction, Executive Compensation, Restricted Stock Units, Performance Stock Units, Stock Options, EBITDA, Long-Term Incentive Plan, Corporate Governance