Form 4: International Seaways CEO Lois Zabrocky Receives Stock Grants

Lois Zabrocky, CEO of International Seaways, was granted restricted stock units and performance restricted stock units on March 14, 2024, under the company's 2020 Management Incentive Plan.

Summary

• On March 14, 2024, Lois Zabrocky, the President and CEO of International Seaways, Inc. (INSW), received grants of restricted stock units (RSUs) and performance restricted stock units (PRSUs) under the company's 2020 Management Incentive Plan.
• The grant included 19,039 restricted stock units (RSUs) that vest in equal installments over three years from the grant date.
• Each RSU represents the right to acquire one share of INSW Common Stock, with settlement potentially in shares or cash, net of withholdings, at the discretion of the Human Resources and Compensation Committee.
• Additionally, 19,040 performance restricted stock units (PRSUs) were granted, with achievement measured over a three-year period from January 2, 2024, to December 31, 2026.
• The PRSU performance is based on an operating performance metric (return on invested capital, or ROIC) and a market performance metric (total shareholder return, or TSR, relative to a peer group), each accounting for half of the PRSUs.
• The number of shares vesting from the PRSUs can range from 50% to 150% of the target amount, depending on performance, and will be determined by the Compensation Committee after the performance period.

Sentiment

Score: 7

Explanation: The document reflects a standard executive compensation practice, indicating confidence in the company's leadership and future performance. The use of performance-based metrics suggests a focus on value creation, which is generally viewed positively.

Positives

• The grants of RSUs and PRSUs align the CEO's interests with those of the shareholders, incentivizing performance and long-term value creation.
• The vesting schedule of the RSUs encourages continued service and commitment from the CEO.
• The performance-based nature of the PRSUs ensures that a portion of the CEO's compensation is directly linked to the company's financial and market performance.

Risks

• The actual number of shares vesting from the PRSUs is subject to the company's performance, which may be affected by various market and economic factors.
• The Compensation Committee has discretion in determining the form of settlement for the RSUs (cash or shares), which could impact shareholder dilution.

Future Outlook

The vesting of the RSUs and the potential vesting of the PRSUs are contingent upon continued service and the achievement of specific performance metrics over the next three years.

Industry Context

Equity compensation is a common practice in the maritime industry to attract and retain top executive talent and align their interests with those of shareholders. The use of performance-based equity awards, such as PRSUs, is increasingly prevalent to incentivize specific financial and operational goals.

Comparison to Industry Standards

• Companies like Teekay Corporation and DHT Holdings also utilize similar equity compensation plans for their executives, often incorporating a mix of time-based and performance-based vesting schedules.
• The specific metrics used for performance-based awards, such as ROIC and TSR, are common benchmarks for evaluating financial and market performance in the shipping industry.
• The vesting periods and performance targets are generally aligned with industry norms, aiming to incentivize long-term value creation and operational efficiency.

Stakeholder Impact

• Shareholders: The equity grants align management's interests with shareholder value.
• Employees: The grants may have a positive impact on employee morale by demonstrating confidence in the company's leadership.
• Management: The grants provide incentives for achieving performance targets and increasing shareholder value.

Next Steps

• The Compensation Committee will monitor the company's performance against the ROIC and TSR targets over the three-year performance period.
• The number of shares vesting from the PRSUs will be determined and reported after the end of the measurement period on December 31, 2026.
• The RSUs will vest in three annual installments from the grant date.

Key Dates