Form 4: International Seaways Executive Granted Restricted Stock Units

James D. Small III, CAO, SVP, Sec. & General Counsel of International Seaways, Inc., 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, James D. Small III, an officer of International Seaways, Inc. (INSW), received grants of restricted stock units (RSUs) and performance-based restricted stock units (PRSUs) under the company's 2020 Management Incentive Plan.
• The grant included 6,603 RSUs, which vest in equal installments on the first, second, and third anniversaries of 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 applicable taxes.
• Additionally, 6,604 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).
• 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 measurement period.

Sentiment

Score: 7

Explanation: The sentiment is neutral to slightly positive. The granting of RSUs and PRSUs is a standard practice, and the performance-based component aligns management's interests with shareholders. However, the actual value of the awards depends on future performance.

Positives

• The grants of RSUs and PRSUs align the executive's interests with those of the shareholders, incentivizing performance and long-term value creation.
• The vesting schedule of the RSUs encourages continued service with the company.
• The performance-based vesting of the PRSUs ties executive compensation to specific, measurable goals related to profitability and shareholder returns.

Risks

• The actual number of shares vesting from the PRSUs is uncertain and depends on the company's performance relative to its ROIC and TSR targets.
• The Compensation Committee has discretion in determining the form of settlement for vested RSUs (cash or shares), which could impact shareholder dilution.

Future Outlook

The vesting of the RSUs and PRSUs is contingent upon continued service and the achievement of specific performance targets over the next three years.

Industry Context

Executive compensation packages often include a mix of salary, bonus, and equity-based awards like RSUs and PRSUs to align management's interests with those of shareholders. The specific metrics used for performance-based awards vary by company and industry.

Comparison to Industry Standards

• Peer companies in the shipping industry, such as Teekay Corporation and DHT Holdings, also utilize equity-based compensation plans with performance metrics tied to financial performance and shareholder returns.
• The vesting schedules and performance targets for these awards are typically benchmarked against industry averages to ensure competitiveness and alignment with shareholder value creation.

Stakeholder Impact

• Shareholders: The equity grants aim to align management's interests with shareholder value creation.
• Employees: The grants are part of the overall compensation package for key executives.
• Management: The grants provide incentives for achieving performance targets and increasing shareholder value.

Next Steps

• The Compensation Committee will assess the company's performance against the ROIC and TSR targets at the end of the three-year performance period (December 31, 2026) to determine the vesting of the PRSUs.
• The vesting of the RSUs will occur annually over the next three years.

Key Dates