DEF 14A: Patterson-UTI Energy, Inc. Outlines Agenda for 2024 Annual Stockholders Meeting, Including Director Elections and Incentive Plan Amendment

Patterson-UTI Energy, Inc. has released its proxy statement detailing proposals for the upcoming annual stockholders meeting, including the election of directors, ratification of the accounting firm, and approval of amendments to the long-term incentive plan and corporate charter.

Summary

• Patterson-UTI Energy, Inc. will hold its annual stockholders meeting on June 6, 2024.
• Stockholders will vote on the election of eleven directors, ratification of PricewaterhouseCoopers LLP as the independent accounting firm, and approval of an amendment to the 2021 Long-Term Incentive Plan.
• An amendment to Patterson-UTI's Restated Certificate of Incorporation to limit the liability of certain officers is also up for approval.
• The Board of Directors recommends voting in favor of all proposals.
• The company is taking advantage of SEC rules to furnish proxy materials online, reducing printing and delivery costs.
• The company's overhang was 5.4% as of March 28, 2024, and would increase to 7.6% upon approval of the Plan Amendment.
• The Board of Directors met 11 times during the year ended December 31, 2023.
• The Executive Committee held one meeting during the year ended December 31, 2023.
• The Audit Committee held six meetings during the year ended December 31, 2023.
• The Compensation Committee held six meetings during the year ended December 31, 2023.
• The Nominating and Corporate Governance Committee held four meetings during the year ended December 31, 2023.
• The Sustainability Committee held five meetings during the year ended December 31, 2023.

Sentiment

Score: 7

Explanation: The document is primarily factual and procedural, outlining the agenda and proposals for the annual stockholders meeting. The tone is professional and forward-looking, with emphasis on corporate governance and stockholder value.

Positives

• The company is committed to providing stockholders with necessary information while reducing costs through online proxy materials.
• The proposed amendment to the long-term incentive plan aims to preserve flexibility in granting future awards to employees and directors.
• The company has a clawback policy in place for executive officers.
• The company has share ownership guidelines for Section 16 officers and directors.
• The company has an anti-hedging policy for directors and executive officers.
• The company has an anti-pledging policy for directors and executive officers.

Negatives

• Approval of the Plan Amendment would increase the company's overhang from 5.4% to 7.6%.

Risks

• Failure to approve the amendment to the 2021 Long-Term Incentive Plan may limit the company's ability to attract and retain employees.
• The nature of the role of directors and officers often requires them to make decisions on crucial matters which can create substantial risk of investigations, claims, actions, suits or proceedings seeking to impose liability on the basis of hindsight, especially in the current litigious environment and regardless of merit.

Future Outlook

The company aims to minimize its environmental impact, invest in the safety and well-being of its people, and maintain a focus on ethics and integrity.

Management Comments

• Curtis W. Huff, Chairman of the Board, and William Andrew Hendricks, Jr., President and Chief Executive Officer, cordially invite stockholders to attend the annual meeting.
• Management believes that the Boards leadership structure, which includes the separation of the role of CEO and Chairman, is appropriate because it, among other things, provides for sufficient independence between the Board and management and for an independent director who provides board member leadership.

Industry Context

The document reflects trends in corporate governance, including emphasis on executive compensation alignment with stockholder interests, sustainability, and diversity and inclusion.

Comparison to Industry Standards

• The company benchmarks its executive pay programs against broader oilfield services companies and comparably sized oil and gas exploration and production companies.
• The company's peer group includes Archrock, Inc., Bristow Group Inc., Cactus, Inc., ChampionX Corporation, EQT Corporation, Expro Group Holdings N.V., Helmerich & Payne, Inc., Liberty Energy Inc., Nabors Industries Ltd., NexTier Oilfield Solutions, NOV, Inc., Oceaneering International, Inc., PDC Energy, Inc., Precision Drilling Corporation, ProPetro Holding Corp., Range Resources Corporation, TechnipFMC plc, Transocean Ltd., Valaris Ltd., and Weatherford International plc.
• The company's 2024 compensation peer group includes Antero Resources Corporation, APA Corporation, ChampionX Corporation, Diamondback Energy, Inc., Dover Corporation, Fluor Corporation, Halliburton Company, Helmerich & Payne, Inc., Ingersoll Rand Inc., KBR, Inc., Liberty Energy Inc., Nabors Industries Ltd., NOV, Inc., TechnipFMC plc, and Weatherford International plc.

Corporate Governance

Related Party Transactions

• Mr. Berns, Executive Vice President and Chief Commercial Officer of Patterson-UTI, is an executive of REMY Investors, which is the general partner of REMY Capital. REMY Capital has certain registration rights with respect to Patterson-UTI's common stock.

Stakeholder Impact

• The proposals outlined in the proxy statement have potential impacts on shareholders, employees, and the company's overall governance structure.
• The company strives to be a leader in our industry in the area of environmental, social, governance ('ESG') and other sustainability-related issues, and remains committed to managing these issues for the long-term benefit of our employees, communities and our business.

Next Steps

• Stockholders are urged to vote their shares promptly by using the Internet or telephone, or by completing, signing, dating and returning their proxy card.
• The company intends to register the additional shares authorized for grant under the 2021 Plan, as amended, on a Registration Statement on Form S-8 filed with the Securities and Exchange Commission, if the Plan Amendment is approved.

Key Dates

Keywords

proxy statement, annual meeting, directors, executive compensation, long-term incentive plan, corporate governance, stockholders, Patterson-UTI, amendment, officers