FORM

For the transition period from to

Commission File Number

Registrant’s Telephone Number, Including Area Code: (281)

☐

☒

☐

☒

☒

☐

S-T

☒

☐

non-accelerated

12b-2

☐

12b-2

☐

The aggregate market value of the registrant’s common stock held by nonaffiliates of the registrant on the last business day of the registrant’s most recently completed second fiscal quarter (based on the closing sales price on the New York Stock Exchange on June 28, 2019) was approximately $1.8 billion.

The number of shares of the registrant’s common stock outstanding at March 31, 2020 was 193,081,224.

10-K

For the Year Ended December 31, 2019

Our Board of Directors (our “Board”) oversees, monitors and directs management in the long-term interests of McDermott and our stockholders. Our Articles of Incorporation provide that, at each annual meeting of stockholders, all directors shall be elected annually for a term expiring at the next succeeding annual meeting of stockholders or until their respective successors are duly elected and qualified. All of our directors, except Mr. Alan J. Carr and Ms. Heather L. Summerfield, were elected at our annual meeting of stockholders held on May 2, 2019. Mr. Carr and Ms. Summerfield were appointed as directors by our Board effective November 18, 2019.

The following profiles provide certain information about each of our 13 directors. Ages and other information are as of March 3, 2020.

Directors

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive Officer Profiles

The following profiles provide certain information about each of our current executive officers, all of whom serve at the direction of our Board. Ages and other information are as of March 31, 2020. The profile of our President and Chief Executive Officer, David Dickson, can be found in the Director profiles above.

Corporate Governance Guidelines, Committee Charters and Code of Conduct and Ethics

We are committed to maintaining the highest standards of corporate governance and promoting a culture that encourages trust and high ethical standards. Our Board has built a strong and effective governance framework through the adoption of Corporate Governance Guidelines and written Committee charters designed to promote the long-term interests of stockholders and support Board and management accountability. Our Board has also adopted a Code of Ethics that applies to our Chief Executive Officer, Chief Financial Officers and other senior financial and accounting officers, which is consistent with regulations of the Securities and Exchange Commission. Copies of all of those documents as well as other principal governance documents are maintained within the corporate governance section on our Web site found at www.mcdermott.com under “INVESTORS – Corporate Governance.”

Director Nominations

In 2019, with the assistance of our advisors, the Governance Committee of our Board (the “Governance Committee”) considered a number of prospective director candidates with restructuring experience. After review and consideration of those prospective candidates, Mr. Alan J. Carr and Ms. Heather L. Summerfield were appointed to our Board effective November 18, 2019.

By-Laws,

The Governance Committee considers candidates identified through the processes described above and evaluates candidates, including incumbents, based on the same criteria. The Governance Committee also takes into account the contributions of incumbent directors as Board members and the benefits to us arising from their experience on our Board. Although the Governance Committee will consider candidates identified by stockholders, the Governance Committee has sole discretion whether to recommend those candidates to our Board.

Audit Committee and Audit Committee Financial Experts

Our Board has a separately designated standing Audit Committee (the “Audit Committee”) established in accordance with applicable provisions of the Exchange Act. Current members of the Audit Committee are Ms. Williams (Chair) and Messrs. Alexander, Barril and Schumann. Principal functions of our Audit Committee include:

Our Board determined that all members of the Audit Committee are independent and financially literate under New York Stock Exchange Listed Company Manual Sections 303A.02 and 303A.07, respectively, and that Ms. Williams and Messrs. Alexander and Schumann each qualify as an “audit committee financial expert,” within the definition established by the SEC.

Introduction

The following Compensation Discussion and Analysis, or CD&A, provides information relevant to understanding the 2019 compensation of our executive officers identified in the Summary Compensation Table, whom we refer to as our NEOs, with the exception of Messrs. Stuart A. Spence, our former Executive Vice President and Chief Financial Officer, Daniel McCarthy, our former Executive Vice President, Lummus Technology and Richard Heo, our former Senior Vice President, North, Central and South America, whom we refer to as our Former NEOs. For 2019, our NEOs and their current respective titles were as follows:

Our NEOs, like our employees generally and our stockholders and other stakeholders, have been significantly impacted by the Chapter 11 Cases. The information presented in this CD&A reflects compensation for our NEOs for fiscal year 2019. The impact of the Chapter 11 Cases is not reflected in the tables contained in this CD&A. Under the Plan of Reorganization, each existing equity interest in McDermott, including shares of our common stock and existing equity-based awards, will be cancelled and extinguished, and our stockholders will not receive any recovery upon our emergence from the Chapter 11 proceedings. Accordingly, upon our emergence from the Chapter 11 proceedings, our NEOs will not receive any value for their performance units, restricted stock units or any other equity interest in McDermott, notwithstanding the values reflected in this CD&A.

What We Pay and Why: Elements of Total Direct Compensation

The Compensation Committee of our Board (the “Compensation Committee”) has been committed to targeting reasonable and competitive total direct compensation, or “TDC”, for our NEOs, with a significant portion of that compensation being performance based. Our compensation programs have been designed to align with and drive achievement of our business strategies and provide competitive opportunities. Accordingly, achievement of most of those opportunities has depended on the attainment of performance goals and/or stock price performance. McDermott’s compensation programs have been designed to provide compensation intended to:

The Compensation Committee designed and administered compensation programs aligned with this philosophy in order to effectively execute our business strategy, including, during 2019, operating our business as efficiently and productively as possible and successfully planning for our financial restructuring.

The Compensation Committee seeks to provide reasonable and competitive compensation. As a result, it targets the elements of TDC for our NEOs generally within approximately 15% of the median compensation of our market for comparable positions, which it considers to be “market range” compensation.

The Compensation Committee may set TDC or individual elements of TDC above or below the market range to account for a NEO’s performance, experience, tenure in the role, internal pay equity and other factors or situations that are not typically captured by looking at standard market data and practices and which the Compensation Committee deems relevant to the appropriateness or competitiveness of a NEO’s compensation.

When making decisions regarding individual compensation elements, the Compensation Committee also considers the effect on the NEO’s target TDC and target total cash-based compensation (annual base salary and annual incentives at target level), as applicable. The Compensation Committee’s goal is to establish target compensation for each element that, when combined, creates a target TDC award for each NEO that is reasonable and competitive and supports our compensation philosophy and objectives.

Total direct compensation is comprised of three elements: annual base salary, annual incentive and long-term incentives.

We pay base salaries to provide a fixed level of compensation that helps attract and retain executives. Base salary levels recognize an executive officer’s experience, skill and performance, with the goal of being market competitive based on the officer’s role and responsibilities within the organization. Adjustments may be made based on individual performance, inflation, pay relative to the external market and internal pay equity considerations.

The Compensation Committee administers our annual incentive compensation program under our Executive Incentive Compensation Plan, or EICP. The EICP is a cash incentive plan designed to motivate and reward our NEOs and other key employees for their contributions to strategic business goals and other factors that we believe drive our earnings and promote creation of enterprise value. In 2019, EICP bonus pool funding was entirely based on our financial performance, with each participant’s actual bonus award determined by achievement of the participant’s individual performance goals.

McDermott’s financial performance against the stated goals determined the threshold (0.5x), target (1.0x) and maximum (2.0x) possible funding for each financial metric performance goal, with the weighted sum of each funding multiple determining the pool funding multiple for the year (the “Pool Funding Multiple”). In approving the EICP design for 2019, the Compensation Committee determined that the Pool Funding Multiple would not be more than 2.0x. The Compensation Committee has the discretion to increase or decrease the Pool Funding Multiple at any time in its sole discretion, subject to the maximum Pool Funding Multiple of 2.0x.

As a result of McDermott’s actual financial performance, the threshold performance level was not achieved for either financial performance metric, and accordingly, no participant was eligible to receive an individual award under the EICP for 2019.    

The Compensation Committee maintained the belief that the interests of our stockholders were best served when a significant percentage of executive compensation is comprised of equity that appreciates in value contingent on increases in the value of our common stock and other performance measures that reflect improvements in McDermott’s business fundamentals. Therefore, as with prior years, long-term incentive, or LTI, compensation represented the single largest element of our NEOs’ total direct compensation in 2019.

For 2019, the Compensation Committee allocated LTI compensation to the executive officers, including the NEOs, as follows:

Under the Plan of Reorganization, each existing equity interest in McDermott, including shares of our common stock and existing equity-based awards, will be cancelled and extinguished, and our stockholders will not receive any recovery upon our emergence from the Chapter 11 proceedings. Accordingly, upon our emergence from the Chapter 11 proceedings, our NEOs will not receive any value for their performance units, restricted stock units or any other equity interest in McDermott, notwithstanding the values reflected in this CD&A.

For the 50% portion of the 2019 performance units based on cumulative operating income, up to 150% of a participant’s target award could have been earned, and for the 50% portion of the 2019 performance units based on relative total shareholder return, up to 200% of a participant’s target award could have been earned, to further the alignment of management’s interests with those of our stockholders. If the 2019 performance units had been earned, they would have paid out in shares of McDermott common stock, cash equal to the fair market value of the shares otherwise deliverable, or any combination thereof, at the sole discretion of the Compensation Committee.

The earned award with respect to the cumulative operating income metric over the performance period from January 1, 2019 through December 31, 2021 would have been determined as follows:

The earned award with respect to the relative total stockholder return metric over the performance period from January 1, 2019 through December 31, 2021 would have been determined as follows:

one-third

In 2019, over 92% of our stockholders voted in favor of our executive compensation program. During 2019, in advance of our Annual Meeting of Stockholders, we reached out to stockholders representing approximately 50% of our outstanding shares of common stock to gain insight regarding their perspectives on corporate governance and compensation matters. No meetings were requested by our stockholders to discuss these topics, which we believe reflected support of our compensation and governance framework. Our Board considered the 2019 say on pay vote and the matters discussed during our previous stockholder outreach efforts in considering any changes to our governance and compensation practices.

Defining Market Range Compensation – 2019 Benchmarking and Peer Groups

To identify median compensation for each element of total direct compensation, the Compensation Committee has relied on “benchmarking.” This involves reviewing the compensation of our NEOs relative to the compensation paid to similarly situated executives at companies we consider our peers. As a result, the annual base salary, target annual incentive compensation, target LTI and target total direct compensation (which may not be additive from the three individual elements of target TDC) for each of the NEOs has been benchmarked. However, the specific performance metrics and performance levels used within elements of annual and long-term compensation have been designed for the principal purpose of supporting our strategic and financial goals and driving the creation of enterprise value, and, as a result, generally have not been benchmarked.

It has been the Compensation Committee’s practice to periodically review and consider the individual companies used for benchmarking purposes. As part of this practice, and in consideration of the significantly increased size and scope of McDermott following McDermott’s business combination (the “Combination”) with Chicago Bridge & Iron Company N.V (“CB&I”), in 2018 the Compensation Committee selected a new set of peers for executive compensation benchmarking purposes. In selecting the companies included in the revised peer group, the Compensation Committee identified a number of desired traits, including companies in related industries, with executive roles of comparable size and scope, roles requiring comparable expertise and indicative of who McDermott may compete with for talent. The Compensation Committee believes that identification of peers using a broad industry sector code is inadequate and does not establish similarity of operations and business models, nor identify historical competitors for managerial talent – factors the Compensation Committee considers in the selection of companies for benchmarking purposes. Therefore, the Compensation Committee has considered revenues as the primary indicator of company size and scope, but also considered other financial and capital value metrics. In this CD&A, we refer to this peer group, which was utilized to develop benchmarks for the amount of compensation opportunities awards to our executive officers for 2019, as the “Compensation Peer Group.” For Messrs. Dickson, Krummel, Freeman and Mukherjee, market data from the Compensation Peer Group was reflective of compensation as reported in the 2018 proxy statements (and subsequent public disclosures, where applicable) of the companies in the Compensation Peer Group. Market data from the Compensation Peer Group was not utilized in making compensation decisions for Mr. de Bruijn, due to the limited proxy statement disclosures and corresponding compensation information available relating to his position. The component companies of the Compensation Peer Group are as follows:

The Compensation Committee also utilized market data based on a set of companies in similar industries which participated in the Willis Towers Watson 2018 general industry survey, which we refer to as the “Survey Peer Group.” Aside from screening companies on the basis of their industry classifications and revenues, no further refinements or judgements were applied in the identification of companies within the sample. The Survey Peer Group is intended to provide a reference point for pay levels within similar industries, and was used as a secondary reference for Messrs. Dickson, Krummel, Freeman and Mukherjee, and a primary reference for Mr. de Bruijn.

Similar to the Compensation Committee’s review of the Compensation Peer Group, in consideration of the significantly increased size and scope of McDermott following the Combination, the Compensation Committee selected a new set of peers for use in connection with our Performance Unit awards. This set of peers, which was originally selected in 2018 and remained the same in 2019, is referred to as the Performance Peer Group. The Performance Peer Group is referenced to develop relative industry benchmarks of company performance, with consideration of market conditions. In selecting the Performance Peer Group companies, the Compensation Committee identified a number of desired traits, including companies in similar or related industries, that are similarly influenced by the same macro-economic factors and are indicative of who McDermott may compete with for capital. The component companies of the Performance Peer Group are as follows:

pre-petition

2019 NEO Target Total Direct Compensation

The target total direct compensation of each NEO is set forth below:

As a result of McDermott’s actual financial performance, the threshold performance level for each financial performance metric under the EICP was not achieved and, accordingly, no participant was eligible to receive an individual award under the EICP for 2019.    

total target value of his LTI award in connection with his promotion to his current position, effective April 1, 2019. The Compensation Committee deferred consideration of any increases to Mr. Krummel’s annual target LTI award as a result of his promotion to his current position until a later date, due to the timing of his November 5, 2019 promotion and unique circumstances faced by McDermott at that time.

lump-sum

With respect to Mr. Spence’s outstanding equity awards under the 2016 McDermott International, Inc. Long-Term Incentive Plan (the “2016 LTIP”), the separation agreement provided that each currently outstanding award of McDermott restricted stock units (“RSUs”) granted to Mr. Spence under the 2016 LTIP which would, absent his termination of employment, remain outstanding and, to the extent applicable, continue to vest during the period from November 4, 2019 through March 1, 2022 (the “Extended Vesting Period”) would, subject to certain conditions, become vested and be settled on the first to occur of (1) the date such award would otherwise be settled in accordance with the terms of the 2016 LTIP and the applicable grant agreement, as if his employment had continued during the Extended Vesting Period, and (2) March 15, 2020. All other outstanding unvested equity or performance-based awards previously granted to Mr. Spence were forfeited at the time of his resignation. As a result of the Chapter 11 Cases, none of Mr. Spence’s outstanding RSUs vested due to the application of the automatic stay and pursuant to the Plan of Reorganization, they will be cancelled upon McDermott’s emergence from the Chapter 11 proceedings.

Additionally, pursuant to the separation agreement, Mr. Spence’s unvested benefits under the McDermott International, Inc. Director and Executive Deferred Compensation Plan (the Deferred Compensation Plan” or the “DCP”) became fully vested as of the date of his resignation, with such amounts paid in accordance with the terms of that plan.

change-of-control

“Change-of-Control

Change-of-Control

change-of-control

Change-of-Control

Change-of-Control

2019 Other Compensation Elements

On October 17, 2019, in connection with our new superpriority credit agreement, the Compensation Committee approved retention bonus award agreements (each, a “Retention Bonus Award Agreement” or “RBA”) for each of Messrs. Dickson, Mukherjee and Spence. The Retention Bonus Award Agreements provided for the payment of cash retention bonuses (each, a “Retention Bonus”) of $3,375,000, $1,400,000 and $1,300,000 to each of Messrs. Dickson, Mukherjee and Spence, respectively, payable as follows:

after-tax

after-tax

after-tax

after-tax

after-tax

In determining the size of the Retention Bonus Awards, the Compensation Committee considered data from the Retention Bonus Award Peer Group in conjunction with the NEO’s total direct compensation benchmarks and found the size of the awards to be reasonable.

For Mr. de Bruijn, on October 17, 2019, the Compensation Committee approved a third form of Retention Bonus Award Agreement, which provided for the payment of a cash retention bonus to him in the amount of $2,100,000, with clawback

provisions, payable 50% in lump sum upon execution of the agreement and 50% payable at the earliest date that any of the following events occurs: (1) signing of a final Technology Business sale agreement by April 30, 2020, or (2) completion of any such other transaction in connection with the Technology Business which would result in a Change in Control (as defined in Mr. de Bruijn’s Retention Bonus Award Agreement).

In 2019, our Compensation Committee continued its approach with respect to perquisites started in 2016, and provided for financial planning services and an executive physical to be reimbursed to the participant or paid directly to the participant’s provider of choice, in a combined amount not to exceed $20,000, rather than providing an allowance to be used for a company-required physical and any other purpose determined by the participant, as in prior years. No other perquisites were available to the participants in McDermott’s perquisite program, with the exception of any company-required spousal travel for (1) the Chief Executive Officer and (2) the remaining participants, including our NEOs, as approved by the Chief Executive Officer. There were no reimbursements to any perquisite program participants for company-required spousal travel in 2019.

gross-up

gross-up

gross-up

5-10%

stay-at-home

non-U.S.

As a local employee of CB&I Nederland B.V., a subsidiary of McDermott in The Netherlands, during the period from January 1, 2019 through August 31, 2019, Mr. Mukherjee was a participant in the CB&I Nederland B.V. Retirement Plan (the “Dutch Retirement Plan”). The Dutch Retirement Plan is part of the standard terms and conditions for employees of CB&I Nederland B.V., and is administered in compliance with governing pension legislation in The Netherlands. The

Dutch Retirement Plan is a collective defined contribution plan, but is reported under generally accepted accounting principles in the United States as an average pay defined benefit plan. Other than through the Dutch Retirement Plan, we do not provide defined benefit pension plans to any of our NEOs. See the “Pension Benefits” table under “Executive Compensation Tables” below for more information.

The McDermott International, Inc. Director and Executive Deferred Compensation Plan, or the DCP, is a defined contribution supplemental executive retirement plan established by our Board and the Compensation Committee to help maintain the competitiveness of our post-employment compensation as compared to our market. The DCP is an unfunded, nonqualified plan that provides each participant in the plan with benefits based on the participant’s notional account balance at the time of retirement or termination. Under the DCP, on an annual basis, the Compensation Committee has the discretion to credit a specified participant’s notional account with an amount equal to a percentage of the participant’s prior-year base salary and annual bonus paid in the prior year. We refer to such credit as a “Company Contribution.” In 2019, Messrs. Dickson, Freeman, Mukherjee, de Bruijn and Spence were participants in the DCP and their respective accounts in the DCP received a Company Contribution in an amount equal to 5% of the sum of their respective base salaries paid in 2018 (in all cases) and 2017 bonus paid in 2018 (in the case of Messrs. Dickson, Freeman and Spence). Additionally, each of Messrs. Mukherjee and de Bruijn received a discretionary Company Contribution under the DCP equal in value to 5% of his then current annualized base salary less the amount of his 2019 Company Contribution. Mr. Krummel was not a participant in the DCP in 2019.

The Compensation Committee has designated deemed mutual fund investments to serve as indices for the purpose of determining notional investment gains and losses to each participant’s account for any Company Contribution or participant-elected deferrals. Each participant allocates any Company Contributions and deferrals among the various deemed investments. DCP benefits are based on the participant’s vested notional account balance at the time of retirement or termination. Please see the “Nonqualified Deferred Compensation” table and accompanying narrative below for more information about the DCP and Company Contributions to DCP accounts.

We do not currently have any employment agreements with any of our NEOs relating to ongoing employment. From July 3, 2018 to August 31, 2019, Mr. Mukherjee had an employment agreement with CB&I Nederland B.V., which related to his status as an employee of that entity, and which set forth the standard employment terms and conditions for employees in The Netherlands. The terms of that employment agreement were generally consistent with those of employment agreements entered into with McDermott’s other employees (other than temporary employees) working in The Netherlands, with the exception of certain provisions relating to the Dutch net pension scheme since they were not applicable to Mr. Mukherjee due to his receipt of a monthly contribution of $2,000 into the Dutch Retirement Plan.

Agreements

change-in-control

change-in-control

change-in-control

change-in-control

pro-rated

In addition, upon an involuntary termination or constructive termination within one year following a change in control, each such officer would become fully vested in any outstanding and unvested equity-based awards and his or her respective account balance in the DCP.

change-in-control

gross-ups;

change-in-control

change-in-control

change-in-control

change-in-control

change-in-control

change-in-control

non-competition

change-in-control

change-in-control

change-in-control

change-in-control

Sizing Long-Term Incentive Compensation and Timing of Equity Grants

The Compensation Committee generally has determined the size of equity-based grants as a dollar value, rather than granting a targeted number of shares or units, with each target value generally set within market range. To determine the number of restricted stock units and performance shares or units granted, the target value of long-term incentive compensation is divided by the fair market value of the applicable component of equity on the date of grant.

10-K

10-Q

Stock Ownership Guidelines

McDermott has adopted stock ownership guidelines requiring generally that our nonemployee directors and employees who are members of McDermott’s executive officer group forming an executive committee (the “EXCOM”) maintain a minimum ownership interest in McDermott. The EXCOM includes all of the NEOs. The ownership requirements are as follows:

Directors and officers have five years from their initial election as a director/officer or a change in position which increases the expected ownership level, whichever is later, to comply with the guidelines. Shares of McDermott common stock, restricted stock units (whether or not McDermott can settle them in cash and whether or not vested), performance shares and units (whether or not McDermott can settle them in cash and whether or not vested, but to the extent not vested, at target performance level), shares of McDermott common stock held in an employee’s Savings Plan account and shares of McDermott common stock held in any trust in which an employee has a pecuniary interest (to the extent the employee has investment control over such shares) are all counted towards compliance with the stock ownership guidelines. Further, each director and officer subject to the stock ownership guidelines has the ability to certify his or her ownership at any time after reaching compliance with the required ownership level, following which such director or officer is not required to accumulate any additional McDermott securities, so long as he or she retains the number of securities held on the certification date, regardless of any subsequent changes in the market price of shares of McDermott common stock. As a result of the Chapter 11 Cases and related circumstances, in early 2020, the Governance Committee waived compliance with the stock ownership guidelines.

Derivatives Trading and Hedging

McDermott’s Insider Trading Policy prohibits all directors, officers and employees, including our NEOs, from engaging in “short sales” or trading in puts, calls or other options on McDermott’s common stock. Additionally, directors, officers and employees are prohibited from, either directly or indirectly, through a designee or otherwise, purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) or otherwise engaging in any transactions that are designed to or have the effect of hedging or offsetting any decrease in the market value of any McDermott shares, and are further prohibited from holding McDermott shares in a margin account or pledging McDermott shares as collateral for a loan.

Clawback Policy

12-month

Forfeiture Provisions

Additionally, consistent with our recent practice, our grant agreements for awards made in 2019 contain a forfeiture provision. In 2019, this provision provided that, if any grantee who is employed by McDermott or performing services on behalf of McDermott under any consulting agreement is convicted of a felony or a misdemeanor involving fraud, dishonesty or moral turpitude, or engaging in conduct that adversely affects or, in the sole judgment of the Compensation Committee, may reasonably be expected to adversely affect, the business reputation or economic interests of McDermott, then all rights and benefits awarded under the respective agreements immediately would be forfeited, terminated and withdrawn.

How We Make Compensation Decisions

The Compensation Committee has primary responsibility for determining and approving, on an annual basis, the compensation of our Chief Executive Officer, or CEO, and other executive officers. The Compensation Committee evaluates, in coordination with the Governance Committee, the CEO’s performance in light of goals and objectives relevant to CEO compensation and sets the CEO’s compensation based on that evaluation. The Compensation Committee receives information and advice from its compensation consultant as well as from our human resources department and management to assist in compensation determinations.

After completion of a competitive selection process, in August 2017 our Compensation Committee engaged Meridian to serve as its consultant on executive compensation matters. Since then, our Compensation Committee has extended the engagement of Meridian annually. Meridian provided advice and analysis to the Compensation Committee on the

design, structure and level of executive and director compensation, and, when requested by the Compensation Committee, attended meetings of the Compensation Committee and participated in executive sessions without members of management present. Meridian reported directly to the Compensation Committee. When requested by the Governance Committee, Meridian will attend meetings of the Governance Committee with respect to nonemployee director compensation. During 2019, Meridian did not perform any services for McDermott other than as described above.

in-court

The Compensation Committee generally reviews its compensation consultant on an annual basis.

While the Compensation Committee has the responsibility to approve and monitor all compensation for our executive officers, management plays an important role in determining executive compensation. Management, at the request of the Compensation Committee, recommends financial goals that drive the business and works with Meridian to analyze competitive market data and to recommend compensation levels for our executive officers other than our CEO. Our CEO likewise assists the Compensation Committee by providing his evaluation of the performance of our other executive officers and recommending compensation for those officers, including adjustments to their annual incentive compensation, based on individual performance.

We have reviewed and discussed the Compensation Discussion and Analysis with McDermott’s management and, based on our review and discussions, we recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this report.

THE COMPENSATION COMMITTEE

W. Craig Kissel,

Our NEOs, like our employees generally and our stockholders and other stakeholders, have been significantly impacted by the Chapter 11 Cases. The information presented in these Executive Compensation Tables reflects compensation for our NEOs for fiscal year 2019. The impact of the Chapter 11 Cases is not reflected in these Executive Compensation Tables. Under the Plan of Reorganization, each existing equity interest in McDermott, including shares of our common stock and existing equity-based awards, will be cancelled and extinguished, and our stockholders will not receive any recovery upon our emergence from the Chapter 11 proceedings. Accordingly, upon our emergence from the Chapter 11 proceedings, our NEOs will not receive any value for their performance units, restricted stock units or any other equity interest in McDermott notwithstanding the values reflected in the Executive Compensation Tables set forth below.

The following table summarizes the prior three years’ compensation of our Chief Executive Officer, our Chief Financial Officer, our three highest paid executive officers who did not serve as our Chief Executive Officer or Chief Financial Officer during 2019 and were employed by McDermott as of December 31, 2019, and the following former executive officers: our former Executive Vice President, Chief Financial Officer, Mr. Stuart Spence (who served in that capacity until November 4, 2019); our former Executive Vice President, Lummus Technology, Mr. Daniel McCarthy (who served in that capacity until March 29, 2019); and our former Senior Vice President, North, Central and South America, Mr. Richard Heo (who served in that capacity until March 1, 2019). No compensation information is provided for Messrs. Freeman or Mukherjee for 2017, as they were not included as “named executive officers” in our proxy statement for our annual meeting of stockholders in 2018. No compensation information is provided for Messrs. Krummel, de Bruijn, Heo and McCarthy for 2017 or 2018, as they were not included as “named executive officers” in our proxy statement for our annual meeting of stockholders in 2018 or 2019. Unless otherwise noted, all amounts reported in the following tables for Mr. Mukherjee have been converted from local currency (Euros) to U.S. dollars on a monthly basis, using the average exchange rate for each month in which such amounts were paid, which ranged from 1.114252 to 1.142057.