ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
REPUBLIC OF |
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(1) |
OTC Pink Marketplace (1) |
(1) | On February 6, 2020, the New York Stock Exchange filed a Form 25 with the Securities and Exchange Commission to delist the common stock, $1.00 par value (the “Common Stock”), of McDermott International, Inc. (the “Registrant”) from the New York Stock Exchange. The delisting was effective 10 days after the Form 25 was filed. The deregistration of the Common Stock under Section 12(b) of the Act will become effective 90 days after the filing date of the Form 25, at which point the Common Stock will be deemed registered under Section 12(g) of the Act. The Registrant’s Common Stock began trading on the OTC Pink Marketplace on January 22, 2020 under the symbol “MDRIQ.” |
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Emerging growth company |
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Item 10 Directors, Executive Officers and Corporate Governance | |||
14 |
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44 |
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46 |
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47 |
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48 |
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48 |
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57 |
Age |
Director Since |
Committee Assignments |
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59 |
2018 |
• Audit Committee• Finance Committee |
• | Jabil, Inc., a product solutions company providing design, manufacturing, supply chain and product management services across various industries |
• | Executive Vice President (2018 – 2020) |
• | Chief Financial Officer (2004 – 2018) |
• | Treasurer (1996 – 2004) |
• | Assistant Treasurer (1996) |
• | Controller, Scotland operations (1993 – 1996) |
• | Director, Chicago Bridge & Iron Company N.V. (May 2017 – May 2018) |
Our Board believes Mr. Alexander is qualified to serve as a director due to his extensive executive leadership experience and financial knowledge, having worked as a financial officer within various types of companies over the course of his career. |
Age |
Director Since |
Committee Assignments |
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55 |
2017 |
• Audit Committee• Risk Committee (Chair) |
• | SMB Offshore N.V., a provider of floating production solutions to the offshore energy industry |
• | Chief Operating Officer (March 2015 – Present) |
• | Member of Management Board (April 2015 – Present) |
• | Technip, S.A., a provider of project management, engineering and construction services for the energy industry |
• | President and Chief Operating Officer (January 2014 – January 2015) |
• | Executive Vice President and Chief Operating Officer, Onshore and Offshore (September 2011 – December 2013) |
• | Senior Vice President, Offshore, Technip France (June 2010 – September 2011) |
• | Senior Vice President, Offshore & Onshore Product Lines and Technologies, Technip France (November 2009 – May 2010) |
• | Managing Director, Entrepose Contracting, EPC contractor for the energy industry (2007 – 2009) |
Our Board believes Mr. Barril is qualified to serve as a director due to his executive leadership and international operations experience within the oilfield engineering and construction industry. |
JOHN F. BOOKOUT, III Partner, Apollo Global Management, LLC |
Age |
Director Since |
Committee Assignments |
||||
66 |
2006 |
• Governance Committee• Risk Committee• Finance Committee |
• | Apollo Global Management, LLC, a global investment management firm |
• | Partner (June 2016 – Present) |
• | Senior Advisor (October 2015 – June 2016) |
• | Kohlberg Kravis Roberts & Co., a private equity firm |
• | Managing Director of Energy and Infrastructure (March 2008 – June 2015) |
• | McKinsey & Company, a global management consulting firm (1978 – 2008) |
• | Managing Partner and Head of North American and European Energy Practices, responsible for McKinsey’s 17 global industry practices |
• | Held various other senior leadership positions |
• | Director, Tesoro Corporation (2006 – 2010) |
Our Board believes Mr. Bookout is qualified to serve as a director due to his broad executive leadership experience within the oil and gas exploration and development industry and the petroleum refining and marketing industry and his experience in private equity and finance. |
Age |
Director Since |
Committee Assignments |
||||
50 |
2019 |
• Finance Committee |
• | Chief Executive Officer and co-founder, Drivetrain LLC, a multi-disciplinary fiduciary services company serving the distressed investing industry with an investor’s perspective (2013 – Present) |
• | Managing Director, Strategic Value Partners, LLC (2003 – 2013) |
• | Corporate restructuring attorney for various law firms in New York and New Jersey (1995 – 2003) |
• | Director, Sears Holdings Corporation, a broadline retailer with full-line and specialty retail stores in the United States and Canada, which filed a voluntary petition under Chapter 11 of the Bankruptcy Code in October 2018 and emerged from bankruptcy in February 2019 (since 2018) |
• | Director, Verso Corporation, a North American producer of specialty and graphic papers, packaging and pulp, which filed a voluntary petition under Chapter 11 of the Bankruptcy Code in January 2016 and emerged from bankruptcy in July 2016 (2016 – January 2019)—Co-Chairman of the Board, co-chairperson of the Corporate Governance and Nominating Committee and member of the Audit and Compensation Committees |
• | Director, TEAC Corporation (2018 – 2019), which filed a voluntary petition under Chapter 11 in May 2018 |
• | Director, Atlas Iron Limited (2016 – 2018) |
• | Director, Tanker Investments, Ltd (2014 – 2017) |
• | Director, Brookfield DTLA Fund Office Trust Investor, Inc. (2014 – 2017) |
• | Director, Tidewater, Inc. (2017 – 2019), which filed a voluntary petition under Chapter 11 in May 2017 |
• | Director, Midstates Petroleum Company, Inc. (2015 – 2019), which filed a voluntary petition under Chapter 11 in May 2016 |
Our Board believes Mr. Carr is qualified to serve as a director due to his extensive experience with respect to financial and strategic matters gained through his representation of companies and investors in complex financial situations and his significant knowledge of corporate governance matters acquired through his service as a director of several public and private companies in diverse industries. |
Age |
Director Since |
Committee Assignments |
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52 |
2013 |
• None |
• | McDermott International, Inc. |
• | President and Chief Executive Officer (since December 2013) |
• | Executive Vice President and Chief Operating Officer (October 2013 – December 2013) |
• | Technip, S.A., a provider of project management, engineering and construction services for the energy industry |
• | President of Technip U.S.A. Inc., with oversight responsibilities for all of Technip’s North American operations and for certain operations in Latin America (September 2008 – October 2013) |
Our Board believes Mr. Dickson is qualified to serve as a director due to his position as our President and Chief Executive Officer, his extensive executive leadership experience in and significant knowledge of the offshore oilfield engineering and construction business, and his broad understanding of the expectations of our core customers. |
Age |
Director Since |
Committee Assignments |
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72 |
2018 |
• Governance Committee (Chair)• Compensation Committee |
• | BP p.l.c., an oil and natural gas exploration, production, refining and marketing company |
• | Chief Executive Officer, Gas, Power & Renewables (1998 – retirement in 2001) |
• | Executive Vice President, Exploration & Production Sector, Amoco Corp. (acquired by BP p.l.c. in 1998) (1996 – 1998) |
• | Various other executive roles, Amoco Corp. (1988 – 1996) |
• | Director, Callon Petroleum Corporation, an independent oil and natural gas company focused on the acquisition, exploration and development of assets in the Permian Basin (since 2004)— Audit, Compensation and Strategic Planning & Reserves Committees |
• | Director, Chicago Bridge & Iron Company N.V. (2003 – May 2018) |
• | Director, QEP Resources, Inc. (June 2010 – May 2015) |
Our Board believes Mr. Flury is qualified to serve as a director due to his extensive experience in serving in executive and director capacities at several public companies, knowledge of the energy industry, knowledge of international business and financial adeptness. |
W. CRAIG KISSEL Former President of Commercial Systems, Trane, Inc. |
Age |
Director Since |
Committee Assignments |
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69 |
2018 |
• Compensation Committee (Chair) |
• | Trane, Inc. (a subsidiary of Ingersoll-Rand plc and successor to American Standard Companies), global manufacturer of heating, ventilating and air conditioning systems and building management systems and controls |
• | President, Commercial Systems (2003 – retirement in 2008) |
• | President, American Standard’s Vehicle Control Systems, Belgium (1998 – 2003) |
• | Various other executive roles since 1980, including President of WABCO Vehicle Control Systems from (1998 – 2003), President, North American Unitary Products Group (1994 – 1997), Vice President, Marketing, North American Unitary Products Group (1992 – 1994) |
• | Director, Watts Water Technologies, Inc. (since 2011)— Chairman of the Board, Nominating & Corporate Governance Committee |
• | Director, Chicago Bridge & Iron Company N.V. (2009 – May 2018) |
Our Board believes Mr. Kissel is qualified to serve as a director due to the breadth of his experience as a division president of a public company and as a public company director, his knowledge of international business and technological expertise. |
GARY P. LUQUETTE Non-Executive Chairman of the Board Former President and Chief Executive Officer, Frank’s International N.V. |
Age |
Director Since |
Committee Assignments |
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64 |
2013 |
• Compensation Committee |
• | Frank’s International N.V., a global provider of engineered tubular services to the oil and gas industry |
• | President and Chief Executive Officer (January 2015 – November 2016), and Special Advisor (November 2016 – retirement in December 2016) |
• | Member of Supervisory Board (November 2013 – May 2017) |
• | Chevron Corporation (1978 – September 2013) |
• | President, Chevron North America Exploration and Production (2006 – September 2013) |
• | Held several other key exploration and production senior leadership positions in Europe, California, Indonesia and Louisiana, including Managing Director of Chevron Upstream Europe, Vice President, Profit Center Manager, Advisor and Engineer |
• | Director, Apergy Corporation, a provider of highly engineered technologies that help companies drill for and produce oil and gas around the world (since 2018)— Compensation Committee (Chair), Governance and Nominating Committee |
• | Director, Southwestern Energy Company (2017 – 2019) |
• | Director, Frank’s International N.V. (2013 – 2017) |
Our Board believes Mr. Luquette is qualified to serve as a director due to his extensive senior management, operational and international experience in the global oil and gas exploration and production industry and the oilfield services industry. |
JAMES H. MILLER Former Chairman, PPL Corporation |
Age |
Director Since |
Committee Assignments |
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71 |
2018 |
• Governance Committee |
• | PPL Corporation, a provider of energy services across the United States and the United Kingdom |
• | Chairman (2006 – retirement in 2012) |
• | President and Chief Executive Officer (2006 – 2011) |
• | Various other management roles, including Executive Vice President and Chief Operating Officer (2004 – 2005) |
• | USEC, Inc. (renamed Centrus Energy Corp. in 2014), a global uranium fuel supplier for commercial nuclear power plants |
• | Executive Vice President (1999 – 2001) |
• | Vice President, Production (1995 – 1999) |
• | Director, AES Corporation, global power company (since 2013) —Compensation Committee (Chair), Financial Audit Committee Strategy and Investment Committee |
• | Director, Crown Holdings, Inc., a global supplier of packaging products to consumer marketing companies (since 2010) – Nominating and Corporate Governance Committee |
• | Director, Chicago Bridge & Iron Company N.V. (2014 – May 2018) |
• | Director, Rayonier Advanced Materials, Inc. (Rayonier, Inc. prior to 2014 spin-off) (2011 – 2015) |
Our Board believes Mr. Miller is qualified to serve as a director due to his vast experience in executive leadership and as a public company director and his broad knowledge of international operations and the energy industry. |
WILLIAM H. SCHUMANN, III Former Executive Vice President, FMC Technologies, Inc. |
Age |
Director Since |
Committee Assignments |
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69 |
2012 |
• Audit Committee• Risk Committee• Finance Committee (Chair) |
• | FMC Technologies, Inc., a global provider of technology solutions for the energy industry, and its predecessor, FMC Corporation (1981 – August 2012) |
• | Executive Vice President (2005 – retirement in August 2012) |
• | Chief Financial Officer (2001 – 2011) |
• | Chief Financial Officer, FMC Corporation (1999 – 2001) |
• | Vice President, Corporate Development (1998 – 1999) |
• | Various other management positions, including: Vice President and General Manager, Agricultural Products Group (1995 – 1998); Regional Director, North America Operations, Agricultural Products Group from (1993 – 1995); Executive Director of Corporate Development (1991 – 1993) |
• | Director, Avnet, Inc., an industrial distributor of electronic components and products (since 2010) —Non-Executive Chairman of the Board (2012 – 2018) and Audit Committee |
• | Director, Andeavor (prior to August 2017, named Tesoro Corporation) (2016 – 2018) |
• | Director, AMCOL International Corporation (2012 – 2014) |
• | Director, URS Corporation (March 2014 – October 2014) |
• | Director, UAP Holding Corp. (2005 – 2008) |
Our Board believes Mr. Schumann is qualified to serve as a director due to his valuable experience acquired from serving in several executive leadership and board positions at public companies within the energy industry and his broad knowledge in the areas of accounting, auditing and financial reporting. |
MARY L. SHAFER-MALICKI Former Senior Vice President and Chief Executive Officer of BP Angola, BP p.l.c. |
Age |
Director Since |
Committee Assignments |
||||
59 |
2011 |
• Compensation Committee• Governance Committee |
• | BP p.l.c., an oil and natural gas exploration, production, refining and marketing company |
• | Senior Vice President and Chief Executive Officer, BP Angola (July 2007 – retirement in March 2009) |
• | Chief Operating Officer, BP Angola (January 2005 – June 2007) |
• | Held several other executive leadership positions with BP p.l.c. and Amoco Corp. (acquired by BP p.l.c. in 1998), including, Director General of BP Vietnam, from 2003 to 2004 |
• | Director, Wood PLC, a leading independent services provider for the oil and gas and power generation markets (since 2012) —Nomination, Remuneration, and Audit Committees |
• | Director, QEP Resources, Inc., an energy company specialized in natural gas and oil exploration (since 2017)— Compensation and Governance Committees |
• | Director, Ausenco Limited (2011 – 2016) |
Our Board believes Ms. Shafer-Malicki is qualified to serve as a director due to her diverse experience in the upstream energy and supporting infrastructure businesses and her significant international operations experience, having served in executive and director roles for public companies in Europe, the Asia Pacific region and Africa. |
HEATHER L. SUMMERFIELD Partner, Arcadi Jackson, LLP |
Age |
Director Since |
Committee Assignments |
||||
47 |
2019 |
• Finance Committee |
• | Partner, Arcadi Jackson, LLP, commercial litigation (October 2019 – Present) |
• | EXCO Resources, Inc., an independent oil and natural gas company engaged in the exploration, exploitation, acquisition, development and production of onshore U.S. oil and natural gas properties, which filed voluntary petitions under Chapter 11 in January 2018 and emerged from bankruptcy in July 2019 |
• | Vice President and General Counsel (December 2016 – September 2019) |
• | Assistant General Counsel (March 2013 – December 2016) |
• | Vice President, Legal, EXCO Resources (PA), LLC (August 2011 – March 2013) |
• | Associate General Counsel, EXCO Resources (PA), LLC (March 2010 – August 2011) |
• | Attorney, K&L Gates, LLP, with practice focused on energy, land use and natural resources litigation (2005 – 2010) |
Our Board believes Ms. Summerfield is qualified to serve as a director due to her extensive legal background and significant experience with respect to complex bankruptcy matters, having recently directed the legal strategy of a publicly traded oil and gas company in a complex and multi-faceted bankruptcy to restructure over $1 billion of secured and unsecured debt. |
MARSHA C. WILLIAMS Former Senior Vice President and Chief Financial Officer, Orbitz Worldwide, Inc. |
Age |
Director Since |
Committee Assignments |
||||
69 |
2018 |
• Audit Committee (Chair)• Finance Committee |
• | Senior Vice President and Chief Financial Officer, Orbitz Worldwide, Inc. (acquired by Expedia, Inc. in 2015), a global online travel company (2007 – retirement in 2010) |
• | Executive Vice President and Chief Financial Officer, Equity Office Properties Trust, publicly held office building owner and manager (2002 – 2007) |
• | Chief Administrative Officer, Crate & Barrel, global home furnishings retailer (1998 – 2002) |
• | Treasurer, Amoco Corp. (acquired by BP p.l.c. in 1998), an oil and natural gas exploration, production, refining and marketing company (1993 – 1998) |
• | Director, Davis Funds, an independent investment management firm (since 1999) |
• | Director, Modine Manufacturing Company, Inc., a global provider of thermal management systems and components (since 1999)— Lead Director, Nominating and Governance Committee |
• | Director, Fifth Third Bancorp, a diversified financial services company (since 2008)— Lead Director, Finance, Nominating and Corporate Governance |
• | Director, Chicago Bridge and Iron Company N.V. (1997 – May 2018) |
Our Board believes Ms. Williams is qualified to serve as a director due to her significant experience gained from serving in executive leadership and board positions at public companies and her extensive knowledge in the areas of accounting, auditing and financial reporting. |
CHRIS KRUMMEL Executive Vice President and Chief Financial Officer Age 51 | Tenure 3 years 6 months |
Mr. Krummel serves as our Executive Vice President and Chief Financial Officer. Previously, he served as our Global Vice President, Finance and Chief Accounting Officer from July 2018 to November 2019, and as our Vice President, Finance and Chief Accounting Officer from October 2016 to July 2018. Prior to joining McDermott, Mr. Krummel served as: a consultant with American Industrial Partners, a firm engaged in private equity investments in industrial businesses in the United States and Canada, from November 2015 through July 2016; Chief Financial Officer and Vice President of EnTrans International, LLC, a global manufacturer of aluminum tank trailers, heavy lift trailers and oilfield pressure pumping equipment used in hydraulic fracturing and other well services, from September 2014 to October 2015; and Chief Accounting Officer, Vice President and Corporate Controller / Vice President of Finance of Cameron International, a worldwide provider of flow equipment products, systems and services to oil, gas and process industries from April 2008 until August 2014. Mr. Krummel also served as a member of the Board of Directors of Eco-Stim Energy Solutions, Inc., an environmentally focused well stimulation and completion company, from January 2014 until August 2019. |
JOHN M. FREEMAN Executive Vice President, Chief Legal Officer and Corporate Secretary Age 58 | Tenure 2 years 8 months |
Mr. Freeman has served as our Executive Vice President, Chief Legal Officer and Corporate Secretary since May 2018. Previously, he served as our Senior Vice President, General Counsel and Corporate Secretary from August 2017 to May 2018. He has more than 30 years of legal and compliance experience in both the private and public sectors. Prior to joining McDermott, Mr. Freeman served at TechnipFMC plc as Special Advisor to the Integration of Technip and FMC from January 2017 to August 2017, and, before the combination of those two companies, served in various executive roles at Technip, including: Global General Counsel, Technip Group (Paris, France) from November 2015 through January 2017; Executive Vice President, Technip Group Legal Business & Operations Counsel (Paris, France), from May 2015 through October 2015; and Vice President, General Counsel, Corporate Secretary & Regional Compliance Officer, Technip USA, Inc. (Houston, Texas), from April 2009 through April 2015. From 2004 to 2009, Mr. Freeman held various senior legal and compliance positions at Baker Hughes Incorporated, after having served in several roles of increasing responsibility for Pennzoil-Quaker State Company and as an attorney at a Washington, D.C. law firm. He began his legal career in 1989 as a prosecuting attorney for the U.S. federal government. |
SAMIK MUKHERJEE Group Senior Vice President, Projects Age 49 | Tenure 1 year 9 months |
Mr. Mukherjee has served as our Group Senior Vice President, Projects since April 2019 and previously, as our Executive Vice President, Chief Operating Officer from July 2018 to April 2019. He has more than 25 years of experience in sales, operations and strategy, serving in leadership and executive-level roles for the upstream and downstream oil and gas industry around the world. Prior to joining McDermott, Mr. Mukherjee was Executive Vice President of Corporate Development, Strategy, Mergers and Acquisitions, Digital and IT of TechnipFMC. Previously, he served as Senior Vice President, Region EMIA, Operating Centers Coordination & Region Change Management Officer of Technip France from May 2016 to October 2017. Prior to that position, he served as Group Senior Vice President, Strategy and Business Development of Technip Corporate from June 2015 to May 2016, as Country Head and Managing Director of Technip India from January 2012 to June 2015, and held a number of other senior corporate and operational positions during his career with Technip, which commenced in 1998. |
LINH AUSTIN Senior Vice President, Middle East & North Africa | Age 50 | Tenure 4 years 3 months |
Mr. Austin has served as our Senior Vice President, Middle East & North Africa since May 2018. Previously, he served: as our Vice President, Middle East and Caspian, from January 2016 to May 2018; and as our Senior Director Operations, Middle East from January 2015 to January 2016. Mr. Austin has over 20 years of executive and operational experience in the oil and gas industry, including two years in the Middle East with Abu Dhabi Marine Operating Company (ADMA-OPCO). Prior to joining McDermott, he served as Senior Advisor for ADMA-OPCO from August 2013 until January 2015. Prior to his employment with ADMA-OPCO, Mr. Austin served with BP plc and Atlantic Richfield Company in various operational and project leadership roles in the upstream and the downstream sectors with increasing levels of responsibility since 1993. |
GENTRY BRANN Senior Vice President, Communications, Marketing & Administration Age 49 | Tenure 1 year 11 months |
Ms. Brann has served as our Senior Vice President, Communications, Marketing & Administration since May 2019 and previously as our Global Vice President, Communications and Marketing, from May 2018 until April 2019. Additionally, she served in various positions of increasing responsibility for Chicago Bridge and Iron Company N.V. (“CB&I”) and The Shaw Group (“Shaw”), including Senior Vice President, Global Communications and Brand Management for CB&I, from September 2016 to May 2018; Vice President, Global Communications and Marketing for CB&I, from February 2013 to September 2016; and Vice President, Investor Relations and Corporate Communications for Shaw, from 2009 to February 2013. Prior to joining Shaw, Ms. Brann was Vice President of Communications and External Affairs at ICF |
International of Fairfax, Virginia, where she was responsible for communications, marketing, media relations, community relations and legislative affairs for the State of Louisiana’s Hurricane Katrina housing recovery program. She also has held senior communications, marketing, strategy and management positions with ALSAC/St. Jude Children’s Research Hospital and with Archer Malmo Advertising and Public Relations Agency, where she served on the agency’s executive management committee. |
LEONARD DE BRUIJN Senior Vice President, Lummus Technology Age 50 | Tenure 1 year 11 months |
Mr. de Bruijn has served as our Senior Vice President of Lummus Technology since April 2019. He has more than 25 years of experience in the technology and EPC sector of the oil and gas industry. Prior to his current position, from January 2011 to March 2019, he served as Vice President and Managing Director of Chevron Lummus Global (“CLG”), McDermott’s technology joint venture with Chevron USA, Inc. Previously, he held various positions of increasing responsibility in multiple locations around the world for CB&I, CLG, and ABB Lummus Global since 1993. |
MARK COSCIO Senior Vice President, North, Central & South America Age 45 | Tenure 1 year 11 months |
Mr. Coscio has served as our Senior Vice President, North, Central & South America since March 2019 and was formerly our Vice President, Petrochemical Operations, beginning in May 2018. Previously, Mr. Coscio served in several positions of increasing responsibility during his employment with CB&I, which commenced in 2001, including: Senior Vice President, Project Operations, Engineering and Construction, from January 2014 to May 2018; Senior Vice President, Randall Gas Technologies, from January 2011 to January 2014; Vice President, Corporate Planning, from September 2008 to December 2010 and other project management roles from 2001 to 2008. Prior to joining CB&I, from 1998 to 2001, Mr. Coscio served as a Project Manager for Pitt Des Moines, a specialty engineering, procurement and construction company which CB&I acquired in 2001. |
TAREQ KAWASH Senior Vice President, Europe, Africa, Russia & Caspian Age 51 | Tenure 1 year 11 months |
Mr. Kawash has served as our Senior Vice President, Africa, Russia & Caspian since May 2018. Previously, he served as CB&I’s: Group Vice President, Engineering and Construction International from December 2016 to May 2018; Vice President, Project Operations from March 2016 to December 2016; and Vice President, Business Development, Europe, Caspian, Middle East and Africa from August 2014 to March 2016, and has held several project management roles from 2000 to 2014. Prior to joining CB&I in 2000, he served in various roles of increasing responsibility at Consolidated Contractors Company from 1993 to 2000 and at KBR, Inc. from 1991 to 1993. |
NEIL GUNNION Senior Vice President, Project Execution and Delivery Age 43 | Tenure 2 years 9 months |
Mr. Gunnion has served as our Senior Vice President, Project Execution and Delivery since October 2018. Previously, he served as our Vice President – Operations Lead (Offshore) North, Central and South America, from May 2018 to September 2018; and as our Senior Director Project and Operations, from July 2017 to May 2018. Prior to joining McDermott, he served as the Senior Vice President for the Americas for Genesis Oil & Gas Consultants, Ltd., from November 2015 to July 2017. Before joining Genesis, he was the Vice President Commercial for Technip for its offshore and subsea business in North America from March 2014 to October 2015 and served in other corporate and project management roles at Technip with increasing levels of responsibility from July 2012 to March 2014. |
BRIAN McLAUGHLIN Senior Vice President, Chief Commercial Officer Age 49 | Tenure 14 years 3 months |
Mr. McLaughlin has served as our Senior Vice President, Chief Commercial Officer, since May 2018. Previously, he served as our: Senior Vice President, Commercial, from September 2015 to May 2018; VP Commercial, Offshore, from 2014 to September 2015; General Manager, Business Development – Middle East and India, from 2010 to 2014; Senior Director, Business Development – Middle East and India, from 2008 to 2010; and, Proposals Manager, Middle East, from 2006 to 2008. Prior to joining McDermott, Mr. McLaughlin held roles of increasing responsibility at Al Faris, Abu Dhabi, ALE Middle East and Weir Pumps. |
TOSHA PERKINS Senior Vice President, Chief Human Resources Officer 37 | 1 year 11 months |
Ms. Perkins has served as our Senior Vice President and Chief Human Resources Officer since January 2020. Prior to her current position, she served as our Vice President of Human Resources from July 2019 to January 2020 and as our Vice President of Talent & Organizational Development from May 2018 to June 2019. Previously, she served as: Senior Director, Talent & Organizational Development for CB&I, from June 2016 to May 2018; Client Service Lead for Slalom, a management consulting firm, from October 2011 to September 2016; and several other positions of increasing responsibility in the consulting industry. |
IAN PRESCOTT Senior Vice President, Asia Pacific Age 56 | Tenure 2 years 3 months |
Mr. Prescott has served as our Senior Vice President, Asia Pacific since May 2018. Previously he served as our Vice President, Asia from January 2018 to May 2018. Mr. Prescott has more than 28 years of extensive operational, marketing and business unit responsibilities for production and processing solutions businesses in the upstream oil and gas sector, including engineering and fabrication. Prior to joining McDermott, he served as: Senior Vice President for SNC-Lavalin Group, Inc., from August 2015 to December 2017; Chief Executive Officer for Global Process Systems from May 2010 to May 2015; and Director, Asia for Global Process Systems from January 2008 to May 2010. He has also held key leadership positions with PAE (Thailand) PLC and Aker Solutions ASA (prior to 2008, known as Aker Kvaerner). |
DALE SUDERMAN Vice President, Chief Accounting Officer Age 46 | Tenure 3 years 9 months |
Mr. Suderman has served as our Vice President, Chief Accounting Officer since November 2019, and previously as our Senior Director, Financial Planning and Analysis, from July 2016 to November 2019. Prior to joining McDermott, Mr. Suderman served as Senior Director, Finance for Direct Energy, a subsidiary of Centrica plc, from 2012 to July 2016 and in other roles of increasing responsibility, including Senior Director, Residential Controller, Consolidated Planning and Reporting, from 2009 to 2011, Director of Portfolio Management and Analytics, from 2008 to 2009, and Director, Financial Accounting and Reporting from 2006 to 2008. Previously, Mr. Suderman served in various positions of increasing responsibility at Ernst & Young, LLP from June 2002 to October 2006, Arthur Andersen, LLP from 1999 to May 2002 and PricewaterhouseCoopers, LLP from 1998 to 1999. |
• | Overseeing the integrity of the financial statements of McDermott, including its internal control over financial reporting, and recommending to our Board that McDermott’s audited financial statements be included in its Annual Report on Form 10-K for the fiscal year. |
• | The selection, appointment, compensation, retention and oversight of McDermott’s independent registered public accounting firm. |
• | Overseeing the performance of McDermott’s internal audit function. |
• | Overseeing compliance with McDermott’s policies with respect to financial risk assessment and management, and particularly McDermott’s management of financial risk exposures. |
• | Monitoring McDermott’s compliance with legal and regulatory financial requirements and certain aspects of McDermott’s ethics and compliance program relating to financial matters, books and records and accounting and as required by applicable statutes, rules and regulations. |
• | David Dickson, our President and Chief Executive Officer; |
• | Christopher Krummel, our Executive Vice President and Chief Financial Officer; |
• | John M. Freeman, our Executive Vice President, Chief Legal Officer and Corporate Secretary; |
• | Samik Mukherjee, our Group Senior Vice President, Projects; and |
• | Leonard de Bruijn, our Senior Vice President, Lummus Technology. |
• | Attract, motivate and retain high-performing executives; |
• | Provide performance-based incentives to reward achievement of short and long-term business goals and strategic objectives while recognizing individual contributions; and |
• | Align the interests of our executives with those of our stockholders. |
Plan Design |
||||||||||||||||||
Weight |
Financial Metric |
Reason Metric Selected |
Performance Level |
Financial Metric Performance Goal |
Funding Multiple |
|||||||||||||
EBITDA |
Reflects execution performance |
Threshold |
$782M |
0.5x |
||||||||||||||
Target |
$920.1M |
1.0x |
||||||||||||||||
Maximum |
$1,058M |
2.0x |
||||||||||||||||
|
Free Cash Flow |
Prioritizes liquidity needs |
Threshold |
$(58)M |
0.5x |
|||||||||||||
Target |
$(50)M |
1.0x |
||||||||||||||||
Maximum |
$(43)M |
2.0x |
Performance Units |
Restricted Stock Units | |
50% |
50% |
Performance Level |
Cumulative Operating Income |
Earned Award |
||||||
Maximum |
≥ $5,222M |
150 |
% | |||||
Target |
$3,481M |
100 |
% | |||||
Threshold |
$1,741M |
50 |
% | |||||
<Threshold |
<$1,741M |
0 |
% |
Total Shareholder Return Percentile Rank |
Earned Award |
|||
90 th Percentile |
200 |
% | ||
50 th Percentile |
100 |
% | ||
25 th Percentile |
50 |
% | ||
<25 th Percentile |
0 |
% |
AECOM |
MasTec, Inc. | |
Dover Corporation |
National Oilwell Varco, Inc. | |
EMCOR Group, Inc. |
Parker-Hannifin Corporation | |
Fluor Corporation |
Quanta Services, Inc. | |
Ingersoll-Rand plc |
Stanley Black & Decker, Inc. | |
Jacobs Engineering Group Inc. |
TechnipFMC plc | |
KBR, Inc. |
Weatherford International plc |
AECOM |
Petrofac Limited | |
Fluor Corporation |
Saipem SpA | |
Halliburton Company |
Schlumberger Limited | |
Jacobs Engineering Group Inc. |
Subsea 7 SA | |
KBR, Inc. |
TechnipFMC plc | |
National Oilwell Varco, Inc. |
Wood plc |
Alpha Natural Resources, Inc. |
iHeart Media, Inc. | |
Arch Coal, Inc. |
The Bon-Ton Stores, Inc. | |
Avaya Inc. |
Toys “R” Us, Inc. | |
Caesar’s Entertainment Operating Company, Inc. |
Annual Base Salary |
Target EICP |
Target LTI |
||||||||||||||||||||||||||
2019 ($) |
% 2019 TDC |
2019 (%) |
% 2019 TDC |
2019 ($) |
% 2019 TDC |
2019 Target TDC ($) |
||||||||||||||||||||||
David Dickson |
$ | 1,125,000 |
10 |
% | 125 |
% | 13 |
% | 8,300,000 |
77 |
% | 10,831,250 |
||||||||||||||||
President and Chief Executive Officer |
||||||||||||||||||||||||||||
McDermott Tenure: |
||||||||||||||||||||||||||||
6 years 5 months |
||||||||||||||||||||||||||||
Christopher A. Krummel |
600,000 |
52 |
% | 40 |
% | 20 |
% | 325,000 |
28 |
% | 1,165,000 |
|||||||||||||||||
Executive Vice President and |
||||||||||||||||||||||||||||
Chief Financial Officer |
||||||||||||||||||||||||||||
McDermott Tenure: |
||||||||||||||||||||||||||||
3 years 6 months |
||||||||||||||||||||||||||||
John M. Freeman |
510,000 |
24 |
% | 85 |
% | 20 |
% | 1,200,000 |
56 |
% | 2,143,500 |
|||||||||||||||||
Executive Vice President, Chief Legal |
||||||||||||||||||||||||||||
Officer and Corporate Secretary |
||||||||||||||||||||||||||||
McDermott Tenure: |
||||||||||||||||||||||||||||
2 years 8 months |
||||||||||||||||||||||||||||
Samik Mukherjee |
700,000 |
21 |
% | 100 |
% | 21 |
% | 2,000,000 |
58 |
% | 3,400,000 |
|||||||||||||||||
Group Senior Vice President, |
||||||||||||||||||||||||||||
Projects |
||||||||||||||||||||||||||||
McDermott Tenure: |
||||||||||||||||||||||||||||
1 year 9 months |
||||||||||||||||||||||||||||
Leonard de Bruijn |
400,000 |
34 |
% | 70 |
% | 24 |
% | 500,000 |
42 |
% | 1,180,000 |
|||||||||||||||||
Senior Vice President, |
||||||||||||||||||||||||||||
Lummus Technology |
||||||||||||||||||||||||||||
McDermott Tenure: |
||||||||||||||||||||||||||||
1 year 11 months |
• | Full vesting of restricted stock units outstanding under the 2008 Chicago Bridge & Iron Company N.V. Long-Term Incentive Plan (“2008 CB&I LTIP”), which were granted to Mr. McCarthy on February 14, 2018; |
• | A cash payment representing a prorated fiscal year 2019 target bonus in the amount of $146,075; |
• | A cash payment representing Mr. McCarthy’s annual bonus for fiscal year 2018, paid at target level, in the amount of $584,302; |
• | A cash payment equal to three times the sum of Mr. McCarthy’s base salary and target bonus in the amount of $3,700,577, which was payable on the six-month anniversary of his resignation, plus an amount for interest due for the six-month delay; |
• | The cost of outplacement services in an amount not to exceed $129,845; |
• | For three years following his resignation, continued participation in welfare benefits (including medical, prescription, dental, disability, salary continuance, individual life, group life, accidental death and travel accident insurance plans), with the cost for such coverage not to exceed the cost in effect prior to his resignation date and provided that he continues to remit payment of the associated premiums to McDermott on a monthly basis; and |
• | Payment of all vested benefits (i.e., 401(k), Deferred Compensation Plan and CB&I Excess Benefit Plan) pursuant to the terms of the applicable plans. |
• | Full vesting of restricted stock units outstanding under the 2008 CB&I LTIP which were granted to Mr. Heo on February 14, 2018; |
• | A cash payment representing a prorated fiscal year 2019 target bonus in the amount of $66,666.66; |
• | A cash payment representing Mr. Heo’s annual bonus for fiscal year 2018, paid at target level, in the amount of $400,000; |
• | A cash payment equal to three times the sum of Mr. Heo’s base salary and target bonus in the amount of $2,700,000, which was payable on the six-month anniversary of his resignation, plus an amount for interest due for the six-month delay; |
• | The cost of outplacement services in an amount not to exceed $100,000; |
• | For three years following his resignation, continued participation in welfare benefits (including medical, prescription, dental, disability, salary continuance, individual life, group life, accidental death and travel accident insurance plans), with the cost for such coverage not to exceed the cost in effect prior to his resignation date and provided that he continues to remit payment to McDermott on a monthly basis; and |
• | Payment of all vested benefits (i.e., 401(k), Deferred Compensation Plan and CB&I Excess Benefit Plan) pursuant to the terms of the applicable plans. |
• | 1/3 of the Retention Bonus to be paid on the effective date of the Retention Bonus Award Agreement (the “First Retention Payment”); |
• | 1/3 of the Retention Bonus to be paid on the date of funding of Tranche B (the “Second Retention Payment”); and |
• | 1/3 of the Retention Bonus to be paid on the date of funding of Tranche C (the “Third Retention Payment”). |
NEO |
Multiple of Base Salary + Target EICP |
|||
Mr. Dickson |
2.5x |
|||
Mr. Krummel |
2.0x |
|||
Mr. Freeman |
2.0x |
|||
Mr. Mukherjee |
2.0x |
|||
Mr. de Bruijn |
2.0x |
Level |
Base Salary or Annual Retainer Multiple |
|||
CEO |
5x |
|||
Members of McDermott’s EXCOM |
3x |
|||
Nonemployee Directors |
5x |
Name and Principal Position |
Year |
Salary ($) (1) |
Bonus ($) (2) |
Stock Awards ($) (3) |
Non-Equity Incentive Plan Compensation ($) (4) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
All Other Compensation ($) (5) |
Total ($) |
||||||||||||||||||||||||
Mr. Dickson |
2019 |
1,125,000 |
2,250,000 |
8,299,986 |
562,500 |
N/A |
169,085 |
12,406,571 |
||||||||||||||||||||||||
President and Chief |
2018 |
1,044,034 |
0 |
8,299,948 |
1,812,500 |
N/A |
137,525 |
11,294,007 |
||||||||||||||||||||||||
Executive Officer |
2017 |
887,500 |
0 |
4,799,979 |
1,694,575 |
N/A |
148,787 |
7,530,841 |
||||||||||||||||||||||||
Mr. Krummel |
2019 |
391,409 |
267,750 |
324,994 |
196,875 |
N/A |
16,011 |
1,197,039 |
||||||||||||||||||||||||
Executive Vice President |
||||||||||||||||||||||||||||||||
and Chief Financial Officer |
||||||||||||||||||||||||||||||||
Mr. Freeman |
2019 |
510,000 |
510,000 |
1,199,990 |
264,500 |
N/A |
67,932 |
2,552,421 |
||||||||||||||||||||||||
Executive Vice President, |
2018 |
492,008 |
0 |
1,199,975 |
647,866 |
N/A |
54,845 |
2,394,694 |
||||||||||||||||||||||||
Chief Legal Officer and |
||||||||||||||||||||||||||||||||
Corporate Secretary |
||||||||||||||||||||||||||||||||
Mr. |
2019 |
684,224 |
933,334 |
1,999,986 |
0 |
29,776 |
127,386 |
3,774,706 |
||||||||||||||||||||||||
Group Senior Vice President, |
2018 |
342,946 |
450,805 |
2,199,995 |
205,768 |
N/A |
27,627 |
3,227,141 |
||||||||||||||||||||||||
Projects |
||||||||||||||||||||||||||||||||
Mr. de Bruijn |
2019 |
376,150 |
0 |
499,979 |
1,050,000 |
N/A |
210,503 |
2,136,631 |
||||||||||||||||||||||||
Senior Vice President, |
||||||||||||||||||||||||||||||||
Lummus Technology |
||||||||||||||||||||||||||||||||
Mr. Spence |
2019 |
546,591 |
433,333 |
1,999,986 |
318,750 |
N/A |
1,003,367 |
4,302,027 |
||||||||||||||||||||||||
Former Executive Vice President |
2018 |
599,621 |
0 |
1,999,947 |
891,062 |
N/A |
85,503 |
3,576,133 |
||||||||||||||||||||||||
and Chief Financial Officer |
2017 |
501,250 |
0 |
1,499,990 |
652,552 |
N/A |
86,869 |
2,740,661 |
Name and Principal Position |
Year |
Salary ($) (1) |
Bonus ($) (2) |
Stock Awards ($) (3) |
Non-Equity Incentive Plan Compensation ($) (4) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
All Other Compensation ($) (5) |
Total ($) |
||||||||||||||||||||||||
Mr. McCarthy |
2019 |
171,791 |
0 |
0 |
146,075 |
N/A |
4,115,349 |
4,436,215 |
||||||||||||||||||||||||
Former Executive Vice President, |
||||||||||||||||||||||||||||||||
Technology |
||||||||||||||||||||||||||||||||
Mr. Heo |
2019 |
96,154 |
0 |
0 |
66,667 |
N/A |
2,814,364 |
2,977,184 |
||||||||||||||||||||||||
Former Senior Vice President, |
||||||||||||||||||||||||||||||||
North, Central & South America |
(1) |
The amounts reported in this column for Messrs. Spence, McCarthy and Heo represent partial-year service. Additionally, the amount reported in this column for Mr. Mukherjee includes amounts paid during January 1, 2019 through August 31, 2019 for (1) a vacation allowance equal to 8% of his yearly salary (2) a so-called “13th month” payment equal to one month of pay, and (3) a gross cost allowance equal to 4.2% of his yearly salary. The vacation allowance, 13th month payment and gross cost allowance form part of the standard terms and conditions for employees who are working for our subsidiaries in The Netherlands. The total of these amounts approximates an annual base salary of $700,000, which is the amount of annual base salary that the Compensation Committee approved for Mr. Mukherjee. |
(2) |
The amounts reported in this column for 2019 are attributable to the first and second payments under the Retention Bonus Award Agreements described above under the caption “Compensation Discussion and Analysis – Compensation Program – 2019 Other Compensation Elements – Retention Bonus Awards.” |
(3) |
The amounts reported in this column represent the aggregate grant date fair value of stock awards granted to each NEO and computed in accordance with FASB ASC Topic 718. For information regarding the compensation expense with respect to these awards, see Note 19 to the Consolidated Financial Statements included in our Form 10-K for the year ended December 31, 2019. |
(4) |
The amounts reported in this column for 2017 and 2018, respectively, are attributable to the annual incentive awards earned in 2018 but paid in 2019, and earned in 2017 but paid in 2018. There were no annual incentive awards earned by any of the NEOs in 2019. The amounts reported in this column for 2019 for Messrs. Dickson, Krummel, Freeman and Spence are attributable to the portion of the 2018 McDermott Recognition Program awards earned and paid in 2019. The 2018 McDermott Recognition Program was adopted in 2018 in recognition of the efforts associated with the Combination and the achievement of related cost synergies and provided for payouts in 2018 and 2019. The amount reported in this column for Mr. Mukherjee for 2018 is solely attributable to the annual incentive award earned in fiscal year 2018, but paid in 2019, since Mr. Mukherjee’s employment with McDermott commenced on July 3, 2018, after the 2018 McDermott Recognition Program awards were already made. The amount reported in this column for Mr. Mukherjee for 2018 was converted from local currency (Euros) to U.S. dollars, using the exchange rate of 1.1311, which was the exchange rate in effect at the close of business on February 18, 2019, the date of the Compensation Committee’s approval of Mr. Mukherjee’s EICP award. The amount reported for Mr. de Bruijn in this column for 2019 is solely attributable to his 2019 Retention Bonus Award, which had a performance component to it, unlike the other NEOs’ respective 2019 Retention Bonus Awards. Mr. de Bruijn was not granted an award under the McDermott Recognition Program. See “Compensation Discussion and Analysis – 2019 Compensation Program – 2019 Other Compensation Elements – Retention Bonus Awards” for a detailed description of the October 17, 2019 Retention Bonus Awards. The amounts reported in this column for Messrs. McCarthy and Heo were paid in 2019 pursuant to the terms of their respective change-in-control agreements, which entitled them to receive a prorated fiscal year 2019 annual incentive award paid at target. |
(5) |
The amounts reported in this column for 2019 are attributable to the following: |
Deferred Compensation Plan Contribution ($) (A) |
Employer Match ($) (B) |
Pension Contribution ($) (C) |
Perquisite Program ($) (D) |
Other ($) (E) |
||||||||||||||||
Mr. Dickson |
136,930 |
13,987 |
0 |
18,168 |
0 |
|||||||||||||||
Mr. Krummel |
0 |
14,311 |
0 |
1,700 |
0 |
|||||||||||||||
Mr. Freeman |
34,128 |
15,325 |
0 |
18,479 |
0 |
|||||||||||||||
Mr. Mukherjee |
35,000 |
0 |
30,678 |
17,259 |
44,449 |
|||||||||||||||
Mr. de Bruijn |
15,571 |
16,800 |
0 |
8,574 |
169,557 |
|||||||||||||||
Mr. Spence |
64,409 |
16,800 |
0 |
1,721 |
920,437 |
|||||||||||||||
Mr. McCarthy |
0 |
10,487 |
0 |
12,846 |
4,092,016 |
|||||||||||||||
Mr. Heo |
0 |
0 |
0 |
5,098 |
2,809,265 |
(A) |
The amounts reported in this column are attributable to contributions made by McDermott under the DCP. |
(B) |
The amounts reported in this column are attributable to contributions made under the McDermott Savings Plan. |
(C) |
The amount reported in this column for Mr. Mukherjee is attributable to contributions made by McDermott under the Dutch Retirement Plan and the gross additional pension allowance Mr. Mukherjee received in lieu of his participation in the McDermott Savings Plan and Dutch Net Pension Scheme from January 1, 2019 to August 31, 2019 as a result of his being a local Netherlands employee during this period. For more information on the contributions made under the Dutch Retirement Plan and the gross additional pension allowance provided to Mr. Mukherjee, see “Executive Compensation Tables – Pension Benefits – The Dutch Retirement Plan.” |
(D) |
The amounts reported in this column are attributable to payments made pursuant to McDermott’s 2019 perquisite program. For Mr. Dickson, $16,760 related to financial planning and $1,408 related to his required physical. For Mr. Krummel, $1,700 related to his required physical. For Mr. Freeman, $17,003 related to financial planning and $1,476 related to his required physical. For Mr. Mukherjee, $15,534 related to financial planning and $1,725 related to his required physical. For Mr. de Bruijn, $6,770 related to financial planning and $1,805 related to his required physical. For Mr. Spence, $1,721 related to his required physical. For more information on McDermott’s 2019 perquisite program, see “Compensation Discussion and Analysis – 2019 Compensation Program – 2019 Other Compensation Elements – Perquisites.” |
As a result of their former employment at CB&I, Messrs. McCarthy and Heo were entitled to the continuation of certain perquisites provided pursuant to the perquisite program in place at CB&I prior to the Combination. For Mr. McCarthy, $3,938 related to financial planning, $4,389 related to country club dues and $4,518 related to his personal usage of a company leased car. For Mr. Heo, $2,791 related to financial planning and $2,308 related to an automobile allowance. |
(E) |
The amount reported in this column for Mr. Spence represents a cash severance payment pursuant to his Separation Agreement ($866,667), payment for vacation earned but not taken by Mr. Spence in 2019 ($45,833) and a payment of an amount to fund six months of continuing health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ($7,938). The amount reported in this column for Mr. de Bruijn, represents the amounts paid by us for his relocation from New Jersey to Houston ($102,836.40) as well as the tax gross up on the move imputed to his income ($66,720.73). The amount reported in this column for Mr. Mukherjee represents the amounts paid by us for his relocation from The Netherlands to Houston ($33,626) as well as the tax gross up on the move imputed to his income ($10,823). The amounts reported in this column for Messrs. McCarthy and Heo represent the amounts payable pursuant to the terms of their respective change-in-control agreements. |
Grant Date |
Committee Action Date |
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) |
Estimated Future Payouts Under Equity Incentive Plan Awards (2) |
All Other Stock Awards: Number of Shares of Stock or Units (3) |
Grant Date Fair Value of Stock and Option Awards ($) (4) |
|||||||||||||||||||||||||||||||||||
Name/Award Type |
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
||||||||||||||||||||||||||||||||||
Mr. Dickson |
||||||||||||||||||||||||||||||||||||||||
EICP |
02/27/19 |
02/27/19 |
703,125 |
1,406,250 |
2,812,500 |
|||||||||||||||||||||||||||||||||||
RSUs |
02/27/19 |
02/27/19 |
468,396 |
4,149,989 |
||||||||||||||||||||||||||||||||||||
PUnits |
02/27/19 |
02/27/19 |
234,198 |
468,397 |
819,694 |
4,149,997 |
||||||||||||||||||||||||||||||||||
Mr. Krummel |
||||||||||||||||||||||||||||||||||||||||
EICP |
02/27/19 |
02/27/19 |
68,000 |
136,000 |
272,000 |
|||||||||||||||||||||||||||||||||||
RSUs |
02/27/19 |
02/27/19 |
25,677 |
227,498 |
||||||||||||||||||||||||||||||||||||
PUnits |
02/27/19 |
02/27/19 |
5,502 |
11,004 |
19,257 |
97,495 |
||||||||||||||||||||||||||||||||||
Mr. Freeman |
||||||||||||||||||||||||||||||||||||||||
EICP |
02/27/19 |
02/27/19 |
216,750 |
433,500 |
867,000 |
|||||||||||||||||||||||||||||||||||
RSUs |
02/27/19 |
02/27/19 |
67,719 |
599,990 |
||||||||||||||||||||||||||||||||||||
PUnits |
02/27/19 |
02/27/19 |
33,860 |
67,720 |
118,510 |
599,999 |
||||||||||||||||||||||||||||||||||
Mr. Mukherjee |
||||||||||||||||||||||||||||||||||||||||
EICP |
02/27/19 |
02/27/19 |
350,000 |
700,000 |
1,400,000 |
|||||||||||||||||||||||||||||||||||
RSUs |
02/27/19 |
02/27/19 |
112,866 |
999,993 |
||||||||||||||||||||||||||||||||||||
PUnits |
02/27/19 |
02/27/19 |
56,433 |
112,866 |
197,515 |
999,993 |
||||||||||||||||||||||||||||||||||
Mr. de Bruijn |
||||||||||||||||||||||||||||||||||||||||
EICP |
02/27/19 |
02/27/19 |
140,000 |
280,000 |
560,000 |
|||||||||||||||||||||||||||||||||||
RBA |
10/17/19 |
10/17/19 |
1,050,000 |
1,050,000 |
2,100,000 |
|||||||||||||||||||||||||||||||||||
RSUs |
02/27/19 |
02/27/19 |
28,215 |
249,985 |
||||||||||||||||||||||||||||||||||||
PUnits |
02/27/19 |
02/27/19 |
14,108 |
28,216 |
49,378 |
249,994 |
||||||||||||||||||||||||||||||||||
Mr. Spence |
||||||||||||||||||||||||||||||||||||||||
EICP |
02/27/19 |
02/27/19 |
325,000 |
650,000 |
1,300,000 |
|||||||||||||||||||||||||||||||||||
RSUs |
02/27/19 |
02/27/19 |
112,866 |
999,993 |
||||||||||||||||||||||||||||||||||||
PUnits |
02/27/19 |
02/27/19 |
56,433 |
112,866 |
197,515 |
999,993 |
(1) |
These columns reflect the threshold, target and maximum payout opportunities under the Executive Incentive Compensation Plan, or EICP, (or, in the case of Mr. de Bruijn, his Retention Bonus Agreement), expressed as a percentage of the NEO’s 2019 annual base salary as of September 30, 2019. The target amounts provided are equal to the percentage for each NEO, as follows: Mr. Dickson – 125%, Mr. Krummel – 40%, Mr. Freeman – 85%, Mr. Mukherjee – 100%, Mr. de Bruijn – 70%, and Mr. Spence – 100%. For all of the NEOs, the threshold amounts provided are equal to 50% of the respective target award amount and the maximum amounts provided are equal to 200% of the respective target award amount. See “Compensation Discussion and Analysis – What We Pay and Why: Elements of Total Direct Compensation – Annual Incentive,” and “Compensation Discussion and Analysis – 2019 Compensation Program – 2019 NEO Target Total Direct Compensation” for a detailed description of the EICP and discussions regarding the determinations made with respect to the 2019 EICP awards. There were no annual incentive awards earned under the EICP by any of the NEOs in 2019. |
(2) |
These columns reflect the target, threshold and maximum payout opportunities of 2019 grants of performance units under the 2016 LTIP and the Amended and Restated 2008 Chicago Bridge & Iron Long-Term Incentive Plan. Each grant represents the right to receive the value of one share of McDermott common stock for each vested performance unit, paid in shares of McDermott common stock, cash equal to the fair market value of the shares otherwise deliverable, or any combination thereof, in the sole discretion of the Compensation Committee. See “Compensation Discussion and Analysis – What We Pay and Why: Elements of Total Direct Compensation – Long-Term Incentives” and “Compensation Discussion and Analysis – 2019 Compensation Program – 2019 NEO Target Total Direct Compensation” for a detailed description of the performance units awarded in 2019. |
(3) |
This column reflects grants of restricted stock units under the 2016 LTIP and the Amended and Restated 2008 Chicago Bridge & Iron Long-Term Incentive Plan. The restricted stock units are generally scheduled to vest in one-third increments on the first, second and third anniversaries of the date of grant. Each restricted stock unit represents the right to receive one share of McDermott common stock, cash equal to the fair market value of the share otherwise deliverable, or any combination thereof, in the sole discretion of the Compensation Committee. |
(4) |
This column reflects the full grant date fair values of the equity awards computed in accordance with FASB ASC Topic 718. Grant date fair values are determined using the closing price of our common stock on the date of grant, as reported on the NYSE. For more information regarding the compensation expense related to 2019 awards, see Note 19 to the Consolidated Financial Statements included in our Form 10-K for the year ended December 31, 2019. |
Stock Awards (1) |
||||||||||||||||||||
Name |
Grant Date |
Number of Shares or Units of Stock That Have Not Vested |
Market Value of Shares or Units of Stock That Have Not Vested ($) (2) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested ($) (3) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (2) |
|||||||||||||||
Mr. Dickson |
||||||||||||||||||||
RSUs (4) |
02/28/17 |
108,696 |
73,913 |
— |
— |
|||||||||||||||
RSUs (5) |
02/28/17 |
36,232 |
24,638 |
— |
— |
|||||||||||||||
RSUs (5) |
03/01/18 |
73,665 |
50,092 |
— |
— |
|||||||||||||||
RSUs (5) |
06/06/18 |
55,056 |
37,438 |
— |
— |
|||||||||||||||
RSUs (5) |
02/27/19 |
468,396 |
318,509 |
— |
— |
|||||||||||||||
PUnits |
06/06/18 |
— |
— |
97,924 |
66,588 |
|||||||||||||||
PUnits |
02/27/19 |
— |
— |
234,199 |
159,255 |
|||||||||||||||
Mr. Krummel |
||||||||||||||||||||
RSUs (4) |
02/28/17 |
2,718 |
1,848 |
— |
— |
|||||||||||||||
RSUs (5) |
02/28/17 |
2,114 |
1,438 |
— |
— |
|||||||||||||||
RSUs (5) |
03/01/18 |
4,297 |
2,922 |
— |
— |
|||||||||||||||
RSUs (5) |
02/27/19 |
25,677 |
17,460 |
— |
— |
|||||||||||||||
PUnits |
06/06/18 |
— |
— |
1,416 |
963 |
|||||||||||||||
PUnits |
02/27/19 |
— |
— |
5,502 |
3,741 |
|||||||||||||||
Mr. Freeman |
||||||||||||||||||||
RSUs (5) |
08/14/17 |
7,433 |
5,054 |
— |
— |
|||||||||||||||
RSUs (5) |
03/01/18 |
6,139 |
4,175 |
— |
— |
|||||||||||||||
RSUs (5) |
06/06/18 |
12,584 |
8,557 |
— |
— |
|||||||||||||||
RSUs (5)(6) |
02/27/19 |
67,719 |
46,049 |
— |
— |
|||||||||||||||
PUnits |
06/06/18 |
— |
— |
14,158 |
9,627 |
|||||||||||||||
PUnits |
02/27/19 |
— |
— |
33,860 |
23,025 |
|||||||||||||||
Mr. Mukherjee |
||||||||||||||||||||
RSUs (5)(6) |
07/03/18 |
52,852 |
35,939 |
— |
— |
|||||||||||||||
RSUs (5) |
02/27/19 |
112,866 |
76,749 |
— |
— |
|||||||||||||||
PUnits |
07/03/18 |
— |
— |
20,503 |
13,942 |
|||||||||||||||
PUnits |
02/27/19 |
— |
— |
56,433 |
38,374 |
|||||||||||||||
Mr. de Bruijn |
||||||||||||||||||||
RSUs (5) |
02/18/16 |
646 |
439 |
— |
— |
|||||||||||||||
RSUs (5) |
02/15/17 |
1,204 |
819 |
— |
— |
|||||||||||||||
RSUs (5) |
02/15/17 |
5,722 |
3,891 |
— |
— |
|||||||||||||||
RSUs (5) |
02/14/18 |
5,952 |
4,047 |
— |
— |
|||||||||||||||
RSUs (5) |
02/27/19 |
28,215 |
19,186 |
— |
— |
|||||||||||||||
PUnits |
02/27/19 |
— |
— |
14,108 |
9,593 |
|||||||||||||||
Mr. Spence |
||||||||||||||||||||
RSUs (4) |
02/28/17 |
33,968 |
23,098 |
— |
— |
|||||||||||||||
RSUs (5) |
02/28/17 |
11,323 |
7,700 |
— |
— |
|||||||||||||||
RSUs (5) |
03/01/18 |
23,020 |
15,654 |
— |
— |
|||||||||||||||
RSUs (5) |
06/06/18 |
7,864 |
5,348 |
— |
— |
|||||||||||||||
RSUs (5) |
02/27/19 |
112,866 |
76,749 |
— |
— |
(1) |
Messrs. McCarthy and Heo had no outstanding equity awards as of the dates of their respective resignations. Prior to their resignations, each had outstanding restricted stock units, which were granted to them during their employment with CB&I on February 14, 2018; however, the change-in-control provisions governing their respective award agreements provided for accelerated vesting of all outstanding restricted stock units upon their resignations. As such, upon their respective resignations, 66,069 restricted stock units became fully vested for Mr. McCarthy and 20,833 restricted stock units became fully vested for Mr. Heo. |
(2) |
Market values in these columns are based on the closing price of our common stock, as reported on the NYSE as of December 31, 2019 ($0.68). |
(3) |
The awards in this column represent grants of performance units, which generally may vest on the third anniversary of the grant date, based on the attainment of stated performance levels. The number and value of the 2018 and 2019 performance units listed are based on achieving threshold performance, each as of the nearest year-end measurement date under the applicable grant agreement. |
(4) |
These awards were originally granted as performance units on February 28, 2017. On March 1, 2018, the Compensation Committee approved amendments to the February 28, 2017 Performance Unit Award Agreement, effective upon the closing of the Combination, to provide that 100% of the initial performance units granted would be converted into time-vested restricted stock units vesting on the third anniversary of the original grant date. |
(5) |
These awards represent grants of restricted stock units, which generally vest in one-third increments on each of the first, second and third anniversaries of the grant date. |
(6) |
This award includes a sign-on award of RSUs, which had a grant date fair value of $700,000 and which was intended to compensate Mr. Mukherjee for the forfeiture of certain incentives from his former employer. |
Stock Awards (1) |
||||||||
Name |
Shares Acquired on Vesting (#) |
Value Realized on Vesting ($) |
||||||
Mr. Dickson |
364,357 |
3,102,370 |
||||||
Mr. Krummel |
5,321 |
38,512 |
||||||
Mr. Freeman |
16,793 |
100,638 |
||||||
Mr. Mukherjee |
26,426 |
237,570 |
||||||
Mr. de Bruijn |
4,615 |
33,090 |
||||||
Mr. Spence |
119,083 |
1,022,667 |
||||||
Mr. McCarthy |
99,103 |
726,553 |
||||||
Mr. Heo |
31,249 |
263,951 |
(1) |
The number of shares acquired on vesting reflected in this table represents the aggregate number of shares that vested during 2019 in connection with awards of RSUs. The value realized on vesting was calculated based on the fair market value of the underlying shares on the vesting date. The following table sets forth the number of shares withheld by McDermott to satisfy withholding taxes upon vesting of the RSUs noted in the table above: |
Name |
Shares Withheld by McDermott on Vesting of Stock Awards (#) |
|||
Mr. Dickson |
143,309 |
|||
Mr. Krummel |
1,989 |
|||
Mr. Freeman |
6,769 |
|||
Mr. Mukherjee |
7,927 |
|||
Mr. de Bruijn |
1,749 |
|||
Mr. Spence |
46,968 |
|||
Mr. McCarthy |
24,447 |
|||
Mr. Heo |
3,089 |
Name |
Plan Name |
Number of Years Credited Service |
Present Value of Accumulated Benefit (1) ($) |
Payments During 2019 ($) |
||||||||||||
Mr. Dickson |
N/A |
N/A |
N/A |
N/A |
||||||||||||
Mr. Krummel |
N/A |
N/A |
N/A |
N/A |
||||||||||||
Mr. Freeman |
N/A |
N/A |
N/A |
N/A |
||||||||||||
Mr. Mukherjee |
Dutch Retirement Plan |
1.2 |
42,556 |
0 |
||||||||||||
Mr. de Bruijn |
N/A |
N/A |
N/A |
N/A |
||||||||||||
Mr. Spence |
N/A |
N/A |
N/A |
N/A |
||||||||||||
Mr. McCarthy |
N/A |
N/A |
N/A |
N/A |
||||||||||||
Mr. Heo |
N/A |
N/A |
N/A |
N/A |
(1) |
The present value of accumulated benefits under the Dutch Retirement Plan reflects accrued age 67 benefits and is based on a discount rate of 1.05%, the most recently published mortality table “Prognosetafel AG2019” and other assumptions used to determine pension plan obligations as reflected in the consolidated financial statements in McDermott’s Annual Report on Form 10-K for the year ended December 31, 2019. |
Name |
Executive Contributions in 2019 ($) (1) |
Company Contributions in 2019 ($) (2) |
Aggregate Earnings in 2019 ($) (3) |
Aggregate Withdrawals/ Distributions ($) |
Aggregate Balance at 12/31/19 ($) (4) |
Percentage Vested at 12/31/19 ($) (5) |
||||||||||||||||||
Mr. Dickson |
— |
136,930 |
133,746 |
— |
694,865 |
100 |
% | |||||||||||||||||
Mr. Krummel |
— |
— |
— |
— |
— |
— |
||||||||||||||||||
Mr. Freeman |
— |
34,128 |
1,129 |
— |
58,596 |
20 |
% | |||||||||||||||||
Mr. Mukherjee |
— |
35,000 |
688 |
— |
35,688 |
0 |
% | |||||||||||||||||
Mr. de Bruijn |
— |
15,571 |
1,297 |
— |
16,868 |
0 |
% | |||||||||||||||||
Mr. Spence |
— |
64,409 |
57,538 |
— |
290,298 |
100 |
% | |||||||||||||||||
Mr. McCarthy |
— |
— |
— |
— |
— |
— |
||||||||||||||||||
Mr. Heo |
— |
— |
— |
— |
— |
— |
(1) |
Under the terms of our Deferred Compensation Plan, an eligible executive may defer up to 50% of his or her annual salary and/ or up to 100% of any bonus earned in any year. Although the Deferred Compensation Plan provides for deferrals, we no longer allow participants to defer compensation due to Section 457A of the Internal Revenue Code (the “Code”). |
(2) |
We make annual contributions to specified participants’ notional accounts equal to a percentage of the participant’s prior-year compensation. Under the terms of the Deferred Compensation Plan, the contribution percentage does not need to be the same for each participant. Additionally, our Compensation Committee may make a discretionary contribution to a participant’s account at any time. 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 each case) and 2018 bonus paid in 2019 (in the case of Messrs. Dickson, Freeman and Spence). Additionally, Messrs. Mukherjee and de Bruijn each received a discretionary Company Contribution under the DCP of $17,853 and $5,390, respectively. All of our 2019 contributions are included in the Summary Compensation Table above in the column “All Other Compensation.” |
(3) |
The amounts reported in this column represent notional accrued gains or losses during 2019 on each indicated participant’s account. The accounts are “participant-directed,” in that each participant personally directs the investment of contributions made on his or her behalf. As a result, any accrued gains or losses are attributable to the performance of the notional mutual fund investments. No amount of the earnings shown is reported as compensation in the Summary Compensation Table. |
(4) |
The amounts reported in this column consist of contributions made by McDermott and notional accrued gains or losses as of December 31, 2019. The balances shown include contributions from previous years which have been reported as compensation to the applicable NEOs and Mr. Spence in the Summary Compensation Table for those years – to the extent a NEO was included in the Summary Compensation Table during those years. The amounts of such contributions previously included in the Summary Compensation Table and years reported are as follows: we made contributions to Mr. Dickson’s account of $103,875 in 2018, $114,767 in 2017, $70,100 in 2016, $42,500 in 2015 and $42,500 in 2014; we made a contribution to Mr. Freeman’s account of $23,000 in 2018; and we made contributions to Mr. Spence’s account of $49,003 in 2018, $52,019 in 2017, $27,283 in 2016 and $23,750 in 2015. |
(5) |
Under the terms of his separation agreement, Mr. Spence became 100% vested in his Deferred Compensation Plan balance as of his resignation date. |
Dickson ($) |
Krummel ($) |
Freeman ($) |
Mukherjee ($) |
de Bruijn ($) |
||||||||||||||||
Severance Payments |
— |
— |
— |
— |
— |
|||||||||||||||
EICP |
— |
— |
— |
— |
— |
|||||||||||||||
Deferred Compensation Plan (1) |
— |
— |
46,877 |
35,688 |
16,868 |
|||||||||||||||
Restricted Stock Units (2) (unvested and accelerated) |
504,591 |
23,668 |
63,835 |
112,688 |
28,383 |
|||||||||||||||
Performance Units (3) (unvested) |
451,686 |
9,408 |
65,304 |
104,633 |
19,187 |
|||||||||||||||
Total |
956,277 |
33,076 |
176,016 |
253,009 |
64,437 |
|||||||||||||||
(1) |
The amounts reported represent 80% of Mr. Freeman’s and 100% of Messrs. Mukherjee’s and de Bruijn’s respective DCP balances as of December 31, 2019 that would become vested on death or disability. Because Mr. Dickson is 100% vested in his DCP balance no additional amount would become vested on his death or disability. Mr. Krummel was not a participant in the DCP in 2019. |
(2) |
Under the terms of the outstanding restricted stock unit awards held by each of the NEOs as of December 31, 2019, all unvested restricted stock unit awards would become vested on his death or disability. |
(3) |
Under the terms of the outstanding 2018 performance unit awards held by each of the NEOs as of December 31, 2019, 100% of the initial performance units granted would vest on the third anniversary of the grant date on his death or disability. The number of performance units that would vest would be the number that would have vested based on actual performance had the NEO remained employed with McDermott until the third anniversary of the grant date. Accordingly, depending on McDermott’s performance during the applicable measurement periods, each NEO would vest in a number of performance units ranging from (1) 0% – 150% of the initial performance units granted for the 50% portion of the 2018 performance units based on aggregate consolidated order intake and (2) 0% – 200% of the initial performance units granted for the 50% portion of the 2018 performance units based on relative total stockholder return. The amounts reported assume that a total of 100% of the initial performance units granted for the 2018 awards would vest during the applicable measurement periods, all valued at the closing price of McDermott stock as reported on the NYSE on December 31, 2019. |
• | a person becomes the beneficial owner of 30% or more of the combined voting power of McDermott’s then outstanding voting stock unless such acquisition is made directly from McDermott in a transaction approved by a majority of McDermott’s incumbent directors; |
• | individuals who are incumbent directors cease for any reason to constitute a majority of McDermott’s board; |
• | completion of a merger or consolidation of McDermott with another company or an acquisition by McDermott or its subsidiaries, unless immediately following such merger, consolidation or acquisition: (1) all or substantially all of the individuals or entities that were the beneficial owners of outstanding McDermott voting securities immediately before such merger, consolidation or acquisition beneficially own at least 50% of the then outstanding shares of voting stock of the parent corporation resulting from the merger, consolidation or acquisition in the same relative proportions as their ownership immediately before such merger, consolidation or acquisition; (2) if such merger, consolidation or acquisition involves the issuance or payment by McDermott of consideration to another entity or its stockholders, the total fair market value of such consideration plus the principal amount of the consolidated long-term debt of the entity or business being acquired, does not exceed 50% of the sum of the fair market value of the outstanding McDermott voting stock plus the principal amount of our consolidated long-term debt; (3) no person beneficially owns 30% or more of the then outstanding shares of the voting stock of the parent company resulting from such merger, consolidation or acquisition; and (4) a majority of the members of the board of directors of the parent corporation resulting from such merger, consolidation or acquisition were incumbent directors of McDermott immediately before such merger, consolidation or acquisition; |
• | completion of the sale or disposition of 50% or more of the assets of McDermott and its subsidiaries on a consolidated basis, unless immediately following such sale or disposition: (1) the individuals and entities that were beneficial owners of outstanding McDermott voting stock immediately before such sale or disposition beneficially own at least 50% of the then outstanding shares of voting stock of McDermott and of the entity that acquires the largest portion of such assets, and (2) a majority of the members of the McDermott Board (if it continues to exist) and the board of directors of the entity that acquires the largest portion of such assets were incumbent directors of McDermott immediately before the completion of such sale or disposition; or any other set of circumstances is deemed by our Board in its sole discretion to constitute a change in control. |
Dickson ($) |
Krummel ($) |
Freeman ($) |
Mukherjee ($) |
De Bruijn ($) |
||||||||||||||||
Salary-Based Severance Payment (1) |
6,328,125 |
1,472,000 |
1,887,000 |
0 |
1,360,000 |
|||||||||||||||
EICP-Based Severance Payment (2) |
1,406,250 |
136,000 |
433,500 |
0 |
280,000 |
|||||||||||||||
Deferred Compensation Plan (3) |
— |
— |
46,877 |
0 |
16,868 |
|||||||||||||||
Restricted Stock Units (4) (unvested and accelerated) |
504,591 |
23,668 |
63,835 |
112,688 |
28,383 |
|||||||||||||||
Performance Units (4) (unvested and accelerated) |
451,686 |
9,408 |
65,304 |
104,633 |
19,187 |
|||||||||||||||
Total |
8,690,652 |
1,641,076 |
2,496,516 |
217,321 |
1,704,437 |
|||||||||||||||
(1) |
The salary-based severance payment made to Mr. Dickson in connection with a change in control would be a cash payment equal to 250% of the sum of his annual base salary prior to termination and his EICP target award applicable to the year in which the termination occurs. The salary-based severance payment made to Messrs. Krummel, Freeman and de Bruijn in connection with a change in control would be a cash payment equal to 200% of the sum of his annual base salary prior to termination and his EICP target award applicable to the year in which the termination occurs. |
NEO |
Annual Base Salary ($) |
Target EICP Award ($) |
||||||
Mr. Dickson |
1,125,000 |
1,406,250 |
||||||
Mr. Krummel |
340,000 |
136,000 |
||||||
Mr. Freeman |
510,000 |
433,500 |
||||||
Mr. de Bruijn |
400,000 |
280,000 |
(2) |
Each NEO listed in the table above could receive up to two EICP-based severance payments in connection with a change in control depending on the timing of the termination relative to the payment of an EICP award, as follows: |
• | If an EICP award for the year prior to termination is paid to other EICP participants after the date of the NEO’s termination, the NEO would be entitled to a cash payment equal to the product of the NEO’s target EICP percentage (or, if greater, the actual amount of the bonus determined under the EICP for the year prior to termination) and the NEO’s annual base salary for the applicable period. No such payment would have been due a NEO on a December 31, 2019 termination, because the 2018 EICP awards had already been paid. |
• | The NEO would be entitled to a prorated EICP payment based upon the NEO’s target EICP percentage for the year in which the termination occurs and the number of days in which the NEO was employed with us during that year. Based on a hypothetical December 31, 2019 termination, each listed NEO would have been entitled to an EICP payment equal to 100% of his 2019 target EICP percentage times annual base salary, calculated based on the base salaries and target EICP percentages below. |
NEO |
Annual Base Salary ($) |
Target EICP Percentage ($) |
||||||
Mr. Dickson |
1,125,000 |
125 |
% | |||||
Mr. Krummel |
340,000 |
40 |
% | |||||
Mr. Freeman |
510,000 |
85 |
% | |||||
Mr. de Bruijn |
400,000 |
70 |
% |
(3) |
The amounts reported represent 80% of Mr. Freeman’s and 100% of Mr. de Bruijn’s respective DCP balances as of December 31, 2019 that would become vested on a qualifying termination within one year following a change in control (as defined in the change-in-control agreements) pursuant to the executive’s change-in-control agreements. Because Mr. Dickson is 100% vested in his DCP balance no additional amount would become vested upon a change in control. Mr. Krummel was not a participant in the DCP in 2019. Under the DCP, vesting will also occur upon a change in control, and for purposes of this plan a “change in control” generally occurs if: |
• | a person (other than a McDermott employee benefit plan or a corporation owned by McDermott stockholders in substantially the same proportion as the ownership of McDermott voting shares) is or becomes the beneficial owner of 30% or more of the combined voting power of McDermott’s then outstanding voting stock; |
• | during any period of two consecutive years, individuals who at the beginning of such period constitute McDermott’s Board of Directors, and any new director whose election or nomination by McDermott’s Board was approved by at least two-thirds of the directors of McDermott’s Board then still in office who either were directors at the beginning of the period or whose election or nomination was previously approved, cease to constitute a majority of McDermott’s Board; |
• | a merger or consolidation of McDermott with any other corporation or entity has been completed, other than a merger or consolidation which results in the outstanding McDermott voting securities immediately prior to such merger or consolidation continuing to represent at least 50% of the combined voting power of the voting securities of McDermott or the surviving entity outstanding immediately after such merger or consolidation; |
• | McDermott’s stockholders approve (1) a plan of complete liquidation of McDermott; or (2) an agreement for the sale or disposition by McDermott of all or substantially all of McDermott’s assets; or |
• | within one year following the completion of a merger or consolidation transaction involving McDermott, (1) individuals who, at the time of execution and delivery of definitive agreements completing such transaction constituted our Board, cease for any reason (excluding death, disability or voluntary resignation) to constitute a majority of our Board; or (2) either individual, who at the first execution and delivery of definitive agreements completing the transaction, served as Chief Executive Officer or Chief Financial Officer does not, for any reason (excluding death, disability or voluntary resignation), serve as the Chief Executive Officer or Chief Financial Officer, as applicable, of McDermott, or if McDermott does not continue as a registrant with a class of equity securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended, as the Chief Executive Officer or Chief Financial Officer, as applicable, of a corporation or other entity that is (A) a registrant with a class of equity securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended, and (B) the surviving entity in such transaction or a parent entity of the surviving entity or McDermott following the completion of such transaction; provided, however, that a change in control would not be deemed to have occurred pursuant to this clause in the case of a merger or consolidation which results in the voting securities of McDermott outstanding immediately |
prior to the completion of the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 55% of the combined voting power of the voting securities of the McDermott or the surviving entity outstanding immediately after such merger or consolidation. |
(4) |
Under the terms of the 2017, 2018 and 2019 restricted stock unit awards outstanding, all unvested restricted stock units would become vested on a change in control, regardless of whether there is a subsequent termination of employment, only if the awards are not assumed in the transaction. On March 1, 2018, the Compensation Committee approved amendments to the February 28, 2017 form of Performance Unit Award Agreement to provide that 100% of the initial performance units granted thereunder would be converted into time-vested restricted stock units vesting on the third anniversary of the original grant date, subject to the completion of the Combination. Under the terms of the amended agreements, all unvested restricted stock units would become vested on a change in control, regardless of whether there is a subsequent termination of employment, only if the awards are not assumed in the transaction. Under the terms of the 2016 LTIP, the outstanding 2018 and 2019 performance unit awards would become vested at the greater of (1) target level, or (2) the actual performance level measured through the date the change in control becomes effective as determined in accordance with the grant agreement, regardless of whether there is a subsequent termination of employment, if the awards are not assumed in the change-in-control transaction. If any of the outstanding restricted stock unit or performance unit awards are assumed in a change-in-control transaction, such awards would only vest on a subsequent termination of employment by the employer without cause or by the executive for good reason. Under the 2016 LTIP, a “change in control” generally occurs under the same circumstances described in the first three bullets in note (3) above with respect to our Deferred Compensation Plan, as well as on the occurrence of the below circumstances: |
• | McDermott’s stockholders approve a plan of complete liquidation of McDermott; |
• | the consummation of a sale or disposition by McDermott of all or substantially all of McDermott’s assets other than to an entity that is under common control with McDermott or to an entity for which at least fifty percent (50%) of the combined voting power of its voting securities outstanding immediately after such sale or disposition are owned or controlled by the stockholders of McDermott immediately prior to such sale or disposition; or |
• | within one year following the completion of a merger or consolidation transaction involving McDermott, (1) individuals who, at the time of execution and delivery of definitive agreements relating to such transaction constituted our Board, cease for any reason (excluding death, disability or voluntary resignation) to constitute a majority of our Board; or (2) the individual, who at the first execution and delivery of definitive agreements relating to the transaction, served as Chief Executive Officer does not, for any reason (excluding death, disability or voluntary resignation), serve as the Chief Executive Officer of McDermott, or if McDermott does not continue as a registrant with a class of equity securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended, as the Chief Executive Officer of a corporation or other entity that is (A) a registrant with a class of equity securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended, and (B) the surviving entity in such transaction or a parent entity of the surviving entity or McDermott following the completion of such transaction; provided, however, that a change in control would not be deemed to have occurred pursuant to this clause in the case of a merger or consolidation which results in the voting securities of McDermott outstanding immediately prior to the completion of the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 55% of the combined voting power of the voting securities of the McDermott or the surviving entity outstanding immediately after such merger or consolidation; or |
• | within one year following the consummation of a merger or consolidation transaction involving McDermott (whether as a constituent corporation, the acquiror, the direct or indirect parent entity of the acquiror, the entity being acquired, or the direct or indirect parent entity of the entity being acquired), as a result of which the voting securities of McDermott outstanding immediately prior thereto continue to represent more than fifty percent (50%) but less than fifty-five percent (55%) of the combined voting power of the voting securities of McDermott or the surviving entity outstanding immediately after such merger or consolidation (a “Merger of Equals”): (1) individuals who, at the time of the execution and delivery of the definitive agreement pursuant to which such transaction has been consummated by the parties thereto (a “Definitive Transaction Agreement”) (or, if there are multiple such agreements relating to such Merger of Equals, the first time of execution and delivery by the parties to any such agreement) (the “Execution Time”), constituted our Board cease, for any reason (excluding death, disability or voluntary resignation but including any such voluntary resignation effected in accordance with any Definitive Transaction Agreement), to constitute a majority of our Board; or (2) the individual who, at the Execution Time, served as the Chief Executive Officer of McDermott does not, for any reason (excluding as a result of death, disability or voluntary termination but including any such voluntary termination effected in accordance with any Definitive Transaction Agreement), serve as the Chief Executive Officer of McDermott or, if McDermott does not continue as a registrant with a class of equity securities registered pursuant to Section 12(b) of the Exchange Act, as the Chief Executive Officer of a corporation or other entity that is (A) a registrant with a class of equity securities registered pursuant to Section 12(b) of the Exchange Act and (B) the surviving entity in such Merger of Equals or a direct or indirect parent entity of the surviving entity or McDermott following the consummation of such Merger of Equals. |
Chief Executive Officer annual total compensation (A) |
$ | 12,406,571 |
||
Median annual total compensation of all employees (excluding Chief Executive Officer) (B) |
$ | 19,751 |
||
Ratio of (A) to (B) |
628 to 1 |
($) |
||||
Annual Board Member Retainer |
120,000 |
|||
Audit Committee Chair Retainer |
20,000 |
|||
Compensation Committee Chair Retainer |
20,000 |
|||
Governance Committee Chair Retainer |
15,000 |
|||
Risk Committee Chair Retainer |
20,000 |
|||
Additional Retainer for Lead Director (if applicable) |
20,000 |
|||
Additional Retainer for Chair of the Board |
150,000 |
|||
Meeting fees for each meeting of the Board or a Committee (of which the director is a member) attended in excess of the twelfth Board or Committee meeting per annual director term |
2,500 |
• | Payment of all cash compensation in advance, on a quarterly basis as opposed to monthly; |
• | Establishment of the Finance Committee Chair retainer in the amount of $20,000; |
• | Conversion of the annual restricted stock unit award of $150,000 to cash; and |
• | Replacement of additional meeting fees with lump sum payments in the amount of $25,000 for all Finance Committee members and $10,000 for all other directors. |
• | Annual cash retainers in the amount of $300,000 per year, payable quarterly in advance; and |
• | Cash compensation payable on a per diem basis at a rate of $5,000 for days on which they devote more than four hours of time to McDermott matters, outside of Board meetings, for meetings or activities outside the scope of normal Board duties. |
Name |
Fees Earned or Paid in Cash ($) (1) |
Stock Awards ($) (2) |
Total ($) |
|||||||||
Forbes I.J. Alexander |
193,750 |
149,997 |
343,747 |
|||||||||
Philippe C. Barril |
221,500 |
149,997 |
371,497 |
|||||||||
Alan J. Carr |
110,833 |
0 |
110,833 |
|||||||||
John F. Bookout, III |
193,750 |
149,997 |
343,747 |
|||||||||
L. Richard Flury |
208,750 |
149,997 |
358,747 |
|||||||||
W. Craig Kissel |
215,000 |
149,997 |
364,997 |
|||||||||
Gary P. Luquette |
377,500 |
149,997 |
527,497 |
|||||||||
James H. Miller |
190,000 |
149,997 |
339,997 |
|||||||||
William H. Schumann, III |
210,691 |
149,997 |
360,688 |
|||||||||
Mary L. Shafer-Malicki |
190,000 |
149,997 |
339,997 |
|||||||||
Heather L. Summerfield |
110,833 |
0 |
110,833 |
|||||||||
Marsha C. Williams |
212,083 |
149,997 |
362,080 |
(1) |
The amounts reported in this column include the annual retainers paid to each director, additional retainers paid to the Chairman of the Board and Committee Chairs and additional meeting fees for each meeting of our Board or a Committee (of which the director is a member) attended in excess of the twelfth Board or Committee meeting per director term. Additionally, as a result of the shift to paying all cash compensation owed to nonemployee directors in advance on a quarterly basis, amounts reported in this column include the portion of the annual retainers, additional retainers and converted equity awards attributable to the first quarter of 2020 but paid in advance in December 2019. |
(2) |
Under our 2019 director compensation program, equity compensation for nonemployee directors included a discretionary grant of restricted stock units generally subject to a one-year vesting period. On May 2, 2019, each of the nonemployee directors then serving as a director received a grant of 18,541 shares of restricted stock units valued at $149,997, which is the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718, using the closing market price of McDermott common stock on the date of grant ($8.09). Under the terms of each award, the restricted stock units were scheduled to vest 100% upon the first to occur of: (1) the first anniversary of the grant date or (2) the date of our 2020 Annual Meeting of Stockholders, subject to each individual’s continued service as a director through the first of such dates to occur. 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, our directors will not receive any value for their restricted stock units or any other equity interest in McDermott notwithstanding the values reflected in this table. For information regarding compensation expense with respect to these awards, see Note 19 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2019. |
Name |
Shares held in Savings Plan (1) |
Total Shares Beneficially Owned (2) |
||||||
Forbes I.J. Alexander |
— |
0 |
||||||
Philippe Barril |
— |
8,277 |
||||||
John F. Bookout, III |
— |
0 |
||||||
Alan J. Carr |
— |
0 |
||||||
David Dickson |
— |
0 |
||||||
Leonard de Bruijn |
— |
0 |
||||||
L. Richard Flury |
— |
0 |
||||||
John M. Freeman |
— |
0 |
||||||
W. Craig Kissel |
— |
0 |
||||||
Christopher A. Krummel |
— |
803 |
||||||
Gary P. Luquette |
— |
0 |
||||||
James H. Miller |
— |
17,503 |
||||||
Samik Mukherjee |
— |
0 |
||||||
William H. Schumann, III |
— |
0 |
||||||
Mary Shafer-Malicki |
— |
0 |
||||||
Heather L. Summerfield |
— |
0 |
||||||
Marsha C. Williams |
— |
0 |
||||||
Stuart A. Spence (3) |
— |
214,076 |
||||||
Daniel McCarthy (3) |
44 |
79,284 |
||||||
Richard Heo (3) |
— |
49,620 |
||||||
All directors, executive officers and Former NEOs as a group (29 persons) |
44 |
480,164 |
(1) |
This column includes shares of common stock held in the indicated person’s McDermott Savings Plan account. |
(2) |
Shares beneficially owned by each individual in all cases constituted less than one percent of the outstanding shares of common stock on March 31, 2020, as determined in accordance with Rule 13d-3(d)(1) under the Securities Exchange Act of 1934. Shares beneficially owned by all directors and executive officers as a group constituted approximately 0.25% of the outstanding shares of common stock on March 31, 2020. |
(3) |
The number of shares reported as beneficially owned by Messrs. Spence, McCarthy and Heo is as of their respective dates of resignation (November 4, 2019, March 29, 2019 and March 1, 2019, respectively). |
Title of Class |
Name and Address of Beneficial Owner |
Amount and Nature of Beneficial Ownership |
Percent of Class (1) |
|||||||||
Common Stock |
Purnendu Chatterjee 888 Seventh Avenue, 37th Floor New York, NY 10106 |
22,085,142 |
(2) |
11.4 |
% | |||||||
Common Stock |
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 |
15,114,586 |
(3) |
7.8 |
% |
(1) |
Percent is based on outstanding shares of our common stock on March 31, 2020. |
(2) |
As reported on the Schedule 13G/A jointly filed on February 11, 2020 with the SEC by (1) Chatterjee Charitable Foundation, a New York charitable trust (“CCF”); (2) MCPI Holdings Limited, a company incorporated in Mauritius (“MCPI”); (3) Labvantage Solutions Technologies Limited, a company incorporated in Mauritius (“LVST”); (4) TCG Lifesciences Limited, a company incorporated in Mauritius (“TCGLF”); (5) CSL Holdings Limited, a company incorporated in Mauritius (“CSL”); (6) Chatterjee Fund Management, L.P., a Delaware limited partnership (“CFM”) and (7) Purnendu Chatterjee (“Dr. Chatterjee”), as the General Partner of CFM. The Schedule 13G/A reports beneficial ownership of 22,085,142 shares, shared voting power over 22,085,142 shares and shared dispositive power over 22,085,142 shares. The Schedule 13G/A further reports that (1) CCF beneficially owns and has shared voting and dispositive power over 600,000 shares; (2) MCPI beneficially owns 5,573,900 shares; (3) LVST beneficially owns and has shared voting and dispositive power over 8,430,200 shares; (4) each of TCGLF and CSL may be deemed to beneficially own and have voting and dispositive power over the 8,430,200 shares (as a result of TCGLF being the parent company of LVST and CSL being the parent company of TCGLF); (5) CFM beneficially owns and has shared voting and dispositive power over 7,181,042 shares, and as the parent company of CSL and MCPI, may be deemed to beneficially own and have voting and dispositive power over the 5,573,900 shares held by MCPI and the 8,430,200 shares held by LVST; and (6) Dr. Chatterjee may be deemed to beneficially own and have voting and dispositive power over an aggregate of 22,085,142 shares of Common Stock consisting of the shares held by CCF, MCPI, LVST and CFM, as a result of him being the general partner of CFM and the trustee of CCF. |
(3) |
As reported on the Schedule 13G/A filed with the SEC on February 10, 2020. The Schedule 13G/A reports beneficial ownership of 15,114,586 shares, sole voting power over 194,285 shares, shared voting power over 32,922 shares, sole dispositive power over 14,928,275 shares and shared dispositive power over 186,311 shares. |
• | McDermott or any of its subsidiaries is, was or will be a participant; |
• | any related person (as defined in the policy) has, had or will have a direct or indirect material interest; and |
• | the amount involved exceeds $120,000. |
• Forbes I.J. Alexander |
• Philippe C. Barril |
• John F. Bookout, III | ||
• Alan J. Carr |
• L. Richard Flury |
• W. Craig Kissel | ||
• Gary P. Luquette |
• James H. Miller |
• William H. Schumann III | ||
• Mary L. Shafer-Malicki |
• Heather L. Summerfield |
• Marsha C. Williams |
2019 ($) |
2018 ($) |
|||||||
Audit Fees The Audit fees for the years ended December 31, 2019 and 2018 were for professional services rendered for the audits of the consolidated financial statements of McDermott, the audit of McDermott’s internal control over financial reporting, statutory and subsidiary audits, reviews of the quarterly consolidated financial statements of McDermott and assistance with review of documents filed with the SEC. |
6,489,238 |
6,893,631 |
||||||
Audit-Related Fees The Audit-Related fees for the years ended December 31, 2019 and 2018 were for assurance and related services, audits of the financial statements of carve-out entities and agreed upon procedures. |
2,467,066 |
72,340 |
||||||
Tax Fees The Tax fees for the years ended December 31, 2019 and 2018 were for professional services rendered for consultations on various U.S. federal, state and international tax matters, international tax compliance and tax planning and assistance with tax examinations. |
6,258,903 |
3,159,419 |
||||||
All Other Fees The Other fees for the years ended December 31, 2018 were for permitted non-audit services and subscriptions to EY’s online accounting and financial reporting research tool. |
0 |
11,200 |
||||||
Total |
15,215,207 |
10,136,591 |
||||||
2018 ($) |
||||
Audit Fees During the period from January 1, 2018 through March 8, 2018, there were no Audit fees billed by D&T. |
0 |
|||
Audit-Related Fees During the period from January 1, 2018 through March 8, 2018, there were no Audit-Related fees billed by D&T. |
0 |
|||
Tax Fees Tax fees for the period from January 1, 2018 through March 8, 2018 were for professional services rendered for consultations on various U.S. federal, state and international tax matters, international tax compliance and tax planning, and assistance with tax examinations. |
15,000 |
|||
All Other Fees During the period from January 1, 2018 through March 8, 2018 and for the year ended December 31, 2017, there were no other services provided to us by D&T. |
0 |
|||
Total |
15,000 |
|||
ITEM |
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULE |
I. | Consolidated Financial Statements |
* | Previously filed with the Original Filing |
II. | Consolidated Financial Statement Schedule |
III. | Exhibits |
Exhibit Number |
Description | |||
2.1 |
||||
2.2 |
||||
2.3 |
Exhibit Number |
Description | |||
2.4 |
||||
3.1 |
||||
3.2 |
||||
3.3 |
||||
3.4 |
||||
3.5 |
||||
3.6 |
||||
4.1† |
||||
4.2 |
||||
4.3 |
||||
4.4 |
||||
4.5 |
||||
4.6 |
Exhibit Number |
Description | |||
4.7 |
||||
4.8† |
||||
4.9 |
||||
4.10 |
||||
4.11 |
||||
4.12 |
||||
4.13 |
||||
4.14 |
||||
4.15 |
||||
4.16 |
||||
4.17 |
Exhibit Number |
Description | |||
4.18 |
||||
4.19 |
||||
4.20 |
||||
4.21 |
||||
4.22† |
||||
4.23† |
||||
10.1* |
||||
10.2 |
Exhibit Number |
Description | |||
10.3* |
||||
10.4* |
||||
10.5* |
||||
10.6* |
||||
10.7* |
||||
10.8* |
||||
10.9* |
||||
10.10* |
||||
10.11* |
||||
10.12* |
||||
10.13* |
||||
10.14* |
||||
10.15* |
||||
10.16* |
||||
10.17* |
Exhibit Number |
Description | |||
10.18* |
||||
10.19* |
||||
10.20* |
||||
10.21* |
||||
10.22* |
||||
10.23* |
||||
10.24* |
||||
10.25* |
||||
10.26* |
||||
10.27* |
||||
10.28* |
||||
10.29* |
||||
10.30* |
||||
10.31* |
||||
10.32* |
Exhibit Number |
Description | |||
10.33* |
||||
10.34* |
||||
10.35*† |
||||
10.36*† |
||||
10.37 |
||||
10.38 |
||||
10.39 |
||||
10.40 |
||||
10.41 |
||||
10.42 |
||||
10.43 |
||||
10.44 |
||||
10.45 |
Exhibit Number |
Description | |||
10.46 |
||||
10.47 |
||||
10.48 |
||||
10.49 |
||||
10.50 |
||||
10.51 |
||||
10.52† |
||||
10.53† |
||||
21.1† |
||||
31.1† |
||||
31.2† |
||||
31.3 |
||||
31.4 |
||||
32.1† |
||||
32.2† |
||||
99.1 |
||||
101.INS XBRL† |
Inline XBRL Instance Document – The instance document does not appear in the interactive date file because its XBRL tags are embedded within the Inline XBRL document | |||
101.SCH XBRL† |
Inline XBRL Taxonomy Extension Schema Document |
Exhibit Number |
Description | |||
101.CAL XBRL† |
Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||
101.LAB XBRL† |
Inline XBRL Taxonomy Extension Label Linkbase Document | |||
101.PRE XBRL† |
Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||
101.DEF XBRL† |
Inline XBRL Taxonomy Extension Definition Linkbase Document | |||
104† |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Management contract or compensatory plan or arrangement. |
† | Incorporated by reference to the corresponding exhibit to the Original Filing. |
McDERMOTT INTERNATIONAL, INC. | ||||||
By: |
/s/ John M. Freeman | |||||
April 24, 2020 |
John M. Freeman | |||||
Executive Vice President, Chief Legal Officer and Corporate Secretary |