Mark Johnson
DNOWAbout Mark Johnson
Mark Johnson, age 43, is Senior Vice President and Chief Financial Officer of DNOW, serving as CFO since June 2020 after roles as VP, Corporate Controller and Chief Accounting Officer (2018–2020) and VP–Finance and Assistant Corporate Controller (2014–2018); he is a CPA with prior public accounting experience and 16 years at DNOW as of year-end 2024 . During his CFO tenure, DNOW delivered 2024 revenue of $2.373 billion (+2% YoY), EBITDA of $176 million (7.4% margin), and record free cash flow of $289 million, while remaining debt-free and completing its $80 million buyback and authorizing a new $160 million program in Jan-2025 . Despite a 2024 U.S. rig count decline (~13% YoY), DNOW grew U.S. revenue 7% and maintained three consecutive years with >=$100 million in net income (ex-other costs), evidencing execution against mix shift toward midstream and Process Solutions . DNOW’s 5-year TSR proxy reference shows $100 invested in 2019 grew to $116 by 2024, broadly in-line with oil service sector volatility, with 2022–2024 PSU results for EBITDA and ROCE paying at max (200%) and TSR above-threshold (76.8%) for the 2022–2024 cycle, linking realized pay to performance .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| DNOW | SVP & Chief Financial Officer | 2020–Present | Led balance sheet discipline (net cash), record 2024 FCF ($289m) and capital returns while funding M&A; maintained EBITDA margin resilience through cycle . |
| DNOW | VP, Corporate Controller & CAO | 2018–2020 | Strengthened financial reporting and controls during business transformation post spin-off . |
| DNOW | VP–Finance & Assistant Corporate Controller | 2014–2018 | Supported spin-off integration and finance scalability as public company . |
| NOV Distribution (pre-spin) | VP–Finance | 2012–2014 | Drove finance for NOV’s distribution group prior to DNOW spin . |
| Public Accounting | Audit/Accounting (CPA) | Pre-2008 | Technical foundation for SEC reporting, controls, and audit readiness . |
Fixed Compensation
| Component | 2024 Amount | Notes |
|---|---|---|
| Base salary | $515,000 | 2024 base as of Dec 31, 2024 . |
| Target annual bonus (% of salary) | 80% | Participation level for 2024 AIP . |
| Actual annual bonus paid | $506,566 | Based on 122.953% payout factor on 80% target . |
Performance Compensation
2024 Annual Incentive Plan (AIP)
| Metric | Weight | Entry | Target | Maximum | 2024 Actual | Payout vs Target | Notes |
|---|---|---|---|---|---|---|---|
| EBITDA % of Revenue | 70% | 5.5% | 7.9% | 8.7% | 7.417% | 89.932% | Above-entry EBITDA; exact achievement 7.417% . |
| Working Capital % of Revenue (lower is better) | 30% | 20% | 18% | 16% | 14.9% | 200% | WC excludes acquisition impact in quarter-of-acquisition . |
| Overall AIP payout | 100% | — | — | Cap 200% | — | 122.953% | Weighted payout: 62.953% (EBITDA) + 60% (WC) . |
2024 Long‑Term Incentive (granted 2/21/2024; 3-year vest)
| Award | Shares Granted | Grant Date Fair Value | Vesting | Performance Structure |
|---|---|---|---|---|
| Restricted Stock (RS) | 34,589 | Included in total $1,034,903 | 100% on 2/21/2027 | Time-based retention . |
| Performance Share Award (PSU) – Target | 34,589 | Included in total $1,034,903 | 3-year performance, vests 2/21/2027 | 50% rTSR vs peer group; 25% EBITDA%; 25% ROCE; 50–200% payout scale . |
2024–2026 PSU performance scales:
- TSR: 25th/50th/75th percentile = 50%/100%/200% payout .
- EBITDA%: 5.5%/7.9%/8.7% = 50%/100%/200% payout (3-year average) .
- ROCE: 10%/15%/17% = 50%/100%/200% payout (3-year average) .
Prior-cycle PSU realization (2012–2024 PSU cycle paid in 2025)
| Metric | Weight | Target | Actual Result | Payout |
|---|---|---|---|---|
| TSR vs designated peer group | 50% | 50th percentile | 38.40th percentile | 76.8% . |
| EBITDA% (3‑yr avg) | 25% | 4.75% | 7.85% | 200% . |
| ROCE (3‑yr avg) | 25% | 5% | 18.56% | 200% . |
| Grant | Target PSUs (2022 grant) | Shares Paid (2025) |
|---|---|---|
| 2022–2024 PSU (vested 2025) | 36,383 | 50,354 . |
Option awards and exercises
| Options (outstanding 12/31/2024) | Status | Exercise Price | Expiration |
|---|---|---|---|
| 10,472 | Exercisable | $15.30 | 2/19/2026 . |
| 21,985 | Exercisable | $9.53 | 2/21/2027 . |
| 50,181 | Exercisable | $10.26 | 2/23/2028 . |
| 2024 Transactions | Shares | Value Realized |
|---|---|---|
| Options exercised (5/14/2024) | 47,015 | $169,254 (avg exercise price vs market) . |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (3/24/2025) | 228,075 common shares; 82,638 options exercisable within 60 days; <1% of outstanding . |
| Unvested equity at 12/31/2024 | RS: 36,383 (2022), 26,923 (2023), 34,589 (2024); PSUs (target): same counts for each grant year . |
| Next vesting dates | RS: 2/22/2025 (2022 grant), 2/20/2026 (2023), 2/21/2027 (2024); PSUs vest 3 years from grant (same dates) . |
| Ownership guidelines | Executives: 3x base salary; CEO: 6x; Directors: 5x retainer. All executives/directors are in compliance or on track . |
| Hedging/pledging | Prohibited: no hedging, short sales, pledging, or holding in margin accounts . |
| Clawback | NYSE Rule 10D‑1 compliant recoupment policy; recovery of erroneously awarded incentive comp after restatements; LTIP also allows clawbacks for misconduct and restrictive covenant violations . |
Potential selling/float considerations:
- 2022 RS/PSU vested in Feb-2025; 2023 RS/PSU vest Feb-2026; 2024 RS/PSU vest Feb-2027, creating periodic supply windows; Johnson also exercised 47,015 options in 2024, evidencing usage of in-the-money grants .
Employment Terms
| Term | Mark Johnson |
|---|---|
| Employment agreement | Originally 2/16/2018; updated 6/1/2020 upon CFO appointment . |
| Severance multiple (termination without cause / Good Reason) | 2.5x current base salary, plus company 401(k)/Supplemental Plan match, continued welfare benefits, RSU full vest, PSUs at target, and outplacement (up to 15% of base) . |
| Change-of-control vesting | Double-trigger: full vest of options, RS, and PSUs upon CoC and qualifying change in responsibilities . |
| Non-compete / non-solicit | 1 year for Johnson post-termination . |
| Tax gross-ups | None; no 280G excise tax gross-ups . |
| Illustrative payout (as of 12/31/2024) | Total $3,973,151 at $13.01/share: base $1,287,500; retirement match $61,173; RS $1,273,614; PSUs (target) $1,273,614; outplacement $77,250; medical $0 . |
| Deferred comp | Aggregate balance $72,015; 2024 contributions $0; 2024 earnings $10,387 . |
Notes: “Good Reason” includes material diminution of duties or breach by the company; amounts based on 12/31/2024 share price and target PSU vesting as disclosed .
Compensation Structure Analysis
- Strong pay-for-performance linkage: 2024 AIP weighted 70% to EBITDA and 30% to Working Capital with strict entry thresholds and a cap at 200%; EBITDA entry and target levels were raised by at least 10% YoY to increase rigor .
- Shift to performance equity: Options eliminated starting 2022; LTI split 50% RS/50% PSUs with PSUs tied to rTSR, EBITDA%, and ROCE over three years; 2022–2024 cycle paid at max for EBITDA/ROCE and above-threshold for TSR (76.8%), aligning realized awards with multi-year operating performance and relative returns .
- Governance and shareholder alignment: 95% Say-on-Pay support in 2024; robust clawbacks; no hedging/pledging; stock ownership guidelines (3x salary for executives) and compliance/on-track status disclosed .
- Market positioning: Total direct compensation targeted near 50th percentile of peer group; independent consultant (Zayla) confirms rigor of incentives and pay positioning .
Performance & Track Record (Selected KPIs under Johnson’s CFO tenure)
| Metric (FY 2024) | Result | Context |
|---|---|---|
| Revenue | $2.373 billion | Highest since 2019; +2% YoY amid U.S. rig/completions decline . |
| EBITDA | $176 million (7.4% margin) | Third straight year ~7.4%+ EBITDA margin . |
| Free cash flow | $289 million | 165% conversion; record year; funded M&A and buybacks . |
| Net income excl. other costs | $100 million | Third consecutive year >=$100m on non‑GAAP basis . |
| Balance sheet | $256m cash; zero debt; $556m liquidity | Post-Whitco/Trojan acquisitions and buyback completion . |
| Capital returns | $80m buyback completed in 2024; new $160m authorization (Jan-2025) | Opportunistic repurchases within disciplined allocation . |
Risk Indicators & Red Flags
- Equity supply windows: Significant scheduled RS/PSU vests in Feb-2026 and Feb-2027 could create episodic selling pressure (subject to blackout/compliance) .
- Option overhang: Fully exercisable options expiring 2026–2028 could be monetized depending on price levels .
- Legal/related parties: No material related party transactions; compliance with Section 16 filings; no material legal proceedings impacting financials disclosed .
- Policy protections: Prohibitions on hedging/pledging, comprehensive clawback, robust insider trading policy mitigate alignment risks .
Investment Implications
- Pay-for-performance alignment appears strong: higher EBITDA/ROCE hurdles, three-year PSUs, and ownership guidelines support long-term value creation and reduce agency risk .
- Retention risk looks contained: multi-year cliff vesting, double-trigger CoC, and 2.5x salary severance for CFO reinforce continuity through the cycle and during M&A integration .
- Trading signals: Monitor scheduled vesting windows (Feb-2026/2027) and option expirations (2026–2028) for potential insider supply; 2024 option exercises (47,015 by Johnson) and 2025 PSU payouts indicate episodic liquidity events .
- Execution credibility: DNOW’s margin/FCF resiliency and capital allocation under Johnson (debt-free, record FCF, buybacks plus M&A) amid activity headwinds suggest disciplined financial stewardship—supportive for valuation and downside protection .