Rocio Surratt
DNOWAbout Rocio Surratt
Rocio Surratt is Vice President – Finance and Corporate Controller at DNOW, age 49, with 14 years at DNOW and its predecessor entities; she has served as Corporate Controller since July 2020 and previously as Vice President of Finance from 2014–2018, following finance leadership roles at NOV Distribution and prior work in public accounting . DNOW’s incentive design emphasizes EBITDA and Working Capital in the annual plan and TSR/EBITDA/ROCE in long-term performance awards; for the 2022–2024 performance cycle, DNOW achieved TSR at the 38.40th percentile, EBITDA at 7.85%, and ROCE at 18.56%, driving payouts of 76.8%, 200%, and 200% on respective metrics . Annual cash incentive participation for Ms. Surratt was 65% of base salary in 2024, with an EBITDA entry threshold required before any payout under either metric .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| DNOW | Vice President – Finance and Corporate Controller | 2020–Present | Not disclosed |
| DNOW | Vice President of Finance | 2014–2018 | Not disclosed |
| NOV Distribution | Director – Finance | 2012–2014 | Not disclosed |
| NOV | International Controller | 2007–2012 | Not disclosed |
| Public accounting | Various | Pre-2007 | Not disclosed |
External Roles
No external board or industry roles for Ms. Surratt are disclosed in the proxy .
Fixed Compensation
| Year | Salary ($) | Non-Equity Incentive Plan Compensation ($) | Stock Awards ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|---|
| 2022 | $223,750 | $259,927 | $269,423 | $8,654 | $761,754 |
| 2023 | $274,038 | $242,554 | $277,585 | $10,962 | $805,139 |
| 2024 | $283,092 | $226,372 | $316,224 | $11,324 | $837,012 |
| Annual Cash Incentive Target | Participation Level (% of Base Salary) |
|---|---|
| 2024 | 65% |
Notes:
- 2024 base salary as of 12/31/2024: $283,250 (used in severance calculations) .
- Annual plan requires achieving entry-level EBITDA before any bonus payout under either metric .
Performance Compensation
Annual Incentive Plan (AIP) Structure
| Metric | Weighting | Threshold (“Entry”) | Target | Maximum | Payout Mechanics | Special Conditions |
|---|---|---|---|---|---|---|
| EBITDA | Not disclosed for 2024 | Requires entry EBITDA achieved before any payout | Set via annual operating plan | Cap at 200% | Sliding scale interpolation between levels | Entry EBITDA must be achieved before any payout under either metric |
| Working Capital | Not disclosed for 2024 | Sliding scale entry level | Set via annual operating plan | Cap at 200% | Sliding scale interpolation between levels | Entry EBITDA condition applies |
Forward-looking 2025 AIP weighting: EBITDA 70%, Working Capital 30% (terms approved Feb 25, 2025; specifics to be disclosed in next proxy) .
Long-Term Incentive Plan (LTIP) – 2024 Grants and 2022–2024 Results
| Grant Type (2/21/2024) | Target (#) | Vesting | 2024 Grant Date Fair Value ($) |
|---|---|---|---|
| Restricted Stock (time-based) | 10,569 | 100% on 2/21/2027 | Included in $316,224 total stock awards for 2024 |
| Performance Shares (PSUs) | 10,569 | Earn based on TSR/EBITDA/ROCE; vest 3 years from grant | Probable-outcome value $178,722; max-outcome $275,005 |
2024–2026 PSU performance metric targets:
| Metric | Entry | Target | Maximum |
|---|---|---|---|
| TSR percentile vs peer group | 25th | 50th | 75th+ |
| EBITDA margin | 5.5% | 7.9% | 8.7%+ |
| ROCE | 10% | 15% | 17%+ |
2022–2024 PSU performance outcomes (certified Feb 2025):
| Metric (Weight) | Performance Result | Payout % |
|---|---|---|
| TSR (50%) | 38.40th percentile | 76.8% |
| EBITDA (25%) | 7.85% | 200% |
| ROCE (25%) | 18.56% | 200% |
PSU payouts from 2022 grant paid in 2025:
| Executive | Target PSUs (2022) | PSUs Paid Out in 2025 (#) |
|---|---|---|
| Rocio Surratt | 12,994 | 17,982 |
Stock awards vested during 2024: 22,332 shares for Ms. Surratt, value realized $296,792 at $13.29 vest price on 2/23/2024 .
Equity Ownership & Alignment
Beneficial Ownership (as of March 24, 2025)
| Holder | Common Shares | Options Exercisable Within 60 Days | Percent of Class | Shares Outstanding Reference |
|---|---|---|---|---|
| Rocio Surratt | 59,572 | 12,545 | <1% | 108,823,368 shares outstanding |
Includes shares deemed held in 401(k) and deferred compensation plans .
Outstanding Equity Awards (as of 12/31/2024)
| Instrument | Quantity | Exercise/Unit Price | Expiration/Vest Date | Market/Payout Value Reference |
|---|---|---|---|---|
| Stock Options (exercisable) | 12,545 | $10.26 | 2/23/2028 | — |
| Unvested Restricted Stock (2022) | 12,994 | — | Vests 2/22/2025 | $169,052 (at $13.01) |
| Unvested Performance Shares (2022 target) | 12,994 | — | Earned/vest with 2022–24 cycle | $169,052 (at $13.01) |
| Unvested Restricted Stock (2023) | 9,615 | — | Vests 2/20/2026 | $125,091 (at $13.01) |
| Unvested Performance Shares (2023 target) | 9,615 | — | Earn/vest 3 years from grant | $125,091 (at $13.01) |
| Unvested Restricted Stock (2024) | 10,569 | — | Vests 2/21/2027 | $137,503 (at $13.01) |
| Unvested Performance Shares (2024 target) | 10,569 | — | Earn/vest 3 years from grant | $137,503 (at $13.01) |
Ownership alignment policies:
- Stock ownership guidelines: Other executive officers must hold 3x base salary; compliance or on-track status across executives .
- Anti-hedging and anti-pledging: Hedging, short sales, options trading, margin accounts, and pledging of DNOW shares are prohibited for employees and directors .
Employment Terms
| Item | Terms |
|---|---|
| Employment agreement date | November 12, 2021 (Surratt) |
| Term | One-year; auto-renew annually |
| Severance multiple | 1.5x base salary upon involuntary termination without cause or for Good Reason |
| Base salary reference used (12/31/2024) | $283,250 |
| Good Reason definition | Material diminution of duties/position or failure to comply with agreement terms |
| Benefits continuation | Welfare/medical plan participation; outplacement services up to 15% of base salary |
| Equity vesting on CoC | Double-trigger: full vesting of options, restricted stock, and performance awards; PSUs vest at target |
| Non-compete / non-solicit | One year for Ms. Surratt |
| Tax gross-ups | None for excise taxes under IRC §4999 |
| Clawback | Recoupment policy adopted November 15, 2023 to comply with SEC Rule 10D-1/NYSE; LTIP permits clawback for misconduct and specified covenant breaches |
Potential payments upon termination or change-in-control (as of 12/31/2024):
| Component | Amount ($) |
|---|---|
| Base salary (multiple application) | $424,875 |
| Continuing medical benefits | $0 |
| Retirement contribution and matching | $27,337 |
| Value of unvested restricted stock | $431,646 |
| Value of unvested performance awards | $431,646 |
| Outplacement services (15% of base) | $42,488 |
| Total | $1,357,992 |
Investment Implications
- Pay-for-performance alignment: DNOW’s mix emphasizes performance equity with three-year vesting and capped payouts, and AIP uses formulaic EBITDA and Working Capital with an EBITDA threshold; 2022–2024 outcomes showed maximum payouts on EBITDA and ROCE but below-target TSR, suggesting operational execution outpaced relative stock performance .
- Retention and overhang: Material unvested RS/PSU tranches vest annually in late February through 2027 (2025: 2022 RS; 2026: 2023 RS; 2027: 2024 RS), and 2022 PSUs paid out in 2025; vesting may create periodic liquidity events and potential selling pressure around those dates even with anti-hedging/pledging policies .
- Ownership alignment: Beneficial ownership of 59,572 shares and options exercisable within 60 days of 12,545 shares, under 1% of the float, with 3x salary ownership guidelines and compliance/on-track status, implies ongoing alignment while limiting leverage/pledge risk .
- Downside protection and change-in-control economics: 1.5x salary severance, benefit continuation, outplacement, and double-trigger equity vesting (PSUs at target) reduce transition risk and can incent stability through potential strategic events; no excise tax gross-ups mitigate shareholder-unfriendly optics .
- Governance signal: Strong say-on-pay support (~95% in 2024) and use of independent consultants (NFPCC, Zayla) with median benchmarking and explicit clawback framework support compensation governance quality and reduce pay-related headline risk .