David Patton
About David Patton
Independent director of DXP Enterprises since 2016; age 75. Retired Partner and Chair-Emeritus of the Energy Practice Group at Locke Lord LLP (career began in 1977; retired December 2024). Core credentials: legal expertise in oil & gas transactions, corporate governance, risk management, and compensation/incentives; currently chairs DXP’s Compensation Committee and serves on Audit, Nominating & Governance, and IT/Cybersecurity Committees .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Locke Lord LLP | Partner; Chair-Emeritus, Energy Practice Group | 1977–Dec 2024 | Led legal work across acquisitions/sales of oil & gas assets and equity interests; negotiated leases/contracts; frequent industry speaker; active in Rocky Mountain Mineral Law Foundation and State Bar of Texas |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Rocky Mountain Mineral Law Foundation | Active member/speaker | Not disclosed | Frequent speaker on oil & gas issues |
| State Bar of Texas | Active member | Not disclosed | Legal community engagement |
| Other public company boards | — | — | No other public company directorships disclosed |
Board Governance
- Independence: Board determined Patton (and all non-employee directors) are independent under NASDAQ standards; all Board committees are composed solely of independent directors .
- Committee assignments and chair roles: Compensation (Chair), Audit, Nominating & Governance, and IT/Cybersecurity; all committees held meetings in 2024 (Audit 4; Compensation 4; Nominating & Governance 4; IT/Cybersecurity 2) .
- Attendance: Board met 4 times in 2024; each director attended all Board and committee meetings of which they were a member .
- Executive sessions: Non-management directors hold executive sessions at least four times a year, chaired by the Audit Committee Chair .
- Leadership structure: No Lead Independent Director; CEO serves concurrently as Board Chair; Board cites majority-independent composition and all-independent committees as counterbalances .
- Majority voting standard: Majority voting in uncontested director elections; process for director resignation if not receiving majority support .
Fixed Compensation
| Component | Structure/Amount | 2024 Patton Actual | Notes |
|---|---|---|---|
| Annual cash retainer | $55,000 | Included in “Fees Earned” | Board raised annual fee, chair fees, and RS awards by 10% effective July 31, 2024 |
| Committee chair fee (Compensation) | $11,000 | Included in “Fees Earned” | Chair fees per committee schedule |
| Committee membership fees | Included in annual structure | Included | All committees independent; Patton serves on four committees |
| Board meeting fee | $13,750 per quarterly meeting | Included | Quarterly meeting fee paid to independent directors |
| Restricted stock grant | $82,500 grant value per director (shares = $82,500 ÷ close on July 1) | 1,862 shares granted 7/1/2024; vests 1 year | RSAs vest on first anniversary; no dividends accrue prior to vesting |
| Indemnification | Standard director indemnification agreements | Applies | Company has indemnification agreements with each director |
| 2024 Fees Earned (cash) | — | $63,000 | Director compensation table |
| 2024 Stock Awards (fair value) | — | $82,500 | Director compensation table |
Performance Compensation
NEO pay program metrics overseen by Patton as Compensation Committee Chair:
- Short-term bonus: Performance-based cash tied to Normalized EPS and Normalized EBITDA for 2024 .
- Long-term incentives: Equity awards linked to EBITDA targets (e.g., FY2024 target $180M or ≥3.3% YoY growth), with threshold and payout schedule below .
| Metric/Plan Element | FY2024 Target/Design | Threshold/Payout Schedule |
|---|---|---|
| STBI (Cash) | Normalized EPS; Normalized EBITDA | Determined annually by Committee |
| LTI (Equity RSAs) | EBITDA target $180M or ≥3.3% YoY growth | 70% of target → 50%; 80% → 75%; 90% → 90%; 98% → 100%; 105% → 110%; 115% → 125%; 125% → 150%; 135% → 200% |
Committee practices and safeguards:
- Independent consultant NFP Compensation Consulting (formerly Longnecker) engaged; assessed independence and advised on market competitiveness .
- Best-practice policies include heavy variable pay, quantitative goals, annual say-on-pay, clawbacks, and no overlapping metrics across ST/LT programs .
- Clawback policies: Board-level guidelines plus NASDAQ-compliant policy for restatements and misconduct .
Other Directorships & Interlocks
| Item | Status |
|---|---|
| Other public company boards | None disclosed |
| Compensation Committee interlocks | None; no relationships requiring disclosure |
Expertise & Qualifications
- Legal (oil & gas), corporate governance, risk management, compensation/incentives, general management .
- Board skills matrix reflects governance, risk, and strategic capabilities at Board level .
Equity Ownership
| Holder | Shares Beneficially Owned | % of Shares Outstanding | RSAs Outstanding (12/31/2024) |
|---|---|---|---|
| David Patton (Director) | 23,427 | * (<1%) | 23,427 |
Policy context:
- Restricted transactions: Directors/officers prohibited from short sales, puts/calls; pledging allowed only with CFO approval and aggregate cap of 10% of outstanding shares across directors/executives .
Governance Assessment
Strengths:
- Independent, experienced Compensation Committee Chair; engages independent consultants; strong pay-for-performance construct (STBI: EPS/EBITDA; LTI: EBITDA targets) .
- Full meeting attendance and active participation across four committees; all committees independent .
- Robust clawback framework (Board guidelines and NASDAQ-compliant policy) .
- High say-on-pay support in 2024 (over 91% approval; common shares for/against/abstentions disclosed), indicating investor confidence in compensation oversight .
Watch items / RED FLAGS:
- No Lead Independent Director while CEO is also Board Chair; relies on structural counterbalances (independent committees, executive sessions) but may reduce independent counterweight optics .
- Tax gross-up inconsistency: “We do not allow tax gross-ups” policy noted, yet CEO’s legacy employment agreement includes a Section 4999 excise tax gross-up—shareholder-unfriendly provision persisting under current oversight; as Compensation Chair, Patton should consider rectifying legacy terms .
- Pledging policy permits director/executive pledging (with approval) up to 10% aggregate—less stringent than outright prohibitions at peers; monitor for any pledging activity (none specifically disclosed for Patton) .
- Section 16 timeliness: Patton filed one late Form 5 for 2024 (and other insiders had late filings)—process rigor should be maintained to avoid repeat .
- Director attendance at annual shareholder meeting is not required; only one director attended last meeting—optics risk for shareholder engagement (not specific to Patton) .
Say-on-Pay & Shareholder Feedback:
- 2024 Say-on-Pay: Over 91% approval; common shares cast “for” 12,093,392; “against” 1,041,539; “abstain” 28,462; preferred shares voting supported the proposal. Compensation Committee maintained program structure while monitoring investor policies .
Related-Party Transactions:
- Multiple related-party arrangements involve CEO/family (leases, employment), but no related-party transactions disclosed for Patton; Audit Committee reviews/approves such transactions under written policies .
Insider Trades and Ownership Alignment:
- Beneficial ownership under 1%; alignment via annual time-based RSAs (vest at one year). No options disclosed for directors; RSAs do not accrue dividends pre-vesting . Patton filed one late Form 5 in 2024 .
Executive Sessions & Risk Oversight:
- Executive sessions at least quarterly, chaired by Audit Chair; Board and committees oversee financial, compensation, cybersecurity, and governance risks; Patton contributes across all four committees .
Overall: Patton brings deep legal/governance rigor and chairs an active, independent compensation committee with structured performance metrics. Key governance optics to monitor include lack of a Lead Independent Director, legacy CEO gross-up provision, permissive pledging policy, and Section 16 timeliness controls .