Neal Lux
FORUM ENERGY TECHNOLOGIESAbout Neal Lux
Neal A. Lux, age 49, is President & Chief Executive Officer of Forum Energy Technologies (FET) and has served on the board since February 2022; he previously held senior operating roles at FET since 2009. He holds a B.S. in Industrial Engineering from Purdue University and brings deep operational and financial experience in oilfield products and services . Under his leadership, 2024 delivered adjusted EBITDA of $100.0 million (+49% YoY) and free cash flow of $105.1 million; over the last three years revenue increased 51% and adjusted EBITDA grew fivefold, though 2024 TSR was -31.7% with PRSU tranche-1 paying out at 50% . Governance mitigants include separation of CEO and Chair roles (with independent chair transition set post-May 2025), strong stock ownership and clawback policies, and a pay mix emphasizing variable, performance-tied compensation .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Forum Energy Technologies | President & CEO; Director | Feb 2022–present | Strategic execution across portfolio; customer-focused growth; board-level leadership |
| Forum Energy Technologies | EVP & COO | Dec 2020–Feb 2022 | Enterprise operations leadership and integration |
| FET & subsidiaries (Global Tubing, Completions) | EVP–Operations; SVP–Completions; Managing Director–Global Tubing; President–Global Tubing | Jan 2009–Dec 2020 | Segment P&L and operations, product portfolio stewardship |
Board Governance and Director Service
- Director since February 2022; not independent due to CEO role .
- CEO and Chair roles separated; Chairman transition to independent director Michael McShane after May 2025; Lux remains CEO/director (dual-role) with independent oversight via committees and regular executive sessions .
- Committees: Audit, Compensation & Human Capital, and NG&S staffed entirely by independent directors; Lux is not a committee member .
- Board meeting attendance: each director attended at least 90% of board/committee meetings in 2024; executive sessions held at each regular meeting .
- Director compensation: Lux receives no additional pay for board service .
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (% of base) | Max Bonus (% of base) | Actual Bonus Paid ($) |
|---|---|---|---|---|
| 2024 | 696,154 | 110% (raised from 100%) | 220% | 1,001,564 |
| 2023 | 663,462 | 100% (pre-2024 policy) | 200% (2× target policy) | 513,519 |
Performance Compensation
Annual Cash Incentive (EMIP) – 2024 Outcome
| Metric | Weight | Target | Actual | Payout vs Target | Weighted Contribution |
|---|---|---|---|---|---|
| Adjusted EBITDA ($MM) | 30% | 120.0 | 100.0 | 58% | 18% |
| Free Cash Flow ($MM) | 40% | 76.0 | 84.8 | 158% | 63% |
| Safety – TRIR | 5% | 1.10 | 0.75 | 200% | 10% |
| Safety – Perfect Days | 5% | 76% | 81% | 200% | 10% |
| Strategic Objectives | 20% | Board-set | Above target (157%) | 157% | 31% |
| Total Performance Factor | — | — | — | — | 133% |
Notes: 2024 targets were set at stretch levels (e.g., EBITDA target implied 79% growth vs 2023; FCF target 138% above prior-year target) . The final EMIP payout to Lux was $1,001,564 .
Long-Term Incentives – Grants and Design
| Award Type | Grant Detail | Vesting | Performance Framework |
|---|---|---|---|
| RSUs (Annual) | 86,391 units; part of total grant value $3,334,693 | Ratably over 3 years: Mar 6, 2025/2026/2027 | Time-based; aligns with sustained retention/ownership |
| Performance RSUs (PRSU) | 86,391 target units | 3 tranches measured 1/1/2024–12/31/2024, 2025, 2026 | Relative TSR vs peer group (OIS, DRQ, Hunting, DMC Global, Core Labs, Cactus, NOV, Expro) with absolute TSR guardrails; 0–200% payout scale |
PRSU Earned Results
| Tranche | Period | Company TSR | Peer Rank | Payout Earned | Vesting Date |
|---|---|---|---|---|---|
| 2024 Tranche 1 | 1/1/2024–12/31/2024 | -31.7% | 7th of 9 | 50% of target | Mar 2025 upon Committee determination |
Guardrails: If absolute TSR < -15%, payout capped at 100%; if TSR < 0% but > -15%, any portion >100% is halved; if TSR ≥ 15%/17.5%/20% for tranches 1/2/3, at least 100% is earned . 2023 PRSU 2nd tranche (1/1/2023–12/31/2024) also earned 50% (TSR -48.6%, rank 7th) and vested in Feb 2025 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 215,728 shares; 1.7% of outstanding |
| Shares Outstanding (record date) | 12,369,625 |
| Stock Ownership Guideline | CEO must hold ≥5× base salary; compliance in place or within grace periods |
| Hedging/Pledging | Prohibited; policy also restricts margin and speculative transactions; 10b5-1 plans permitted |
| Director Ownership Guideline | Non-employee directors must hold ≥$210,000; all compliant or within five-year grace period |
Vested vs unvested awards at year-end 2024 show ongoing alignment and retention:
- Unvested RSUs: 15,840 vesting Feb 18, 2025; 27,866 vest Feb 17, 2025/2026; 86,391 vest Mar 6, 2025/2026/2027 .
- PRSUs: 6,967 (2023 grant) and 14,399 (2024 grant) earned at 50% and vested Feb 13, 2025; remaining tranches scheduled for performance testing through 2025/2026 .
Employment Terms
| Provision | Key Terms |
|---|---|
| Severance (qualifying termination) | Lump sum equal to 2× (base + highest target bonus) or 3× if within two years post-change-in-control; prior-year bonus paid; current-year bonus pro-rata; 18 months COBRA differential reimbursed |
| Triggers | Without Cause or for Good Reason; Cause/Good Reason defined (incl. material salary decrease, authority diminution, >75-mile involuntary relocation) |
| Change-in-Control Treatment | Double trigger (no single-trigger acceleration); awards vest on qualifying termination within two years post-CIC; PRSUs settle at target |
| Non-compete | During employment and for two years post-termination (with exceptions) |
| Clawbacks | Rule 10D-1 compliant three-year recovery on restatement; additional fraud/willful misconduct clawback for cash/equity |
| Tax Gross-ups | No excise tax gross-ups; cut-back/best-net approach under Section 4999 |
Compensation Structure Analysis
- Pay mix emphasizes at-risk compensation: ~85% of CEO’s target pay is variable, with half of LTIs in TSR-based PRSUs, reinforcing shareholder alignment .
- Performance calibration tightened: 2024 EMIP targets were notably above prior-year levels (EBITDA and FCF), yet payouts remained formulaic (133%) with safety overachievement, avoiding discretionary overrides .
- Equity design features investor-friendly guardrails: absolute TSR limits, double-trigger CIC, no repricing, minimum vesting periods, and clawback integration under NYSE/SEC rules .
Performance & Track Record
| Metric/Initiative | 2024 Result / Multi-year Trend |
|---|---|
| Adjusted EBITDA | $100.0 million (+49% YoY) |
| Free Cash Flow | $105.1 million |
| Revenue/EBITDA trend (3 years) | Revenue +51%; adjusted EBITDA ×5 |
| TSR (2024) | -31.7%; PRSU tranche-1 paid at 50% |
| Net Income (2024) | $(135.326) million |
| Balance Sheet/Capital Actions | Refinanced $100 million notes; authorized $75 million share repurchase program |
| Safety | TRIR 0.75; Perfect Days 81% |
Compensation & Human Capital Committee Practices
- Independent oversight and consultant (Meridian) for benchmarking; independence certification and regular market reviews .
- Best practices: no perquisites, no hedging/pledging, no option repricing, stock ownership requirements, annual risk assessment; directors compensated with cash + equity (annual grant vests in one year) .
Investment Implications
- Alignment: Strong performance linkage through EMIP and PRSUs, ownership guidelines (CEO 5× salary), and clawbacks reduce agency risk; hedging/pledging ban lowers misalignment risk .
- Payout dynamics: 2024 EMIP paid 133% on FCF and safety outperformance despite EBITDA shortfall; PRSU tranche-1 at 50% on negative TSR, demonstrating downside sensitivity and limiting windfalls .
- Retention risk: Two-year non-compete and double-trigger severance (up to 3× post-CIC) support retention but create potential CIC cash costs; minimal perqs and no tax gross-ups are shareholder-friendly .
- Governance: Separation of CEO/Chair and independent committee control mitigate dual-role concerns; pending chair transition strengthens independent oversight .
- Performance watch items: Negative TSR and net loss in 2024 offset strong FCF/EBITDA momentum; continued PRSU outcomes will reflect relative strength versus peers and serve as trading signals on execution .
Appendices
Outstanding Equity Awards (Selected for Neal Lux at 12/31/2024)
| Award | Unvested Units | Notable Dates |
|---|---|---|
| RSU (2019–2022 cycles) | 15,840 (vest 2/18/2025) | Time-based |
| RSU (2023 cycle) | 27,866 (vest 2/17/2025 & 2/17/2026) | Time-based |
| RSU (2024 cycle) | 86,391 (vest 3/6/2025–2027) | Time-based |
| PRSU (2023 tranche earned) | 6,967 (earned 50%, vested 2/13/2025) | TSR-based |
| PRSU (2024 tranche earned) | 14,399 (earned 50%, vested 2/13/2025) | TSR-based |
| PRSU (older price-based) | 15,840 (unearned, forfeited 2/18/2025) | Price hurdle not met |
Director Compensation Context (for governance)
- 2024 non-employee director program: $70,000 cash annual retainer + $150,000 equity; committee chair/member fees; Chairman fee $100,000; Lead Independent Director fee $20,000 .
- Lux receives no additional compensation for board service .
Policies
- Insider Trading Policy prohibits hedging, pledging, margin accounts; permits Rule 10b5-1 plans with pre-clearance .
- Stock ownership requirements and compliance status for executives and directors .
Investment Implications
- Pay-for-performance is operative: expect bonuses and PRSU vesting to respond to FCF/EBITDA delivery and TSR versus peers; 2024 results show discipline with partial PRSU vesting and formulaic EMIP .
- Retention looks stable given severance protections and non-compete scope; watch for 10b5-1 plan adoptions and scheduled RSU/PRSU vesting as potential supply overhangs, though pledging is banned .
- Governance risk contained via independent Chair transition, independent committees, clawbacks; minimal perqs and no excise gross-ups are shareholder-friendly .
- Trading signals: monitor TSR trajectory against the PRSU peer cohort and progress on FCF/EBITDA targets; continued underperformance would suppress PRSU realization, while improvement accelerates earned payouts and supports equity value .