Clay Williams

About Clay Williams

Clay C. Williams (age 62) is Chairman of the Board (since May 2014), Director (since November 2013), and Chief Executive Officer (since February 2014) of NOV; he served as President through March 2025, COO (2012–2014), EVP (from 2009), and CFO (2005–2012). He holds an MBA from the University of Texas at Austin and a BS in Civil/Geological Engineering from Princeton University, with deep oilfield services experience and prior CFO/Corporate Development roles at Varco International . NOV delivered FY 2024 revenue of $8.87B (+3.3% YoY), Adjusted EBITDA of $1.11B (+10.9% YoY), and free cash flow of $953M; management fell slightly short of incentive targets, yielding near-target annual bonus payouts; three-year TSR for the 2022 PSAs was -1% (29th percentile vs OSX), producing a 78.45% payout on those awards .

Past Roles

External Roles

Fixed Compensation

CEO pay practices emphasize at-risk compensation; Clay has voluntarily reduced base salary in challenging years, and long-term incentives historically weighted 50% PSUs, 25% RSUs, 25% options (modified to 50% PSUs, 40% RSUs, 10% options beginning 2025) .

Performance Compensation

2024 Annual Incentive Plan (Corporate)

Working capital modifier (WCM) reduced NOV’s Adjusted EBITDA score by $10M (Target $3,328M; Actual $3,396M; -$68M x 15%) .

2024 Long-Term Equity Grants (Approved Feb 6, 2024)

PSU Design and Results

• TSR collar: payout capped at 100% if absolute TSR <0%; floor 50% if annualized absolute TSR >15% .
• 2022 PSU payout certified at 78.45% (TSR portion: 57% of target; NVA portion: 200% of target) .

Equity Ownership & Alignment

• Ownership Guidelines: CEO required to hold 6x base salary; all NEOs were in compliance as of Jan 1, 2025 .
• Anti-hedging policy prohibits hedging/monetization transactions; insider trading policy forbids trading on MNPI .
• As of Dec 31, 2024, all previously granted stock options were underwater, reducing near-term in-the-money exercise pressure .

Employment Terms

Board Governance

• Board Service History: Director since Nov 2013; Chairman since May 2014; CEO since Feb 2014; Clay does not serve on committees as an employee-director .
• Committee Structure/Attendance: Audit (9 mtgs), Compensation (2), Nominating/Governance (4) in 2024; incumbents attended at least 75% of meetings .
• Combined Chair/CEO: NOV maintains combined roles with a Lead Independent Director (expected post-2025 Annual Meeting to be William R. Thomas); quarterly executive sessions of non-employee directors .
• Independence: Majority of Board affirmed independent under Corporate Governance Guidelines; employee-director Clay is non-independent .
• Director Compensation: Employee-directors receive no board fees/equity grants; non-employee director program includes $100k retainer plus committee/lead premiums and RSUs .

Compensation Structure Details and Peer Benchmarking

• Pay Mix and Risk Mitigation: Balanced annual/long-term incentives; bonus cap 200% of target; three-year vesting minimum on equity; clawbacks; stock ownership guidelines .
• Performance Metrics: Annual plan emphasizes Adjusted EBITDA with working capital modifier and safety (TRIR + safety goals); PSUs emphasize relative TSR (OSX index) and absolute returns on capital (NVA) .
• Peer Group (for benchmarking): APA; Baker Hughes; ChampionX; Cummins; Generac; Halliburton; Helmerich & Payne; Hess; Illinois Tool Works; Ingersoll Rand; Marathon Oil; Oceaneering; Parker-Hannifin; Schlumberger; TechnipFMC; TPI Composites; Transocean; Weatherford .
• Consultant: Meridian Compensation Partners advises the Compensation Committee; reports directly to the Committee and provided peer benchmarking (independent) .

Equity Plan Overhang and Burn Rate

Investment Implications

• Pay-for-performance alignment is credible: 2024 corporate payout at 95% reflects near-target performance, with strong safety scores and WCM lowering EBITDA payout; 2022 PSU payout at 78.45% demonstrates formulaic linkage to TSR/NVA rather than discretionary outcomes .
• Retention and selling pressure: Upcoming 3-year installment vesting for 2024 options/RSUs (starting 2/6/2025) may create periodic supply; however, legacy options were underwater at YE 2024, reducing near-term exercise-related selling pressure .
• Governance risk mitigants: Combined Chair/CEO structure is offset by a Lead Independent Director and quarterly executive sessions; majority-independent board and robust clawback/anti-hedging policies reduce agency risk .
• Change-in-control economics: Double-trigger acceleration and pro-rated PSUs (greater of target or actual) provide balanced protection without single-trigger windfalls; no excise tax gross-ups .
• Dilution watch: If LTIP expansion is approved, potential overhang rises to ~9.5%; plan uses fungible ratios (1:1 for options/SARs; 1.5:1 for full-value awards), and 2025 mix shifts toward RSUs (40%)—investors should monitor share usage and PSU outcomes to manage dilution .
• Shareholder sentiment: 2024 say-on-pay passed with 96% support, signaling investor approval of design and outcomes despite modestly below-target performance .

Overall, Clay Williams’ compensation structure emphasizes multi-year, returns-based incentives with credible downside sensitivity, while severance and CoC terms are competitive but not excessive. Near-term supply from scheduled vesting and potential LTIP expansion warrant monitoring alongside operating momentum and TSR relative to OSX peers. **[1021860_0001193125-25-076219_d911436ddef14a.htm:56]** **[1021860_0001193125-25-076219_d911436ddef14a.htm:58]** **[1021860_0001193125-25-076219_d911436ddef14a.htm:59]** **[1021860_0001193125-25-076219_d911436ddef14a.htm:74]** **[1021860_0001193125-25-076219_d911436ddef14a.htm:28]** **[1021860_0001193125-25-076219_d911436ddef14a.htm:65]**