Martin J. McDonald
OCEANEERING INTERNATIONALAbout Martin J. McDonald
Senior Vice President, Subsea Robotics (SSR) at Oceaneering International (OII). He is one of the company’s Named Executive Officers. SSR achieved a 99% ROV uptime in 2024 and a 12% improvement in average ROV revenue per day, while company-level results included revenue of $2.7B (+10% YoY), adjusted EBITDA of $347M (+20% YoY), and net income of $147M (+51% YoY). Over the three-year period ending 2024, company TSR was 142%.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Not disclosed in 2024–2025 proxies beyond current position | — | — | — |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Not disclosed in 2024–2025 proxies | — | — | — |
Fixed Compensation
- Base salary history and changes
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 360,500 | 371,315 | 386,168 |
| Committee-Approved Salary Increase | — | +3% effective 1/1/2023 | +4% effective 1/1/2024 |
- Retirement and perquisites (2024)
- SERP company contribution: $77,234; 401(k) contribution: $20,700; basic life insurance premium: $6,500; perquisites (excess liability insurance, supplemental medical, club membership): $23,633.
- SERP balance at 12/31/2024: $3,640,311; executive contribution in 2024: $132,753; fully vested in SERP.
Performance Compensation
Annual Cash Bonus Program (2024 structure and outcome)
| Measure | Weight | Target (Plan) | 2024 Actual Performance | Payout vs Target |
|---|---|---|---|---|
| Adjusted EBITDA | 60% | $355M | 98% of target ($348M for plan purposes) | 95% |
| Free Cash Flow | 25% | $130M | 74% of target ($96M) | 58% |
| Safety | 10% | Program goals | 108% | 108% |
| Environmental | 5% | Program goals | 90% | 90% |
| Overall | — | — | — | 87% |
- McDonald’s 2024 target bonus: 70% of base salary; 2024 target dollars: $270,318; threshold $65,552; maximum $508,197.
- 2024 actual annual bonus paid: $234,365.
Long-Term Incentive (LTI) Awards
- 2024 grants (service-based RSUs and performance units; 50%/50% target mix; 3-year cliff vest)
- RSUs: 13,460 units; grant-date fair value $295,716; vest on 2/23/2027 (3rd anniversary).
- Performance Units (2024–2026 performance period): target $279,972; measures and curve below.
| 2024–2026 PSU Measure | Weight | Threshold | Target | Maximum | Payout As % of Target |
|---|---|---|---|---|---|
| Cumulative Adjusted EBITDA | 70% | $852M | $1,065M | $1,598M | 50% / 100% / 200% |
| Relative TSR vs peer group | 30% | 30th percentile | 50th percentile | >90th percentile | 50% / 100% / 200% (capped at target if absolute TSR negative) |
- Prior cycle payout: 2022–2024 performance units paid 137% of target based on $867M cumulative Adjusted EBITDA (80% weight) and 67th percentile Relative TSR (20% weight).
- No stock options; company has not used options since 2006.
Multi-Year NEO Compensation (reported totals)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 360,500 | 371,315 | 386,168 |
| Stock Awards ($) | 213,316 | 258,121 | 295,716 |
| Non-Equity Incentive Plan Comp ($) | 523,176 | 785,972 | 662,743 |
| All Other Compensation ($) | 115,559 | 120,616 | 128,067 |
| Total ($) | 1,212,551 | 1,536,024 | 1,472,694 |
Equity Ownership & Alignment
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Beneficial ownership (as of March 17, 2025)
- Shares owned: 86,068; RSUs underlying: 37,987; total 124,055. Each director/executive officer represents 0.7% or less of shares outstanding (including RSUs).
- Shares outstanding at record date: 101,071,473.
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Unvested RSUs and vesting schedule (as of 12/31/2024)
- Unvested RSUs: 41,589 (market value $1,084,641 at $26.08/share).
- Scheduled deliveries: 15,086 on 2/25/2025; 13,043 on 2/24/2026; 13,460 on 2/23/2027.
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Stock vested in 2024: 22,033 shares; value realized $484,065.
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Ownership policy and alignment
- Stock ownership guideline: Other Senior Vice Presidents = 2x base salary; company states current NEOs either comply or are within initial 5-year window to comply.
- Prohibitions on hedging, pledging, short sales, and holding in margin accounts for directors and officers.
- No stock options outstanding for executives.
Employment Terms
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Change-of-Control (CoC) protection
- Agreement type: Legacy CoC Agreement (double trigger).
- Cash severance multiple: 2x (base salary + target annual bonus).
- “Net better-of” 280G approach (no excise tax gross-ups).
- Benefits continuation: generally 24 months of benefits under Legacy CoC for McDonald.
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Illustrative potential payments (assuming 12/31/2024 termination; includes plan-based equity treatment)
- Involuntary termination (no CoC): cash severance $386,168; benefits $2,387.
- Death/Disability: RSUs $347,412; PSUs at target value $276,400; other items per table.
- CoC with qualifying termination (double trigger): cash severance $1,312,972; benefits $158,809; RSUs $347,412; PSUs $552,800 (per Legacy CoC agreement terms).
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Retirement eligibility
- McDonald is fully vested in SERP; proxy notes his attainment of “Retirement Age” for certain awards (affecting vesting/treatment).
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Clawback
- SEC- and NYSE-aligned clawback policy adopted August 2023, covering three fiscal years prior to a restatement.
Risk Indicators & Red Flags
- Section 16(a) compliance: The 2024 proxy states Mr. McDonald filed one Form 4 after the prescribed time for sales of Common Stock.
- Governance protections: No option grants since 2006; no single-trigger severance; no excise tax gross-ups; prohibitions on hedging/pledging; strong say-on-pay support (94% in 2024; 93% in 2023).
Compensation Structure Analysis
- Cash vs equity mix: Target LTI set at 145% of base salary in 2024 (split 50/50 between RSUs and performance units), consistent with “at-risk” pay philosophy.
- Performance metrics in incentives: Annual plan uses Adjusted EBITDA (60%), Free Cash Flow (25%), Safety (10%), Environmental (5%); PSUs use three-year Cumulative Adjusted EBITDA (70%) and Relative TSR (30%).
- Target difficulty and oversight: 2024 annual plan paid 87% of target overall, reflecting near-target EBITDA and below-target FCF offset by above-target safety performance; long-term PSU cycle (2022–2024) paid 137% based on strong multi-year EBITDA and relative TSR.
Compensation Peer Group (benchmarking context)
- Peer set includes: ChampionX, Chart Industries, Dril-Quip, Expro Group, Flowserve, Helix Energy Solutions, Helmerich & Payne, Noble, NOW/DNOW, Oil States International, Transocean, Weatherford.
Equity Grant and Vesting Calendar (Forward Supply Considerations)
- RSU vesting cadence (subject to continued service, absent CoC/qualifying termination):
- 2/25/2025: 15,086 shares; 2/24/2026: 13,043; 2/23/2027: 13,460. Potential share deliveries may create periodic liquidity supply; company prohibits hedging/pledging.
Performance & Track Record (context)
- SSR operating KPIs (2024): 99% ROV uptime; +12% average ROV revenue/day.
- Company-level 2024 results: Revenue $2.7B (+10% YoY), Operating Income $246M (+36% YoY), Net Income $147M (+51% YoY), Adjusted EBITDA $347M (+20% YoY).
- Shareholder returns: 3-year TSR of 142%.
Investment Implications
- Alignment and retention: High “at-risk” mix with rigorous multi-year EBITDA/TSR metrics and 3-year cliff vesting supports retention and performance alignment; stock ownership guidelines (2x salary for SVPs) and hedging/pledging prohibitions reinforce skin-in-the-game.
- Near-term selling pressure: Scheduled RSU deliveries through 2027 (15,086; 13,043; 13,460) create known windows of potential supply, though insider policy restricts hedging/pledging and trading is subject to company windows.
- CoC economics and downside protection: Double-trigger CoC at 2x base+target bonus (illustrative severance ~$1.31M) plus equity acceleration provide substantial protection, but no excise tax gross-ups (net-better-of) and no single-trigger severance temper shareholder risk.
- Execution considerations: SSR’s strong operational KPIs and company-wide EBITDA/FCF improvements supported above-target PSU outcomes (137% for 2022–2024), indicating incentive structures have paid for measurable outperformance; watch FCF delivery versus targets in annual plans.