C. Andrew Smith
PATTERSON UTI ENERGYAbout C. Andrew Smith
C. Andrew Smith is Executive Vice President and Chief Financial Officer of Patterson‑UTI Energy (PTEN) since September 2017, age 54 as of the 2025 proxy, with a BBA from the University of Houston . He previously served as CFO at Kirby Corporation and held CFO roles at Global Industries and NATCO Group, and SVP/CFO at Benthic Geotech . Under his finance leadership, PTEN returned over $400M to shareholders in 2024, achieved investment grade ratings, reduced net debt, and exceeded announced integration synergy milestones from the NexTier merger, triggering milestone bonuses for integration progress . Annual incentive design ties pay to Operating Cash Flow, Adjusted EBITDA, HSE, and strategic actions, with 2024 payout at 107% of target based on OCF and strong HSE/strategy execution .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Kirby Corporation | EVP & CFO; EVP – Finance | Jan 2014–Sep 2017 | Led public company finance; marine transport and engine services; prepared for PTEN CFO role |
| Benthic Geotech | SVP & CFO | Prior to 2014 | Subsea engineering finance leadership |
| Global Industries LTD | CFO | Prior | Offshore services CFO role |
| NATCO Group | CFO | Prior | Oilfield equipment CFO role |
External Roles
No public company directorships disclosed for Mr. Smith .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $450,000 | $450,000 | $680,000 |
| Target Bonus (% of Salary) | 125% (in effect for 2023; 2022 not explicitly stated) | 125% | 110% |
| Target Bonus ($) | N/A | $562,500 | $748,000 |
Summary Compensation (realized and grant-date values):
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $450,000 | $450,000 | $680,000 |
| Bonus ($) | $0 | $0 | $360,000 (integration milestones) |
| Stock Awards ($) | $2,718,489 | $2,076,670 | $2,225,112 |
| Non-Equity Incentive ($) | $984,375 | $603,058 | $798,000 |
| All Other Comp ($) | $12,200 | $13,200 | $13,800 |
| Total ($) | $4,165,064 | $3,142,928 | $4,076,912 |
Performance Compensation
Annual Incentive Plan Design and Outcomes:
| Metric (Weight) | 2023 Target/Threshold | 2023 Actual | 2023 Payout | 2024 Target/Threshold | 2024 Actual | 2024 Payout |
|---|---|---|---|---|---|---|
| Operating Cash Flow (50% in 2023; 60% in 2024) | $528.0M / $422.4M | $530.9M | 101% (weighted 51%) | $583.0M / $466.4M | $568.1M (adj.) | 97% (weighted 56%) |
| Adjusted EBITDA (25% in 2023; 20% in 2024) | $1,081.0M / $864.8M | $1,009.0M | 93% (weighted 21%) | $1,488.5M / $1,190.8M | $1,205.7M (adj.) | 53% (weighted 11%) |
| Health, Safety & Environmental (10%) | Holistic KPI | Threshold (50%) (weighted 5%) | 50% | Holistic KPI | 200% (weighted 20%) | 200% |
| Strategy (15% in 2023; 10% in 2024) | Actions to maximize shareholder value | 200% (weighted 30%) | 200% | Integration, capital returns, balance sheet, technology | 200% (weighted 20%) | 200% |
| Total Payout (% of Target) | 107% | — | — | 107% | — | — |
CFO Annual Bonus Outcomes:
| Year | Target Bonus ($) | Payout (% of Target) | Actual Bonus ($) |
|---|---|---|---|
| 2023 | $562,500 | 107% | $603,058 |
| 2024 | $748,000 | 107% | $798,000 |
Long-Term Incentives (LTI) – Design and 2024 Grants:
- Mix: ~49% time-vested RSUs (1/3 each year over 3 years), ~51% performance units (PSUs) tied to relative TSR over 1-, 2-, and 3-year periods with target at 55th percentile; capped at target if absolute TSR over 3-year period is not positive . | 2024 Grant Detail | Threshold | Target | Maximum | Grant-Date Fair Value ($) | |---|---|---|---|---| | PSUs (units) [5/9/2024] | 48,000 | 96,000 | 192,000 | $1,196,160 | | RSUs (units) [5/9/2024] | — | — | — | $1,028,952 (92,200 units) | | 2024 LTI Target Value (All) | — | $2,100,000 | — | — |
2021 PSU Payout (3-year period ended 3/31/2024): PTEN TSR 51.4% (47th percentile), payout 87.9%; Smith earned 122,181 units from 139,000 granted .
Equity Ownership & Alignment
Beneficial Ownership (as of 3/31/2025):
| Holder | Shares Beneficially Owned | % of Class | Notes |
|---|---|---|---|
| C. Andrew Smith | 537,685 | <1% | Includes 79,800 RSUs vesting within 60 days; excludes 89,667 RSUs vesting after 60 days |
Unvested Equity at 12/31/2024:
| Type | Count | Market/Payout Value ($) | Vesting / Performance Detail |
|---|---|---|---|
| RSUs (unvested) | 169,467 | $1,399,797 (at $8.26/sh) | Vests 1/3 on 4/29/2025 (20,867), 1/3 on 5/5/2025 (28,200), 1/3 on 5/9/2025 (30,733), then same amounts in 2026–2027 |
| PSUs (threshold presentation) | 124,550 | $1,028,783 | 2022, 2023, 2024 PSU tranches (relative TSR design) |
RSU Vesting Schedule (units):
| Date | 4/29/2025 | 5/5/2025 | 5/9/2025 | 5/5/2026 | 5/9/2026 | 5/9/2027 | Total |
|---|---|---|---|---|---|---|---|
| Smith RSUs | 20,867 | 28,200 | 30,733 | 28,200 | 30,733 | 30,734 | 169,467 |
Ownership & Trading Policies:
- Stock ownership guidelines: Section 16 officers must hold shares equal to 2× base salary; compliance confirmed as of proxy date .
- Anti-pledging: executives prohibited from pledging PTEN shares; no waiver disclosed for Smith .
- Anti-hedging: executives prohibited from hedging PTEN equity .
- Blackout windows: quarterly blackouts (from 20th day of last month of quarter until two full trading days after earnings release) and preclearance required; Rule 10b5‑1 cooling off applies .
Employment Terms
| Provision | Base Case (Termination w/o Cause or Good Reason) | Change-in-Control (Double Trigger) |
|---|---|---|
| Cash Severance | 2.5× (salary + average bonus of prior 3 yrs) | Same multiple; pro-rated bonus based on highest in last 3 yrs |
| Bonus Eligibility | Pro-rated annual bonus, paid with actual performance | Pro-rated based on highest year’s bonus |
| Equity – Time-Based | Accelerated vesting on day 60 post-termination | Accelerated vesting on day 60 post-termination |
| Equity – Performance-Based | Continues through period; vests on actual results | Accelerated at target on day 60 post-termination |
| Benefits Continuation | — | 30 months subsidized coverage |
| Non-Compete/Non-Solicit | One year post-termination | One year post-termination |
| Clawback | Nasdaq 10D‑1 compliant clawback on excess incentive; SARBOX 304 misconduct recoveries | |
| Tax Gross-Ups | None in employment agreements (legacy Berns CIC has gross-up; not applicable to Smith) |
Illustrative CIC Value (if event on 12/31/2024, amounts per proxy):
| Component | Amount ($) |
|---|---|
| Bonus Payment | $984,375 |
| Salary + Bonus Multiple | $3,608,798 |
| Stock Awards (time-based) | $1,399,797 |
| Performance Units (target) | $2,057,566 |
| Other Benefits | $37,758 |
| Total | $8,088,294 |
Say‑on‑Pay & Benchmarking
Say‑on‑Pay (Support %):
| Year | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Approval % | 96% | 98% | 97% | 98% | 96% |
Compensation Peer Group (2024): Antero Resources, APA, ChampionX, Diamondback Energy, Dover, Fluor, Halliburton, Helmerich & Payne, Ingersoll Rand, KBR, Liberty Energy, Nabors, NOV, TechnipFMC, Weatherford – used to benchmark executive pay levels post-merger scale-up .
Pay vs Performance (context): PTEN compensation actually paid tracked Operating Cash Flow and TSR; value of a fixed $100 investment in 2024 was $87 vs peer group $102; OCF $568.1M used as company-selected measure .
Investment Implications
- Alignment: Smith’s pay mix emphasizes at-risk incentives: 2024 AIP tied 80% to financial metrics and 20% to HSE/strategy; LTI is majority performance-based PSUs on relative TSR with multi-period measurement, which aligns with shareholder outcomes and discourages short-termism .
- Retention Risk: Robust CIC protections (2.5× severance, equity acceleration) and 30 months benefits under CIC reduce flight risk amid industry consolidation; non-compete for one year mitigates competitive leakage .
- Selling Pressure: Material unvested RSUs with scheduled vesting through 2027 and blackout/trading policies (plus potential use of 10b5‑1 plans) suggest predictable supply dynamics; no pledging disclosed, lowering forced-sale risk .
- Execution Track Record: Finance-led integration and synergy delivery (milestones achieved in Mar/May 2024), shareholder returns ($400M in 2024), IG rating and balance sheet improvements indicate disciplined capital allocation under Smith’s CFO leadership .
- Governance Quality: Strong say‑on‑pay support (96–98%), clawbacks, anti-hedging/pledging, and stock ownership requirements support pay-for-performance and risk management—reducing headline and governance risk for investors .