Notice of 2020 Annual General Meeting of Shareholders

Tuesday, June 2, 2020, 10:00 A.M. CDT

The Offices of Nabors Corporate Services, Inc., 515 W. Greens Rd., Houston, Texas 77067

April 23, 2020

Dear Fellow Shareholder:

On behalf of the Board of Directors (the “Board”) of Nabors Industries Ltd. (“Nabors,” or the “Company”), we cordially invite you to attend the Company’s 2020 annual general meeting of shareholders to be held at the offices of our subsidiary, Nabors Corporate Services, Inc., 515 W. Greens Rd., Houston, Texas, 77067 on June 2, 2020 at 10:00 A.M. CDT (the “meeting”). Depending on concerns about the Coronavirus or COVID-19, we may choose to hold a virtual annual meeting (the “virtual meeting”) instead of holding the meeting in Texas. The Company would publicly announce a determination to hold a virtual meeting in a press release available at www.nabors.com as soon as practicable before the meeting. In that event, the meeting would be conducted solely on a virtual basis, on the above date and time, via live audio webcast. You or your proxyholder could participate, vote, and examine our shareholder list at the virtual meeting by visiting http://www.virtualshareholdermeeting.com/NBR2020ANNUAL, but only if the meeting is not held in Texas. Regardless of whether the meeting is held in person or virtually, you are entitled to vote at the meeting if you were a shareholder of record at the close of business on April 3, 2020. This year, shareholders will consider:

 

1.	the election of seven directors for a one year term (Item 1);

 

2.	the approval and appointment of PricewaterhouseCoopers LLP as the Company’s independent auditor for the year ending December 31, 2020, and authorization for the Audit Committee of the Board to set the independent auditor’s remuneration (Item 2);

 

3.	an advisory “Say on Pay” vote to approve the compensation paid by the Company to its named executive officers as disclosed in the Proxy Statement (Item 3);

 

4.	the approval of the Company’s Amended and Restated 2016 Stock Plan (Item 4); and

 

5.	such other business as may properly come before the meeting.

The Company’s annual audited financial statements for the year ended December 31, 2019, also will be presented at the meeting.

Further information regarding the meeting and the above proposals is set forth in the Proxy Statement. We are mailing a Notice of Internet Availability of Proxy Materials (the “Notice”) on or about April 23, 2020. Shareholders who have requested a paper copy of the Proxy Statement and the Company’s 2019 Annual Report will receive those documents. The Notice contains instructions on how to access the proxy materials, vote online and obtain a paper copy of the proxy materials.

YOUR VOTE IS VERY IMPORTANT. PLEASE SUBMIT YOUR PROXY OR VOTING INSTRUCTIONS AS SOON AS POSSIBLE. We hope you will read the Proxy Statement and 2019 Annual Report and submit your proxy, or use telephone or Internet voting, prior to the meeting. Even if you plan to attend the meeting, please submit a proxy as soon as possible to ensure that your shares are voted at the meeting in accordance with your instructions.

On behalf of the Board and our management team, I extend our appreciation for your continued support.

Sincerely yours,

 

ANTHONY G. PETRELLO

Chairman, President and Chief Executive Officer

 

April 23, 2020

Dear Fellow Shareholder:

The members of the Board of Directors of Nabors Industries Ltd. (“Nabors”) are proud of the Company’s accomplishments over the last year. During the year, in what was and continues to be a difficult industry environment, the Company:

 

•

Generated cash provided by operating activities of $685 million, and free cash flow after dividends of $279 million;

 

•

Reduced total debt by $253 million, and net debt by $224 million;

 

•

Improved its liquidity by entering into a $250 million A/R purchase and sale facility, and amending its 2018 revolving credit facility to, among other things, replace the capitalization-related covenant with a more appropriate covenant comparing net funded debt to EBITDA;

 

•

Increased adjusted EBITDA by 6 percent;

 

•

Increased daily margins in the U.S. Lower 48 by 8.4% to $10,218 in the fourth quarter of 2019;

 

•

Increased annual average rig count in the US Lower 48 while the industry decreased by approximately 10 percent;

 

•

Introduced our next generation Canrig® Sigma top drive; and

 

•

Increased higher-margin integrated tubular running services work.

These accomplishments and others help to explain why the Company was able to outpace industry competitors in relative Total Shareholder Return during 2019.

During the year, management and members of the Board again reached out to shareholders to let them ask questions and to listen to their concerns. Environmental, social, and governance (ESG) issues continue to be of the utmost importance. We feel the same way. In fact, Nabors has a long history of sustainability-minded operations, having pioneered the use of alternative-powered rigs on the North Slope of Alaska way back in 1985. Today, all of our active rigs on the North Slope are highline-capable, and 40 of our rigs in the U.S. Lower 48 are dual-fuel-capable. We are now at the forefront of the industry in developing robots for use on the rig floor. We believe that increased automation will improve efficiency, reduce our green-house gas emissions and, more importantly, help us to improve on the Company’s already stellar safety performance.

Notwithstanding the above accomplishments, Nabors is facing some of the most difficult economic conditions experienced in years. The combination of the COVID-19 pandemic and an ongoing price war in the oil sector is impacting our activity levels in the U.S. and overseas. Rest assured that the Company and the Board are engaged and taking appropriate measures to address these extraordinary circumstances, including the recent amendment to our common share capital to effect a reverse stock split of our outstanding common shares. In addition, we have instituted Company-wide cost savings measures involving, among other things, planned reductions to 2020 capital expenditures and reductions to Board and executive compensation. The Board’s annual non-committee retainer has been reduced by 20 percent, and the CEO’s and CFO’s base salaries have been reduced by approximately 31 percent for the period from March 23, 2020 through the remainder of the year (and 26 percent and 24 percent for the entire year) from the amounts set forth in their respective employment agreements.

We appreciate each and every one of our shareholders, and we are especially grateful for those that take the time to meet with us one on one. We want you to know that we will do our utmost to be as responsive as possible while we strive to maximize shareholder returns. Our vision has not changed. We will be the driller of choice for employees, customers and investors.

We encourage you to read this Proxy Statement and the accompanying 2019 Annual Report. We thank you for your investment in Nabors, and encourage you to vote your shares with the Board’s recommendations.

Sincerest regards,

 

JOHN YEARWOOD

Lead Director

Table of Contents

 

PROXY SUMMARY			1
Items to be Considered & Board Recommendations			1
Director Nominees			2
Director Dashboard			2
Corporate Governance Highlights			3
Note Regarding Share Number Disclosures in Proxy Statement			3
PROXY STATEMENT			4
General			4
Meeting Information			4
Who can Vote & Record Date			4
Meeting Attendance			4
Important Notice Regarding Internet Availability of Materials			4
Householding			5
Proxy Solicitation			5
Voting Information			5
CORPORATE GOVERNANCE			7
Role of the Board of Directors			7
Overview of Key Governance Topics			7
Sustainability			9
Code of Business Conduct			9
Shareholder Engagement			9
Meetings of the Board and Committees			10
Item 1: Election of Directors			12
Criteria			13
Director Nominee Snapshot			14
Director Nominees			16
Other Executive Officers			20
Non-Employee Director Compensation			21
Director Compensation Table			22
Share Ownership			23
Delinquent Section 16(a) Reports			24
Certain Relationships and Related-Party Transactions			25
AUDIT COMMITTEE REPORT			26
Item  2: Approval and Appointment of Independent Auditor and Authorization for the Audit Committee to Set the Independent Auditor’s Remuneration			28
Audit Committee Pre-Approval Policy			28
Independent Auditor Fees			28

COMPENSATION DISCUSSION AND ANALYSIS			29
Executive Summary			29
Compensation Principles and Practices			35
Key Components of Executive Compensation			36
Setting Executive Compensation			46
Other Benefits and Perquisites			47
Term of Employment			49
Share Ownership Policy			49
Hedging Policy and Practices			50
Risk Assessment			50
Tax Considerations – Section 162(m)			50
COMPENSATION COMMITTEE REPORT			51
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION			52
EXECUTIVE COMPENSATION TABLES			53
Summary Compensation Table			53
Grants of Plan-Based Awards			56
Option Exercises and Shares Vested			57
Outstanding Equity Awards at Fiscal Year End			58
Nonqualified Deferred Compensation			59
Potential Payments upon Termination or Change in Control			60
Required CEO Pay Ratio Disclosure			63
COMPANY PROPOSALS			65
Item 3: Advisory Vote to Approve Compensation of Named Executive Officers			65
Item 4: Approval of the Company’s Amended and Restated 2016 Stock Plan			66
ADDITIONAL INFORMATION			76
Shareholder Matters			76
2021 Shareholder Proposals			76
Other Matters			76
ANNEX A RECONCILIATION OF NON-GAAP MEASURES			A-1
ANNEX B AMENDED AND RESTATED NABORS INDUSTRIES LTD. 2016 STOCK PLAN			B-1

 

 

2020 Proxy Statement				i

PROXY SUMMARY

This summary highlights information contained in this Proxy Statement. It does not contain all the information that you should consider before voting. We encourage you to read the entire Proxy Statement. For information regarding the Company’s 2019 financial performance, please read our 2019 Annual Report. The annual meeting will take place:

 

Date:   June 2, 2020				Time:   10:00 A.M. CDT				Place:   The Offices of Nabors Corporate Services, Inc. 515 W. Greens Rd. Houston, Texas 77067

Please vote your shares promptly, as this will save the expense of additional proxy solicitation. You may submit your vote by Internet, telephone, mail or in person.

 

		Visit the website listed on your proxy card/voting instruction form to vote via the Internet.				Call the telephone number on your proxy card/voting instruction form to vote by telephone.
		Sign, date and return your proxy card/voting instruction form to vote by mail.				Vote in person at the annual meeting. Owners with shares held through a bank or broker may vote in person at the meeting if they have a legal proxy from the bank or broker and bring it to the meeting.

Items To Be Considered & Board Recommendations

 

Item				Votes Required for Approval		Board’s Voting Recommendation		Page Reference
Item 1		Elect directors		Plurality of votes cast		FOR		12
Item 2		Approve and appoint PricewaterhouseCoopers LLP as our independent auditor for the year ending December 31, 2020 and authorize the Board’s Audit Committee to set the independent auditor’s remuneration		Majority of votes present		FOR		28
Item 3		Advisory vote to approve the compensation of the company’s named executive officers		Majority of votes present The vote on this item is nonbinding, but the Board will consider the results of the vote in making future decisions		FOR		65
Item 4		Approve the Company’s Amended and Restated 2016 Stock Plan		Majority of votes present		FOR		66

 

		This Proxy Statement and our 2019 Annual Report are available electronically on our hosted website at www.proxyvote.com and accessible via the QR code at the right. The Notice and proxy materials are first being made available to our shareholders on or about April 23, 2020.

 

2020 Proxy Statement				1

PROXY SUMMARY

 

Director Nominees

Upon the recommendation of the ESG Committee (formerly the Governance and Nominating Committee), our Board of Directors has nominated the following seven director nominees (all of whom are current directors) to be elected at the annual general meeting of shareholders. All the nominees for director are independent under the rules of the NYSE, other than Mr. Petrello, who is our Chief Executive Officer. Detailed information about each director nominee, including their respective backgrounds, skills and experience, can be found under “Corporate Governance—Director Nominees”.

 

Name, Age and Primary Occupation				Director Since		Independent				Committees
		Tanya S. Beder, Age 64 Chairman and CEO of SBCC Group Inc.		2017			✓			Risk Oversight (Chair), Audit, Compensation, Technology and Safety
		Anthony R. Chase, Age 65 Chairman and CEO of ChaseSource, L.P.		2019			✓			ESG, Risk Oversight
		James R. Crane, Age 66 Chairman and CEO of Crane Capital Group Inc.		2012			✓			Technology and Safety (Chair), Executive
		John P. Kotts, Age 69 Private investor and entrepreneur		2013			✓			Audit (Chair), Compensation, Risk Oversight
		Michael C. Linn, Age 68 President and CEO of MCL Ventures, LLC		2012			✓			Compensation (Chair), ESG
		Anthony G. Petrello, Age 65 Chairman of the Board, President and CEO		1991						Executive (Chair)
		John Yearwood, Age 60 Retired President, CEO and COO of Smith International, Inc.		2010			✓			ESG (Chair), Audit, Executive, Technology and Safety

Director Dashboard

 

 

2				2020 Proxy Statement

PROXY SUMMARY

 

Corporate Governance Highlights

The following actions reflect our ongoing, constructive dialogue with shareholders and commitment to transparency and good corporate governance:

 

•

Introduced unvested Performance Share Unit awards in early 2020, issued at the beginning of the one-year performance period instead of after the conclusion of the performance period as has been the practice with Performance Share awards;

 

•

Changed the name of the Nominating and Governance Committee to the Environmental, Social and Governance Committee, to recognize the growing importance of ESG matters in our operations;

 

•

In light of the COVID-19 crisis and the oil price war, further reduced the CEO’s base salary from March 23, 2020 through the end of the year to approximately 69 percent of the amount set forth in his employment agreement (74 percent for all of 2020); and

 

•

Held direct discussions regarding corporate governance and executive compensation matters with shareholders representing approximately 24 percent of shares, and regular direct investor relations outreach to active institutional investors representing approximately 34 percent of shares.

Note Regarding Share Number Disclosures in Proxy Statement

On April 20, 2020, the Company held a Special Meeting of Shareholders in order to, among other things, seek shareholder approval of an amendment to the Company’s common share capital to effect a consolidation (reverse stock split) of the Company’s outstanding common shares at a ratio not less than one-for-fifteen (1:15) and not greater than one-for-fifty (1:50), with the exact ratio to be set within that range at the discretion of the Board before the effective date of the reverse stock split without further approval or authorization of the Company’s shareholders. The record date for the Annual General Meeting of Shareholders to which this proxy statement applies was April 3, 2020, prior to the effectiveness of the reverse stock split. Therefore, unless explicitly stated otherwise, the disclosures in this proxy statement reflect share numbers outstanding prior to the effectiveness of the reverse stock split.

 

2020 Proxy Statement				3

PROXY STATEMENT

General

This Proxy Statement and the proxy card/voting instructions are being furnished to all shareholders beginning on or about April 23, 2020, in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Nabors Industries Ltd. for the 2020 annual general meeting of shareholders (the “meeting”).

In this Proxy Statement, “Nabors”, the “Company”, “we”, “us” and “our” refer to Nabors Industries Ltd. Where the context requires, these references also include our consolidated subsidiaries and predecessors. Our principal executive offices are located at Crown House, 4 Par-la-Ville Road, Second Floor, Hamilton, HM 08 Bermuda.

Meeting Information

We will hold the meeting at the offices of our subsidiary, Nabors Corporate Services, Inc., located at 515 W. Greens Rd., Houston, Texas, 77067, at 10:00 a.m. Central Daylight Time on Tuesday, June 2, 2020, unless adjourned or postponed. Directions to the meeting can be found under the Investor Relations tab of our website at www.nabors.com or by calling our Investor Relations department at 281-775-8038. Depending on concerns about the Coronavirus or COVID-19, we may choose to hold a virtual annual meeting (the “virtual meeting”) instead of holding the meeting in Texas. The Company would publicly announce a determination to hold a virtual meeting in a press release available at www.nabors.com as soon as practicable before the meeting. In that event, the meeting would be conducted solely virtually, on the above date and time, via live audio webcast. You or your proxyholder could participate, vote, and examine our shareholder list at the virtual meeting by visiting http://www.virtualshareholdermeeting.com/NBR2020ANNUAL, but only if the meeting is not held in Texas

Who Can Vote & Record Date

All shareholders of record at the close of business on April 3, 2020 (the “record date”), are entitled to vote, in person at the meeting or by proxy, on each matter submitted to a vote of shareholders at the meeting. On the record date, 419,457,162 of the Company’s common shares were outstanding, the holders of which are entitled to one vote per common share on all matters. The number of common shares outstanding includes shares held by certain of our Bermuda subsidiaries, which will be voted consistent with the Board’s recommendation. We currently have no other class of securities entitled to vote at the meeting. The number of shares outstanding on the record date does not reflect the reverse stock split approved by the shareholders on April 20, 2020..

Meeting Attendance

Only record or beneficial owners of the Company’s common shares may attend the meeting in person. If you are a shareholder of record, you may be asked to present proof of identification, such as a driver’s license or passport. Beneficial owners who hold their shares through a broker, dealer, or other nominee must also present evidence of share ownership, such as a recent brokerage account or bank statement, as well as present a legal proxy from their broker. All attendees must comply with our standing rules, which are available on our website and will be distributed upon entrance to the meeting.

Important Notice Regarding Internet Availability of Materials

Pursuant to the Securities and Exchange Commission (the “SEC”) “notice and access” rules, we may furnish proxy materials, including this Proxy Statement and our Annual Report for the year ended December 31, 2019, to our shareholders by providing access to such documents on the Internet instead of mailing printed copies. Most shareholders will not receive printed copies of the proxy materials unless they request them prior to distribution of the Proxy Statement. Instead, a Notice of Internet Availability of Proxy Materials (the “Notice”) was mailed or otherwise delivered, which explains how you may access and review the proxy materials and how you may submit your proxy on the Internet. We believe that this makes the proxy distribution process more efficient, less costly, and helps to conserve natural resources. If you would like to receive a paper or electronic copy of our proxy materials, please follow the instructions included in the Notice. Shareholders who requested paper copies of the proxy materials or previously elected to receive proxy materials electronically did not receive the Notice and are receiving the proxy materials in the format requested. Proxy materials will also be provided for distribution through brokers, custodians and other nominees and fiduciaries. We will reimburse these parties for their reasonable out-of-pocket expenses for forwarding the proxy materials.

 

4				2020 Proxy Statement

PROXY STATEMENT

 

Householding

The SEC permits a single set of annual reports and proxy statements or a notice of Internet availability of proxy materials, as applicable, to be sent to any household at which two or more shareholders reside if they appear to be members of the same family. Each shareholder continues to receive a separate proxy card or voting instructions. This procedure, referred to as householding, reduces the volume of duplicate information shareholders receive and reduces mailing and printing expenses. A number of brokerage firms have instituted householding. As a result, if a shareholder holds shares through a broker and resides at an address at which two or more shareholders reside, that residence may receive only one annual report and proxy statement or notice, as applicable, unless any shareholder at that address has given the broker contrary instructions. However, if any such shareholder residing at such an address wishes to receive a separate annual report and proxy statement or Notice in the future, or if any such shareholder that elected to continue to receive such materials wishes to receive a single set of materials in the future, that shareholder should contact their broker, call our Corporate Secretary at (441) 292-1510, or send a request to our Corporate Secretary at Crown House Second Floor, 4 Par-la-Ville Road, Hamilton, HM08 Bermuda. The Company will deliver, promptly upon written or oral request to the Corporate Secretary, a separate copy of the annual report and proxy statement or notice, as applicable, to a shareholder at a shared address to which a single copy of the documents was delivered.

Proxy Solicitation

We have retained Georgeson LLC, 1290 Avenue of the Americas, 9^th Floor, New York, NY 10104, for a fee of approximately $16,000, plus reimbursement of out-of-pocket costs and expenses, to solicit proxies on behalf of the Board by mail, in person and by telephone. We will pay all expenses associated with this solicitation and the preparation of proxy materials. In addition, certain of our directors, officers, and employees may solicit proxies by telephone, personal contact, or other means of communication. They will not receive any additional compensation for these activities.

Voting Information

Quorum. A majority of the common shares outstanding on the record date, represented in person or by proxy, will constitute a quorum to transact business at the meeting. Abstentions, withheld votes, and broker nonvotes will be counted for purposes of establishing a quorum.

Submitting voting instructions for shares held in your name. As an alternative to voting in person at the meeting, you may direct your vote for the meeting by telephone or via the Internet or, for those shareholders who receive a paper proxy card in the mail, by mailing a completed and signed proxy card. We encourage you to vote via telephone or the internet prior to the meeting in order to ensure that your vote is recorded in a timely manner. A properly submitted proxy submitted proxy will be voted in accordance with your instructions, unless you subsequently revoke it. A properly submitted proxy will be voted in accordance with your instructions, unless you subsequently revoke your instructions. If you submit a signed proxy without indicating your vote, the person voting the proxy will vote your shares according to the Board’s recommendation unless they lack the discretionary authority to do so.

Submitting voting instructions for shares held in street name and broker nonvotes. If you hold your shares through your broker, follow the instructions you receive from your broker. If you want to vote in person at the meeting, you must obtain a legal proxy from your broker and bring it to the meeting. If you do not submit voting instructions to your broker, your broker may still be permitted to vote your shares. New York Stock Exchange (“NYSE”) member brokers may vote your shares on the approval and appointment of the Company’s independent auditor and authorization for the Audit Committee to set the independent auditor’s remuneration, which is a “discretionary” item. All other items to be voted on at the meeting are “nondiscretionary” items. Absent specific voting instructions from the beneficial owners, NYSE member brokers may not vote on these proposals. If your broker does not have discretion to vote your shares on a matter, your shares will not be voted on that matter, resulting in a “broker nonvote”. Broker nonvotes will be counted for purposes of establishing a quorum, but will not be counted in determining the outcome of “non-discretionary” items. In other words, broker nonvotes will have no effect on the proposal.

Withholding your vote or voting to “abstain”. You may withhold your vote for any nominee for election as a director. Withheld votes will be excluded from the vote. Because directors are elected by a plurality of votes and there are only seven nominees for the seven director positions, withheld votes will have no effect on the election of directors. On the other proposals, you may vote to “abstain”. If you vote to “abstain”, your shares will be counted as present at the meeting, and your abstention will have the effect of a vote against the proposal.

Revoking your proxy. You may revoke your proxy at any time before it is actually voted by (1) delivering a written revocation notice prior to the meeting to the Corporate Secretary in person or by courier at the address on the notice of meeting appearing at the front of this Proxy Statement or by mail to P.O. Box HM3349, Hamilton, HMPX Bermuda; (2) submitting a later-dated proxy that we receive no later than the conclusion of voting at the meeting; or (3) actually voting in person at the meeting. Please note that merely attending the meeting will not, by itself, constitute a revocation of a proxy.

 

2020 Proxy Statement				5

PROXY STATEMENT

 

Votes Required / Abstentions and Broker Nonvotes. The following chart provides information on the votes required to elect a director nominee or approve a proposal and the treatment of abstentions and broker nonvotes:

 

Voting Item		Vote Required to Elect or Approve		Treatment of Abstentions and Broker Nonvotes
Election of Directors		Each director must receive a plurality of the votes cast; however, a nominee who does not receive the affirmative vote of a majority of the shares voted in connection with his/her election must tender his conditional resignation from the Board, which the Board will accept unless it determines that it would not be in the Company’s best interests to do so.		No effect
Independent Auditor		Requires the affirmative vote of the holders of a majority of shares present in person or represented by proxy.		Abstentions have the same effect as a vote against the proposal; brokers may vote undirected shares
Say-on-Pay		Requires the affirmative vote of the holders of a majority of shares present in person or represented by proxy. The vote on this item is nonbinding, but the Board will consider the results of the vote in making future decisions.		Abstentions have the same effect as a vote against the proposal; broker nonvotes will have no effect
Amended and Restated 2016 Stock Plan		Requires the affirmative vote of the holders of a majority of shares present in person or represented by proxy. The vote on this item is nonbinding, but the Board will consider the results of the vote in making future decisions.		Abstentions have the same effect as a vote against the proposal; broker nonvotes will have no effect

 

				❖ YOUR VOTE IS IMPORTANT ❖   PLEASE VOTE

 

6				2020 Proxy Statement

CORPORATE GOVERNANCE

Role of the Board of Directors

The Board directs the management of the Company’s business and affairs. The shareholders elect the Board to act on their behalf and to oversee their interests. Unless reserved to the shareholders under applicable law or the Company’s Bye-laws, all corporate authority resides in the Board as the representative of the shareholders.

The Board selects and appoints executive officers to manage the day-to-day operations of the Company, while retaining ultimate oversight responsibilities. Together, the Board and management share an ongoing commitment to the highest standards of corporate governance and ethics. The Board reviews all aspects of our governance policies and practices, including the “Board Guidelines on Significant Corporate Governance Issues” (the “Governance Guidelines”) and the Company’s “Code of Business Conduct”, at least annually and makes changes as necessary. The Governance Guidelines and the Code of Business Conduct along with all committee charters are available on the Company’s website at www.nabors.com.

Overview of Key Governance Topics

Director Independence

The ESG Committee (formerly the Governance and Nominating Committee) conducts a review at least annually of the independence of each member of the Board and its committees and reports its findings to the full Board. As permitted by the rules of the NYSE, the Board has adopted categorical standards to assist it in making determinations of director independence. These standards incorporate and are consistent with the independence requirements of the NYSE and are set forth in our Governance Guidelines available on our website at www.nabors.com. In addition to these standards, the Board also reviews each of the transactions, relationships and arrangements described under “Certain Relationships and Related-Party Transactions” below, as well as social and other relationships, in determining whether a director is independent.

Upon the recommendation of the ESG Committee, the Board has determined that each director of the Board, other than Mr. Petrello, is independent. The Board also has determined that each member of our Audit, Compensation, and ESG Committees meets the independence standards established for these committees by the NYSE and the rules and regulations of the SEC.

Director Nominations

The ESG Committee recommends director candidates to the full Board. The ESG Committee considers the entirety of each candidate’s credentials including, especially, the ability of each candidate to assist the Board in fulfilling its fiduciary duties to the Company and its shareholders. See “Item 1: Election of Directors” below for a more complete discussion of the criteria used to select director nominees.

Shareholder Nominations and Proxy Access Policy

The ESG Committee accepts shareholder recommendations of director candidates and evaluates such candidates in the same manner as other candidates. Shareholders who wish to submit a candidate for consideration by the ESG Committee for election at our 2021 annual general meeting of shareholders may do so by submitting in writing the candidate’s name, together with the information described in the Board’s “Amended and Restated Policy Regarding Director Candidates Recommended by Shareholders” available at www.nabors.com. In addition, in July 2017, our Board amended the Company’s proxy access policy to permit up to 20 shareholders owning collectively three percent or more of our outstanding common shares for at least three years to nominate and include in our proxy materials nominees representing up to 20% of the Board, as detailed in the policy, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in the policy. Submissions to the Board should be delivered in person or by courier to the address on the notice of meeting appearing at the beginning of this Proxy Statement or by mail to P.O. Box HM3349, Hamilton, HMPX Bermuda, no later than the date required for shareholder submissions pursuant to SEC Rule 14a-8, as set forth on page 76 of this proxy statement.

Shareholder Communications with the Board

Shareholders and other interested parties may contact any of the Board’s directors (as a group or individually), committees, or independent directors as a group, by writing to them at Nabors Industries Ltd., c/o Corporate Secretary. Communications should be delivered in person or by courier to the address on the notice of meeting appearing at the beginning of this Proxy Statement or by mail to P.O. Box HM3349, Hamilton, HMPX Bermuda. Shareholder communications received in this manner will be handled in accordance with the Board’s “Policy Regarding Shareholder

 

2020 Proxy Statement				7

CORPORATE GOVERNANCE

 

Communications with the Board of Directors” which is available at www.nabors.com. In addition, any concern about the Company’s conduct, or a complaint about the Company’s accounting, internal control or auditing matters, may be communicated directly to the Lead Director, to the outside directors as a group, or to the Audit Committee. Such communications will be treated as confidential and can be anonymous, and may be submitted in writing in care of the Corporate Secretary, or reported by phone to the Nabors Hotline, established specifically for reporting policy concerns, at 1-877-NABORS7.

Annual Meeting Attendance Policy

The Company encourages all directors to attend the annual general meeting of the shareholders. Five of the seven incumbent directors then comprising the full Board attended the 2019 annual general meeting of shareholders.

Executive Sessions of Non-Employee Directors

Our non-employee directors, each of whom the Board has determined is independent, meet in executive session at each regular meeting of the Board, and any executive sessions convened by the Lead Director during the year, without the CEO or any other member of management present. The Lead Director presides over these executive sessions.

Board Leadership Structure

Our Governance Guidelines were modified in 2014 to provide for an independent chairman of the Board following the tenure of our current Chairman and CEO, Mr. Petrello, whose employment agreement provides that he will serve in both roles. Until such time, the Board believes that the current combination of the chairmanship with an experienced, independent Lead Director creates an effective Board leadership structure for the Company. The Board believes that, as the individual with primary responsibility for managing the Company’s day-to-day operations and with extensive knowledge and understanding of the Company, Mr. Petrello is best positioned to chair regular Board meetings as the directors discuss key business and strategic issues and to focus the Board’s attention on the issues of greatest importance to the Company and its shareholders. Furthermore, combining the roles of Chairman and CEO in Mr. Petrello creates a clear line of authority that promotes decisive and effective leadership, both within and outside the Company. The Board’s current view is that a combined Chairman and CEO position, together with a predominantly independent board and a proactive, independent Lead Director, promotes a candid discourse and responsible corporate governance.

Mr. Yearwood will continue to serve as our independent Lead Director, a position he has held since 2011. The Lead Director’s primary responsibility is to preside over executive sessions of non-employee directors and to call meetings of the non-employee directors as desirable. Such executive sessions provide non-employee directors an opportunity to independently evaluate management and the Company’s operations. In addition, the Lead Director:

 

•

serves on the Executive Committee of the Board;

 

•

chairs certain portions of Board meetings;

 

•

serves as liaison between the Chairman and the non-employee directors;

 

•

develops and approves, together with the Chairman, the agenda for Board meetings, adding agenda items where he deems appropriate;

 

•

leads the Board’s annual self-evaluation; and

 

•

performs other duties delegated by the Board from time to time.

The Board believes that the Company’s corporate governance and leadership structures, including the composition of the Board, its committees and the presence of a strong Lead Director, creates an effective leadership structure for the Company with independent oversight of the Board itself and management. Both the Chairman and Lead Director serve on the Board’s Executive Committee, and any director may raise a matter for consideration by the Board. This past year, our Lead Director:

 

•

partnered with the Chair of the Compensation Committee and others in extensive communications with significant shareholders regarding governance matters; and

 

•

provided input and guidance on strategy and growth directly to management in operations.

The Board believes that Mr. Yearwood’s extensive management experience in the industry and effective performance in the role of Lead Director qualify him to continue to serve in that capacity.

 

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CORPORATE GOVERNANCE

 

Board’s Role in Risk Oversight

Our full Board is responsible for risk oversight and has designated the Risk Oversight Committee to provide assistance in fulfilling its oversight responsibilities with respect to the Company’s processes and policies regarding risk assessment and risk management, including the Company’s enterprise risk management, compliance and operational control activities. The Risk Oversight Committee currently meets, at a minimum, on a quarterly basis to evaluate the Company’s risk exposure and tolerance. Ms. Beder, who has significant professional experience in risk management, serves as the Chair of the Risk Oversight Committee.

 

Risk Oversight Committee’s Role in Risk Oversight

 

❖  Receives information from management regarding a variety of matters, including operations, legal, regulatory, finance, internal audit, cybersecurity, information technology, and strategy, as well as any material risks associated with each matter.

❖  Receives an update from the Company’s Enterprise Risk Management Committee* (“ERMC”) comprised of almost a dozen top senior managers of the Company from various functions, each of whom supervises day-to-day risk management throughout the Company.

❖  Receives an update from the chairman of each of the committees and in turn provides a quarterly risk report to the Board.

 

*	The ERMC is not a committee of the Board. The ERMC is tasked with identifying all potential material risks facing the Company and implementing mitigation measures. The ERMC members meet formally throughout the year to define and improve the risk mapping process and implementation.

The Board also has adopted a procedure for employees and shareholders to report concerns about the Company’s conduct, accounting, internal controls and other matters directly to certain members of the Board. In addition, the Board oversees management as management fulfills its responsibilities for the assessment and mitigation of risks and for taking appropriate risks.

Sustainability

Sustainability is an essential part of our corporate culture and an integral part of our strategic plans. Through technological innovation, environmental impact planning, corporate safety initiatives and community relations activities, the Company understands that how we conduct business is of equal importance to our results. Our sustainability report can be found on our website, www.nabors.com.

Code of Business Conduct

The Company has adopted a Code of Business Conduct in accordance with NYSE requirements. All of our employees, including our executive officers and senior management, as well as our non-employee directors, are required to abide by our Code of Business Conduct, and related policies and procedures, to ensure that our business is conducted in a consistently legal and ethical manner. We also expect venders and suppliers to act consistently with the Code of Business Conduct. The Code of Business Conduct is posted on our website at www.nabors.com. We intend to disclose on our website any material amendments to the Code of Business Conduct, or waivers from any provision of the Code of Business Conduct that apply to our CEO and CFO.

Shareholder Engagement

 

Engagement Process

Outreach

»

Discussion

»

Feedback

»

Results

Shareholders are engaged through various methods, including one-on-one meetings, analyst conferences, investor days, panel discussions, and the annual shareholder meeting.

Active discussions are the key to gaining insight and understanding of investor questions and concerns.

Shareholder feedback from any medium is shared with management and the Board of Directors.

Serious matters are deliberated by the Board, which converts shareholder feedback into tangible actions.

 

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CORPORATE GOVERNANCE

 

In making decisions regarding corporate governance and executive compensation issues, the Board considers shareholder opinions and input, which it obtains in several ways. One way is through advisory votes on executive officer compensation, as well as shareholder and other proposals at our annual general meetings. In addition, as part of our shareholder outreach effort, since our last annual meeting we contacted our ten largest institutional shareholders, representing approximately 46 percent of our outstanding common shares, in an attempt to obtain their views on the Company’s corporate governance and executive compensation programs. Of those, only three shareholders representing approximately 24 percent of our shares, ultimately agreed to hold discussions with Board members, including our Lead Director and the Chairman of our Compensation Committee. In early 2020, members of our Board and management also met via telephone with teams from Glass Lewis & Co. LLC and Institutional Shareholder Services Inc. to discuss governance issues, including executive compensation. We believe that dialogue with shareholders and other stakeholders affords our directors deeper insight into shareholder concerns than is provided just by a vote on individual topics, and enables a more effective response to issues of most importance to shareholders. We will continue our shareholder outreach, and hope to have higher shareholder response in the future. In addition, during 2019 our investor relations team engaged in dialogue on a regular basis with approximately 100 shareholders collectively holding approximately 34 percent of our outstanding shares.

Meetings of the Board and Committees

The Board met four times during 2019.

The Board has six committees, each of which report their activities to the Board: (1) the Audit Committee, (2) the Compensation Committee, (3) the Executive Committee, (4) the ESG Committee, (5) the Risk Oversight Committee and (6) the Technology and Safety Committee. Appointments to and chairmanships of the committees are recommended by the ESG Committee and approved by the Board. Directors are expected to attend all meetings of the Board and committees on which they serve.

Each of our incumbent directors attended over 75 percent of all meetings of the Board and committees on which he or she served during 2019.

The following chart shows the current membership and chairmanship of each Board committee, and the number of meetings held by each committee during 2019.

 

 

Director

Audit

Compensation

Executive

ESG

Risk Oversight

Technology and Safety

Tanya S. Beder

❖

❖(1)

❖(2)

Chair

❖

Anthony R. Chase

❖(4)

❖(4)

James R. Crane

❖(3)

❖

Chair

John P. Kotts

Chair

❖

❖

Michael C. Linn

Chair

❖

Anthony G. Petrello

Chair

John Yearwood

❖

❖

Chair

❖(2)

❖

Number of Meetings

4

4

0

4

4

4

 

(1)	Since July 25, 2019.

(2)	Until February 21, 2019.

(3)	Until July 25, 2019.

(4)	Since Mr. Chase’s appointment to the Board on February 21, 2019.

Board Practices and Commitment

The Board typically meets four times a year at a location outside the United States. A typical Board meeting requires at least one, and most times two, overnight stays. The Board targets at least one meeting each year to be held at a key Nabors market location outside the United States. This practice allows the Board members to have direct contact with both field level and local management, and facilitates a greater understanding of the challenges and opportunities in these markets. The Board also may use these occasions to meet with key customers and vendors, and to receive direct feedback on the Company’s performance and opportunities.

Board meetings, including committee meetings, typically consume collectively about 15 hours of actual meeting time for each trip. Travel times range from 8 hours to as many as 34 hours depending on location.

 

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CORPORATE GOVERNANCE

 

As a policy, Board member participation is virtually always in person and not telephonic. Key management personnel are invited on a rotational basis to make presentations to the Board at almost every meeting. This practice ensures informed contact by the Board members with one another as well as with management.

Given that Board meetings must be held outside the U.S., our standard practice is for each director to attend all committee meetings, whether or not a member of that committee. This practice promotes extraordinary depth of knowledge with respect to Company matters and ensures the Company benefits from the directors’ collective knowledge, skill and experience. Board members also hold meetings with shareholders, either in person or by telephone. This allows the Board to have direct communication and to discuss all issues that are of importance to the shareholders. This year Board members also held a telephone conference with a team from Glass Lewis & Co. LLC and Institutional Shareholder Services Inc. to discuss governance issues. Members of the Board also meet regularly with management and employees of the Company to discuss strategy and other matters.

The Company believes these Board practices are among the best in class for corporate governance.

Key Committee Responsibilities

The following table shows the key responsibilities of each Board Committee.

 

Audit Committee		Key Responsibilities

 

		•  Oversees the integrity of our consolidated financial statements, system of internal controls, internal audit, financial risk management, and compliance with legal and regulatory requirements.   •  Selects, determines the compensation of, evaluates and, if deemed appropriate, replaces the independent auditor, and preapproves audit and permitted nonaudit services.   •  Determines the qualifications and independence of our independent auditor and evaluates the performance of our internal auditors and independent auditor.   •  After review, recommends to the Board the acceptance and inclusion of the annual audited consolidated financial statements in our annual report on Form 10-K.   •  Conducts information sessions in connection with the Company’s quarterly earnings releases and other matters.   All members of the Audit Committee were determined to have met the independence, financial literacy and experience requirements of the NYSE and SEC rules and regulations. The Board has also determined that Messrs. Kotts and Yearwood and Ms. Beder are “audit committee financial experts” as defined under SEC rules.   The Audit Committee operates under a written charter adopted by the Board, and which is available on the Corporate Governance page of Nabors’ website at www.nabors.com.

 

Compensation Committee		Key Responsibilities

 

		•  Reviews and approves the compensation of our executive officers and other senior leaders.   •  Oversees the administration of our incentive compensation and other equity-based compensation plans for officers and employees.   •  Reviews and discusses with management the Compensation Discussion and Analysis and recommends to the Board the inclusion of the CD&A in the proxy statement.   •  Communicates with the Audit Committee regarding performance goals and evaluations of key finance, internal control, internal audit and risk management personnel.   •  Meet with the Risk Oversight Committee to confirm that compensation and incentive pay structures do not encourage unnecessary risk taking.   All members of the Compensation Committee were determined to have met the independence standards of the NYSE.   The Compensation Committee operates under a written charter adopted by the Board, and which is available on the Corporate Governance page of Nabors’ website at www.nabors.com.

 

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CORPORATE GOVERNANCE

 

Executive Committee		Key Responsibilities

 

		•  As necessary between meetings of the Board, exercises all power and authority of the Board overseeing the management of the business and affairs of the Company.

 

ESG Committee		Key Responsibilities

 

		•  Identifies and recommends candidates for election to the Board.   •  Establishes procedures for the committee’s oversight of the evaluation of the Board.   •  Recommends director compensation.   •  Reviews corporate governance policies annually.   •  Reviews and approves any related-party transactions involving directors and executive officers.   •  Monitors and advises the Board on environmental, social, and governance-related policy initiatives, including compliance, and oversees the publication of the Company’s sustainability report.   All members of the ESG Committee during 2019 were determined to have met the independence standards of the NYSE.   The ESG Committee operates under a written charter adopted by the Board, and which is available on the Corporate Governance page of Nabors’ website at www.nabors.com.

 

Risk Oversight Committee		Key Responsibilities

 

		•  Monitors management’s identification and evaluation of major strategic, operational, regulatory, information and external risks inherent in the Company’s business.   •  Reviews the integrity of the Company’s systems of operational controls, regarding legal and regulatory compliance.   •  Reviews the Company’s processes for managing and mitigating operational and enterprise risk.   The Risk Oversight Committee operates under a written charter adopted by the Board, and which is available on the Corporate Governance page of Nabors’ website at www.nabors.com.

 

Technology and Safety Committee		Key Responsibilities

 

		•  Reviews the Company’s strategic technology positions, including intellectual property, patents, and trademarks.   •  Monitors the Company’s compliance with health and safety standards.   •  Reviews the Company’s safety performance and strategic technology position.   •  Reviews the integrity of information technology systems, including the potential for cybersecurity threats.   The Technology and Safety Committee Charter Committee operates under a written charter adopted by the Board, and which is available on the Corporate Governance page of Nabors’ website at www.nabors.com.

Item 1: Election of Directors

Each nominee for director who is elected at the meeting will serve a one-year term, expiring at the next annual general meeting of shareholders or until such later time as such director’s successor is duly elected and qualified. At the meeting, proxies cannot be voted for a greater number of individuals than seven. The directors standing for election have been nominated by the Board, upon the recommendation of the ESG Committee. Each of the nominees has agreed to serve as a director if elected, and we do not anticipate that any will be unable or unwilling to stand for election. If that were to occur, your proxy will be voted for another person nominated by the Board.

 

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CORPORATE GOVERNANCE

 

Criteria

The Board’s top priority is to ensure effective and ethical oversight of the Company and its operations, and the implementation of its strategic goals. To accomplish this the Board, through the ESG Committee, seeks a diverse group of director nominees that have demonstrated exceptional skills, qualifications, attributes, and experience. In identifying and recommending director nominees, the ESG Committee places primary emphasis on the following criteria:

 

•

Reputation, integrity and independence (for non-employee directors);

 

•

Judgment and diversity of viewpoints, backgrounds and experience, including gender, race, ethnicity, age, and geography;

 

•

Business or other relevant experience;

 

•

The extent to which the interplay of the nominee’s expertise, skills, knowledge, and experience with that of the other members of the Board will result in an effective Board that is responsive to the Company’s needs; and

 

•

For director nominees who are current directors, history of attendance at Board and committee meetings, as well as preparation for, participation in and contributions to the effectiveness of those meetings.

These criteria include those set forth in our Board Guidelines on Significant Corporate Governance Issues, which are available on our website at www.nabors.com and to any shareholder who requests them in writing. Requests should be addressed to the Corporate Secretary and delivered in person or by courier to the address on notice of meeting appearing at the beginning of this Proxy Statement, or by mail to P.O. Box HM3349, Hamilton, HMPX Bermuda.

The ESG Committee believes that each nominee should be evaluated on his or her individual merits, taking into account the needs of the Company at any given time as well as the overall composition of the Board. There are certain criteria that are expected of all director nominees. For example, all nominees are expected to have high integrity and a reputation of success in his or her field. In addition, all nominees are expected to have the time and ability to fulfill his or her responsibilities to the Company and its shareholders, if elected. Other than these basic criteria, however, the Board does not set universal minimum qualifications that all nominees must meet in order to be recommended. Rather, using the broad criteria set out above, the Board identifies specific skills and qualifications that may be beneficial at any given time – including those that are determined to be necessary for committees of the Board to fulfill their respective mandates – which the ESG Committee in turn utilizes to determine whether a given director nominee is qualified to serve on our Board. Members of the ESG Committee then discuss and evaluate possible candidates in detail and suggest individuals to explore in greater depth. Accordingly, while we believe that each director meets the broad criteria for inclusion as a director nominee, he or she undoubtedly does so in a way specific to that director. The Board, together with the ESG Committee, believes this approach helps to ensure a diversity of viewpoints and experience that enables the Board, and the Company, to maintain the highest levels of corporate governance and oversight. The ESG Committee has discretion to engage outside consultants to help identify candidates and also considers suggestions from shareholders, as described in our Governance Guidelines.

 

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CORPORATE GOVERNANCE

 

Director Nominee Snapshot

 

INDEPENDENT DIRECTORS 85.7%				DIVERSITY						AGE RANGE 60 u 69
				14.3% WOMEN		14.3% MINORITY

 

		IND. DIRECTOR AVG. TENURE 6.2 YEARS				AVERAGE AGE 65 YEARS

 

Beder

Chase

Crane

Kotts

Linn

Petrello

Yearwood

Skills & Experience

Board of Directors

❖

❖

❖

❖

❖

❖

❖

Corporate Governance

❖

❖

❖

❖

❖

❖

❖

Oilfield Services Industry

❖

❖

❖

❖

❖

Drilling

❖

❖

❖

❖

Oil and Gas

❖

❖

❖

❖

❖

❖

CEO / Business Head

❖

❖

❖

❖

❖

❖

❖

International

❖

❖

❖

❖

❖

❖

❖

Finance / Capital Allocation

❖

❖

❖

❖

❖

❖

Financial Literacy / Accounting

❖

❖

❖

❖

❖

❖

❖

Investment Banking

❖

❖

❖

❖

Manufacturing

❖

❖

❖

Technology

❖

❖

❖

❖

Logistics

❖

Academia/Education

❖

❖

❖

Health, Safety and Environment

❖

❖

❖

❖

Board Tenure

Years

3

1

8

7

8

29

10

 

14				2020 Proxy Statement

CORPORATE GOVERNANCE

 

Being on a board of directors for a public company with global operations brings a broad scope of responsibilities, as directors must understand general operational activities as well as corporate governance, including issues surrounding strategic direction and exposures to risk. As a result, the ESG Committee believes that the skills and experience listed above benefit the Board in overseeing the Company’s governance as well as its vision and long-term strategy, as follows:

 

Board of Directors		Prior public-company board experience is helpful in that the nominee will have an understanding of (i) his or her role – there is no time for on-the-job training; (ii) how to deal with the myriad complex issues that can arise and need attention; and (iii) the time commitment involved
Corporate Governance		Experience in dealing with evolving and dynamic corporate governance matters helps to ensure proper corporate policies are in place and enforced, and that the Board and management are appropriately and fully fulfilling their responsibilities
Oilfield Services/ Drilling/Oil & Gas		An in-depth knowledge of these industries is important for maintaining our place as a leading provider of drilling and drilling-related services and equipment
CEO/Business Head		Background and experience as a CEO provides an understanding of what it takes to manage employees and run a company
International		International experience is essential for a company like Nabors, with operations and offices in over 20 countries worldwide
Finance/ Capital Allocation		Knowledge and expertise in financial matters helps to ensure the availability and correct allocation of financial resources to maximize returns
Investment Banking		A background and understanding in this area is useful in pursuing strategic acquisitions
Financial Literacy/ Accounting		An understanding of financial reporting and accounting principles is necessary to satisfy stock market listing requirements and, more importantly, in fulfilling accounting oversight responsibilities
Manufacturing		Experience and knowledge of manufacturing processes is important for us as, unlike some of our competitors, we develop and manufacture much of the equipment we use
Technology		A broad understanding of technology and technical systems helps ensure the sensible investing in, and development of, technology
Logistics		Without the proper flow of equipment, supplies, and personnel, we cannot support and satisfy global customer demands
Academia/Education		An academic background can bring new ways of thinking and problem solving to corporate issues
Health, Safety and Environment		Essential to achieving Nabors’ Mission Zero company-wide effort to eliminate injuries and incidents, and ensuring environmentally sound operations

Please see the biographic information under “—Director Nominees” beginning on page 16 for insight as to how each director satisfies the skills and experience indicated above.

While the proper skillset and professional expertise are important, the ESG Committee also believes that the Board should reflect racial, gender, cultural and geographical diversity, as appropriate, in light of the entire Board’s composition. To that end, Mr. Anthony Chase was appointed to the Board and nominated to stand for election last year for the first time. Ms. Tanya S. Beder was nominated and voted onto the Board in 2017. Equally as important as race or gender, however, is the considerable experience, expertise and insight these and the other nominees brings to the Board, as identified in their respective professional biographies set forth under “—Director Nominees” below. The members of the ESG Committee recommended the re-nomination of all continuing director nominees. The full Board has agreed with the recommendations of the ESG Committee and nominated each of Ms. Beder and Messrs. Chase, Crane, Kotts, Linn, Petrello and Yearwood for re-election.

 

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CORPORATE GOVERNANCE

 

Over the past several years, the ESG Committee has nominated qualified new independent directors to provide fresh perspectives to the Board. The average tenure of the independent director nominees is just over six years, with two new directors added within the last three years. The Committee believes that directors with many years of service provide the Board with a deep knowledge of the Company, while newer directors lend fresh perspectives.

The members of the ESG Committee, as well as the full Board, believe that the combination of the various qualifications, attributes, skills, and experience of the director nominees will contribute to an effective and well-functioning Board and that, individually and as a whole, the director nominees possess the necessary qualifications and expertise to provide effective oversight of the Company and its business.

In the biographical descriptions that follow, except as otherwise noted, the companies for which directors have worked are not a parent, subsidiary or otherwise affiliated with the Company.

Director Nominees

 

		TANYA S. BEDER   Independent Director Director since: 2017 Age: 64		Committees: Audit, Compensation, Risk Oversight, Technology and Safety   Other Public Company Boards: 1

Ms. Beder currently serves as the Chairman and CEO of SBCC Group, Inc. (“SBCC”), which she founded in January 1987. SBCC is an independent advisory firm operating globally, whose projects include assisting corporate management, institutional investors, large financial firms and other clients in solving complex financial problems under crisis and providing strategic advice to seize opportunities. Ms. Beder has served since 2011 on the board of the American Century mutual fund complex in Mountain View, California, where she chairs the Risk Committee and is a member of the Portfolio Committee and the Audit & Compliance Committee. She also served on the board of Kirby Corporation (NYSE:KEX) since October 2019. Previously, Ms. Beder served as a member of the CYS Investments, Inc. (NYSE:CYS) board of directors from May 2012 to September 2018, where she chaired the Nominating and Governance Committee and was a member of the Audit and Compliance Committee. She also served as the Chief Executive Officer of Tribeca Global Management LLC, a $2.6 billion dollar fund with operations in Singapore, London, and New York; Managing Director of Caxton Associates LLC, a $10 billion asset management firm with operations in New York and London; and President of Capital Market Risk Advisors, Inc. in New York, which she co-founded. Ms. Beder also spent time in various positions with The First Boston Corporation (now Credit Suisse) where she was a part of the first team of derivatives traders and structurers for currency and interest rate swaps, caps, collars, floors, futures, and options, and was on the mergers and acquisitions team in New York and London. In January 2013, she was appointed to the President’s Circle of the National Academies in Washington, DC, after serving six years at the National Academy of Sciences on the Board of Mathematics and their Applications. Ms. Beder also serves on the Mathematical Finance Advisory Board of New York University and is a Board Member Emeritus of the International Association of Quantitative Finance, where she previously served as Chairman. She is an appointed Fellow of the International Center for Finance at Yale University and teaches a course on finance and fintech at Stanford University. From 2004 – 2017 she served on the Advisory Board of the Columbia University Financial Engineering Program, from 2014 – 2017 she served on the Board of The Institute for Pure and Applied Mathematics at UCLA, and from 2010-2014 she served as a Director of the Pilgrim Asia Macro Fund in Singapore. Ms. Beder holds a B.A. in mathematics and philosophy from Yale University, and an MBA from Harvard Business School.

 

 

16				2020 Proxy Statement

CORPORATE GOVERNANCE

 

ANTHONY R. CHASE   Independent Director Director since: 2019 Age: 65		Committees: ESG, Risk Oversight   Other Public Company Boards: 1

Mr. Chase is Chairman and Chief Executive Officer of ChaseSource, L.P., a Houston-based staffing and real estate development firm. He was a founder of mobile phone provider Cricket Wireless and of ChaseCom, L.P., a global customer relationship management and staffing services company, until its sale to AT&T, Inc. in 2007. He is a tenured Professor of Law and Business at the University of Houston Law Center, where he began teaching in 1990. He has published numerous law review articles during his tenure. Mr. Chase is on the board of directors of the Texas Medical Center, M.D. Anderson Board of Visitors and the Greater Houston Partnership, serving as its chairman during 2012. Mr. Chase has been nominated to serve on the board of directors of Cullen/Frost Bankers, Inc., and previously served as a director of Anadarko Petroleum Corporation, Paragon Offshore plc, Sarepta Therapeutics, Inc. and Western Midstream Operating, LP. Additionally, he is a Trustee of the Houston Endowment, and served on the board of trustees of St. John’s School and KIPP Schools. Mr. Chase is the former Deputy Chairman of the Federal Reserve Bank of Dallas and a former Director of the Federal Reserve Bank of Houston. Mr. Chase holds B.A., M.B.A. and J.D. degrees from Harvard University. He is also an Eagle Scout.

 

❖ Qualifications

Mr. Chase brings experience and expertise in oil and gas, environmental law, real estate, and management and provision of human resources, as well as experience as an executive and as a board member of both public and private companies.

 

JAMES R. CRANE   Independent Director Director since: 2012 Age: 66		Committees: Executive, Technology and Safety   Other Public Company Boards: 2

Chairman and CEO of Crane Capital Group Inc., an investment management company, since 2006. Crane Capital Group has invested in transportation, power distribution, real estate and asset management. Its holdings include Crane Worldwide Logistics, a premier global provider of customized transportation and logistics services with 130 offices in 35 countries, and Crane Freight & Cartage. Mr. Crane purchased the Floridian National Golf Club in March 2010 and quickly turned it into one of the nation’s premier golf clubs. Mr. Crane led an investor group that in November 2011 purchased the Houston Astros. In January 2017, Crane acquired and serves as Chairman of the board of Davaco, a leader in high-volume remodels and technology deployments in global brands. In March 2017, Mr. Crane opened two restaurants – Osso & Kristalla and Potente – in Houston, Texas. In June 2017, he started Crane Safety, a commercial safety supply company. In August 2017 he started Modiant, a software company. In June 2018 he became the principal owner of Apurture Cellars, a winery in Sonoma County, California. Mr. Crane was Founder, Chairman and Chief Executive Officer of Eagle Global Logistics, Inc., a NASDAQ-listed global transportation, supply chain management and information services company, from 1984 until its sale in August 2007. Mr. Crane holds a B.S. in Industrial Safety from Central Missouri State University. He serves on the boards of directors of Cargojet, Inc. (TO:CJT) and Western Midstream Holdings, LLC, a subsidiary of Occidental Petroleum Corporation and the general partner of Western Midstream Partners, LP.

 

 

2020 Proxy Statement				17

CORPORATE GOVERNANCE

 

		JOHN P. KOTTS   Independent Director Director since: 2013 Age: 69		Committees: Audit, Compensation, Risk Oversight   Other Public Company Boards: 2

Mr. Kotts is a private investor and entrepreneur. Through his management company, J.P. Kotts & Co., Inc., Mr. Kotts also operates a private investment fund focused on the trading of U.S. and international securities and other financial instruments. He also invests in real estate and private equities. Mr. Kotts is currently the owner and CEO of Vesco/Cardinal, an oil tool rental and service company, as well as several manufacturing companies. Mr. Kotts previously held various financial, banking and investment banking positions in companies specializing in leveraged buyouts, venture capital and turnaround transactions. From 1990 to 1998, he owned and operated Cardinal Services, Inc., a leading supplier of liftboat rentals and other production-related services, including mechanical wireline services and plug and abandonment services, to oil companies operating in the Gulf of Mexico. Mr. Kotts previously served on the board of directors for C&J Energy Services Ltd. from March 2015 to September 2015. He holds a B.A. in Philosophy and an M.B.A in Finance from Hofstra University and completed additional post-graduate work at McGill University in Montréal, New York University and Harvard Business School.

 

❖ Qualifications

Mr. Kotts’ industry background and knowledge, business acumen and financial expertise were the primary factors considered by the Board in deciding to appoint him as a director and nominate him for election to the Board. Mr. Kotts brings to the Board entrepreneurial drive and management skills.

 

		MICHAEL C. LINN   Independent Director Director since: 2012 Age: 68		Committees: ESG, Compensation   Other Public Company Boards: 1

President and CEO of MCL Ventures, LLC, an oil, gas and real estate investment firm, since 2012. Mr. Linn is the former Chairman, CEO, President and Director of LINN Energy, LLC, which he founded. Since 2015 he has served as a director for the general partner of Black Stone Minerals, L.P. He has served as a Senior Advisor for Quantum Energy Partners, LLC since 2012, and previously served as a director for Western Refining Logistics GP. Mr. Linn is on the Board of Managers of Cavallo Mineral Partners, LLC, and previously served as a director of Jagged Peak Energy Inc. He serves as a member of the National Petroleum Council’s Board of Directors and as Chairman of the Education Committee of the IPAA. He previously served on the board of directors of C&J Energy Services Ltd., as Non-Executive Director and Chairman of the Safety, Health, Environment, Security and Ethics Committee for Centrica plc, as Chairman and director of the Natural Gas Council, as Chairman of the Independent Petroleum Association of America, as director of the Natural Gas Supply Association, as Chairman and President of each of the Independent Oil and Gas Associations of New York, Pennsylvania and West Virginia, and as Texas Representative for the Legal and Regulatory Affairs Committee of the Interstate Oil and Gas Compact Commission. Mr. Linn holds a B.A. in Political Science from Villanova University and a J.D. from the University of Baltimore School of Law.

 

 

18				2020 Proxy Statement

CORPORATE GOVERNANCE

 

ANTHONY G. PETRELLO   Independent Director Director since: 1991 Age: 65		Committees: Executive   Other Public Company Boards: None

Chairman of the Board of Nabors since 2012 and director since 1991; Deputy Chairman of Nabors 2003-2012; President and CEO of Nabors and Nabors Industries, Inc. since 2011; President and Chief Operating Officer of Nabors and Nabors Industries, Inc. from 1991-2011. Mr. Petrello holds a J.D. degree from Harvard Law School and B.S. and M.S. degrees in Mathematics from Yale University. Mr. Petrello also serves as a director of Hilcorp Energy Company. In 2018, Mr. Petrello was the recipient of the Offshore Energy Center Pinnacle Award, recognizing outstanding individuals who have taken today’s leading-edge tools and technologies and applied them to real world challenges.

 

 

JOHN YEARWOOD   Independent Director Director since: 2010 Age: 60		Committees: Audit, ESG, Executive, Technology and Safety   Other Public Company Boards: 1

Mr. Yearwood currently serves on the board of directors of TechnipFMC plc, Sheridan Production Partners, Barra Energia, Foro Energy LLC, Bazean LLC, and Coil Tubing Partners LLC. He previously served on the boards of Sabine Oil & Gas, LLC until August 2016, Premium Oilfield Services, LLC until April 2017, and Dixie Electric LLC until November 2018. Until August 2010, he served as the Chief Executive Officer, President and Chief Operating Officer of Smith International, Inc. (“Smith”). He was first elected to Smith’s board of directors in 2006 and remained on the board until he successfully negotiated and completed the sale of Smith to Schlumberger Limited in August 2010. Before joining Smith, Mr. Yearwood spent 27 years with Schlumberger Limited in numerous operations, management and staff positions throughout Latin America, Europe, North Africa and North America, including as President and in financial director positions. He also previously served as Financial Director of WesternGeco, a 70:30 joint venture between Schlumberger and Baker Hughes from 2000 to 2004. Mr. Yearwood received a B.S. Honors Degree in Geology and the Environment from Oxford Brookes University in England.

 

 

 

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Other Executive Officers

 

		WILLIAM J. RESTREPO   Chief Financial Officer Age: 60

CFO of Nabors since March 2014. In this role, Mr. Restrepo has global oversight for finance and accounting, including the treasury, tax, risk management, internal audit and supply chain groups. He also works closely on Nabors’ corporate development and investor relations initiatives. Mr. Restrepo formerly served as Chief Financial Officer at Pacific Drilling S.A. from February 2011 to February 2014. He also previously served as Chief Financial Officer at Seitel from 2005 to 2009, and at Smith from 2009 to 2010 until its merger with Schlumberger Limited. Prior to that, from 1985 to 2005, Mr. Restrepo served in various senior financial and operational positions for Schlumberger Limited, including operational responsibility for all product lines in the Continental Europe and Arabian Gulf markets, as well as senior financial executive roles in Corporate Treasury and worldwide controller positions with international posts in Europe, South America and Asia. Mr. Restrepo currently serves on the board of SANAD (Nabors’ joint venture with Saudi Aramco) and previously served on the boards of directors of C&J Energy Services Ltd. from 2015 to 2017, Probe Technology Services from 2008 to 2016, and Platinum Energy Solutions, Inc. from 2012 to 2013. Mr. Restrepo holds a B.A. in Economics and an M.B.A, both from Cornell University, as well as a B.S. in Civil Engineering from the University of Miami.

 

		MARK D. ANDREWS   Corporate Secretary Age: 47

Corporate Secretary of Nabors since September 2007. Prior to joining Nabors, Mr. Andrews served in various treasury and financial management positions with General Electric Company, a diversified technology and financial services company, beginning in December 2000. Mr. Andrews was employed by the public accounting firm of PricewaterhouseCoopers LLP from September 1996 to November 2000 in a number of capacities, including Tax Manager, within the firm’s Mining and Resource Practice. Mr. Andrews holds a B.B.A. degree from Wilfrid Laurier University and is also a Chartered Professional Accountant, Chartered Secretary and a CFA charterholder.

 

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Non-Employee Director Compensation

We believe it is essential to attract outstanding non-employee directors and align their economic interest in the Company with other shareholders. We accomplish this through a combination of annual cash retainers and equity incentive awards. Director compensation and benefits are set by the full Board, upon the recommendation of the ESG Committee in consultation with the Compensation Committee and with market analysis provided by Pearl Meyer & Partners LLC (“Pearl Meyer”), the compensation consultancy firm retained by both committees. Both the ESG Committee and the Compensation Committee consist entirely of independent directors, and are authorized to delegate authority to one or more subcommittees. We believe that director compensation should be reasonable in light of what is customary for companies of similar size, scope and complexity and should reflect the time, effort and expertise required of directors to adequately perform their responsibilities. The amount of compensation paid or awarded to non-employee directors takes into account the fact that, given the nature of the business and the location of our operations, our directors are required to travel a substantial distance to attend meetings outside of the U.S. These travel obligations often result in the directors dedicating a number of days to attending meetings. Directors do not receive additional amounts for attendance at these Board and committee meetings.

In 2018, in connection with the amendment of the Company’s 2016 Stock Plan, the Board approved and the shareholders ratified a director compensation policy that limits each non-employee director’s individual compensation to a maximum of $550,000 per calendar year (the “Non-Employee Director Compensation Limitation”). Under the Non-Employee Director Compensation Limitation, the Board has the authority to make decisions with respect to director compensation within the $550,000 limit; in other words, such compensation may consist of cash, equity or other amounts, but cannot in any event exceed $550,000 per non-employee director per calendar year. The Non-Employee Director Compensation Limitation will continue as part of the Company’s Amended and Restated 2016 Stock Plan, if approved by the shareholders at the annual meeting.

The amount of director compensation was not increased in connection with the adoption and ratification of the Non-Employee Director Compensation Limitation. In fact, our non-employee director compensation was reduced in early 2019, with the annual retainer for the chairman of each committee, other than the chairman of the Audit Committee, being reduced from $50,000 to $30,000, and the retainer for the chairman of the Audit Committee being reduced from $100,000 to $60,000. In addition, the retainer paid to members of the Audit Committee was reduced by $5,000, to $15,000 annually. Finally, the retainer for the Lead Director was reduced from $50,000 to $35,000. More recently, in March of 2020, the annual non-committee cash retainer for each member of the Board was reduced by 20 percent, to $80,000, in connection with cost-cutting initiatives resulting from the industry downturn caused by the COVID-19 crisis and the price war in the oil sector.

All cash retainers are paid on a pro rata basis at the end of each quarter. Any director may elect to receive immediately vested stock options, in lieu of any cash compensation, valued at the amount of the payment using the Black-Scholes valuation model. During 2019, in lieu of cash compensation Mr. Kotts elected to receive immediately vested options at the end of each of the first, second and third quarter, and Mr. Chase – who was appointed to the Board on February 21, 2019 – elected to receive immediately vested options at the end of the first quarter.

In addition to the cash compensation described above, non-employee directors also receive an annual equity incentive award. Annual grants of restricted share awards to non-employee directors are made shortly after the annual general meeting of shareholders. This ensures that the awards are granted only to shareholder-elected members for the current year and not to directors who are retiring or otherwise not continuing as directors. In addition, directors who retire from the Board and who meet other criteria may under certain circumstances maintain previously issued equity awards outstanding upon approval by the ESG Committee.

Beginning in 2018, following shareholder approval of the amendment to the Company’s 2016 Stock Plan, we began issuing restricted shares to our non-employee Board members with a vesting period of one year from the grant date. In early 2019, the Board agreed to reduce the yearly stock grant from $300,000 to $250,000, with the number of shares granted based on the “fair market value” equal to our share price on the date of grant.

In 2018 the Board also approved and adopted new Director Share Ownership Guidelines. Under the guidelines, each director is required to own Company shares with a value of at least five times the director’s annual cash retainer (exclusive of any portion of the retainer received as a member or chair of any Board committee). Share value for purposes of the guidelines is determined as of the date of grant for vested or unvested restricted share awards or, in the case of open market purchases, the date of acquisition. Each director has three years from the date of his or her first election to the Board by the shareholders to meet the ownership requirements of the guidelines. Each director is currently in compliance with the guidelines or is on schedule to be within the requisite three-year period.

 

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The following table sets forth information concerning total director compensation in 2019 for each non-employee director.

Director Compensation Table

 

Name(1)		Fees Earned or Paid in Cash ($)				Stock Awards ($)(2)(3)				Option Awards ($)(4)				Non-Equity Incentive Plan Compensation Non-Equity Incentive Plan Compensation ($)				Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)				All Other Compensation ($)				Total ($)
Tanya S. Beder			160,765				250,000				0				0				0				0				410,765
Anthony R. Chase(5)			90,000				250,000				13,000				0				0				0				353,000
James R. Crane			135,652				250,000				0				0				0				0				385,652
John P. Kotts			45,000				250,000				135,000				0				0				0				430,000
Michael C. Linn			140,000				250,000				0				0				0				0				390,000
John Yearwood			191,417				250,000				0				0				0				0				441,417

 

(1)	Mr. Petrello, who was an employee of the Company throughout 2019, is not included in this table. His compensation is reflected in the Summary Compensation Table under “—Executive Compensation Tables” below.

(2)

The amounts shown in the “Stock Awards” column reflect the grant-date fair value of restricted share awards, in accordance with FASB ASC Topic 718. Dividends on stock awards are not shown in the table because those amounts are factored into the grant date fair value. On June 4, 2019, upon re-election each non-employee director then on the Board received an award of 96,899 restricted shares as part of his or her annual compensation. The number of restricted shares was determined by dividing the approved award dollar amount of $250,000 by the “Fair Market Value” on the date of grant, which was $2.58.

(3)	As of December 31, 2019, the aggregate number of outstanding unvested restricted share awards held by non-employee directors were: Ms. Beder—107,370 shares; Mr. Chase—96,899 shares; Mr. Crane—107,370 shares; Mr. Kotts—107,370 shares; Mr. Linn—107,370 shares; and Mr. Yearwood—107,370 shares.

(4)

The amounts shown in the “Option Awards” column reflect the grant-date fair value of stock option awards, as calculated in accordance with FASB ASC Topic 718. The only stock option awards granted to non-employee directors during 2019 were to Messrs. Chase and Kotts, each of whom received options in lieu of certain of their quarterly cash retainers. As of December 31, 2019, the aggregate numbers of stock options outstanding were: Ms. Beder—2,982; Mr. Chase—8,851; Mr. Crane—58,463; and Mr. Kotts—479,791, all of which are fully vested.

(5)	Mr. Chase was appointed as a director on February 21, 2019. Accordingly, fees earned by Mr. Chase consist of a pro-rata amount of annual retainer fee and committee membership fees in 2019 following his appointment to the Board.

 

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Share Ownership

Share Ownership of Directors and Executive Officers

We encourage our directors and executive officers to own our common shares in order to align their interests with those of other shareholders. Ownership of the Company’s common shares ties a portion of their net worth to the Company’s share price and provides a continuing incentive for them to work toward superior long-term stock performance.

As of April 3, 2020, Nabors had 419,457,162 common shares outstanding and entitled to vote, including shares held by subsidiaries of Nabors. For purposes of the following table, “beneficial ownership” is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) pursuant to which a person or group of persons is deemed to have “beneficial ownership” of any common shares that such person has the right to acquire within 60 days. The following table sets forth the beneficial ownership of common shares, as of April 3, 2020, by each of our current directors and executive officers, both individually and as a group. Except as otherwise indicated below, each person has sole voting and investment power for the common shares shown below.

 

		Common Shares Beneficially Owned
Beneficial Owner(1)		Number of Shares				Percent of Total Outstanding(2)
Tanya S. Beder(3)			222,391	*
Anthony R. Chase(3)			105,750	*
James R. Crane(3)			331,796	*
John P. Kotts(3)			755,924	*
Michael C. Linn			273,333	*
Anthony G. Petrello(3)(4)			15,250,667				3.55	%
John Yearwood			494,333	*
Mark D. Andrews			92,128	*
William J. Restrepo(3)			3,148,605	*
All directors and executive officers as a group(3)			20,674,927				4.91	%

 

*	Less than 1%

(1)	The address of each of the directors and named executive officers listed above is in care of the Company at Crown House, 4 Par-la-Ville Rd., Second Floor, Hamilton, HM 08 Bermuda.

(2)	Based on the Company’s total common shares outstanding as of April 3, 2020, the record date for this year’s meeting.

(3)

We have included in the table common shares underlying stock options that have vested or are scheduled to vest within 60 days of April 3, 2020. For purposes of computing the percentage of shares held by the persons named above, such option shares are not deemed to be outstanding for purposes of computing the ownership of any person other than the relevant option holder. The number of common shares underlying fully vested stock options, or those vesting within 60 days of April 3, 2020, included in the table are as follows: Ms. Beder – 2,982; Mr. Chase – 8,851; Mr. Crane – 58,463; Mr. Kotts – 479,791; Mr. Petrello – 750,000; and all directors/executive officers as a group – 1,300,087. Restricted share awards are considered outstanding shares and therefore are included in the table above regardless of vesting schedule. Similarly, we have included in the table common shares underlying mandatory convertible preferred shares as of April 3, 2020, based on the minimum conversion rate of 5.7173 common share for each preferred share held. For purposes of computing the percentage of shares held by the persons above, such convertible shares are not deemed to be issued and outstanding for purposes of computing the ownership of any other person other than the relevant holder of the preferred shares. The number of common shares underlying fully converted preferred shares as of April 3, 2020, included in the table, are as follows: Mr. Petrello – 5,146; Mr. Restrepo – 41,336.

(4)	The shares listed for Mr. Petrello include 314,236 shares owned by a charitable foundation over which Mr. Petrello, as an officer of the foundation, has voting and dispositive power. Mr. Petrello disclaims beneficial ownership of those shares.

 

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Share Ownership of Certain Beneficial Owners

The following table contains information regarding each person known to us to beneficially own more than 5% of our outstanding common shares as of April 3, 2020, based on Schedule 13G filings made by such persons with the SEC.

 

Beneficial Owner Name and Address		Number of Shares				Percent of Total Outstanding(1)
BlackRock, Inc.(2) 55 East 52nd Street New York, NY 10055			56,302,802				13.42	%
Dimensional Fund Advisors LP(3) Building One 6300 Bee Cave Road Austin, TX 78746			27,523,737				6.56	%
The Vanguard Group(4) 100 Vanguard Blvd. Malvern, PA 19355			37,332,050				8.90	%

 

(1)	Based upon the Company’s total common shares outstanding as of April 3, 2020.

(2)	Based on a Schedule 13G/A filed on February 10, 2020, BlackRock, Inc. and certain of its affiliates have sole voting power with respect to 55,150,925 shares and sole dispositive power with respect to 56,302,802 shares as of December 31, 2019.

(3)

Based on a Schedule 13G/A filed on February 12, 2020, Dimensional Fund Advisors LP and certain of its affiliates have sole voting power with respect to 26,851,806 shares and sole dispositive power with respect to 27,523,737 shares as of December 31, 2019. Dimensional Fund Advisors LP serves as investment adviser, sub-adviser and/or manager to certain investment companies, comingled funds, group trusts and separate accounts that own all of the reported shares. According to its Schedule 13G/A, Dimensional Fund Advisors LP disclaims beneficial ownership of such shares.

(4)

Based on a Schedule 13G/A filed on February 12, 2020, The Vanguard Group and certain of its affiliates have sole voting power with respect to 322,368 shares, shared voting power with respect to 37,305 shares, sole dispositive power with respect to 37,008,344 shares and shared dispositive power with respect to 323,706 shares as of December 31, 2019.

Delinquent Section 16(a) Reports

All of our directors and executive officers are required to file reports of share ownership and reports of changes in ownership with the SEC pursuant to Section 16(a) of the Exchange Act. To our knowledge, and based solely on our review of the copies of Forms 3, 4 and 5 and amendments thereto furnished to us during 2019, and written representations from our directors and executive officers, we believe that all Section 16(a) filing requirements were met for such directors and executive officers in 2019 in a timely manner, with the exception of a single transaction by Mr. Kotts for which a Form 4 was inadvertently not filed due to an administrative error, but which was filed later on a Form 5.

 

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Certain Relationships and Related-Party Transactions

The Board has adopted a written policy regarding the review, approval and ratification of “related-party transactions”. A “related person” is defined under applicable SEC rules and includes our directors, executive officers, beneficial owners of 5% or more of our common shares and each of their immediate family members. Under the written policy, our ESG Committee, which is comprised entirely of independent directors, is responsible for reviewing and approving in advance all transactions involving any related party of the Company. In making its determination, the Committee must consider the fairness of the transaction to the Company and the potential impact of the transaction on the director’s independence.

Mr. Crane, an independent director of our Board, controls Crane Capital Group Inc. (“CCG”), an investment management company that indirectly owns a majority interest in or otherwise controls several operating companies, some of which have provided services to the Company in the ordinary course of business, including transportation and international logistics. In 2019, the Company’s payments to these CCG companies totaled $18.9 million excluding pass through charges, which the ESG Committee determined is immaterial to both the Crane companies and the Company. In its determination, the ESG Committee considered that:

 

(1)	The Company’s aggregate payment for services to the CCG companies constituted approximately 1.2 percent of the consolidated revenue of the CCG companies;

(2)	Mr. Crane was not and is not involved in the commercial decisions of either the Company or the CCG companies related to the provision of services to the Company; and

(3)	All commercial transactions between the Company and the CCG companies were and are conducted at arm’s length and in the ordinary course of business.

The ESG Committee and the Board considered the totality of the information and concluded that Mr. Crane met both the objective and subjective standards of director independence established by the NYSE, as well as the Board’s Governance Guidelines. The ESG Committee and the Board also approved ongoing ordinary-course business transactions between the Company and the CCG companies.

 

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