PATTERSON UTI ENERGY INC (PTEN)
Sector: Energy
2025 Annual Meeting Analysis
PATTERSON UTI ENERGY INC · Meeting: June 5, 2025
Directors FOR
5
Directors AGAINST
6
Say on Pay
FOR
Auditor
FOR
Director Elections
Election of Directors
Against Analysis
Mr. Huff has served as Chairman since 2001, his tenure fully overlaps the 3-year period during which PTEN's stock return trailed the company-disclosed compensation peer group median by 38.0 percentage points — exceeding the 35-point threshold that applies given PTEN's low-positive absolute 3-year return — and the 5-year relative gap of -31.3pp also exceeds that same threshold, so the longer-term record does not mitigate the trigger.
Mr. Hendricks has served as CEO and director since 2017, his tenure fully overlaps the 3-year underperformance period where PTEN trailed peer group median by 38.0 percentage points (above the 35pp threshold for low-positive absolute TSR), and the 5-year relative gap of -31.3pp also exceeds the threshold, so the longer track record does not rescue the vote; this director-level AGAINST is independent of the Say on Pay assessment.
Ms. Cepak has served since 2014, fully overlapping the 3-year underperformance window during which PTEN trailed the peer group median by 38.0 percentage points (exceeding the 35pp threshold), and the 5-year relative underperformance of -31.3pp also exceeds the applicable threshold, confirming this is not a transient shortfall.
Mr. Jaime joined in April 2022, meaning his tenure covers the bulk of the 3-year underperformance period during which PTEN trailed the peer group by 38.0 percentage points; while he joined after underperformance had already begun, his tenure covers more than half the window and the 5-year gap also exceeds the threshold, so the policy triggers an AGAINST vote.
Ms. Judah has served since 2018, her tenure fully overlaps the 3-year period in which PTEN underperformed its peer group median by 38.0 percentage points (above the 35pp trigger), and the 5-year relative gap also exceeds the threshold, meaning the longer-term record provides no mitigation.
Ms. Robertson joined in April 2022, covering the majority of the 3-year underperformance period during which PTEN trailed its peer group median by 38.0 percentage points; while some of the underperformance predates her arrival, her tenure covers more than half the window and the 5-year gap equally exceeds the threshold, supporting an AGAINST vote.
For Analysis
Mr. Drummond joined the board in September 2023, which is within the 24-month exemption window for new directors, so the TSR underperformance trigger does not apply to him; he also brings extensive oilfield services CEO experience.
Ms. Beyer joined the board in September 2023, placing her within the 24-month new-director exemption, so the TSR trigger does not apply; she brings relevant energy industry regulatory and advocacy experience.
Mr. Halverson joined the board in September 2023, which falls within the 24-month new-director exemption, so the TSR underperformance trigger does not apply; he has relevant energy and private equity experience.
Ms. Nelson joined the board in September 2023, placing her squarely within the 24-month new-director exemption; the TSR underperformance trigger does not apply, and she brings strong oilfield services strategy and private equity experience.
Mr. Stewart joined the board in September 2023, which is within the 24-month new-director exemption; the TSR underperformance trigger therefore does not apply, and he has extensive oilfield services leadership experience.
Seven of the eleven director nominees trigger an AGAINST vote under the TSR underperformance policy: PTEN's 3-year stock return trailed its company-disclosed compensation peer group median by 38.0 percentage points, exceeding the 35pp threshold applicable to low-positive absolute TSR, and the 5-year relative gap of -31.3pp also exceeds the same threshold so the 5-year mitigant does not apply. The four NexTier-legacy directors who joined in September 2023 (Drummond, Beyer, Halverson, Nelson, Stewart) fall within the 24-month new-director exemption and receive FOR votes. Directors Jaime and Robertson, who joined in 2022, receive AGAINST votes because their tenure covers the majority of the underperformance period.
Say on Pay
✓ FORCEO
William Andrew Hendricks, Jr.
Total Comp
$12,051,176
Prior Support
96%%
The CEO's total reported compensation of approximately $12.1 million is within a reasonable range for the CEO of a $4 billion oilfield services company, and the program's design is strong: more than 50% of long-term awards are performance-based stock awards tied to relative and absolute total shareholder return, annual bonuses are paid against pre-set financial targets (operating cash flow and EBITDA), and the company has maintained a clawback policy covering all executive officers. Shareholder support has been consistently at or above 96% over the past five years, and the company engages with shareholders on compensation matters. While PTEN's stock has underperformed its peers over three years, the incentive structure includes meaningful relative TSR hurdles that should reduce payout in continued underperformance periods, and the pay level itself does not appear to be materially above benchmark for a company of this size and complexity.
Auditor Ratification
✓ FORAuditor
PricewaterhouseCoopers LLP
Tenure
N/A
Audit Fees
N/A
Non-Audit Fees
N/A
PricewaterhouseCoopers LLP is a Big 4 firm appropriate for a $4 billion market-cap company; the proxy does not disclose specific audit or non-audit fee amounts in the portion of the filing provided, so the non-audit fee ratio trigger cannot be evaluated and the policy default is FOR; auditor tenure is similarly undisclosed, and the policy requires confirmed tenure data before applying any concern, so no tenure trigger fires.
Overall Assessment
The 2025 Patterson-UTI annual meeting features a director election where seven of eleven nominees trigger an AGAINST vote due to three-year stock underperformance of 38.0 percentage points versus the company's own compensation peer group — a gap that exceeds the 35-point policy threshold and is not rescued by the five-year track record; the four newest directors (all joining in September 2023) are exempted as new joiners. The Say on Pay and auditor ratification proposals both receive FOR votes: the compensation program is well-structured with genuine performance conditions, strong shareholder support history, and a credible clawback policy, while PricewaterhouseCoopers is an appropriate Big 4 auditor for this company.
Compensation Peer Group
15 companies disclosed in 2025 proxy filing