UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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☐ | | | Preliminary Proxy Statement |
☐ | | | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒ | | | Definitive Proxy Statement |
☐ | | | Definitive Additional Materials |
☐ | | | Soliciting Material Pursuant to Sec.240.14a-12 |
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INTERNATIONAL SEAWAYS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 12, 2024
To the Stockholders of International Seaways, Inc.:
We cordially invite you to attend the Annual Meeting of Stockholders (the “Annual Meeting”) of International Seaways, Inc. (the “Company” or “INSW”), to be held at Club 101, Kenilworth Room, 101 Park Avenue, New York, New York, on Wednesday, June 12, 2024, at 2:00 p.m. Eastern time. You will also be able to attend the meeting online, vote your shares and submit questions during the meeting by visiting the website www.virtualshareholdermeeting.com/INSW2024. In order to join the Annual Meeting virtually, you will need to have the 16-digit control number included on your proxy card or in the instructions that accompanied your proxy materials (or in other communications you may have received from the broker, bank or other nominee in whose name your shares are held). The Annual Meeting will be held for the following purposes:
(1) | Electing the ten (10) director nominees named in the accompanying Proxy Statement, each to serve until the annual meeting of the Company to be held in 2025; |
(2) | Ratifying the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2024; and |
(3) | Approving, by advisory vote, the compensation of the Named Executive Officers for 2023 as described in the accompanying proxy statement: |
We will also act on any other business that is properly raised in accordance with the Company’s by-laws.
Only stockholders of record at the close of business on April 16, 2024 (the “Record Date”) are entitled to notice of, and to vote at, the Annual Meeting. The stockholders list will be open to the examination of stockholders for any purpose germane to the Annual Meeting during normal business hours for ten days prior to the Annual Meeting, at the Company’s offices, 600 Third Avenue, 39th Floor, New York, New York.
Your vote is important so that your shares are represented at the Annual Meeting. We urge you to vote as soon as possible by telephone, over the Internet or by marking, signing and returning by mail your proxy or voting instruction card, even if you plan to attend the Annual Meeting in person or virtually. If you attend the meeting and wish to vote, you may withdraw your proxy and vote at that time. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder. Your prompt consideration is greatly appreciated.
The U.S. Securities and Exchange Commission (the “SEC”) rules allows issuers, including us, to furnish certain proxy materials to their stockholders over the Internet. These rules lower delivery costs and reduce the environmental impact of our Annual Meeting, while allowing us to provide stockholders with the information they need. If you requested a printed copy of these materials, we have included a copy of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (with this notice and the accompanying Proxy Statement, the “2023 Annual Report”).
| | | By order of the Board of Directors, | |
| | | JAMES D. SMALL III | |
| | | ||
| | | Chief Administrative Officer, Senior Vice President, | |
| | | General Counsel and Secretary | |
New York, New York | | | |
April 26, 2024 | | |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF
PROXY MATERIAL FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON WEDNESDAY, JUNE 12, 2024
You may access the following materials at https://www.intlseas.com/Docs:
• | the Notice of Annual Meeting of Stockholders of the Company to be held on June 12, 2024; |
• | the Company’s Proxy Statement for the Annual Meeting; |
• | the Company’s Annual Report on Form 10-K for the year ended December 31, 2023; and |
• | the form of proxy card. |
INTERNATIONAL SEAWAYS, INC.
600 Third Avenue, 39th Floor
New York, New York 10016
PROXY STATEMENT
International Seaways, Inc. (NYSE: INSW) (the “Company” or “INSW”) is one of the world’s largest balanced tanker companies, providing energy transportation services for crude oil and petroleum products in international markets. At December 31, 2023, the Company owned and operated an International Flag fleet of 73 vessels on the water (totaling an aggregate of 8.8 million deadweight tons), consisting of 13 VLCCs, 13 Suezmaxes, five Aframaxes/LR2s, seven LR1s and 35 MR tankers. In addition, (i) in February 2024 the Company agreed to purchase six 2014 and 2015 built MRs (all of which are scheduled to be delivered through May), (ii) in April the Company sold a 2009 built MR, and (iii) the Company has six dual-fuel ready LR1 newbuilds scheduled for delivery between the second half of 2025 and the third quarter of 2026, bringing the total operating or contracted for and newbuild fleet to 84 vessels at April 26, 2024, the date of this Proxy Statement.
The Company’s customers, including those of commercial pools in which it participates, include major independent and state-owned oil companies, oil traders, refinery operators and international government entities. We generally charter our vessels to customers either for specific voyages at spot rates through the services of pools in which INSW participates, or for specific periods of time at fixed daily rates through time charters or bareboat charters. Spot market rates are highly volatile, while time charter and bareboat charter rates provide more predictable streams of time charter equivalent revenues because they are fixed for specific periods of time.
Our goals for 2023 were to (i) further maximize our fleet’s earnings potential through safe and reliable operations, opportunistic charter-ins / charter-outs, and sales and purchases of vessels, (ii) continue to build on our track record as a disciplined capital allocator and (iii) execute transactions that would ultimately unlock the value of our shares to investors.
Accordingly, we:
• | Further built upon on our track record as a disciplined capital allocator |
• | In a cyclical business such as ours, we believe that disciplined capital allocation requires levers to be pulled at the right times in the cycle. We have a track record of buying vessel assets as low points, voluntarily decreasing our leverage and returning a substantial amount of cash to shareholders. |
• | We paid out $322 million in returns to our stockholders during 2023 primarily in the form of dividends with $14 million in share repurchases. |
• | Our three dual-fuel LNG VLCCs were delivered during the first half of 2023 and commenced employment on seven-year time charters with the oil major Shell. |
• | Completed the $42 million purchase of two 2009-built Aframaxes that were previously bareboat chartered-in at a significant discount to the then current market value of such vessels. |
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• | Continued to maintain our fleet optimization program: |
• | We sold three 2008-built MRs resulting in net proceeds of approximately $39 million after debt repayment. |
• | We entered into construction contracts for six dual-fuel ready LR1 product carriers (including two carriers contracted for in April 2024), which are expected to deliver between the second half of 2025 and the third quarter of 2026. The total construction cost for the vessels will be approximately $347 million, which will be paid for through a combination of long-term financing and available liquidity. |
• | We opportunistically locked in $173 million of minimum revenues (before reduction for brokerage commissions) on non-cancelable time charters with durations of two to three years for one Suezmax, one Aframax and six MRs with charter party expiry dates ranging from February 2025 to June 2026. These charters have increased the contracted future minimum revenues remaining under our time charter agreements (excluding any applicable profit share) to approximately $354 million from January 1, 2024 through charter expiry. |
• | Executed a number of liquidity enhancing, deleveraging and financing diversification initiatives, including: |
• | We prepaid $324 million of outstanding debt under our $750 Million Facility Term Loan and COSCO Lease Financing during 2023. This ultimately resulted in the release of 30 vessels from the collateral packages of the respective credit facilities. |
• | As a result of the principal prepayments made under the $750 Million Facility Term Loan during 2023, the scheduled quarterly principal amortization under the $750 Million Facility Term Loan decreased from $30 million at the beginning of the year to $19 million at the end of the year. |
• | We entered into a secured $160 million revolving credit facility, which matures on March 27, 2029 and reduces on a 20-year-age-adjusted profile. |
• | We ended 2023 with undrawn revolving credit facilities of approximately $414 million. |
In 2023, we had our best financial results since becoming an independent public company in 2016. Shipping revenues and TCE Revenues achieved in 2023 were $1.1 billion and $1.1 billion, respectively, of which approximately 51% were generated from our Product Carriers segment and 49% from our Crude Tankers segment. Income from vessel operations increased by $173 million to $615 million in 2023, from $442 million in 2022, primarily driven by higher average daily rates across most of INSW’s fleet sectors. We achieved Adjusted EBITDA of $724 million in 2023 compared to $549 million in 2022. “Adjusted EBITDA” is a non-GAAP financial measure that represents net income before interest expense, income taxes and depreciation and amortization expense adjusted for the impact of certain items that INSW does not consider indicative of our ongoing operating performance, as disclosed in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s 2023 Annual Report. We have included a reconciliation of Adjusted EBITDA to net income in the 2023 Annual Report.
In addition, we continued to build a strong balance sheet by increasing total liquidity to $601 million from $541 million at the end of 2022, prepaying $324 million of outstanding debt in addition to regular principal amortization of $152 million and ended the year with 41% (i.e., 30 vessels) of our fleet unencumbered, a net loan to value ratio of 17%, and a net debt-to-capital ratio of 24%. We made approximately $241 million in capital investments for vessel and other property purchases, vessel improvements, vessel construction and drydocking. We also returned capital to our shareholders through cash dividends totaling $308 million and $14 million in repurchases of our common stock.
INSW is committed to working to address Environmental, Social and Governance (“ESG”) issues as a part of our core culture. Accordingly, we strive to meet, and when possible and appropriate, exceed minimum compliance levels for all applicable rules and regulations governing the maritime industry. In
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2023, we published our fourth annual ESG report, which outlined our ESG metrics and performance in 2022 compared with 2021 as well as our vision and goal for the future. Our core philosophy is to transport energy safely and efficiently. The ESG report may be accessed at our website https://www.intlseas.com and clicking on Sustainability and then ESG Report on the bottom of the page. The ESG report is not incorporated by reference in any filings with the SEC made pursuant to the Securities Act of 1933, as amended (the “1933 Act”), or the Securities Exchange of 1934, as amended (the “1934 Act”), including this Proxy Statement.
We are focused on various matters in connection with ESG issues:
• | Environment. Due to the nature of our business, environmental and climate change-related risks are key considerations for us. Greenhouse gas (“GHG”) emissions, which are largely caused by burning fossil fuels, contribute to the warming of the global climate system. Our industry, which is heavily dependent on the burning of fossil fuels, faces the dual challenge of reducing its carbon footprint by transitioning to the use of low-carbon fuels while extending the economic and social benefits of delivering energy to consumers across the globe. We welcome and support efforts to increase transparency and to promote investors’ understanding of how we and our industry peers are addressing the climate change-related risks and opportunities particular to our industry. |
During 2022, we achieved significant reductions in total pollutant emissions and fleet energy consumption, positioning ourselves in line with IMO’s long-term emissions ambitions. Notably, compared to 2021, we achieved a 13% reduction in carbon dioxide (CO2) emissions and fleet energy consumption, positioning ourselves on alignment with IMO’s long-term targets.
The Annual Efficiency Ratio, or AER, is a supply-based efficiency metric that measures the theoretical carbon intensity of a ship or fleet and the Energy Efficiency Operational Indicator, or EEOI, is a demand-based operational efficiency metric that measures real-world carbon intensity of the fleet. The AER or EEOI for an entire fleet can be calculated by aggregating the total carbon dioxide emitted by the fleet and dividing by both the total miles traveled by the fleet and the total deadweight of the fleet (in the case of AER) or the total cargo carried by the fleet (in case of the EEOI). Year on year changes in the fleet – buying and selling ships – will change the fleet-wide AER and EEOI.
Our Ship Sustainability Index (SSI) values – which compare AER to Poseidon Principles (the global framework by which financial institutions can assess the climate alignment of their ship finance portfolios) and compare EEOI to targets set out by the Sea Cargo Charter (a framework for assessing and publishing the climate alignment of chartering activities) – offer a meaningful way to analyze emissions performance. Our alignment with the Poseidon Principles’ AER Trajectory fell slightly short in 2022 of our previous three year improvement trend, resulting in a fleet SSI (AER) increasing from 0.98 to 1.01 while the fleet SSI (EEOI) improved to 1.02 in 2022 from 1.04 in 2021. We recognize that both AER and EEOI metrics are influenced by voyage decisions and technical performance changes. In 2022, some vessels experienced anomalous operational behavior from rough weather, delays to cargo discharge operations, or preparing for recycling procedures under the Hong Kong Convention, impacting their environmental performance metrics. Year-on-year changes to speed and utilization also contributed to the level of climate alignment. However, we continue to prioritize energy efficiency improvements during drydockings. Please refer to the 2022 ESG Report for additional information.
To achieve our environmental goals, we have taken actions that include:
• | Achieved year-on-year reduction on gross emissions; |
• | Reported on Scope 2 emissions, which cover purchased energy, heat, cooling, and/or steam at our business locations, for the first time, demonstrating transparency and accountability; |
• | Took delivery in 2023 of our three dual-fuel LNG VLCC tankers, prioritizing the safety and efficiency training of our seafarers to operate these ships. These tankers exceed today’s standards as well as exceed 2025 targets significantly; |
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• | Implemented operational improvements dedicated to reducing emissions contributing to more sustainable operations; |
• | In 2022, as we refinanced our senior secured debt, we further enhanced our sustainability-linked features to include seafarer safety metrics, in lost time incident frequency rates, and a measure of our commitment to sustainable principles as demonstrated by “green” capital expenditure, such as investments in energy savings initiatives that in addition reduce emissions; |
• | Participation on the Board of Directors of the International Tanker Owners Pollution Federation, the leading not-for-profit marine ship pollution response advisors; |
• | Proactively monitored the regulatory landscape to adapt to evolving environmental and requirements; and |
• | Specifically considering overall fuel consumption when selecting vessel purchase candidates and ships in our fleet to consider for disposition, in order to reduce our fleet’s contribution to GHG emissions. |
• | Social. We operate a well-maintained fleet staffed by experienced officers and crews, and we believe that our seafarers are as crucial to our success as the team ashore that supports them. Through our technical and commercial management partners and our own in-house expertise, we have developed a global network to support our seafarers while delivering shipping services safely and effectively to our customers. Our philosophy is one of continual improvement throughout ship and shoreside operations, and we are committed to providing our mariners a safe, high quality place to work in an environment where they can thrive professionally. We maintain a robust safety and compliance culture that reflects the leadership and commitment displayed every day by our senior officers and shoreside staff. Furthermore, we believe in fair and transparent business practices, and we do not tolerate unethical business dealings or facilitation payments. |
In 2022, we joined the All Abroad Alliance, an international organization of senior leaders throughout the maritime industry to pursue increased diversity, equity and inclusion both at sea and onshore. One program of All Aboard Alliance is to address gender imbalance at sea by changing not only the number of women but also the conditions and culture onboard ships to be more inclusive for women seafarers. In 2022, we also joined the Steering Committee of Together in Safety, a nonregulatory industry consortium that connects the maritime sector with the common purpose of working together to improve safety performance.
• | Governance. ESG matters are of significant relevance to us, and the Board regularly engages in discussions relating to both ESG risks and opportunities. All of our current directors (other than the Chief Executive Officer and the former Chief Executive Officer of Diamond S) are independent for service on the Board, which includes experts in both shipping and compliance. Our management team, led by the Chief Executive Officer, executes the action plans as approved by the Board and works to manage ESG-related risks and opportunities. We participate in the Marine Anti-Corruption Network, a global business network of over 100 members whose vision is a maritime industry free of corruption that enables fair trade to the benefit of society at large. |
As part of the Company’s approach to ESG issues, the Company has historically focused on diversity and inclusion, both of which are key to its global operations. INSW employs on its vessels, seafarers from more than nine countries, predominantly in Asia and Europe, and its shore-based staff were born in more than nine countries. During 2023 and until February 19, 2024 (when Mr. Nadim Z. Qureshi resigned as a director), the Board included three (3) women out of ten (10) directors, as well as one (1) director of Asian heritage, and the senior leadership team (comprised of the five (5) NEOs, the Controller, and the heads of Information Technology, Human Resources and the lightering business) includes two (2) women (including the CEO, who is also a director) and three (3) members of underrepresented minority groups.
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The Company’s global mindset, coupled with its focus on fairness, diversity and inclusion, helps drive business success and ensures the Company is committed to its people and the communities in which they work and live.
ESG-related matters are regularly discussed with both the Corporate Governance and Risk Assessment Committee, and with the full Board.
Management depends on the Company’s workforce to provide superior service and to ensure its vessels are operated safely and securely. Seafarers are hired by the technical managers acting as agent for the individual ship owning companies, each of which is a subsidiary of INSW. We are committed to creating a safe, healthy and secure workplace at sea and ashore. We are also committed to providing safe, reliable and environmentally sound transportation to our customers. The development, attraction and retention of employees at sea and ashore is a critical success factor for the Company for succession planning and sustaining our core values.
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The accompanying proxy is solicited on behalf of the Board of Directors (the “Board”) of the Company for use at the Annual Meeting of Stockholders (the “Annual Meeting”) to be held at Club 101, Kenilworth Room, 101 Park Avenue, New York, New York on Wednesday, June 12, 2024 at 2 p.m. Eastern time, or any adjournment or postponement thereof, for the purposes set forth herein and in the accompanying Notice of Annual Meeting of Stockholders. You will be able to attend the meeting online, vote your shares and submit questions during the meeting by visiting the website www.virtualshareholdermeeting.com/INSW2024. In order to join the Annual Meeting virtually, you will need to have the 16-digit control number included on your proxy card or in the instructions that accompanied your proxy materials (or in other communications you may have received from the broker, bank or other nominee in whose name your shares are held).
Any stockholder giving a proxy may revoke it at any time before it is exercised at the meeting. This Proxy Statement and the accompanying proxy will first be sent to stockholders on or about April 26, 2024.
The Company’s Annual Meeting will be conducted through a hybrid meeting model: in person and online. Stockholders at the close of business on the Record Date will be allowed to communicate with us and ask questions in person or online before and during the Annual Meeting.
A summary of information about participating in the Annual Meeting online follows:
• | Any stockholder can attend the Annual Meeting live via the Internet at www.virtualshareholdermeeting.com/INSW2024 |
• | Webcast starts at 2:00 p.m., Eastern Time |
• | Online check-in is expected to begin at 1:45 p.m., Eastern time, and you should allow up to 15 minutes for the online check-in procedures. |
• | Stockholders will be able to vote and submit questions while attending the Annual Meeting |
• | Please have your 16-digit control number to enter the Annual Meeting |
• | Information on how to attend and participate via the Internet will be posted at www.virtualshareholdermeeting.com/INSW2024 |
Stockholders who participate in the Annual Meeting by way of the link provided above will be deemed to be “present in person,” as such term is used in this Proxy Statement, including for purposes of determining a quorum and counting votes.
Only stockholders of record at the close of business on April 16, 2024 (the “Record Date”) will be entitled to vote at the Annual Meeting. As of the Record Date, the Company had one class of voting securities, its Common Stock, of which 49,049,288 shares were outstanding on the Record Date and entitled to one vote each (the “Common Stock”). A list of our stockholders will be open to the examination of stockholders for any purpose germane to the Annual Meeting, during ordinary business hours for ten days prior to the Annual Meeting, at the Company’s offices, 600 Third Avenue, 39th Floor, New York, New York.
All shares represented by the accompanying proxy, if it is duly executed and received by the Company at or prior to the meeting, will be voted at the meeting in accordance with the instructions provided therein. If no instructions are provided, the proxy will be voted (1) FOR the election of directors, (2) FOR ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2024, and (3) FOR approval, in an advisory vote, of the compensation for 2023 of the executive officers named in the Summary Compensation Table in this Proxy Statement (each, a “Named Executive Officer” and collectively, the “NEOs”), as described in “Compensation Discussion and Analysis” section and in the accompanying compensation tables and narrative in this Proxy Statement.
Each of the election of directors and the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2024 requires the affirmative vote (in
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person or by proxy) of a majority of the votes cast by the holders of the shares of Common Stock present in person or represented by proxy at the meeting and, in the case of the election of directors, entitled to vote on the election of directors. The advisory vote on approval of the compensation to the NEOs for 2023 is non-binding, but the Board and the Human Resources and Compensation Committee (the “Compensation Committee”) will review the voting results in connection with their ongoing evaluation of the Company’s compensation program.
Your vote and ensuring that your shares will be represented at the meeting are both very important. We urge you to vote as soon as possible by telephone, over the Internet or by marking, signing and returning your proxy or voting instruction card, even if you plan to attend the Annual Meeting in person or virtually.
Abstentions and broker non-votes will be counted for purposes of determining the presence or absence of a quorum but will not be counted for purposes of determining the number of votes cast.
New York Stock Exchange (the “NYSE”) rules permit brokers to vote for routine matters such as the ratification of the appointment of Ernst & Young LLP without receiving instructions from the beneficial owner of the shares. NYSE rules prohibit brokers from voting on the election of directors, executive officer compensation, and other non-routine matters without receiving instructions from the beneficial owner of the shares. In the absence of instructions, the shares are viewed as being subject to “broker non-votes.” “Broker non-votes” will be counted for quorum purposes (as they are present and entitled to vote on the ratification of the appointment of Ernst & Young LLP) but will not affect the outcome of any other matter being voted upon at the Annual Meeting.
All of these matters are very important to the Company, and we urge you to vote your shares by telephone, over the Internet or by marking, signing and returning your proxy or voting instruction card.
The cost of soliciting proxies for the meeting will be borne by the Company. The Company has retained Innisfree M&A Incorporated to assist with the solicitation of votes for a fee of up to $20,000 plus reimbursement of expenses, which will be paid by the Company. The Company will also reimburse brokers and others who are only record or nominee holders of the Company’s shares for their reasonable expenses incurred in obtaining voting instructions from beneficial owners. Directors and officers of the Company may solicit proxies personally or by telephone or facsimile, but will not receive additional compensation for doing so.
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “1934 Act”), any proposals of stockholders that are intended to be presented at the Company’s 2025 Annual Meeting of Stockholders must be received at the Company’s principal executive offices no later than December 31, 2024, and must comply with all other applicable legal requirements, in order to be included in the Company’s proxy statement and form of proxy for that meeting.
Stockholders who wish to propose a matter for action at the Company’s 2025 Annual Meeting of Stockholders (the “2025 Annual Meeting”), including the nomination of directors, but who do not wish to have a proposal or nomination included in the proxy statement for that meeting, must notify the Company in writing of the information required by the provisions of the Company’s Amended and Restated By-laws (the “By-laws”) dealing with stockholder proposals. The notice must be delivered to the Company’s Corporate Secretary between March 14, 2025 and April 14, 2025. Stockholders can obtain a copy of the By-laws on the Company’s website https://www.intlseas.com/investor-relations/governance/governance- documents or by writing the Corporate Secretary at: Corporate Secretary, International Seaways, Inc., 600 Third Avenue, 39th Floor, New York, New York 10016.
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Our Board of Directors currently has nine (9) members (Mr. Nadim Z. Qureshi having resigned as a director on February 19, 2024), and each director serves for a one-year term. In connection with Mr. Qureshi’s resignation, the Board of Directors reduced the number of authorized directors from ten to nine. In addition, Mr. Joseph I. Kronsberg notified the Company that he will not stand for reelection and will retire from the Board of Directors at the Annual Meeting. Following Mr. Kronsberg’s notification and discussions with representatives of the Seatankers Group (“Seatankers”) referred to below, the Board of Directors increased the number of authorized directors from nine to ten effective at the Annual Meeting. At the Annual Meeting, stockholders will vote on the ten nominees named below, eight of whom are incumbent members of the Board and two are new independent nominees, Messrs. Darron M. Anderson and Kristian K. Johansen. Each of the eight incumbent director nominees was elected by a majority of stockholders voting at the annual meeting of stockholders held in June 2023.
The nomination of Mr. Darron M. Anderson is a result of the Company’s independent search process following the resignation of Mr. Nadim Z. Qureshi from the Board in February 2024. The nomination of Mr. Kristian K. Johansen follows discussions with representatives of Seatankers of which Famatown Finance Limited, the Company’s largest stockholder, is a member. In connection with his nomination, Mr. Johansen has delivered an irrevocable conditional letter of resignation to the Board (the “Letter”) in which Mr. Johansen has agreed to resign from the Board upon the occurrence of certain events specified in the Letter, including if any member of Seatankers becomes adverse to the Company or if Mr. Johansen fails to comply with the Company and Board policies applicable to directors.
The nominees identified below were selected by the Board upon the recommendation of the Corporate Governance and Risk Assessment Committee (the “Governance Committee”), and each nominee has consented to serve if elected. Unless otherwise directed, the proxy will be voted for the election of these nominees, to serve until the 2025 Annual Meeting and until their successors are elected and qualify. We are not aware of any reason the nominees would not be able to serve if elected. Three (3) of the ten (10) director nominees are women and one (1) of the nominees is a member of an underrepresented minority group.
There are no family relationships among our directors, or between our directors and executive officers, and the Board has determined that each of the director nominees other than Ms. Lois K. Zabrocky and Mr. Craig H. Stevenson, Jr. is independent within the meaning of the applicable rules of the SEC and the listing standards of the NYSE, and that each of the director nominees other than Ms. Zabrocky and Mr. Stevenson is independent under the rules of the SEC and the NYSE relating to audit committees. See “Corporate Governance And The Board — Independence” below.
Election of each nominee for director requires that such nominee receive a majority of the votes cast FOR his or her election. Abstentions and broker non-votes are not counted as votes cast and will have no effect on the outcome of any of these proposals.
The Board recommends a vote “FOR” the election of each of the nominees for director named in this Proxy Statement.
The following is biographical information about each nominee, including a description of the experience, qualifications and skills that have led the Board to determine that each nominee should serve on the Board. The terms of elected directors will expire as of the date of the annual meeting of stockholders to be held in 2025, or will continue until their successors are elected and have qualified. The age of each director is as of the date of this Proxy Statement.
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 Doug Wheat Independent Chairman of the Board Age: 73 Chairman since November 2016 Committee Membership • None | | | Professional Experience | ||||||
| | • | | | Mr. Wheat is currently the Managing Partner of Wheat Investments, LLC, a private investment firm | |||||
| | • | | | From 2007 to 2016, he was the founding and Managing Partner of the private equity company Southlake Equity Group | |||||
| | • | | | From 1992 to 2006, Mr. Wheat was the President of Haas Wheat & Partners (“Haas Wheat”) | |||||
| | • | | | Prior to the formation of Haas Wheat, Mr. Wheat was a founding member of the merchant banking group at Donaldson, Lufkin & Jenrette, where he specialized in leveraged buyout financing | |||||
| | • | | | From 1974 to 1984, Mr. Wheat practiced corporate and securities law in Dallas, Texas | |||||
| | Skills and Expertise | ||||||||
| | • | | | Mr. Wheat’s finance and legal expertise and experience serving on numerous boards of directors make him a valuable asset to the Board | |||||
| | Other Board Experience | ||||||||
| | • | | | Current Public Boards | |||||
| | | | ○ | | | Overseas Shipholding Group, Inc. (“OSG”) (NYSE: OSG) (Chairman) | |||
| | | | ○ | | | AMN Healthcare Services, Inc. (NYSE: AMN) (Chairman since 2007; director since 1999) | |||
| | • | | | Previous Boards & Organizations: Dex Media, Inc. (Vice Chairman); SuperMedia (Chairman prior to merger with Dex One); Playtex Products (Chairman); Dr. Pepper/Seven-Up Companies, Inc.; Dr. Pepper Bottling of the Southwest, Inc.; Walls Industries, Inc.; Alliance Imaging, Inc.; Thermadyne Industries, Inc.; Sybron International Corporation; Nebraska Book Corporation; ALC Communications Corporation; Mother’s Cookies, Inc.; and Stella Cheese Company | |||||
| | Education and Certification | ||||||||
| | • | | | Mr. Wheat received both his Juris Doctor and Bachelor of Science degrees from the University of Kansas | |||||
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 Darron M. Anderson Independent Director Nominee Age: 55 Committee Membership • None | | | Professional Experience | ||||||
| | • | | | Mr. Anderson currently serves of President and Chief Executive Officer of Stallion Infrastructure Services Ltd., a market leading temporary infrastructure services company supporting many different end-markets including the U.S. oil and gas industry (“Stallion”). | |||||
| | • | | | From March 2017 until 2021 when he became President and Chief Executive Officer of Stallion, Mr. Anderson was President and Chief Executive Officer of Ranger Energy Services, Inc. (“RES”) (NYSE: RNGR), a diversified completion and production services company operating across all major U.S. Shale Basins. Mr. Anderson was responsible for successfully implementing and executing an initial public offering on the NYSE of RES in August 2017. | |||||
| | • | | | Mr. Anderson began his career in the oil and natural gas industry as a drilling engineer for Chevron Corporation in 1998, holding positions of increasing responsibility across U.S. Land, Offshore and Canada. Mr. Anderson resigned from Chevron in 1998 to pursue an entrepreneurial career in oil field services where he spent the last 26 years building successful service organizations focused on land and offshore drilling, completion and production operations. | |||||
| | Skills and Expertise | ||||||||
| | • | | | Mr. Anderson’s extensive leadership experience in the energy industry, particularly in offshore and on land drilling, with an entrepreneurial spirit and mindset, and demonstrated significant visionary, transactional and operational improvement skills, will make him a valuable asset to the Board. | |||||
| | | | |||||||
| | Other Board Experience | ||||||||
| | • | | | Current Public Boards | |||||
| | | | ○ | | | Tidewater, Inc. (NYSE: TDW) | |||
| | • | | | Previous Boards & Organizations: Ranger Energy Services, Inc. (NYSE: RNGR); Sidewinder Drilling, LLC; and Express Energy Services, LLC. | |||||
| | Education and Certification | ||||||||
| | • | | | Mr. Anderson holds a Bachelor of Science in Petroleum Engineering from the University of Texas, Austin. | |||||
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 Timothy J. Bernlohr Independent Director Age: 65 Director since November 2016 Committee Membership • Compensation (Chair) • Governance | | | Professional Experience | ||||||
| | • | | | Mr. Bernlohr is the Founder and Managing Member of TJB Management Consulting, LLC (“TJB”), which specializes in providing project-specific consulting services to businesses in transformation, including restructurings, interim executive management and strategic planning services | |||||
| | • | | | Prior to founding TJB in 2005, he was the President and Chief Executive Officer of RBX Industries, Inc. (“RBX”), a nationally recognized leader in the design, manufacture and marketing of rubber and plastic materials to the automotive, construction and industrial markets | |||||
| | • | | | Before joining RBX in 1997, Mr. Bernlohr spent 16 years in the International and Industry Products division of Armstrong World Industries and held various management positions | |||||
| | • | | | Mr. Bernlohr has significant experience in both the energy and maritime sectors having served as chairman or director of Petro Rig; Hercules Offshore, Inc.; Aventime Renewable Resources; Trident Resources; San Antonio Oil and Gas S.A.; Windstar Cruise Lines; Senvion S.A.; Edison Mission Energy; and US Power Generating Company. | |||||
| | Skills and Expertise | ||||||||
| | • | | | Mr. Bernlohr’s experience serving as a chief executive of an international manufacturing company and his varied directorship positions make him a valuable asset to the Board | |||||
| | Other Board Experience | ||||||||
| | • | | | Current Public Boards | |||||
| | | | ○ | | | WestRock Company (NYSE: WRK) (Chairman of the Compensation Committee) | |||
| | • | | | Previous Boards & Organizations: Atlas Air Worldwide Holdings, Inc; Chemtura Corporation; Rock-Tenn Company (a predecessor of WestRock Company); Cash Store Financial Services, Inc; Skyline Champion Corporation; OSG; and F45 Training Holdings Inc. | |||||
| | Education and Certification | ||||||||
| | • | | | Mr. Bernlohr is a graduate of Pennsylvania State University | |||||
11
 Ian T. Blackley Independent Director Age: 69 Director since July 2013 Committees Membership • Audit • Governance | | | Professional Experience | ||||||
| | • | | | Mr. Blackley was the President and Chief Executive Officer of OSG (the former parent corporation of the Company) from January 2015 until his retirement in December 2016 | |||||
| | • | | | From September 2014 to November 2016, Mr. Blackley was the Senior Vice President and Chief Financial Officer of the Company | |||||
| | • | | | After joining OSG in 1991, Mr. Blackley held numerous operating and financial positions before he was appointed President and Chief Executive Officer, including Executive Vice President and Chief Operating Officer (from December 2014 to January 2015), Senior Vice President (from May 2009 to December 2014), Chief Financial Officer (from April 2013 to December 2014) and Head of International Shipping (from January 2009 to April 2013) | |||||
| | • | | | Mr. Blackley began his seagoing career in 1971, serving as a captain from 1987 to 1991 | |||||
| | Skills and Expertise | ||||||||
| | • | | | Mr. Blackley’s extensive experience both with the shipping industry generally, and the Company in particular, makes him a valuable asset to the Board | |||||
| | Other Board Experience | ||||||||
| | • | | | Mr. Blackley does not currently serve on other public company boards | |||||
| | • | | | Previous Boards & Organizations: Gard P.& I. (Bermuda) Ltd.; OSG (including the Company as a wholly-owned subsidiary) | |||||
| | Education and Certification | ||||||||
| | • | | | Mr. Blackley holds a diploma in Nautical Science from Glasgow College of Nautical Studies and a Master Mariner Class I license | |||||
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 A. Kate Blankenship Independent Director Age: 59 Director since July 2021 Committees Membership • Audit • Compensation | | | Professional Experience | ||||||
| | • | | | Mrs. Blankenship served as Chief Accounting Officer and Company Secretary of Frontline Ltd. from 1994 to 2005 | |||||
| | Skills and Expertise | ||||||||
| | • | | | Mrs. Blankenship’s substantial experience in international shipping as an accountant and a director makes her a valuable asset to the Board | |||||
| | Other Board Experience | ||||||||
| | • | | | Current Public Boards | |||||
| | | | ○ | | | Borr Drilling Limited (NYSE: BORR) (Chair of the Audit Committee and Compensation Committee) | |||
| | | | ○ | | | 2020 Bulkers Ltd. (OSE: 2020) | |||
| | • | | | Previous Boards & Organizations: Diamond S Shipping Inc. (“Diamond S”) (until merger with the Company); Eagle Bulk Shipping Inc.; North Atlantic Drilling Ltd.; Archer Limited; Golden Ocean Group Limited; Frontline Ltd.; Avance Gas Holding Limited; Ship Finance International Limited; Golar LNG Limited; Golar LNG Partners LP; Seadrill Limited; and Seadrill Partners LLC | |||||
| | Education and Certification | ||||||||
| | • | | | Mrs. Blankenship has a Bachelor of Commerce degree from the University of Birmingham | |||||
| | • | | | Mrs. Blankenship is also a Member of the Institute of Chartered Accountants of England and Wales | |||||
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 Randee E. Day Independent Director Age: 76 Director since November 2016 Committees Membership • Audit (Chair) • Compensation | | | Professional Experience | ||||||
| | • | | | Ms. Day is President and Chief Executive Officer of Day & Partners, LLC, a maritime consulting and advisory company | |||||
| | • | | | From 2020 until June 2022, she was also a senior advisor to Teneo, a global capital advisory and restructuring firm | |||||
| | • | | | Prior to founding Day & Partners, LLC in 2011, Ms. Day served as interim Chief Executive Officer of DHT Holdings Inc. (NYSE: DHT) | |||||
| | • | | | Ms. Day was previously a Managing Director at the Seabury Group, a transportation advisory firm, the Division Head of JP Morgan’s shipping group in New York, and has additional banking experience at Continental Illinois National Bank, Bank of America and the Export-Import Bank of the United States | |||||
| | Skills and Expertise | ||||||||
| | • | | | Ms. Day’s extensive experience in the shipping and banking industries makes her a valuable asset to the Board | |||||
| | Other Board Experience | ||||||||
| | • | | | Ms. Day does not currently serve on other public company boards. | |||||
| | • | | | Previous Boards & Organizations: DHT Holdings, Inc.; TBS International, Inc.; Tidewater, Inc.; Ocean Rig ASA; Excel Maritime Carriers Inc.; and Eagle Bulk Shipping Inc. | |||||
| | Education and Certification | ||||||||
| | • | | | Ms. Day is a graduate of the School of International Relations at the University of Southern California and did graduate studies at George Washington University | |||||
| | • | | | Ms. Day is also a graduate of the Senior Executives in National and International Security Program at the Kennedy School at Harvard University | |||||
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 David I. Greenberg Independent Director Age: 70 Director since June 2017 Committee Membership • Audit • Governance (Chair) | | | Professional Experience | |||
| | • | | | Mr. Greenberg is a Managing Director of Cortina Partners LLC, a private equity firm that invests in and manages companies in the textile, health care, communications, and medical transportation and bedding industries | ||
| | • | | | From 2017 to March 2022, Mr. Greenberg was Special Advisor (and from 2008 through 2016 was a member of the Executive Committee) for LRN Corporation, serving as Chief Executive Officer during 2020. LRN advises global companies on governance, ethics, compliance, culture and strategy issues | ||
| | • | | | For 20 years prior to 2008, Mr. Greenberg served in various senior positions at Altria Group, Inc. (then the parent company of Phillip Morris USA), Phillip Morris International, Kraft Foods and Miller Brewing — culminating in his role as Senior Vice President, Chief Compliance Officer and a member of the Corporate Management Committee | ||
| | • | | | Earlier in his career, Mr. Greenberg was a partner in the Washington, D.C. law firm of Arnold & Porter | ||
| | Skills and Expertise | |||||
| | • | | | Mr. Greenberg’s investment and legal experience, particularly with respect to governance-related matters, makes him a valuable asset to the Board | ||
| | Other Board Experience | |||||
| | • | | | Mr. Greenberg does not currently serve on other public company boards | ||
| | • | | | Other Boards & Organizations: Adventure Genie, Inc. (Chairman); Acqua Recovery (Chairman) | ||
| | Education and Certification | |||||
| | • | | | Mr. Greenberg attended Williams College and has Juris Doctor and Master of Business Administration degrees from the University of Chicago | ||
15
 Kristian K. Johansen Independent Director Nominee Age: 52 Director Nominee Committee Membership • None | | | Professional Experience | ||||||
| | • | | | Mr. Johansen currently serves as the Chief Executive Officer of TGS ASA (“TGS”) (Oslo Stock Exchange (“OSE”): TGS), a leading energy data and intelligence company. Prior to being appointed to his current position in TGS in March 2016, Mr. Johansen held several senior executive positions at TGS, including Chief Operating Officer from 2015 to 2016 and Chief Financial Officer from 2010 to 2015. | |||||
| | • | | | Prior to joining TGS, Mr. Johansen served as an Associate Director of Danske Markets Inc., a Norwegian investment firm from 2000 to 2005, Executive Vice President and Chief Financial Officer of AF Gruppen ASA, a public Norwegian engineering and construction company from 2005 to 2007 and as Executive Vice President and Chief Financial Officer of EDB Business Partner ASA (formerly OSE: TIETO), a Norwegian information technology company, from 2007 to 2010. | |||||
| | Skills and Experience | ||||||||
| | • | | | Mr. Johansen’s wide experience of executive and board positions in the global energy industry, combined with international finance and capital markets knowledge, will make him a valuable asset to the Board. | |||||
| | Other Board Experience | ||||||||
| | • | | | Current Public Boards | |||||
| | | | ○ | | | Valaris Limited (NYSE: VAL), an offshore drilling contractor | |||
| | • | | | Other Boards & Organizations: | |||||
| | | | Previous Boards & Organizations: Prosafe SE; Agrinos ASA; and Seven Drilling ASA. | ||||||
| | Education and Certification | ||||||||
| | • | | | Mr. Johansen has a Bachelor and Masters degree in Business Administration from the University of New Mexico. | |||||
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 Craig H. Stevenson, Jr. Director Age: 70 Director since July 2021 Committee Membership • None | | | Professional Experience | |||
| | • | | | Mr. Stevenson served as a consultant to the Company from the merger with Diamond S until January 2022 | ||
| | • | | | From March 2019 until the merger, he served as Chief Executive Officer, President and director of Diamond S | ||
| | • | | | Mr. Stevenson founded DSS Holdings L.P. (“DSS LP”), the predecessor of Diamond S, in 2007 and served as its Chief Executive Officer, President and a member of its board of directors since its establishment | ||
| | • | | | Mr. Stevenson was previously the Chairman of the Board and Chief Executive Officer of OMI Corporation and oversaw its sale in 2007, having first joined in 1993 as Senior Vice President – Commercial | ||
| | Skills and Expertise | |||||
| | • | | | Mr. Stevenson’s substantial experience and expertise in the shipping industry and knowledge of Diamond S’ affairs as its former Chief Executive Officer and President make him a valuable asset to the Board | ||
| | Other Board Experience | |||||
| | • | | | Mr. Stevenson does not currently serve on other public company boards | ||
| | • | | | Other Boards & Organizations: American Bureau of Shipping; Previous Boards & Organizations: Diamond S (until merger with the Company); SFL Corporation Limited (formerly named Ship Finance International Limited) (Non-Executive Chairman and subsequently director); Intermarine (Non-Executive Chairman) | ||
| | Education and Certification | |||||
| | • | | | Mr. Stevenson attended Lamar University, where he graduated with a degree in business administration | ||
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 Lois K. Zabrocky Director, President & Chief Executive Officer Age: 54 Director since May 2018 Committee Membership • None | | | Professional Experience | ||||||
| | • | | | Ms. Zabrocky has been the President and Chief Executive Officer of the Company since the spin-off from OSG on November 30, 2016 (the “Spin-Off”). Under her leadership, the Company’s operating and newbuilding fleet has grown from 55 vessels (including six vessels held by joint ventures) to more than 80 vessels and the Company’s revenues have increased from under $300 million to more than $1 billion. | |||||
| | • | | | Prior to the Spin-Off, Ms. Zabrocky served as Co-President and Head of the International Flag Strategic Business Unit of OSG, where she was responsible for the strategic plan and profit and loss performance of OSG’s international tanker fleet. | |||||
| | • | | | Ms. Zabrocky previously served in various roles during her more than 25 years at OSG, including Senior Vice President, Chief Commercial Officer of the International Flag Strategic Business Unit, and Head of the International Product Carrier and Gas Strategic Business Unit | |||||
| | Skills and Expertise | ||||||||
| | • | | | Ms. Zabrocky’s long experience with the Company and the shipping industry makes her a valuable asset to the Board | |||||
| | Other Board Experience | ||||||||
| | • | | | Current Public Boards | |||||
| | | | ○ | | | Tidewater, Inc. (NYSE: TDW) | |||
| | • | | | Other Boards & Organizations: Gard P. & I. (Bermuda) Ltd.; ITOPF Limited, a not-for-profit ship pollution advisor providing advice worldwide on responses to spills of oil, chemicals and other substances at sea; the Company (as a wholly-owned subsidiary of OSG) | |||||
| | Education and Certification | ||||||||
| | • | | | Ms. Zabrocky holds a Bachelor of Science degree from the United States Merchant Marine Academy and holds a Third Mate’s License | |||||
| | • | | | She has also completed the Harvard Business School Strategic Negotiations and Finance for Senior Executives courses | |||||
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The Board has delegated to the Compensation Committee the determination of the compensation of directors, including compensation for serving on Board committees. During 2023, the Company’s non-executive Chairman of the Board received an annual cash retainer of $172,000 and each of the Company’s other non-employee directors received an annual cash retainer of $80,000. The Chairman of each of the Compensation Committee and the Governance Committee received an additional annual cash retainer of $20,000 and the Chairman of the Audit Committee received an additional annual cash retainer at the rate of $20,000 for the first six months of 2023 and at the rate of $25,000 for the second six months of 2023 for a total annual cash retainer of $22,500. Each member of the three committees (other than the committee Chairman) received an additional annual cash retainer of $10,000, except that members of the Governance Committee received an annual cash retainer at the rate of $6,500 for the first six months of 2023 and at the rate of $10,000 for the second six months of 2023 for a total annual cash retainer of $8,250. No director earned any fee for attending any Board meeting or Board committee meeting. The Company reimburses directors for their reasonable travel and lodging expenses in attending in-person Board and Board committee meetings. Directors who are also employees of the Company do not receive any additional compensation for their service on the Board. All directors’ cash compensation is payable quarterly in advance.
Under the 2020 International Seaways, Inc. Non-Employee Director Incentive Compensation Plan (the “Director Plan”), the Board has discretion to grant various types of equity-based awards to directors. The Board has delegated to the Compensation Committee administration of the Director Plan. The Compensation Committee, based upon consideration of information provided by the Compensation Committee’s independent advisors, has established the annual equity compensation of the non-Executive Chairman of the Board at $220,000 and the annual equity compensation of each other non-employee director at $100,000. On June 20, 2023, the Board granted the non-Executive Chairman of the Board 5,798 shares of Common Stock having a fair market value of $220,000 and granted each other non-employee director 2,635 shares of Common Stock having a fair market value of $100,000, in each case vesting on the earlier of (a) June 6, 2024 and (b) the date of the Annual Meeting of Stockholders of the Company in 2024, subject to the director continuing to provide services to the Company as of such date.
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The following table shows the total compensation paid to the Company’s non-employee directors during 2023:
| | | Fees earned or Paid in Cash ($)(1) | | | Stock Awards ($)(2) | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | | | All Other Compensation ($) | | | Total ($) | |
Timothy J. Bernlohr | | | 108,250 | | | 100,000 | | | — | | | — | | | 208,250 |
Ian T. Blackley | | | 98,250 | | | 100,000 | | | — | | | — | | | 198,250 |
A. Kate Blankenship | | | 90,000 | | | 100,000 | | | — | | | — | | | 190,000 |
Randee E. Day | | | 112,500 | | | 100,000 | | | — | | | — | | | 212,500 |
David I. Greenberg | | | 110,000 | | | 100,000 | | | — | | | — | | | 210,000 |
Joseph I. Kronsberg | | | 80,000 | | | 100,000 | | | — | | | — | | | 180,000 |
Nadim Z. Qureshi(3) | | | 90,000 | | | 100,000 | | | — | | | — | | | 190,000 |
Craig H. Stevenson, Jr. | | | 80,000 | | | 100,000 | | | — | | | — | | | 180,000 |
Douglas D. Wheat | | | 172,000 | | | 220,000 | | | — | | | — | | | 392,000 |
(1) | Consists of annual Board fees, annual Board Chairman and annual Chairman of the Audit, Compensation and Governance Committees fees, and annual committee member fees. |
(2) | Stock awards are calculated at grant date fair value in accordance with FASB Topic 718. As of December 31, 2023, the Chairman of the Board held 5,798 shares or unvested restricted shares of Common Stock and, as of such date, each non-employee director held 2,635 shares of unvested restricted shares of Common Stock, for an aggregate of 26,878 shares of unvested restricted shares of Common Stock at 2023 year end. |
(3) | Mr. Qureshi resigned as a director on February 19, 2024. In connection with his resignation, the Company and Mr. Qureshi entered into an agreement under which, among other matters, the Company accelerated the vesting of Mr. Qureshi’s 2023 stock award of 2,635 shares of Common Stock (having a fair market value at the time of the award of $100,000), the Company will not seek any reimbursement of the cash director fees paid to Mr. Qureshi in advance for the first quarter of 2024 and Mr. Qureshi agreed not to (i) compete with the Company’s crude and product tanker operations for a one year period commencing on the date of his resignation and (ii) solicit any employee of the Company or retain the services of any such employee for a two year period commencing on the date of his resignation. |
The Company encourages stock ownership by directors in order to align interests of directors with the long-term interests of the Company’s stockholders. To further stock ownership by directors, the Board believes that regular grants of equity compensation should be a significant component of director compensation.
The Board has adopted stock ownership guidelines for non-employee directors. Under the stock ownership guidelines, each non-employee director is expected within five years after becoming a director to own shares of the Company’s common stock (including restricted stock units and restricted shares convertible into shares of stock and stock owned by his or her spouse and minor children), with a market value equal to at least three times his or her annual cash base retainer. At December 31, 2023, each non-employee director complied with such stock ownership guidelines.
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Corporate Governance Principles. The Board believes that ethics and integrity cannot be legislated or mandated by directive or policy and that the ethics, character, integrity and values of the Company’s directors and senior management remain the most important safeguards in quality corporate governance. The business and affairs of the Company are managed under the direction of the Board in accordance with Marshall Islands law. The Board’s principal responsibilities are to provide direction, oversight and counsel to the Company’s management and to generally maximize the value of the Company for its stockholders.
Corporate Governance Guidelines. The Board has adopted Corporate Governance Guidelines to promote the effective functioning of the Board and its committees, to promote the interests of all stockholders, and to ensure a common set of expectations as to how the Board, its various committees, individual directors and management should perform their functions. The Corporate Governance Guidelines are posted on the Company’s website https://www.intlseas.com/investor-relations/governance/governance-documents, and are available in print upon request. That website and the information contained on that site, or connected to that site, are not incorporated by reference in this Proxy Statement. Mergers and other business combinations may be approved by the affirmative vote of holders of a majority of outstanding shares of Common Stock (unless the transaction would require the amendment of any provision of the Company’s Articles of Incorporation or By-laws requiring a greater percentage to amend).
Board Leadership Structure. The Corporate Governance Guidelines provide that the Board selects the CEO of the Company and may select a Chairman of the Board (the “Chairman”) in the manner it considers in the best interests of the Company. The Guidelines provide that if the Board determines that there should be a Chairman, he or she may be a non-management director or the CEO. The Company currently separates the role of CEO and Chairman.
The CEO and the Chairman are in frequent contact with one another and with senior management of the Company. They provide advice and recommendations to the full Board for the full Board’s consideration. They each review in advance the schedule of Board and committee meetings and establish the agenda for each Board meeting in order to ensure that the interests and requirements of the stockholders, the directors and other stakeholders are appropriately addressed. The Board believes that the existing leadership structure, with the current individuals in their positions, is in the best interests of stockholders.
The Board, primarily through its Governance Committee, periodically reviews the Company’s leadership structure to determine if it remains appropriate in light of the Company’s specific circumstances and needs, current corporate governance standards, market practices and other factors the Board considers relevant. The Board retains the right to combine the CEO and Chairman roles in the future if it determines that such a combination would be in the best interests of the Company and its stockholders.
Board Oversight of Risk Management. While the responsibility for management of the Company’s material risks lies with management of the Company, the Board provides oversight of risk management, directly and indirectly, through its committee structure. The Board performs this oversight role by using several different levels of review. The Board and the Governance Committee receive regular reports from key members of management responsible for specified areas of material non-financial risk to the Company. In addition, the Board reviews the risks associated with the Company’s strategic plan at an annual strategic planning session and periodically throughout the year as part of its consideration of the strategic direction of the Company.
At the committee level, the Audit Committee regularly reviews the financial statements and financial and other internal controls. Further, the Audit Committee meets in private sessions individually with certain members of management and with representatives of the internal auditors and the independent registered public accounting firm at the conclusion of every regularly scheduled meeting, where aspects of financial risk management are discussed as necessary.
21
The Governance Committee manages risk associated with Board independence, environmental, social and corporate governance issues and potential conflicts of interest as well as oversight over non-financial risk assessments associated with the Company’s operations. Included in such oversight is a review of the Company’s business resiliency, data privacy and cybersecurity, both onshore and on the Company’s vessels. The Company’s cybersecurity program is based on the National Institute of Standards and Technology cybersecurity framework and related framework developed for the maritime industry. INSW’s information systems have been enhanced in recent years through the implementation of cloud-based architecture and AI machine-learning based security solutions. Management reports to the Governance Committee on the Company’s information systems and security semi-annually and the Company provides a mandatory on-line information security training program to onshore employees annually.
The Compensation Committee annually reviews executive compensation policies and practices and employee benefits, and associated risks. Both the Audit Committee and the Compensation Committee also rely on the advice and counsel of the Company’s independent registered public accountants and independent compensation consultants, respectively, to raise awareness of any risk issues that may arise during their regular review of the Company’s financial statements, audit work and executive compensation policies and practices, as applicable.
Managing risk is an ongoing process inherent in all decisions made by management. The Company has an enterprise risk management program that is designed to ensure that risks are taken knowingly and purposefully.
Management is responsible for assessing all the risks and related mitigation strategies for all material projects and initiatives of the Company prior to being submitted for consideration by the Board.
Environmental, Social and Governance (“ESG”) Initiatives. The Board and the Governance Committee regularly engage in discussions relating to ESG risks and opportunities, including INSW’s response to environmental and climate change-related risks and opportunities. The Company’s management team, led by the Chief Executive Officer, has the day-to-day responsibility to execute the action plans as approved by the Board of Directors. The Company is committed to meeting ESG principles as a part of its core culture. Accordingly, INSW strives to meet, and when possible and appropriate, exceed minimum compliance levels for all applicable rules and regulations governing the maritime industry, as described in greater detail in the 2023 Annual Report. The Company’s governance, strategy, risk management and performance monitoring efforts in this area are evolving and will continue to do so over time.
Independence. Under the Corporate Governance Guidelines, which incorporate standards established by the NYSE, the Board must consist of a majority of independent directors. As determined by the Board, as of the date of this Proxy Statement, all of the nominees other than Ms. Lois K. Zabrocky and Mr. Craig H. Stevenson, Jr. have been determined to be independent under the Corporate Governance Guidelines for purposes of service on the Board, because no relationship was identified that would automatically bar any of them from being characterized as independent, and any relationships identified were not so material as to impair their independence. In addition, the Board has determined that all of the nominees other than Ms. Lois K. Zabrocky and Mr. Craig H. Stevenson, Jr. are independent for purposes of serving on the Audit Committee. The Board annually reviews relationships that directors may have with the Company to make a determination of whether there are any material relationships that would preclude a director from being independent. See “— Related Party Transactions” below.
Executive Sessions of the Board. To ensure free and open discussion and communication among the non-management directors, the Corporate Governance Guidelines provide that non-management directors meet in executive session at the time of each regular meeting of the Board; at least one of such executive sessions shall exclude non-management directors who do not qualify as independent. In accordance with the Guidelines, the nonexecutive Chairman of the Board chairs the executive sessions. Any non-management director can request that an additional executive session be scheduled.
Meetings of the Board. The Board held nine meetings during 2023. Each director attended at least 75% of the total number of meetings of the Board and Board committees of which the director was a
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member. Under the Corporate Governance Guidelines, each director is expected to attend all Board meetings and all meetings of committees of which the director is a member. Meeting materials are provided to Board and Committee members prior to meetings, and members are expected to review such materials prior to each meeting.
Annual Meetings of Stockholders. Directors are not required, but are strongly encouraged, to attend the Annual Meeting of Stockholders in person or telephonically. All of the current directors attended the Annual Meeting of Stockholders in 2023, which was held both in person and “virtually” via live webcast.
Communications with Board Members. Interested parties, including stockholders, may communicate with any director, with the nonexecutive Chairman of the Board or with the non-management directors as a group by sending a letter to the attention of such director, the nonexecutive Chairman of the Board or such non-management directors as a group, as the case may be, in care of the Company’s Corporate Secretary, 600 Third Avenue, 39th Floor, New York, New York 10016. The Corporate Secretary opens and forwards all such correspondence (other than advertisements and other solicitations) to directors unless the director to whom the correspondence is addressed has requested that the Corporate Secretary forward correspondence unopened. Unless the context otherwise requires, the Corporate Secretary will provide any communication addressed to the Board to the director most closely associated with the nature of the request based on Committee membership and other factors.
Business Conduct and Governance Policies. The Company has adopted a number of business conduct and governance policies, including the following:
• | A Code of Business Conduct and Ethics, which is an integral part of the Company’s business conduct compliance program and embodies the commitment of the Company and its subsidiaries to conduct operations in accordance with the highest legal and ethical standards. The Code of Business Conduct and Ethics applies to all of the Company’s officers, directors and employees. Each is responsible for understanding and complying with the Code of Business Conduct and Ethics. |
• | An Insider Trading Policy which prohibits the Company’s directors and employees from purchasing or selling securities of the Company while in possession of material nonpublic information or otherwise using such information for their personal benefit. The Insider Trading Policy also prohibits the Company’s directors and employees from hedging or pledging their ownership of securities of the Company. |
• | An Anti-Bribery and Corruption Policy which memorializes the Company’s commitment to adhere faithfully to both the letter and spirit of all applicable anti-bribery legislation in the conduct of the Company’s business activities worldwide. |
• | An Incentive Compensation Recoupment Policy under which, depending on the circumstances, (i) executive officers of the Company are required to repay or return erroneously awarded compensation to the Company in accordance with clawback rules under the 1934 Act and New York Stock Exchange listing standards and (ii) officers of the Company, in the good faith discretion of the Board of Directors or the Compensation Committee, are required to repay all or a portion of incentive compensation paid to them by the Company. |
A current copy of each of these policies is available in print upon request to our Investor Relations department at International Seaways, Inc., 600 Third Avenue, New York, New York 10016 and is posted on the Company’s website at https://www.intlseas.com/investor-relations/documents/. If the Board grants any waivers from the Code of Business Conduct and Ethics to any of our directors or executive officers, or if we amend such policies, we will, if required, disclose these matters through that section of our website on a timely basis.
Other Directorships and Significant Activities. The Company values the experience directors bring from other boards of directors on which they serve, but recognizes that those boards also present significant demands on a director’s time and availability and may present conflicts and legal issues. The Corporate Governance Guidelines provide that non-management directors refrain from
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serving on the boards of directors of more than four publicly-traded companies (other than the Company or a company in which the Company has a significant equity interest) absent special circumstances. A member of the Audit Committee may not serve on more than two other audit committees of publicly-traded companies.
The Corporate Governance Guidelines require the CEO and other members of senior management, whether or not they are members of the Board of the Company, to receive the approval of the Governance Committee before accepting outside board membership. The Corporate Governance Guidelines prohibit the CEO from serving on the board of directors of more than one publicly-traded company (other than the Company or a company in which the Company has a significant equity interest).
If a director’s principal occupation or business association changes substantially during the director’s tenure as a member of the Board, that director is required by the Corporate Governance Guidelines to inform the Chair of the Governance Committee of the change and offer to resign from the Board. In such case, such Committee must recommend to the Board the action, if any, to be taken with respect to the offer of resignation, taking into account the appropriateness of continued Board membership.
Related Party Transactions
Related party transactions may present potential or actual conflicts of interest and create the appearance that Company decisions are based on considerations other than the best interests of the Company and its stockholders. The Company’s Code of Business Conduct and Ethics requires all directors, officers and employees who may have a potential or apparent conflict of interest to disclose fully all the relevant facts to the Company’s legal department. In addition to this reporting requirement, in order to identify related party transactions, each year the Company requires its directors and executive officers to complete Director and Officer questionnaires identifying any transactions with the Company in which the director or officer has an interest. Management and the legal department review the terms of all related party transactions, and management reports to the Board on all proposed related party transactions with directors and executive officers. Upon the presentation of a proposed related party transaction to the Board, the related party (if such related party is a director) is excused from participation and voting on the matter. In deciding whether to approve the related party transaction, the Board determines whether the transaction is on terms that could be obtained in an arm’s length transaction with an unrelated third party. If the related party transaction is not on such terms, it will not be approved. During 2023 and through the date of this Proxy Statement, the Company did not have any related party transactions.
The Company has three standing committees of its Board: the Audit Committee, the Governance Committee and the Compensation Committee. Each of the Board committees has a charter that is posted on the Company’s website at https://www.intlseas.com/investor-relations/governance/governance-documents and is available in print upon request.
Audit Committee. The Audit Committee is required to have no fewer than three members all of whom must be and are independent directors under the standards set forth in the Company’s Corporate Governance Guidelines. During 2023, the Audit Committee consisted of Ms. Randee E. Day (Chair), Mr. Ian T. Blackley, Mrs. A. Kate Blankenship and Mr. David I. Greenberg. The Board determined that each of Ms. Day, Mr. Blackley and Mrs. Blankenship is an audit committee financial expert, as defined by rules of the Securities and Exchange Commission (the “SEC”) and NYSE. The Audit Committee met five times in 2023.
The Audit Committee oversees the Company’s accounting, financial reporting process, internal controls and audits and consults with management, internal auditors and the Company’s independent registered public accounting firm on, among other things, matters related to the annual audit, and published financial statements and the accounting principles applied, and the oversight of financial risk assessments associated with the Company’s operations. As part of its duties, the Audit Committee appoints and retains the Company’s independent registered public accounting firm, subject to stockholder ratification (though the stockholder vote is not binding on the Audit Committee, and the Audit Committee
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may in its sole discretion terminate the engagement of the firm and direct the appointment of another independent auditor at any time during the year if it determines that such an appointment would be in the best interests of the Company and its stockholders).
The Audit Committee maintains direct responsibility for the compensation and oversight of the Company’s independent registered public accounting firm and evaluates the independent registered public accounting firm’s qualifications, performance and independence. The Audit Committee has established policies and procedures for the pre-approval of all services provided by the Company’s independent registered public accounting firm.
Governance Committee. The Governance Committee is required to have no fewer than three members, all of whom must be and are independent directors under the standards set forth in the Company’s Corporate Governance Guidelines. During 2023, the Governance Committee consisted of Mr. David I. Greenberg (Chair), Mr. Timothy J. Bernlohr and Mr. Ian T. Blackley. The Governance Committee met six times in 2023.
The Governance Committee assists the Board by identifying and recommending individuals qualified to become Board members to the Board for nomination at the next annual stockholder meeting. It develops and recommends to the Board the establishment of the Company’s corporate governance guidelines, and it provides oversight over non-financial risk assessments associated with the Company’s operations, including cybersecurity threats. The Governance Committee’s risk assessment responsibilities include oversight of the Company’s quality of services, the Company’s vessels’ adherence to environmental and regulatory requirements, and an assessment of the scope and amount of the Company’s insurance coverage. The Governance Committee also meets with the General Counsel (in his capacity as compliance officer) in executive session from time to time as needed. As part of its duties, the Governance Committee also aids the Board by providing a review of the Board performance on an annual basis.
The Governance Committee evaluates prospective nominees identified on its own initiative or referred to it by other Board members, management, stockholders or external sources and all self-nominated candidates. The Governance Committee uses the same criteria for evaluating candidates nominated by stockholders and self-nominated candidates as it does for those proposed by other Board members, management and search consultants.
The Governance Committee considers the following criteria for identifying and recommending qualified candidates for membership on the Board, seeking to maintain within these criteria appropriate diversity of individuals on the basis of gender, ethnic heritage, international background and life experiences:
• | judgment, character, age, integrity, expertise, tenure on the Board, skills and knowledge useful to the oversight of the Company’s business; |
• | status as “independent” or an “audit committee financial expert” or “financially literate” as defined by the NYSE or the SEC; |
• | high level managerial, business or other relevant experience, including, but not limited to, experience in the industries in which the Company operates, and, if the candidate is an existing member of the Board, any change in the member’s principal occupation or business associations; |
• | absence of conflicts of interest with the Company; and |
• | ability and willingness of the candidate to spend a sufficient amount of time and energy in furtherance of Board matters. |
As part of its annual assessment of Board size, structure and composition, the Governance Committee evaluates the extent to which the Board as a whole satisfies the foregoing criteria. The average age of the nine (9) current directors is 64.1 years. Three (3) directors are age 59 or younger, two (2) directors are from 60 through 69 years old and four (4) directors are more than 69 years old. Two (2) directors have served as directors for three or less years, one (1) has served from three to six years and six (6) directors have served for six or more years. Three (3) of the nine (9) directors are female. Seven (7) of the directors are “independent” and three (3) are “audit committee financial experts” as defined by the NYSE or the SEC. During 2023, Mr. Nadim Z. Qureshi was a director of the Company and the Company had
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ten directors. He is 49 years old, and until his resignation on February 19, 2024 served as a director for 2.5 years, is of Asian heritage and was independent. The Governance Committee believes that the ten (10) director nominees (of whom three are women and one is a member of an underrepresented minority group) have the requisite character, integrity, expertise, skills, and knowledge to oversee the Company’s business in the best interests of the Company’s stockholders.
All the director nominees named in this Proxy Statement have been evaluated under the criteria set forth above and recommended by the Governance Committee to the full Board for election by stockholders at the Annual Meeting. The entire Board recommends that stockholders elect all nominees. Eight (8) of the ten (10) director nominees for election at the Annual Meeting were previously elected to the Board by the stockholders at the Annual Meeting of Stockholders in 2023.
A stockholder may recommend a person as a nominee for director by writing to the Corporate Secretary of the Company.
Recommendations must be received by December 31, 2024 in order for a candidate to be considered for election at the 2025 Annual Meeting. Each recommendation for nomination should contain the following information: (a) the name and address of the stockholder who intends to make the nomination and of the person or persons to be nominated; (b) a representation that the stockholder is a holder of record of stock of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (c) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (d) such other information regarding each nominee proposed by such stockholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the SEC had such nominee been nominated, or intended to be nominated, by the Board; and (e) the consent of each nominee to serve as a director of the Company if so elected.
Compensation Committee. The Compensation Committee is required to have no fewer than three members, all of whom must be and are independent directors under the standards set forth in the Company’s Corporate Governance Guidelines. During 2023, the Compensation Committee consisted of Mr. Timothy J. Bernlohr (Chair), Ms. Randee E. Day, and Mr. Nadim Z. Qureshi. The Compensation Committee met six (6) times in 2023. As a result of the vacancy on the Compensation Committee created by the resignation of Mr. Qureshi as a director in February 2024, the Board elected Mrs. A. Kate Blankenship as a member of the Compensation Committee.
The Compensation Committee establishes, oversees, and carries out the Company’s compensation philosophy and strategy. It implements the Board responsibilities relating to compensation of the Company’s executive officers, and ensures that the Company’s officers and senior executives are compensated in a manner consistent with the Company’s philosophy and competitive with its peers. It annually reviews executive compensation policies and practices and employee benefits, and associated risks. As part of its duties, it monitors and oversees the preparation of the Company’s annual Compensation Discussion and Analysis for inclusion in the annual proxy statement, prepares an annual report on executive compensation, and provides guidance with respect to other compensation matters including recommendations for the CEO and the other NEOs. In addition, the Compensation Committee determines the cash and equity compensation of directors, including the Chairman of the Board.
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Management has primary responsibility for preparing the consolidated financial statements of the Company, for maintaining effective internal control over financial reporting and for assessing the effectiveness of internal control over financial reporting. The Company’s independent registered public accounting firm is responsible for performing independent audits of the Company’s consolidated financial statements in accordance with auditing standards generally accepted in the United States (“U.S. GAAS”) and the effectiveness of the Company’s internal control over financial reporting based on criteria established by the Public Company Accounting Oversight Board (the “PCAOB”). The Audit Committee’s responsibility is to monitor and oversee these processes on behalf of the Board. The Board has adopted a written Audit Committee Charter describing the Audit Committee’s role and responsibilities, which is posted on the Company’s website at https://www.intlseas.com/investor-relations/governance/governance-documents
In fulfilling its oversight responsibilities, the Audit Committee met and held discussions with management and the Company’s independent registered public accounting firm concerning the acceptability and quality of the accounting principles, the reasonableness of significant judgments, and the adequacy and clarity of disclosures in the consolidated financial statements to be included in the 2023 Annual Report. Management represented to the Audit Committee that such consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States. The Audit Committee reviewed and discussed such consolidated financial statements with management and the Company’s independent registered public accounting firm. The Audit Committee further discussed with the Company’s independent registered public accounting firm the matters required to be discussed by U.S. GAAS, including those described in the PCAOB Auditing Standard No. 1301 (Communications with Audit Committees).
The Committee also held discussions with the Company’s internal auditors and reviewed management’s report on the assessment of the effectiveness of the Company’s internal control over financial reporting and the Company’s independent registered public accounting firm’s report on the effectiveness of the Company’s internal control over financial reporting.
The Company’s independent registered public accounting firm also provided to the Audit Committee the written disclosures and letter required by PCAOB Rule 3526 (Communication with Audit Committees Concerning Independence), and the Audit Committee discussed with the independent registered public accounting firm their independence from the Company and management, and considered the compatibility of non-audit services with the registered public accounting firm’s independence.
Based upon the Audit Committee’s discussions with management and the Company’s internal auditors and independent registered public accounting firm, the Audit Committee’s review of the representations of management, the certifications of the Company’s chief executive officer and chief financial officer which are required by the Securities and Exchange Commission (“SEC”) and the Sarbanes-Oxley Act of 2002, and the reports, letters and other communications of the independent registered public accounting firm, the Audit Committee recommended to the Board (and the Board approved) that the audited consolidated financial statements and management’s assessment of the Company’s internal control over financial reporting referred to above be included in the 2023 Annual Report for filing with the SEC.
| | | International Seaways, Inc. Audit Committee: | |
| | | ||
| | | Randee E. Day, Chair | |
| | | A. Kate Blankenship | |
| | | Ian T. Blackley | |
| | | David I. Greenberg | |
| | | April 26, 2024 |
In accordance with the rules of the SEC, this Audit Committee report does not constitute “soliciting material” and shall not be incorporated by reference in any filings with the SEC made pursuant to the 1933 Act or the 1934 Act and shall not otherwise be deemed filed under such Acts.
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PUBLIC ACCOUNTING FIRM (PROPOSAL NO. 2)
The Audit Committee has reappointed Ernst & Young LLP (“EY”) as the independent registered public accounting firm of the Company and its subsidiaries for the year ending December 31, 2024, subject to the ratification of the stockholders at the Annual Meeting. EY has served as the independent registered public accounting firm of the Company since 2017. The lead audit partner for 2023 was appointed in 2022 in accordance with applicable auditor independence policies. As in prior years, management and the Audit Committee engaged in a review of EY in connection with the Audit Committee’s review of whether to recommend that stockholders ratify the selection of EY as the Company’s independent registered public accounting firm for 2024. In that review, the Audit Committee considered, among other factors, (i) the continued independence of EY, (ii) whether retaining EY is in the best interest of the Company and its stockholders, (iii) EY’s known legal risks and significant proceedings that may affect its ability to perform the Company’s annual audit, (iv) EY’s fees and services provided to the Company and (v) the impact of changing independent registered public accounting firms. The Audit Committee considers the appointment of EY to be in the best interest of the Company and its stockholders.
In deciding to engage EY, the Audit Committee reviewed auditor independence and existing commercial relationships with EY, and concluded that EY had no commercial relationship with the Company that would impair its independence.
Representatives of EY will attend the Annual Meeting and be afforded the opportunity to make a statement, as well as be available to respond to appropriate questions submitted by stockholders. If the appointment is not ratified by stockholders, the selection of the Company’s independent registered public accounting firm will be reconsidered by the Audit Committee.
• | Audit Fees. Audit fees incurred by the Company to EY were $1,251,200 in 2023 and $1,233,000 in 2022. Audit fees incurred by the Company to EY for 2023 and 2022 include fees for professional services rendered for the audit of the Company’s annual financial statements for the years ended December 31, 2023 and 2022; the review of the financial statements included in the Company’s Forms 10-Q for the respective quarters in the years ended December 31, 2023 and 2022; financial audits and reviews for certain of the Company’s subsidiaries and expenses incurred related to the performance of the services noted above. |
• | Audit-Related Fees. Audit-related fees incurred by the Company to EY in 2023 were $100,000 and in 2022 were $120,000, all for services associated with the Company’s registration statement filings. |
• | Tax Fees. Tax fees incurred by the Company to EY were $15,000 in 2023 and $23,600 in 2022. Tax fees relate to the preparation of certain foreign tax returns. |
• | All Other Fees. There were no other fees incurred by the Company to EY in 2023 and 2022. |
The Audit Committee considered whether the provision of services described above under “Tax Fees” are compatible with maintaining EY’s independence. The Company does not believe that any reasonable concerns about the objectivity of EY in conducting the audit of the Company’s financial statements are raised as a result of the fees paid for non-audit-related services in 2023.
The Audit Committee has established policies and procedures for pre-approving audit and permissible non-audit work performed by its independent registered public accounting firm. As set forth in the pre-approval policies and procedures, unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committee if it is to be provided by the independent auditor. Any proposed services exceeding pre-approved cost levels require specific pre-approval by the Audit Committee.
Accordingly, at the Annual Meeting, stockholders will be asked to vote on the following resolution:
RESOLVED, that the action of the Audit Committee of the Board of Directors of the Company in appointing Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2024 be, and it hereby is, ratified and approved.
The Audit Committee and the Board recommends a vote “FOR” such ratification.
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EXECUTIVE OFFICERS (PROPOSAL NO. 3)
As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), stockholders are being provided with the opportunity to cast an advisory vote on the compensation of the Named Executive Officers for 2023 as described beginning on the next page of this Proxy Statement in the section titled “Compensation Discussion and Analysis”.
As more fully described in that section, the Company’s executive compensation program is designed to promote the following objectives:
• | Attract, motivate, retain and reward highly-talented executives and managers, whose leadership and expertise are critical to the Company’s overall growth and success; |
• | Compensate each executive based upon the scope and impact of his or her position as it relates to achieving the Company’s corporate goals and objectives, as well as on the potential of each executive to assume increasing responsibility within the Company; |
• | Align the interests of the Company’s executives with those of its stockholders by linking incentive compensation rewards to the achievement of performance goals that maximize stockholder value; and |
• | Reward the achievement of both the short-term and long-term strategic objectives necessary for sustained optimal business performance. |
The Compensation Committee and the Board believe that the design of the executive compensation program, and hence the compensation awarded to the Named Executive Officers, fulfills these objectives.
Stockholders are urged to read the “Compensation Discussion and Analysis” section of this Proxy Statement and the accompanying compensation tables and narrative which describe in detail how the Company’s compensation policies and procedures implement the Company’s compensation philosophy and disclose the compensation paid to the Named Executive Officers for 2023.
Accordingly, at the Annual Meeting, stockholders will be asked to vote on the following resolution:
RESOLVED, that the stockholders of the Company hereby approve, in an advisory vote, the compensation of the Named Executive Officers for 2023 as described in the “Compensation Discussion and Analysis” section and in the accompanying compensation tables and narrative in the Company’s Proxy Statement for the 2024 Annual Meeting of Stockholders.
As an advisory vote, the results of the vote will not be binding on the Board or the Company. However, the Board and the Compensation Committee value the opinion of the Company’s stockholders and will consider the outcome of the vote when making future decisions on the compensation of the Named Executive Officers and the Company’s executive compensation principles, policies and procedures. The affirmative vote of the holders of a majority of the outstanding shares of Common Stock present in person or represented by proxy and entitled to vote is required to approve the resolution.
The Board recommends a vote “FOR” advisory approval of the resolution set forth above and approval of the compensation of the Named Executive Officers for 2023 as disclosed in the “Compensation Discussion and Analysis” section and in the accompanying compensation tables and narrative of this Proxy Statement.
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This Compensation Discussion and Analysis (“CD&A”) discusses our 2023 executive officer compensation program. It describes our compensation philosophy; the objectives of the executive compensation program and policies in 2023; the elements of the compensation program; and how each element fits into our overall compensation philosophy. The Compensation Committee oversees the compensation paid to our executive officers, including under their employment agreements (described below).
The compensation of the executives who constitute INSW’s named executive officers (the “Named Executive Officers” or “NEOs”) is set out in the Summary Compensation Table following this CD&A. In 2023, our NEOs (all of whom were employees of INSW throughout the year) were as follows:
Incumbent | | | NEOs Position |
Lois K. Zabrocky | | | President and Chief Executive Officer (“CEO”) |
Jeffrey D. Pribor | | | Chief Financial Officer (“CFO”), Senior Vice President and Treasurer |
James D. Small III | | | Chief Administrative Officer, Senior Vice President, General Counsel & Secretary |
Derek G. Solon | | | Senior Vice President (Chief Commercial Officer) |
William F. Nugent | | | Senior Vice President (Chief Technical and Sustainability Officer) |
We have a strong and measurable pay for performance philosophy. Accordingly, our operational and financial performance in fiscal years 2021, 2022 and 2023 are important factors in understanding our 2023 executive compensation. Please refer to “Who We Are – 2023 in Review” above for a summary of our recent achievements. INSW posted the strongest financial results in our Company history in 2023, as described in our 2023 Annual Report (a copy of which you can obtain as described in “Other Matters” below).
Say-on-Pay Results
INSW has provided stockholders with an annual advisory vote to approve executive compensation since our first annual meeting of stockholders in 2017. All INSW proposals during this time, except for 2022 and 2023, received greater than 89.5% stockholder support. In 2022 and 2023 approximately 68% and 64% (excluding broker non-votes), respectively, of the stockholders who voted on the say-on-pay proposal supported it.
In May 2023, the Company’s largest stockholder, Famatown Finance Limited (“Famatown”), issued a public letter to the Company’s stockholders opposing the Company’s amended and restated stockholder rights plan, the reelection of two members of the Board, and the say-on-pay proposal. On June 1, 2023, the proxy advisory firms Institutional Shareholders Services and Glass, Lewis & Co., recommended that stockholders vote in favor of the Company’s advisory proposal on the executive compensation at the 2023 annual meeting of stockholders. At INSW’s 2023 annual meeting, more than 82% of the stockholders who voted, voted in favor of the say-on-pay proposal if one were to exclude the votes on the advisory proposal on executive compensation cast by Famatown. In addition, as noted earlier in this Proxy Statement, following discussions with representatives of Seatankers, an affiliate of Famatown, the Company has nominated Mr. Kristian K. Johansen as a director nominee.
INSW has a longstanding practice of regularly engaging with its stockholders to ensure alignment of strategic, material, compensatory, and other interests and has benefited from the candid and constructive feedback provided by stockholders through the course of such outreach efforts. The Company has a quarterly engagement program designed to identify and communicate with its top 50 stockholders.
In 2023, the Company, including in selected calls the Chair of the Compensation Committee or the Chair of the Audit Committee, contacted such top 50 stockholders, including stockholders who we believe owned in the aggregate more than 90% of the total number of shares who voted against our 2022 say-on-pay proposal. Our stockholders generally did not identify INSW’s compensation and practices as
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points of concern during these discussions. One stockholder made certain limited comments about the Company’s compensation program and these comments were considered by the Compensation Committee, including that the return on invested capital metric for performance-based restricted stock units was too low. The Compensation Committee decided to increase such performance-based metric for grants made in 2023 and 2024. Overall, our stockholders did not identify structural issues with our executive compensation programs or request that INSW overhaul its executive compensation plans and programs. Based on these discussions, we believe that the votes of certain stockholders who voted against our 2022 and 2023 say-on-pay proposals may have been influenced by considerations unrelated to our executive compensation program. More specifically, we believe that a large number of shares were voted against our say-on-pay proposals in reaction to our adoption of a stockholder rights plan in 2022 and the amendment and restatement of such plan in April 2023, which plan was subsequently approved by a majority of our stockholders at our 2023 annual meeting of stockholders.
The Company acknowledges the strong support from its stockholders owning a substantial majority of its shares which were voted at its 2023 annual meeting and believes the results reflect an endorsement of its existing compensation policies and decisions. If, in the future, dissatisfaction is expressed with our compensation program as we continue engagement in our regular and thorough stockholder outreach, we will consider making adjustments to our program where appropriate to address any such dissatisfaction.
The Company holds an annual say-on-pay vote by its stockholders, whose vote frequency was approved by stockholders in 2023. The Company’s next “say-when-on-pay” vote will be conducted at the 2029 Annual Meeting of Stockholders. The Compensation Committee will continue to engage with stockholders and will consider feedback from them, as well as the results from this years and future advisory votes on executive compensation, when evaluating INSW’s executive compensation program and policies.
Compensation Philosophy and Objectives
The Company believes that a well-designed compensation program is a powerful tool to attract, motivate, retain and reward top executive and managerial talent. INSW further believes that the compensation program should align the interests of executives with those of stockholders in achieving and sustaining increases in stockholder value over both the short- and long-term.
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The Company’s compensation program is structured to drive and support these goals, and is designed with the following objectives in mind:
COMPENSATION PROGRAM OBJECTIVES | |||||||||
Overall Objectives | | | • | | | Attract, motivate, retain and reward highly talented executives and managers, whose leadership and expertise are critical to our overall growth and success. | |||
| | | | | | |||||
| | | • | | | Align the interests of our executives with those of our stockholders. | ||||
| | | | | | |||||
| | | • | | | Support the long-term retention of the Company’s executives to maximize opportunities for teamwork, continuity of management and overall effectiveness. | ||||
| | | | | | |||||
| | | • | | | Compensate each executive competitively (1) within the marketplace for talent in which we operate; (2) based upon the scope and impact of his or her position as it relates to achieving our corporate goals and objectives; and (3) based on the potential of each executive to assume increasing responsibility within the Company. | ||||
| | | | | | |||||
| | | • | | | Discourage excessive and imprudent risk-taking. | ||||
| | | | | | |||||
| | | • | | | Structure the total compensation program to reward the achievement of both the short-term and long-term strategic objectives necessary for sustained optimal business performance. | ||||
| | | | | | | ||||
Pay Mix Objectives | | | • | | | Provide a mix of both fixed and variable (“at-risk”) compensation, each of which has a different time horizon and payout form (cash and equity), to reward the achievement of annual and sustained, long-term performance. For the 2023 fiscal year, the pay mix at target for the Chief Executive Officer and the average for the other NEOs is displayed below. | |||
| | | | | | | ||||
Pay-For-Performance Objectives | | | • | | | Use our incentive compensation program and plans to align the interests of our executives with those of our stockholders by linking incentive compensation rewards to the achievement of performance goals that maximize stockholder value by: | |||
| | | | | | | ||||
| | | | | – | | | Ensuring our compensation programs are consistent with, and supportive of, our short-term and long-term strategic, operating and financial objectives. | ||
| | | | | | | ||||
| | | | | – | | | Placing a significant portion of our executives’ compensation at risk, with payouts dependent on the achievement of both corporate and individual performance goals, which are set annually by the Compensation Committee. | ||
| | | | | | | ||||
| | | | | – | | | Encouraging balanced performance by employing a variety of performance measures to avoid over-emphasis on the short-term or any one metric. | ||
| | | | | | | ||||
| | | | | – | | | Applying judgment and reasonable discretion in making compensation decisions to avoid relying solely on formulaic program design, taking into account both what has been accomplished and how it has been accomplished in light of the existing commercial environment. | ||
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Executive Compensation Practices
Our goal is to maintain an executive compensation program that is competitive, rooted in the principles of pay-for-performance and in conformance with best practices in executive compensation and corporate governance. To this end, the Compensation Committee routinely evaluates its practices and programs with respect to executive compensation to identify opportunities for improvement. The Compensation Committee believes a significant portion of the NEOs’ total compensation should be variable and “at risk,” based upon Company earnings from shipping operations (“ESO”) achievement, business/operational metrics and individual performance. To accomplish this, the Compensation Committee uses a balanced weighting of performance measures and metrics in its incentive compensation programs to (i) promote the achievement of its annual operating plan and long-term business strategy; (ii) build long-term stockholder value; and (iii) discourage excessive risk taking by eliminating any inducement to over-emphasize one goal to the detriment of others.
The following table summarizes key features of our executive compensation program.
WHAT WE DO | | | |
| | | ||
Pay For Performance | | | We align the interests of our executives and stockholders using performance-based annual cash incentive compensation and service and performance-based long-term cash and equity incentive compensation. |
| | | ||
Compensation Benchmarking | | | We compare our executives’ total compensation to a consistent peer group for comparable market data. We evaluate that peer group annually to ensure that it remains appropriate, and we add or remove peers only when our Compensation Committee determines, with the advice of its independent compensation consultant, it is clearly warranted. |
| | | ||
Stock Ownership Guidelines | | | We maintain and track progress against, stock ownership guidelines for our executives and non-employee directors. |
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Anti-Hedging and Anti-Pledging Policies | | | We maintain policies and procedures for transactions in the Company’s securities that are designed to ensure compliance with all insider trading rules and that prohibit all hedging, pledging and short selling of our stock by all directors, officers and employees. |
| | | ||
Compensation Recoupment Policy | | | Our Incentive Compensation Recoupment Policy, all of our incentive compensation plans and the terms of our equity agreements describe the circumstances pursuant to which (i) Executive Officers are required to repay or return erroneously awarded compensation to the Company in accordance with clawback rules under the 1934 Act and New York Stock Exchange listing standards or (ii) the Board of Directors or the Compensation Committee may, in its good faith discretion, require officers to repay to the Company all or a portion of incentive compensation they receive. |
| | | ||
Annual Risk Assessment | | | We conduct an annual comprehensive risk analysis of our executive compensation program with our independent compensation consultant to ensure that our program does not encourage inappropriate risk-taking. |
| | | ||
Independent Compensation Consultant | | | Our Compensation Committee engages an independent compensation consultant to review and provide recommendations regarding our executive compensation program. |
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WHAT WE DO NOT DO | | | |
| | | ||
Automatic Salary Increases & Bonus Payments | | | We do not provide for automatic salary or bonus increases. |
| | | ||
Excise Tax Gross-Ups | | | We do not provide for any tax gross-ups. |
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Executive Benefits / Perquisites | | | We do not maintain any defined benefit or active supplemental retirement plan; nor do we provide other personal benefits or perquisites to our named executive officers that are not available to all employees other than excess liability insurance coverage. |
| | | ||
Supplemental Executive Retirement Plans (“SERPs”) | | | We do not provide any SERPs. |
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Dividends | | | We do not pay dividends on unvested equity awards (other than restricted stock) until, and only to the extent, those awards vest. |
| | | ||
Long-Term Incentive Plan | | | Our long-term equity incentive plan prohibits liberal share recycling and repricing or buyouts of underwater options or stock appreciation rights without stockholder approval. |
Role of the Compensation Committee
Structure of the Compensation Committee: During 2023, the Compensation Committee consisted of three members of the Board, Mr. Timothy J. Bernlohr (Chair), Ms. Randee E. Day and Mr. Nadim Z. Qureshi, each of whom qualified as “independent” under the NYSE listing standards and applicable independence standards under the 1934 Act and the Dodd-Frank Act. Recognizing the importance of independent perspectives, the Compensation Committee regularly meets in executive session, without any members of management present. In February 2024, Mr. Qureshi resigned from the Board of Directors and Mrs. A. Kate Blankenship was elected a member of the Compensation Committee to fill the vacancy created by Mr. Qureshi’s resignation and qualifies as “independent” under the foregoing standards.
Objectives of The Compensation Committee and the Decision-Making Process: The primary goals of the Compensation Committee are to establish the Company’s compensation philosophy and strategy and to ensure that the Company’s executives are compensated in a manner consistent with the articulated philosophy and strategy. The Compensation Committee takes many factors into account when making compensation decisions with respect to the NEOs and other senior executives, including the individual’s performance, tenure and experience; the ability of the individual to affect long-term growth and success of the Company; INSW’s overall performance; internal equity among the NEOs; and external, publicly available market data on competitive compensation practices and levels.
Role of Outside Advisors: The Compensation Committee has the authority to engage independent advisors to assist in carrying out its duties. The Compensation Committee has engaged Lyons, Benenson & Company Inc. (“LB&Co.”) as its independent compensation consultant to advise on executive and director compensation arrangements and related governance matters. Additionally, LB&Co. assisted management in the preparation of this Proxy Statement.
As required by rules adopted by the SEC under the Dodd-Frank Act, the Compensation Committee assessed all relevant factors and determined that the work of LB&Co. did not raise any conflict of interest in 2023. In making this determination, the Compensation Committee considered all relevant factors, including those set forth in Rule 10C-1(b)(4)(i) through (vi) under the 1934 Act.
Role of the CEO in Setting CEO and Other Executives’ Compensation
All decisions relating to the compensation of Ms. Zabrocky, INSW’s CEO, are made by the Compensation Committee without her or other members of management present. In making determinations regarding compensation for INSW’s other NEOs and other selected senior executives, the
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Compensation Committee generally considers the recommendations of the CEO (for all executives other than herself), and the advice received from LB&Co. The CEO recommends the compensation levels for the other NEOs and for all others whose compensation is determined by the Compensation Committee. In making her recommendations, the CEO evaluates the performance of each executive, considers each executive’s compensation in relation to the other officers and executives (“internal equity”), external equity and assesses retention risks. The CEO’s recommendations are subject to review by and, in some cases modification by, and ultimately approval of, the Compensation Committee or, if and when, sufficiently material, the full Board.
All 2023 compensation decisions (including base salaries, annual incentive and long-term incentive target percentages and annual incentive and long-term incentive performance measures and goals) were made under the auspices of the Compensation Committee. Additionally, the Compensation Committee was responsible for the review and certification of the 2023 performance results that determined the annual incentive and long-term incentive payouts for the NEOs.
Consideration of Compensation Peer Group
The Compensation Committee examines the executive compensation of a group of peer companies to stay current with market pay practices and trends, and to understand the competitiveness of our total compensation and its various elements. In general, we strive for total compensation to be competitive with a select group of companies that the Compensation Committee believes to be an appropriate compensation reference group (the “Peer Group”). The Compensation Committee reviews the Peer Group with LB&Co. on a regular basis to affirm that the Peer Group comprises companies that are similar to us in terms of industry focus and scope of operations, size (based on revenues and market capitalization), and the competitive marketplace for talent.
While the Compensation Committee believes the data derived from any peer group is helpful, it also recognizes that benchmarking is not necessarily definitive in every case, as there are unique aspects of company performance – for example, work relating to strategic initiatives – that may not apply to peer companies or be apparent based on benchmarking comparisons. Furthermore, the Peer Group is limited to those companies for which executive compensation data is publicly available, which necessarily eliminates some of INSW’s closest competitors that are privately held and/or incorporated in jurisdictions that do not require public disclosure of executive compensation. The Compensation Committee, therefore, uses the information from the Peer Group for informational and analytical purposes, but does not make compensation decisions based solely on this market data. With this in mind, INSW augments the Peer Group data with publicly available survey data, and uses all compensation data in conjunction with annual assessments of corporate and individual performance to make recommendations and decisions on the compensation arrangements applicable to the Company’s NEOs.
2023 Peer Group. The Peer Group for 2023 consisted of 12 publicly traded oil, shipping and transportation companies, with a significant international focus. For the 2023 fiscal year, the total revenues of this group ranged between $383.8 million and $3.2 billion with median revenues of some $865.6 million. INSW’s total revenues for 2023 were approximately $1.1 billion. The following 12 companies comprised the 2023 Peer Group and remains unchanged from 2022:
Algoma Central Corporation | | | Genesis Energy, L.P. |
DHT Holdings, Inc. | | | Kirby Corporation |
Dorian LPG Ltd. | | | Matson, Inc. |
Eagle Bulk Shipping Inc. | | | Pangaea Logistics Solutions, Ltd. |
Euronav NV | | | Tidewater Inc. |
Genco Shipping & Trading Limited | | | TORM plc |
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2024 Peer Group. In March of 2024, the Compensation Committee decided and approved that the Peer Group for 2024 would be as follows:
Algoma Central Corporation | | | Genesis Energy, L.P. |
Dorian LPG Ltd. | | | Kirby Corporation |
Eagle Bulk Shipping Inc. | | | Matson, Inc. |
Euronav NV | | | Tidewater Inc. |
Genco Shipping & Trading Limited | | | TORM plc |
The Compensation Committee reviews each element of compensation annually to ensure it aligns with our compensation philosophy and objectives, as well as to assess INSW’s executive compensation program and levels relative to the competitive landscape. The executive compensation program consists of the following:
• | Base salary |
• | Annual (performance-based cash) incentive compensation |
• | Long-term (equity) incentive compensation |
• | Severance arrangements |
• | Retirement benefits generally available to all employees |
• | Welfare and similar benefits (e.g., medical, dental, disability and life insurance) available to all employees |
INSW seeks to provide competitive “fixed” compensation in the form of base salary while emphasizing a pay-for-performance culture in which we place a larger portion of total compensation “at-risk” in the form of annual performance-based cash incentives (which will only be paid if INSW achieves specified performance goals) and long-term equity incentives (which vest over a multi-year period and, in certain cases, also depend on the achievement of specific performance goals).
Base Salary
We strive to pay base salaries that are market competitive to attract talented executives and to provide a secure fixed level of compensation to our executives and managers. The Compensation Committee reviews the base salaries of the executive officers and compares them to the salaries of senior management among the Peer Group companies, bearing in mind that total estimated direct compensation opportunity is the principal comparative measure of the competitiveness of our program. Based on its own experience and that comparison, the Compensation Committee determines whether the NEO salaries, taken together with other elements of compensation, are at levels sufficient to attract, motivate, retain and reward the executives who are essential to leading the Company and driving stockholder value.
Annual adjustments in base salary, if any, consider individual performance, position duties and responsibilities, internal equity and external market practices. The Compensation Committee generally relies on the CEO’s evaluation of each NEO’s performance (other than her own) in deciding whether to recommend and/or approve merit increases for any NEOs in a given year. In those instances where the duties and responsibilities of a NEO change, the CEO may recommend any adjustments believed to be warranted, and the Compensation Committee will consider all the factors above in determining whether to approve any such changes.
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With respect to those employees who were NEOs in 2023 and based on the factors and criteria described above, increases in base salary from 2022 to 2023 for Ms. Zabrocky, Messrs. Pribor, Small, Solon and Nugent were 7.7%, 6.0%, 5.9%, 9.3% and 9.3% respectively. The following table summarizes 2023 base salaries for our NEOs.
Name | | | Position | | | 2023 Salary |
Lois K. Zabrocky | | | President and Chief Executive Officer | | | $750,000 |
Jeffrey D. Pribor | | | Chief Financial Officer, Senior Vice President and Treasurer | | | $580,000 |
James D. Small III | | | Chief Administrative Officer, Senior Vice President, General Counsel & Secretary | | | $530,000 |
Derek G. Solon | | | Senior Vice President (Chief Commercial Officer) | | | $410,000 |
William F. Nugent | | | Senior Vice President (Chief Technical and Sustainability Officer) | | | $410,000 |
2023 Annual (Cash) Incentive Plan
Pursuant to the Company’s currently effective Management Incentive Compensation Plan (the “MICP”), NEOs are eligible to receive annual cash incentives based upon the achievement of specified annual performance goals, which are established and approved by the Compensation Committee during the first quarter of the performance year. Our annual cash incentive plan, which for the NEOs generally reflects the terms of the annual cash incentive plan available to all employees, is intended to focus our NEOs on our critical, short-term financial and operational goals. As in past years, the financial performance measure for 2023 was ESO. The NEO awards were also based on quantifiable measures of Company performance against certain corporate metrics, business/operational metrics (including safety) and environmental measures, in addition to the achievement of individual performance goals.
ESO is a non-GAAP measure defined as income from vessel operations before depreciation and amortization, gains and losses from vessel sales (including impairments), stock compensation expenses and certain other non-cash charges, one-time merger and integration related costs, legal and consulting expenses for shareholder activism-related matters, and third-party debt modification fees, reduced by expenditures for dry dockings and vessel expenditures, which we use for compensation purposes. INSW establishes ESO threshold goals based on multiple factors, including projected time charter rates that reflects views of the shipping market (including the market’s cyclical nature), and the probability of the resumption of normalized trading patterns and not upon then current war and geopolitical events, such as the continued conflict between Russia and Ukraine and hostilities in the Red Sea. The ESO threshold goals for 2023 were higher than for 2022. ESO for INSW were earnings of $670.4 million in 2023. The following table reconciles income from vessel operations for 2023, as reflected in the consolidated statements of operations of the Company for 2023 set forth in the 2023 Annual Report, to ESO:
(Dollars in thousands) | | | |
Income from vessel operations | | | $615,431 |
Depreciation and amortization | | | 129,038 |
Gain on sale of vessels, net | | | (35,934) |
Third-party debt modification fees | | | 568 |
Legal and consulting expenses for shareholder activism-related matters | | | 1,392 |
Non-cash stock compensation expense | | | 8,518 |
Non-cash amortization of a prepaid Directors and officers run off policy related to the Merger | | | 600 |
Non-cash rent expense | | | 811 |
| | | 720,423 | |
Drydock expenditures | | | (35,117) |
Vessel expenditures (excluding $192.4 million of newbuild and vessel purchase costs) | | | (14,875) |
Earnings from Shipping Operations (ESO) | | | $670,431 |
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For 2023, the annual incentive target for Ms. Zabrocky was 125% of her base salary and the annual incentive targets for Messrs. Pribor, Small, Solon and Nugent were 100% of their respective base salaries. Based on the weighting described below, the potential actual incentive payout range for Ms. Zabrocky and Messrs. Pribor and Small was 0% to 142% of target, while for Messrs. Solon and Nugent the range was 0% to 137%.
NEOs have different weights ascribed to their Company ESO, business/operational and individual goals, each of which is a component of the payout calculation. The specific weights were established based on the scope of each NEO’s role and their respective abilities to affect the results and were ultimately recommended by the CEO and approved by the Compensation Committee. The following table sets forth the weights by component and NEO.
Individual | | | Company ESO | | | Business/ Operational Metrics | | | Individual Performance Goals |
Ms. Zabrocky | | | 60% | | | 15% | | | 25% |
Messrs. Pribor and Small | | | 60% | | | 10% | | | 30% |
Messrs. Solon and Nugent | | | 33.3% | | | 33.3% | | | 33.4% |
For 2023, each goal was assessed on an achievement scale of between 70% and 130%, with 100% reflecting target level, 130% being the maximum level, and a score of 0% given for achievement below 70%.
• | For ESO achievement, the performance factor (i.e., payout) can range from 0% to a maximum of 150% (corresponding to a 130% ESO achievement level, as detailed below). |
• | For the business/operational metrics and individual performance goals, the payout can range from 0% to a maximum of 130% (corresponding with actual achievement level). |
• | If the achievement level for ESO is below 70%, the payout on the commercial and operational metrics cannot exceed its target (100%) and the payout on the individual performance goals component (MBO) cannot exceed 50% of the individual performance goals (MBO) target. |
• | If the achievement level for the business/operational metrics is below 70%, the performance factor (payout) for this measure is zero, resulting in no bonus being payable in respect of this measure. |
• | If the individual performance achievement level for any NEO is below 70%, it would result in no bonus being payable on this metric. |
2023 Company ESO Goal. The table below sets forth the ESO performance thresholds at INSW and the corresponding amounts that would be earned (expressed as percentages of target) by the NEOs at each level of achievement.
($ Thousands) | | | | | ESO Threshold | |
Performance Factor (Payout As a % of Target) | | | % Achievement | | | 2023 |
50.00% | | | 70% | | | 109,700 |
58.40% | | | 75% | | | 136,141 |
66.70% | | | 80% | | | 162,582 |
75.00% | | | 85% | | | 189,023 |
83.30% | | | 90% | | | 215,464 |
91.70% | | | 95% | | | 241,905 |
100.0% | | | 100% | | | 268,346 |
108.4% | | | 105% | | | 294,787 |
116.7% | | | 110% | | | 321,228 |
125.0% | | | 115% | | | 347,669 |
133.3% | | | 120% | | | 374,110 |
141.7% | | | 125% | | | 400,551 |
150.0% | | | 130% | | | 426,992 |
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In 2023, the ESO result was earnings of $670.4 million which was an achievement of 130% for this metric which corresponded to a performance factor (payout) of 150%. ESO targets were higher in 2023 than in 2022.
INSW Commercial/Operational Metrics.
For 2023, the INSW business and operational metrics were weighted equally. The business metrics related to the time charter equivalent (“TCE”) performance of INSW’s VLCCs, Aframaxes, Suezmaxes, LR1s and MRs TCE compared with spot TCE rates of competitors or market spot TCE rates published by a third-party maritime research service. Regarding the business metrics as approved in March 2023 they remain unchanged through 2023 as a measure for the NEOs.
The operational metrics included (a) achieving or doing better than the INSW vessel operating budget; (b) vetting observations — a metric that indicates acceptability of our fleet to our customers; (c) total recordable case frequency — a metric that tracks safety within the fleet; (d) time not earning (technical) — a metric that measures operational availability; and (e) an environmental performance metric based on propulsion efficiency, which is intended to encourage environmental efficiency consistent with our stated commitment to ESG initiatives.
The overall INSW performance score for business/operational metrics for 2023 was 92%.
Individual Performance Goals. Each of our NEOs also had individual performance goals established by the Compensation Committee. The individual goals for 2023 covered a broad range of performance indicators that included, among others, the following (although not all goals listed below applied to all NEOs):
• | Identifying, developing and executing business strategy; |
• | Achieving revenue, operating expenses and general and administrative expense targets; |
• | Enhancing lines of communication with key customers and investors; |
• | Evaluating and executing strategic alternatives; merging and integrating where needed; |
• | Evaluating financial initiatives, capital allocation choices and balance sheet recapitalization; |
• | Further establishing and executing ESG initiatives, including the Company’s “get to green” initiative; |
• | Reviewing and identifying operational risks and performing risk assessments; and |
• | Assessing and engaging in special projects, including additional fleet renewal assessments, business development, scrubber technology implementation and maintenance, capital management, leadership development, ensuring ethics throughout the organization, insurance projects, risk management, disaster planning, contingency planning, succession planning, cyber security protection and projects, compensation planning and financial strategy and reporting. |
After the 2023 performance year, the Compensation Committee assessed the level of achievement of our NEOs relative to their respective individual performance goals. Following this assessment, it was determined that Ms. Zabrocky and Messrs. Pribor, Small, Solon and Nugent achieved their individual goals at above target levels.
2023 Actual Annual Incentive Paid. Based on the foregoing, the NEOs received the following annual cash incentive awards for 2023, which were paid in March 2024 and is reflected in the compensation paid in this Proxy Statement: Ms. Zabrocky — $1,231,242; Mr. Pribor — $765,559; Mr. Small — $696,335; Mr. Solon — $489,005; and Mr. Nugent – $480,309.
Equity-Based Compensation
INSW’s equity-based compensation program is intended to align the interests of its executives with those of its stockholders, and to focus executives on achieving long-term performance objectives aligned with the Company’s business strategy, thereby establishing a direct relationship between compensation, long-term operating performance and sustained increases in stockholder value. The MICP became
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effective as of November 18, 2016 and provided for awards of long-term equity compensation to be made to employees through April 2020 when the Company ceased making awards under such plan. In April 2020, the Company adopted the 2020 Management Incentive Compensation Plan (the “2020 MICP”) and the 2020 Non-Employee Director Incentive Compensation Plan (the “2020 Director Plan”), which provide long-term equity compensation for employees and non-employee directors, respectively, and succeed the MICP and a prior Non-Employee Director Incentive Compensation Plan. The 2020 MICP provides for grants of nonqualified stock options, incentive stock options, stock appreciation rights, performance units, performance shares and other performance awards, restricted stock units and restricted stock, and other awards valued in whole or in part by reference to, or otherwise based on, INSW stock. The primary purpose of the 2020 MICP and the 2020 Director Plan is to facilitate the grant of equity and cash incentives to employees (including our NEOs) and equity compensation to non-employee directors of the Company, and to enable the Company to obtain and retain the services of these individuals, which is essential to our long-term success. INSW reserved 1,400,005 shares for issuance under the 2020 MICP (including five shares that were reserved but not granted under the MICP) and 460,774 shares for issuance under the 2020 Director Plan (including 60,774 shares that were reserved but not granted under a prior Non-Employee Director Incentive Compensation Plan). The 2020 MICP contains an anti-dilution provision whereby in the event of certain corporate changes in the Company, outstanding awards may be adjusted, as appropriate, to prevent dilution or enlargement of rights. The terms of the MICP, the 2020 MICP and the 2020 Director Plan are set forth in Exhibit 10.1 to the Company’s Current Report on Form 8-K dated November 25, 2016, in Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 8, 2020 (the “April 2020 Form 8-K”) and in Exhibit 10.2 to the April 2020 Form 8-K, respectively.
Consistent with our practices and in each case pursuant to the terms of the MICP, equity awards may be granted from time to time to motivate and retain executives and other key managers and employees and to align their interests with stockholders.
2023 Awards. In March 2023, the Compensation Committee approved the following long-term incentive award date values for Ms. Lois K. Zabrocky and Messrs. Jeffrey D. Pribor, James D. Small III, Derek G. Solon and William F. Nugent:
Incumbent | | | Total Grant Date Value | | | Stock Options | | | Time-Based RSUs | | | Performance- Based RSUs |
Lois K. Zabrocky | | | $1,875,000 | | | $— | | | $937,500 | | | $937,500 |
Jeffrey D. Pribor | | | $1,015,000 | | | $— | | | $507,500 | | | $507,500 |
James D. Small III | | | $662,500 | | | $— | | | $331,250 | | | $331,250 |
Derek G. Solon | | | $512,500 | | | $— | | | $256,250 | | | $256,250 |
William F. Nugent | | | $512,500 | | | $— | | | $256,250 | | | $256,250 |
The time-based restricted stock units (“RSUs”) vest and become exercisable in equal amounts on the first, second and third anniversaries of the grant date of March 8, 2023. Each of the RSU and performance-based RSU awards represent 50% of the annual target grant award. The performance-based restricted stock units (“PRSUs”) awards vest as follows: (i) one-half of the target PRSUs vest on December 31, 2025, subject to INSW’s three-year Return on Invested Capital (“ROIC”) performance; and (ii) one-half of the target PRSUs vest on December 31, 2025, subject to INSW’s three-year total shareholder return (“TSR”) performance relative to that of a performance peer group. As was noted above under the section “Consideration of Compensation Peer Group”, our compensation peer group is limited to those companies for which executive compensation data is publicly available, which necessarily eliminates some of INSW’s closest competitors that are privately held and/or incorporated in jurisdictions that do not require public disclosure of executive compensation. In order to ensure that we are measuring our relative performance against our closest competitors, the Board has approved the use of a Performance Peer Group, which is not so limited, and can include publicly-traded companies incorporated in other jurisdictions. “Performance Peer Group” means the following eight companies: Ardmore Shipping Corporation (NYSE: ASC); DHT Holdings, Inc. (NYSE: DHT); Euronav NV (NYSE: EURN); Frontline LTD (NYSE: FRO); Scorpio Tankers Inc. (NYSE: STNG); Tsakos Energy Navigation Limited (NYSE: TNP); Teekay Tankers Ltd. (NYSE: TNK); and TORM plc (NYSE: TRMD). For the avoidance of doubt, if a company has entered bankruptcy (or ceases to have a publicly available trading
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price by virtue of its stock price failing to meet minimum listing requirements), it shall be treated as having a TSR of nil and shall be ranked last among the Performance Peer Group; if, however, a company ceases to exist (via merger, acquisition or similar transaction) or ceases to have a publicly available trading price (via a going-private transaction or otherwise), that company shall be removed from the Performance Peer Group. Vesting is subject in each case to the Compensation Committee’s certification of achievement of the performance targets no later than March 15, 2026.
The funding formulas applicable to the PRSUs granted in March 2023 are as follows:
• | The cumulative target ROIC for the three-year period is 8.57% (with a minimum threshold performance achievement of 5.57% resulting in 50% of the applicable PRSUs vesting, and a maximum performance achievement of 11.57% resulting in 150% of the applicable PRSUs vesting). |
• | TSR performance is described in the following table. If the absolute value of three-year TSR is negative, then the payout for the TSR component of the PRSUs is capped at 100%. |
TSR | | | Threshold | | | Target | | | Maximum |
Performance Achievement | | | 25th Percentile | | | 50th Percentile | | | 90th Percentile |
Payout | | | 50% | | | 100% | | | 150% |
The 2021 PRSUs vested on December 31, 2023, based on the achievement of the performance measures with a maximum payout of 150% for half of the grant and with a payout of 88.8% for the other half of the grant.
Upon termination of employment for any reason, all unvested PRSUs will be forfeited unless the NEO’s respective employment agreement provides otherwise.
Based on total target compensation opportunity.
Base Salary Decision:
On March 12, 2024, base salaries for the NEOs were increased for Ms. Zabrocky (from $750,000 to $800,000), Mr. Pribor (from $580,000 to $610,000), Mr. Small ($530,000 to $555,000), Mr. Solon (from $410,000 to $435,000) and Mr. Nugent (from $410,000 to $435,000), in each case retroactive to January 1, 2024. Ms. Zabrocky, as President and CEO, does not receive additional compensation for services as a director of the Company.
Annual Incentive Decisions:
The design of INSW’s 2024 annual cash incentive plan is generally consistent with INSW’s 2023 annual cash incentive plan. In 2024, pursuant to the terms of their employment agreements with the Company, as amended, Ms. Zabrocky will continue to have a target annual incentive equal to 125% of base salary, and Messrs. Pribor, Small, Solon and Nugent will each continue to have a target annual incentive equal to 100% of their base salaries.
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Long-Term Equity Awards Decisions:
On March 12, 2024, the Compensation Committee awarded each of the NEOs equity grants of approximately (1) for Ms. Zabrocky, 250% of her base salary; (2) for Mr. Pribor, 175% of his base salary; and (3) for Messrs. Small, Solon and Nugent, 125% of their respective base salaries, using in each case a reference stock price based on 20-day VWAP to and including the grant date. These equity grants were divided equally among time-based RSUs and PRSUs.
INSW has employment agreements with Ms. Zabrocky and Messrs. Pribor and Small. Under the terms of those agreements, Ms. Zabrocky and Messrs. Pribor and Small are entitled to certain compensation arrangements and severance benefits as detailed in the paragraphs below. Although Messrs. Solon and Nugent do not have formal contractual employment agreements with INSW, they are also entitled to certain compensation arrangements and severance benefits. Please see “Potential Payments Upon Termination and Change in Control” in the “Summary Compensation Data” section of this Proxy Statement. In addition, each NEO (whether or not his or her employment relationship with INSW is governed by a formal contractual employment agreement) is entitled to vacation in accordance with INSW policy, and each of them participates in medical, dental, and life insurance, as well as retirement and other benefit plans as may be in effect from time to time on a similar basis to all other INSW employees. Please see the “All Other Compensation Table” in the “Summary Compensation Data” section of this Proxy Statement. Each of the employment agreements also provides for the possibility of annual equity grants at the discretion of the Board upon recommendation from the Compensation Committee.
Under the terms of the employment agreements for Ms. Zabrocky and Messrs. Pribor and Small, if an executive’s employment is terminated by INSW for any reason or terminated voluntarily by the executive, he or she is entitled to the following payments (“Accrued Payments”):
• | any earned, unpaid base salary through the date of termination; |
• | any earned, unpaid annual bonus applicable to the performance year prior to the termination; |
• | reimbursement of any business expenses not reimbursed as of the date of termination. |
If any such executive’s employment is terminated by reason of death or permanent disability, INSW will pay the Accrued Payments to the executive or the executive’s estate, and INSW will vest any non-performance-based equity previously granted to the executive that has not yet vested.
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The following table summarizes certain terms of the Company’s employment agreements, including the termination provisions in the event of a termination without cause by the Company, or resignation by the executive with good reason, with Ms. Zabrocky and Messrs. Pribor and Small as in effect on December 31, 2023 (and describing amendments to those agreements made during 2023 and 2024):
Name and Current Position | | | Date of Original Agreement | | | Base Salary at 12/31/2023 | | | Bonus Target at 12/31/2023 | | | Additional Terms / Amendments to Employment Agreements in 2023 and 2024 | ||||||
Lois K. Zabrocky President and CEO | | | 9/29/14 (originally entered into with OSG; assumed in Spin-Off) | | | $750,000 (increasing to $800,000 for 2024) | | | 125% | | | • | | | Severance benefits in the event of termination without cause or resignation with good reason include: | |||
| | | | ○ | | | salary continuation for 24 months | ||||||||||||
| | | | ○ | | | a lump sum payment of $1,049,999 | ||||||||||||
| | | | ○ | | | accelerated vesting of all outstanding and unvested options, RSUs and other equity-based grants or cash in lieu of grants that in all cases are not performance-based upon a termination without cause, for good reason, by death or disability; performance-based awards will be treated as set out below in the “Potential Payments Upon Termination and Change in Control” section | ||||||||||||
| | • | | | Equity grant target set at 250% of base salary for 2023 and 2024. | ||||||||||||||
| | • | | | Amended as of March 8, 2023 to increase base salary for 2023 to $750,000 | ||||||||||||||
| | • | | | Amended as of March 14, 2024 to increase base salary for 2024 to $800,000. | ||||||||||||||
| | | | | | | | | | | | | |||||||
Jeffrey D. Pribor Senior Vice President, CFO and Treasurer | | | 11/9/16 | | | $580,000 (increasing to $610,000 for 2024) | | | 100% | | | • | | | Severance benefits in the event of termination without cause or resignation with good reason include: | |||
| | | | ○ | | | 12 months’ continuation of annual base salary plus Target Bonus (18 months’ in the event of a change in control) | ||||||||||||
| | | | ○ | | | a lump sum payment of a pro rata portion of his annual bonus based on actual achievement | ||||||||||||
| | | | ○ | | | accelerated vesting of the outstanding time-based awards that would have vested on the next regularly scheduled vesting date following the termination date | ||||||||||||
| | | | ○ | | | pro-rated vesting of all performance-based RSUs and other equity-based grants, to the extent the applicable performance goals are achieved | ||||||||||||
| | • | | | Amended as of March 8, 2023 to increase base salary for 2023 to $580,000. | ||||||||||||||
| | • | | | Amended as of March 8, 2023 to increase equity grant target to 175% of base salary. | ||||||||||||||
| | • | | | Amended as of March 14, 2024 to increase base salary for 2024 to $610,000. | ||||||||||||||
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Name and Current Position | | | Date of Original Agreement | | | Base Salary at 12/31/2023 | | | Bonus Target at 12/31/2023 | | | Additional Terms / Amendments to Employment Agreements in 2023 and 2024 | ||||||
James D. Small III Senior Vice President, Chief Administrative Officer, Secretary & General Counsel | | | 2/13/15 (originally entered into with OSG; assumed in Spin-Off) | | | $530,000 (increasing to $555,000 for 2024) | | | 100% | | | • | | | Severance benefits in the event of termination without cause or resignation with good reason include: | |||
| | | | ○ | | | salary continuation for 24 months | ||||||||||||
| | | | | | | | | | ○ | | | a lump sum payment of $950,000 | ||||||
| | | | | | | | | | ○ | | | accelerated vesting of all outstanding and unvested time-based options, RSUs and other equity-based grants upon a termination without cause, for good reason, by death or disability; performance-based awards will be treated as set out below in the “Potential Payments Upon Termination and Change in Control” section | ||||||
| | | | | | | | • | | | Amended as of March 8, 2023 to increase base salary for 2023 to $530,000 | ||||||||
| | | | | | | | • | | | Amended as of March 14, 2024 to increase base salary for 2024 to $555,000. | ||||||||
The Company has entered into its standard offer letter with Messrs. Solon and Nugent, except that each of Messrs. Solon and Nugent have an additional letter providing for their years of service to be treated as 26 years of service solely with regard to the terms of the INSW severance plan and the specific terms as described in their equity grant letters. On March 12, 2024, each of their annual base salaries was increased to $435,000 from $410,000.
Benefits
In general, INSW provides benefits to its employees that we believe are important to maintaining a competitive total compensation program. Benefits are designed to provide a reasonable level of retirement income and to provide a safety net for protection against the financial concerns and catastrophes that can result from illness, disability or death.
Under the Savings Plan, INSW will match 100% of the first 6% of a participant’s pre-tax contribution (up to the Internal Revenue Code limit) which for 2023 was $19,800 and for 2024 is $20,700.
INSW does not currently have any plans that provide for payments or other benefits at, following or in connection with the retirement of our employees, other than the Savings Plan and the INSW SERP (as described in the following paragraph). INSW also assumed OSG’s obligations under the retiree medical plan with respect to those former OSG employees who continued to work for INSW after the Spin-Off.
In December 2017, INSW formally adopted the INSW Supplemental Executive Retirement Plan (“INSW SERP”), pursuant to which INSW formally documented its assumption of existing obligations under OSG’s Supplemental Executive Retirement Plan (the “OSG SERP”), which were assumed in connection with the Spin-Off. INSW employees who participated in the OSG SERP prior to the Spin-Off (including Ms. Zabrocky) participated in the INSW SERP, which was frozen to new contributions and paid interest on assumed obligations at an annual rate of 2.98%. The legacy INSW SERP was terminated on June 3, 2022, with the payout of remaining amounts thereunder completed in the second quarter of 2023. We do not provide any other SERPs, and our legacy SERP was frozen to new participants in November 2012.
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Risk Mitigation
Hedging, Pledging and Insider Trading. INSW’s insider trading policy prohibits its directors and employees from hedging their ownership of its securities, including investing in options, puts, calls, short sales, futures contracts or other derivative instruments relating to his or her securities or pledging securities directly owned by them, regardless of whether such directors and employees have material nonpublic information about INSW. The policy also prohibits INSW directors and employees from purchasing or selling its securities while in possession of material nonpublic information or otherwise using such information for their personal benefit. Directors and employees are permitted to enter into trading plans under Rule 10b5-1 under the 1934 Act. With the approval of INSW’s General Counsel, a 10b5-1 Plan may be entered into during a time when the equity participant is not in possession of material, non-public information. These plans are intended to aid the equity participants in diversifying their portfolios without violating federal securities laws.
Incentive Compensation Recoupment Policy for Executive Officers. In November 2023, INSW adopted its Incentive Compensation Recoupment Policy that generally provides that (i) executive officers of the Company are required to repay or return erroneously awarded compensation to the Company in accordance with clawback rules under the 1934 Act and New York Stock Exchange listing standards and (ii) if an officer of the Company receives performance-based or time-based incentive compensation during the past five completed fiscal years which the Board of Directors or Compensation Committee, in good faith discretion, determines was erroneously awarded it may require such officer to repay such compensation to the Company.
Stock Ownership Guidelines. INSW encourages stock ownership by its executives and non-employee directors in order to align their interests with the long-term interests of its stockholders. INSW has adopted stock ownership guidelines for non-employee directors and executive officers of the Company. As measured on January 1 of each fiscal year, each non-employee director and officer of the Company (including the NEOs) is expected to own a number of shares of INSW common stock priced at the closing price on the last trading day of the prior fiscal year equal to a specified multiple of his or her salary (or, in the case of the independent, non-employee members of the Board, a multiple of his or her annual cash retainer) as follows:
• | President and CEO — 5 × base salary |
• | Senior Vice Presidents — 2 x base salary |
• | Vice Presidents — 1 x base salary |
• | Independent Non-Employee Directors — 3 x annual board service cash retainer |
NEOs and independent, non-employee directors are afforded five years from the later of (1) the adoption of the ownership guidelines following the Spin-Off and (2) the time they first received an equity grant from INSW to achieve these ownership guidelines. For purposes of satisfying the guidelines, shares of common stock deemed to be owned include (a) stock owned outright by the NEO or non-employee director, his or her spouse and minor children; (b) vested time-based restricted stock or vested time-based RSUs; (c) vested PRSUs where the performance criteria have been satisfied; (d) vested in-the-money stock options (counted based on the number of shares underlying such in-the-money options); and (e) shares of stock held for the NEOs or non-employee director’s benefit in any pension or 401(k) plan. Unvested time-based RSUs and unvested PRSUs do not count towards satisfying the guidelines. INSW’s directors and executive officers have met these goals.
45
The Compensation Committee, comprised entirely of independent directors (as defined under applicable U.S. securities laws and NYSE listing standards), has reviewed the CD&A included in this Proxy Statement and discussed that CD&A with management. Based on its review and discussion with management, the Compensation Committee approved the CD&A and recommended to the INSW Board of Directors that the CD&A be included in this Proxy Statement.
| | | Compensation Committee: | |
| | | ||
| | | Timothy J. Bernlohr, Chair | |
| | | Randee E. Day | |
| | | A. Kate Blankenship | |
| | | ||
| | | April 26, 2024 |
In accordance with the rules of the SEC, the report of the Compensation Committee does not constitute “soliciting material” and is not incorporated by reference in any filings with the SEC made pursuant to the 1933 Act or the 1934 Act.
None of the members of the Compensation Committee has been an officer or employee of INSW. None of our executive officers serves on the board of directors or compensation committee of a company that has an executive officer that serves on our Board or the Compensation Committee.
46
The following Summary Compensation Table includes individual compensation information for services in all capacities for the Company received by the individuals identified as NEOs of the Company.
Name and Principal Position | | | Year | | | Salary(1) | | | Bonus | | | Stock Awards(2)(3) | | | Option Awards | | | Non-Equity Incentive Plan Compensation(4) | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings | | | All Other Compensation(5) | | | Total |
Lois Zabrocky President and Chief Executive Officer | | | 2023 | | | $748,973 | | | $— | | | $2,028,776 | | | $— | | | $1,231,242 | | | $— | | | $266,375 | | | $4,275,366 |
| | | 2022 | | | $696,185 | | | $— | | | $3,497,628 | | | $— | | | $1,165,490 | | | $— | | | $49,844 | | | $5,409,147 | |
| | | 2021 | | | $675,000 | | | $— | | | $1,136,956 | | | $562,494 | | | $633,302 | | | $— | | | $44,798 | | | $3,052,550 | |
| | | | | | | | | | | | | | | | | | | ||||||||||
Jeffrey D. Pribor Senior Vice President, Chief Financial Officer and Treasurer | | | 2023 | | | $579,365 | | | $— | | | $1,098,219 | | | $— | | | $765,559 | | | $— | | | $37,826 | | | $2,480,969 |
| | | 2022 | | | $546,673 | | | $— | | | $1,526,674 | | | $— | | | $734,982 | | | $— | | | $38,398 | | | $2,846,727 | |
| | | 2021 | | | $529,692 | | | $— | | | $535,610 | | | $264,993 | | | $398,942 | | | $— | | | $34,411 | | | $1,763,648 | |
| | | | | | | | | | | | | | | | | | | ||||||||||
James D. Small III Senior Vice President, Chief Administrative Officer, Secretary and General Counsel | | | 2023 | | | $529,433 | | | $— | | | $716,772 | | | $— | | | $696,335 | | | $— | | | $32,693 | | | $1,975,233 |
| | | 2022 | | | $500,202 | | | $— | | | $1,256,490 | | | $— | | | $671,000 | | | $— | | | $31,208 | | | $2,458,900 | |
| | | 2021 | | | $485,000 | | | $— | | | $408,458 | | | $202,080 | | | $362,159 | | | $— | | | $28,826 | | | $1,486,523 | |
| | | | | | | | | | | | | | | | | | | ||||||||||
Derek G. Solon Senior Vice President and Chief Commercial Officer | | | 2023 | | | $409,327 | | | $— | | | $554,511 | | | $— | | | $489,005 | | | $— | | | $24,207 | | | $1,477,050 |
| | | 2022 | | | $374,192 | | | $— | | | $941,408 | | | $— | | | $395,912 | | | $— | | | $49,844 | | | $1,761,356 | |
| | | 2021 | | | $332,800 | | | $— | | | $280,433 | | | $138,741 | | | $262,089 | | | $— | | | $44,798 | | | $1,058,861 | |
| | | | | | | | | | | | | | | | | | | ||||||||||
William F. Nugent Senior Vice President and Chief Technical and Sustainability Officer | | | 2023 | | | $409,327 | | | $— | | | $554,511 | | | $— | | | $480,309 | | | $— | | | $48,593 | | | $1,492,740 |
| | | 2022 | | | $374,192 | | | $— | | | $941,408 | | | $— | | | $395,912 | | | $— | | | $49,844 | | | $1,761,356 | |
| | | 2021 | | | $332,800 | | | $— | | | $280,433 | | | $138,741 | | | $263,035 | | | $— | | | $44,798 | | | $1,059,807 |
(1) | The salary amounts reflect the actual gross salary received during the year. |
(2) | On March 8, 2023, Ms. Zabrocky and Messrs. Pribor, Small, Solon and Nugent received time-based equity awards. One-third of these awards vests on each of the first, second and third anniversaries of the grant date of the award. The 2023 amounts in this column represent in the aggregate grant date fair value of the RSU awards calculated in accordance with accounting guidance as follows: For the grant, Ms. Zabrocky - $1,003,256, Mr. Pribor - $543,084, Mr. Small - $354,453, Mr. Solon - $274,213 and Mr. Nugent - $274,213. In prior years, this column reflected the Compensation Committee’s grant date values and not the grant date fair value in accordance with accounting guidance. The Compensation Committee grant date values for the RSUs are $937,500 for Ms. Zabrocky, $507,500 for Mr. Pribor, $331,250 for Mr. Small and $256,250 for each of Messrs. Solon and Nugent. |
(3) | Ms. Zabrocky and Messrs. Pribor, Small, Solon and Nugent received PRSU grants on March 8, 2023. The performance awards vest in full on December 31, 2025, subject to the Compensation Committee’s certification of achievement of the performance measures and targets. Settlement of the PRSUs may be either in shares of common stock or cash, as determined by the Compensation Committee in its discretion, and shall occur as soon as practicable following the Compensation Committee’s certification of the achievement of the applicable performance measures and targets for 2025 and in any event no later than March 15, 2026. The number of PRSUs shall be subject to an increase or decrease depending on performance against the applicable performance measures and targets with the maximum number of PRSUs vesting equivalent to 150% of the PRSUs awarded. The 2023 amounts in this column represent the aggregate grant date fair value of the PRSU award at target, calculated in accordance with accounting guidance, as follows: Ms. Zabrocky — $1,025,520, Mr. Pribor — $555,136, Mr. Small — $362,319, Mr. Solon — $280,298 and Mr. Nugent — $280,298. The aggregate grant date fair value of the PRSUs at maximum level of payout is as follows: Ms. Zabrocky - $1,538,280, Mr. Pribor - $832,704, Mr. Small - $543,479, Mr. Solon - $420,448 and Mr. Nugent - $420,448. For information with respect to grant date fair values, see Note 13. “Capital Stock and Stock Compensation” to INSWs consolidated financial statements included in INSW’s 2022 Annual Report. |
(4) | The amounts in this column for 2023, 2022 and 2021 reflect the amounts paid in 2024, 2023 and 2022 under the Company’s Cash Incentive Compensation Plan for performance in 2023, 2022, and 2021, respectively. |
(5) | See the “All Other Compensation Table” below for additional information. |
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The following table describes each component of the All Other Compensation column for 2023 in the Summary Compensation Table.
Name | | | Savings Plan Matching Contribution(1) | | | Life Insurance Premiums(2) | | | Other(3) | | | Total |
Lois K. Zabrocky | | | $19,800 | | | $1,158 | | | $245,417 | | | $266,375 |
Jeffrey D. Pribor | | | $19,800 | | | $753 | | | $17,273 | | | $37,826 |
James D. Small III | | | $19,800 | | | $1,158 | | | $11,735 | | | $32,693 |
Derek G. Solon | | | $19,800 | | | $1,158 | | | $3,249 | | | $24,207 |
William F. Nugent | | | $19,800 | | | $1,158 | | | $27,635 | | | $48,593 |
(1) | Constitutes INSW’s matching contributions under the Savings Plan. |
(2) | Life insurance premiums represent the cost of term life insurance paid on behalf of the NEO. |
(3) | Includes the following amounts for each NEO under plans and arrangements generally maintained by us for all employees (other than “umbrella” liability insurance coverage): (a) medical and dental coverage premiums of $24,386 for Ms. Zabrocky, $14,024 for Mr. Pribor, $8,486 for Mr. Small, $0 for Mr. Solon and $24,386 for Mr. Nugent, (b) long-term and short-term disability plan premiums for each NEO of $735; (c) a premium for excess liability insurance coverage for each NEO of $2,514; and (d) Ms. Zabrocky received $217,782 when INSW paid out the SERP. |
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The following table lists the INSW equity and non-equity incentive plan awards granted in fiscal year 2023 to the NEOs under the 2020 MICP.
| | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Stock Units(3) | | | All Other Option Awards: Number of Securities Underlying Options (#) | | | Exercise or Base Price of Option Awards ($/Sh) | | | Grant Date Fair Value of Stock and Option Awards(4) | ||||||||||||||
Name | | | Grant Date | | | Threshold | | | Target | | | Maximum | | | Threshold (#) | | | Target (#) | | | Maximum (#) | | | | | | | | | ||||
Lois K. Zabrocky | | | 3/8/2023 | | | $468,750 | | | $937,500 | | | $1,406,250 | | | 9,765 | | | 19,530 | | | 29,295 | | | 19,530 | | | | | $ | | | $2,028,776 | |
Jeffrey D. Pribor | | | 3/8/2023 | | | $290,000 | | | $580,000 | | | $870,000 | | | 5,286 | | | 10,572 | | | 15,858 | | | 10,572 | | | | | $ | | | $1,098,219 | |
James D. Small III | | | 3/8/2023 | | | $265,000 | | | $530,000 | | | $795,000 | | | 3,450 | | | 6,900 | | | 10,350 | | | 6,900 | | | | | $ | | | $716,772 | |
Derek G. Solon | | | 3/8/2023 | | | $205,000 | | | $410,000 | | | $615,000 | | | 2,669 | | | 5,338 | | | 8,007 | | | 5,338 | | | | | $ | | | $554,511 | |
William F. Nugent | | | 3/8/2023 | | | $205,000 | | | $410,000 | | | $615,000 | | | 2,669 | | | 5,338 | | | 8,007 | | | 5,338 | | | | | $ | | | $554,511 | |
(1) | Amounts actually paid under these awards for 2023 are set forth above under “ – Elements of the 2023 Executive Officer Compensation Program – 2023 Actual Annual Incentive Paid.” |
(2) | In 2023, Ms. Zabrocky and Messrs. Pribor, Small, Solon and Nugent received PRSU grants on March 8, 2023. These performance awards vest in full on December 31, 2025, subject to the Compensation Committee’s certification of achievement of the performance measures. Settlement of the PRSUs may be either in shares of common stock or cash, as determined by the Compensation Committee in its discretion, and shall occur as soon as practicable following the Compensation Committee’s certification of the achievement of the applicable performance measures and targets for 2025 and in any event no later than March 15, 2026. The number of PRSUs shall be subject to an increase or decrease depending on performance against the applicable performance measures and targets with the maximum number of PRSUs vesting equivalent to 150% of the PRSUs awarded. |
(3) | These grants comprise time-based RSUs. The grants made on March 8, 2023 vest in equal installments on the first, second and third anniversaries of the date of grant. |
(4) | For information with respect to grant date fair values, see Note 13, “Capital Stock and Stock Compensation” to INSW’s consolidated financial statements included in INSW’s 2023 Annual Report. |
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The following table lists outstanding INSW equity awards at December 31, 2023 for NEOs under the 2020 MICP.
Name | | | Year | | | Option Awards | | | Stock/RSU Awards | |||||||||||||||||||||
| | | Grant Year | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) Unexercisable | | | Options Exercise Price | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested (#)(1) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(1) | |
Lois K. Zabrocky | | | 2020 | | | 19,370 | | | | | — | | | $21.93 | | | 4/2/2030 | | | | | | | | | |||||
| | | 2021 | | | 18,901 | | | 18,901(2) | | | — | | | $21.58 | | | 3/17/2031 | | | 8,689(3) | | | $395,176 | | | —(4) | | | $— | |
| | | 2022 | | | — | | | — | | | — | | | — | | | — | | | 32,760(5) | | | $1,489,924 | | | 49,139(6) | | | $2,234,842 | |
| | | 2022 | | | — | | | — | | | — | | | — | | | — | | | 52,416(5) | | | $2,383,880 | | | — | | | $— | |
| | | 2023 | | | — | | | — | | | — | | | — | | | — | | | 19,530(7) | | | $888,224 | | | 19,530(8) | | | $888,224 | |
| | | | | | | | | | | | | | | | | | | | | |||||||||||
Jeffrey D. Pribor | | | 2017 | | | 17,442 | | | — | | | — | | | $19.13 | | | 3/29/2027 | | | | | | | | | ||||
| | | 2018 | | | 28,995 | | | — | | | — | | | $17.46 | | | 4/4/2028 | | | | | | | | | |||||
| | | 2019 | | | 31,289 | | | — | | | — | | | $17.21 | | | 4/5/2029 | | | | | | | | | |||||
| | | 2020 | | | 26,342 | | | — | | | — | | | $21.93 | | | 4/2/2030 | | | | | | | | | |||||
| | | 2021 | | | 17,808 | | | 8,905(2) | | | — | | | $21.58 | | | 3/17/2031 | | | 4,093(3) | | | $186,150 | | | —(4) | | | $— | |
| | | 2022 | | | — | | | — | | | — | | | — | | | — | | | 15,434(5) | | | $701,938 | | | 23,151(6) | | | $1,052,907 | |
| | | 2022 | | | — | | | — | | | — | | | — | | | — | | | 20,580(5) | | | $935,978 | | | — | | | $— | |
| | | 2023 | | | — | | | — | | | — | | | — | | | — | | | 10,572(7) | | | $480,815 | | | 10,572(8) | | | $480,815 | |
| | | | | | | | | | | | | | | | | | | | | |||||||||||
James D. Small III | | | | | | | | | | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | | | | | | | | | |||||||||||
| | | 2020 | | | 10,438 | | | — | | | — | | | $21.93 | | | 4/2/2030 | | | | | | | | | |||||
| | | 2021 | | | 13,580 | | | 6,791(2) | | | — | | | $21.58 | | | 3/17/2031 | | | 3,122(3) | | | $141,989 | | | —(4) | | | $— | |
| | | 2022 | | | — | | | — | | | — | | | — | | | — | | | 11,769(5) | | | $535,254 | | | 17,653(6) | | | $802,858 | |
| | | 2022 | | | — | | | — | | | — | | | — | | | — | | | 18,830(5) | | | $856,388 | | | — | | | $— | |
| | | 2023 | | | — | | | — | | | — | | | — | | | — | | | 6,900(7) | | | $313,812 | | | 6,900(8) | | | $313,812 | |
| | | | | | | | | | | | | | | | | | | | | |||||||||||
Derek G. Solon | | | 2020 | | | 3,673 | | | | | — | | | $21.93 | | | 4/2/2030 | | | | | | | | | |||||
| | | 2021 | | | 4,662 | | | 4,662(2) | | | — | | | $21.58 | | | 3/17/2031 | | | 2,143(3) | | | $97,464 | | | —(4) | | | $— | |
| | | 2022 | | | — | | | — | | | — | | | — | | | — | | | 8,818(5) | | | $401,043 | | | 13,226(6) | | | $601,518 | |
| | | 2022 | | | — | | | — | | | — | | | — | | | — | | | 14,108(5) | | | $641,632 | | | — | | | $— | |
| | | 2023 | | | — | | | — | | | — | | | — | | | — | | | 5,338(7) | | | $242,772 | | | 5,338(8) | | | $242,772 | |
| | | | | | | | | | | | | | | | | | | | | |||||||||||
William F. Nugent | | | | | | | | | | | | | | | | | | | | | ||||||||||
| | | 2021 | | | — | | | 4,662(2) | | | — | | | $21.58 | | | 3/17/2031 | | | 2,143(3) | | | $97,464 | | | —(4) | | | — | |
| | | 2022 | | | — | | | — | | | — | | | — | | | — | | | 8,818(5) | | | $401,043 | | | 13,226(6) | | | $601,518 | |
| | | 2022 | | | — | | | — | | | — | | | — | | | — | | | 14,108(5) | | | $641,632 | | | — | | | $— | |
| | | 2023 | | | — | | | — | | | — | | | — | | | — | | | 5,338(7) | | | $242,772 | | | 5,338(8) | | | $242,772 | |
| | | | | | | | | | | | | | | | | | | | | |||||||||||
(1) | Based on the closing price of INSW common stock of $45.48 on December 29, 2023. |
(2) | These unvested options vested and became exercisable on March 17, 2024. |
(3) | These unvested RSUs vested on March 17, 2024. |
(4) | These PRSUs vested on December 31, 2023, subject to achievement of the performance measures with a maximum payout of 150% for half of the grant and with a payout of 88.8% for the second half of the grant. |
(5) | One-half of these RSUs vested on April 7, 2024. The remaining half will vest on April 7, 2025, subject to accelerated vesting in the event of certain terminations of employment. |
(6) | These PRSUs will vest on December 31, 2024, subject to performance achievement. The PRSUs have a maximum payout of 150% of target. |
(7) | One-third of these RSUs vested on March 8, 2024. The remaining two-thirds will vest ratably on each of the second and third anniversaries of March 8, 2023, subject to accelerated vesting in the event of certain terminations of employment. |
(8) | These PRSUs will vest on December 31, 2025, subject to performance achievement. These PRSUs have a maximum payout of 150% of target. |
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The following table provides information regarding the number of options exercised by the NEOs and the number of stock awards that vested during the year ended December 31, 2023 for each of the NEOs.
| | | Option Awards | | | RSU/Stock Awards | |||||||
Name | | | Number of Shares Acquired on Exercise (#)(1) | | | Value Realized on Exercise(2) | | | Number of Shares Acquired on Vesting (#)(3) | | | Value Realized on Vesting(4) |
Lois K. Zabrocky | | | 0 | | | $0 | | | 90,945 | | | $4,136,179 |
Jeffrey D. Pribor | | | 0 | | | $0 | | | 40,635 | | | $1,848,080 |
James D. Small III | | | 9,205 | | | $418,643 | | | 32,671 | | | $1,485,877 |
Derek G. Solon | | | 4,662 | | | $212,028 | | | 22,901 | | | $1,041,537 |
William F. Nugent | | | 8,335 | | | $379,076 | | | 22,901 | | | $1,041,537 |
(1) | Mr. Small exercised stock options on March 2, 2023 in the amount of 9,205. Mr. Solon exercised stock options on August 28, 2023 in the amount of 4,662. Mr. Nugent exercised stock options on August 17, 2023 in the amounts of 3,673 and 4,662. |
(2) | The value realized on exercise is the difference between the market value of the shares on the exercise date and the exercise price of the option, multiplied by the number of options shown in the table. |
(3) | Ms. Zabrocky and Messrs. Pribor, Small, Solon and Nugent had RSUs vest on March 17, 2023, April 2, 2023 and April 7, 2023 in the amounts of (a) 8,688, 8,550 and 42,586, respectively, for Ms. Zabrocky; (b) 4,093, 3,876 and 18,006, respectively, for Mr. Pribor; (c) 3,121, 3,072 and 15,298, respectively, for Mr. Small; (d) 2,143, 1,621 and 11,462, respectively, for Mr. Solon and (e) 2,143, 1,621 and 11,462, respectively, for Mr. Nugent. Ms. Zabrocky and Messrs. Pribor, Small, Solon and Nugent all had PRSUs vest on December 31, 2023 in the amounts of 31,121, 14,660, 11,180, 7,675 and 7,675, respectively. |
(4) | The value realized on vesting is calculated by multiplying the number of shares shown in the table by the closing market price of the Company’s common stock as of December 31, 2023, which was $45.48 per share. |
The following table provides information with respect to the deferral of compensation on a non-tax qualified basis to the INSW SERP for each NEO. The INSW SERP provided for interest at an annual rate of 2.98% through the termination date of the participant. The plan was frozen to new participants. The SERP was terminated on June 3, 2022, with the payout of remaining amounts thereunder completed in the second quarter of 2023.
Name | | | Executive Contributions in 2023 | | | Company Contributions on 2023 | | | Aggregate Earnings/ Losses in 2023(1) | | | Aggregate Withdrawals/ Spin-Offs in 2023 | | | Aggregate Balance at December 31, 2023 |
Lois K. Zabrocky | | | $— | | | $— | | | $2,083 | | | $217,782 | | | $— |
Jeffrey D. Pribor | | | $— | | | $— | | | $— | | | $— | | | $— |
James D. Small III | | | $— | | | $— | | | $— | | | $— | | | $— |
Derek G. Solon | | | $— | | | $— | | | $— | | | $— | | | $— |
William F. Nugent | | | $— | | | $— | | | $— | | | $— | | | $— |
(1) | The aggregate earnings constitute interest accrued between January 1, 2023 and the plan payout date. There were no executive or INSW contributions in 2023. |
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The following table discloses the amounts that would have been payable to each NEO upon termination of their employment, assuming for this purpose that such termination had occurred on December 31, 2023, in each case conditioned upon continued compliance with certain restrictive covenants and the delivery of a release to the Company. At December 31, 2023, Mr. Pribor was eligible for normal retirement at age 65 and not entitled to any other benefits. The table excludes amounts payable pursuant to the INSW SERP, as described above, and pursuant to plans that do not discriminate in favor of executive officers and that are generally available to all salaried employees, such as the Savings Plan.
Event(1) | | | Lois K. Zabrocky | | | Jeffrey D. Pribor | | | James D. Small III | | | Derek G. Solon | | | William F. Nugent |
Involuntary Termination Without Cause or Voluntary Resignation for Good Reason, Including in Connection with a Change in Control | | | | | | | | | | | |||||
Cash Severance Payment(2) | | | $1,500,000 | | | $870,000 | | | $1,060,000 | | | $410,000 | | | $410,000 |
Pro Rata Bonus Payment(3) | | | $937,500 | | | $580,000 | | | $530,000 | | | $0 | | | $0 |
Bonus Payment(4) | | | $0 | | | $0 | | | $0 | | | $410,000 | | | $410,000 |
Equity Awards(5) | | | $5,608,939 | | | $2,729,450 | | | $2,010,203 | | | $0 | | | $0 |
Lump Sum Payment | | | $1,049,999 | | | $0 | | | $950,000 | | | $0 | | | $0 |
Total | | | $9,096,438 | | | $4,179,450 | | | $4,550,203 | | | $820,000 | | | $820,000 |
| | | | | | | | |||||||||
Death/Disability | | | | | | | | | | | |||||
Pro Rata Bonus Payment | | | $0 | | | $580,000(6) | | | $0 | | | $0 | | | $0 |
Equity Awards | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 |
Total | | | $0 | | | $580,000 | | | $0 | | | $0 | | | $0 |
(1) | The values in this table reflect estimated payments associated with various termination scenarios. |
(2) | This reflects a cash severance payment equal to 24 months of base salary for Ms. Zabrocky and Mr. Small per the terms of their respective employment agreements. Mr. Pribor is entitled to 18 months of base salary plus target bonus if the separation is without cause or for good reason and due to a change in control as shown in this table and 12 months of base salary plus target bonus if he is terminated without cause or resigns with good reason without a change in control per the terms of his employment agreement. Messrs. Solon and Nugent are entitled to 12 months of base salary plus target bonus. |
(3) | For Ms. Zabrocky and Messrs. Pribor and Small a pro-rata target bonus is provided for in their respective employment agreements. The amounts listed assume a termination of employment occurs on the last business day of the year. For Mr. Pribor the pro-rata target is to be based on actual Company performance (other than for individual goal metrics, which are calculated at target) if no bonus payment is made to other executive officers of the Company in respect of the year in which the separation from service occurs due to business unit and company performance objectives not being met, then no amount shall be payable to Mr. Pribor. |
(4) | Messrs. Solon and Nugent are entitled to receive a 12-month bonus calculated at target for the year if terminated. |
(5) | For Ms. Zabrocky and Mr. Small all option shares and time based RSUs (and any other equity-based grant or cash in lieu of grants that is not performance-based) granted to Ms. Zabrocky and Mr. Small, to the extent not otherwise vested, shall vest as of the separation date, as applicable. The unvested PRSUs will be forfeited in the event of termination. As of December 31, 2023, Ms. Zabrocky had 113,395 unvested RSUs and 18,901 unvested stock options with a strike price of $21.58. Mr. Pribor had 50,678 unvested RSUs and 8,905 unvested stock options with a strike price of $21.58. Mr. Small had 40,631 unvested RSUs and 6,791 unvested stock options with a strike price of $21.58 . For Mr. Pribor, those unvested RSUs and stock options that otherwise would have vested on the next regularly scheduled vesting date following the separation will vest upon the separation date. For RSUs, this will amount to 4,093, 7,717, 10,290 and 3,524 units vesting at $45.48 for 3/17/21, 4/7/22 and 3/8/2023 respectively, for actual value of $1,165,364. For unvested stock options this will amount to 8,904 vesting at the difference of their respective strike price and the share price upon vesting of $45.48 for 3/17/21 for an actual value realized of $212,837. For PRSUs, Mr. Pribor will receive a number of unvested units prorated for the number of weeks actually worked. The number of unvested units reflected herein for Mr. Pribor includes: 12,279 at a rate of $45.48 multiplied by 145 the number of weeks worked for a total value of 558,449 at a rate of $45.48 multiplied by 90 the number of weeks worked for a total value of $653,529 for the 4/7/2022 grant; and 10,572 at a rate of $45.48 multiplied by 42 the number of weeks worked for a total value of $139,270 for the 3/8/23 grant. Messrs. Solon and Nugent would be entitled to vesting of their unvested time-based RSUs and unvested stock options if the separation is for “good reason” and within 12 months of a “change in control”; otherwise, the unvested RSUs and unvested stock options shall immediately be forfeited (as reflected above). For Messrs. Solon and Nugent all PRSUs shall immediately be forfeited on the separation date. |
(6) | Regarding Mr. Pribor being of eligible retirement age, over age 65, he will receive his contractual amounts shown above. He will not receive any other retirement benefits from the company. Upon Mr. Pribor’s disability, Mr. Pribor, or in the case of his death, his estate, is entitled to receive the pro-rata portion of his annual bonus at target for the year of termination. The amount listed in the table reflects his disability or death occurring on December 31, 2023, the last business day of the year. |
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The compensation of the Company’s median employee (“Median Employee”) was determined by reviewing the amount of compensation paid to each of the Company’s full-time and part-time employees, of which 64 (not including the CEO) were located in its New York, Houston, United Kingdom and Singapore offices, all of whom were employed by the Company through December 31, 2023, and the 2,921 seafarers who had been employed on the Company’s vessels for one or more days during the year ended December 31, 2023. The Company’s seafarers are hired by its technical managers acting as agent for the individual ship owning companies, each of which is a subsidiary of the Company, and include employees from various non-U.S. jurisdictions, including in particular the Philippines, India, Russia, China, Bangladesh, Croatia, Estonia, Georgia, Latvia, Turkey, Ukraine, Italy, and Sri Lanka. In determining the compensation paid to the CEO and the Median Employee, the Company used the data as shown in its payroll records including base salary, bonuses (including equity awards), seniority payments, performance bonuses, welfare costs, healthcare payments and other benefits paid by or on behalf of the Company. While the number of days worked by the Company’s seafarers ranged from 1 to 347 days in 2023, the Median Employee worked approximately 248 days. Our CEO had annual total compensation of $4,275,366 and our Median Employee had annual total compensation of $21,933. Therefore, our CEO’s annual total compensation in 2023 was approximately 195 times that of the median of the annual total compensation of our Median Employee.
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Pay vs. Performance
The following table provides information in understanding NEO compensation and Company performance as required by Section 953(a) of the Dodd-Frank Act, and Item 402(v) of Regulation S-K.
Year | | | Summary Compensation Table Total for PEO(1) | | | Compensation Actually Paid to PEO(2) | | | Average Summary Compensation Table Total for Non-PEO NEOs(3) | | | Average Compensation Actually Paid to Non-PEO NEOs(4) | | | Value of Initial Fixed $100 Investment Based On: | | | Net Income/(Loss) (millions) | | | Earnings from Shipping Operations (ESO) (millions)(6) | |||
| | Total Shareholder Return | | | Peer Group Total Shareholder Return(5) | | |||||||||||||||||||
(a) | | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | | | (h) | | | (i) |
2023 | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ |
2022 | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ |
2021 | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $( | | | $( |
2020 | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $( | | | $ |
(1) | The dollar amounts reported in column (b) are the amounts of total compensation reported for |
(2) | The dollar amounts reported in column (c) represent the amount of compensation actually paid to Ms. Zabrocky, as computed in accordance with Item 402(v) of Regulation S-K (“CAP”). |
(3) | The dollar amounts reported in column (d) represent the average of the amounts reported for our non-CEO NEOs as a group in the “Total” column of the SCT for each applicable year. The non-CEO NEOs included for purposes of calculating the average amounts in each applicable year are as follows: Messrs. Jeffrey D. Pribor, James D. Small III, Derek G. Solon and William F. Nugent. |
(4) | The dollar amounts reported in column (e) represent the average amount of CAP for the non-CEO NEOs as a group, as computed in accordance with Item 402(v) of Regulation S-K. |
(5) | The dollar amounts reported in column (g) represent the weighted INSW 2023 peer group total shareholder return, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The TSR group consists of: Ardmore Shipping Corporation (NYSE:ASC); DHT Holdings, Inc. (NYSE:DHT); Euronav NV (NYSE: EURN); Frontline LTD (NYSE: FRO); Scorpio Tankers Inc. (NYSE: STNG); Tsakos Energy Navigation Limited (NYSE:TNP); Teekay Tankers Ltd. ( NYSE:TNK); and TORM plc (NYSE: TRMD). |
(6) | The dollar amounts reported in column (i) represent |
Most Important Market Measures
1. Earnings from Shipping Operations
2. Return on Invested Capital
3. Total Shareholder Return
Reconciliation of Summary Compensation Table Total to Compensation Actually Paid for PEO
Year | | | 2023 | | ||
Summary Compensation Table Total | | | $ | | ||
(Minus): Grant Date Fair Value of Equity Awards Granted in Fiscal Year | | | ( | | ||
Plus: Fair Value at Fiscal Year End of Outstanding and Unvested Equity Awards Granted in the Fiscal Year | | | | |||
Plus/(Minus): Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Fiscal Years | | | | |||
Plus: Fair Value at Vesting of Equity Awards Granted and Vested in the Fiscal Year | | | | |||
Plus/(Minus): Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Fiscal Years that Vested in the Fiscal Year | | | | |||
(Minus): Fair Value as of the Prior Fiscal Year End of Equity Awards Granted in Prior Fiscal Years that Failed to Meet Vesting Conditions in the Fiscal Year | | | | | | |
Plus: Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Reflected in Total Compensation | | | | | ||
Compensation Actually Paid | | | $ | |
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Our PEO does not have any accumulated benefit under any defined benefit or actuarial pension plans; accordingly, we did not deduct or add any amounts with respect to defined benefit pension plans in calculating CAP to the PEO.
Reconciliation of Summary Compensation Table Total to Compensation Actually Paid for Non-PEO NEOs
Year | | | 2023 | | ||
Summary Compensation Table Total | | | $ | | ||
(Minus): Grant Date Fair Value of Equity Awards Granted in Fiscal Year | | | ($ | | ||
Plus: Fair Value at Fiscal Year End of Outstanding and Unvested Equity Awards Granted in the Fiscal Year | | | $ | | ||
Plus/(Minus): Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Fiscal Years | | | $ | | ||
Plus: Fair Value at Vesting of Equity Awards Granted and Vested in the Fiscal Year | | | | | ||
Plus/(Minus): Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Fiscal Years that Vested in the Fiscal Year | | | $ | | ||
(Minus): Fair Value as of the Prior Fiscal Year End of Equity Awards Granted in Prior Fiscal Years that Failed to Meet Vesting Conditions in the Fiscal Year | | | | | | |
Plus: Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Reflected in Total Compensation | | | | | ||
Compensation Actually Paid | | | $ | |
Our non-PEO NEOs do not have any accumulated benefit under any defined benefit or actuarial pension plans; accordingly, we did not deduct or add any amounts with respect to defined benefit pension plans in calculating CAP to non-PEO NEOs.
For purposes of the above adjustments, the fair value of equity awards on the applicable date were determined in accordance with FASB’s ASC Topic 718, using valuation methodologies that are generally consistent with those used to determine the grant-date fair value for accounting purposes.
The table below contains ranges of assumptions used in the valuation of outstanding equity awards for the relevant fiscal year(s). For more information, please see the notes to our financial statements in our Annual Report on Form 10-K and the footnotes to the Summary Compensation Table of this proxy statement.
| | | Fiscal Year 2023 | |
Restricted Stock Units | | | |
Stock Price | | | $ |
Performance Share Units | | | |
Financial Metric Multiplier | | | |
TSR Realized Performance (Percentile) | | | |
Volatility | | | |
Risk-Free Interest Rate | | | |
Stock Options | | | |
Expected Term (years) | | | |
Strike Price | | | $ |
Volatility | | | |
Dividend Yield | | | |
Risk-Free Interest Rate | | |
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The Company operates in the maritime tanker shipping industry, which is a highly cyclical business where results often reflect an underlying commodity-based rate environment. Accordingly, the results of our business can fluctuate significantly from time to time, driven by changes in shipping rates and vessel valuations that can be caused by, among other things, geopolitical events, global or regional conflicts, government action and regulatory developments, in the global capital markets, environmental incidents and various other factors discussed in detail in our Annual Report. As part of its effort to appropriately align compensation incentives to management performance, the Compensation Committee annually evaluates and implements both fixed and variable components of compensation. Due, however, to the volatile nature of the industry, variable compensation actually paid can be significantly affected (either positively or negatively) by short-to-medium-term changes in market rates and INSW stock performance.
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AND CERTAIN OTHER BENEFICIAL OWNERS
The tables below set forth certain beneficial ownership information with respect to certain individuals and stockholders. Except as disclosed in the notes to these tables and subject to applicable community property laws, the Company believes that each beneficial owner identified in the table possesses sole voting and investment power over all Common Stock shown as beneficially owned by the beneficial owner.
Beneficial ownership for the purposes of the following tables is determined in accordance with the rules and regulations of the SEC. Those rules generally provide that a person is the beneficial owner of shares if such person has or shares the power to vote or direct the voting of shares, or to dispose or direct the disposition of shares or has the right to acquire such powers within 60 days. For purposes of calculating each person’s percentage ownership, shares of Common Stock issuable pursuant to options exercisable within 60 days (including out of the money options) are included as outstanding and beneficially owned for that person, but are not deemed outstanding for the purposes of computing the percentage ownership of any other person. The percentage of beneficial ownership is based on 49,049,288 shares of the Company’s Common Stock outstanding as of the Record Date (April 16, 2024), and excludes any treasury stock.
The table below sets forth information as to each current director, director nominee and Named Executive Officer listed in the Summary Compensation Table in this Proxy Statement, and includes the amount and percentage of the Company’s Common Stock of which each director, director nominee, each Named Executive Officer, and all directors, directors nominees and executive officers as a group, was the “beneficial owner” (as defined in regulations of the SEC) on the Record Date, all as reported to the Company. The address of each person identified below as of the date of this Proxy Statement is c/o International Seaways, Inc., 600 Third Avenue, 39th Floor, New York, New York 10016.
| | | Shares of Common Stock Beneficially Owned(1) | ||||
Name | | | Number | | | Percentage |
Directors/Nominees | | | | | ||
Doug Wheat | | | 26,056(2) | | | * |
Darron M. Anderson | | | — | | | |
Timothy J. Bernlohr | | | 44,180(3) | | | * |
Ian T. Blackley | | | 14,725(3) | | | * |
A. Kate Blankenship | | | 19,098(3) | | | * |
Randee E. Day | | | 20,045(3) | | | * |
David I. Greenberg | | | 26,907(3) | | | * |
Kristian K. Johansen | | | — | | | |
Joseph I. Kronsberg | | | 11,760(3) | | | * |
Craig H. Stevenson, Jr. | | | 187,705(4) | | | 0.4% |
Lois K. Zabrocky | | | 179,376(5) | | | 0.4% |
Named Executive Officers (other than Ms. Zabrocky who is listed above with the other Directors/Nominees) | | | | | ||
Jeffrey D. Pribor | | | 208,630(6) | | | 0.4% |
James D. Small III | | | 72,825(7) | | | 0.1% |
Derek G. Solon | | | 63,384(8) | | | 0.1% |
William F. Nugent | | | 60,913(9) | | | 0.1% |
All Directors, Director Nominees and Executive Officers as a Group (15 Persons) | | | 949,693(10) | | | 1.9% |
* | Less than 0.1% |
(1) | Includes shares of Common Stock issuable within 60 days of the Record Date upon the exercise of options owned by the indicated stockholders on that date. |
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(2) | Includes 5,798 shares of Common Stock that vest on June 6, 2024. |
(3) | Includes 2,635 shares of Common Stock that vest on June 6, 2024. |
(4) | Includes 2,635 shares of Common Stock that vest on June 6, 2024, and 65,075 shares of Common Stock held by a limited liability company of which Mr. Stevenson is the controlling member and with respect to which Mr. Stevenson disclaims beneficial interest except to the extent of his pecuniary interest therein. |
(5) | Includes 18,901 shares issuable upon the exercise of options. |
(6) | Includes 130,781 shares issuable upon the exercise of options. |
(7) | Includes 10,187 shares issuable upon the exercise of options. |
(8) | Includes 12,997 shares issuable upon the exercise of options. |
(9) | Includes 4,662 shares issuable upon the exercise of options. |
(10) | Includes 179,079 shares issuable upon the exercise of options. |
Set forth below is information regarding stockholders of the Company’s Common Stock that are known by the Company to have been “beneficial owners” (as defined in regulations of the SEC) of 5% or more of the outstanding shares of the Common Stock as of the Record Date. The information with respect to beneficial ownership by the identified stockholders was prepared based on information supplied by such stockholders in their filings with the SEC.
| | | Shares of Common Stock Beneficially Owned* | ||||
Name | | | Number | | | Percentage |
BlackRock, Inc.(1) | | | 3,045,003 | | | 6.2% |
Dimensional Fund Advisors L.P.(2) | | | 3,198,443 | | | 6.5% |
Famatown Finance Limited(3) | | | 8,266,856 | | | 16.9% |
The Vanguard Group(4) | | | 3,700,058 | | | 7.6% |
* | Unless otherwise stated in the notes to this table, the share and percentage ownership information presented is as of the Record Date. |
(1) | Based on a Schedule 13G filed on February 3, 2024 with the SEC by BlackRock, Inc. (“BlackRock”) with respect to the beneficial ownership of 3,045,033 shares of Common Stock as of December 31, 2023 by BlackRock and certain of its subsidiaries. The address of BlackRock is 50 Hudson Yards, New York, New York 10001. |
(2) | Based on a Schedule 13G filed on February 9, 2024 with the SEC by Dimensional Fund Advisors L.P. (“Dimensional”) with respect to the beneficial ownership of 3,198,443 shares of Common Stock as of December 29, 2023 by Dimensional. Dimensional is an investment advisor registered under the Investment Advisors Act of 1940. The address of Dimensional is 6300 Bee Cave Road, Building One, Austin, Texas 78746. |
(3) | Based on a Schedule 13D filed on April 22, 2024 with the SEC with respect to the beneficial ownership of 8,266,856 shares of Common Stock as of April, 17, 2024 by Famatown Finance Limited (“Famatown”), Greenwich Holdings Limited (“Greenwich”) and C.K. Limited (“CK”). The address of Famatown and Greenwich is Deana Beach Apartments, Block 1, 4th Floor, 33 Promachon Eleftherias Street, Ayios Athanasias, 4103 Limassol, Cyprus and the address of CK is JTC House, 28 Esplanade, St. Helier, Jersey, Channel Islands JE4 2QP. |
(4) | Based on a Schedule 13G filed on February 13, 2024 with the SEC by The Vanguard Group (“Vanguard”) with respect to the beneficial ownership of 3,700,058 shares of Common Stock as of December 29, 2023 by Vanguard and certain of its subsidiaries. Vanguard is an investment advisor registered under Section 203 of the Investment Advisors Act of 1940. The address of Vanguard and its subsidiaries is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. |
Under the securities laws of the United States, the Company’s directors, executive officers and any persons holding more than 10 percent of the Company’s common stock are required to report their ownership of common stock and any changes in that ownership, on a timely basis, to the SEC. Directors, executive officers and beneficial owners of more than 10% of the common stock are also required to furnish the Company with copies of all Section 16(a) reports that they file with the SEC. Based on material provided to the Company, all such reports were filed on a timely basis in 2023 and through the date of this Proxy Statement, April 26, 2024.
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The Board is not aware of any matters to be presented at the meeting other than those specified above. If any other matter should be presented, the holders of the accompanying proxy will vote the shares represented by the proxy on such matter in accordance with their best judgment.
The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for stockholders and cost savings for companies. Some brokers use this process for proxy materials, delivering a single proxy statement to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice that any person will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement, or if you are receiving multiple copies of the proxy statement and wish to receive only one, please notify your broker if your shares are held in a brokerage account or the Company if you hold shares registered in your name, and the Company will promptly undertake to carry out your request. You can notify the Company by sending a written request to the Company at its address set forth below.
The Company’s 2023 Annual Report is available at https://www.intlseas.com/investor-relations/sec-filing. That 2023 Annual Report does not form part of this Proxy Statement. The Company will provide to any stockholder of the Company, without charge, a copy of the Company’s 2023 Annual Report upon written request addressed to the Corporate Secretary of the Company at 600 Third Avenue, New York, New York 10016.
| | | By order of the Board of Directors, | |
| | | ||
| | | JAMES D. SMALL III | |
| | | Chief Administrative Officer, Senior Vice President, | |
| | | General Counsel and Secretary |
New York, New York
April 26, 2024
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