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 |
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Definitive Proxy Statement |
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Soliciting Material Pursuant to §240.14a-12 |
SUPERIOR ENERGY SERVICES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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SUPERIOR ENERGY SERVICES, INC.
Annual Meeting of Stockholders
May 20, 2011
Supplemental Information Regarding Proposal No. 2
Advisory Vote on Executive Compensation
Commencing May 12, 2011, Superior Energy Services, Inc. sent the following communication to certain
stockholders:
At our 2011 Annual Meeting of Stockholders to be held on Friday, May 20, 2011, stockholders
will be asked to vote on a non-binding proposal to approve the compensation of our named executive
officers (also known as say-on-pay) as disclosed in the 2011 Proxy Statement. Proposal No. 2 in
the Companys 2011 Proxy Statement includes the relevant information regarding this matter. Our
Board of Directors has unanimously recommended that our stockholders vote FOR this advisory
proposal.
Your vote is important. ISS Proxy Advisory Services (ISS) has recommended that its clients
vote AGAINST Proposal No. 2. ISS asserts that there are excessive non-performance based payments
and benefits to two former executives, without clear justification. The Board of Directors strongly
disagrees with this opinion, and urges you to vote FOR the approval of Proposal No. 2.
Management Transition
We experienced a significant management transition during 2010. Effective April 28, 2010, Mr.
Terence E. Hall, our founder and former Chief Executive Officer, retired and the Board of Directors
appointed David D. Dunlap as Chief Executive Officer. Additionally, Kenneth L. Blanchard, our
former President and Chief Operating Officer, announced his intention to retire as of December 31,
2010. These two executives had been at the helm of our Company for more than 20 years, and their
relatively simultaneous departure presented significant challenges to the Board. ISSs position is
based solely on its opposition to the 2010 transition-related payments to these two former
executives, which are thoroughly described in the 2011 proxy statement. Our Board believes that
the arrangements we were able to negotiate with these executives were in the best interests of our
stockholders because they provide for the continuation of significant non-competition,
non-solicitation and other protections for the Company and secure the continuing professional
services of these two former senior executives during the early years of this transition period.
Most importantly, these arrangements supported the smooth transition to our new Chief Executive
Officer, which is reflected in part in the approximately $750,000,000 increase in market value
between Mr. Dunlaps hire date and year end, despite significant disruption to substantially all of
the Companys operations in the Gulf of Mexico due to the Macondo oil spill.
Executive Compensation and Pay-for-Performance
ISS specifically asserts that the transition-related payments made to Messrs. Hall and
Blanchard in connection with their retirements raise concerns regarding the pay for performance
alignment at the Company. The Board strongly disagrees with this assessment. The retirement of
the Companys founder chief executive officer and its long-tenured chief operating officer
represent a unique, one-time event in the history of Superior, and do not reflect the ongoing
practices of the Company. Superior has a long history of utilizing short and long-term
performance-based compensation in our executive compensation programs, and that commitment has not
changed as reflected in the 2011 Proxy Statement. The primary purpose of many of the
transition-related payments was to further reward past achievements and growth key factors that
made the Company attractive for Mr. Dunlap to join and to encourage a continued commitment to our
Company by these former senior executives. Throughout the transition process, the Board was
committed to maximize stockholder value through stability and Mr. Dunlaps successful assumption of
the role of our new leader.
ISS also takes issue with the additional lump-sum credit under the Supplemental Executive
Retirement Plan (the SERP) that we awarded Mr. Blanchard (although ISS mistakenly characterizes
this award as a credit of additional years of service). ISS fails to note that the Companys plan
is relatively new, and this award to Mr. Blanchard was intended to
address the lack of such a benefit for the bulk of
Mr. Blanchards
career. The Company introduced the current SERP in 2008, and before that time, there was no
similar benefit provided to our executives. We implemented the SERP at that time, under the
guidance of an independent consultant specializing in supplemental retirement programs, in order to
help attract and retain top executives. Since its inception, one of the stated purposes of the
SERP has been to reward exceptional performance by executives employed by the Company before its
adoption, and it includes a mechanism for discretionary contributions to reward long-serving
executives such as Mr. Blanchard. Mr. Blanchard dedicated a substantial portion of his career to
the Company during a period in which supplemental retirement benefits were not provided, and thus
had a very limited time to earn meaningful retirement income. For this reason, while the SERP
award to Mr. Blanchard is significant, we do not believe this award is excessive.
Conclusion
In summary, we strongly believe we have developed a pay-for-performance approach to executive
compensation that is appropriate for our Company. Above all, our goal is to attract and retain
executives who we believe are most qualified to face the challenges involved in growing our
business. In addition to this ongoing goal, however, during 2010 we also were committed to
providing the successful transition of our senior executive team for the benefit of all of our
stockholders.
We appreciate your time and consideration of these matters and ask for your support of the
Boards recommendation. If you have questions, please feel free to contact me at (504) 587-7374.
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Greg Rosenstein |
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Vice President Investor Relations
and Corporate Secretary |
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