Cactus, Inc. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Cactus, Inc. on March 17, 2020, covering events occurring on March 11, 2020. The filing details the Compensation Committee's approval of 2020 executive compensation packages, including base salaries, bonus targets, and equity grants, alongside voluntary salary reductions implemented in response to the economic environment.
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, margins, debt, or liquidity metrics. It focuses exclusively on executive compensation adjustments and equity grant values.
Material Changes and Compensation Adjustments
While 2020 base salaries were initially approved to remain unchanged from 2019, management subsequently implemented voluntary salary reductions:
- Scott Bender, Joel Bender, and Steven Bender: Agreed to 50% salary cuts.
- Stephen Tadlock and David Isaac: Agreed to 20% salary cuts.
The Compensation Committee also approved two forms of Performance Stock Unit (PSU) agreements tied to the Company's average annual Return on Capital Employed (ROCE) relative to peer companies. Vesting schedules include a three-year cliff and a two-and-three-year split.
Equity Grants and Management Commentary
Effective March 11, 2020, the Company granted Restricted Stock Units (RSUs) and PSUs to named executive officers. The grants vest over three years (RSUs) or according to the specific PSU agreement terms. The total target value of grants is as follows:
| Executive Officer | RSU Value | Target PSU Value |
|---|---|---|
| Scott Bender (CEO) | $750,000 | $750,000 |
| Joel Bender (COO) | $750,000 | $750,000 |
| Steven Bender (VP Operations) | $400,000 | $200,000 |
| Stephen Tadlock (CFO) | $402,000 | $201,000 |
| David Isaac (General Counsel) | $350,000 | $175,000 |
Management cited the "current economic environment" as the rationale for the immediate salary reductions.
Investor Verification Checklist
- Verify the actual impact of the 50% and 20% salary cuts on the Company's 2020 operating expenses.
- Review the specific ROCE performance hurdles and peer group definitions in the attached PSU Award Agreements (Exhibits 10.1 and 10.2).
- Confirm the total number of shares underlying the RSU and PSU grants based on the March 11, 2020 stock price.
- Assess whether the salary reductions are temporary or permanent for the fiscal year.