CJ 2018 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS The Compensation Committee also determined it was appropriate to significantly revamp the historical composition and mix of the equity awards comprising the long-term incentive component of our executive compensation program. In 2017, performance shares were, for the first time, introduced as part of an intended phased transition to a heavier weighted risk- and performance- based mix of equity awards. These performance shares will be earned, if at all, based on total relative stockholder return (“TSR”) over a three-year performance period. The grant of annual LTI equity awards, which also included restricted stock and stock options for executives, was made in December 2017 (See “—Components of our 2017 Executive Compensation Program—Annual Long-Term Incentive Award—Equity Grant” for more information). To further strengthen the alignment between the interests of our stockholders and that of our executive team, we adopted stock ownership guidelines requiring our CEO to own C&J common stock having a value of at least five times his annual base salary and our other executives to own C&J common stock having a value of at least three times their annual base salary. Pursuant to our stock ownership guidelines, non-employee directors must own C&J common stock having a value of at least five times their annual cash retainer (See “—Components of our 2017 Executive Compensation Program—Stock Ownership Guidelines” for more information). “Say on Pay” and “Say on Frequency” Advisory Votes Prior to 2017, we submitted our executive compensation program to the “Say on Pay” stockholder advisory vote, as required by Section 14A of the Exchange Act, on an annual basis. Due to the impact of our Chapter 11 Proceeding and the terms of our Restructuring Plan, we were not listed on a public exchange at emergence and did not re-list on the NYSE until April 2017. Accordingly, we did not hold an annual stockholders meeting in 2017 and, therefore, the Say on Pay vote was not held in 2017. However, our 2016 executive compensation program was subject to significant scrutiny in the Chapter 11 Proceeding and approved by the interested parties, including substantially all of our stockholders at emergence from the Chapter 11 Proceeding, as described above in “—2017 Overview—Key Considerations and Actions.” We are now submitting our 2017 executive compensation program to a Say on Pay advisory vote, as described in this Proxy Statement under “Proposal No. 2—Advisory Vote to Approve Named Executive Officer Compensation.” We are also providing our stockholders with a right to cast an advisory vote to inform the Company as to how often our stockholders prefer to be able to cast the Say on Pay advisory vote, known as a “Say on Frequency” advisory vote, as described in this Proxy Statement under “Proposal No. 3—Advisory Vote on Frequency of Say on Pay Votes.” After careful consideration, our Board has determined that it is appropriate to conduct the Say on Frequency advisory vote on an annual basis, and has recommended this to our stockholders. As advisory votes, neither the Say on Pay nor the Say on Frequency results are binding on the Company. However, we value the opinions of our stockholders, and we will consider the outcome of these advisory votes when evaluating and setting future executive compensation programs and in determining how often we will submit our executive compensation program to a Say on Pay advisory vote. Based on the factors and reasons explained in this CD&A, the Compensation Committee believes that our current executive compensation program is reasonable and appropriate, links executive pay with the Company’s financial performance, and closely aligns the interests of the Named Executive Officers and our stockholders long term. Summary of Our Compensation Program Objectives and Principles Our compensation program is designed to achieve the following objectives, which we believe are critical to our ongoing growth and success, the creation of long-term value and the realization of competitive stockholder returns: • Attract, develop, motivate and retain talented, experienced and dedicated people by providing compensation packages that are competitive, market driven and in-line with industry practice; • Support our business strategies and motivate best-in-class performance by linking compensation with the achievement of strategic, operational, financial and personal objectives to further incentivize our people; and • Align the interests of our people with those of our stockholders by providing a direct relationship between compensation and Company performance on both a short-term and long-term basis, and rewarding our people for individual and collective effort, contributions and successes. Our compensation policies and practices promote our core values focused on our people, performance and profitability. We value a diverse workforce and empower our employees with the support, tools and opportunities they need to help them achieve their full potential. We are committed to fair and equitable compensation practices and take a consistent and inclusive approach to compensation across all levels of our workforce. We believe that our success depends largely on our ability to attract, develop, motivate and retain highly talented people, which requires a competitive compensation package. We generally seek to target total direct compensation between the 50 th and 75 th percentiles of our compensation peer group. C&J ENERGY SERVICES, INC. 2018 PROXY STATEMENT 29