CJ 2018 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS • Companies with a similar Standard Industry Classification code or that are involved in the oil and natural gas services industries; • Companies that are most statistically related to us with similar revenue size and number of employees; • Companies that generally are subject to the same market conditions due to industry affiliation; and • Companies that are tracked similarly or which are considered comparable investments by outside analysts. For purposes of evaluating 2017 compensation, our peer group consisted of the following companies: Archrock, Inc. Newpark Resources, Inc. Basic Energy Services, Inc. Oceaneering International, Inc. Ensco plc Oil States International, Inc. Forum Energy Technologies, Inc. Patterson-UTI Energy, Inc. Helmerich & Payne, Inc. RPC, Inc. Key Energy Services Inc. Superior Energy Services, Inc. McDermott International, Inc. Transocean Ltd. Components of Our 2017 Executive Compensation Program Overview Our 2017 executive compensation program was composed of primarily of base salary, short-term incentives, and long-term incentives, each of which is highlighted in the following chart and described in more detail below. We use base salary as the primary reference point for determining the appropriate target value and calculating the actual value of the STI and LTI awards, individually and in the aggregate, for each Named Executive Officer. Doing so is market practice and assists the Compensation Committee in confirming that our compensation package for Named Executive Officers is appropriate and competitive, with benchmarking to our peer. Component Objective Nature Type Value Determination 2017 Decisions Base Salary Attract and retain talent Only fixed component to provide a base level of competitive compensation when all other elements are variable Cash Reviewed annually, adjusted when appropriate Generally evaluated based on individual’s performance and leadership, time in position and years of service, skills and overall experience, role and scope of responsibilities Also reviewed for internal equity and competitive positioning benchmarked against peers Remained at reduced levels resulting from industry downturn from Q1 of 2016 into Q3 of 2017 Once restored, base salaries generally in line with 50 th percentile of peer group Short-Term Incentives (“STI”) Support our business strategies and motivate performance for the applicable year Fosters a results- driven pay-for-performance culture At risk, performance- based Cash bonus opportunity based on achievement of predetermined performance measures Structure reviewed annually to ensure supports strategy and objectives, including performance metrics, goals and levels C&J’s actual performance is measured against predetermined performance measures and goals to determine earned level of incentive opportunity payout, if any (no payout without achievement of threshold criteria) Established first Short- Term Incentive Plan (“STIP”) with rigorous financial and operational goals for annual cash bonus awards STI target values were generally set to the C&J ENERGY SERVICES, INC. 2018 PROXY STATEMENT 33