CJ 2018 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS 2017 was the first year in which we implemented a formal, performance-based STIP for the annual STI cash bonus opportunity, and the Compensation Committee determined it was also appropriate to include, for the first time, performance-based awards as part of the annual LTI equity grant. Given the need to build stock ownership for our executives, the Compensation Committee determined it was appropriate to undertake a phased transition to a heavier weighted risk- and performance-based mix. Looking forward, we expect additional increases to the percentage of performance-based awards in the annual LTI equity grants as our executives achieve sufficient C&J stock ownership. In future years, we expect that a substantial portion of the total direct compensation opportunity for each of our Named Executive Officers will be performance-based. Performance-Based Compensation. The graph below illustrates the overall mix of at-risk compensation, as well as the percentage that is performance-based, delivered to our CEO and other Named Executive Officers for 2017, excluding the Emergence Grant: 11% 29% 60% C&J Energy CEO 2017 Ordinary Pay Mix Base Salary Short-Term Incentive Long-Term Incentive (25% performance) 20% 54% C&J Energy Other NEO 2017 Ordinary Pay Mix Base Salary Long-Term Incentive (23% performance) 26% Short-Term Incentive *Total % Performance-Based Compensation: 54% *Total % Performance-Based Compensation: 49% Special Performance-Based Compensation. The graph below illustrates the overall mix of at-risk compensation, as well as the percentage that is performance-based, delivered to our CEO and other Named Executive Officers for 2017, including the Emergence Grant: 82% C&J Energy CEO 2017 Special Pay Mix 5% Base Salary 9% Base Salary 13% Short-Term Incentive Long-Term Incentive (25% performance) *Total % Performance-Based Compensation: 38% *Total % Performance-Based Compensation: 36% 79% C&J Energy Other NEO 2017 Special Pay Mix 12% Short-Term Incentive Long-Term Incentive (24% performance) C&J ENERGY SERVICES, INC. 2018 PROXY STATEMENT 35