Slide 1: Shareholder Outreach
Shareholder Outreach May 2015 © Copyright 2015 McDermott International, Inc. All Rights Reserved
Slide 2: Forward-Looking Statements
Forward-Looking Statements In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, McDermott cautions that statements made in connection with this presentation which are forward-looking, and provide other than historical information, involve risks, cont
Slide 3: Executive Summary
Executive Summary We are one of the largest U.S.-based engineering and construction companies exclusively Our focused on the upstream offshore oil and gas sector Business Model Integrated resources include ~13,800 employees* and a diversified fleet of marine vessels, fabrication facilities and e
Slide 4: About McDermott
About McDermott Industry leader focused on designing and executing complex offshore oil and gas projects worldwide Integrated capabilities offer differentiated solutions to customers Only U.S.-headquartered company with offshore, upstream engineering, procurement, construction and installation
Slide 5: Company Transition Impacted Our Pay Program
Company Transition Impacted Our Pay Program When 2014 compensation decisions were made, our Company had been battling three years of operating in a difficult business environment In Q1 2014, the business had significantly deteriorated as our new CEO stepped in to execute on our turnaround plan
Slide 6: 2014 Compensation Plan Overview
2014 Compensation Plan Overview Element Description Primary Objectives Base Annual fixed cash compensation Attract and retain qualified executives Salary Cash-based compensation Motivate and reward executives for significant Annual Bonus plan is funded based on financial goals contribution
Slide 7: Evolution of Annual Award Program
Evolution of Annual Award Program Our Compensation Program has Evolved to Adapt to Company Transition and Turnaround Threshold Target Maximum Financial 100% Operating Income** $159M $227M $273M Where We Were 2013 Corporate N/A Performance Metrics Individual * Threshold Target Maximum Finan
Slide 8: Evolution of Long-Term Incentive Award Program
Evolution of Long-Term Incentive Award Program Threshold Target Maximum Performance Shares 50% 3-Year ROIC*,** 10% 13% 16% Where We Were 2013 % of Target Earned 50% 100% 150% RSUs 25% Award Composition Stock Options 25% Threshold Target Maximum Performance Shares 40% Cumulative Consoli
Slide 9: Negative Discretion Utilized for 2014 Annual Awards
Negative Discretion Utilized for 2014 Annual Awards 0.15x 1.015x 0.5x 0.5x Annual Incentive Calculated Funding Actual Bonus Pool CEO Award Calculated bonus pool Following the Based on his achievement funding based on 2014 recommendation of of corporate and individual financial performance mana
Slide 10: Additional Compensation-Related Information
Additional Compensation-Related Information CEO Target Pay $7.5M Reasonable CEO Compensation • 2014 Target CEO pay was below the $5.7M $5.9M median of our peers $5.2M • Annual award was reduced by 36% by application of negative discretion • Long-term incentive award was subject to a letter agreeme
Slide 11: Compensation Practices Align Executive Pay with Company and Individual Performance
Compensation Practices Align Executive Pay with Company and Individual Performance What We Do Clawback policy Long-term incentive compensation is subject to forfeiture Annual incentive compensation is subject to linear and capped payouts Use of multiple performance metrics Significant stoc
Slide 12: Thoughtful, Independent Board Provides Strong Oversight at a Critical Time for McDermott
Thoughtful, Independent Board Provides Strong Oversight at a Critical Time for McDermott Best Practices in Corporate Governance Well-Balanced Director Tenure Separate Chairman and CEO roles 3 3 Hold Board meeting executive sessions with independent directors only present 2 Majority vote standa
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