UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549​

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.     )

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under §240.14a-12

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ProPetro Holding Corp.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

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No fee required.

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Fee paid previously with preliminary materials.

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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11

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Strategic Acquisition of Silvertip Completion Services

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Electric Fleet Orders

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Tier IV Dynamic Gas Blending (“DGB”) Fleet Conversions

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​		​	​	OPTIMIZE AND INDUSTRIALIZE	​
​		​	​	CAPITAL LIGHT ASSET TRANSITION	​
​		​	​	STRATEGIC EXECUTION	​

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ProPetro Holding Corp. (NYSE) is a Midland, Texas-based oilfield services company providing hydraulic fracturing, wireline and cementing services to leading upstream oil and gas companies engaged in the exploration and production of North American unconventional oil and natural gas resources. The Company was founded in 2005. In 2010, management strategically focused the Company’s efforts on establishing a best-in-class hydraulic fracturing platform targeting the Permian Basin. Our fleet has been designed to handle the highest-intensity, most complex hydraulic fracturing jobs. By successfully serving some of the largest and most demanding public and private exploration and production (“E&P”) operating companies, we have established ourselves as a premium completion services company.

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2022 BUSINESS HIGHLIGHTS

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Message from Our Chief Executive Officer

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Thanks to the hard work of our team throughout 2022, we have significantly advanced our strategy to industrialize the business, and are confident that ProPetro is well-positioned to execute on the many value-enhancing opportunities ahead in 2023 and beyond.

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LOOKING AHEAD

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2023 ANNUAL MEETING

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Dear Stockholders,

We cordially invite you to attend the 2023 annual meeting of stockholders of ProPetro Holding Corp.

When	​
May 11, 2023 10:00 a.m. Central Time	​

Where	​
2518 FM 307 Midland, Texas 79706	​

Record Date	​
Stockholders who owned our common stock at the close of business on March 20, 2023 are entitled to notice of, and to vote at, the annual meeting, or any continuation, postponement or adjournment thereof.	​

​	​	Items of Business	​	​
​	​	1 Election of nine director nominees to serve for a one-year term ​ 2 Approval, on an advisory basis, of the compensation of our named executive officers ​ 3 Approval of the Amended and Restated Long-Term Incentive Plan (LTIP) ​ 4 Ratification of the appointment of RSM US LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023 ​ 5 Transaction of such other business as may properly come before the meeting ​	​	​

A stockholders’ list will be available at our offices at 1706 S. Midkiff, Midland, Texas 79701 for a period of ten days prior to the meeting. We hope that you will be able to attend the meeting in person.

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​	​	This proxy statement and our 2022 Annual Report on Form 10-K to stockholders are each available at http://www.viewproxy.com/propetro/2023	​	​

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By Order of the Board of Directors, John J. Mitchell General Counsel and Corporate Secretary March 30, 2023

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​	1	​	​	PROXY STATEMENT SUMMARY	​
​	2	​	​	CORPORATE GOVERNANCE AND BOARD MATTERS	​
​	5	​	​	Proposal 1―Election of Directors	​
​	6	​	​	Nominees	​
​	11	​	​	Director Independence	​
​	11	​	​	Board Leadership Structure	​
​	12	​	​	Board of Directors and Risk Oversight	​
​	12	​	​	Sustainability and ESG Initiatives	​
​	13	​	​	Communicating with Our Board of Directors	​
​	14	​	​	Annual Meeting Attendance	​
​	14	​	​	Compensation Committee Interlocks and Insider Participation	​
​	14	​	​	Board and Committee Activity and Structure	​
​	16	​	​	Role of the Board, Compensation Committee and Our Executive Officers	​
​	16	​	​	Role of External Advisors	​
​	17	​	​	Director Nominations Process	​
​	17	​	​	Director Orientation and Education	​
​	18	​	​	Certain Relationships and Related Party Transactions	​
​	19	​	​	Director Compensation	​
​	20	​	​	Non-Employee Director Stock Ownership Guidelines	​
​	21	​	​	EXECUTIVE OFFICERS	​
​	23	​	​	EXECUTIVE COMPENSATION	​
​	23	​	​	Proposal 2―Advisory Vote to Approve Named Executive Officer Compensation	​
​	24	​	​	Compensation Discussion and Analysis	​
​	43	​	​	Report of the Compensation Committee	​
​	44	​	​	Executive Compensation Tables	​
​	44	​	​	Summary Compensation Table	​

​	48	​	​	Grants of Plan-Based Awards Table	​
​	49	​	​	Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table	​
​	49	​	​	Outstanding Equity Awards at Fiscal Year End	​
​	50	​	​	2021 Options Exercises and Stock Vested	​
​	50	​	​	Pension Benefits	​
​	50	​	​	Nonqualified Deferred Compensation	​
​	51	​	​	Potential Payments Upon Termination or Change in Control	​
​	57	​	​	Pay Versus Performance	​
​	60	​	​	CEO Pay Ratio	​
​	69	​	​	Equity Compensation Plan Information	​
​	61	​	​	Proposal 3―Approval of The Amended and Restated Long-Term Incentive Plan	​
​	70	​	​	AUDIT MATTERS	​
​	70	​	​	Proposal 4―Ratification of Appointment of Independent Registered Public Accounting Firm	​
​	72	​	​	Auditor Fees for Fiscal Years 2022 and 2021	​
​	72	​	​	Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent Registered Public Accounting Firm	​
​	72	​	​	Report of the Audit Committee	​
​	74	​	​	STOCK OWNERSHIP INFORMATION	​
​	74	​	​	Security Ownership of Certain Beneficial Owners and Management	​
​	76	​	​	ADDITIONAL INFORMATION	​
​	76	​	​	Information about the Annual Meeting and Voting	​
​	81	​	​	Information about Stockholder Proposals	​
​	81	​	​	Annual Report on Form 10-K	​
​	82	​	​	Other Matters	​
​	A-1	​	​	APPENDIX A—AMENDED AND RESTATED LTIP	​

The following section is only a summary of key elements of this proxy statement, and is intended to assist you in reviewing this proxy statement in advance of the 2023 annual meeting. This summary does not contain all of the information you should consider, and you are encouraged to read this entire proxy statement before submitting your votes.

2023 Annual Meeting

Director Nominees

The Board of Directors (the “Board”) has nominated the nine director nominees shown below for a one-year term.

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Proxy Statement Summary

Corporate Governance Highlights

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Proxy Statement Summary

Our nine directors nominated for reelection at the 2023 annual meeting comprise a well-balanced Board.

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Proxy Statement Summary

Environmental, Social and Governance Highlights

2022 Performance Highlights

During 2022, we improved upon our outstanding performance in 2021, by, again, realizing excellent operational efficiencies, enhancing our commercial architecture, and continuing our fleet transition to natural gas powered equipment. Additionally, we executed on our strategy of making accretive acquisitions and driving value through a focus on completions services with our acquisition of Silvertip Completion Services, which established our wireline operating segment and service offering. Accordingly, we generated $1.3 billion in revenue and $300 million of operating cash flow. Our operations continue to be focused almost entirely in the Permian Basin, where our pressure pumping and wireline footprint exists. Our team was able to accomplish these achievements amid continued dynamic market conditions. Moreover, our reputation for providing high-quality service and our sustained performance for customers resulted in continuing strong demand for our services. As a result, the Company averaged 14.5 effectively utilized fleets in 2022. These achievements are a function of our employees’ commitment to excellence in efficient operations and safety.

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At the 2023 annual meeting, nine directors are to be elected. All nominees are currently directors. Each director is to hold office until the next annual meeting of stockholders or until his or her successor is elected and qualified. Directors hold office until their successors have been elected or qualified or until their earlier death, resignation, removal, or disqualification.

The nominees have consented to being nominated and have expressed their intention to serve if elected. We believe that the nominees possess the professional and personal qualifications necessary for board service and have highlighted particularly noteworthy attributes for the nominees in their biographies below. We have no reason to believe that the nominees will be unable to serve if elected to office, and, to our knowledge, the nominees intend to serve the entire term for which election is sought. In the event any of the nominees should become unable to serve, or for good cause will not serve, as a director, it is intended that votes will be cast for a substitute nominee designated by the Board or the Board may elect to reduce its size. Only the nominees or substitute nominees designated by the Board will be eligible to stand for election as directors at the meeting.

Our Nominating and Corporate Governance Committee did not nominate Alan E. Douglas for reelection as a director. Accordingly, Mr. Douglas is not included as a nominee for election at the 2023 annual meeting and his current term will expire at the 2023 annual meeting. Following the 2023 annual meeting, our authorized number of directors will be reduced to nine.

In 2018, we entered into an investor rights agreement (the “Investor Rights Agreement”) with an affiliate of Pioneer Natural Resources Company (“Pioneer”) that provides Pioneer certain rights to designate nominees for election to the Board. Under the Investor Rights Agreement, Pioneer was granted:

(i)

the one-time right to designate an independent director to the Board and

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(ii)

the right to designate a non-independent director to the Board for so long as a certain affiliate of Pioneer owns 5% or more of our outstanding common stock.

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Pioneer has designated Mark S. Berg as the non-independent director and has no further rights to designate an independent director to the Board.

The proposal regarding the election of directors requires the approval of a plurality of the votes cast. This means that the nine nominees receiving the highest number of affirmative “FOR” votes will be elected as directors. Votes withheld and broker non-votes are not considered to be votes cast and, accordingly, will have no effect on the outcome of the vote on this proposal.

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Corporate Governance and Board Matters

Nominees

All of the current members of the Board being nominated for reelection at the 2023 annual meeting are listed in the following table, and certain information concerning those directors follows the table:

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(1)

Chairman of the Board

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(2)

Chief Executive Officer

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(3)

Lead Independent Director

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Corporate Governance and Board Matters

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Corporate Governance and Board Matters

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Corporate Governance and Board Matters

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Corporate Governance and Board Matters

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Corporate Governance and Board Matters

Director Independence

Based on information provided by the director nominees concerning their background, employment and affiliations, our Board has determined that these directors do not have a material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company). In making this determination, our Board considered the current and prior relationships that each of the directors has with us, and all other facts and circumstances our Board deemed relevant in determining independence, including any beneficial ownership of our capital stock by each of the directors.

Board Leadership Structure

Our Board has adopted our Corporate Governance Guidelines, which are available on our website, www.propetroservices.com, in the “Corporate Governance” subsection of the “Investors” section. Our Corporate Governance Guidelines provide that if the Chairman of the Board is a member of management or does not otherwise qualify as independent, the independent directors may elect a lead independent director. Our Board believes it is important to retain the flexibility to determine whether the roles of Chairman and Chief Executive Officer should be separated or combined depending on the circumstances and changing needs of the Company from time to time.

While our Board has previously combined the roles of Chairman and Chief Executive Officer, at present, the Board has chosen to separate the positions of Chairman and Chief Executive Officer. The Board believes this structure enhances corporate governance and allows each of our Chairman and Chief Executive Officer to remain focused on their distinct roles, which, for the Chairman, primarily involves Board and corporate governance and, for the Chief Executive Officer, primarily involves day-to-day management leadership and implementing our corporate strategy.

Although the roles of Chairman and Chief Executive Officer are currently separated, the Chairman previously served as a member of management and does not currently qualify as independent. As such, the Board believes the role of Lead Independent Director enhances independent oversight of the Company and that Mr. Best should continue to serve as the Lead Independent Director. In this capacity Mr. Best provides, in conjunction with the Chairman, leadership and guidance to the Board. The Lead Independent Director responsibilities are as follows:

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Preside over all meetings of the Board at which the Chairman of the Board is not present, including any executive sessions of the independent directors

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Approve Board meeting schedules and agendas

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Act as the liaison between the independent directors and the Chairman of the Board

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Communicate the Chief Executive Officer’s annual evaluation and compensation, after approval of the Compensation Committee

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Interested parties who wish to communicate with the Board, its committees, the Chairman, the Lead Independent Director, or any other individual director should follow the procedures described below under “Communication with our Board of Directors.”

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Corporate Governance and Board Matters

To facilitate candid discussion among the Company’s directors, the non-management directors meet at regularly scheduled executive sessions presided over by our Chairman. In addition, at least once a year, the non-management directors who are independent under NYSE listing standards meet in executive session presided over by the Lead Independent Director, in conjunction with a regular board meeting.

Board of Directors and Risk Oversight

In the normal course of business, we are exposed to a variety of risks, including market risks relating to changes in commodity prices, interest rates, political risks and credit and investment risks. The Board oversees our strategic direction and in doing so considers the potential rewards and risks of our business opportunities and challenges and monitors the development and management of risks that impact our strategic goals. The Audit Committee assists the Board in fulfilling its oversight responsibilities by monitoring the effectiveness of our systems of financial reporting, auditing, internal controls and legal and regulatory compliance. The Nominating and Corporate Governance Committee assists the Board in fulfilling its oversight responsibilities with respect to the management of risks associated with Board organization, membership and structure, succession planning for our directors and executive officers, and corporate governance. The Compensation Committee assists the Board in fulfilling its oversight responsibilities by overseeing our compensation policies and practices. The Board does not believe that its role in the oversight of our risks affects the Board’s leadership structure.

Sustainability and ESG Initiatives

At ProPetro, our fundamental policy is to conduct business with honesty and integrity in accordance with the highest legal and ethical standards, along with a daily focus on safety and quality. Guided by these values, we pursue the pillars of our strategy—(1) optimizing operations and industrializing our business; (2) pursuing a more capital-light asset profile and next generation fleet by developing and integrating innovative technologies; (3) pursuing opportunistic strategic transactions to accelerate value creation and distribution; and (4) maintaining a strong balance sheet. Our strategic approach is designed to support ProPetro’s core goals of generating robust earnings, increasing free cash flow, and building towards enhanced shareholder returns. Achievement of these strategic objectives is a key to our long-term success, and our sustainability and environmental, social, and governance (“ESG”) initiatives are designed to support and enhance our pursuit of these goals.

In 2022, the Company focused on several core sustainability and ESG goals to support our corporate strategy and the continued development of our employees. We believe that the future of the oilfield and the success of businesses in the oilfield services sector will grow from the successful integration of a cohesive and more environmentally friendly supply chain, which allows E&P and oilfield service companies to produce hydrocarbons in the safest and most efficient manner possible. We believe our services play a vital role in the broader energy value chain by meaningfully contributing to the delivery of low-cost, dependable energy to end users and that our sustainability and ESG initiatives will enable us to continue to do so for years to come.

As part of our sustainability and ESG initiatives, we aim to reduce the overall environmental impact of our services by focusing on excellent execution and superior service quality. We believe that a lower emissions profile is not only vital to aid in our competitiveness but it is also a crucial component in deploying the innovative tools necessary to support our customers’ efforts to be capital efficient while respecting the communities in which we work. We seek to meet our customers’ needs while also pursuing a consistent, sustainable service solution that will increasingly replace diesel with cleaner burning and cost-advantaged fuels. With continued, significant investments in and the successful deployment of five fleets of Tier IV DGB, dual-fuel equipment, 2022 was a milestone in our approach to enhance our service offerings and reduce the carbon footprint of our operations. Integrating cleaner burning fuel sources, such as natural gas, is important to optimizing fuel consumption on our worksites.

In addition to investing in our Tier IV DGB service offering, we remained focused on the next generation of technology by working with our customers to evaluate electric powered hydraulic fracturing equipment and other pumping innovations. This work culminated in the execution of our strategic long-term lease agreement through which we have agreed to acquire four electric frac fleets with expected delivery through the second half of 2023. We believe this strategically important technology will help advance our customers’ efforts to reduce costs and greenhouse gas emissions, while enhancing our competitiveness and free cash flow profile. Further, the lease agreement was in line with our strategic plan of transitioning to emissions-friendly services in a capital efficient manner.

As a key initiative in 2022, we built on the preliminary emissions study conducted in 2021 to develop a Scope 1 and Scope 2 emissions profile for our business, which we plan to utilize to better understand and optimize our operations. More details on our progress in this area will be disclosed in 2023 through the publication of our inaugural sustainability report.

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Corporate Governance and Board Matters

An additional focus of our sustainability and ESG initiatives is to give back to the area where we live and work by providing employment and supporting and encouraging our employees to commit to safety and investing in our community. We aspire to play a role in shaping the future of the Permian Basin by investing in education, donating to first responders and veterans, supporting health and wellness related organizations, and focusing on charities that support local children. We do this through various charities and other organizations that are heavily involved in the Permian Basin communities. Our employees created the P.U.M.P. committee to drive their humanitarian endeavors through wellness events, monthly events with a local foodbank, quarterly blood drives, Thanksgiving meal drives, school supply donation drives, and other important initiatives.

Additionally, in 2022, the Company sponsored our initial signature community event—Don’t Mess with the Permian—a community-wide trash pickup event, which resulted in the participation of more than 220 volunteers working over 400 hours and collecting approximately 5.85 tons of trash from local roadways, schools and public areas. We are excited to build on this success in 2023.

2022 also saw increased investment in our employee base as we invested in new training resources and systems and commenced a leadership training initiative across all functions to support the enhancement of over 250 of our existing managers and senior leaders along with a class of developing leaders.

Our safety record substantiates the close collaboration between our customers and our employees in completing each job safely. We pride ourselves on our commitment to safety and our commitment to each other, which we demonstrate and support through operational initiatives like our dedicated heavy haul team to reduce driving hazards; our culture of training, accountability, and consistent improvement; and our long-term relationships with teammates, customers and stakeholders.

Additional information and updates regarding our sustainability and ESG initiatives can be found under the “Sustainability” tab of our website at www.propetroservices.com.

Communicating with Our Board of Directors

Stockholders and other interested parties may communicate with our Board by writing to:

Stockholders may submit their communications to the Board, the independent directors, any committee of the Board or individual directors on a confidential or anonymous basis by sending the communication in a sealed envelope marked “Stockholder Communication with Directors” and clearly identifying the intended recipient(s) of the communication.

Our General Counsel and Corporate Secretary will review each communication and will forward the communication, as expeditiously as reasonably practicable, to the addressees if:

(1)

the communication complies with the requirements of any applicable policy adopted by the Board relating to the subject matter of the communication and

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(2)

the communication falls within the scope of matters generally considered by the Board.

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To the extent the subject matter of a communication relates to matters that have been delegated by the Board to a committee or to an executive officer of the Company, our General Counsel and Corporate Secretary may forward the communication to the executive officer or chairman of the committee to which the matter has been delegated. The acceptance and forwarding of communications to the members of the Board or an executive officer does not imply or create any fiduciary duty of the Board members or executive officer to the person submitting the communications.

Information may be submitted confidentially and anonymously. However, the Company may be obligated by law to disclose the information or identity of the person providing the information in connection with government or private legal actions and in other circumstances. The Company’s policy is not to take any adverse action, and not to tolerate any retaliation against any person for asking questions or making good faith reports of possible violations of law, our policies or our Code of Ethics & Conduct.

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Corporate Governance and Board Matters

Annual Meeting Attendance

While the Company does not have a specific policy about director attendance at annual meetings of stockholders, all directors are expected to attend meetings of the Board (and any committees thereof on which they serve) either in person or telephonically unless exigencies prevent them from attending. Each incumbent director, with the exception of Ms. Ricciardello, who was not appointed until January 2023, attended at least 75% of the aggregate of   (1) the total number of meetings of the Board (held during the period for which he or she has been a director) and (2) the total number of meetings of committees of the Board on which he or she served (during the periods that he or she served). Our non-employee directors meet at regularly scheduled executive sessions presided over by our Lead Independent Director. Additionally, our independent directors meet at least once a year without members of management or non-independent directors present. All of our directors who were members of the Board at the time of our 2022 annual meeting of stockholders attended the meeting.

Compensation Committee Interlocks and Insider Participation

During the year ended December 31, 2022, the Compensation Committee was comprised of Ms. Vion and Messrs. Moore and Best. Ms. Vion serves as committee chair. No executive officer of the Company served as a member of the board of directors or compensation committee of any other entity that has one or more executive officers serving as a member of our Board or Compensation Committee.

Board and Committee Activity and Structure

Our Board is governed by our certificate of incorporation, bylaws, the Investor Rights Agreement, charters of the standing committees of the Board, and the laws of the State of Delaware.

On December 31, 2018, we entered into the Investor Rights Agreement with an affiliate of Pioneer. The Investor Rights Agreement provides that Pioneer was granted:

(i)

the one-time right to designate an independent director to the Board and

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(ii)

the right to designate a non-independent director to the Board for so long as Pioneer owns 5% or more of the Company’s outstanding common stock.

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Pioneer has designated Mark S. Berg as the non-independent director and has no further rights to designate an independent director to the Board.

During 2022, our Board held seven meetings. There are currently three standing committees of the Board:

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the Audit Committee,

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the Compensation Committee, and

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the Nominating and Corporate Governance Committee.

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Members serve on these committees until their resignation or until as otherwise determined by our Board. The composition of the Board committees complies with the applicable rules of the NYSE and applicable law. Our Board has adopted a written charter for each of the standing committees, which can be found in the “Corporate Governance” subsection of the “Investors” section of our website at www.propetroservices.com.

In addition to the above governing documents, our Code of Ethics & Conduct that applies to all of our employees, as well as each member of the Board, can also be found in the “Corporate Governance” subsection of the “Investors” section of our website at www.propetroservices.com. The composition and responsibilities of each of the standing committees of our Board are as follows:

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Corporate Governance and Board Matters

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Corporate Governance and Board Matters

Role of the Board, Compensation Committee and Our Executive Officers

Executive compensation decisions are typically made on an annual basis by the Compensation Committee with input from our Chief Executive Officer. Specifically, after reviewing relevant market data and surveys within our industry, our Chief Executive Officer typically provides recommendations to the Compensation Committee regarding the compensation levels for our existing named executive officers and our executive compensation program as a whole. Our Chief Executive Officer generally attends all Compensation Committee meetings. After considering these recommendations, the Compensation Committee typically meets in executive session and adjusts base salary levels and non-equity award targets. In addition, the Compensation Committee determines the achievement of non-equity Incentive Award Plan metrics and the amount of equity awards from the Incentive Award Plan to be granted to each of our named executive officers. In making executive compensation recommendations, our Chief Executive Officer considers each named executive officer’s performance during the year, the Company’s performance during the year, as well as comparable company compensation levels. While the Compensation Committee gives considerable weight to our Chief Executive Officer’s recommendations on compensation matters, the Compensation Committee has the final decision-making authority on all executive compensation matters.

Role of External Advisors

The Compensation Committee engaged Pearl Meyer & Partners, LLC (“Pearl Meyer”) in 2021 to assist the Compensation Committee and the Board in evaluating, designing and implementing compensation practices.

The Compensation Committee reviews and assesses the independence and performance of its executive compensation consultant in accordance with applicable SEC and NYSE rules and regulations on an annual basis to confirm that the consultant is independent and meets all applicable statutory and regulatory requirements.

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Corporate Governance and Board Matters

Director Nominations Process

The Nominating and Corporate Governance Committee may utilize a variety of methods for identifying potential nominees for directors, including considering potential candidates who come to their attention through current officers, directors, professional search firms or other persons. Once a potential nominee has been identified, the Nominating and Corporate Governance Committee evaluates whether the nominee has the appropriate skills and characteristics required to become a director in light of the then current make-up of the Board. This assessment includes an evaluation of the nominee’s judgment and skills, such as experience at a strategy/policy setting level, financial sophistication, leadership and objectivity, all in the context of the perceived needs of the Board at that point in time. One of the director nominees, Mr. Berg, was not recommended for nomination by the Nominating and Corporate Governance Committee but rather was appointed pursuant to the Investor Rights Agreement.

In February 2019, the Board amended our Corporate Governance Guidelines to specifically take the diversity of a potential director nominee’s gender, race, and ethnicity into account when considering candidates for the Board, and the Nominating and Corporate Governance Committee and the Board are committed to increasing Board diversity. Our Board believes that at a minimum all members of the Board should have the highest professional and personal ethics and values. In addition, each member of the Board must be committed to increasing stockholder value and should have enough time to carry out his or her responsibilities as a member of the Board.

Our Board monitors the mix of specific experience, qualifications, and skills of its directors in order to assure that the Board, as a whole, has the necessary tools to perform its oversight function effectively in light of the Company’s business and structure.

Stockholders may recommend individuals to the Nominating and Corporate Governance Committee for consideration as potential director candidates by submitting the names of the recommended individuals, together with appropriate biographical information and background materials, to:

In the event there is a vacancy, and assuming that appropriate biographical and background material has been provided on a timely basis, the Nominating and Corporate Governance Committee will evaluate stockholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates submitted by others.

Director Orientation and Education

We provide each new director with an orientation that consists of meeting with senior management and others on our business operations, strategic plans, significant accounting and risk management issues, corporate governance, compliance, and key policies and practices.

The orientation sessions are tailored to the particular director depending on their orientation needs and generally include an overview of board fiduciary duties, board independence and public company reporting requirements. New directors are also provided the most recent reports presented to the Board and its committees by management and external advisors.

Each director is expected to participate in continuing educational programs as necessary to maintain the expertise necessary to perform his or her responsibilities as a director. In this regard, from time to time we provide pertinent articles, white papers, and information relating to our business, financial affairs, risks, competitors, corporate governance, areas of focus in shareholder activism, ESG trends, proxy advisory firm ratings, and changes in legal and regulatory issues.

We may also coordinate training and educational sessions for directors from outside experts and provide directors with tours of our facilities from time to time.

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Corporate Governance and Board Matters

Certain Relationships and Related Party Transactions

Operations and Maintenance Yards

The Company also rents five yards from South Midkiff Partners, LLC, an entity partially owned by Spencer D. Armour III (a director) and David Sledge, the father of Sam Sledge, our Chief Executive Officer. Total annual rent expense in 2022 for each of the five yards was approximately $0.03 million, $0.03 million, $0.1 million, $0.1 million, and $0.2 million, respectively.

Transportation and Equipment Rental

Adam Muñoz, our President and Chief Operating Officer, has a family relationship with an employee of J&M Burns Transportation, an entity that provides transportation services to the Company. The employee receives a portion of his compensation from J&M Burns Transportation based on the amount of services sold by him to customers, including the Company. The Company incurred approximately $36.8 million in expense for the year ended December 31, 2022 for services provided to the Company by J&M Burns Transportation.

Executive Officer Family Members

J. Oscar Dominguez is our former Vice President of Frac Technical Services and the father-in-law of Adam Muñoz. Mr. Dominguez received total compensation of approximately $2.1 million for his services for the year ended December 31, 2022 (including $459,000 cash compensation, $286,000 non-cash equity compensation, $1.3 million cash as a severance payment and $15,000 cash payout for accrued paid time off).

Oscar M. Dominguez is our Vice President of Frac Operations and the brother-in-law of Adam Muñoz. Mr. Dominguez received total compensation of approximately $1.1 million for his services for the year ended December 31, 2022 (including $781,000 cash compensation and $276,000 non-cash equity compensation).

Roger Dominguez is our Supply Chain Logistics Manager and the brother-in-law of Adam Muñoz. Mr. Dominguez received total compensation of approximately $312,000 for his services for the year ended December 31, 2022 (including $260,000 cash compensation and $52,000 non-cash equity compensation).

Pioneer

On December 31, 2018, we consummated the purchase of certain pressure pumping assets and real property in connection with the Pioneer Pressure Pumping Acquisition. In connection with the consummation of the Pioneer Pressure Pumping Acquisition and effective January 1, 2019, we became a long-term service provider to Pioneer, providing pressure pumping and related services. In March, 2022, we amended and restated our agreement to provide pressure pumping and related services to Pioneer, which reduced the number of contracted fleets to six fleets from eight fleets, modified the pressure pumping scope of work and pricing mechanism for contracted fleets, replaced the idle fees arrangement with equipment reservation fees and provided for an initial term from January 1, 2022 through December 31, 2022, subject to extension and termination as described therein. On October 31, 2022, we entered into (i) a certain Pressure Pumping Services Agreement—Fleet One Simulfrac (the “Fleet One Pressure Pumping Agreement”) and (ii) a certain Pressure Pumping Services Agreement—Fleet Two (the “Fleet Two Pressure Pumping Agreement”), which replaced all previous agreements with Pioneer and reduced the number of contracted fleets to two fleets. The Fleet One Pressure Pumping Agreement is effective as of January 1, 2023 and will terminate on August 31, 2023 and is subject to certain extension, termination and release rights as described therein. The Fleet Two Pressure Pumping Agreement is effective as of January 1, 2023. In February 2023, we mutually agreed with Pioneer to terminate the Fleet Two Pressure Pumping Agreement, effective on or about May 12, 2023. Revenue from services provided to Pioneer (including reservation fees) accounted for approximately $422.8 million during the year ended December 31, 2022.

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Corporate Governance and Board Matters

Any request for us to enter into a transaction with an executive officer, director, principal stockholder or any of such persons’ immediate family members or affiliates, among others, in which the amount involved exceeds $120,000, must first be presented to our Audit Committee for review, consideration and approval. All of our directors and executive officers are required to report to the Audit Committee chair any such related person transaction. In approving or rejecting the proposed agreement, our Audit Committee shall consider the facts and circumstances available and deemed relevant to the Audit Committee, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party, the extent of the related party’s interest in the transaction and the conflicts of interest and corporate opportunity provisions of our certificate of incorporation. If we should discover related person transactions that have not been approved, the Audit Committee will be notified and will determine the appropriate action, including ratification, revision or termination of such transaction.

Director Compensation

Our Amended and Restated ProPetro Holding Corp. Non-Employee Director Compensation Policy (the “Director Compensation Policy”) provides that each eligible non-employee director receives the following:

All equity retainers consist of awards of restricted stock units (“RSUs”) that will vest in full on the earliest to occur of: (i) the first anniversary of the grant date, (ii) the day immediately preceding the first annual meeting of stockholders following the grant date, and (iii) the occurrence of a Change in Control, subject, in each case, to continuous service through the applicable vesting date.

The portion of the annual equity retainer that would have vested in the year following a non-employee director’s separation from service due to his or her death or disability will vest upon such separation from service. All annual retainers are pro-rated based on days of service for non-employee directors who join the Board during the applicable calendar year. The members of the Board are also entitled to reimbursement of expenses incurred in connection with attendance at Board and committee meetings in accordance with Company policy.

The following table summarizes the compensation paid for services provided by our non-employee directors during 2022. Mr. Gobe’s compensation paid for services provided as a non-employee director is summarized in the table entitled “Executive Compensation—Summary Compensation Table.”

​

(1)

Reflects annual cash retainer payments made pursuant to the Director Compensation Policy.

​

(2)

Reflects the grant date fair value of RSU awards on the date of grant computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”). For information

​

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Corporate Governance and Board Matters

regarding assumptions underlying the valuation of equity awards, see Note 13 to the Consolidated Financial Statements included in our 2022 Annual Report on Form 10-K.

(3)

Mr. Berg has elected not to be compensated for his service as a director.

​

The following table sets forth the aggregate number of outstanding stock awards held by each of our non-employee directors on December 31, 2022. With the exception of Mr. Sledge who held 21,750 stock options as of December 31, 2022, none of our directors held stock options as of December 31, 2022. The aggregate number of Mr. Gobe’s outstanding awards is included in the table entitled “Executive Compensation—Outstanding Equity Awards at Fiscal Year End.”

​

(1)

Mr. Berg has elected not to be compensated for his service as a director.

​

Non-Employee Director Stock Ownership Guidelines

We maintain a non-employee director stock ownership policy that is applicable to all of our eligible non-employee directors. Pursuant to this policy, each non-employee director is encouraged to hold, on and following the later of the fifth anniversary of: (i) the closing of our initial public offering (“IPO”) and (ii) the non-employee director’s election or appointment to the Board, shares of our common stock or certain equity awards (valued based on the closing price of our common stock) with a value equal to or in excess of 300% of the non-employee director’s annual cash retainer, as such threshold may be amended by the Nominating and Corporate Governance Committee from time to time.

Outstanding awards of unvested time-based RSUs will count toward a non-employee director’s qualifying shareholdings to the extent the RSUs are not settled in cash. A non-employee director who is not compensated for his or her services as non-employee director pursuant to the Director Compensation Policy or any other plan, policy or agreement then in effect is not subject to the guidelines set forth in our director stock ownership policy.

As of December 31, 2022, each of our non-employee directors was in compliance with these ownership guidelines. The stock ownership guidelines do not apply to Mr. Berg since he does not receive compensation for his services as a non-employee director. A description of each non-employee director’s beneficial ownership of the Company’s common stock is included in the section entitled “Security Ownership of Certain Beneficial Owners and Management.”

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Our executive officers serve at the direction of our Board. All of our executive officers and certain other key officers are listed in the following table, and certain information concerning those officers, except for Mr. Sledge, who is a member of the Board, follows the table.

​

(1)

Mr. Omavuezi is a key officer but does not serve as an executive officer of the Company. He has served as the Chief Accounting Officer since 2019.

​

See “Corporate Governance and Board Matters—Nominees” for biographical information for Mr. Sledge.

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Executive Officers

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We are asking stockholders to approve, on a non-binding advisory basis, the compensation of our Named Executive Officers as disclosed in this proxy statement. As described below in “Compensation Discussion and Analysis,” the Compensation Committee has structured our executive compensation program to achieve the following guiding principles:

•

Reward executives for exceptional performance and hold them accountable for poor performance in a manner that adheres to our values

​

•

Align executive interests with those of our stockholders by making a substantial portion of compensation performance-based and “at risk”

​

•

Provide the necessary flexibility to respond to varying market conditions and changing circumstances with a structure that ensures accountability in our cyclical and volatile business

​

•

Remain competitive in our industry in order to attract, retain, and motivate the talent that is necessary to achieve our financial and strategic goals

​

•

Be internally consistent and equitable

​

We urge stockholders to read the section entitled “Compensation Discussion and Analysis” beginning on page 24 of this proxy statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the compensation tables and narrative included therein beginning on page 44, which provide detailed information on the compensation of our Named Executive Officers. The Compensation Committee and the Board believe that the policies and procedures articulated in the “Compensation Discussion and Analysis” are effective in achieving our goals and that the compensation of our Named Executive Officers reported in this proxy statement has and will contribute to the Company’s recent and long-term success.

In accordance with Section 14A of the Exchange Act, and as a matter of good corporate governance, we are asking stockholders to approve the following resolution at the annual meeting:

RESOLVED, that the stockholders of the Company approve, on a non-binding advisory basis, the compensation of the Company’s Named Executive Officers as disclosed in the Compensation Discussion and Analysis section and the related compensation tables, notes and narrative in the proxy statement for the Company’s 2023 annual meeting.

This advisory resolution, commonly referred to as a “say-on-pay” resolution, is non-binding on the Board. Although non-binding, the Board and the Compensation Committee will review and consider the voting results when making future decisions regarding our executive compensation program.

The affirmative “FOR” vote of the holders of a majority of the shares represented at the meeting (in person or by proxy) and entitled to vote is required to approve this Proposal No. 2. Brokers do not have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal. Abstentions and broker non-votes will have no effect on Proposal No. 2.

We currently intend to hold the next non-binding advisory vote to approve the compensation of our Named Executive Officers at our 2024 annual meeting of stockholders, unless our Board modifies its policy of holding this vote on an annual basis.

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Executive Compensation

Compensation Discussion and Analysis

CD&A Contents

​	25	​	​	I. EXECUTIVE COMPENSATION HIGHLIGHTS ​	​
​	25	​	​	Named Executive Officers for 2022	​
​	25	​	​	2022 Company Performance	​
​	25	​	​	Successful Execution of Our Leadership Succession Plan	​
​	26	​	​	Fleet Transition Investments, Strategic Growth and ESG Advancement	​
​	27	​	​	Guiding Principles	​
​	27	​	​	Performance-Based Compensation Philosophy	​
​	28	​	​	Compensation Policies and Practices	​
​	28	​	​	Say on Pay Advisory Vote	​
​	29	​	​	II. WHAT GUIDES OUR PROGRAM ​	​
​	29	​	​	Philosophy and Guiding Principles of Our Compensation Program	​
​	30	​	​	How We Make Compensation Decisions	​
​	31	​	​	Use of Peer Compensation Data	​

​	32	​	​	III. ELEMENTS OF COMPENSATION AND 2022 DECISIONS IN DETAIL ​	​
​	33	​	​	Base Salary	​
​	33	​	​	Annual Cash Incentive Awards	​
​	37	​	​	Long Term Incentive Awards	​
​	38	​	​	Employee Benefits, Perquisites and Special Payments	​
​	39	​	​	IV. OTHER COMPENSATION PRACTICES, POLICIES AND GUIDELINES ​	​
​	39	​	​	Succession and Additional Agreements	​
​	40	​	​	Executive Severance Plan	​
​	41	​	​	Employee Compensation Claw-Back Policy	​
​	41	​	​	Executive Stock Ownership Policy	​
​	41	​	​	Prohibition on Hedging and Pledging	​
​	42	​	​	No Tax Gross-Ups	​
​	42	​	​	Regulatory Considerations	​
​	42	​	​	Compensation Risk Assessment	​

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Executive Compensation

This Compensation Discussion and Analysis (“CD&A”) describes our compensation practices and the compensation awarded to, earned by, or paid to each of our named executive officers (the “Named Executive Officers”) during the last completed fiscal year.

Named Executive Officers for 2022

For the year ended December 31, 2022, our Named Executive Officers consisted of the following:

2022 Company Performance

Successful Execution of Our Leadership Succession Plan

The Board and the Compensation Committee have built and seamlessly executed a strong and successful succession plan for the Company over the last several years.

On August 31, 2021, years of succession planning by the Compensation Committee and the Board came to fruition when Samuel D. Sledge, previously President, was appointed as Chief Executive Officer and Adam Muñoz, previously Chief Operating Officer, was appointed as President and Chief Operating Officer of the Company. Phillip A.

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Executive Compensation

Gobe, who preceded Mr. Sledge as Chief Executive Officer, continued to support the Company and Mr. Sledge in the role of Executive Chairman of the Board until March 31, 2022, when he resigned from that position. Mr. Gobe has continued his service with the Company as the non-executive Chairman of the Board.

Effective as of December 31, 2022, Newton W. Wilson III retired from the Company and resigned from his positions as General Counsel and Corporate Secretary of the Company. Effective January 1, 2023, John J. Mitchell was appointed to succeed Mr. Wilson as General Counsel and Corporate Secretary. Mr. Mitchell has over a decade of in-house legal experience at companies in the energy industry in Texas. Prior to his appointment, Mr. Mitchell served as Vice President and Deputy General Counsel of the Company, during which time he gained a deep knowledge of our business and became an integral member of our team. The Board, the Compensation Committee, and Mr. Wilson identified Mr. Mitchell as a strong candidate for succeeding to the role of General Counsel and Corporate Secretary at the time of his hiring in April of 2021. As a result, the Company provided Mr. Mitchell with increasing responsibility and leadership opportunities over the course of his tenure in that role, ensuring a smooth transition to his new role and a successful execution of the Company’s succession plan.

Fleet Transition Investments, Strategic Growth and ESG Advancement

For 2022, the Compensation Committee structured the performance metrics for the Amended and Restated ProPetro Holding Corp. Executive Incentive Bonus Plan (the “Annual Bonus Plan”) to align with and incentivize the Company’s strategic fleet transition initiatives. The Company’s business plan for 2022 included a significant reinvestment cycle as the Company sought to revitalize its legacy fleet and undertake meaningful investments to acquire and deploy next generation Tier IV DGB and electric fleet equipment in order to allow the Company to provide a more competitive and sustainable service offering for its customers. The Compensation Committee therefore structured the Annual Bonus Plan metrics to allow the Company’s executives to focus on important long-term and revenue generating capital investments and improvements while motivating the executives to continue to protect the balance sheet.

The implementation of these goals resulted in Annual Bonus Plan metrics that focused on growing the Company’s Adjusted EBITDA by increasing the weighting of this metric from 40% to 50% and increasing target level achievement by over 50% from the 2021 target and by over 85% from the Company’s actual performance in 2021. By setting an aggressive target for the Adjusted EBITDA metric, the Company’s executives would be incentivized to grow earnings to support the necessary capital investments. Additionally, to further strengthen the focus on and accountability for protecting the Company’s balance sheet during this reinvestment period, the Compensation Committee elected to retain the free cash flow (“FCF”) metric that had been originally instituted in the 2021 plan. Due to the strategic investments planned for 2022, the Committee rebalanced the weighting of the Adjusted EBITDA and FCF metrics and set the achievement goals as necessary to align with the Company’s plan. The definitions of Adjusted EBITDA and FCF and other details regarding the use of these metrics in the Annual Bonus Plan can be found in Section III under the discussion of Annual Cash Incentive Awards in the description of Performance Measures and Payout Results beginning on page 33 below.

After initially instituting specific sustainability and ESG compensation metrics in the 2021 plan, the 2022 Annual Bonus Plan was designed to include specific metrics that were tailored to align with the Company’s strategic initiatives, with a focus on the following:

•

Identify, organize, and prepare to report on the Company’s greenhouse gas emissions profile,

​

•

Align with the Company’s business objectives for fleet transition and strategic customer contracts,

​

•

Provide for continued development of the Company’s employee base and current and future leaders through training on ESG and personal development topics, and

​

•

Increase community involvement through a Company-sponsored initiative and policy implementation to facilitate individual employee community engagement.

​

In addition, the Compensation Committee evaluated the treatment of the Company’s strategic acquisition of Silvertip Completion Services (“Silvertip”), which was executed in 2022, and decided that because the acquisition was completed in November 2022, the Adjusted EBITDA, FCF and Safety metrics of the Annual Bonus Plan should not be adjusted to account for the incremental results of the performance of this new operating segment. Rather, the Compensation Committee determined that the performance attributable to Silvertip should be excluded from the assessment of performance with respect to these metrics and that the successful completion of the transaction should be included as a factor in assessing the Individual and Operational performance metric in connection with the

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Executive Compensation

execution of the Company’s strategic objective of expanding its service offering of complementary completion services, as further described below, beginning on page 33.

Guiding Principles

Performance-Based Compensation Philosophy

Making a substantial portion of our Named Executive Officers’ compensation “at risk” and performance-based ensures that their interests are strongly aligned with those of our stockholders and, as a result, is one of the guiding principles of our executive compensation philosophy.

(1)

Reflects compensation for Mr. Sledge.

​

(2)

RSU and performance share unit (“PSU”) figures reflect the aggregate grant date fair value of the RSU and PSU awards granted in 2022, calculated in accordance with FASB ASC Topic 718. Annual Incentive Bonus figures represent the 2022 target award opportunity under our Annual Bonus Plan.

​

(3)

Phillip Gobe served as Executive Chairman of the Board for a portion of 2022. As a result, his compensation has been excluded from this chart as it caused the figures reported not to be representative of the compensation generally paid to Named Executive Officers not serving in the Chief Executive Officer position both because of his former position (which no longer exists) and his partial year of service in that role.

​

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Executive Compensation

Compensation Policies and Practices

The following features of our executive compensation program promote sound compensation governance and are designed in the best interests of our stockholders and executives.

Say-on-Pay Advisory Vote

At the Company’s 2022 annual meeting, the stockholders of the Company were asked to approve, on an advisory basis, the compensation of the Named Executive Officers. Advisory votes in favor of our executive compensation program were cast by over 98% of the shares of common stock of the Company represented at the meeting (in person or by proxy) and entitled to vote. The Compensation Committee took the results of the “Say-on-Pay” vote in account when evaluating the compensation of the Named Executive Officers in 2022. In part because the result of the vote was overwhelmingly positive, the Compensation Committee decided to retain our overall approach to executive compensation. We have continued, and plan to continue, engaging in ongoing stockholder outreach regarding corporate governance generally, including executive compensation programs.

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Executive Compensation

Our executive compensation program is designed to attract, motivate, and retain the management talent that we believe is necessary to achieve our financial and strategic goals. Further, we believe that our executive compensation program should be appropriately tailored to balance short-term compensation with intermediate and long-term compensation while allowing for measurement of and accountability for strategic goals in varying market conditions. We believe this structure effectively aligns the interests of our executives with the interests of our stockholders.

In establishing and evaluating our executive compensation programs, the Compensation Committee strives to achieve total compensation for our executives that reflects their individual contributions to the Company, responsibilities, duties, and experience and is competitive with the companies with which we compete for executive talent.

Philosophy and Guiding Principles of Our Compensation Program

Our compensation program is guided by the following principles:

PROPETRO 2023 Proxy Statement | 29

Executive Compensation

How We Make Compensation Decisions

THE ROLE OF THE COMPENSATION COMMITTEE

Our Compensation Committee is comprised of independent, non-employee members of the Board. The Compensation Committee is responsible for establishing the elements, terms, and target value of compensation paid or delivered to our Named Executive Officers but often consults the full Board with respect to material compensation actions. For example, the Compensation Committee typically makes a recommendation to the non-employee members of the Board, who in turn consider and approve the annual compensation of the Chief Executive Officer and, when applicable, Executive Chairman, based upon such recommendations. Our Compensation Committee is also involved in all executive succession planning. Details of the Compensation Committee’s authority and responsibilities are specified in its charter, which may be accessed at https://ir.propetroservices.com/compensation-committee-charter. In determining the compensation of our Named Executive Officers, the Compensation Committee considers:

•

the information and advice provided by its compensation consultant,

​

•

our corporate goals,

​

•

historic and projected performance,

​

•

the current economic and commodities environment,

​

•

individual performance, experience, and responsibilities of each of our Named Executive Officers,

​

•

the results of the “Say-on-Pay” vote and feedback received from stockholders through our outreach and engagement efforts, and

​

•

other relevant factors.

​

THE ROLE OF EXECUTIVE OFFICERS IN COMPENSATION DECISIONS

With respect to the compensation of the Named Executive Officers other than our Chief Executive Officer, the Compensation Committee considers the recommendations of our Chief Executive Officer. Additionally, in light of our Named Executive Officers’ integral role in establishing and executing the Company’s overall operational and financial objectives, the Compensation Committee requests that our Chief Executive Officer provide the initial recommendations on the appropriate goals for the performance metrics used under our Annual Bonus Plan and may choose to accept or modify these recommendations in its sole discretion. In addition, the Compensation Committee may invite any Named Executive Officer to attend Compensation Committee meetings to report on the Company’s progress with respect to the interim or final status of performance metrics. All Named Executive Officers are excluded from any decisions or discussions regarding their individual compensation.

THE ROLE OF THE INDEPENDENT COMPENSATION CONSULTANT

Pearl Meyer served as the Compensation Committee’s independent compensation consultant in 2022. The compensation consultant provides advice to and works with the Compensation Committee in designing and implementing the structure and mechanics of the Company’s executive compensation program, as well as other matters related to officer, senior management, and director compensation and corporate governance. For example, our compensation consultant regularly updates the Compensation Committee on regulatory changes impacting executive compensation, proxy advisor policies, and compensation-related risks. In addition, they provide the Compensation Committee with relevant data, including market and peer-company compensation and performance surveys and information and advice regarding trends and developments in executive and director compensation practices in our industry. This information assists the Compensation Committee in making executive and director compensation decisions based on market pay levels and best practices.

Our compensation consultant reports directly and exclusively to the Compensation Committee and does not provide any other services to management, the Company, or its affiliates. While the Compensation Committee generally reviews and considers information and recommendations provided by the compensation consultant, they do not make compensation-related decisions for the Compensation Committee or otherwise with respect to the Company. The Compensation Committee has the discretion to allow our compensation consultant to work directly with management in preparing or reviewing materials for the Compensation Committee’s consideration. During 2022, and after taking into consideration the factors listed in Section 303A.05(c)(iv) of the “NYSE” Listed Company Manual, the Compensation Committee concluded that neither it nor the Company has any conflicts of interest with

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Executive Compensation

Pearl Meyer, and that Pearl Meyer was independent from management. Other than Pearl Meyer, no other compensation consultants provided services to the Compensation Committee during 2022.

Use of Peer Compensation Data

The Company competes with business entities across multiple industries for top executive-level talent. To this end, the Compensation Committee evaluates, on an annual basis, industry-specific and general market compensation practices and trends to ensure that our program and Named Executive Officer pay opportunities remain appropriately competitive. As part of its evaluation, the Compensation Committee works with its independent consultant to validate that the companies included in its peer group are as comparable as possible to the Company in terms of operations, revenue, market capitalization, and geographic location.

The 2022 peer group was determined by the Compensation Committee based on an in-depth review from its independent compensation consultant. This review included an assessment of potential comparators to evaluate the degree to which the current peers have kept pace with the Company’s growth and evolution, as well as an examination of the broader marketplace. Following such review and with input and support from the Company’s management, Pearl Meyer recommended, and the Compensation Committee agreed, that no modifications were necessary and that the 2022 peer group should remain the same as the 2021 peer group. In setting 2022 target compensation levels for the Named Executive Officers, as well as evaluating TSR performance for the PSUs granted in 2022, the Company used the 2022 peer group detailed below (such companies, the “2022 Peer Group”):

In 2022, the comparative compensation data reviewed by the Compensation Committee was created by Pearl Meyer based on data from a blend of the 2022 Peer Group and survey data collected by Pearl Meyer from companies in the energy industry with corporate revenues of approximately $1 billion (the “Peer Data”). Data from both sources was used to provide the best mix of authorities for competitive positions, and to help smooth volatility of changes in the peer group. The Compensation Committee generally targets total compensation for each of our Named Executive Officers and directors, as well as each element of compensation, at the 50th percentile of the Peer Data. However, the Compensation Committee also considers many other factors when establishing compensation levels, including, but not limited to internal pay equity at the Company, each executive’s experience and responsibility, succession planning, and recruiting and retention concerns.

As a result, the compensation of our Named Executive Officers and directors may be higher or lower than the 50th percentile of the 2022 Peer Group or the Peer Data.

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Executive Compensation

As shown below, a significant portion of the target compensation for our Named Executive Officers in 2022 was performance-based and an even larger portion is variable or “at risk,” meaning that it can be forfeited, and its value is dependent upon factors such as our stock price or company performance.

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Executive Compensation

Base Salary

The Compensation Committee monitors and adjusts salaries for our Named Executive Officers over time as necessary to remain competitive with market rates for similarly situated officers at our peer companies and to reflect changes in each Named Executive Officer’s role, duties and responsibilities. In some cases, the Board approves the base salary level for the Chief Executive Officer and Executive Chairman of the Board.

​

(1)

Mr. Sledge was appointed as Chief Executive Officer, effective August 31, 2021, but his base salary was not modified. In February of 2022, Mr. Sledge’s base salary was increased to reflect his position as Chief Executive Officer.

​

(2)

Slight increases in base salary for Messrs. Schorlemer and Wilson were to ensure their compensation remained competitive with individuals in similar positions at members of the 2022 Peer Group.

​

(3)

Mr. Muñoz was appointed as President and Chief Operating Officer, effective August 31, 2021, at which time no modifications were made to his base salary. In February of 2022, Mr. Muñoz’s base salary was increased to reflect his position as President and Chief Operating Officer.

​

(4)

Mr. Gobe’s base salary was decreased to $810,000 in connection with his resignation as Chief Executive Officer and appointment as Executive Chairman of the Board. Upon his resignation as Executive Chairman of the Board he began receiving the compensation specified in the Director Compensation Policy and outlined above in the section of this proxy statement entitled “—Director Compensation.”

​

Annual Cash Incentive Awards

The Annual Bonus Plan governs cash incentive awards made each year to our Named Executive Officers. Awards under the Annual Bonus Plan are tied to the achievement of performance goals, which may be based on qualitative or quantitative measures, or both, as determined by the Compensation Committee.

TARGET AWARD OPPORTUNITIES

In February 2022, the Compensation Committee (or in the case of Messrs. Gobe and Sledge, the Board) established the following target bonuses under the Annual Bonus Plan for each of the Named Executive Officers, which are unchanged from the target bonuses in place at the end of 2022:

Target bonus levels for each executive were established or recommended, as applicable, by the Compensation Committee after reviewing peer group data and considering each Named Executive Officer’s responsibility and experience.

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Executive Compensation

PERFORMANCE MEASURES AND PAYOUT RESULTS

Each year, the Compensation Committee establishes performance metrics and threshold, target, and maximum goals for each such metric. Potential payouts under the Annual Bonus Plan depend on the actual performance level for each metric established by the Committee, as outlined below.

If performance falls between the specified performance levels, payments are generally determined via straight-line interpolation. If performance falls below the threshold performance level, no payments will be awarded. The Annual Bonus Plan provides the Compensation Committee or the Board with the discretion to increase or decrease actual payout amounts otherwise resulting from the pre-established metrics, as it may deem necessary.

Under the 2022 Annual Bonus Plan, as in prior years, the Compensation Committee selected a mix of quantitative and qualitative performance metrics to incentivize achievement of specific pre-established financial and safety metrics, while enabling the Compensation Committee the ability to encourage performance with respect to areas that are important to the growth and success of the Company but are harder to measure. While the Compensation Committee values qualitative metrics as a tool, it felt that the vast majority of the annual bonus should be calculated based on quantitative metrics, with a significant emphasis on financial metrics. To that end, 70% of each Named Executive Officer’s annual bonus for 2022 was based on the achievement of quantitative metrics (Adjusted EBITDA, FCF and safety), with 60% of that 70% dedicated to financial performance. The remaining 30% of the annual bonus for 2022 was based upon a qualitative analysis of ESG (10%) and “Individual and Operational Performance” ​(20%).

The Compensation Committee selected these performance metrics because they are important to the ongoing success of the Company and were intended to drive short-term business performance by focusing executives on key objectives that position the Company for sustained growth. Specifically, Adjusted EBITDA and FCF are measures of our financial performance and capital discipline, and total recordable incident rate (“TRIR”) is an important measure of safety. The qualitative component of the Annual Bonus Plan allows the Committee to assess individual performance of the Named Executive Officers as well as specific progress towards a variety of ESG goals.

The Compensation Committee knew that an important component of the Company’s financial plan for 2022 was to make significant planned capital reinvestments in the Company by transitioning over half of our pumping fleet from diesel pumps to electric or dual fuel pumps. The Company believes this investment is key to retaining existing clients, gaining new clients, and achieving our ESG goals. Knowing that this important investment would occur in 2022 and would significantly reduce FCF, the Compensation Committee reduced the weighting for the FCF metric from 20% to 10% and reduced the threshold, target, and maximum performance levels for that metric as compared to 2021 in order to ensure that the Company’s annual bonus program was aligned with and supported the Company’s business plan for the year. The Compensation Committee retained the FCF metric, increased the weighting of the Adjusted EBITDA metric from 40% to 50%, and substantially increased each of the threshold, target, and maximum performance levels for Adjusted EBITDA for 2022 to encourage continued focus on financial measures and protection of the Company’s balance sheet during this transformational year. The Compensation Committee also established more concrete goals for the ESG metric in order to drive the achievement of specific goals across the spectrum of ESG issues, including achievement of environmental goals, employee education, and community service. Finally, during 2022, the Compensation Committee chose to exclude the Silvertip transaction from the actual calculation of the qualitative metrics for the 2022 annual incentive program and, instead, elected to take it into consideration when evaluating the Company’s operational performance.

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Executive Compensation

​

(1)

We define EBITDA as earnings before (i) interest expense, (ii) income taxes, and (iii) depreciation and amortization. We define Adjusted EBITDA as EBITDA, plus (i) loss/(gain) on disposal of assets, (ii) loss/(gain) on extinguishment of debt, (iii) stock-based compensation, and (iv) other unusual or non-recurring (income)/expenses, such as impairment charges, severance, costs related to our IPO and costs related asset acquisition or one-time professional fees. For a more detailed definition of the non-GAAP financial measure of Adjusted EBITDA and reconciliation of Adjusted EBITDA to our most directly comparable financial measures calculated in accordance with GAAP, please read “How We Evaluation Our Operations” in our Form 10-K filed for the year ended December 31, 2022.

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(2)

We define FCF as Adjusted EBITDA less Total Capital Expenditures, which are defined as costs incurred in connection with the growth and maintenance of our asset base. For a more detailed definition of Total Capital Expenditures please see Note 11—Reportable Segment Information in the Notes to Consolidated Financial Statements to our Form 10-K filed for the year ended December 31, 2022.

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(3)

The Compensation Committee may provide for the manner in which actual performance and the performance goal(s) with regard to these metrics will reflect the impact of specified events or occurrences during the year, which may mean including or excluding the impact of one or more events or occurrences, as specified by the Compensation Committee, for the year.

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(4)

TRIR stands for Total Recordable Incident Rate and is a measurement of workplace safety calculated as follows: (total number of recordable incidents amongst covered personnel in the applicable period (here, 2022) multiplied by 200,000) divided by the total man hours worked by covered personnel in the applicable period. TRIR is a commonly accepted and utilized metric for both workplace safety regulation and for making safety performance comparisons amongst companies. The Company uses an annual TRIR metric in our compensation program to reflect aggregate safety performance across the year being reviewed.

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(5)

We define ESG as Environmental, Social, and Governance. For 2022, the Compensation Committee established the following ESG goals: (i) complete a reportable Scope 1 and Scope 2 GHG emissions profile and develop and implement applicable emissions testing protocols to verify and support emissions profile, (ii) enter into a long-term customer contract for one or more lower emissions NextGen fleets, (iii) successfully deploy all Tier IV units from the 2021-22 conversion plan as they are delivered and continue execution of the long-term strategy for conversion of our legacy diesel pumps to cleaner Tier IV DGB units, (iv) coordinate and execute on a Company led signature community/​charity event that will maximize employee involvement and community impact, (v) encourage community engagement for all employees including designing and implementing a policy to provide eight-hours paid time off for qualifying community involvement, and (vi) highlight and present a key governance topic each quarter at regular management meetings, all employee town hall meetings, and on the company intranet.

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Executive Compensation

The Compensation Committee determined that the Company had performed above expectations with respect to the ESG metric, awarding a 13.3% payout percentage for this metric. The Compensation Committee recognized the Company’s success in accomplishing its ESG goals for 2022, noting that the Company outperformed its goals with respect to strategic agreements for next generation fleet equipment and establishing a signature community event and achieved the four additional ESG goals at target performance.

In particular, the Compensation Committee recognized the Company’s successful negotiation and execution of its strategically impactful long-term equipment lease agreement through which the Company acquired four electric fleets while mitigating required capital expenditures and protecting the Company’s balance sheet. Additionally, the Compensation Committee found that the Company’s success in obtaining a three-year service agreement with a leading Permian Basin operator for the Company’s first electric fleet was a significant commercial and strategic achievement.

The Compensation Committee also credited the Company’s success with its first annual signature community event, a community beautification event named “Don’t Mess with the Permian,” which resulted in the participation of over 220 employee and community volunteers and the removal of approximately 5.85 tons of trash from roadways, schools and other public areas in and around Midland, Texas, the Company’s headquarters and operating base. The Compensation Committee also highlighted the importance of the Company’s successful completion of its initial Scope 1 and Scope 2 corporate greenhouse gas emissions profile. This goal was successfully completed through the leadership of the Company’s executives and the participation of multiple individuals and departments throughout the organization, and provides a platform for the Company to plan and publish its first sustainability report in 2023.

Lastly, the Compensation Committee recognized the Company’s successful execution on the goals

•

to deploy all Tier IV DGB units from its 2021-2022 equipment conversion plan,

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•

establish a policy authorizing paid time off for qualifying community involvement, and

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•

heighten employee awareness of the Company’s sustainability and ESG initiatives by reviewing key topics at employee town hall meetings.

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In connection with these achievements, the Compensation Committee certified one hundred thirty-three percent (133%) achievement of the Company’s 2022 ESG goals.

The Company recognized significant achievements towards operational performance objectives in 2022. The Company’s ongoing internal optimization program, designed to drive meaningful and sustainable improvements in operations and maintenance procedures and achieve associated financial improvements, saw new organization changes and procedures, which resulting in over $15 million in annualized FCF value being captured. The Company expects that it will reap meaningful and operational benefits from the efforts associated with the internal optimization program in 2023 and beyond. The Compensation Committee determined that performance was at the target level for Messrs. Gobe and Sledge. For Messrs. Schorlemer, Muñoz, and Wilson, the Compensation Committee determined that their individual performance exceeded the target level. Each of Messrs. Schorlemer, Muñoz, and Wilson were given significant credit for their roles in the ongoing internal optimization program. Additionally, the Compensation Committee made particular note of Mr. Schorlemer’s role in overseeing the Company’s mergers and acquisitions efforts, which resulted in the divestiture of the Company’s coiled tubing business and the Silvertip acquisition and implementing pricing policies and cost control efforts. Mr. Muñoz was recognized for overseeing the successful operational execution of significant equipment and customer transition. Mr. Wilson was also credited with successful transition and succession planning in connection with his retirement.

As a result, the Compensation Committee approved the following payments under the Annual Bonus Plan:

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(1)

Bonus amounts were rounded up or down to the nearest hundred dollars.

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(2)

Mr. Gobe remained eligible for a pro-rated bonus award based on the number of days he served as Executive Chairman in 2022, and the target bonus award opportunity reflects such pro-rated bonus amount.

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Executive Compensation

Long Term Incentive Awards

In 2022, 50% of the value of each Named Executive Officer’s long term incentive awards were granted pursuant to the ProPetro Holding Corp. 2020 Long Term Incentive Plan (the “2020 LTIP”) in the form of RSUs that vest in three substantially equal annual installments commencing on the first anniversary of the grant date. The other 50% was granted in the form of PSUs that vest, if earned, following the completion of a three-year performance period, in each case subject to the Named Executive Officer’s continued employment through the end of such period.

The PSUs granted in 2022 vest based on the Company’s TSR as compared to the TSR of the 2022 Peer Group. After careful review, the Compensation Committee chose to use the same 2022 Peer Group to set 2022 target compensation levels for our Named Executive Officers and evaluate TSR performance for the PSUs granted in 2022. Recipients of PSUs may earn between 0% and 200% of the target number of shares granted, as indicated in the following table. If performance falls between the specified performance levels, payouts will be determined via straight-line interpolation. If performance falls below the threshold performance level, no payouts will be awarded. If the Company’s TSR is below zero on an absolute basis for the performance period, the number of PSUs earned shall be reduced in accordance with the table below. For PSU awards granted in 2021, if the Company’s TSR was below zero, the awards would not vest in excess of the target number of PSUs granted. The Compensation Committee modified its approach for 2022 in order to ensure the Named Executive Officers will continue to be strongly motivated to outperform the Company’s peers, even in a negative TSR environment, while retaining a meaningful reduction in the number of PSUs settled if absolute TSR was negative for the performance period so that the Named Executive Officers’ continue to be motivated to achieve a positive absolute TSR.

The performance period for the 2022 PSU awards commenced on January 1, 2022 and ends on December 31, 2024.

If a peer company is acquired by another peer company during the performance period, the acquirer will remain in the peer group but the acquired company will be excluded from the peer group entirely. If a peer company files for bankruptcy during the performance period, it will remain in the peer group but will be ranked last. Should a peer company cease to exist as a separate publicly traded company for any other reason during the performance period, it will be excluded from the peer group entirely.

The annual value of each Named Executive Officer’s long-term incentive award is generally determined in conjunction with the Compensation Committee’s annual compensation analysis or, if later, in connection with the Named Executive Officer’s promotion or hire date following the Compensation Committee’s review of peer compensation data and consideration of each Named Executive Officer’s position and associated responsibilities. In 2022, the Compensation Committee granted the RSUs and PSUs included in the table below to our Named Executive Officers. Except as specified below, all awards were granted in February of 2022.

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Executive Compensation

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(1)

Amounts in these columns reflect the aggregate grant date fair value of the RSU and PSU awards granted in 2022 under the 2020 LTIP, calculated in accordance with FASB ASC Topic 718. Because the grant date fair value is calculated different for time-based and performance-based awards under FASB ASC Topic 718, the value of the awards reported is different even though the number of RSUs and PSUs granted to each Named Executive Officer is the same. The number of awards granted by the Compensation Committee and the Board were calculated based on the closing price on the date of grant, rather than the accounting grant date fair value, which is the standard practice.

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(2)

These RSUs were granted in April of 2022 pursuant to the Director Compensation Policy as compensation for Mr. Gobe’s service as Chairman of the Board during 2022. Mr. Gobe did not receive a grant of RSUs or PSUs in 2022 in his role as Executive Chairman of the Board prior to his resignation on March 31, 2022.

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Employee Benefits, Perquisites, and Special Payments

HEALTH/WELFARE PLANS

All of our full-time employees, including our Named Executive Officers, are eligible to participate in our health and welfare plans on the same basis, including: medical, dental and vision benefits, medical and dependent care flexible spending accounts, short-term and long-term disability insurance, and group life insurance.

RETIREMENT PLANS

We currently maintain a 401(k) retirement savings plan for our employees who satisfy certain eligibility requirements. Our Named Executive Officers are eligible to participate in the 401(k) plan on the same terms as other full-time employees. Currently, we match contributions made by participants in the 401(k) plan up to a specified percentage of the employee contributions, and we may make certain discretionary profit sharing contributions. Both the matching contributions and the profit sharing contributions vest immediately. We believe that offering a vehicle for tax-deferred retirement savings through our 401(k) plan and making matching contributions and profit sharing contributions that vest over time add to the overall desirability of our compensation packages and further incentivize our employees in accordance with our compensation policies. We do not maintain any defined benefit pension plans or deferred compensation plans.

PERQUISITES

Messrs. Sledge, Muñoz, Schorlemer, and Wilson each participated in a vehicle allowance program during 2022. In addition, in 2022 we provided Mr. Gobe with a Company vehicle for his use while in Midland, Texas. In 2022, the Company also provided other limited perquisites to its Named Executive Officers, including club memberships and dues and use of a Company chartered aircraft to attend a professional sporting event hosted by an important vendor of the Company. The lodging, food, and tickets to such professional sporting event were provided to those of our executives in attendance at no cost and paid for by the vendor of the Company. The sporting event was attended by certain of our executives primarily in order to strengthen the relationship between the Company and the vendor.

The Compensation Committee reviews the perquisites we provide to our Named Executive Officers periodically, including in 2022, to ensure that they are necessary to retain our executives, appropriate, and consistent with benefits offered by companies with which we compete for executive talent.

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Succession and Additional Agreements

SUCCESSION PLAN

The Board and the Compensation Committee have built and seamlessly executed a strong and successful succession plan for the Company over the last several years.

2020 was a year of significant transition in the executive roles at the Company. While the context of every departure and shift to a new role was unique, in each case, the Company’s careful succession planning and thoughtful recruiting paid dividends, ensuring that each transition was smooth and the Company’s performance remained strong. For example, Mr. Gobe joined the Company in 2019 as director and Chairman of the Board. Because of his extensive experience in our industry and exceptional leadership skills the Board quickly identified him as someone who could take on a larger leadership role with the Company, if needed. As it became clear in late 2019 and early 2020 that there would be significant changes to the Company’s management team and that the Company needed to strengthen its culture of compliance, the Board appointed Mr. Gobe to roles of increasing responsibility until he assumed the position of Chief Executive Officer in early 2020. Similarly, Mr. Wilson was hired as General Counsel and Corporate Secretary of the Company during this period because of his industry experience and compliance expertise. Messrs. Gobe and Wilson had both set aside retirement from their prior roles with other companies to help the Company recover from the challenges it faced in 2019 and 2020 and to build the new and stronger culture in which it has flourished. The Board knew that Messrs. Gobe and Wilson would want to resume their retirement at some point in the years following their appointment and that the creation and execution of a plan for succession for both of their roles was key to ensuring management continuity going forward. Messrs. Gobe and Wilson worked closely with the Board during the formulation and execution of the succession plan and devoted significant time and expertise to training and mentoring the individuals who would eventually succeed to their roles as well as the rest of the Company’s management team.

On August 31, 2021, years of succession planning by the Compensation Committee and the Board came to fruition when Samuel D. Sledge, previously President, was appointed as Chief Executive Officer and Adam Muñoz, previously Chief Operating Officer, was appointed as President and Chief Operating Officer of the Company. Phillip A. Gobe, who preceded Mr. Sledge as Chief Executive Officer, continued to support the Company and Mr. Sledge in the role of Executive Chairman of the Board until March 31, 2022, when he resigned from that position. Mr. Gobe has continued his service with the Company as the non-executive Chairman of the Board.

Effective as of December 31, 2022, Newton W. Wilson III retired from the Company and resigned from his positions as General Counsel and Corporate Secretary of the Company. Effective January 1, 2023, John J. Mitchell was appointed to succeed Mr. Wilson as General Counsel and Corporate Secretary. Mr. Mitchell has over a decade of in-house legal experience at companies in the energy industry in Texas. Prior to his appointment, Mr. Mitchell served as Vice President and Deputy General Counsel of the Company, during which time he gained a deep knowledge of our business and became an integral member of our team. The Board, the Compensation Committee, and Mr. Wilson identified Mr. Mitchell as a strong candidate for succeeding to the role of General Counsel and Corporate Secretary at the time of his hiring in April of 2021. As a result, the Company provided Mr. Mitchell with increasing responsibility and leadership opportunities over the course of his tenure in that role, ensuring a smooth transition to his new role and a successful execution of the Company’s succession plan.

AGREEMENTS WITH MESSRS. GOBE AND WILSON

The Compensation Committee and the Board determined that the terms of the Gobe Resignation Agreement and the Wilson Resignation Agreement (each as defined below) appropriately reflect the important contributions that Messrs. Gobe and Wilson have made to the Company during their tenures as Chief Executive Officer and Executive Chairman of the Board and General Counsel and Corporate Secretary of the Company, respectively. Both executives joined the Company during a challenging time and were tasked with leading the Company through the implementation of a remediation and improvement plan to address internal and control deficiencies discovered during an internal review. Their expertise, steady hands, and wise leadership was invaluable during this turbulent chapter and it is in very large part thanks to them that the Company emerged from that period stronger than ever. They each played an active role with the Board in the development of the Company’s succession plan and were instrumental in ensuring a smooth transition of their roles to their successors. As a result, the Compensation Committee determined

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that it was particularly important to afford Messrs. Gobe and Wilson with the opportunity to realize the value, if any, from their outstanding PSUs since their hard work prior to their separation had already greatly contributed toward the achievement of the applicable Company performance goals. Further, seventy-four percent (146,899 RSUs) of Mr. Gobe’s RSUs were scheduled to vest within one year of the Gobe Separation Date (defined below) and forty-six percent (34,707 RSUs) of Mr. Wilson’s RSUs were scheduled to vest within the two-month period following the Wilson Separation Date (defined below).

Mr. Gobe resigned from his position as Executive Chairman of the Company, effective March 31, 2022 (the “Gobe Separation Date”), but continues to serve as a non-employee Chairman of the Board. Effective as of the Gobe Separation Date, the Company and Mr. Gobe entered into a Resignation from Employment agreement (the “Gobe Resignation Agreement”) memorializing the terms of his termination of employment. The Gobe Resignation Agreement does not provide Mr. Gobe with the opportunity to receive any cash severance payments or benefits but instead provides that Mr. Gobe shall receive the following benefits after the Gobe Separation Date, subject to his execution and non-revocation of the Gobe Resignation Agreement and his compliance with certain restrictive covenants, including obligations regarding confidentiality, non-competition, non-solicitation and non-disparagement: (i) the 198,759 RSUs held by Mr. Gobe immediately prior to the Gobe Separation Date vested as of the Gobe Separation Date and (ii) the service requirement associated with the 647,125 PSUs held by Mr. Gobe immediately prior to the Gobe Separation Date was deemed to be fulfilled and the PSUs will remain outstanding and will vest, if at all, based on the Company’s actual performance over the applicable performance period. The Gobe Resignation Agreement specifies that the RSUs will be settled following the date that the Gobe Resignation Agreement becomes irrevocable but no later than 30 days following the Gobe Separation Date. If applicable performance metrics are achieved, the PSUs will be settled at the time originally specified in the applicable award agreement. For the avoidance of doubt, all PSUs held by Mr. Gobe continue to be subject to Company performance through the end of the applicable performance period and will only settle if performance in excess of the thresholds specified at the time of grant is achieved. In addition, the Gobe Resignation Agreement provides that the Company will pay for the reasonable attorneys’ fees incurred by Mr. Gobe in connection with the negotiation of the Gobe Resignation Agreement.

Mr. Wilson retired from the Company and resigned from his position as General Counsel and Corporate Secretary, effective December 31, 2022 (the “Wilson Separation Date”). Effective as of the Wilson Separation Date, the Company and Mr. Wilson entered into a Resignation from Employment Agreement (the “Wilson Resignation Agreement”), memorializing the terms of his termination of employment. The Wilson Resignation Agreement does not provide Mr. Wilson with the opportunity to receive any cash severance payments or benefits but instead provides that Mr. Wilson shall receive the following benefits after the Wilson Separation Date, subject to his execution and non-revocation of the Wilson Resignation Agreement, which includes a release of claims, and his compliance with certain restrictive covenants, including obligations regarding confidentiality, non-competition, non-solicitation and non-disparagement: (i) the 75,149 RSUs held by Mr. Wilson on the Wilson Separation Date vested as of the Wilson Separation Date and (ii) the service requirement associated with the 101,604 PSUs held by Mr. Wilson on the Wilson Separation Date was deemed to be fulfilled and the PSUs will remain outstanding and will vest, if at all, based on the Company’s actual performance over the applicable performance period. The RSUs were required to be settled following the date that the Wilson Resignation Agreement becomes irrevocable but no later than 30 days following the Wilson Separation Date. If applicable performance metrics are achieved, the PSUs will be settled at the time originally specified in the applicable award agreement. For the avoidance of doubt, all unvested PSUs held by Mr. Wilson at the Wilson Separation Date continue to be subject to Company performance through the end of the applicable performance period and will only settle if performance in excess of the thresholds specified at the time of grant is achieved. In addition, the Wilson Resignation Agreement provides that the Company will pay for the reasonable attorneys’ fees incurred by Mr. Wilson in connection with the negotiation of the Wilson Resignation Agreement. The Wilson Resignation Agreement also clarifies that Mr. Wilson will be entitled to receive a full annual bonus for the 2022 fiscal year.

On the Gobe Separation Date, Mr. Gobe held unvested PSUs that had originally been granted in each of 2020 and 2021. On the Wilson Separation Date, Mr. Wilson held unvested PSUs that had originally been granted in each of 2021 and 2022. Since the modification to Mr. Gobe’s and Mr. Wilson’s PSUs, the PSUs granted in 2020 vested at 61% and performance for the PSUs granted in 2021 and 2022 is currently tracking to vest at 0%.

Executive Severance Plan

The Board adopted the Second Amended and Restated ProPetro Services, Inc. Executive Severance Plan and subsequently (the “Executive Severance Plan”) because they and the Compensation Committee felt it was desirable to pivot away from individually negotiated employment agreements and towards a streamlined plan providing for

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more uniform treatment upon a termination of employment. Each of our Named Executive Officers is a participant in the Executive Severance Plan. We believe the Executive Severance Plan serves to maintain the focus of our senior executives and ensure that their attention, efforts and commitment are aligned with maximizing the success of the Company and stockholder value. Further, providing market severance benefits is an important element of compensation that allows us to attract and retain talented executives, ensuring continuity of management, stability of the Company, and efficient execution of our business goals.

The amounts of the severance and benefits established for each “Tier” under the Executive Severance Plan were selected after the Compensation Committee received advice from its independent compensation consultant at the time of adoption regarding the types and amounts of severance that are market among the Company’s peers. The Compensation Committee also considered its members’ ample experience in the industry when making this determination. The Tier level assigned to each participant in the plan was determined based on each participant’s position and responsibility. No changes were made to the Tier levels for the Named Executive Officers in 2022, except that Mr. Gobe ceased to participate in the Executive Severance Plan upon his resignation as Executive Chairman of the Board on March 31, 2022 and Mr. Wilson ceased to participate in the Executive Severance Plan upon his resignation as General Counsel and Corporate Secretary of the Company on December 31, 2022. The Tier levels for each of the Named Executive Officers and the terms of the Executive Severance Plan are described in detail below in the section entitled “Potential Payments upon Termination and Change of Control―Executive Severance Plan.”

Employee Compensation Claw-Back Policy

Under the terms of our Executive Compensation Claw-Back Policy, any incentive compensation, including all types of equity awards, paid to an executive officer (including all of our Named Executive Officers) which was determined based on our performance against financial metrics will be subject to recovery by the Company in the event that the underlying financial metrics are negatively impacted by a restatement of our financial statements. In addition, incentive compensation, including all types of equity awards, is subject to recovery by the Company where an executive engages in certain misconduct. The Company expects to adopt a revised Claw-Back policy in accordance with the SEC’s adoption of new rules to implement Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 in connection with the implemented of such final rule by the NYSE.

Executive Stock Ownership Policy

Under the terms of our Executive Stock Ownership Policy, our executive officers must own shares of our common stock or certain equity awards with a value equal to not less than the following multiples of base salary:

Any individuals who became executive officers as a result of an internal promotion or a new hire, will have five years from the date of being named an executive officer to meet the stock ownership guidelines. As a result, all of our Named Executive Officers still have additional time in which to comply with these guidelines. In calculating the value of shares of our common stock or certain equity awards held for purposes of determining compliance with the policy, such value is equal to the closing price per share on the measurement date, based on shares owned outright and unvested RSUs, with the value of such unvested RSUs discounted by 40%. Unexercised option awards and unvested PSUs are excluded from the calculation.