DNOW Inc
For the period ended May 21, 2025. Filed Apr 4, 2025.
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What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
May 21, 2025 · Filed Apr 4, 2025
Contents
Proxy Summary
This summary highlights information throughout our Proxy Statement. Please read this entire Proxy Statement carefully as this summary does not contain all information you should consider before voting.
| ANNUAL SHAREHOLDERS MEETING | |
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| Date and Time: May 21, 2025 10:00 a.m. Central Time Place: DNOW Inc. 7402 N. Eldridge Parkway Houston, TX 77041 Record Date: March 24, 2025 How to Vote Online: www.proxyvote.com | Notice Date: This Proxy Statement was first distributed to shareholders on or about April 4, 2025 Meeting Agenda: The meeting will cover the three proposals listed in the Agenda Items and Vote Recommendations herein as well as any other business that may properly come before the meeting. Voting: Shareholders as of the record date are entitled to vote. Each share of common stock of DNOW Inc. (“Company”) is entitled to one vote for each director nominee and one vote for each proposal. |
The Company continued to be the leader within the upstream distribution energy market and saw expansion in both the midstream market and the Company’s process solution segment with the additions of Whitco Supply and Trojan Rentals in 2024. These acquisitions show the Company’s continued focus on inorganic growth through acquisitions by taking a patient and disciplined approach of targeting margin accretive businesses and expanding existing relationships and geographical customer service. The Company continued to be debt-free and produced results that fueled an organic growth and efficient operations strategy by driving significant free cash flow while producing solid revenue growth. The Company’s commitment to repurchase shares opportunistically and a broadened capital allocation framework to generate attractive shareholder returns without deviating from a disciplined approach to balance sheet management continue to be drivers despite softer than hoped for market conditions. The Company’s results show its cash generation capabilities and future earnings potential alongside its acquisition focus and share repurchases providing multiple avenues for shareholder value creation.
Agenda Items and Vote Recommendations
| Proposal 1: | Election of eight nominees as directors of the Company for one-year terms. |
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The Board believes that each director nominee brings a valuable set of skills, experience, and attributes to the boardroom that align with the long-term interests of the Company and its stockholders and contribute to the overall effectiveness of the Board as a whole. The Board recommends that you vote “FOR” the eight director nominees. See discussion beginning on Page 10
| Proposal 2: | Ratification of the appointment of Ernst & Young LLP as independent auditors of the Company for 2025. |
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The Board has appointed Ernst & Young to serve as DNOW’s independent registered public accounting firm for 2025 and this appointment is being submitted for ratification. The Board recommends that you vote “FOR” the proposal to ratify the appointment of Ernst & Young. See discussion beginning on Page 38
| Proposal 3: | Approval on an advisory basis, the compensation of our named executive officers. |
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The Board, specifically the Compensation Committee, has established a market-competitive executive compensation program with many best practices that is aligned with the long-term interests of our shareholders and significantly dependent on Company’s positive performance. The Board recommends that you vote “FOR” the advisory proposal of the compensation of the Company’s named executive officers. See discussion beginning on Page 42
2024 External Recognitions
Our Board at a Glance
We are committed to and recognize the importance of good corporate governance and high ethical standards. Our Board believes that having a diverse mix of directors with complementary qualifications, expertise and attributes is essential to meeting its oversight responsibilities. Average Director Tenure Effective & Independent Board Oversight 0-6 Independent Chairman of the Board serving as lead director 7.27-10 Executive sessions provided for all Board and years committee meetings All committee chairs and members are independent Average Director Age Declassified where all directors are elected annually 44-65 64.2566-75 Skills and Competencies years CEO/Former CEO (2) Process Solutions (3) Financial Expert (7) Distribution/Supply Chain (8) Operations Leadership (5) Technology Systems (6) ESG Experience (8) Cybersecurity Experience (7) International Exposure (8) Strategic Planning (8) Energy (8) Business Transformation (8) Other Corporate Governance Highlights ✔ Annual say on pay voting (95% approval in 2024) ✔ Stock ownership guidelines for officers including robust clawback policy to recover executive compensation ✔ Board engagement with CEO over management succession planning ✔ Annual Board and committee evaluations using a third-party facilitator ✔ Majority voting to elect board members ✔In-depth strategic review with senior management analyzing risks and opportunities ✔ 5X stock ownership requirement of annual retainer fornon-employee directors
| * | The charts above are representative of DNOW’s Board composition as of April 4, 2025 unless otherwise noted. |
DNOW Management Team Members. From Left to Right: Brad Wise, Kelly Munson, Mark Johnson, David Cherechinsky, Timm Bohnert, Clent Rawlinson, and Raymond Chang.
Defined Terms
| 401(k) Plan | DNOW Inc. 401(k) and Retirement Savings Plan |
|---|---|
| 2024 LTIP | DNOW Inc. Long-Term Incentive Plan approved by stockholders in 2024 |
| Annual Meeting | 2025 Annual Meeting of Stockholders of DNOW Inc. |
| BlackRock | BlackRock, Inc. |
| Board | Board of Directors of DNOW Inc. |
| CCUS | Carbon Capture, Utilization and Storage |
| CD&A | Compensation Discussion and Analysis |
| CEO | Chief Executive Officer |
| Company | DNOW Inc. |
| EBITDA | Earnings before interest, taxes, depreciation and amortization (EBITDA) excluding other costs |
| ESG | Environmental, Social, and Governance |
| EY | Ernst & Young LLP |
| FCF | Free Cash Flow |
| GAAP | U.S. Generally accepted accounting principles |
| GHG | Greenhouse gas |
| Independent Chair | Chairman of the Board |
| NACD | National Association of Corporate Directors |
| NEO | Named executive officers |
| NFPCC | NFP Compensation Consulting |
| NWC | Net Working Capital |
| NYSE | New York Stock Exchange |
| PCAOB | Public Company Accounting Oversight Board |
| PEO | Principal executive officer |
| PEO 1 | Mr. Cherechinsky served as our principal executive officer for a portion of 2020 and for the full year onward beginning in 2021 |
| PEO 2 | Mr. Alario served as our interim principal executive officer for a portion of 2020 |
| PSA | Performance share award |
| RNG | Renewable natural gas |
| ROCE | Return on capital employed |
| RSU | Restricted stock unit |
|---|---|
| rTSR | Relative Total Shareholder Return |
| SASB | Sustainability Accounting Standards Board |
| SEC | U.S. Securities and Exchange Commission |
| Supplemental Plan | DNOW Inc. Supplemental Savings Plan |
| Tax Act | 2017 Tax Cuts and Jobs Act, signed into law on December 22, 2017 |
| TCFD | Task Force on Climate-Related Financial Disclosures |
| TSR | Total stockholder return |
| UN SDGs | United Nations Sustainable Development Goals |
| Working Capital | Working capital as a percentage of revenue |
| Zayla | Zayla Partners |
Contacting the Board of Directors, Management, or the Corporate Secretary of DNOW
| Please address your inquiry to: | For Investor Relations: |
|---|---|
| Raymond Chang | Brad Wise |
| VP, General Counsel and Secretary | VP of Investor Relations and Digital Strategy |
| 7402 N. Eldridge Parkway | 7402 N. Eldridge Parkway |
| Houston, TX 77041 | Houston, TX 77041 |
Disclosure Statement
Statements made in the course of this Proxy Statement that state the Company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. It is important to note that the Company’s actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time-to-time in the Company’s filings with the SEC. Any decision regarding the Company or its securities should be made upon careful consideration of not only the information here presented, but also other available information, including the information filed by the Company with the SEC. Copies of these filings may be obtained by contacting the Company or the SEC.
This Proxy Statement, including the Compensation Discussion and Analysis, contains financial measures presented on anon-GAAP basis. We use thesenon-GAAP financial measures internally to evaluate and manage the Company’s operations because we believe it provides useful supplemental information regarding the Company’s ongoing economic performance. The non-GAAP financial measures include: (i) earnings before interest, taxes, depreciation and amortization (EBITDA) excluding other costs, (ii) EBITDA excluding other costs as a percentage of revenue, (iii) net income attributable to DNOW Inc. excluding other costs, (iv) diluted earnings per share attributable to DNOW Inc. stockholders excluding other costs, and (v) free cash flow. The Company uses these non-GAAP financial measures to evaluate and manage the Company’s operations because they believe they provide useful supplemental information regarding the financial performance of our business. These non-GAAP financial measures are not intended to replace the GAAP financial measures. Free cash flow is net cash provided by (used in) operating activities adjusted for purchases of property, plant and equipment. A reconciliation of eachnon-GAAP financial measure to its most comparable GAAP financial measure can be found on page 32 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on February 18, 2025. We undertake no duty to update any forward-looking statement that we may make, whether as a result of new information, future events, or otherwise except as may be required by applicable law. References herein to materials available on our website, including website links, are for informational purposes only and is not a part of, nor incorporated by reference into, this Proxy Statement.
7402 N. Eldridge Parkway
Houston, Texas 77041
PROXY STATEMENT
Except as otherwise specifically noted in this Proxy Statement, “DNOW,” the “Company,” “we,” “our,” “us,” and similar words in this Proxy Statement refer to DNOW Inc.
| ANNUAL MEETING: | Date: Wednesday, May 21, 2025 Time: 10:00 a.m. (Central Standard Time) Place: DNOW Corporate Headquarters 7402 N. Eldridge Parkway Houston, Texas 77041 |
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| AGENDA: | Proposal 1: To elect eight nominees as directors of the Company for one-year terms. Proposal 2: To ratify the appointment of Ernst & Young LLP as independent auditors of the Company for 2025. Proposal 3: To approve, on an advisory basis, the compensation of our named executive officers. The Board of Directors recommends that you vote “FOR” the election of the eight nominees for director (Proposal 1), “FOR” the proposal to ratify the appointment of Ernst & Young LLP as independent auditors of the Company for 2025 (Proposal 2), and “FOR” the approval of the compensation of our named executive officers (Proposal 3). |
| RECORD DATE/ WHO CAN VOTE: | All stockholders of record at the close of business on March 24, 2025 are entitled to vote. The only class of securities entitled to vote at the Annual Meeting is DNOW common stock. Holders of DNOW common stock are entitled to one vote per share at the Annual Meeting. |
| PROXY NOTICE: | Proxy Materials will be available to stockholders on or about April 4, 2025. Our Annual Report on Form 10-K, including financial statements for the fiscal year ended December 31, 2024, accompanies this Proxy Statement. The Annual Report on Form 10-K does not form any part of the proxy solicitation materials nor will be it considered as having been incorporated by reference. |
| PROXIES SOLICITED: | Your vote and proxy is being solicited by the Board of Directors for use at the Annual Meeting. This Proxy Statement and enclosed proxy card is being sent on behalf of the Board of Directors to all stockholders as of the record date beginning on or about April 4, 2025. By completing, signing, and returning your proxy card, you will authorize the persons named on the proxy card to vote your shares according to your instructions. |
| PROXIES: | If your proxy does not indicate how you wish to vote your common stock, the persons named on the proxy card will vote FOR election of |
| the eight nominees for director (Proposal 1), FOR the ratification of the appointment of Ernst & Young LLP as independent auditors (Proposal 2), and FOR the approval of the compensation of our named executive officers (Proposal 3). | |
| REVOKING YOUR PROXY: | You can revoke your proxy at any time prior to when the vote is taken at the meeting by: (i) filing a written notice revoking your proxy; (ii) filing another proxy bearing a later date; or (iii) casting your vote in person at the Annual Meeting. Your last vote will be the vote that is counted. |
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| QUORUM: | As of March 24, 2025, there were 108,823,368 shares of DNOW common stock issued and outstanding. The holders of these shares have the right to cast one vote for each share held by them. Shareholders, in person or by proxy, casting at least 54,411,684 votes constitutes a quorum for adopting the proposals at the Annual Meeting. Abstentions will be included in determining the number of shares present at the meeting for the purpose of determining a quorum, as will broker non-votes. A broker non-vote occurs when a broker is not permitted to vote on a matter without instructions from the beneficial owner of the shares and no instruction is given. If you have properly signed and returned your proxy card, you will be considered part of the quorum, and the persons named on the proxy card will vote your shares as instructed. |
| VOTE REQUIRED FOR APPROVAL: | For the proposal to elect the eight director nominees (Proposal 1), our bylaws require that each director nominee be elected by the majority of votes cast with respect to such nominee (i.e. the number of shares voted FOR a director nominee must exceed the number of shares voted AGAINST that nominee). For additional information regarding our majority voting policy, see page 10 of the Proxy Statement. Broker non-votes and abstentions are not counted as votes cast for or against a director nominee and therefore will have no effect on this vote. Brokers are not permitted to vote your shares on the election of directors in the absence of your specific instructions as to how to vote. Please provide your broker with voting instructions so that your vote can be counted. Approval of the proposal to ratify the appointment of Ernst & Young LLP as independent auditors (Proposal 2) and the proposal to approve the compensation of our named executive officers (Proposal 3) will require the affirmative vote of a majority of the shares of our common stock present in person or by proxy at the Annual Meeting. An abstention will have the same effect as a vote AGAINST for each such proposal. For Proposal 2, brokers are permitted to vote your shares in the absence of your specific instructions as to how to vote. With respect to Proposal 3, brokers are not permitted to vote your shares in the absence of your specific instructions as to how to vote. Please provide your broker with voting instructions so that your vote can be counted. Broker non-votes will have no impact on the outcome of Proposal 3. |
| HOUSEHOLDING: | The SEC has adopted rules that permit companies and intermediaries, such as brokers, to satisfy the delivery requirements for proxy |
| statements with respect to two or more stockholders sharing the same address by delivering a copy of these materials, other than the Proxy Card, to those stockholders. This process, which is commonly referred to as “householding,” can mean extra convenience for stockholders and cost savings for the Company. Beneficial stockholders can request information about householding from their banks, brokers, or other holders of record. Through householding, stockholders of record who have the same address and last name will receive only one copy of our Proxy Statement and Annual Report, unless one or more of these stockholders notifies us that they wish to continue receiving individual copies. If an individual receives multiple proxy cards, this indicates that your shares are held in more than one account, such as two brokerage accounts, and are registered in different names. You should vote each of the proxy cards to ensure that all of your shares are voted. Stockholders who participate in householding will continue to receive separate Proxy Cards. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate Proxy Statement and Annual Report, please notify your broker if you are a beneficial stockholder. If you are eligible for householding, but you and other stockholders of record with whom you share an address currently receive multiple copies of Proxy Statements and Annual Reports, or if you hold stock in more than one account and wish to receive only a single copy of the Proxy Statement or Annual Report for your household, please contact Broadridge Householding Department, in writing, at 51 Mercedes Way, Edgewood, New York 11717, or by phone at (800) 542-1061. | |
| COST OF PROXY SOLICITATION: | We have retained Okapi Partners LLC to solicit proxies from our stockholders at an estimated fee of $12,500, plus expenses. This fee does not include the costs of preparing, printing, assembling, and delivering the Proxy Statement. The Company will pay for the cost of soliciting proxies. Some of our directors, officers, and employees may also solicit proxies personally, without any additional compensation, by telephone or mail. Proxy materials also will be furnished without cost to brokers and other nominees to forward to the beneficial owners of shares held in their names. |
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Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be
Held on Wednesday, May 21, 2025. The Company’s 2025 Proxy Statement and the Annual Report
to Stockholders for the year ended 2024 are also available at:
http://www.proxyvote.com
For directions to the Annual Meeting, please contact Investor Relations at 281-823-4700.
PLEASE VOTE – YOUR VOTE IS IMPORTANT
ELECTION OF DIRECTORS
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.