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Stock-Based Compensation | 3 Months Ended
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Mar. 31, 2025
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | 10. Stock-Based Compensation The Company’s stock-based compensation plan, known as the NOV Inc. Long-Term Incentive Plan (the “NOV Plan”), was approved by shareholders on May 11, 2018 and amended and restated on May 24, 2022. The NOV Plan provides for the granting of stock options, restricted stock, restricted stock units, performance awards, phantom shares, stock appreciation rights, stock payments and substitute awards. The number of shares authorized under the NOV Plan is 55.7 million. At March 31, 2025, approximately 1.9 million shares remained available for future grants under the NOV Plan. The Company also has outstanding awards under its former stock-based compensation plan known as the National Oilwell Varco, Inc. Long-Term Incentive Plan (the “Former Plan”); however, the Company is no longer granting new awards under the Former Plan. On February 19, 2025, under the NOV Plan, the Company granted 526,425 stock options with a fair value of $6.67 per option and an exercise price of $15.28 per share, 3,214,507 restricted stock units with a fair value of $15.28 per share, and performance share awards (PSAs) to senior management employees with potential payouts varying from zero to 1,217,278 shares in the aggregate. On March 20, 2025, the Company granted 82,781 restricted stock units with a fair value of $15.10 per share and performance share awards to senior management employees with potential payouts varying from zero to 152,316 shares in the aggregate. The stock options vest over a three-year period from the grant date. The restricted stock units vest in three equal annual installments commencing on the first anniversary of the grant date. The 2025 PSAs can be earned based on performance against two established goals over a three-year period: 85% with a TSR (total shareholder return) goal; and 15% with an internal NVA (“NOV Value Added”, a return on capital metric) goal. TSR performance is determined by comparing the Company’s TSR with the TSR of the members of the Philadelphia Stock Exchange’s Oil Services Sector Index (OSX) for the three-year performance period. The TSR portion of the performance share awards is subject to a vesting cap equal to 100% of Target Level if the Company’s absolute TSR is negative, regardless of relative TSR results. Conversely, if the Company’s absolute TSR is greater than 15% annualized over the three-year performance period, the payout amount shall not be less than 50% of Target Level, regardless of relative TSR results. The NVA goal is based on the Company’s improvement in NVA from the beginning of the performance period until the end of the performance period. NVA is calculated as an amount equal to the Company’s (a) gross cash earnings less (b) average gross operating assets times an amount equal to a required return on assets, with certain adjustments. Total expense for all stock-based compensation arrangements was $16 million for the three months ended March 31, 2025 and $19 million for the three months ended March 31, 2024. The total income tax expense recognized in the Consolidated Statements of Income for stock-based compensation arrangements for the three months ended March 31, 2025 and 2024 was $9 million and $4 million, respectively.

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