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Employee Benefit Plans
 12 Months Ended
Dec. 31, 2024
Employee Benefit Plans  
Employee Benefit Plans

Note 16: Employee Benefit Plans

Defined Benefit Pension Plan

The Company’s multiemployer Retirement Income Plan (the Plan), a trusteed defined benefit pension plan, in which Marine Products Corporation (Marine Products) also participated, was fully terminated in 2023. As part of termination, the Company settled its participant liabilities in one of the following ways – (i) through a lump-sum settlement at the election of the participants; or (ii) transfer to a commercial annuity provider or a government agency. The Company funded this transfer through the liquidation of investments in the Plan assets and additional cash contributions. The Company recognized a pre-tax, non-cash settlement charge of $18.3 million during 2023 which represented the accelerated recognition of net actuarial loss that was previously recorded in accumulated other comprehensive loss (net of tax) and deferred taxes (tax effect). In addition, the Company utilized funds related to Marine Products’ plan assets to settle its participant liabilities.

​

The following table sets forth the funded status of the Plan and the amounts recognized in RPC’s Consolidated Balance Sheet:

​

​

​

​

​

December 31, 

    

2023

(in thousands)

​

  

​

Accumulated benefit obligation at end of year

​

$

—

​

​

​

​

Change in projected benefit obligation:

​

 

  

Benefit obligation at beginning of year

​

$

29,651

Service cost

​

 

—

Interest cost

​

 

22

Actuarial gain

​

 

(3,715)

Benefits paid

​

 

(836)

Settlement

​

​

(25,122)

Projected benefit obligation at end of year

​

$

—

Change in Plan assets:

​

 

​

Fair value of Plan assets at beginning of year

​

$

20,041

Actual return on Plan assets

​

 

249

Employer contribution

​

 

5,454

Benefits paid

​

 

(836)

Transfer of assets

​

​

524

Refund related to Plan trust dissolution

​

​

(310)

Settlement

​

​

(25,122)

Fair value of Plan assets at end of year

​

$

—

Funded status at end of year

​

$

—

​

​

The components of net periodic cost of the Retirement Income Plan are summarized as follows:

​

​

​

​

​

​

​

​

​

​

2023

​

2022

(in thousands)

​

​

​

​

​

​

Interest cost (1)

​

$

22

 

$

972

Amortization of net losses (1)

​

​

226

 

​

1,010

Settlement loss

​

​

18,286

​

​

2,921

Net periodic benefit cost

​

$

18,534

​

$

4,903

​

(1)Reported as part of Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations.

​

The pre-tax amounts recognized in accumulated other comprehensive (loss) income for the years ended December 31, 2023, and 2022 are summarized as follows:

​

​

​

​

​

​

​

​

​

December 31,

    

    

2023

    

2022

(in thousands)

​

​

​

​

​

​

​

Net (loss) gain

​

​

$

(3,964)

​

$

2,939

Amortization of net loss

​

​

​

(226)

​

​

(1,010)

Settlement loss

​

​

​

(18,286)

​

​

(2,921)

Amount recognized in accumulated other comprehensive (loss) income

​

​

$

(22,476)

​

$

(992)

​

The weighted average assumptions as of December 31 used to determine the projected benefit obligation and net benefit cost were as follows:

​

​

​

​

​

​

​

December 31, 

    

2023

    

2022

 

Net Benefit Cost:

 

  

 

  

​

Discount rate

 

N/A

​

4.86

%

Expected return on Plan assets

 

N/A

​

0.0

%

Rate of compensation increase

 

N/A

​

N/A

​

​

Supplemental Executive Retirement Plan (SERP)

The Company permitted through December 31, 2024, selected highly compensated employees to defer a portion of their compensation to the SERP. The liabilities related to these deferrals are recognized as retirement plan liabilities in the Consolidated Balance Sheet.

The SERP assets are invested primarily in company-owned life insurance (COLI) policies as a funding source to satisfy the obligations of the SERP. The assets are subject to claims by creditors, and the Company can designate them for another purpose at any time. Investments in COLI policies consisted of variable life insurance policies totaling $49.9 million as of December 31, 2024, and $49.3 million as of December 31, 2023. In the COLI policies, the Company is able to allocate the investment of the assets across a set of choices provided by the insurance underwriters, including fixed income securities and equity funds. The COLI policies are recorded at their net cash surrender values, which approximates fair value, as provided by the issuing insurance company, whose Standard & Poor’s credit rating was A+.

The Company classifies the SERP assets as trading securities as described in the note titled Significant Accounting Policies. The fair value of these assets totaled $30.7 million as of December 31, 2024, and $26.8 million as of December 31, 2023. The SERP assets are reported as part of retirement plan assets in the Consolidated Balance Sheet. The changes in the fair value of these assets, and normal insurance expenses are recorded in the Consolidated Statements of Operations as compensation cost within selling, general and administrative expenses. Trading gains (losses) related to the SERP assets totaled $2.7 million in 2024, $2.6 million in 2023, and $(4.4 million) in 2022. The SERP liability includes participant deferrals net of distributions and is recorded on the Consolidated Balance Sheet as part of retirement plan liabilities with any change in the fair value of the liabilities recorded as compensation cost within selling, general and administrative expenses in the Consolidated Statements of Operations. Trading gains (losses) related to the SERP liability totaled $2.6 million in 2024, $2.8 million in 2023, and $(4.1 million) in 2022.

In the fourth quarter of 2024, the Board of Directors approved the termination of the SERP and deferrals ceased effective December 31, 2024. Pursuant to the Internal Revenue Service rules, participant balances will be distributed between 12 and 24 months after termination. The Company is currently evaluating its funding options and timing to distribute participant balances.

401(k) Plan

RPC sponsors a defined contribution 401(k) Plan that is available to substantially all full-time employees with more than three months of service. This Plan allows employees to make tax-deferred contributions from one to 25 percent of their annual compensation, not exceeding the permissible contribution imposed by the Internal Revenue Code. The Company makes 100 percent matching contributions for each dollar $(1.00) of a participant’s contribution to the 401(k) Plan for the first three percent of his or her

annual compensation and fifty cents $(0.50) for each dollar $(1.00) of a participant’s contribution to the 401(k) Plan for the next three percent of his or her annual compensation. Employees vest in the RPC contributions after two years of service. The charges to expense for the Company’s contributions to the 401(k) Plan were $11.6 million in 2024, $11.3 million in 2023, and $9.8 million in 2022.

Stock Incentive Plans

The Company has issued various forms of stock-based incentives, including incentive and non-qualified stock options, time-lapse restricted shares and performance share unit awards under its Stock Incentive Plans to officers, selected employees and non-employee directors. In April 2024, the Company reserved 8,000,000 shares of common stock under the 2024 Stock Incentive Plan with a term of 10 years expiring in April 2034. As of December 31, 2024, there were 7,324,824 shares available for grant under the Company’s 2024 Stock Incentive Plan (SIP).

The Company recognizes compensation expense for the unvested portion of awards outstanding over the remainder of the service period. The compensation cost recorded for these awards is based on their fair value at the grant date less the cost of estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods to reflect actual forfeitures.

Pre-tax stock-based employee compensation expense included as part of selling, general and administrative expense was $9.2 million in 2024 $(7.4 million after tax), $7.9 million in 2023 $(6.1 million after tax) and $6.4 million in 2022 $(4.9 million after tax).

Restricted Stock

The Company grants certain employees and non-employee directors time-lapse restricted stock which vests after a stipulated number of years from the grant date in the case of employees and vests immediately for non-employee directors, depending on the terms of the issue. Time-lapse restricted shares granted to employees in 2024 and thereafter vest ratably over a period of three years; the shares granted to employees in 2023 vest ratably over a period of four years; and the shares granted in 2022 vest ratably over a period of five years. Prior to 2022, the time-lapse restricted shares vested one-fifth per year beginning on the second anniversary of the grant date. Grantees receive dividends declared and retain voting rights for the granted shares. The agreement under which the restricted stock is issued provides that shares awarded may not be sold or otherwise transferred until restrictions established under the stock plans have lapsed. Upon termination of employment from the Company, with the exception of death (fully vests) or normal retirement/disability (partially vests based on pre-approved formula), shares with restrictions are forfeited in accordance with the SIP.

In addition to time-lapse restricted stock, officers and selected employees are granted Performance Share Unit (PSU) awards that vest at different levels based on pre-established financial performance targets with a modifier for stock performance based on total shareholder return (TSR). The Company periodically evaluates the portion of performance share unit awards that are probable to vest and updates compensation expense accruals accordingly. The PSUs typically cliff-vest at the end of a three-year performance period. Upon termination of employment (other than due to death or disability as defined in the agreements), the unvested PSUs will be forfeited. In the event of death or disability as defined in the agreements, all unvested PSUs shall vest immediately at 100% of target levels, without regard to the actual EBITDA performance, and with no adjustment for the TSR modifier. PSU awards also include the right to dividend equivalents with respect to the underlying shares which are accrued over the performance period, based upon target payout level and paid out in cash upon vesting of the PSUs. To the extent the awards fail to vest or are forfeited, or the performance goals are not met, no such dividend equivalents will be payable. PSUs confer no voting rights with respect to the underlying shares prior to vesting and payout.

The following is a summary of the changes in non-vested restricted shares for the year ended December 31, 2024:

​

​

​

​

​

​

​

​

​

​

​

Weighted Average 

​

    

Shares

    

Grant-Date Fair Value

Non-vested shares at January 1, 2024

​

3,532,185

​

$

7.35

Granted

 

1,414,376

 

​

7.27

Vested

 

(1,102,849)

 

​

8.08

Forfeited

 

(154,995)

 

​

6.81

Non-vested shares at December 31, 2024

 

3,688,717

​

$

7.13

​

The following is a summary of the changes in non-vested restricted shares for the year ended December 31, 2023:

​

​

​

​

​

​

​

​

    

​

​

Weighted Average 

​

    

Shares

    

Grant-Date Fair Value

Non-vested shares at January 1, 2023

​

3,248,728

​

$

6.87

Granted

 

1,235,728

 

​

9.50

Vested

 

(859,485)

 

​

8.63

Forfeited

 

(92,786)

 

​

7.74

Non-vested shares at December 31, 2023

 

3,532,185

​

$

7.35

​

The fair value of restricted share awards is based on the market price of the Company’s stock on the date of the grant and is amortized to compensation expense, net of estimated forfeitures, on a straight-line basis over the requisite service period. The weighted average grant date fair value per share of these restricted stock awards was $7.27 for 2024, $9.50 for 2023 and $6.72 for 2022. The total fair value of shares vested was $7.6 million during 2024, $7.8 million during 2023 and $2.9 million during 2022. The above table does not include any activity related to PSUs since they are not currently granted or vested.

For the year ending December 31, 2024, approximately $57 thousand of net tax deficits for stock-based compensation awards were recorded as a discrete tax adjustment and classified within operating activities in the consolidated statements of cash flows compared to approximately $222 thousand of excess tax benefits for the year ending December 31, 2023.

Other Information

As of December 31, 2024, total unrecognized compensation cost related to non-vested restricted shares was $16.6 million which is expected to be recognized over a weighted-average period of 2.0 years.