SEC Form DEF 14A filed by Archrock Inc.

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March 11, 2025

Dear Fellow Stockholder:

On behalf of the Board of Directors and our management team, we cordially invite you to attend Archrock, Inc.’s Annual Meeting of Stockholders, which will be held at 9:00 a.m. Central Time on Thursday, April 24, 2025, at our corporate offices located at 9807 Katy Freeway, Suite 100, Houston, Texas.

At this meeting, you will have a chance to vote on the matters set forth in the accompanying Notice of Annual Meeting and Proxy Statement.

In 2024, we continued to execute against our strategic, operational and financial objectives, maintaining strong levels of equipment utilization and pricing, increasing our dividend per share and continuing purchases under our stock repurchase program. Additionally, we completed the acquisition of Total Operations and Production Services, LLC (“TOPS”), which added approximately 580,000 horsepower of electric motor drive compression equipment to our existing fleet. This acquisition strengthened Archrock’s position as a leading provider of electric motor drive compression equipment, which we believe benefits both Archrock from a maintenance standpoint and our customers’ operating economics through reduced maintenance, higher run time and no loss of gas in the pipeline. It also has the benefit of lessening our customers’ environmental footprint with reduced carbon dioxide and methane emissions.

We expect market demand for natural gas and natural gas production to remain strong. We believe America’s energy future is full of promise. It will take all forms of energy to meet future demands, and natural gas will continue to play a key role in providing affordable and environmentally conscious energy to residential and commercial markets. Our compression services are critical to processing and pipeline operations. The significant addition of electric motor drive compression equipment to our fleet through the TOPS acquisition enhances our ability to provide customers with an electric option where feasible. Equally important, we are focused on innovative technologies and processes, internally and through investments in methane mitigation and carbon capture technology to apply to traditional gas-powered compression. Our investments in new technology and electric motor drive compression equipment demonstrate strong commitment to our mission:

WE POWER A CLEANER AMERICA^®.

Your vote is important, regardless of the number of shares you own. Whether or not you plan to attend the Annual Meeting, please vote by internet, telephone or mail as soon as possible to ensure your vote is recorded promptly. The instructions set forth in the Proxy Statement and on the proxy card explain how to vote your shares.

Thank you for your continued support of Archrock, an investment in reliable, affordable and cleaner energy.

Sincerely,

Gordon Hall, Chairman of the Board	Brad Childers, President and Chief Executive Officer

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		NOTICE OF 2025 ANNUAL STOCKHOLDERS’ MEETING
ANNUAL MEETING DETAILS		MEETING AGENDA
DATE Thursday, April 24, 2025   TIME 9:00 a.m. Central Time   LOCATION Archrock, Inc. 9807 Katy Freeway, Suite 100 Houston, Texas 77024   RECORD DATE March 3, 2025		PROPOSAL   1: Election of nine director nominees to serve until the 2026 Annual Meeting of Stockholders or until their respective successors are duly elected and qualified   2: Ratification of the appointment of Deloitte & Touche LLP as Archrock’s independent registered public accounting firm for fiscal year 2025   3: Advisory, non-binding vote to approve the compensation provided to our Named Executive Officers for 2024	BOARD’S VOTING RECOMMENDATION   FOR EACH NOMINEE         FOR       FOR	PAGE REFERENCE   1         25       28

The Board recommends that you vote “FOR” each director nominee and “FOR” proposals 2 and 3. The full text of these proposals is set forth in the accompanying Proxy Statement. Stockholders of record at the close of business on March 3, 2025, are entitled to receive notice of and to vote at the Annual Meeting and any adjournment or postponement thereof.

For specific instructions on how to vote your shares, please refer to the Notice of Internet Availability of Proxy Materials you received in the mail, the instructions provided in this document, or, if you requested to receive printed proxy materials, your proxy card.

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INCORPORATION BY REFERENCE

To the extent that this Proxy Statement has been or will be specifically incorporated by reference into any other filing of Archrock, Inc. under the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the sections of this Proxy Statement titled “Report of the Audit Committee” (to the extent permitted by the rules of the U.S. Securities and Exchange Commission (“SEC”)) and “Report of the Compensation Committee” shall not be deemed to be so incorporated, unless specifically stated otherwise in such filing. In addition, this Proxy Statement includes references to websites, website addresses, and additional materials found on those websites. For example, we reference our 2023 Sustainability Report. The content of these materials as well as any websites and other materials named, hyperlinked, or otherwise referenced in this Proxy Statement are not incorporated by reference into this Proxy Statement on Schedule 14A or in any other report or document we file with the SEC, and any references to such websites and materials are intended to be inactive textual references only.

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FISCAL 2024 HIGHLIGHTS

Strategic

Operational

Financial

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¹ Adjusted EBITDA is a non-GAAP measure. See page 38 of this Proxy Statement for our calculation of Adjusted EBITDA and the inside cover of the 2024 Annual Report for a reconciliation of net income (loss) to Adjusted EBITDA.

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SUSTAINABILITY

Archrock, Inc. (“Archrock,” the “Company,” “we,” “our” or “us”) is committed to a strategy focused on natural gas and a cleaner energy future for us, our customers and other stakeholders. We believe that a multi-faceted approach focused on partnerships, customer expectations and investments in innovative technology and processes will drive long-term business sustainability. Sustainability is embedded in our corporate strategy and reinforced by rigorous corporate governance as we seek to maximize stockholder value. We recognize the focus on reducing emissions intensity and a lower-carbon future will present both challenges and opportunities to the industry and Archrock. We also appreciate the impact of affordable energy on our collective health and wellbeing – and our natural gas compression infrastructure plays a critical role.

We invite our stockholders to learn more about our approach and performance with respect to sustainability by reading our 2023 Sustainability Report and listening to our quarterly earnings calls. Our Sustainability Report and transcripts of our quarterly earnings calls can be found at www.archrock.com.

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CORPORATE GOVERNANCE

Archrock maintains best practices in governance, with Board of Directors (the “Board”) oversight of strategy and risk, including sustainability and cyber risks and opportunities.

EXECUTIVE COMPENSATION

Our philosophy is to reward performance with a mix of fixed and variable compensation and that balances long-term and annual performance objectives. Good governance, adherence to best practices and consideration of stakeholder interests form the foundation of our executive compensation program, developed by a fully independent Compensation Committee with the support of an independent executive compensation consultant. Our best practices include:

For more information regarding our 2024 executive compensation program, see the “Compensation Discussion and Analysis” in this Proxy Statement.

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Nine directors are nominated to be elected to the Board at the 2025 Stockholders’ Annual Meeting (the “Annual Meeting”). Each nominee has consented to serve as a director if elected.

OVERVIEW OF 2025 DIRECTOR NOMINEES¹

¹ Gender/Racial Diversity is calculated based on the number of members of our Board who identify as either a traditionally underrepresented gender or a traditionally underrepresented race/ethnicity divided by the total number of directors.

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NOMINEES FOR DIRECTOR

The following biographical information is furnished with respect to each director nominee, together with a discussion of each nominee’s experience, qualifications and attributes or skills that were considered in their nomination to the Board.

ANNE-MARIE N. AINSWORTH Age 68 Independent Director since April 2015 Chair, Governance and Sustainability Committee Member, Audit Committee

Qualifications ●   Extensive leadership experience in the oil and gas industry ●   Familiarity with governance issues, having served as chief executive officer of both public and private energy companies ●   Experience operating a portfolio of energy assets including direct responsibility for safety

Career Highlights

Board Service

Education

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D. BRADLEY CHILDERS Age 60 President and Chief Executive Officer, Archrock Non-Independent Director since April 2013

Qualifications ●   Intimate knowledge of our strategy, operations and markets ●   Deep understanding of operational opportunities and challenges acquired through prior operating roles ●   Business judgment, management experience and leadership skills that are highly valuable in assessing our business strategies and accompanying risks

Career Highlights

Board Service

Education

GORDON T. HALL Age 65 Independent Director since March 2002 Member, Audit and Compensation Committees

Qualifications ●   Thorough understanding of our operational and strategic opportunities and challenges ●   Experience as a research analyst covering oil field services companies provides a broad-based understanding of the industry, as well as mergers, acquisitions and capital markets transactions ●   Extensive energy company board service

Career Highlights

Board Service

Education

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FRANCES POWELL HAWES Age 70 Independent Director since April 2015 Chair, Audit Committee Member, Governance and Sustainability Committee

Qualifications ●   Over 20 years of service as a financial advisor and CFO for both private and public companies resulting in financial expertise, business knowledge and leadership experience ●   Extensive understanding of the audit function and risk management ●   Financial consulting and advisory experience ●   National Association of Corporate Directors Cyber Risk Oversight Certificate

Career Highlights

Board Service

Education

J.W.G. “WILL” HONEYBOURNE Age 73 Independent Director since April 2006 Member, Compensation and Governance and Sustainability Committees

Qualifications ●   Thorough understanding of the challenges and opportunities of markets and financing through energy company board service for both publicly listed and privately held companies, and as managing director of a private equity firm focused on the energy industry ●   Executive and operations leadership experience with oilfield services companies ●   Petroleum engineering experience in the commercialization of technical services and prior service on energy sector technology company boards

Career Highlights

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Board Service

Education

JAMES H. LYTAL Age 67 Independent Director since April 2015 Chair, Compensation Committee Member, Governance and Sustainability Committee

Qualifications ●   Over 40 years of experience in the midstream oil and gas sector, including executive leadership and advisory roles ●   Deep familiarity with the management of midstream assets ●   Through extensive board service, experience with public company executive compensation and governance matters

Career Highlights

Board Service

Education

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LEONARD W. MALLETT Age: 68 Independent Director since January 2021 Member, Audit and Compensation Committees

Qualifications ●   Significant executive leadership experience with responsibility for engineering, strategic sourcing and health, safety and environmental training, compliance and reporting ●   Operations experience and technical expertise, including construction, start-up and operation of natural gas and oil pipeline gathering, transportation and processing facilities

Career Highlights

Board Service

Education

JASON C. REBROOK Age 51 Non-Independent Director since July 2020

Qualifications ●   Over 25 years of experience in capital markets, acquisitions, divestures and operations in both the upstream and midstream sectors ●   Operating experience and understanding of the unique risks, opportunities and challenges of the oil and gas industry ●   Leadership experience in a highly entrepreneurial and successful privately held company

Career Highlights

Board Service

Education

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EDMUND P. SEGNER, III Age 71 Independent Director since July 2018 Member, Audit and Governance and Sustainability Committees

Qualifications ●   Technical experience and financial acumen ●   Thorough understanding of the energy industry and operational challenges unique to the industry ●   Experience with compensation, financing matters and the evaluation of acquisition opportunities through service as a president and director of other publicly traded companies

Career Highlights

Board Service

Education

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INVESTOR OUTREACH

Highlights of our corporate governance practices are provided at the beginning of this Proxy Statement under “2024 in Review”. The Board is committed to responsible and responsive corporate governance policies and practices that serve the interests of all stockholders. The full Board, with the recommendation of our Governance and Sustainability Committee, routinely reviews best practices in corporate governance, as well as sustainability issues, and considers stakeholder interests and feedback.

Archrock takes a multipronged approach to investor communications, and during 2024, members of our senior management team attended 12 investor conferences and non-deal roadshows as well as numerous meetings to discuss our strategy and outlook with our stockholders and have received information on the topics they consider most important as an investor in Archrock.

During 2024, in addition to these traditional investor conference and roadshows, we initiated outreach to our top stockholders (representing over 70% of our shares outstanding as of year-end 2024) to engage on proxy and stewardship matters. The meetings were focused on executive compensation as well as topics at the investors’ discretion, including governance and sustainability. The meetings were attended by our General Counsel, Compensation Committee Chair and/or our Chairman of the Board. Based on certain investors’ valuable feedback, we have provided additional disclosure herein and in our upcoming sustainability report, as appropriate, regarding the operation of our long-term incentive awards based on total stockholder return, director onboarding and continuing education and Board and committee self-evaluations.

DIRECTOR INDEPENDENCE AND TENURE

We have adopted a code of business conduct (the “Code of Business Conduct”), which is applicable to our directors, our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer or Controller (or persons performing similar functions) (“designated officers”) and employees. The Code of Business Conduct is posted on our website at www.archrock.com under the “Investor Relations – Governance” tabs. We will furnish a copy of the Code of Business Conduct to any person, without charge, upon written request to the address provided under “Company Contact Information.” Code of Conduct waivers for directors, executive officers and any designated officer may only be made by the Board of Directors or a committee of the Board and will be promptly and publicly disclosed.

The Code of Business Conduct requires all employees, officers and directors to avoid situations that may impact their ability to carry out their duties in an independent and objective fashion. Any circumstance that has the potential to compromise their ability to perform independently must be disclosed. At least annually, we distribute director and officer questionnaires to elicit related-party information. The questionnaire includes our Code of Business Conduct, Corporate Governance Principles and Securities Trading Policy and requires that each director and executive officer certify their review and compliance with such documents. We also require that responses to the questionnaire be updated throughout the year to the extent circumstances change.

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Our Governance and Sustainability Committee assesses director independence annually by considering all direct and indirect business relationships between Archrock and each director (including his or her immediate family), as well as relationships with our registered public accounting firm, our compensation consultant, other for-profit concerns and charitable organizations. With our Governance and Sustainability Committee’s recommendation, the Board makes a determination relating to the independence of each member, which is based on applicable laws, regulations, our Corporate Governance Principles and the rules of the New York Stock Exchange (“NYSE”).

During our Governance and Sustainability Committee’s most recent review of independence, the committee was provided with responses to the director and officer questionnaires, along with information regarding transactions with related parties identified through a search of our accounting records. See “Related Party Information” in this Proxy Statement for more information.

Based on the recommendation of our Governance and Sustainability Committee, the Board determined that the following nominees for director are independent: Mmes. Ainsworth and Hawes and Messrs. Hall, Honeybourne, Lytal, Mallett and Segner.

The Board believes it has a healthy mix of representation based on tenure of the directors currently serving.

BOARD STRUCTURE AND OVERSIGHT

Our Fourth Amended and Restated Bylaws (as amended, our “bylaws”) provide that our Chairman of the Board may be a “non-executive” Chairman or an Executive Chairman. Our Corporate Governance Principles currently provide that the functions of the Chairman of the Board and the Chief Executive Officer are distinct, and the Board has determined that such functions should be performed by separate individuals. We have selected an independent, non-executive Chairman to lead our Board. The Board recognizes the time, effort and energy that our Chief Executive Officer is required to devote to his position, while our Chairman fulfills a stewardship and Board leadership role. The Board believes this structure is appropriate for us and is in the best interest of our stockholders because of the size and composition of the Board, the scope of our operations and the responsibilities of the Board and management. In addition, in evaluating the leadership structure of the Board, consideration has been given to the heightened need to monitor the rapidly changing energy environment and markets, to innovate, and to focus on sustainability performance. Dependent upon one or more of these factors, as well as stockholder sentiment, the Board would consider the adoption of a different leadership structure and in such event would promptly communicate that change to stockholders.

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DIRECTOR ONBOARDING

We have an immersive approach to director onboarding, which begins with one-on-one meetings with our Chairman of the Board, who mentors the new Board member. Additional meetings are held with our committee Chairs and with members of our senior management team, including our Chief Executive Officer, Chief Financial Officer, General Counsel and senior officers over operations. New directors are educated regarding key governance matters and Company policies that impact the director’s service and effectiveness on the Board, including but not limited to, our Code of Business Conduct, governance documents and policies related to human resources, conflicts of interest, securities trading, related party transactions, auditor independence and pre-approvals and executive and board succession planning. In addition to learning about the Company’s near- and long-term operational, financial and strategic objectives, the new director puts on a hard hat for a visit to a make-ready shop or gas compression site to see our operations first-hand, receive a “boots on the ground” education and ask questions. Our Vice President, Health Safety and Environment also meets with the new director to discuss the safety risks associated with our operations and our approach to mitigating those risks. During their first year of service, a new director is limited in committee service but is encouraged to attend all committee meetings to observe and learn. This gives the Chairman of the Board and Chair of the Governance and Sustainability Committee the opportunity to further assess the new director’s interest in and expertise for additional committee service.

DIRECTOR CONTINUING EDUCATION

The Company supports director continuing education with a formal policy that provides for reimbursement for attendance at an unlimited number of daily seminars as well as one multi-day conference per year. The Board believes it is vital that directors feel free to avail themselves of continuing education to further their knowledge and understanding of various aspects of general industry and, especially, energy industry topics including, but not limited to, strategy, finance, risk management, human resource management, executive compensation, auditing, cybersecurity, risk management, governance, sustainability, market and economic trends and strategic planning.

BOARD AND COMMITTEE EVALUATION

The Board and each committee of the Board conducts a formal annual self-evaluation through a written questionnaire, with the individual responses kept anonymous to ensure that each director has the opportunity to provide critical input where necessary. Archrock’s General Counsel reviews the responses and provides a detailed report for the Chairman of the Board and each Committee Chair for review and discussion at the following Board and committee meetings. Our Governance and Sustainability Committee oversees the Board and committee evaluations.

The Governance and Sustainability Committee determined that it would not extend the evaluation process to assess individual director performance. This is based on our directors’ exceptional board attendance (including by all independent directors at all committee meetings) and director feedback that fellow Board members demonstrate that they are thoroughly prepared, have an understanding of the materials provided in advance of meetings and meaningfully participate during meetings with a collegial yet critical approach to the topics presented.

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Components of Annual Board Performance Evaluation

The Board is committed to continuing enhancements of best practices and in response to formal evaluations as well as informal director and management input, made the following enhancements over the past several years:

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BOARD COMMITTEES AND MEETING ATTENDANCE

The Board has designated an Audit Committee, a Compensation Committee and a Governance and Sustainability Committee (together, the “Committees”) to assist in the discharge of the Board’s responsibilities. The Board and the Committees are governed by our Code of Business Conduct, Corporate Governance Principles and the applicable committee charters, each of which is available to the public on our website at www.archrock.com under the “Investor Relations – Governance” tabs or in print by submitting a written request to the address provided under “Company Contact Information.” The purpose and composition of each committee is summarized in the following table.

The Compensation Committee’s primary purpose is to oversee the development and implementation of our compensation philosophy and strategy that assist management with attracting, developing, retaining and compensating the senior executive talent required to achieve corporate objectives that align with the interests of management and the Company’s stockholders, and linking pay and performance. Our Compensation Committee is charged with overseeing our broad-based strategies related to human capital management. In addition, the Compensation Committee is responsible for incentive-compensation plans and equity-based plans as well as administering and overseeing the Company’s compliance with our Compensation Recovery Policy, required by the applicable SEC and NYSE rules. 

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The Board met 11 times in 2024. All directors attended 100% of the regularly scheduled meetings of the Board and each committee on which he or she served during 2024. Two directors each missed one Board meeting during 2024, in both instances, due to a pre-existing conflict with a specially called Board meeting. Directors are also encouraged to attend each Annual Meeting of Stockholders, and in 2024 all directors attended the meeting.

RISK OVERSIGHT

The Board has an active role, as a whole and through its committees, in the oversight of the Company’s risks consistent with the principles outlined in the Committee of Sponsoring Organizations of the Treadway Commission (COSO) 2017 framework and is assisted by management in the exercise of these responsibilities. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed through committee reports; our directors are invited to attend all committee meetings, and the independent directors typically do so. This facilitates coordination of the risk oversight role among the Board and its committees, particularly with respect to risk interrelationships. The involvement of the Board in reviewing, approving and monitoring our fundamental financial and business strategies, as contemplated by our Corporate Governance Principles, is important to the determination of the types and appropriate levels of risk we undertake.

Management is responsible for identifying risks and opportunities along with the associated response which may involve implementing processes and procedures intended to mitigate risks, which can range from risk avoidance or acceptance to reduction or transfer depending on the facts and circumstances. Archrock engages an outside consultant on a periodic basis to assist management with the identification of short-, intermediate- and long-term risks and to provide insight into emerging trends and best practices, with the last engagement occurring in 2023. Identified risks are ranked based on likelihood of occurrence and potential impact. The assessment considered our risk response and mitigating factors, resulting in the assignment of a management effectiveness score. Risk exposure is considered in the development of our annual and long-term business planning and executive compensation program and informs our approach to business continuity and cybersecurity planning and our compliance and human resource programs. See “Risk Management with Respect to Information Technology and Cybersecurity” below for further information on cybersecurity risk management.

Validation of management’s risk response occurs through internal audits or resources independent of the functional area, our disclosure controls and procedures and, with respect to financial reporting, external auditing. While management presents their findings on risk exposure and our response, the Board has the authority to override management on any risk matter. 

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Risk management is a continuous process comprised of five intertwined components: strategy and objective setting, performance, review and revision, information, communication and reporting and governance and oversight. Through these activities, regular reports are provided to the Board and its committees. Importantly, management’s regular attendance at Board and committee meetings and in-person reports to the Board and its committees provide direct access to our management team, for example:

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The following sets forth the responsibility of the Board, Board committees and management with respect to risk oversight:

Risk Management with Respect to Information Technology and Cybersecurity. Our Board delegates oversight to specific subcommittees and is informed quarterly through committee reports. The Audit Committee is responsible for overseeing our cybersecurity risk management program. Various Audit Committee members have first-hand or supervisory experience over cybersecurity, and our Audit Committee chair is certified in the National Association of Corporate Directors Cyber Risk Oversight Program.

Our IT senior management team, including our Vice President of IT, is responsible for assessing and managing our material risks from cybersecurity threats and has primary responsibility for our overall cybersecurity risk management program, including supervising both our internal cybersecurity personnel and external cybersecurity consultants. Our Vice President of IT has over 25 years of experience primarily focused on managing large scale, complex programs and projects as well as managing application development teams in a global environment. Our senior manager in charge of IT security has more than a decade of experience in cybersecurity risk management, including Certified Information Systems Security Professional certification. Our IT management team utilizes various processes and technologies to identify, protect, detect, respond and recover from cybersecurity events and incidents. During 2024, our IT management team initiated an independent evaluation of our cybersecurity framework and implemented certain company-wide security enhancements. In addition, the IT management team is subject to specific key performance indicators (“KPIs”) and performance against such KPIs is reviewed by our Audit Committee. To create awareness in our first line of defense, training is also provided to employees to help them identify security risks, which includes routine phishing exercises and appraisal of and assistance with security-related performance.

Cybersecurity events and incidents can be reported to our Vice President of IT in several ways, including through our externally managed detection and response provider, system alerts or employees reporting suspicious activity. The Vice President of IT reports to our executive leadership team and along with our senior manager in charge of IT security, provides cybersecurity risk assessment and response updates to the Audit Committee on a regular basis, or as often as deemed necessary. 

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Other Areas of Risk Management. See our 2023 Sustainability Report at www.archrock.com for information associated with additional areas of risk management addressed by our management team and reviewed by our Board and committees of the Board.

DIRECTOR QUALIFICATIONS AND NOMINATIONS

Our Governance and Sustainability Committee believes that all Board candidates should be selected for their character, judgment, ethics, integrity, business experience, time commitment and acumen. The Board, as a whole, through its individual members, seeks to have competence in areas of particular importance to us such as finance, accounting, operations, energy industry, health, safety and the environment and relevant technical expertise. Our Governance and Sustainability Committee also considers issues of diversity in the director identification and nomination process in compliance with applicable laws, regulations or other legal requirements. In addition, our Governance and Sustainability Committee believes that a variety of types and a balance of experience, knowledge and abilities among directors are in the best interests of the stockholders and employee population. While our Governance and Sustainability Committee does not have a formal policy with respect to diversity, it seeks nominees with a broad diversity of experience, professions, skills, education and backgrounds to meet the Company’s ongoing needs. Our Governance and Sustainability Committee does not assign specific weights to particular criteria, and no particular criterion is necessarily applicable to all prospective nominees. Our Governance and Sustainability Committee believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities.

Directors must be committed to enhancing the long-term interests of our stockholders as a whole and should not be biased toward the interests of any particular segment of the stockholder or employee population. Board members should also be prepared to travel to attend meetings of the Board and its committees and should be ready to dedicate sufficient time to prepare in advance of such meetings to allow them to make an effective contribution to the meetings. Further, Board members should ensure that they are not otherwise committed to other activities which would make a commitment to the Board impractical or unadvisable. In addition, Board members should satisfy the independence, qualification and composition requirements of the Board and its committees, as required by law, regulation and the rules of the NYSE, our certificate of incorporation, our bylaws and our Corporate Governance Principles.

Stockholders may propose director nominees to our Governance and Sustainability Committee (for consideration for election at the 2026 Annual Meeting of Stockholders) by submitting, within the time frame set forth in this Proxy Statement, the names and supporting information (including confirmation of the nominee’s willingness to serve as a director) to the address provided under “Company Contact Information.” Any stockholder-recommended nominee will be evaluated in the context of our director qualification standards and the existing size and composition of the Board, and there is no difference in the manner in which the Governance and Sustainability Committee evaluates nominees for director based on whether the nominee is recommended by a stockholder. See “Additional Information – 2026 Annual Meeting of Stockholders.”

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. Hall, Honeybourne, Lytal and Mallett served on our Compensation Committee in 2024. There are no matters relating to interlocks or insider participation that we are required to report.

MANAGEMENT SUCCESSION PLANNING

Succession planning is a critical Board function. Our Compensation Committee considers our business strategy in evaluating the skills and experience necessary for us to achieve our objectives and is actively engaged in management succession planning. With input from our Chief Executive Officer, our Compensation Committee routinely reviews management talent and leadership development and advises the Board in this regard. The Board has adopted a management succession plan, as well as a succession policy in the event of an unanticipated vacancy in the Chief Executive Officer position. In addition, the Company has entered into a Retention Incentive Agreement with our Chief Executive Officer. See “Other Compensation Policies, Practices and Guidelines – Agreements with Executive Officers – CEO Retention Agreement.” 

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RELATED PARTY INFORMATION

Related Party Policy and Practices. We recognize that transactions with related persons can present potential or actual conflicts of interest and create the appearance that decisions are based on considerations other than the best interests of Archrock and our stockholders. Therefore, our Audit Committee has adopted a written policy on related party transactions to provide guidance and set standards for the approval and reporting of transactions between Archrock and individuals with a direct or indirect affiliation with the Company and to ensure that those transactions are in Archrock’s best interest. Any proposed related party transaction must be submitted to our Audit Committee for approval prior to entering into the transaction. Additionally, our policy requires a review by our Financial Reporting Department of any related party transactions on a quarterly basis. In the event we become aware of any pending or ongoing related party transaction that has not been previously approved or ratified, the transaction must be promptly submitted to our Audit Committee or its Chair for ratification, amendment or termination of the related party transaction. A director may not participate in an Audit Committee discussion or approval of a transaction for which he or she is a related party, except to provide information concerning the related party transaction. If a related party transaction is ongoing, our Audit Committee may establish guidelines for management and will annually assess the relationship with such related party.

In reviewing a proposed or ongoing related party transaction, our Audit Committee will consider, among other things, the following factors to the extent relevant to the related party transaction:

Related Party Transactions During 2024. From August 2019 to present, our Board has included a member affiliated with our customer Hilcorp Energy Company (“Hilcorp”) or its subsidiaries or affiliates. Jason C. Rebrook, who was elected to the Board in July 2020, continues to serve as a director on Archrock’s Board and is Chief Executive Officer and director of Harvest Midstream Company (“Harvest”), a Hilcorp affiliate. See “Election of Directors – Nominees for Director.”

In the normal course of business, the Company and its affiliates provide Hilcorp, Harvest and certain other Hilcorp affiliates with contract operations services and aftermarket parts at standard market rates. For fiscal year 2024, we recognized revenue of approximately $41.7 million from transactions with Hilcorp, Harvest and their affiliates. The Audit Committee has and will continue to monitor these transactions pursuant to our related party policy and Mr. Rebrook is currently deemed not independent. Therefore, the Board may request that Mr. Rebrook recuse himself from discussions that would reasonably be expected to result in a conflict of interest, including (without limitation) matters relating directly to Hilcorp, Harvest or any of their affiliates, as well as pricing discussions.

DIRECTOR COMPENSATION

Our Compensation Committee is responsible for recommending director compensation to the full Board for approval. Director compensation is designed to ensure we can attract and retain outstanding directors who meet the qualifications outlined in the Board’s Corporate Governance Principles, ensure alignment with long-term stockholder interests and recognize the substantial time commitments associated with service on the Board.

Each non-employee member of the Board is compensated in cash and equity. Mr. Hall receives additional cash compensation to reflect his additional responsibilities as Chairman of the Board. As President and Chief Executive Officer of Archrock, Mr. Childers does not receive additional compensation for service on the Board.

Our independent compensation consultant conducted a comprehensive market review of director compensation in October 2023, evaluating data derived from the proxy statements of our peer companies and the National Association of Corporate Directors Compensation Survey for energy industry companies and general industry with 2023 estimated revenues between $500 million and $2 billion. The review indicated that the structure of our director compensation program was generally consistent with our peer group and that our typical director compensation was near the peer group median. The Compensation Committee, with input from our independent compensation consultant, continues to monitor director compensation in conjunction with review of our peer group. 

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Cash Compensation. Each non-employee director earned an annual cash retainer (the “Base Retainer”) for his or her service during 2024. The Chairman of the Board and the chairs of our Audit Committee, Compensation Committee and Governance and Sustainability Committee each received an additional retainer for their services. All retainers are paid in arrears in equal quarterly installments. Directors are also reimbursed for reasonable expenses incurred to attend Board and committee meetings and continuing education. On December 14, 2023, the Compensation Committee, with input from our independent compensation consultant, approved increased retainers for the Chairman of the Board and each committee chair ($120,000 for the Chairman of the Board, $30,000 for the Audit Committee Chair and $25,000 for each of the Compensation Committee and Governance and Sustainability Chair) effective January 1, 2024, to more properly align with their responsibilities and market compensation. The Base Retainer for 2024 remained the same as 2023 at $100,000.

Equity-Based Compensation. On December 14, 2023, the Compensation Committee, with input from our independent compensation consultant, approved an increase in the grant of restricted stock or restricted stock units to each non-employee director from approximately $130,000 to approximately $135,000, effective January 1, 2024. The directors’ equity was awarded on January 25, 2024, with the number of shares awarded based on the market closing price of our common stock on the grant date ($16.00). This resulted in the award of 8,437 restricted shares or restricted stock units (with dividend equivalent rights) to each non-employee director. The equity award was one-quarter vested on the grant date, and on each of June 1, September 1 and December 1, 2024.

Stock Ownership Requirements. Our stock ownership policy requires each non-employee director to own an amount of our common stock equal to at least five times the Base Retainer amount (which equals $500,000 of our common stock) within five years of his or her election to the Board. We measure the stock ownership of our directors annually as of each June 30. All directors are in compliance with our stock ownership policy.

Director Stock and Deferral Plan. Under our Directors’ Stock and Deferral Plan (the “Directors’ Plan”), directors may elect to receive all or a portion of their cash compensation for Board service in the form of our common stock and may defer their receipt of the stock. Mr. Honeybourne elected to receive 50% of his 2024 base retainer in the form of common stock (with no deferred delivery) pursuant to the Directors’ Plan.

Total Director Compensation. The following table shows the total compensation paid to each non-employee director for his or her service during 2024. As shown below, excluding our Chairman of the Board, the equity (at-risk) portion of compensation is greater than 50% of each director’s total compensation.

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¹ Represents the grant date fair value of our common stock calculated in accordance with ASC 718 (defined below under “Tax and Accounting Considerations – Accounting for Stock-Based and Unit-Based Compensation”).

² Mr. Honeybourne elected to receive 50% of his 2024 base retainer in the form of Archrock common stock (with no deferred delivery) pursuant to the Directors’ Plan. The number of shares issued is based on the market closing price of our common stock on the last trading day of each quarter.

³ Represents the payment of dividends on unvested restricted stock. In lieu of restricted stock, Mr. Segner elected to receive equity in the form of restricted stock units with deferred delivery; dividend equivalent rights were accrued on the restricted stock units issued to Mr. Segner and will be paid upon distribution of the shares underlying the units according to the terms of the Archrock, Inc. 2020 Stock Incentive Plan and his deferral election.

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COMPANY MANAGEMENT TEAM

The following provides information regarding our executive officers and senior leadership as of March 3, 2025. Information concerning the business experience of Mr. Childers is provided under “Nominees for Director” in this Proxy Statement.

Douglas S. Aron (51) – Senior Vice President and Chief Financial Officer since 2018
	● Executive Vice President and Chief Financial Officer of HollyFrontier Corporation (an independent petroleum refiner and marketer of petroleum products) from 2011 to 2017 ● Prior to Frontier Oil Corporation’s merger with Holly Corporation in 2011, served Frontier as Executive Vice President and Chief Financial Officer, from 2009, as Vice President of Corporate Finance, from 2005 to 2008 and as Director of Investor Relations, from 2001 to 2005  ● Executive Vice President and Chief Financial Officer of Nine Energy Service, Inc. (a North America oilfield services company) in 2017  ● BA, Journalism, The University of Texas at Austin  ● MBA, Jesse H. Jones Graduate School of Business, Rice University
Donna A. Henderson (57) – Vice President and Chief Accounting Officer since 2016
	● Vice President, Accounting, of our primary operating subsidiary since 2015  ● Vice President and Chief Accounting Officer of Southcross Energy Partners GP, LLC (a provider of natural gas gathering, processing, treating, compression and transportation services) from 2013 to 2015  ● Vice President and Chief Audit Executive of GenOn Energy, Inc. (a wholesale electric generator that merged into NRG Energy) from 2011 to 2012  ● Assistant Controller of GenOn Energy, Inc. and its predecessor companies, RRI Energy, Inc. and Reliant Energy Inc., from 2005 to 2011, and various other leadership roles within the accounting department of that organization since 2000  ● From 1996 to 2000, various accounting positions with Lyondell Chemical (a manufacturer of chemicals and polymers), having begun her career with accounting firms Deloitte & Touche LLP and KPMG LLP  ● Member of the Executive Committee and Board of Trustees of the Good Samaritan Foundation from 2012 through 2024  ● BBA, Accounting, Eastern New Mexico University  ● Member of the American Institute of Certified Public Accountants
Stephanie C. Hildebrandt (60) – Senior Vice President, General Counsel and Secretary since 2017
	● Partner, Norton Rose Fulbright (a global law firm) from 2015 to 2017  ● Senior Vice President, General Counsel and Secretary of Enterprise Products Partners L.P. (“Enterprise”, a publicly traded pipeline and infrastructure company and consumer energy service provider) from 2010 to 2014, after serving in various other roles at Enterprise  ● Member of the Board of Directors of FS Crude Parent, LLC  ● Member of the Tulane Center for Energy Law Advisory Board since 2019  ● Member of the President’s Advisory Board, University of St. Thomas, since 2016  ● Member of the executive council, from 2020 to 2024, and advisory council, from 2014 to 2024, The University of Texas Kay Bailey Hutchison Center for Energy, Law & Business  ● Former director and member of the audit committee of WildHorse Resource Development Corporation from 2017 until it was acquired in 2019, and for a portion of her tenure, chair of the compensation committee  ● Former director and member of the conflicts committee of Rice Midstream Management LLC, from 2016 until it was acquired in 2018  ● Former director, chair of the compensation committee and member of the nominating and governance committee of TRC Companies, Inc. from 2014 until it was acquired in 2017  ● BS, Foreign Service, Georgetown University  ● JD, Tulane University Law School

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Jason G. Ingersoll (54) – Senior Vice President, Sales and Operations Support since 2018 and 2020, respectively
	● Senior Vice President, Marketing and Sales of Archrock since 2018 after having served as Vice President from 2015 to 2018  ● Vice President, Sales of our predecessor subsidiary Exterran Energy Solutions, L.P. (“EESLP”) from 2013 to 2015, as well as positions of increasing responsibility with EESLP, including Regional Vice President, from 2012 to 2013, and Business Unit Director from 2009 to 2012  ● Held positions of increasing responsibility, including Country Manager of China, with UCI  ● Member of the Executive Committee and Board of Trustees of the Good Samaritan Foundation  ● BS, Mechanical Engineering, Texas A&M University
Elspeth A. Inglis (56) – Senior Vice President and Chief Human Resources Officer since 2019
	● Vice President, Culture Integration at Baker Hughes from 2016 to 2019  ● Head of Human Resources, Downstream Technology Services, GE Oil and Gas (a global manufacturing business) from 2013 to 2016  ● Vice President, Human Resources supporting the startup operations for the US unconventional shale gas business of Reliance Industries from 2011 to 2013  ● From 2002 to 2009, held positions of increasing responsibility at CGG (a geophysical services company) including Marine Human Resource Manager and Vice President Human Resources, Western Hemisphere in Houston and Senior Vice President Geophysical Services based in Paris    ● Human Resource Manager for Enron Corp. from 1999 to 2001 in both London and Houston  ● Director and member of the Human Resource Committee of Catholic Charities  ● Advisory board member of Workforce Next  ● Graduate member of the Institute of Personnel Development (UK) and Senior Practitioner of Human Resources (US) certification    ● Human Resource and Management education from Rice University and Henley Business Management School, University of Reading (UK); Associate degree from University of the Arts London (UK), Business Management
Eric W. Thode (59) – Senior Vice President, Operations since 2020
	● Vice President, Operations since October 2018, having previously served as Vice President and Business Unit Director of the South Texas Business Unit of Archrock Services, L.P., our wholly owned operating subsidiary, since 2018 and 2014, respectively  ● Director of Archrock’s Barnett Business Unit from 2012 to 2014  ● Director of Archrock Business Development, negotiating alliance contracts that generated over $100 million in annual revenue, having served our predecessor subsidiaries, EESLP and UCI, since 2004  ● Director, Public Relations of Enron Corporation from 1999 to 2004  ● Manager, Government and Public Affairs of TEPPCO Partners from 1991 to 1999  ● BS, Economics, Texas A&M University  ● MPA, Texas A&M University

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OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table provides information about beneficial owners, known by us as of March 3, 2025, except to the extent indicated otherwise in the footnotes, of 5% or more of our outstanding common stock (the “5% Stockholders”). Unless otherwise noted in the footnotes to the table, the 5% Stockholders named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them.

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¹ Reflects shares of common stock beneficially owned as a percentage of approximately 175 million shares of common stock outstanding as of March 3, 2025.

² Based solely on a review of the Schedule 13G/A filed by BlackRock, Inc. on February 5, 2025. BlackRock, Inc. (including its subsidiaries and affiliates) has sole voting power over 28,039,629 shares and sole dispositive power over 28,844,227 shares.

³ Based solely on a review of the Schedule 13G/A filed on January 30, 2025 by The Vanguard Group, Inc. (“Vanguard”). Vanguard does not have sole power to vote any of the shares reported, but has shared voting power over 318,546 shares. Vanguard has sole dispositive power over 21,078,625 shares and shared dispositive power over 493,175 shares.

⁴ Based on a review of the Schedule 13G/A filed by EARNEST Partners, LLC on November 13, 2024. EARNEST Partners, LLC has sole voting power over 9,068,743 shares, shared voting power over 2,492,178 shares and sole dispositive power over all shares reported herein.

⁵ Based on a review of the Schedule 13G/A filed by Dimensional Fund Advisors LP on October 31, 2024, which provides investment advice to four registered investment companies and acts as investment manager or sub-advisor to certain other commingled funds, group trusts and separate accounts (collectively, the “Funds”). Dimensional Fund Advisors LP and its subsidiaries (collectively, “Dimensional”) may act as an adviser, sub-adviser and/or manager to certain Funds with sole dispositive power over all shares held by the Funds. Dimensional may be deemed to be the beneficial owner of the shares held by the Funds, however, Dimensional disclaims beneficial ownership. Based on a further review of this 13G/A, Dimensional possesses sole voting power over 8,807,134 shares and sole dispositive power over all shares reported herein.

⁶ Based solely on a review of the Schedule 13G filed by Invesco Ltd. on February 7, 2025. Invesco Ltd, in its capacity as a parent holding company to its investment advisers, may be deemed to beneficially own 8,883,949 shares, held by clients of Invesco Ltd., and has sole voting power over 8,828,164 shares and sole dispositive of all shares reported herein. 

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OWNERSHIP OF MANAGEMENT

The following table provides information, as of March 3, 2025, regarding the beneficial ownership of our common stock by each of our directors, each of our Named Executive Officers and all of our current directors and executive officers as a group. Unless otherwise noted in the footnotes to the table, the persons named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them. The address for each individual listed below is c/o Archrock, Inc., 9807 Katy Freeway, Suite 100, Houston, Texas 77024.

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* Less than 1%

¹ For Ms. Hawes, includes restricted stock units awarded in 2021 and 2022 with deferred delivery. For Mr. Segner includes restricted stock units awarded annually in 2021 through 2025 with deferred delivery. For all other directors, includes unvested restricted stock awarded in 2025.

For Mr. Childers, includes unvested restricted stock units awarded in 2024 and 2025 in lieu of restricted stock, which vest over a three-year period from the date of grant. For executive officers, including Mr. Childers, includes unvested restricted stock awards from annual grants that vest ratably over a three-year period from the date of grant.

Except with respect to the restricted stock units reported herein for Ms. Hawes and Messrs. Segner and Childers, officers and directors have voting power and once vested, dispositive power.

² Mr. Thode does not share voting or dispositive power over 239 shares held by a family member, and he disclaims beneficial ownership of such shares.

DELINQUENT SECTION 16(a) REPORTS

Under Section 16(a) of the Exchange Act, our directors and officers are required to file reports of holdings and transactions in Archrock stock with the SEC on a timely basis. During 2024, when reporting for each of our Named Executive Officers’ withholding of shares to meet the tax obligation pursuant to the vesting of 2021 TSR Performance Awards, we inadvertently failed to report the vesting and conversion of such awards to common stock. The performance payout determination and vesting of the 2021 TSR Performance Awards was reported in our 2024 proxy statement, and this administrative error was corrected on a subsequent late Form 4 filing for each Named Executive Officer. In addition, we inadvertently failed to timely report the issuance of shares associated with Director Will Honeybourne’s election to receive 50% of his quarterly retainer payment in the form of Archrock common stock for the fourth quarter of 2024; this administrative error was corrected on a subsequent late Form 4 filing for Mr. Honeybourne. Based on our records, we believe all other filing requirements of Section 16(a) of the Exchange Act were met by our officers and directors in 2024.

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Deloitte & Touche LLP (“Deloitte”) served as our independent registered public accounting firm for the fiscal year ended December 31, 2024. Our Audit Committee has selected Deloitte as our independent registered public accounting firm for the fiscal year ending December 31, 2025. We are submitting the selection of Deloitte for stockholder ratification at the Annual Meeting.

Representatives of Deloitte attended all meetings of our Audit Committee in 2024 as well as our 2024 Annual Meeting of Stockholders. For additional information concerning our Audit Committee and its activities with Deloitte, see “Pre-Approval Policy” and “Report of the Audit Committee” following this proposal description. We expect that a representative of Deloitte will attend the Annual Meeting, and the representative will have an opportunity to make a statement if he or she so chooses. The representative will also be available to respond to appropriate questions from stockholders.

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FEES PAID TO THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The following table presents fees for professional services rendered by Deloitte and its member firms and respective affiliates on our behalf for calendar years 2024 and 2023.

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¹ Audit fees include fees billed by our independent registered public accounting firm related to audits and reviews of financial statements we are required to file with the SEC, audits of internal control over financial reporting and assistance with and review of documents filed with the SEC.

² Audit-related fees include fees billed by our independent registered public accounting firm primarily related to issuance of comfort letters.

³ Tax fees include fees billed by our independent registered public accounting firm primarily related to tax compliance and consulting services.

⁴ All other fees include fees billed by our independent registered public accounting firm primarily related to advisory services for pre-acquisition financial and tax due diligence.

In considering the nature of the services provided by Deloitte, our Audit Committee determined that such services are compatible with the provision of independent audit services. Our Audit Committee discussed these services with Deloitte and our management to determine that they are permitted under the rules and regulations concerning auditor independence promulgated by (a) the SEC to implement the Sarbanes-Oxley Act of 2002, and (b) the American Institute of Certified Public Accountants.

PRE-APPROVAL POLICY

Our Audit Committee has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by our independent registered public accounting firm. This policy generally provides that we will not engage our independent registered public accounting firm to render audit or non-audit services and will not engage any other independent registered public accounting firm to render audit services, unless the service is specifically approved in advance by our Audit Committee.

Our Audit Committee’s practice is to consider for approval, at its regularly scheduled meetings, all audit and non-audit services proposed to be provided by our independent registered public accounting firm. In situations where a matter cannot wait until the next regularly scheduled committee meeting, the chair of our Audit Committee has been delegated authority to consider and, if appropriate, approve audit and non-audit services. Approval of services and related fees by our Audit Committee chair is reported to the full Audit Committee at the next regularly scheduled meeting. All services performed by our independent registered public accounting firm in 2024 were pre-approved pursuant to this policy.

REPORT OF THE AUDIT COMMITTEE

The purpose of the Audit Committee is to assist the Board in its general oversight of Archrock’s financial reporting, internal controls and audit functions. The Audit Committee Charter describes in greater detail the full responsibilities of the Audit Committee and is available on Archrock’s website at www.archrock.com.

The Audit Committee has reviewed and discussed the consolidated financial statements and management’s assessment and report on internal control over financial reporting with management and Deloitte. The Audit Committee also reviewed and discussed with Deloitte its review and report on Archrock’s internal control over financial reporting. Archrock published these reports in its Annual Report on Form 10-K for the year ended December 31, 2024, which it filed with the SEC on February 25, 2025. Management is responsible for the preparation, presentation and integrity of financial statements and the reporting process, including the system of internal controls. Deloitte is responsible for performing an independent audit of Archrock’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and issuing a report thereon, as well as expressing an opinion on the effectiveness of Archrock’s internal control over financial reporting. The Audit Committee monitors these processes. 

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The Audit Committee members are not professional accountants or auditors, and their functions are not intended to duplicate or to certify the activities of management or the independent auditors. The Audit Committee serves a board-level oversight role, in which it provides advice, counsel and direction to management and the independent auditors on the basis of the information it receives, discussions with management and the independent auditors, and the experience of the Audit Committee members in business, financial and accounting matters. In accordance with applicable law, the Audit Committee has ultimate authority and responsibility for selecting, compensating, evaluating, and, when appropriate, replacing Archrock’s independent auditors. The Audit Committee has the authority to engage its own outside advisers, including experts in particular areas of accounting, as it determines appropriate, apart from counsel or advisers hired by management.

In this context, the Audit Committee discussed with Archrock’s internal auditors and Deloitte the overall scope and plans for their respective audits. The Audit Committee met with the internal auditors and Deloitte, with and without management present, to discuss the results of their examinations, their evaluations of Archrock’s internal controls, and the overall quality of Archrock’s financial reporting. Management represented to the Audit Committee that Archrock’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States, and the Audit Committee reviewed and discussed the consolidated financial statements with management and Deloitte, including a discussion of the quality, not just the acceptability, of the accounting principles applied, the reasonableness of significant judgments and the clarity of disclosures in the consolidated financial statements. The Audit Committee also discussed with Deloitte the matters required to be discussed under applicable requirements of the PCAOB and the SEC.

In addition, the Audit Committee discussed with Deloitte its independence, considered the compatibility of non-audit services with the auditors’ independence and received the written disclosures and letter required from Deloitte required by the applicable requirements of the PCAOB regarding Deloitte’s communications with the Audit Committee concerning independence.

Based on the reviews and discussions referred to above, the Audit Committee recommended to Archrock’s Board, and the Board has concurred, that (a) the audited financial statements be included in Archrock’s Annual Report on Form 10-K for the year ended December 31, 2024, for filing with the SEC; (b) Deloitte meets the requirements for independence; and (c) the appointment of Deloitte for 2025 be submitted to the stockholders for ratification.

The Audit Committee of the Board of Directors

Frances Powell Hawes, Chair 

Anne-Marie N. Ainsworth 

Gordon T. Hall 

Leonard W. Mallett 

Edmund P. Segner, III

The information contained in this Report of the Audit Committee shall not be deemed to be “soliciting material,” to be “filed” with the SEC or be subject to Regulation 14A or Regulation 14C or to the liabilities of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any filing of Archrock, except to the extent that Archrock specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act. 

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Pursuant to Section 14A of the Exchange Act, our stockholders are provided the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our Named Executive Officers as disclosed in this Proxy Statement. This proposal gives stockholders the opportunity to approve, reject or abstain from voting with respect to the compensation provided to our Named Executive Officers for 2024.

As discussed in the Compensation Discussion and Analysis section of this Proxy Statement, our executive compensation program is designed to attract and retain individuals with the level of expertise and experience needed to help achieve the business objectives intended to drive both short- and long-term success and stockholder value. You are encouraged to carefully review the information about our executive compensation program and policies in the Compensation Discussion and Analysis following this proposal description, as well as the compensation-related tabular and other disclosure following the Compensation Discussion and Analysis.

Unless the Board modifies its determination of the frequency of future “say on pay” advisory votes, the next “say on pay” advisory vote will be held at our 2026 Annual Meeting of Stockholders.

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NAMED EXECUTIVE OFFICERS

This Compensation Discussion and Analysis explains the compensation earned during 2024 by our Chief Executive Officer, Chief Financial Officer and our other executive officers whom we refer to as “Named Executive Officers.” It also summarizes our executive compensation philosophy, each element of compensation, and how each element supports our compensation objectives and corporate strategy. Our executive compensation program is designed to balance rewards and risks, drive performance and sustain long-term stockholder value. Our 2024 Named Executive Officers were as follows:

2024 PERFORMANCE HIGHLIGHTS

Our management team and Board have continued to exercise heightened focus on the following objectives: keep employees safe, preserve and grow revenue, exercise capital discipline, reduce expenses, and maintain our dividend program. In addition, we continue to be aware of the evolving energy landscape and placed considerable emphasis during the past year on reviewing various opportunities to continue to contribute to our and our customers’ efforts to reduce emissions.

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MOST RECENT SAY ON PAY VOTE AND HISTORICAL PROGRAM CHANGES

At our 2024 Annual Meeting of Stockholders, 88% of stockholders supported our 2023 executive compensation program. This result reflects strong stockholder support for our approach to executive pay, which is grounded in clearly defined performance metrics and ambitious goals. However, we acknowledge that this result is lower than our five-year average of over 95%, highlighting the importance of maintaining alignment with stockholder expectations. We highly value the perspectives of our stockholders and are committed to ensuring our executive compensation program aligns with their priorities and reflects market best practices.

In response to stockholder feedback received in 2024 (see “Governance – Investor Outreach”), we refined our 2025 executive compensation program to place greater emphasis on performance-based equity. Beginning in 2025, long-term incentive awards will be granted using an equally weighted mix of time- and performance-based equity vehicles, shifting from the prior mix of 60%/40%, respectively. This change increases the portion of performance-driven incentives, reinforcing accountability for key financial objectives and further aligning executive compensation with stockholder priorities. 

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We remain committed to a thoughtful and transparent approach to executive compensation, ensuring it aligns with stockholder priorities while rewarding the exceptional achievements that drive our operational, financial, and sustainability goals, as well as our Company’s long-term success. Below is a timeline of changes we have made to our program over the last several years:

Our Compensation Committee remains committed to the ongoing evaluation of our executive compensation program, taking into consideration market trends, best practices, industry conditions, our performance and feedback received from our stockholders.

OUR BEST PRACTICES

Our executive compensation program provides balanced incentives and does not promote risks that are reasonably likely to have a material adverse effect on us. Our Compensation Committee has incorporated certain stockholder-aligned compensation governance practices into our executive compensation program, including:

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COMPONENTS OF OUR 2024 EXECUTIVE COMPENSATION

The charts below illustrate that the majority of compensation awarded at target by our Compensation Committee is variable: 87% for our CEO and an average of 76% for our other Named Executive Officers (“NEOs”) for fiscal 2024.

Target Total Direct Compensation Mix 

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CEO REALIZABLE COMPENSATION

The chart below illustrates that our CEO’s realizable compensation aligns with total stockholder return (“TSR”).¹ Realizable compensation includes the actual annual incentive award paid for performance during each year and the year-end face value of equity-based awards granted during the year.

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¹ TSR derived from Standard & Poor’s Capital IQ Platform and reflects adjustments for dividends. 

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COMPENSATION PHILOSOPHY AND OBJECTIVES

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ELEMENTS OF COMPENSATION

Our executive compensation program is designed to align our Named Executive Officers’ pay with individual and Company performance in order to achieve profitability and return for our stockholders, and to attract and retain executives with the level of expertise and experience necessary to achieve our business objectives while driving short- and long-term results. The key elements of our Named Executive Officers’ compensation and the targeted objectives of each are as follows:

HOW OUR COMPENSATION COMMITTEE DETERMINES EXECUTIVE COMPENSATION

Our Compensation Committee is responsible for establishing and overseeing compensation programs that are consistent with our compensation philosophy. In carrying out this role, our Compensation Committee considers such factors as they deem relevant, including the following:

Role of Management. The most significant aspects of management’s, including our Chief Executive Officer’s, role in the compensation-setting process are:

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Our Chief Executive Officer annually reviews the individual performance of our Named Executive Officers and recommends salary adjustments, annual cash incentives and LTI Awards for executives other than himself, which our Compensation Committee considers along with the other factors discussed above.

Role and Independence of Compensation Consultant. The Compensation Committee has the sole authority to retain, oversee and terminate any compensation consultant used to assist in the evaluation of executive compensation and approve the consultant’s fees and retention terms. For 2024, the Compensation Committee retained Pearl Meyer as its independent executive compensation consultant to:

In 2024, the Compensation Committee assessed the independence of Pearl Meyer, pursuant to SEC rules and concluded that no conflict of interest exists that would prevent Pearl Meyer from serving as its independent compensation consultant.

Peer Group. Our Compensation Committee annually reviews the composition of the peer group, based on input from its compensation consultant, and modifies it as circumstances, including industry consolidation and other competitive forces, warrant. Since there are few publicly traded companies that directly match our profile, our Compensation Committee uses a peer group that includes a diverse group of midstream, oilfield services and related companies with primarily domestic operations. The analysis presented by Pearl Meyer includes a review of each company’s financial data and business profile (including geographic footprint), and includes companies considered talent competitors, companies that identify us as a peer and companies identified by proxy advisory firms as potential peers.

2024 Compensation Peer Group. In consultation with Pearl Meyer, our Compensation Committee determined to make no changes to the 2023 peer group for the evaluation of 2024 total compensation (the “2024 Compensation Peer Group”), which included the following companies:

Our Compensation Committee’s considered the 2024 Compensation Peer Group to be appropriate based on the following:

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BASE SALARY

In its review of executive compensation in early 2024, our Compensation Committee considered the competitive positioning of each officer’s base salary as compared to the data provided by our independent compensation consultant, market conditions, the competitive macro employment environment, and each officer’s scope of responsibilities and individual experience, skill and performance.

For 2024, the Compensation Committee approved base salary increases to better align with the market for their respective roles. The table below lists each executive’s annualized 2023 and 2024 base salary and shows the percent increase year over year.

ANNUAL PERFORMANCE-BASED INCENTIVE COMPENSATION

During the first quarter of each year, our Compensation Committee adopts a program to provide the short-term cash incentive element of our Named Executive Officers’ compensation for that year. In early 2024, our Compensation Committee adopted the 2024 Incentive Program. Each Named Executive Officer’s potential cash payout under the 2024 Incentive Program ranged from 0% to 200% of his or her incentive target, as described below, and our Compensation Committee determined payouts to the Named Executive Officers using the following formula:

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* Adjusted EBITDA performance of <80% of target performance will result in a payout factor of 0%. Adjusted EBITDA, a non-GAAP measure, is defined as net income (loss) excluding interest expense, income taxes, depreciation and amortization, long-lived and other asset impairment, unrealized change in fair value of investment in unconsolidated affiliate, restructuring charges, debt extinguishment loss, transaction-related costs, non-cash stock-based compensation expense, amortization of capitalized implementation costs and other items. See the inside cover of the 2024 Annual Report for a reconciliation of net income (loss) to Adjusted EBITDA.

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Our Compensation Committee believes Adjusted EBITDA is a comprehensive measure of financial performance, requiring focus on various components of financial and operating health, and an appropriate measure of management’s ability to run the business on an annual basis. The above formula is designed to create a focus on the overall success of the Company as well as the achievement of line-of-sight performance objectives. In addition, our Compensation Committee retains discretion to include or exclude exceptional, non-recurring items, which could result in unintended consequences and an erroneous performance achievement to the advantage or detriment of our Named Executive Officers.

2024 Incentive Program Target. Each Named Executive Officer’s cash incentive target was a specified percentage of eligible earnings during 2024. The table below presents each Named Executive Officer’s 2024 cash incentive target as a specified percentage of his or her eligible earnings and a potential payout assuming the achievement of Company, Operating Unit (where applicable), and individual results are achieved at 100%.

Weighting of Performance Criteria. Adjusted EBITDA, Sustainability, and where applicable, Operating Unit financial and operational metrics for 2024, were weighted as follows:

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¹ TRIR is total recordable incident rate and PVIR is preventable vehicle incident rate.

Adjusted EBITDA Target and Results. Our Compensation Committee set the performance target for 2024 Adjusted EBITDA at $518 million based on continued capital discipline and anticipated favorable market conditions. Adjusted EBITDA for 2024 was achieved at approximately $595 million. However, for purposes of the 2024 Incentive Program, the Compensation Committee determined to exclude the positive impact from the TOPS acquisition, which reduced the achievement results for Adjusted EBITDA to approximately $559 million, a payout of approximately 179% of target.

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Sustainability Targets and Results. Our Sustainability metrics together comprise 20% of our 2024 Incentive Program. Targets and results excluded the TOPS acquisition.

The payout percentage for each Sustainability metric is impacted by the performance achieved for each metric and, if such performance is equal to or exceeds target, the payout percentage is also impacted by Adjusted EBITDA performance, as indicated in the following chart.

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¹ Performance excludes TOPS; with TOPS included, the result for TRIR and PVIR was 0.17 and 0.29, respectively. 

² TRIR (calculated pursuant to OSHA guidelines) = TRIR x 200,000/divided by the total hours worked during the year. 

³ PVIR (calculated pursuant to API guidelines) = PVIR x 1,000,000 miles/divided by mileage driven during the year.

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Operating Unit Targets and Results. Operating Unit performance criteria are applicable to Mr. Ingersoll, Sales and Operations Support, and to Mr. Thode, Operations, and include more granular and specific line of sight performance goals necessary to maintain our focus on operating efficiencies at the business unit level and critical to the Company’s success.

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¹ Specific performance targets with respect to the achievement of operating unit performance are not disclosed because they are derived from internal analyses reflecting our business strategy. We believe their disclosure would provide our competitors, customers and other third parties with significant insights regarding our confidential business strategies that could cause us substantial competitive harm.

Individual Performance. In early 2024, our Compensation Committee approved individual performance objectives for Mr. Childers related to the Company’s financial and operational performance, strategic initiatives (including as related to new ventures opportunities, leverage reduction and other initiatives), leadership goals and Company culture initiatives. Upon conclusion of fiscal year 2024, our Compensation Committee met with Mr. Childers to discuss his performance relative to the approved individual objectives. Thereafter, our Compensation Committee met in executive session and reported its assessment to the full Board. The Board delivered its evaluation to Mr. Childers, the result of which is summarized below and in “Executive Summary – 2024 Performance Highlights”. Our Compensation Committee considered each Named Executive Officers’ accomplishments during 2024, including implementation of operational improvements, demonstrated leadership, capital discipline, leverage and cash flow, and progress on other initiatives, analysis and reporting.

Following such assessments of individual performance during 2024, our Compensation Committee and Board concluded that all Named Executive Officers met or exceeded expectations.

Our Compensation Committee also considered each Named Executive Officer’s (including Mr. Childers’) individual contribution toward significant strategic initiatives and accomplishments that were not specifically enumerated in the 2024 Incentive Program performance criteria but are critical to our long-term strategic objectives. Specifically, our Compensation Committee considered the following:

The chart below provides each Named Executive Officer’s target cash incentive, multiplied by the achievement percentages for Company and operating unit performance and individual performance and the payout earned.

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LONG-TERM INCENTIVE COMPENSATION

During 2024, our long-term incentive program consisted of the following LTI Awards:

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¹ As previously noted, the 2025 long-term incentive program includes an equal mix of time-vested restricted stock/units and performance-based units.

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Long-Term Incentive Plan. Grants of restricted stock and performance-based restricted stock units were made under the Archrock, Inc. 2020 Stock Incentive Plan, which was approved by our stockholders in April 2020. The 2020 Stock Incentive Plan is administered by our Compensation Committee.

Named Executive Officers’ 2024 LTI Awards. In determining the grant of 2024 LTI Awards, our Compensation Committee considered the factors discussed above under “How Our Compensation Committee Determines Executive Compensation” and reviewed share utilization under the 2020 Stock Incentive Plan and potential overhang and burn rate under various award scenarios. Our Compensation Committee also considered the retention aspect of awards as well as performance metrics that balance short- and long-term objectives. The following table provides the total value of each Named Executive Officer’s 2024 LTI Award based on the grant date market value of our stock and the number of shares and units awarded.

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¹ In lieu of time-vested restricted stock, Mr. Childers was granted time-vested restricted units (with dividend equivalent rights). See “Other Compensation Policies, Practices and Guidelines – Agreements with Executive Officers – CEO Retention Agreement” for more information regarding vesting and settlement of these restricted units.

2024 Performance-Based LTI Awards.

CAD and Leverage Performance Units. The percentage of 2024 CAD and Leverage Performance Units that may be earned will be based on the achievement of the performance factors over a three-year performance period as indicated in the chart below.

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At the conclusion of the performance period, a number of CAD and Leverage Performance Units ranging from 0% to 200% of the total number of units granted will be earned. If the Company’s performance falls between the levels specified in the chart, the percentage of CAD and Leverage Performance Units that will be earned will be determined using straight-line interpolation between such levels. No payout will be earned if the Company’s CAD and Leverage performance is below the threshold level. The earned CAD and Leverage Performance Units are also subject to three-year cliff vesting on January 25, 2027, subject to continued employment through the vesting date. Pursuant to Mr. Childers’ Retention Agreement, in the event of a qualifying retirement the award will remain outstanding through the vesting date and be paid based on actual performance (see “Agreements with Executive Officers – CEO Retention Agreement”). In addition, the award is subject to accelerated vesting as described below under “Potential Payments upon Termination or Change of Control”. Each earned CAD and Leverage Performance Unit is payable in cash based on the market closing price of our common stock on the date of vesting. The award includes tandem DERs which are accrued during the performance period and will be paid based on the number of units earned and vested.

TSR Performance Units. The percentage of 2024 TSR Performance Units that may be earned will be based on our absolute TSR and our TSR performance rank relative to the companies in our 2024 Performance Peer Group at the conclusion of the three-year performance period as described below.

In consultation with Pearl Meyer, our Compensation Committee reviewed our peer group utilized for 2023 LTI Awards based on relative TSR performance and considered changes to the peer group based upon subsequent spin-offs, mergers and changes in estimated financial performance. Following such evaluation, the below peer group (the “2024 Performance Peer Group”) was approved for purposes of evaluating relative TSR over the performance period of January 1, 2024 through December 31, 2026:

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