Valaris : 2023 Proxy Statement (24.11 MB)

Dear Fellow Shareholders,

The Valaris story begins 100 years ago when two brothers purchased a single steam-powered drilling rig and began contract drilling operations. Today, the Rowan brothers' bold first step has grown into the largest offshore drilling fleet in the world. The unifying thread between these modest beginnings and Valaris' position as an industry-leading drilling contractor is the unwavering dedication of our employees and a commitment to delivering the highest levels of service to our customers. During 2023, we continued to focus our efforts on investing in our people and fleet while innovating and continuously improving to drive our operational performance, increased earnings and long-term shareholder value.

Positioning Valaris for a multi-year upcycle

Commodity prices remain supportive for continued investment in offshore projects and growing global demand for hydrocarbons means that these resources will be needed to meet the world's energy needs. We are seeing a growing pipeline of customer demand, with increased term and longer lead times, which is a positive sign for the strength and duration of the current upcycle.

As a result, we continued to position Valaris to capitalize on these strong market conditions by reactivating drillships VALARIS DS-8 and DS-17 for attractive contracts offshore Brazil and purchasing drillships VALARIS DS-13 and DS-14 at compelling prices, providing additional operating leverage to the upcycle.

The successful reactivation of VALARIS DS-8 marked our fifth drillship reactivation completed since early 2022 and our second in 2023. We continue to make good progress on reactivating VALARIS DS-7, and look forward to adding another drillship to the active fleet later this year for a multi-year contract offshore West Africa.

Our industry-leading ability to execute these complex projects has been an important part of our growth story and will be a key driver of the meaningful improvement expected in our financial results during 2024.

Investing in our people

Delivering safe and efficient operations to customers is key to our success and our people are critical to achieving this objective.

With the continued increase in drilling activity, we expanded our rig crews, hiring approximately 1,200 offshore employees in 2023. We also conducted approximately 530,000 hours of training, an increase of 150% compared to the prior year. Our orientation program for new hires includes the Valaris Basic Training Program - a unique, immersive program that utilizes a dedicated rig in the U.S. Gulf of Mexico to provide training for our new crew members to prepare them to work safely offshore. The Valaris Basic Training Program was recognized by the Center for Offshore Safety with its 2023 Safety Leadership Award - an honor that serves as a positive endorsement of the value this program creates for the company and its shareholders.

For our onshore employees, we launched the Onshore Leadership Engagement program, which is focused on developing leadership skills for our shore- based colleagues, and more than 150 of our senior leaders completed this training during 2023. We will continue to invest in our people as we expand our operations to meet increasing customer demand.

Delivering earnings and cash flow growth

We achieved significant commercial success in 2023, adding nearly $3 billion in new contract backlog at meaningfully improved day rates. As of February 2024, we had total contract backlog of nearly $4 billion, an industry-leading 59% increase as compared to a year prior.

This contracting success is anticipated to lead to a notable improvement in our 2024 forecasted financial results, and we expect further improvement in 2025 with more rigs expected to reprice from lower legacy day rate contracts to higher market rates as well as the benefit of a full-year of operations for VALARIS DS-7 following its reactivation.

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2024 Proxy Statement

1

Letter to Our Shareholders

Committed to returning capital to shareholders

We demonstrated our commitment to returning capital to shareholders by repurchasing $200 million of shares during 2023. In February 2024, the Valaris Board of Directors increased our share repurchase authorization from $300 million to $600 million, providing increased flexibility to opportunistically return additional capital to shareholders.

We would like to thank the entire Valaris team not only for their hard work and commitment to living

Sincerely,

Elizabeth D. Leykum

Chair of the Board

our values, but also for their many accomplishments in 2023. Looking forward, we remain confident in the strength and duration of this upcycle and the outlook for Valaris is positive. We expect to deliver significant earnings and cash flow growth over the next few years, and we intend to return all future free cash flow to shareholders unless there is a better or more value accretive use for it.

On behalf of our entire global workforce and the Board of Directors, thank you for your support.

Anton Dibowitz

Director, President and

Chief Executive Officer

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Valaris Limited

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Date and Time	Location
June 12, 2024	Verdmont Room
8:00 a.m. Bermuda time	Rosewood Bermuda
6:00 a.m. Houston time	60 Tucker's Point Drive
Hamilton Parish
	HS 02, Bermuda

Who Can Vote

Shareholders of Valaris Limited ("Valaris," "we," "us," "our" or the "Company") as of April 15, 2024 are entitled to vote.

Resolution 1	Resolution 2	Resolution 3
Election of Eight Director	Advisory Vote to Approve	Approve appointment of
Nominees Named in the	Named Executive Officer	KPMG LLP as our Independent
Proxy Statement	Compensation	Registered Public Accounting
		Firm and to authorize the Board,
		acting by its Audit Committee,
		to set KPMG LLP's remuneration

"FOR"

each director nominee

Page 11

"FOR"

Page 37

"FOR"

Page 68

Shareholders may also be asked to consider and vote on such other business as may properly come before the meeting and any adjournment or postponement thereof. The Company's audited financial statements for the year ended December 31, 2023 will also be available at the Meeting and are included in our 2023 annual report to shareholders ("2023 annual report").

Your vote is very important. Even if you plan to attend the meeting, please submit a proxy as soon as possible to ensure that your shares are voted at the meeting in accordance with your instructions. Voting your shares will help to ensure that your interests are represented at the Meeting. Please review the proxy statement accompanying this notice for more complete information regarding the Meeting and the full text of the resolutions to be proposed at the Meeting.

By Order of the Board of Directors,

Davor Vukadin

Senior Vice President, General Counsel and Secretary

April 17, 2024

How to Vote

Internet

www.proxyvote.com

Have your proxy card in hand when you access the website and follow the instructions.

Mail

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 so that it is received no later than 3:00 PM Eastern time on June 11, 2024, which is the voting cutoff time.

Important Notice Regarding the Availability of Proxy Materials for the Annual General Meeting of Shareholders to be held on June 12, 2024. The proxy statement, our 2023 annual report and notice are available without charge at www.proxyvote.com.

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2024 Proxy Statement 3

Letter to Our Shareholders	1
Notice of Annual General Meeting of	3
Shareholders (The "Meeting")
2023 Business Highlights	6
Proxy Summary	8
Resolution 1: Election of Directors	11
Board Overview	12
Director Nominees	15
Determination of Independence	23
Director Nominations	23
Corporate Governance	25
Corporate Governance Policy	25
Board and Committee Structure	26
Director Engagement	28
Oversight by Our Board	30
Risk Oversight	30
Other Governance Matters	33
Director Compensation	35
Resolution 2: Advisory Vote to Approve	37
Named Executive Officer Compensation
Compensation Discussion and Analysis	38
2023 Business Highlights	38
Elements of Our Executive Compensation	43
Program
Other Executive Compensation Matters	50
Share Ownership Guidelines	50
Clawbacks and Award Disqualifications	50
Hedging Policy	50
Pledging Policy	50
Compensation Risk Assessment	51
Compensation Committee Report	52

Executive Compensation	53
Summary Compensation Table	53
Grants of Plan-Based Awards Table	55
Outstanding Equity Awards at Fiscal	56
Year-End Table
Shares Vested Table	58
Pension Benefits	58
Supplemental Executive Retirement Plans	58
Pension Benefits Table	59
Nonqualified Deferred Compensation Table	59
Potential Payments Upon Termination or	60
Change in Control
Termination or Change in Control Payments	61
and Benefits
Mr. Dibowitz's Employment Agreement	61
CEO Pay Ratio	62
Pay Versus Performance	63
Resolution 3: Appointment of the Independent	68
Registered Public Accounting Firm
Evaluation of Audit Firm	68
Fees and Services	69
Independent Auditor Pre-approval Policies	69
and Procedures
Audit Committee Report	70
Ownership of Voting Securities	71
Questions and Answers about the Meeting	74
and Voting
Other Matters	80
Appendix A: Reconciliation of GAAP and	82
non-GAAP Financial Measures

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Table of Contents

FORWARD-LOOKING STATEMENTS

Statements contained in this proxy statement that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. Forward-looking statements include words or phrases such as "anticipate," "believe," "estimate," "expect," "intend," "likely," "plan," "project," "could," "may," "might," "should," "will" and similar words. The forward-looking statements contained in this proxy statement are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from those indicated, and we can give no assurance that they will prove to be correct or that any plan, initiative, projection, target, goal, commitment or expectation can or will be achieved. You should also carefully read and consider "Item 1A. Risk Factors" in Part I and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II of our most recent annual report on Form 10-K, which is available on the SEC's website at www.sec.gov or on the Investor Relations section of our website at www.valaris.com. Each forward-looking statement speaks only as of the date of the particular statement and we undertake no obligation to update or revise any forward-looking statements, except as required by law.

Standards of measurement and performance made in reference to our sustainability targets, plans and goals are based on evolving protocols and assumptions which may change or be refined. Company goals are aspirational and may change. Statements regarding the Company's goals, including greenhouse gas emissions' reduction goals, are not guarantees or promises that they will be met. The inclusion of information regarding our sustainability initiatives and aspirations is not an indication that these contents are necessarily material to investors or required to be disclosed in our filings with the SEC. Content available on websites and in documents referenced in this proxy statement are not incorporated by reference herein and are not part of this proxy statement.

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2024 Proxy Statement 5

Our Purpose

To provide responsible solutions that deliver energy to the world

Our Values

Integrity	Respect
Doing the right thing;	Treating others the
whether or not anyone	way we would like to
is watching	be treated

Safety	Ingenuity
Causing no harm is	Solving problems
always our priority	creatively
Excellence	Stewardship
Delivering value to the	Safeguarding where
customer while	we work for the next
consistently raising the	generation
bar on performance

Our Strategy

Focused

Building enduring presence and long-term relationships

• Operate a high spec jackup and floater fleet
• Build deep customer and partner relationships
• Identify and commit to priority basins

Value Driven

Exercising financial discipline and driving efficiency

• Deliver Operational Excellence
• Operate an efficient and scalable cost structure
• Exercise disciplined capital allocation / be returns focused

Responsible

Advancing our sustainability program

• Decarbonize our operations
• Dedication to a safety-first work culture
• Be transparent on our sustainability progress
• Partner with customers on their energy transition efforts
• Monitor compatible opportunities within the energy transition

Performance Highlights

Financial Performance

• Generated net income of $866.8 million (including tax benefit of $782.6 million), Adjusted EBITDA of $141.3 million and Adjusted EBITDAR of $301.1 million, which adds back one-time reactivation costs to return rigs to a ready-to-work state from a preservation stacked state following a prolonged idle period.
• Adjusted EBITDA and Adjusted EBITDAR represent non-GAAP financial measures. See Appendix A for a reconciliation of GAAP and non-GAAP financial measures.

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2023 Business Highlights

Operational Excellence

• Continued our track record of operational excellence, by delivering revenue efficiency of 96% and earned recognition by the Center for Offshore Safety with its 2023 Safety Leadership Award for the Valaris Basic Training program.
• Reactivated two drillships from preservation stack for multi-year contracts and have now completed five drillship reactivations since early 2022. We also progressed the reactivation of an additional drillship, which we expect to join the active fleet in 2024.
• Purchased and took delivery of our newbuild seventh-generation drillships VALARIS DS-13 and VALARIS DS-14 at highly attractive prices, creating additional operating leverage in our rig fleet.

Contracting Success

• Awarded new contracts and extensions in 2023 with associated contract backlog of nearly $3 billion.
• Increased total contract backlog to nearly $4 billion as of February 15, 2024, representing a 59% increase since February 2023.

Financial Management

• Enhanced our capital structure by executing financing transactions, including refinancing our first lien senior secured notes with $700 million second lien senior secured notes, issuing $400 million in additional second lien senior secured notes and the addition of a $375 million revolving credit facility.
• Repurchased $200 million of shares in 2023, representing 3 million shares or approximately 4% of the total outstanding share count, and in February 2024 increased share repurchase authorization to $600 million from $300 million.

Sustainability Highlights

• Published our 2023 Annual Sustainability Report, which highlights the sustainability efforts that demonstrate our commitment to our purpose, values and communities. The report was prepared in accordance with the standards of the Task Force on Climate-Related Financial Disclosures (TCFD), in addition to the Sustainability Accounting Standards Board (SASB), with references to other frameworks such as the Global Reporting Initiative (GRI) and the Carbon Disclosure Project (CDP), where relevant, and report scope 1, 2 and 3 GHG emissions, among other data. In addition, we announced last year a target of reducing our emissions' intensity. Please refer to our 2022 Sustainability Report for information on the assumptions underlying our emissions' intensity target.
• Partnered with customers on their energy transition efforts. Since 2022, six of our jackup rigs have been involved in carbon capture and storage (CCS) projects with customers, including three in 2023.
• Endeavored to support and build diversity and inclusion throughout our workforce. As our operations span the globe, we seek to bring employment for the benefit of the local communities in which we work. Employees of 74 nationalities are represented in our workforce as of December 31, 2023. In addition, all employees were assigned unconscious bias training as part of our efforts to support a more inclusive workforce.
• Continued alignment of compensation with sustainability performance by setting a spill prevention performance component for our 2023 Valaris Cash Incentive Plan. Spill prevention performance is a measure that considers the environmental impact of any substances released in the course of our operations. Consistent with prior years, safety (personal and process) was also a component of our 2023 Valaris Cash Incentive Plan.
• Invested in our employees through our BOLD leadership training for offshore supervisors which was attended by nearly 500 personnel in 2023. We also implemented an onshore leadership program in 2023, which included eight separate onshore leadership sessions, which was delivered to over 150 personnel. We also delivered over 28,700 training hours under our Behavior Based Safety program, focused on improving the safety of our operations.
• Continued our efforts to protect the biodiversity of the marine environments we operate in by preventing spills, managing discharges and cleaning hulls and jackup legs before moving geographies.

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2024 Proxy Statement 7

Resolution 1

Election of Directors

Board Highlights

The Board recommends a vote FOR each director nominee.

See page 11

Board Nominees

Committee Membership

			Director
Name and Principal Occupation	Age	Independent	Since
Anton Dibowitz								●
President and Chief Executive Officer	52	No	2021
of Valaris Limited
Dick Fagerstal				●		●
Former Executive Chairman of	63	Yes	2021
Global Marine Group
Joseph Goldschmid	38	Yes	2021		●		●	●
Managing Director, Oak Hill Advisors, L.P.
Catherine J. Hughes					●	●
Former Executive Vice President International	61	Yes	2022
at Nexen Inc.
Kristian Johansen	52	Yes	2023					●
Chief Executive Officer of TGS ASA
Elizabeth D. Leykum (Chair of the Board)	45	Yes	2021	●	●		●	●
Founder of Serenade Capital LLC
Deepak Munganahalli	54	Yes	2021			●		●
Founder of Sencirc Holding Limited
James W. Swent, III
Former Chairman, President and	73	Yes	2021	●	●	●	●
Chief Executive Officer of Southcross
Energy Partners, L.P.

• Chair
• Member

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Valaris Limited

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