PES Pioneer Energy Services Corp

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Sincerely,

Dean A. Burkhardt		Wm. Stacy Locke
Chairman		President and Chief Executive Officer

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( 1 )	elect Dean A. Burkhardt and Scott D. Urban , who have been nominated by the Board, as Class I directors of the Board of Pioneer Energy Services Corp., to serve until our 2020 Annual Meeting of Shareholders or until their successors have been duly elected and qualified (Proposal 1 );

( 2 )	approve an amendment to the Company’s Restated Articles of Incorporation to increase the number of authorized shares of common stock of the Company (Proposal 2 );

( 3 )	conduct an advisory vote to approve the compensation of the named executive officers (Proposal 3 );

( 5 )	ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017 (Proposal 5 ); and

( 6 )	transact any other business that may properly come before the annual meeting or any adjournment or postponement of the meeting.

San Antonio, Texas	By Order of the Board
April __, 2017
	Carlos R. Peña
	Executive Vice President, President of Production Services Segment, General Counsel, Secretary and Compliance Officer

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Table of Contents

PROXY SUMMARY				5
PARTICIPATE IN THE FUTURE OF PIONEER ENERGY SERVICES CAST YOUR VOTE RIGHT AWAY				10
QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING				11
PROPOSAL 1 ELECTION OF DIRECTORS	14
			2017  COMPENSATION ACTIONS	53
INFORMATION CONCERNING MEETINGS AND COMMITTEES OF THE BOARD
	20		COMPENSATION COMMITTEE REPORT	54
Director Meetings	20
Independent Chairman of the Board	22		EXECUTIVE COMPENSATION	56
Independent Committees of the Board	23		2016  Summary Compensation Table	56
Director Resignation Policy	23		2016  Grants of Plan-Based Awards	58
Director Recommendations from Shareholders	23		2016  Outstanding Equity Awards at Fiscal Year End	59
Code of Business Conduct and Ethics and Corporate Governance Guidelines			2016  Option Exercises and Stock Vested	60
	24		2016 Nonqualified Deferred Compensation	61
Board’s Role in Risk Oversight	24
Risk – Related Compensation Policies and Practices	24		POTENTIAL PAYMENTS UNDER TERMINATION OR CHANGE OF CONTROL
Communications with the Board	25			62
Director Compensation	26		Key Executive Severance Plan	62
Stock Ownership Requirements	28		Potential Payments upon Termination or Change in Control	66
Compensation Committee Interlocks and Insider Participation	28
Certain Relationships and Related Transactions	28		REPORT OF THE AUDIT COMMITTEE	70
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			PROPOSAL 2 APPROVAL OF THE AMENDMENT TO THE COMPANY'S RESTATED ARTICLES OF INCORPORATION
	29
Section 16(a) Beneficial Ownership Reporting Compliance				71
	30
			PROPOSAL 3 ADVISORY VOTE ON EXECUTIVE COMPENSATION
EXECUTIVE OFFICERS	31			73
COMPENSATION DISCUSSION AND ANALYSIS
	32		PROPOSAL 4 ADVISORY VOTE ON FREQUENCY OF ADVISORY VOTES ON EXECUTIVE COMPENSATION
Executive Summary	32
Our Compensation Philosophy	37			76
The Role of the Compensation Committee	38
The Role of Management	39		PROPOSAL 5 RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Role of the Compensation Consultant	41
The Role of Competitive Pay Analysis	42			77
The Role of Team Performance	43
The 2016 Executive Compensation Program in Detail	43		OTHER INFORMATION	78

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     4

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PROXY SUMMARY

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting. Page references are supplied to help you find further information in this proxy statement.

Eligibility to Vote (page 11 )

You can vote if you were a shareholder as of the close of business on March 20, 2017 .

How to Cast Your Vote (page 11 )

You can vote by any of the following methods:

•	Internet ( proxyvote.com ) through May 16, 2017 ;

•	Completing, signing and returning your proxy or voting instruction card before May 4, 2017 ; or

•	In person, at the annual meeting. If your shares are held in the name of a broker, nominee or other intermediary, you must bring with you to the meeting proof of ownership and the legal proxy card you received from your intermediary.

Business Highlights (page 30 )

(For more detail, please see our Form 10-K for the year ended 2016 , as filed with the SEC on February 17, 2017 .)

		Executed on our strategy to transform our drilling fleet into a highly capable, pad optimal fleet focused on the horizontal drilling market:
		•	Sold three drilling rigs and other drilling equipment for aggregate proceeds of over $12 million, with an additional six drilling rigs, other drilling equipment and 13 wireline units held for sale at year end;
		•	Current fleet is 100% high spec, multi-well pad-capable with 16 AC rigs in the United States engineered to optimize pad drilling and 8 SCR rigs in Colombia; and
		•	Achieved 81% utilization of our domestic AC rig fleet by year end, and 50% utilization of our fleet in Colombia.
		Achieved award winning safety results:
		•	Our 2016 lost time incident rate is the lowest in company history, and was also the third consecutive year with improving rates; and
		•	Received the 2016 Division IV Association of Energy Service Companies 3 rd  place award for wireline services and received the 1 st  place award for coiled tubing services.
		Improved liquidity and financial flexibility:
		•	Completed equity offering in December 2016 with net proceeds of $65.4 million, which were used to reduce outstanding borrowings;
		•	Amended our revolving credit facility in June 2016 to provide for enhanced liquidity through maturity in 2019; and
		•	Paid down $49 million of debt outstanding during 2016.
		Positioned for industry recovery:
		•	Reallocated our assets to regions with increasing demand, hired field personnel and acquired job materials to prepare for expected demand improvement in 2017;
		•	Committed to trade in 20 older well servicing rigs for 20 new-model rigs, and to purchase four new completion-oriented wireline units; and
		•	Current fleets and crews are highly capable and ready for recovery.

Results of 2016 Say on Pay (page 31 )

At our 2016 Annual Meeting of Shareholders, the advisory vote on our executive compensation ("say on pay") received the support of 98% of the votes cast. The Board is extremely pleased with this result, and has continued its efforts to continually improve our executive compensation program, listen to shareholders, and focus on performance-based compensation.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     5

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PROXY SUMMARY

Board Nominees (pages 14-16 )

Name	Age	Director since	Experience/Qualification	Independent	Committee Memberships
Dean A. Burkhardt	66	2001	• Over 35 years of experience in the energy services industry • Over 15 years of experience as our Board member • Financial and accounting expertise	Yes	• Audit Committee • Compensation      Committee • Nominating and     Governance     Committee (chair)
Scott D. Urban	63	2008	• Over 35 years of energy industry experience • Significant and varied management experience at multiple global oil and gas companies • Mr. Urban's background in geology gives him a deeper understanding of our business and the challenges we face	Yes	• Audit Committee • Compensation Committee (chair) • Nominating and Governance Committee

Governance of the Company (pages 20-26 )

•	Director Meetings	•	Risk – Related Compensation Policies and Practices
•	Independent Chairman of the Board	•	Communications with the Board
•	Independent Committees of the Board	•	Director Compensation
•	Director Resignation Policy	•	Stock Ownership Requirements
•	Director Recommendations from Shareholders	•	Compensation Committee Interlocks and Insider Participation
•	Code of Business Conduct and Ethics and Corporate Governance Guidelines	•	Certain Relationships and Related Transactions
•	Board’s Role in Risk Oversight

Executive Officers (page 29 )

Name	Age	Position	Joined Pioneer	Experience
Wm. Stacy Locke	61	President, Chief Executive Officer and Director	1995	Mr. Locke has over 35 years of industry and management experience. He has served as our President since May 1995. Prior to joining Pioneer, Mr. Locke worked in investment banking for seven years, and as a geologist for seven years.
Lorne E. Phillips	46	Executive Vice President and Chief Financial Officer	2009	Prior to joining Pioneer in 2009, Mr. Phillips worked for 10 years at Cameron International Corporation in several senior financial roles as well as in business development, marketing, and mergers and acquisitions. Before joining Cameron, Mr. Phillips worked in investment banking.
Carlos R. Peña	50	Executive Vice President, President of Production Services Segment, General Counsel, Secretary and Compliance Officer	2008	Since joining Pioneer in 2008, Mr. Peña has been involved in a wide number of industry related projects, including the oversight of our compliance and safety resources, and most recently, as President of our Production Services Segment. With a background in law, Mr. Peña has extensive experience providing both outside corporate and securities counsel with Fulbright & Jaworski L.L.P., Cox Smith Matthews Incorporated, and Vinson & Elkins L.L.P, and in-house M&A counsel with AT&T Inc.
Brian L. Tucker	43	Executive Vice President and President of Drilling Services Segment	2012	Mr. Tucker has over 10 years of industry experience. Prior to joining Pioneer in 2012, Mr. Tucker served as a Vice President of Helmerich and Payne, prior to which he served as an operation manager of the company. Mr. Tucker also served eight years as an officer in the U.S. Army and is a West Point graduate.
Joe P. Freeman	68	Senior Vice President of Well Servicing	2008	Mr. Freeman has over 25 years of industry experience. Prior to joining Pioneer, Mr. Freeman served as Vice President of the well servicing division of WEDGE Oil and Gas Services from 2005 to 2008, Gulf Coast Division Manager of Key Energy Services from 1998 to 2004, and independent entrepreneur and owner of JPF Well Service from 1987 to 1998, which was sold to Key Energy Services in 1998.
Bill W. Bouziden	56	Senior Vice President of Wireline Services and Coiled Tubing Services	2009	Mr. Bouziden has over 30 years of industry experience. Prior to joining Pioneer in 2009, Mr. Bouziden served in many capacities, including Production Services Business Development Vice President at Smith International, Inc., President of Perf-O-Log, Inc. and Operations Manager at Diamond Wireline.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     6

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PROXY SUMMARY

Executive Compensation (pages 30-46 )

Our Compensation Philosophy (page 33 )

The Compensation Committee aims to design our executive compensation program with goals and objectives to:

•	Provide a compensation structure that is consistent with competitive pay practices and pay levels with respect to industry peers;	•	Encourage the attainment of strategic business objectives with pay-for-performance principles; and
•	Attract, motivate and retain executives necessary for our success;	•	Reward executives for building shareholder value.

WHAT WE DO			WHAT WE DON’T DO
þ	A significant portion of our executive pay is performance-linked		ý	No personal aircraft
þ	Apply shareholder aligned performance objectives for our executives		ý	No re-pricing of underwater stock options
þ	Use an independent compensation consultant		ý	No country club memberships for personal use
þ	Evaluate our executive compensation against our industry peers		ý	No tax gross ups for anyone becoming a participant in our Key Employee Severance Plan after March 2011
þ	Apply share ownership guidelines for named executive officers and directors		ý	No hedging of Company securities or pledging of Company securities as collateral for a loan
þ	Adhere to a claw-back policy
þ	Consider risk in our executive compensation program: • A significant portion of our executive compensation is tied to long-term performance • We use diversified performance metrics, including TSR, EBITDA ROCE, EBITDA growth, EBITDA, EPS, safety, etc. • We use diversified plans through which relative performance is measured against our own budgeted goals and against the performance of our peers

The 2016 Executive Compensation Program in Detail (page 37 )

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     7

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PROXY SUMMARY

2016 Executive Total Compensation Mix (page 32 )

We believe that our 2016 executive compensation program is competitive and strongly aligned with pay-for-performance principles. Consistent with prior practice, in 2016 the Compensation Committee emphasized compensation opportunities that reward our named executive officers when they deliver financial and operational results.

A significant percentage of the 2016 compensation granted to our named executive officers 2016 was performance-linked, as the following graphs illustrate:

Fifty percent of our Chief Executive Officer's target total direct compensation is performance-linked, including :

▪	Annual Cash Incentive Awards. The annual cash incentive award is based on operational and financial performance.

▪	Stock Options. The value of these awards is tied directly to the Company’s stock price and thus is closely correlated with our shareholders’ interests.

▪	Performance-Based Phantom Stock Unit Awards. The performance-based phantom stock unit awards are earned based on our relative performance versus a pre-defined group of ten peer companies over the three-year performance period in each of the following three metrics: total shareholder return, EBITDA growth and EBITDA ROCE.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     8

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PROXY SUMMARY

2016 Executive Compensation Summary (page 49 )

Name and Principal Position	Year	Salary			Bonus			Option Awards			Stock Awards			Non-Equity Incentive Plan Compen- sation			Change in Pension Value and Nonqualified Deferred Compensation Earnings		All Other Compen- sation			Total
Wm. Stacy Locke, Director, President and Chief Executive Officer	2016	$	715,000		$	225,400		$	301,957		$	573,075		$	470,699		—		$	2,173		$	2,288,304
	2015	$	715,000		—			$	324,576		$	1,963,060		$	284,231		—		$	27,302		$	3,314,169
	2014	$	715,000		—			$	452,996		$	1,315,542		$	968,720		—		$	26,708		$	3,478,966
Lorne E. Phillips, Executive Vice President and Chief Financial Officer	2016	$	375,000		$	82,880		$	105,579		$	200,378		$	146,560		—		$	696		$	911,093
	2015	$	375,000		—			$	119,347		$	239,785		$	89,444		—		$	25,696		$	849,272
	2014	$	375,000		—			$	152,224		$	574,702		$	304,842		—		$	25,448		$	1,432,216
Carlos R. Peña, Executive Vice President, President of Production Services Segment, General Counsel, Secretary and Compliance Officer	2016	$	345,000		$	68,413		$	89,848		$	170,520		$	134,834		—		$	696		$	809,311
	2015	$	345,000		—			$	98,515		$	197,936		$	82,288		—		$	25,696		$	749,435
	2014	$	345,000		—			$	130,630		$	493,181		$	280,454		—		$	23,198		$	1,272,463
Brian L. Tucker, Executive Vice President and President of Drilling Services Segment	2016	$	340,000		$	55,216		$	88,546		$	168,048		$	132,880		—		$	696		$	785,386
	2015	$	340,000		$	58,333		$	79,512		$	159,754		$	101,217		—		$	26,246		$	765,062
Joe P. Freeman, Senior Vice President of Well Servicing	2016	$	320,000		$	131,665		—			$	85,493		$	125,563		—		$	14,821		$	677,542
	2015	$	320,000		$	138,635		—			$	73,451		$	76,109		—		$	25,421		$	633,616

Auditors (page 69 )

As a matter of good corporate governance, we are asking our shareholders to ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017 .

Voting matters (page 10 )

		Board Recommendation	More Information
PROPOSAL 1	Election of Dean A. Burkhardt and Scott D. Urban as Class I directors	FOR	Page	15
PROPOSAL 2	Approval of an amendment to the Restated Articles of Incorporation to increase the number of authorized shares of common stock of the Company	FOR	Page	65
PROPOSAL 3	Approval, on an advisory basis, of the compensation paid to our named executive officers	FOR	Page	67
PROPOSAL 4	Advisory vote on the frequency of future advisory votes on executive compensation	1 Year	Page	70
PROPOSAL 5	Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017	FOR	Page	71

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     9

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PARTICIPATE IN THE FUTURE OF PIONEER ENERGY SERVICES CORP.
CAST YOUR VOTE RIGHT AWAY

It is very important that you vote to play a part in the future of Pioneer Energy Services Corp. NYSE rules require that if your shares are held through a broker, bank or other nominee, these nominees cannot vote on your behalf on non-discretionary matters without your voting instructions.

Please cast your vote right away on all of the proposals listed below to ensure that your shares are represented.

Proposals which require your vote

		More Information		Board Recommendation	Abstentions	Broker Non-Votes	Votes Required for Approval
PROPOSAL 1	Election of Dean A. Burkhardt and Scott D. Urban as Class I directors	Page	15	FOR	No effect	No effect	Plurality (subject to the Director Resignation Policy)
PROPOSAL 2	Approval of an amendment to the Restated Articles of Incorporation to increase the number of authorized shares of common stock of the Company	Page	65	FOR	Vote against	Vote against	Two-Thirds of the Outstanding Shares
PROPOSAL 3	Approval, on an advisory basis, of the compensation paid to our named executive officers	Page	67	FOR	Vote against	No effect	Majority
PROPOSAL 4	Advisory vote on the frequency of future advisory votes on executive compensation	Page	70	1 Year	No effect	No effect	N/A
PROPOSAL 5	Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017	Page	71	FOR	Vote against	N/A	Majority

Vote right away

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Even if you plan to attend our Annual Meeting in person, please read this Proxy Statement with care and vote right away using any of the following methods. In all cases, have your proxy card or voting instruction form in hand and follow the instructions.

By Internet using your computer	By mailing your proxy card
Visit 24/7   proxyvote.com	Cast your ballot, sign your proxy card and send by freepost

Visit our Annual Meeting website

	Visit 24/7   proxyvote.com		• Review and download interactive versions of this Proxy Statement and our Annual Report

Attend our 2017 Annual Meeting of Shareholders

	Date:	May 17, 2017
	Time:	1:00 p.m. (Central Time)
	Location:	Petroleum Club of San Antonio
		7th Floor of the Energy Plaza Building 8620 N. New Braunfels Street San Antonio, TX 78217

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     10

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QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING

Q:	When and where is the annual meeting of shareholders?

A:	The 2017 Annual Meeting of Shareholders of Pioneer Energy Services Corp. will be held on Wednesday, May 17, 2017 , at 1:00 p.m., Central Time, at the Petroleum Club of San Antonio , 7th Floor of the Energy Plaza Building, 8620 N. New Braunfels Street, San Antonio, Texas 78217 .

Q:	Who is soliciting my proxy?

A:	Pioneer is soliciting your proxy on behalf of its Board.

Q:	What am I being asked to vote on?

A:	We are asking you to take action on the following:

•	to elect Dean A. Burkhardt and Scott D. Urban , who have been nominated by the Board, as Class I directors of the Board of Pioneer Energy Services Corp., to serve until our 2020 Annual Meeting of Shareholders or until their successors have been duly elected and qualified;

•	to approve an amendment to the Company’s Restated Articles of Incorporation to increase the authorized shares of common stock of the Company from 100,000,000 shares, par value $0.10 per share, to 200,000,000 shares, par value $0.10 per share ;

•	to conduct an advisory vote to approve the compensation of the named executive officers;

•	to conduct an advisory vote on the frequency of future advisory votes on executive compensation ;

•	to ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017 ; and

•	to transact any other business that may properly come before the annual meeting or any adjournment or postponement of the meeting.

Q:	Who may vote?

A:	All holders of the Company's stock as of the close of business on March 20, 2017 , the record date, are entitled to vote. Shareholders are entitled to one vote per share of common stock held. As of March 20, 2017 , there were 77,280,191 shares of our common stock outstanding.

 

Q:	What is the difference between holding shares as a shareholder of record and as a beneficial owner?

A:	If your shares are registered directly in your name with the Company’s registrar and transfer agent, American Stock Transfer & Trust Company, LLC, you are considered a shareholder of record with respect to those shares. If your shares are held in a brokerage account or bank, you are considered the “beneficial owner” of those shares.

Q:	Who may attend the meeting?

A:	All shareholders as of the record date, or their duly appointed proxies, may attend the meeting. You will need to bring a photo ID to gain admission to the annual meeting.

Q:	How do I vote?

A:	If you are a shareholder of record, you may vote in three ways:

•	you may come to the annual meeting and cast your vote in person;

•	you may vote online by visiting proxyvote.com ; or

•	you may vote by completing, signing and returning the enclosed proxy card. If you return a completed and signed proxy card, the persons named on the card will vote your shares in the manner you indicate.

If you are a beneficial owner of shares, your broker, bank or other intermediary will advise you on the methods of voting your shares. Your intermediary has enclosed with this Proxy Statement a voting instruction card for you to use in directing the intermediary on how to vote your shares. The instructions from your intermediary will indicate if Internet or telephone voting is available and, if so, will provide details regarding how to use those systems.

Q:	How can I vote at the annual meeting if I am a beneficial owner?

A.	If you are the beneficial owner of shares, you may only vote these shares in person at the annual meeting if you have requested and received a legal proxy from your broker, bank or other intermediary (the stockholder of record) giving you the right to vote the shares at the annual meeting, complete such legal proxy, and present it at the annual meeting.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     11

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QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING

Q:	When did Pioneer first distribute this proxy statement and the accompanying form of proxy to its shareholders?

A:	We first distributed this proxy statement and the accompanying form of proxy to our shareholders on or about April __, 2017 .

Q:	What happens if I am a shareholder of record and do not indicate how I wish to vote on one or more of the proposals?

A:

If you return your signed proxy card but do not indicate how you wish to vote, the persons named as proxies will vote your shares as follows: FOR election of the director nominees (Proposal 1 ); FOR approval of an amendment to the Company’s Restated Articles of Incorporation (Proposal 2 ); FOR the approval, on an advisory basis, of the compensation paid to our named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K (Proposal 3 ); FOR the approval, on an advisory basis, of conducting future advisory votes on executive compensation once every year, (Proposal 4 ); and FOR ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017 (Proposal 5 ). We are not aware of any other matters that may properly come before the annual meeting. If other matters are properly brought before the annual meeting, the proxy holders will vote your shares in accordance with their discretion.

Q:	What happens if I am a beneficial owner of shares and do not indicate how I wish to vote on one or more of the proposals?

A:

As a beneficial owner of shares, in order to ensure your shares are voted in the way you would like, you must provide voting instructions to your broker, bank or other intermediary by the deadline provided in the materials you receive from your broker, bank or other intermediary. If you do not provide voting instructions to your broker, bank or intermediary, whether your shares can be voted by such person depends on the type of items being considered for vote.

•

Non-Discretionary Items. The election of directors, the approval of the amendment to the Company's Restated Articles of Incorporation, the advisory vote to approve executive compensation, and the advisory vote on the frequency of future advisory votes on executive compensation are non-discretionary items and may not be voted on by brokers, banks or other intermediaries who have not received specific voting instructions from the beneficial owners (i.e., referred to as a broker non-vote).

•	Discretionary Items. The ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017 is a discretionary item. Generally, brokers, banks and intermediaries that do not receive voting instructions from beneficial owners may vote on this proposal in their discretion.

 

Q:	What if I vote by proxy and then change my mind?

A:	If you are a shareholder of record, you can revoke your proxy at any time prior to the vote at the annual meeting by:

•	timely providing written notice of the revocation of your proxy to our Corporate Secretary at our principal executive offices at the mailing address indicated below;

•	timely delivering a properly executed proxy dated after the date of the proxy you want to revoke;

•	timely submitting a later-dated vote via the Internet (which automatically revokes the earlier proxy); or

•	attending the annual meeting and casting your vote in person.

If you are a beneficial owner of shares, you may revoke your proxy by:

•	timely submitting new voting instructions to your broker, bank or other intermediary in accordance with their voting instructions; or

•	if you have obtained a legal proxy from your intermediary giving you the right to vote your shares, by attending the annual meeting, presenting the completed legal proxy to the Company, and voting in person.

You should be aware that simply attending the annual meeting will not in and of itself constitute a revocation of your proxy.

Q:	What constitutes a quorum?

A:	The presence, in person or by proxy, of the holders of a majority of the issued and outstanding shares of capital stock of Pioneer entitled to vote at the meeting constitutes a quorum. We need a quorum of shareholders to hold a valid annual meeting. If you properly sign and return your proxy card, you will be considered part of the quorum.

We will count abstentions and broker non-votes as present for the purpose of establishing a quorum. A broker “non-vote” occurs when a broker holding shares for a beneficial owner does not vote on a particular proposal because the broker does not have discretionary voting power for that particular proposal and has not received instructions from the beneficial owner. If a quorum is not present, a majority in interest of those present or represented at the annual meeting may adjourn the meeting, without notice other than an announcement at the meeting, until a quorum is present or represented.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     12

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QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING

Q:	What vote is required for each of the proposals being considered at the annual meeting?

A:

Election of Directors. The directors will be elected by a plurality of the votes cast at the annual meeting, subject to the Board’s policy regarding resignations for directors who do not receive a majority of “FOR” votes (the “Director Resignation Policy”). “Plurality” means that the nominees receiving the highest number of votes "for" such election are elected as directors. Abstentions and broker non-votes will not have any effect on the vote for the director nominees.

Under the Director Resignation Policy, in an uncontested election of directors, any nominee who receives a greater number of votes “withheld” from his or her election than votes “for” his or her election will, within five business days following the certification of the shareholder vote, tender his or her written resignation to the Chairman of the Board for consideration by the Board. For further information on this policy, see the section titled “Information Concerning Meetings and Committees of the Board–Director Resignation Policy” below.

Approval of the Amendment to the Company's Restated Articles of Incorporation. The approval of the amendment to the Company's Restated Articles of Incorporation requires the affirmative vote of the holders of at least two-thirds of the outstanding shares of our common stock entitled to vote on this proposal. An abstention and broker non-vote will have the effect of a vote against this proposal.

Advisory Vote on Executive Compensation. The advisory vote to approve executive compensation requires the affirmative vote of the holders of a majority of the shares of our common stock entitled to vote on, and that voted for or against or expressly abstained with respect to, this proposal. An abstention will have the effect of a vote against this proposal and a broker non-vote will not have any effect on the vote of this proposal.

Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation. Our Board is seeking a non-binding advisory vote regarding whether shareholders prefer an advisory vote on our executive compensation once every one, two or three years. Shareholders may also abstain from voting on this proposal. An abstention and a broker non-vote will not have any effect on the vote of this proposal.

Ratification of KPMG LLP as our Independent Registered Public Accounting Firm. The ratification of KPMG LLP as our independent registered public accounting firm requires the affirmative vote of the holders of a majority of the shares of our common stock entitled to vote on, and that voted for or against or expressly abstained with respect to, this proposal. An abstention will have the effect of a vote against this proposal.

Q:	Who will count the votes?

A:	We have retained Broadridge Financial Solutions, Inc. to tabulate the votes.

Q:	What shares are included on the proxy card?

A:	The shares listed on your proxy card represent all the shares of our common stock held in your name (as distinguished from shares held by a broker intermediary, bank or other intermediary). You will receive a separate proxy card from your intermediary if your intermediary holds shares for you.

Q:	What does it mean if I receive more than one proxy card?

A:	It indicates that your shares are held in more than one account, such as two brokerage accounts, and are registered in different names. You should vote each of the proxy cards to ensure that all your shares are voted.

 

Q:	What is Pioneer’s mailing address?

A:	Our mailing address is Pioneer Energy Services Corp., 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     13

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Proposal 1	Election of Directors

Our Board currently consists of five directors. The Board has determined that all of the directors are independent directors, as defined by the rules of the NYSE, other than Mr. Locke who, as our President and Chief Executive Officer, is an employee of Pioneer. There are no family relationships of first cousin or closer among our directors or officer by blood, marriage or adoption. Our Board is divided into three separate classes (Class I, Class II and Class III) with staggered terms. The current term of office for our Class I directors will expire at the annual meeting.

Our Board has nominated Dean A. Burkhardt and Scott D. Urban , who currently serve on the Board, as the director nominees for election as Class I directors at the annual meeting. Messrs. Burkhardt and Urban have each served as our director since 2001 and 2008, respectively .

Each director nominee has consented to be named as a director nominee in this proxy statement and has agreed to serve as a director if elected. If any director nominee becomes unavailable for election, which is not anticipated, the named proxies will vote for the election of such other person as the Board may nominate, unless the Board resolves to reduce the number of directors to serve on the Board and thereby reduce the number of directors to be elected at the annual meeting.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     14

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PROPOSAL 1 ELECTION OF DIRECTORS

DIRECTOR NOMINEES

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Dean A. Burkhardt
	Class I Director Nominee for Election to a Term Expiring at the 2020 Annual Meeting		Acquired expertise of particular relevance to Pioneer:
	Board member since:	2001	•    Over 35 years of experience in the energy services industry •    Over 15 years of experience as our Board member •    Financial and accounting experience
	Chairman since:	2008
	Age:	66
	Currently serving as:	- Chairman of the Nominating and Corporate Governance Committee - Member of the Compensation Committee - Member of the Audit Committee

Professional Experience

Firm	Consultant	Applied Petroleum Software	Seismic Products	Cliff Mock, Inc.	Tescorp, Inc.	Tescorp Energy Services	Cheyenne Services, Inc.	Cheyenne Services, Inc.
Date	1997-Present	1983-1985	1982	1982	1982	1981-1982	1979-1989	1979-1981
Positions Held	Consultant in the energy services industry	Co-founder, President and CEO	President and CEO	President and CEO	President and COO	President and CEO	Director	Co-Founder, Executive Vice President of Sales and Operations

Education

•	Bachelor of Arts Degree from the University of Houston

•	Master’s Degree in International Management from the American Graduate School of International Management

Other Relevant Qualifications and Experience

•	Dean A. Burkhardt  has served as one of our directors since October 2001 and as Chairman of the Board since May 2008. He has been active in the energy industry for over 35 years. Mr. Burkhardt has consulted with the energy services industry since 1997, with a focus on oil and gas projects in emerging markets, workover services, fuel cells and engineering and quality management services. He was co-founder, President and CEO of Applied Petroleum Software, a provider of production engineering software for optimizing oil and gas well completions (1983-1985); President and CEO of Seismic Products, a provider of seismic cable (1982), Cliff Mock, Inc., a provider of oilfield valves (1982) and Tescorp Energy Services, a provider of coiled tubing, hydraulics and fishing and rental tools (1981-1982) as well as President and COO of Tescorp, Inc. (1982); was a co-founder (1979), Executive Vice President of Sales and Operations (1979-1981) and a director (1979-1989) of Cheyenne Services, Inc., a provider of oilfield tubular makeup, tubular inspection and third party quality assurance services. Mr. Burkhardt is also a cattle and horse rancher and served on the Executive Committee and Finance Committee of the Board of Directors of Inprint, a non-profit literary organization supporting the creative writing program at the University of Houston, and in the past, served as the Treasurer and chair of its Finance Committee. Mr. Burkhardt also served in the past as a director of Good Neighbor Healthcare Center, a non-profit corporation, and as a member of the Executive Committee of the Board of Directors of the American Brahman Breeders Association.	•	Having served on the Company’s Board for over 15 years, Mr. Burkhardt is very knowledgeable about the Company’s business and the important issues that it faces. In addition to serving as Chairman of the Board and the Nominating and Governance Committee, he is currently a member of the Audit Committee and qualifies as an “audit committee financial expert.” He has also previously chaired the Company’s Audit and Compensation Committees. Mr. Burkhardt’s extensive service in the energy services industry enables him to advise and consult with the Board on the many issues that the Company faces, including oil and gas projects in emerging markets, workover services, fuel cells and engineering and quality management services. Mr. Burkhardt holds a Master’s Degree in international management from the American Graduate School of International Management, where his studies emphasized international marketing and accounting. He has obtained certificates as a Board Leadership Fellow and a Board Governance Fellow from the National Association of Corporate Directors (NACD) and regularly attends continuing education seminars presented by the NACD and other professional organizations covering a variety of accounting and financial, information technology, and cyber security matters. Mr. Burkhardt has also recently spoken on a panel at a cyber security conference. Attending and speaking at these seminars helps him provide guidance to the Board related to the Company’s international development, accounting-related matters and cyber security advancements.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     15

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PROPOSAL 1 ELECTION OF DIRECTORS

DIRECTOR NOMINEES , CONTINUED

Scott D. Urban
	Class I Director Nominee for Election to a Term Expiring at the 2020 Annual Meeting		Acquired expertise of particular relevance to Pioneer:
	Director since:	2008	•    Over 35 years of energy industry experience •    Significant and varied management experience at multiple global oil and gas companies •    Mr. Urban's background in geology gives him a deeper understanding of our business and the challenges we face
	Age:	63
	Currently serving as:	- Chairman of the Compensation Committee - Member of the Audit Committee - Member of the Nominating and Corporate Governance Committee

Professional Experience

Firm	Edgewater Energy	BP PLC	Amoco Corporation
Date	2008-Present	1999-2005	1977-1999
Positions Held	Managing Director; Lead Partner	Group Vice President - Upstream	Group Vice President - Worldwide Exploration; Manager - China

Education

•	Bachelor’s Degree in Earth Science from Bowling Green State University

•	Master’s Degree in Geology from Bowling Green State University

Other Relevant Qualifications and Experience

•	Scott D. Urban  has served as one of our directors since October 2008. Mr. Urban is a partner in Edgewater Energy, a consulting and investment firm focused on the oil and gas exploration and production industry and assisting private equity firms with upstream investments. Mr. Urban served as Group Vice President - Upstream for BP PLC from 1999 to 2005 with responsibility for several profit centers including the North Sea, Alaska, North American Onshore, Egypt and Middle East. Prior to joining BP, Mr. Urban held a variety of management positions with Amoco Corporation, including Group Vice President - Worldwide Exploration and Upstream Business Unit Manager - China. Mr. Urban received a Master’s Degree in geology and a Bachelor’s Degree in earth science from Bowling Green State University. Mr. Urban currently serves on the board of directors of Edgewater Energy and Noble Energy, Inc. and has served as a board member of the UK Offshore Operators Association, the Business Council for International Understanding and the Netherlands Oil and Gas Exploration and Production Association.	•	Mr. Urban’s expertise as a consultant in the oil and gas exploration and production industry makes him a valuable member of the Board. Mr. Urban’s significant experience at multiple global oil and gas companies provides him with insights relating to many of the same issues we face in our business, including capital markets, operational, regulatory, industry, technological, and financial. Mr. Urban’s Master’s Degree in geology gives him a deep understanding of, and enables him to advise the Board on, many matters relating to oil and gas drilling. Mr. Urban currently serves as a member of the board of directors of Noble Energy, Inc., which gives him valuable experience in managing the issues that face a publicly held oil and gas company with international operations and allows him to share best practices with our Board.

Our Board unanimously recommends a vote “FOR” the election of Dean A. Burkhardt and Scott D. Urban as Class I Directors .

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     16

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PROPOSAL 1 ELECTION OF DIRECTORS

DIRECTORS WITH A TERM EXPIRING IN 2018

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	Wm. Stacy Locke
		Class II Director Whose Term Expires at the 2018 Annual Meeting		Acquired expertise of particular relevance to Pioneer:
		President, Chief Executive Officer and Director since:	1995	• Over 35 years of industry experience •   Over 20 years of experience at Pioneer •   Mr. Locke's varied work experience from geology to investment banking and multiple management roles has provided him with a wide skill set that uniquely benefits Pioneer
		Age:	61

Professional Experience

Firm	Pioneer Energy Services Corp.	Arneson, Kercheville, Ehrenberg & Associates	Chemical Banking Corporation	Valero Energy Corporation, Huffco Petroleum Corporation, Tesoro Petroleum Corporation
Date	1995-Present	1993-1995	1988-1992	1979-1986
Positions Held	Currently President & CEO	Investment Banker	Investment Banker	Geologist

Education

•	Bachelor’s Degree in Geology from University of California Santa Barbara

•	Master Business Administration Degree from the Southern Methodist University

Other Relevant Qualifications and Experience

•	Wm. Stacy Locke  has served as one of our directors as well as President of the Company since May 1995, when he joined Pioneer. In December 2003, Mr. Locke was appointed Chief Executive Officer. In addition to his continuous role as President, Mr. Locke has also served as our Chief Financial Officer and Chief Operating Officer. Prior to joining Pioneer, Mr. Locke was in investment banking with Arneson, Kercheville, Ehrenberg & Associates from 1993 to 1995 and Chemical Banking Corporation from 1988 to 1992. Mr. Locke worked for Tesoro Petroleum Corporation, Valero Energy Corporation and Huffco Petroleum Corporation as a geologist from 1979 to 1986. Mr. Locke received a Bachelor’s Degree in geology from the University of California Santa Barbara and a Master of Business Administration Degree from Southern Methodist University. Mr. Locke has obtained a certificate as a Board Governance Fellow from the National Association of Corporate Directors.	•	Mr. Locke’s over 20 years of experience at Pioneer, including his service as Chief Executive Officer for eleven years, gives him unique knowledge of the opportunities and challenges associated with our business. Mr. Locke’s familiarity with all aspects of Pioneer’s business and his historical understanding of its operations, combined with his understanding of the oil and gas industry, geology and investment banking makes him uniquely qualified to advise the Board of Directors and to lead Pioneer as Chief Executive Officer. Mr. Locke also currently serves as a board member of the nonprofit organization, Good Samaritan Community Services, and in the past, served as a board member of the privately-held Omni Water Solutions, Inc. and the nonprofit organization, Any Baby Can.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     17

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PROPOSAL 1 ELECTION OF DIRECTORS

DIRECTORS WITH A TERM EXPIRING IN 2018, CONTINUED

C. John Thompson
	Class II Director Whose Term Expires at the 2018 Annual Meeting		Acquired expertise of particular relevance to Pioneer:
	Director since:	2001	•    Over 35 years of experience in the energy capital business •    One of Pioneer's longest-serving non-executive directors •    Deep institutional knowledge with experience as an executive in the oil and gas industry
	Age:	64
	Currently serving as:	- Member of the Audit Committee - Member of the Compensation Committee - Member of Nominating and Corporate Governance Committee

Professional Experience

Firm	Ventana Capital Advisors, Inc.	Enron	Sagestone Capital Partners	InterFirst Bank
Date	2004-Present	1990-1997; 2000-2001	1997-2000	1979-1987
Positions Held	President and CEO	Vice President	Co-Founder; Managing Partner	Senior Vice President

Education

•	Bachelor’s Degree in Business Administration from Texas Tech University

•	Master’s Degree in Business Administration from the University of Texas at Austin

Other Relevant Qualifications and Experience

•	C. John Thompson  has served as one of our directors since May 2001. Mr. Thompson currently serves as Chairman and Chief Executive Officer of Ventana Capital Advisors, Inc., a capital advisory company he founded in June 2004. Mr. Thompson has over 35 years of experience in the energy capital business. Mr. Thompson has worked as a business consultant, in the energy capital business with Enron, the investment banking services business with a company he co-founded, Sagestone Capital Partners, and as the manager of the energy commercial banking business with InterFirst Bank in Houston.	•	As Pioneer’s longest-serving non-executive director, Mr. Thompson brings an important institutional knowledge to the Board. His work as an executive in the oil and gas industry, and his experience in the energy capital business including more than ten years in energy commercial banking, provides him with insights relating to many of the same issues facing our business, including capital markets, operational, regulatory, industry, technological, and financial. Mr. Thompson also serves as a member of the Audit Committee and qualifies as an “audit committee financial expert.” Mr. Thompson holds a Bachelor’s Degree in Business Administration with a major in finance from Texas Tech University and a master’s Degree in Business Administration with an emphasis in finance and accounting from the University of Texas at Austin, which enables him to provide guidance to the Board on finance, accounting-related and capital structure matters. Mr. Thompson’s experience as founder of a capital advisory company and as a consultant provides the Board with a unique perspective into different industries and an understanding of various capital strategies.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     18

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PROPOSAL 1 ELECTION OF DIRECTORS

DIRECTOR WITH A TERM EXPIRING IN 2019

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J. Michael Rauh
	Class III Director Whose Term Expires at the 2019 Annual Meeting		Acquired expertise of particular relevance to Pioneer:
	Director since:	2008	•    Financial and accounting expertise •    Experienced with Sarbanes-Oxley 404 compliance •    Over 25 years of experience in various financial capacities including several financial positions at a global oil and gas company and another 8 years of audit and accounting experience at a large public accounting firm
	Age:	67
	Currently serving as:	- Chairman of the Audit Committee - Member of the Compensation Committee - Member of the Nominating and Corporate Governance Committee

Professional Experience

Firm	Kerr-McGee Corporation	Arthur Young & Company
Date	1981 – 2006	1973-1981
Positions Held	Vice President and Controller; Vice President and Treasurer	Audit Manager

Education

•	Bachelor’s Degree in Accounting and Economics from Northwestern Oklahoma State University

•	Master’s Degree in Accounting from Oklahoma State University

Other Relevant Qualifications and Experience

•	J. Michael Rauh  has served as one of our directors since October 2008. Mr. Rauh served in various financial capacities including Vice President and Controller and Vice President and Treasurer during his career at Kerr-McGee Corporation from 1981 until his retirement in 2006. Prior to joining Kerr-McGee, Mr. Rauh was an auditor with Arthur Young & Company, which merged with Ernst & Whinney in 1989 to form Ernst & Young. He received a Master’s Degree in accounting from Oklahoma State University and a Bachelor’s Degree in accounting and economics from Northwestern Oklahoma State University. Mr. Rauh has obtained a certificate as a Board Leadership Fellow from the National Association of Corporate Directors.	•	Mr. Rauh’s expertise in a variety of financial and accounting matters, experience in Sarbanes-Oxley 404 compliance and service with a global oil and gas business make him a valuable member of the Board and enhances the value of his service as a member of the Audit Committee, where he also qualifies as an “audit committee financial expert.” Mr. Rauh’s Bachelor’s and Master’s Degrees in accounting enable him to advise the Board on accounting-related matters. Mr. Rauh’s experience at a diversified global oil and gas company, with a range of operations including oil and gas drilling, exploration, and marketing, offshore contract drilling, chemical manufacturing and marketing, and coal and nuclear mining, provides him with insights relating to many of the same issues we face in our business, including capital markets, operational, regulatory, industry, technological, and financial. Mr. Rauh’s significant experience in several senior financial positions at Kerr-McGee, as well as his previous service as an auditor with an accounting firm, provides a solid platform for him to advise and consult with the Board on financial and audit-related matters.
	Mr. Rauh, as well as other Tronox, Inc. and Kerr-McGee Corp. officers and directors, was named as a defendant in a complaint filed in the United States District Court for the Southern District of New York, asserting securities law violations. On June 28, 2010, the Court dismissed the allegations that Mr. Rauh violated Section 10(b) of the Securities Exchange Act, but permitted plaintiffs to proceed with the allegation that Mr. Rauh had been a “control person” of Tronox under Section 20 of the Securities Exchange Act for an approximately four-month period. On August 3, 2012, the parties filed a Stipulation and Agreement of Settlement, and on November 26, 2012, the Court entered a final judgment approving the settlement.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     19

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INFORMATION CONCERNING MEETINGS AND COMMITTEES OF THE BOARD

Director Meetings

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     20

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INFORMATION CONCERNING MEETINGS AND COMMITTEES OF THE BOARD

Our Board held six meetings during the fiscal year ended December 31, 2016 . The Board has three standing committees: an audit committee; a compensation committee; and a nominating and corporate governance committee. During the fiscal year ended December 31, 2016 , all of the directors attended, in person, 100% of the total number of meetings of the Board and any committee on which each served .

 

In addition, the independent directors/non-management directors also held regular meetings consisting solely of independent directors/non-management directors during the fiscal year ended December 31, 2016 , and all of our directors attended last year's annual meeting of shareholders . The Chairman of the Board (or other independent director) presided over all such regular meetings.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     21

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INFORMATION CONCERNING MEETINGS AND COMMITTEES OF THE BOARD

Independent Chairman of the Board

Our Board has separated the roles of Chairman and Chief Executive Officer. The separation of roles was implemented to allow our Chief Executive Officer, Mr. Locke, to focus on the management of the Company and our independent Chairman to focus on the continued development of a high-performing Board. We believe separation of the roles of Chairman and Chief Executive Officer helps preserve our Board’s independence and objectivity and provides an appropriate division of labor between our Chairman and Chief Executive Officer. In addition to presiding at Board meetings, including those of independent directors, the duties and responsibilities of our independent Chairman include the following:

•	approving an appropriate schedule of Board meetings;

•	establishing, with the assistance of the Chief Executive Officer, Chief Financial Officer and General Counsel, the agendas for Board meetings;

•	advising the chairperson of each Board committee with respect to agendas and information needs relating to committee meetings;

•	reviewing information sent to the Board;

 

•	retaining and terminating outside consultants and advisors that report directly to the Board, as appropriate;

•	assisting management in establishing the strategic direction of the Company;

•	coordinating with the Chief Executive Officer and the Board to develop succession procedures and arrangements;

•	establishing, with the assistance of the Corporate Secretary, procedures for shareholders and other interested parties to communicate with the Board, any Board committee, the independent or non-management directors, or any other individual director;

•	initiating and overseeing the Board's review of CEO performance;

•	performing or exercising such additional duties and powers as may be conferred upon the Chairman by resolution of the Board; and

•	promoting, with senior management, the Company's enterprise risk oversight process.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     22

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INFORMATION CONCERNING MEETINGS AND COMMITTEES OF THE BOARD

Independent Committees of the Board

Each of the committees’ members is independent, as defined by the rules of the NYSE and as defined by the rules and regulations of the SEC, and each member of the Audit Committee is an “audit committee financial expert” as defined by the SEC.

During 2016 , each of the members of each committee attended 100% of the meetings held by the committee. Each of the committees is governed by a written charter, which you may access and print from our website at www.pioneeres.com .

Name and Members	Independent Committee Members	Primary Responsibilities	Meetings and Attendance
Audit Committee J. Michael Rauh (Chair) Dean A. Burkhardt C. John Thompson Scott D. Urban	• ALL	• Appointing, compensating, retaining and overseeing our independent registered public accounting firm and overseeing the qualifications and independence of such firm; • Overseeing our accounting and financial reporting processes and the audits of our financial statements; • Overseeing the performance of our internal audit function; • Overseeing our compliance with legal and regulatory requirements; • Preparing a report for inclusion in our proxy statement of its review of our audited financial statements; • Pre-approving audit, review or attest services and permitted non-audit services (including the terms and fees thereof) to be performed by our independent registered public accounting firm; and • Reviewing and assessing, on an annual basis, the adequacy of the Audit Committee’s charter and recommending revisions to the Board.	• 5 meetings - 100% attendance in person
Compensation Committee Scott D. Urban (Chair) Dean A. Burkhardt J. Michael Rauh C. John Thompson	• ALL	• Annually reviewing and approving corporate goals, objectives and other key measures relevant to the compensation of Pioneer’s executive officers and other key employees; • Reviewing and approving all formal employment or other contracts between Pioneer and our executive officers and other key employees; • Administering and reviewing Pioneer’s incentive-compensation plans, equity-based plans and other compensation and benefit plans, and authorizing the issuance of stock of Pioneer pursuant to such plans; and • Appointing, compensating, retaining and overseeing a compensation consultant and other advisors to assist the committee.	• 3 meetings - 100% attendance in person
Nominating and Corporate Governance Committee Dean A. Burkhardt (Chair) J. Michael Rauh C. John Thompson Scott D. Urban	• ALL	• Responsible for seeking, evaluating and recommending qualified individuals to become directors and serve on committees of the Board; • Periodically reviewing and assessing the adequacy of our corporate governance policies and procedures and recommending proposed changes to the Board; and • Oversee the annual evaluation of the Board, Board committees, and the directors.	• 2 meetings - 100% attendance in person

Director Resignation Policy

In an uncontested election of directors, any nominee who receives a greater number of votes “withheld” from his or her election than votes “for” his or her election will, within five business days following the certification of the shareholder vote, tender his or her written resignation to the Chairman of the Board for consideration by the Board. A director whose resignation is under consideration shall abstain from participating in any recommendation or decision regarding that resignation, but shall otherwise remain active and engaged in all Board activities, deliberations, and decisions during this Board process.

The Board shall promptly make a determination whether to accept, reject, or otherwise act with respect to the tendered resignation. In making this determination, the Board may consider all factors that it deems relevant, including, without limitation, the underlying reasons why shareholders “withheld” votes for election from such director (if ascertainable), the length of service and qualifications of the director whose resignation has been tendered, the director’s contributions to

 

the Company, whether by accepting such resignation the Company will no longer be in compliance with any applicable law, rule, regulation (including, without limitation, any listing or governance requirement of the NYSE) or governing document, and whether or not accepting the resignation is in the best interests of the Company and its shareholders. The Board may also consider a range of possible alternatives concerning the director’s tendered resignation, including, without limitation, acceptance of the resignation, rejection of the resignation, or rejection of the resignation coupled with a commitment to seek to address and cure the underlying reasons reasonably believed by the Board to have substantially resulted in the “withheld” votes.

The Board shall act on the tendered resignation and shall publicly disclose its decision regarding the resignation within one hundred twenty (120) days after the results of the election are certified. If the Board does not accept the resignation, the director shall continue to serve until the end of his or her term and until the director’s successor is elected and qualified, or until his or her earlier resignation or removal.

Director Recommendations from Shareholders

The Nominating and Corporate Governance Committee considers candidates for Board membership suggested by its members and other Board members, as well as by management and shareholders. The committee may also retain a third-party executive search firm to identify candidates from time to time. Shareholders wishing to suggest a qualified candidate should submit the recommendation in writing to the Nominating and Corporate Governance Committee in care of our Corporate Secretary at 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209. Any shareholder wishing to submit a director candidate for consideration should send the following information to the Corporate Secretary:

•	the name, age and business address of the director candidate;

•	the principal occupation or employment of the director candidate;

•	the class or series and number of shares of capital stock of Pioneer which the shareholder recommending the director candidate, as well as the director candidate, beneficially owns; and

•

all other information, if any, relating to the shareholder recommending the director candidate and the director candidate which Section 14 of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder would require Pioneer or such shareholder to disclose in a proxy statement or in any other filing in connection with solicitations of proxies for an election of directors.

Once a prospective director candidate has been identified, the Nominating and Corporate Governance Committee makes the initial determination as to whether to conduct a full evaluation of the candidate. This initial determination is based on the information provided to the committee with the recommendation of the prospective director candidate, as well as the committee’s own knowledge of the prospective director candidate, which may be supplemented by inquiries to the person making the recommendation or others. If the committee determines that additional consideration is warranted, it may ask a third-party search firm to gather additional information about the candidate’s background and experience and to report its findings to the committee. The committee then evaluates the prospective director candidate by considering, in addition to the criteria set forth in our bylaws, each candidate’s personal and professional integrity, experience, skills, ability and willingness to devote the time and effort necessary to be an effective Board member, and commitment to acting

 

in our shareholders’ and our best interests. Consideration is also given to members of the Board having an appropriate mix of background and skills. Although we do not have a formal diversity policy in place for the director nomination process, an important factor in our Nominating and Corporate Governance Committee’s consideration and assessment of a director candidate is the diversity of the candidate’s background, viewpoints, training, professional experience, education and skill set. The Nominating and Corporate Governance Committee strives to nominate director candidates with a variety of complementary skills so that, as a group, the Board will possess the appropriate talent, skills, and expertise to oversee the Company’s business.

The same criteria apply with respect to the Nominating and Corporate Governance Committee’s evaluation of all candidates for membership to our Board, including candidates recommended by shareholders. However, additional procedures will apply, as provided in our bylaws, if a shareholder wishes to submit at an annual meeting a director candidate who is not approved by our Nominating and Corporate Governance Committee or our Board.

Any shareholder desiring to nominate a director at our 2018 Annual Meeting of Shareholders must provide timely notice to the Company of such nomination in the form provided by our bylaws. See our bylaws for a description of the required form and content of this notice. To be timely, such notice must ordinarily be delivered to our principal executive offices (Attention: Corporate Secretary), at the address set forth above, no later than the close of business on the 90 ^th day nor earlier than the 180 ^th day prior to the first anniversary date of the preceding year’s annual shareholder meeting (i.e., nominations for director for inclusion in the 2018 Annual Meeting of Shareholders must be delivered to our principal executive offices no earlier than the close of business on November 18, 2017 , and no later than the close of business on February 16, 2018 ), or such proposal will be considered untimely. However, in the event that the date of the pending annual meeting of shareholders is more than 30 days before or more than 60 days after the first anniversary of the previous year’s annual meeting of shareholders, then such notice must be received not later than the later to occur of the close of business on the 90 ^th day prior to the pending annual meeting of shareholders or the 10 ^th day following the day on which public announcement of the date of such annual meeting of shareholders is first made by the Company. The foregoing time limits also apply in determining whether notice is timely for purposes of rules

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     23

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INFORMATION CONCERNING MEETINGS AND COMMITTEES OF THE BOARD

adopted by the SEC relating to the exercise of discretionary voting authority.

Any shareholder desiring a copy of our bylaws will be furnished one without charge upon written request to the Corporate Secretary at 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209.

Code of Business Conduct and Ethics and Corporate Governance Guidelines

We have adopted a Code of Business Conduct and Ethics that satisfies the SEC’s definition of a “Code of Ethics” and applies to all employees, including our principal executive officer, principal financial officer, principal accounting officer, and controller. As part of our continuing efforts to improve our corporate governance principles and practices, we have also adopted Corporate Governance Guidelines that conform to the NYSE corporate governance listing standards. All of the Company’s corporate governance materials, including the Code of Business Conduct and Ethics, the Corporate Governance Guidelines,

 

and our Board committee charters are posted on the Company’s website at www.pioneeres.com and are also available without charge upon request to the Company’s Corporate Secretary. We intend to disclose on our website any amendments to the Code of Business Conduct and Ethics and any waivers of the Code of Business Conduct and Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer, controller or persons performing similar functions.

Board’s Role in Risk Oversight

Our Board is responsible for the Company’s risk-oversight function. The Board, with the assistance of its standing committees, our Chief Executive Officer, our Chief Financial Officer, our General Counsel, VP-Controller, and our VP-Associate General Counsel, identifies, evaluates and discusses the material enterprise risks that could impact the Company’s operations and tactical and strategic decisions. These enterprise risks include operational, financial, legal, regulatory, market, cyber and reputational risks. In addition, the Board reviews the risks

 

associated with the Company’s strategic plan at an annual strategic planning session and periodically throughout the year as part of its consideration of the strategic direction of the Company. Each Board committee also oversees the management of the Company’s risks that fall within each committee’s areas of responsibility. In performing this function, each committee has full access to management, as well as the ability to engage advisors.

Risk – Related Compensation Policies and Practices

The Compensation Committee has undertaken an assessment of the risk profile of its executive and non-executive compensation programs. With the assistance of our Chief Executive Officer, our Chief Financial Officer, our General Counsel, our Vice President Global Human Resources and our independent compensation consultant, Pearl Meyer & Partners ("Pearl Meyer"), the Compensation Committee has developed a framework to assist it in ascertaining any potential material risks associated with its compensation programs, policies and procedures, including: external market reference; pay mix; range and sensitivity of performance-based variable plans; selection of performance metrics; goal-setting process; and the Company’s checks and balances on the payment of compensation. This process enables the Compensation Committee to consider if any of the Company’s current compensation programs, practices or procedures should be altered in order to ensure that an appropriate balance between competitive pay and prudent risk is maintained. As a result of this analysis, the Compensation Committee has identified the following risk mitigating factors:

•	the pay mix including fixed and variable compensation, including the use of fixed cash and variable cash and the use of long-term equity as variable compensation;

 

•	limits on annual cash bonus awards;

•	the use of varied performance goals;

•	after several years of use, there appears to be no evidence that the performance goals encourage unnecessary or excessive risk taking;

•	stock ownership guidelines;

•	the oversight of incentive compensation plans by our Compensation Committee;

•	the high level of Board involvement in approving material investments and capital expenditures; and

•	the adoption of a clawback policy.

As a result of the above assessment, the Compensation Committee believes that the Company’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     24

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INFORMATION CONCERNING MEETINGS AND COMMITTEES OF THE BOARD

Communications with the Board

Shareholders and all other interested parties may communicate with the Board, any Board committee, the independent or non-management directors, each as a group, and individual directors by submitting their communications in writing to the attention of the Corporate Secretary. All communications must identify the recipient, author, state whether the author is a shareholder of the Company, and be forwarded to the following address:

Pioneer Energy Services Corp.

1250 N.E. Loop 410, Suite 1000

San Antonio, Texas 78209

The directors of the Company, including the non-management directors, have directed the Corporate Secretary not to forward to the intended recipient any communications that are reasonably determined in good faith by the Corporate Secretary to relate to improper or irrelevant topics or are substantially incomplete.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     25

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INFORMATION CONCERNING MEETINGS AND COMMITTEES OF THE BOARD

Director Compensation

The Compensation Committee is responsible for determining the type and amount of compensation for the Company’s non-employee directors. The Compensation Committee reviews the director compensation program annually and aims to design the program to attract and compensate qualified individuals who possess the expertise and skill set required by the Company’s Board members.  

Pearl Meyer, the Compensation Committee’s independent compensation consultant, provides the Compensation Committee with competitive pay information for director compensation every other year. The competitive pay information provided in December 2014 was considered by the Compensation Committee in setting non-employee director compensation for 2015 and 2016 . A competitive pay analysis was also provided in December 2016 , which will be considered by the Compensation Committee in setting non-employee director compensation for 2017 and 2018 . For more information about the compensation consultant and competitive pay analysis, see the sections titled " The Role of the Compensation Consultant " and " The Role of Competitive Pay Analysis ." Our executive officers do not make recommendations regarding the non-employee directors’ compensation.

The following table summarizes the compensation of our non-employee directors during 2016 :

Name	Fees Earned or Paid in Cash (1)			Stock Awards (2)			Total
Dean A. Burkhardt	$	160,752		$	114,998		$	275,750
C. John Thompson	$	77,504		$	114,998		$	192,502
J. Michael Rauh	$	87,504		$	114,998		$	202,502
Scott D. Urban	$	85,752		$	114,998		$	200,750

(1)	The amounts reflected in this column consist of the board member and committee member annual retainers and meeting attendance fees earned in 2016 .

(2)

The amounts included in the “Stock Awards” column represent the aggregate grant date fair value of the restricted stock awards granted to directors during the fiscal year ended December 31, 2016 , computed in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, Stock Compensation, except that no assumption for forfeitures was included. Each director was granted 41,666 shares of restricted stock under the 2007 Incentive Plan on May 19, 2016 , based on the closing price ( $2.76 ) of our common stock on the grant date. For a discussion of valuation assumptions, see Note 8 to our consolidated financial statements included in our annual report on Form 10-K for the fiscal year ended December 31, 2016 .

In setting non-employee director compensation in 2016 , the Compensation Committee considered the competitive pay information provided by Pearl Meyer in December 2014 , the experience and expertise of the directors, and the significant amount of time that non-employee directors spend in fulfilling their duties to the Company and its shareholders. The total compensation for non-employee directors during 2016 was slightly above the market median of our peers, according to the competitive pay analysis provided by Pearl Meyers in December 2016 .

The non-employee director fees for 2016 were approved by the Compensation Committee as follows:

	Fee Per Meeting Attended							Annual Retainer
	In Person			By Telephone				Chairman			Member
Board of Directors	$	1,500		$	1,000			$	120,000		$	45,000
Audit Committee	$	1,500		$	1,000			$	15,000		$	5,000
Compensation Committee	$	1,500		$	1,000			$	10,000		$	1,750
Nominating and Corporate Governance Committee	$	1,500		$	1,000			$	10,000		$	1,750

In an effort to simplify director compensation in 2017 , and in recognition of a market trend towards compensating non-employee directors with an annual retainer that is inclusive of meeting fees, rather than director compensation that is based on meeting attendance, the following annual retainer and meeting fee structure was approved for our non-employee directors by the Compensation Committee for 2017 (with an additional per meeting fee if we exceed the number of meetings included in the annual retainer):

	Number of Meetings Included in Annual Retainer		Annual Retainer
			Chairman			Member
Board of Directors	7		$	130,500		$	55,500
Audit Committee	5		$	22,500		$	12,500
Compensation Committee	3		$	14,500		$	6,250
Nominating and Corporate Governance Committee	2		$	13,000		$	4,750
Meetings not otherwise included above	7		$	—		$	—

Due to the fact that per meeting fees have been eliminated from the new fee structure (unless the total meetings exceed the designated number listed above), the new fee structure will result in reduced fees to our non-employee directors in years when additional meetings are held. If assuming the same number of meetings were held in 2017 as in 2016, the new fee structure would result in $1,500 more in fees to each of our non-employee directors in 2017, as compared to 2016.

We expect each director to make every effort to attend each meeting of the Board, each meeting of any Board committee on which he serves and the annual meeting of shareholders. Attendance in person at Board and committee meetings is preferred but not required; attendance by teleconference is permitted, if necessary. During the fiscal year ended December 31, 2016 , all of the directors attended, in person, 100% of the total number of meetings of the Board and any committee on which each served , and all of our directors attended last year's annual meeting of shareholders .

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INFORMATION CONCERNING MEETINGS AND COMMITTEES OF THE BOARD

In addition to the cash compensation described above, the Compensation Committee granted each non-employee director a restricted stock award in 2016 that will vest at the end of the one-year vesting period, with a grant date fair market value of approximately $115,000 , which represents a restoration of 2014 award levels that were reduced during 2015 by 24% in order to reduce costs in light of the industry downturn. We also reimburse the directors for reasonable out-of-pocket expenses they incur in connection with attending meetings of the Board and Board committees or otherwise in their capacity as directors.

The following table provides information on the outstanding equity awards for each of our non-employee directors as of December 31, 2016 :

	Option Awards										Stock Awards
	Number of Securities Underlying Unexercised Options				Option Exercise Price			Option Expiration Date			Number of Shares of Stock That Have Not Vested (1)			Market Value of Shares of Stock That Have Not Vested (2)
Name	Exercisable		Unexercisable
Dean A. Burkhardt	—		—		—			—			41,666			$	285,412
C. John Thompson	—		—		—			—			41,666			$	285,412
J. Michael Rauh	10,000		—		$	10.32		10/05/18			41,666			$	285,412
Scott D. Urban	10,000		—		$	10.32		10/05/18			41,666			$	285,412

(1)	The indicated shares of restricted stock are scheduled to vest on May 19, 2017 .

(2)	The market value of the shares of restricted stock that have not vested is based on the closing price of our common stock on December 30, 2016, of $6.85 per share.

In 2016, the Board (and our shareholders) approved an amendment and restatement of the 2007 Incentive Plan that, among other things, limits the aggregate grant date fair value for financial reporting purposes of awards granted under the 2007 Incentive Plan during any single calendar year to a non-employee director as compensation for his or her services as a director to $300,000 in total value.

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INFORMATION CONCERNING MEETINGS AND COMMITTEES OF THE BOARD

Stock Ownership Requirements

In order to encourage the acquisition and retention of our common stock by our directors and to further align their economic interests with those of our shareholders and to focus our directors on the long-term sustained appreciation of our common stock, our Compensation Committee and our Board have adopted guidelines requiring each of our directors to own a specified amount of our common stock.

In March 2015, we increased the stock ownership requirements from three times each Board member's annual retainer to five times the annual retainer for non-employee directors (other than the Chairman) and six times the annual retainer for the Chairman of the Board. We increased the stock ownership requirements for our CEO from three times the annual base salary to five times the annual base salary, and from two times the annual base salary for our other named executive officers to three times the annual base salary.

Generally, the ownership target is to be acquired no later than the December 31 following the fifth anniversary of the director’s initial appointment or election to the Board, or the fifth anniversary following the change in the ownership requirement. For purposes of this

 

calculation, unvested restricted stock and restricted stock units may be counted toward the applicable ownership requirement .

Because the stock ownership requirements were revised during 2015, all named executive officers and directors will be required to comply with the revised requirements by December 31, 2020. Until then, the previous requirement is in effect. Additionally, because the fee structure for the non-employee directors was revised effective January 1, 2017, the annual retainer that was applicable for the year ended December 31, 2016 will serve as the annual retainer fee basis for the ownership calculations until the fifth anniversary following the change in annual retainer fees, which is January 1, 2022.

As of May 18, 2016 , all of our non-employee directors and named executive officers were in compliance with their stock ownership requirements and remain in compliance. Messrs. Tucker and Freeman initially became subject to the stock ownership guidelines in 2015 and thus have until December 31, 2020 to meet their respective ownership requirements.

Compensation Committee Interlocks and Insider Participation

Messrs. Burkhardt, Thompson, Rauh and Urban served on our Compensation Committee during the fiscal year ended December 31, 2016 . No member of the Compensation Committee (1) was an officer or employee of our Company or a subsidiary of our Company during that period, (2) was formerly an officer of our Company or a subsidiary of our Company or (3) had any relationship required to be disclosed in this proxy statement pursuant to Item 404 of Regulation S-K.

During the fiscal year ended December 31, 2016 , none of our named executive officers served as (1) a member of a compensation

 

committee of another company, one of whose executive officers served on our Compensation Committee; (2) a director of another company, one of whose executive officers served on our Compensation Committee; or (3) a member of a compensation committee of another company, one of whose executive officers served as one of our directors.

Certain Relationships and Related Transactions

Our Audit Committee reviews any transaction in which (1) we or any of our subsidiaries, on the one hand, and (2) any of our directors, nominees for director, executive officers or holders of more than 5% of our common stock or any of their immediate family members, on the other hand, is, was or is proposed to be a participant and the amount involved exceeds $120,000. Our Audit Committee is required by its charter to review and approve all such related person transactions, as well as to periodically reassess these transactions to ensure their continued appropriateness. Our chief financial officer is primarily responsible for the development and implementation of processes and controls to obtain information from directors and officers with respect to any such related person transactions, including the use of annual director and officer questionnaires. Our management is responsible for determining whether a transaction contains the characteristics described above requiring review and approval by our Audit Committee.

None of our directors or executive officers and no holder of more than 5% of the outstanding shares of our common stock, and no member of the immediate family of any such director, officer or security holder, to our knowledge, had any material interest in any transaction during the fiscal year ended December 31, 2016 , or in any currently proposed transaction, to which we or any of our subsidiaries was or is to be a participant in which the amount involved exceeds $120,000, except

 

that in 2016 , the Company paid approximately $154,000 for rental and trucking services to Gulf Coast Lease Service, a trucking and construction company, of which Joe Freeman, our Senior Vice President of Well Servicing, serves as President, and which is owned and operated by Mr. Freeman's two sons. Mr. Freeman does not receive compensation from Gulf Coast Lease Service, and he serves primarily in an advisory role to his sons. As of March 20, 2017 , the Company has paid Gulf Coast Lease Service approximately $10,000 for its services in 2017 . The Audit committee reviewed and ratified the rental and trucking services provided to the Company by Gulf Coast Lease Service after discussing the business rationale and an analysis of pricing competitiveness, in accordance with Company policy.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     28

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table shows the beneficial ownership of our common stock as of March 20, 2017 by (1) each person (or group of affiliated persons) who is known by us to beneficially own more than 5% of our common stock, (2) each of our directors and nominees, (3) each of the named executive officers listed in the summary compensation table in this proxy statement and (4) all our directors and executive officers as a group. As of March 20, 2017 , we were not aware of any person beneficially owning more than 5% of the outstanding shares of our common stock, other than those listed below. Unless otherwise indicated below, all shareholders have the same principal business address as Pioneer. All persons listed in the table below have sole voting and investment power with respect to their shares unless otherwise indicated. As of March 20, 2017 , there were 77,280,191 shares of common stock outstanding.

		Shares of Common Stock Beneficially Owned
Name of Beneficial Owner		Number			Percent of Class (1)
BlackRock Inc. 55 East 52 nd  Street New York, NY 10055		9,066,556		(2)	11.73	%
Dimensional Fund Advisors LP 6300 Bee Cave Road Austin, TX 78746		5,504,778		(3)	7.12	%
The Vanguard Group, Inc. 100 Vanguard Blvd Malvern, PA 19355		3,798,203		(4)	4.91	%
Wm. Stacy Locke		2,679,336		(5)	3.39	%
Lorne E. Phillips		740,619		(6)	*
Carlos R. Peña		458,614		(7)	*
Joe P. Freeman		211,878		(8)	*
Brian L. Tucker		190,956		(9)	*
Dean A. Burkhardt		177,530		(10)	*
J. Michael Rauh		166,672		(11)	*
Scott D. Urban		141,672		(12)	*
C. John Thompson		41,666		(10)	*
All directors and executive officers as a group (ten persons)		4,868,292		(13)	6.05	%
*	Less than 1%

(1)

In accordance with the rules of the Securities and Exchange Commission (the “SEC”), the amounts shown for the number of shares and percentage ownership for each person listed include (1) any shares that may be acquired pursuant to options exercisable within 60 days of March 20, 2017 , (2) any shares that may be acquired pursuant to the vesting of long-term incentive restricted stock awards within 60 days of March 20, 2017 , and (3) unvested restricted stock. These shares are also deemed outstanding for the purpose of computing the percentage of outstanding shares owned by the person; however, these shares are not deemed outstanding for the purpose of computing the percentage ownership of any other person. The amounts shown for the number of shares and percentage ownership for all executive officers and directors as a group include (1) any shares that may be acquired pursuant to options held by members of the group and exercisable within 60 days of March 20, 2017 , (2) any shares that may be acquired by members of the group pursuant to the vesting of long-term incentive restricted stock awards within 60 days of March 20, 2017 , and (3) unvested restricted stock held by members of the group. Holders of unvested restricted stock have voting rights with respect to such shares. Holders of stock options do not have voting rights with respect to the shares subject to such options.

(2)	Based on a Schedule 13G filed with the SEC by BlackRock Inc. on January 17, 2017 . Blackrock Inc. has sole dispositive power with respect to these shares and has sole voting power with regard to 8,912,886 shares.

(3)

Based on a Schedule 13G filed with the SEC by Dimensional Fund Advisors LP (“Dimensional”) on February 9, 2017 . Dimensional furnishes investment advice to four investment companies and serves as investment manager or sub-advisor to certain other commingled funds, group trusts and separate accounts. These investment companies, trusts and accounts are referred to herein as the “Funds.” In certain cases, subsidiaries of Dimensional may act as an adviser or sub-adviser to certain Funds. In its role as investment advisor, sub-adviser and/or manager, Dimensional or its subsidiaries may possess voting and/or investment power over the securities of the issuer that are owned by the Funds, and may be deemed to be the beneficial owner of the shares of the issuer held by the Funds. Dimensional disclaims beneficial ownership of such securities. With respect to these reported shares, Dimensional has sole dispositive power with regard to 5,504,778 shares and sole voting power with regard to 5,282,525 shares.

(4)

Based on a Schedule 13G filed with the SEC by The Vanguard Group, Inc. (“Vanguard”) on February 13, 2017 . Vanguard has sole voting power with regard to 81,128 shares, sole dispositive power with regard to 3,717,075 shares, and shared dispositive power with regard to 81,128 shares. Vanguard Fiduciary Trust Company (“VFTC”), a wholly owned subsidiary of Vanguard, is the beneficial owner of 81,128 shares as a result of its serving as investment manager of collective trust accounts.

(5)	Includes options to purchase 1,537,733 shares of common stock and unvested restricted stock units representing 112,547 shares of stock. Mr. Locke’s common stock holdings include 180,334 shares held in the Locke Children’s Trust.

(6)	Includes options to purchase 516,255 shares of common stock and unvested restricted stock units representing 37,819 shares of stock.

(7)	Includes options to purchase 341,178 shares of common stock and unvested restricted stock units representing 32,455 shares of stock.

(8)	Includes options to purchase 179,484 shares of common stock and unvested restricted stock units representing 13,452 shares of stock.

(9)	Includes options to purchase 134,880 shares of common stock and unvested restricted stock units representing 13,224 shares of stock.

(10)	Includes 41,666 shares of unvested restricted stock.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     29

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(11)	Includes options to purchase 10,000 shares of common stock and 41,666 shares of unvested restricted stock. Mr. Rauh's common stock holdings include 25,000 shares held in the Rauh Trust.

(12)	Includes options to purchase 10,000 shares of common stock and unvested restricted stock units representing 41,666 shares of stock.

(13)	The amount indicated includes options to purchase 2,748,544 shares of common stock, unvested restricted stock units representing 223,176 shares of stock and 166,664 shares of unvested restricted stock.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers and any persons beneficially owning more than 10% of our common stock to report their initial ownership of our common stock and any subsequent changes in that ownership to the Securities and Exchange Commission. Specific due dates for these reports have been established, and we are required to disclose in this proxy statement any failure to file by these dates. To our knowledge, all required Section 16(a) filings were timely and correctly made by reporting persons during 2016 .

In making these disclosures, we relied solely on written statements of directors, executive officers and shareholders, and copies of the reports that they have filed with the SEC.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     30

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EXECUTIVE OFFICERS

Our current executive officers are:

Wm. Stacy Locke			Lorne E. Phillips
	President, Chief Executive Officer and Director Age: 61			Executive Vice President and Chief Financial Officer Age: 46
Wm. Stacy Locke has served as one of our directors as well as President of the Company since May 1995, when he joined Pioneer. In December 2003, Mr. Locke was appointed Chief Executive Officer. In addition to his continuous role as President, Mr. Locke has also served as our Chief Financial Officer and Chief Operating Officer. Prior to joining Pioneer, Mr. Locke was in investment banking with Arneson, Kercheville, Ehrenberg & Associates from 1993 to 1995 and Chemical Banking Corporation from 1988 to 1992. Mr. Locke worked for Tesoro Petroleum Corporation, Valero Energy Corporation and Huffco Petroleum Corporation as a geologist from 1979 to 1986. Mr. Locke received a Bachelor’s Degree in Geology from the University of California Santa Barbara and a Master of Business Administration Degree from Southern Methodist University. Mr. Locke has obtained a certificate as a Board Governance Fellow from the National Association of Corporate Directors.			Lorne E. Phillips has served as our Executive Vice President and Chief Financial Officer since joining Pioneer in 2009. Prior to joining Pioneer, Mr. Phillips worked for 10 years at Cameron International Corporation, serving most recently as Vice President and Treasurer. Prior to that, he was General Manager of Cameron’s Canadian valves operations, Vice President of Marketing and M&A for the valves division, and Business Development Manager for Cameron. Before joining Cameron, he was a Financial Analyst for SCF Partners, a provider of equity capital to energy service and equipment companies, and for Simmons & Company International, an investment bank focused on the energy industry. Mr. Phillips received a Bachelor's Degree in Economics from Rice University and a Master of Business Administration Degree from Harvard Business School.
Carlos R. Peña			Brian L. Tucker
	Executive Vice President, President of Production Services Segment, General Counsel, Secretary and Compliance Officer Age: 50			Executive Vice President and President of Drilling Services Segment Age: 43
Carlos R. Peña joined Pioneer in 2008 as our Senior Vice President, General Counsel, Secretary and Compliance Officer, and he was promoted to Executive Vice President, General Counsel, Secretary and Compliance Officer in 2015. In 2016, Mr. Peña was promoted to President of our Production Services Segment, having gained valuable experience with a variety of industry issues during his almost ten year tenure here. Mr. Peña has practiced law since 1992 and has extensive experience providing both outside corporate and securities counsel with Fulbright & Jaworski L.L.P., Cox Smith Matthews Incorporated, and Vinson & Elkins L.L.P., and in-house M&A counsel with AT&T, Inc. Mr. Peña received a Bachelor's Degree in Economics from Princeton University and a Juris Doctor law degree from the University of Texas School of Law, and completed the Harvard Business School Advanced Management Program in 2016.			Brian L. Tucker was appointed President of our Drilling Services Segment effective January 1, 2015. Since joining Pioneer in 2012, Mr. Tucker has served as our Senior Vice President over Appalachia, Utah and North Dakota drilling divisions. Prior to joining Pioneer, Mr. Tucker was a Vice President for Helmerich and Payne (H&P) managing the South Texas operations from 2010 to 2012. From 2004 to 2010, Mr. Tucker served as drilling engineer and operations manager for the Barnett Shale, South Texas and West Texas operations for H&P. Mr. Tucker served eight years as an officer in the U.S. Army, is a West Point graduate with a Bachelor of Science in Systems Engineering, and completed the Harvard Business School Advanced Management Program in 2014.
Joe P. Freeman			Bill W. Bouziden
	Senior Vice President of Well Servicing Age: 68			Senior Vice President of Wireline Services and Coiled Tubing Services Age: 56
Joseph P. Freeman, Jr. joined Pioneer in 2008 as Vice President of Well Servicing and he was promoted to Senior Vice President in 2014. Previously, Mr. Freeman served as Vice President of the well servicing division of WEDGE Oil and Gas Services from 2005 to 2008, Gulf Coast Division Manager of Key Energy Services from 1998 to 2004, and independent entrepreneur and owner of JPF Well Service from 1987 to 1998, which was sold to Key Energy Services in 1998. Mr. Freeman also serves as a director for Rice Belt Warehouse Inc., the El Campo Bowling Center, and Hospice Support, Inc. Mr. Freeman received a Bachelor's Degree in Accounting from the University of Texas in Austin.			Bill W. Bouziden joined Pioneer in 2009 as Division Manager for the Gulf Coast region wireline services. In 2013, Mr. Bouziden was promoted to Vice President of Wireline Services and Coiled Tubing Services. In 2014, he was promoted to Senior Vice President of Wireline Services and Coiled Tubing Services. Mr. Bouziden has served in many capacities during his career of over 30 years in the energy industry, including Production Services Business Development Vice President at Smith International, Inc., President of Perf-O-Log, Inc., Operations Manager at Diamond Wireline Services, and Completions Manager at TransAmerican/TransTexas Natural Gas.

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COMPENSATION DISCUSSION AND ANALYSIS

This compensation discussion and analysis provides information regarding our executive compensation program in 2016 for the following executive officers of the Company (collectively, the “named executive officers”):

Name	Position
Wm. Stacy Locke	Director, President and Chief Executive Officer
Lorne E. Phillips	Executive Vice President and Chief Financial Officer
Carlos R. Peña	Executive Vice President, President of Production Services Segment, General Counsel, Secretary and Compliance Officer
Brian L. Tucker	Executive Vice President and President of Drilling Services Segment
Joe P. Freeman	Senior Vice President of Well Servicing

Executive Summary

Business Highlights

Early in 2016, our Board approved a business plan that reflected aggressive goals for earnings per share (“EPS”), adjusted earnings before interest, taxes, depreciation, amortization and impairments (“Adjusted EBITDA”), adjusted EBITDA return on capital employed (ROCE) and safety. These goals served as targets for our annual cash incentive plan. As 2016 progressed, the downturn proved more severe and more prolonged than was previously expected at the time these goals were set, and our financial and operational performance in 2016 fell below our targets for all these measures except for safety, and therefore the annual cash incentive awards earned by our named executive officers were negatively affected and below target.

However, the Company achieved operating results that met its cash flow and debt compliance requirements, the Company continued to be a going concern and thus, shareholder value was preserved. In comparison, five of the peers in the Company's Custom Peer Group filed for bankruptcy during 2015 and 2016.

Despite the downturn in the industry, the Compensation Committee believes that management performed well during 2016 and delivered strong results for the 2016 Team Goals. Key highlights of our 2016 performance include the following:

	Executed on our strategy to transform our drilling fleet into a highly capable, pad optimal fleet focused on the horizontal drilling market:
	•	Sold three drilling rigs and other drilling equipment for aggregate proceeds of over $12 million, with an additional six drilling rigs, other drilling equipment and 13 wireline units held for sale at year end;
	•	Current fleet is 100% high spec, multi-well pad-capable with 16 AC rigs in the United States engineered to optimize pad drilling and 8 SCR rigs in Colombia; and
	•	Achieved 81% utilization of our domestic AC rig fleet by year end, and 50% utilization of our fleet in Colombia.
	Achieved award winning safety results:
	•	Our 2016 lost time incident rate is the lowest in company history, and was also the third consecutive year with improving rates; and
	•	Received the 2016 Division IV Association of Energy Service Companies 3 rd  place award for wireline services and received the 1 st  place award for coiled tubing services.
	Improved liquidity and financial flexibility:
	•	Completed equity offering in December 2016 with net proceeds of $65.4 million, which were used to reduce outstanding borrowings;
	•	Amended our revolving credit facility in June 2016 to provide for enhanced liquidity through maturity in 2019; and
	•	Paid down $49 million of debt outstanding during 2016.
	Positioned for industry recovery:
	•	Reallocated our assets to regions with increasing demand, hired field personnel and acquired job materials to prepare for expected demand improvement in 2017;
	•	Committed to trade in 20 older well servicing rigs for 20 new-model rigs, and to purchase four new completion-oriented wireline units; and
	•	Current fleets and crews are highly capable and ready for recovery.

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COMPENSATION DISCUSSION AND ANALYSIS

Results of 2016 Say on Pay

At our 2016 Annual Meeting of Shareholders, the advisory vote on our executive compensation ("say on pay") received the support of 98% of the votes cast. The Board is extremely pleased with this result, and has continued its efforts to continually improve our executive compensation program, listen to shareholders, and focus on performance-based compensation.

Fifty percent of our Chief Executive Officer's target total direct compensation is performance-linked, including :

▪	Annual Cash Incentive Awards. The annual cash incentive award is based on operational and financial performance.

▪	Stock Options. The value of these awards is tied directly to the Company’s stock price and thus is closely correlated with our shareholders’ interests.

▪	Performance-Based Phantom Stock Unit Awards. The performance-based phantom stock unit awards are earned based on our relative performance versus a pre-defined group of ten peer companies over the three-year performance period in each of the following three metrics: total shareholder return, EBITDA growth and EBITDA ROCE.

2016 Compensation Highlights

The Compensation Committee took the following key actions in 2016 :

•	Held Base Salaries Flat. The Compensation Committee continued to hold the salaries of the named executive officers flat in 2016.

•

Revised Performance Measures for Annual Cash Incentive Awards. The Compensation Committee increased the performance level required to achieve a maximum award payout from 130% of target to 140% of target, and lowered the threshold (minimum performance level) from 75% of target to 60% of target. This change effectively makes it more difficult for an award participant to receive a maximum award payout, while providing an award payout at a reduced threshold performance level. Considering the difficult operating environment during the industry downturn, in 2016 the Compensation Committee adjusted the performance levels to provide greater incentive for our employees to perform well, while preserving the overall award opportunity and ensuring that the potential for a maximum payout was set at a level representing a stretch goal.

•

Increased Target Level Annual Cash Incentive Awards for Named Executive Officers. In 2016 , the Compensation Committee restored the 2014 annual cash incentive award levels that were reduced during 2015 by 50% and then increased the annual cash incentive awards' target levels for all the named executive officers except our CEO by 10% for each participant (for example, an increase from a target level of 60% to a target level of 70%), in order to better align the incentive award targets with the competitive pay information derived by Pearl Meyer as well to increase the competitiveness of the target total cash compensation of the named executive officers.

Based on Company performance measures and the achievement of the 2016 Team Goals, each of the named executive officers earned a cash incentive award below their target level.

•	Revised Long-Term Incentive Award Target Levels. In 2016, the Compensation Committee re-evaluated the market competitiveness of the long-term incentive award levels for all participants as compared to the competitive pay information derived by Pearl Meyer. As a result of this review, the Compensation Committee revised the overall plan levels downward in 2016, as compared to 2015.

•	Granted Long-Term Incentive Awards. All of the named executive officers were granted long-term incentive awards in 2016 that were allocated approximately 20% to stock options, 40% to performance-based phantom stock unit awards , and 40% to long-term incentive cash awards.

In order to continue our practice of offering equity compensation awards to levels of management below the named executive officers, while still maintaining total equity awards granted at a consistent level with prior years, the Compensation Committee elected to again provide long-term cash incentive awards to executive officers rather than time-based equity awards.

The Company implemented the use of phantom stock unit awards in the long-term performance-based compensation program. The phantom stock unit awards offer incentive compensation linked to share value and are thus aligned with our shareholders' interests, while preserving the number of shares in the incentive plan. The phantom stock unit awards may be settled in cash or shares of common stock of the Company, at the discretion of the Compensation Committee. At the time the phantom stock unit awards were issued to the named executive officers in 2016, the number of shares available for issuance under the 2007 Incentive Plan was low. At the 2016 Annual Meeting of Shareholders, the Company's shareholders approved an amendment to the 2007 Incentive Plan to, among other things, increase the number of authorized shares under the plan by 3,800,000 shares. The number of performance-based phantom stock unit awards that each named executive officer may earn is based on our relative EBITDA growth, EBITDA ROCE, and total shareholder return versus a defined group of ten peer companies over a three-year performance period.

Under the 2013 performance-based restricted stock unit ("RSU") award (which had similar performance-based vesting terms as the phantom stock unit awards described above, but with a performance period of April 1 , 2013 to December 31, 2015 ), Messrs. Locke, Phillips, Peña, Tucker and Freeman each received approximately 72% of their target award shares, which vested in April 2016 .

•

Temporarily Suspended Certain Benefits. In order to reduce costs, the Compensation Committee decided to temporarily suspend car allowances for members of the corporate management team (including all the named executive officers, except for Joe Freeman who primarily works in our field location offices), effective January 1, 2016. Also, 401K employer matching contributions were temporarily suspended for all employees, effective February 1, 2016.

•

Restored Restricted Stock Awards for Director Compensation and Held Cash Compensation Flat in 2016. The Compensation Committee granted each non-employee director a restricted stock award with a grant date fair market value of approximately $115,000 , which represents a restoration of 2014 award levels that were reduced during 2015 by 24% in order to reduce costs in light of the industry downturn. Additionally, with the exception

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COMPENSATION DISCUSSION AND ANALYSIS

of the annual retainer for the Chairman of the Board, the Compensation Committee has held all other cash compensation for the non-employee directors flat since 2013.

•

Approved Amendments to the 2007 Incentive Plan. The Board (and our shareholders) approved an amendment and restatement of the 2007 Incentive Plan that, among other things, limits the aggregate grant date fair value for financial reporting purposes of awards granted under the 2007 Incentive Plan during any single calendar year to a non-employee director as compensation for his or her services as a director to $300,000 in total value.

2016 Executive Total Compensation Mix

We believe that our 2016 executive compensation program is competitive and strongly aligned with pay-for-performance principles. Consistent with prior practice, in 2016 the Compensation Committee emphasized compensation opportunities that reward our named executive officers when they deliver financial and operational results.

A significant percentage of the 2016 compensation granted to our named executive officers was performance-linked, as the following graphs illustrate:

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COMPENSATION DISCUSSION AND ANALYSIS

Shareholder Advisory Vote on Executive Compensation

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COMPENSATION DISCUSSION AND ANALYSIS

We conducted an advisory vote on executive compensation last year at our 2016 Annual Meeting of Shareholders. While this vote is not binding on the Compensation Committee, the Board of Directors or us, the Compensation Committee values the opinions of our shareholders on executive compensation matters.

 

Based upon the Inspector of Election’s report, the advisory vote on executive compensation received the favorable support of 98% of the votes cast thereon. The Compensation Committee evaluated the results of the 2016 advisory vote together with the other factors and data discussed in this Compensation Discussion and Analysis in determining our 2016 executive compensation program. The

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COMPENSATION DISCUSSION AND ANALYSIS

Compensation Committee considered the vote results and, in light of the strong stockholder support, did not make any significant changes to our executive compensation program solely as a result of the 2016 advisory vote.

In response to the majority of the votes cast for an advisory vote on executive compensation every year at our 2011 Annual Meeting of Shareholders, we determined that an advisory vote on executive compensation would be conducted every year.

 

We recognize the importance of receiving input from our shareholders on important issues, including executive compensation. After careful consideration, the Board is recommending that our shareholders approve that future advisory votes on our executive compensation be held on an annual basis, consistent with our past practices. See Proposal 4 of this Proxy Statement for more information about this advisory vote on the frequency of future advisory votes on executive compensation.

Our Compensation Philosophy

The Compensation Committee aims to design our executive compensation program with goals and objectives to:

•	Provide a compensation structure that is consistent with competitive pay practices and pay levels with respect to industry peers;	•	Encourage the attainment of strategic business objectives with pay-for-performance principles; and
•	Attract, motivate and retain executives necessary for our success;	•	Reward executives for building shareholder value.

WHAT WE DO			WHAT WE DON’T DO
þ	A significant portion of our executive pay is performance-linked		ý	No personal aircraft
þ	Apply shareholder aligned performance objectives for our executives		ý	No re-pricing of underwater stock options
þ	Use an independent compensation consultant		ý	No country club memberships for personal use
þ	Evaluate our executive compensation against our industry peers		ý	No tax gross ups for anyone becoming a participant in our Key Employee Severance Plan after March 2011
þ	Apply share ownership guidelines for named executive officers and directors		ý	No hedging of Company securities or pledging of Company securities as collateral for a loan
þ	Adhere to a claw-back policy
þ	Consider risk in our executive compensation program: • A significant portion of our executive compensation is tied to long-term performance • We use diversified performance metrics, including TSR, EBITDA ROCE, EBITDA growth, EBITDA, EPS, safety, etc. • We use diversified plans through which relative performance is measured against our own budgeted goals and against the performance of our peers

Performance-Linked Compensation. Fifty percent of our Chief Executive Officer's target total direct compensation is performance-linked, including :

▪	Annual Cash Incentive Awards. The annual cash incentive award is based on operational and financial performance.

▪	Stock Options. The value of these awards is tied directly to the Company’s stock price and thus is closely correlated with our shareholders’ interests.

▪	Performance-Based Phantom Stock Unit Awards. The performance-based phantom stock unit awards are earned based on our relative performance versus a pre-defined group of ten peer companies over the three-year performance period in each of the following three metrics: total shareholder return, EBITDA growth and EBITDA ROCE.

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COMPENSATION DISCUSSION AND ANALYSIS

Our Use of Peer Groups for Compensation Analysis and Performance Awards. The Compensation Committee uses a "Custom Peer Group" as well as certain Industry Survey Data in order to develop a "market consensus" for the compensation of our named executive officers. The Compensation Committee believes the Custom Peer Group reflects our current competitors for employee talent and that it provides an appropriate peer set for the purposes of evaluating our pay practices and pay levels. For purposes of determining our performance achieved as compared to the performance of our peers under the performance-based phantom stock unit awards , we use a "Performance Peer Group" representing the peers with whom the Compensation Committee believes we compete for business on a daily basis. Because the companies in the Performance Peer Group are direct business competitors, the Compensation Committee subjectively determined that these companies provide a better comparison for EBITDA growth, EBITDA ROCE and TSR than the Custom Peer Group, which consists of a broader group of companies with which we compete for employee talent. See additional disclosure in the sections titled "The Role of Competitive Pay Analysis" and "The 2016 Executive Compensation Program in Detail."

Target Compensation. Our executive compensation program is generally designed to achieve target total direct compensation (base salary, target annual cash incentive award and target long-term incentive awards) for our named executive officers at the market median compensation level, as determined by our compensation consultant. See additional disclosure in the section titled "The Role of our Compensation Consultant." Accordingly, under our long-term performance-based awards, if the Company’s performance over the relevant period were to fall exactly in the middle of the peer group, the participant would receive a target award equal to 50% of the maximum potential award. We believe this design drives improved performance because of the opportunity for above-target payouts for above-median performance. See additional disclosure in the section titled " 2016 Total Direct Compensation."

Our Use of Performance Metrics and Diversified Plans. We use diversified performance metrics and plans. Our annual cash incentive awards and long-term performance-based phantom stock unit awards are tied to our strategic business objectives and are not intended to reward executives multiple times for the same performance. Among other performance measures, the Compensation Committee strategically selected earnings before interest, taxes, depreciation and amortization ("EBITDA") and EBITDA return on capital employed ("ROCE") as base performance metrics for both the annual cash incentive award and the long-term performance-based award. However, the awards are varied in the way the metrics are used to determine performance and payouts because the annual cash incentive award is measured over a one-year period against the Company's budgeted metric, while the long-term performance-based phantom stock unit awards are measured over a three-year period against the relative performance of a pre-defined peer group. Consequently, the Company's achievement of a target level EBITDA payout under the annual cash incentive awards will not necessarily mean that a target payout level will be achieved under the long-term performance-based phantom stock unit awards , as the performance-based phantom stock unit awards ' payout is based on the Company's EBITDA growth over the three-year performance period relative to the performance of the pre-defined peer group, which could be zero if the Company's relative performance was in the bottom quartile as compared to the peer group. Because of the varied plans, we do not believe the use of similar metrics in multiple plans would reward our executives multiple times for the same performance.

The Role of the Compensation Committee

The Compensation Committee administers our executive compensation program and is responsible for establishing appropriate compensation for our named executive officers. The duties of the Compensation Committee include:

•	Approving and overseeing our compensation policies, objectives and programs for executive officers;

•	Reviewing and approving all formal employment or other contracts between us and our executive officers;

•	Annually reviewing and approving corporate goals, objectives and other key measures relevant to the compensation of our executive officers;

 

•	Evaluating the performance of our executive officers; and

•	Appointing, compensating, retaining and overseeing the Compensation Committee’s consultant and other advisors.

Except as disclosed in this Compensation Discussion and Analysis, at this time, the Compensation Committee does not intend to delegate its powers and authority to any subcommittee or other persons.

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COMPENSATION DISCUSSION AND ANALYSIS

The Role of Management

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COMPENSATION DISCUSSION AND ANALYSIS

The Compensation Committee believes that even the best advice of a compensation consultant or other outside advisors must be combined with the input from senior management and the Compensation Committee’s own individual experiences and judgment to arrive at the proper alignment of compensation philosophy, objectives, and programs. In 2016 , the Chief Executive Officer, Chief Financial Officer, Senior Vice President of Human Resources, and General Counsel worked closely with the Compensation Committee in formulating award designs, performance measures, and performance levels (i.e., threshold, target, and above expectation) necessary to align the executive compensation program with our strategic business objectives.

 

Generally, the Chief Executive Officer reviews with the Compensation Committee his performance evaluations of the other named executive officers and his recommendations regarding base salary adjustments, cash incentive awards, and long-term incentive awards for the other named executive officers to help ensure alignment with pay-for-performance principles. However, all final decisions regarding the compensation of the named executive officers are made in executive session by the Compensation Committee.

The Board and Compensation Committee conduct their own performance assessment of the Chief Executive Officer and no management recommendation is made with regard to his compensation.

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COMPENSATION DISCUSSION AND ANALYSIS

While certain members of management attended the Compensation Committee’s meetings in 2016 upon invitation, they did not attend either

 

private sessions or portions of any other meetings of the Compensation Committee where executive compensation determinations were made by the Compensation Committee.

The Role of the Compensation Consultant

During 2016 , the Compensation Committee retained Pearl Meyer as its independent compensation consultant to obtain objective, expert advice on executive compensation. Pearl Meyer is the preeminent consultant for the oilfield services and drilling industry and has served as the Compensation Committee's compensation consultant since 2011. In 2016 , Pearl Meyer advised the Compensation Committee on a variety of compensation related issues, including:

•	Competitive pay analysis on executive compensation including:

•	The composition of the "Custom Peer Group" which the Compensation Committee uses for competitive pay analysis;

•	The weighting of information from the Custom Peer Group and Industry Survey Data in order to develop a "market consensus" which is used by the Compensation Committee for the named executive officers' competitive pay analysis;

•	Pay levels of the named executive officers;

•	Our executive compensation program design, including short-term incentive plan design, long-term incentive plan design and pay mix; and

•	The composition of the "Performance Peer Group" which the Company uses for certain of its performance-based equity awards.

Pearl Meyer developed a “market consensus” for each named executive officer’s 2016 base salary, target total cash compensation (i.e. base salary, target annual cash incentive and long-term cash incentive awards), target long-term incentive awards, and target total direct compensation (i.e. base salary, target annual cash incentive award and target long-term incentive awards) by subjectively prioritizing the data derived from the Custom Peer Group and the Industry Survey Data. The “market consensus” was used to determine the competitiveness of the Company’s executive compensation for each named executive officer. See additional disclosure in the section titled " The Role of Competitive Pay Analysis ."

In the course of conducting its activities, Pearl Meyer attended meetings of the Compensation Committee and presented its findings and recommendations for discussion. During 2016 , Pearl Meyer also met with certain senior management to obtain and validate data and review materials.

The compensation consultant also provides the Compensation Committee with an analysis of director compensation every other year with the last review done in December 2016 (which was considered in setting the director compensation for 2017 and 2018 ). The Compensation Committee reviews the analysis and determines whether to recommend a compensation increase for non-employee directors. The executive officers do not play a role in determining or recommending the amount or form of director compensation.

In 2016 , Pearl Meyer did not provide any services to the Company, or receive any payments from the Company, other than in its capacity as a consultant to the Compensation Committee. The Compensation Committee has assessed whether the services provided by Pearl Meyer raised any conflicts of interest pursuant to the SEC rules, and has concluded that no such conflicts of interest existed during 2016 .

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COMPENSATION DISCUSSION AND ANALYSIS

The Role of Competitive Pay Analysis

Each year the Compensation Committee evaluates how our pay practices and the named executive officers’ compensation levels compare to the competitive market for executive talent.

To evaluate the competitiveness of the named executive officers’ base salary, target total cash compensation (i.e. base salary, target annual cash incentive and long-term cash incentive awards), target long-term incentive awards, and target total direct compensation (i.e. base salary, target annual cash incentive award and target long-term incentive awards) for 2016 , Pearl Meyer provided the Compensation Committee competitive pay information derived from a custom peer group (the “Custom Peer Group”) and the following industry specific survey data (collectively, the “Industry Survey Data”):

•	Pearl Meyers Oilfield Services Benchmark Survey;

•	Pearl Meyers Drilling Management Survey;

•	Watson Wyatt Top Management; and

•	William M. Mercer-Energy.

The companies comprising the Custom Peer Group for 2016 included:

Custom Peer Group	Primary SIC (Standard Industrial Classification) Description
Atwood Oceanics	Oil & Gas Drilling
Basic Energy Services	Oil & Gas Equipment & Services
C&J Energy Services	Oil & Gas Equipment & Services
Helix Energy Solutions Group, Inc.	Oil & Gas Equipment & Services
Helmerich & Payne	Oil & Gas Drilling
Hercules Offshore	Oil & Gas Drilling
Key Energy Services	Oil & Gas Equipment & Services
Newpark Resources	Oil & Gas Equipment & Services
Oil States International	Oil & Gas Equipment & Services
Parker Drilling	Oil & Gas Drilling
Patterson-UTI Energy	Oil & Gas Drilling
RPC Inc.	Oil & Gas Equipment & Services
Seventy Seven Energy Inc.	Oil & Gas Equipment & Services
Superior Energy Services	Oil & Gas Equipment & Services
TETRA Technologies	Oil & Gas Equipment & Services
Unit Corp	Oil & Gas Drilling

The Compensation Committee, with the assistance of the compensation consultant, annually reviews the companies comprising the Custom Peer Group in order to maintain its appropriateness for the competitive pay analysis. These companies were generally selected based upon their (i) Primary SIC Description, (ii) annual revenues (roughly 0.6 x to 4.7 x our revenues), and (iii) market capitalization (roughly 0.4 x to 40.7 x our market capitalization). Information regarding our and our peer companies’ annual revenues and market capitalization is based on publicly available information as of September 30, 2015 and October 31, 2015 , respectively. There were no changes to the composition of the Custom Peer Group from 2015 to 2016 except for the addition of Seventy Seven Energy Inc. which became a public company in 2014 and is a direct competitor of Pioneer with comparable revenue and market capitalization levels. The Compensation Committee believes the Custom Peer Group reflects our current competitors for employee talent and that it provides an appropriate peer set for the purposes of evaluating our pay practices and pay levels.

Pearl Meyer developed a “market consensus” for each named executive officer’s 2016 base salary, target total cash compensation, target long-term incentive awards and target total direct compensation by subjectively weighting the data derived from the Custom Peer Group and the Industry Survey Data, where appropriate, to provide representative market comparisons.

The Compensation Committee uses the competitive pay information as a “market check” to ensure, in its subjective judgment, that the named executive officers’ base salary, target total cash compensation, target long-term incentive awards and target total direct compensation remain competitive. Other than target total direct compensation, the Compensation Committee does not target any individual pay component to fall within a specific range or percentile of the competitive pay information. The Compensation Committee generally aims to set the target total direct compensation of the named executive officers at the median compensation level of the market consensus. While the competitive pay information is important to the Compensation Committee’s approval process, it is just one of several factors considered by the Compensation Committee in approving executive compensation and the Compensation Committee has discretion in determining the nature and extent of its use.

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COMPENSATION DISCUSSION AND ANALYSIS

The Role of Team Performance

The named executive officers’ compensation is impacted by their individual contributions to team goals, as well as their overall performance as a team. The Compensation Committee annually conducts a subjective assessment of the named executive officers’ accomplishments as a team with respect to goals and strategies that are established at the beginning of each year. The Compensation Committee believes that focusing on team performance, rather than individual performance, emphasizes the importance of team work among the named executive officers.

The 2016 team goals included the following (collectively, the “ 2016 Team Goals”):

•	Maintain liquidity and financial flexibility, with a focus on positioning the Company for growth and greater profitability upon recovery of the industry;

 

•	Divest non-strategic and/or under-performing assets;

•	Achieve high utilization of domestic AC rigs;

•	Maintain emphasis on safety and service with a goal to be the best in the industry;

•	Improve profitability of operations in Colombia;

•	Leverage IT resources to protect and benefit our operations; and

•	Execute named executive officer successor development.

The Compensation Committee subjectively determined that the named executive officers successfully accomplished the 2016 Team Goals during 2016 .

The 2016 Executive Compensation Program in Detail

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COMPENSATION DISCUSSION AND ANALYSIS

Base Salary

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We provide the named executive officers with a base level of monthly income for the expertise, skills, knowledge and experience they offer to our management team. The Compensation Committee generally reviews each named executive officer’s base salary on an annual basis.

As discussed previously in the section titled " 2016 Compensation Highlights ", the Compensation Committee continued to hold the salaries of the named executive officers flat in 2016.

The named executive officers’ annual base salary as of December 31, 2016 and 2015 were as follows:

	Annual Base Salary as of
Name and Position	December 31, 2016			December 31, 2015			% Change
Wm. Stacy Locke, Director, President and Chief Executive Officer	$	715,000		$	715,000		—
Lorne E. Phillips, Executive Vice President and Chief Financial Officer	$	375,000		$	375,000		—
Carlos R. Peña, Executive Vice President, President of Production Services Segment, General Counsel, Secretary and Compliance Officer	$	345,000		$	345,000		—
Brian L. Tucker, Executive Vice President and President of Drilling Services Segment	$	340,000		$	340,000		—
Joe P. Freeman, Senior Vice President of Well Servicing	$	320,000		$	320,000		—

As a “market check,” the Compensation Committee reviewed the competitive pay information in setting the named executive officers’ base salaries for 2016 . The respective base salaries of Messrs. Phillips, Peña and Tucker fell below the 25th percentile, while Mr. Locke's base salary fell between the 25 ^th and 50 ^th percentiles, and Mr. Freeman’s base salary fell slightly above the 50th percentile of the competitive pay information.

While the Compensation Committee reviewed the competitive pay information in connection with setting the named executive officers' base salary, together with their contributions toward the team goals, the Compensation Committee did not target their respective base salary to fall within a specific range or percentile of the competitive pay information.

Annual Cash Incentive Compensation

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Each year, the named executive officers are eligible to earn a cash incentive award under our 2007 Incentive Plan. The annual cash incentive award is intended to motivate and reward the named executive officers for their contributions in achieving certain strategic business objectives that we believe create shareholder value.

Each named executive officer has a target annual cash incentive award opportunity expressed as a percentage of their annual base salary paid. Subject to performance and continued employment, the payout of the annual cash incentive award can range from zero to two times the target award opportunity. As discussed previously in the section titled " 2016 Compensation Highlights", in 2016 , the Compensation Committee restored the 2014 annual cash incentive award levels that were reduced during 2015 by 50% and then increased the annual cash incentive awards' target levels for all the named executive officers except our CEO by 10% for each participant (for example, an increase from a target level of 60% to a target level of 70%), in order to better align the incentive award targets with the competitive pay information derived by Pearl Meyer as well to increase the competitiveness of the target total cash compensation of the named executive officers.

The resulting threshold, target and maximum opportunity levels for our named executive officers, expressed as a percentage of each named executive officer’s respective base salary paid in 2016 , are as follows:

	Award Opportunity (as % of Salary Paid)							Award Opportunity ($)
Name	Threshold		Target		Maximum			Threshold			Target			Maximum
Wm. Stacy Locke	45	%	100	%	200	%		$	321,750		$	715,000		$	1,430,000
Lorne E. Phillips	32	%	70	%	140	%		$	118,125		$	262,500		$	525,000
Carlos R. Peña	32	%	70	%	140	%		$	108,675		$	241,500		$	483,000
Brian L. Tucker	32	%	70	%	140	%		$	107,100		$	238,000		$	476,000
Joe P. Freeman	27	%	60	%	120	%		$	86,400		$	192,000		$	384,000

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COMPENSATION DISCUSSION AND ANALYSIS

	Our Cyclical Industry's Effect on our Compensation
	The targets in our annual cash incentive plan are based on budgeted metrics measured over a one-year period. Due to the cyclical nature of the oil and gas industry, the targets in a given year could be lower than the targets or actual results achieved in the prior year. We believe it is appropriate to measure the performance of management over a one-year period against such targets primarily because the cyclical nature of the industry is outside of management’s control and because the budgeted targets are rigorous, as demonstrated by the eight-year history of annual incentive plan payouts for our CEO represented in the graph at right. The average bonus over this eight-year period was 103% of target, with five bonuses below target, and three above target.

The amount of the cash incentive award is determined by comparing our actual performance against a scorecard of specific performance measures and associated performance levels approved by the Compensation Committee each year. The results of this comparison dictate the ultimate amount of each named executive officer’s annual cash incentive award. The Compensation Committee designed the cash incentive award to reward exceptional performance by providing for progressively increasing payments as our performance exceeds the target level, and correspondingly providing for no payment unless a threshold level of performance is achieved. If the Company’s performance falls between the threshold, target or above expectation performance levels, the cash incentive award opportunity is linearly interpolated to determine the actual payout.

As discussed previously in the section titled " 2016 Compensation Highlights", the Compensation Committee increased the performance level required to achieve a maximum award payout from 130% of target to 140% of target, and lowered the threshold (minimum performance level) from 75% of target to 60% of target. This change effectively makes it more difficult for an award participant to receive a maximum award payout, while providing an award payout at a reduced threshold performance level. Considering the difficult operating environment during the industry downturn, in 2016 the Compensation Committee adjusted the performance levels to provide greater incentive for our employees to perform well, while preserving the overall award opportunity and ensuring that the potential for a maximum payout was set at a level representing a stretch goal.

Accordingly, in January  2016 , the Compensation Committee reviewed and approved the following performance measures and associated performance levels for the 2016 annual cash incentive awards. The Company's performance measures and associated performance levels were designed to be in alignment with the Company’s strategic plans and the 2016 budget (which was approved by the Board).

	Performance Levels
	Threshold			Target			Above Expectation			Actual Performance				Measurement Indicator
Adjusted Diluted Earnings (Loss) Per Share (1)	$	(1.60	)	$	(1.14	)	$	(0.68	)	$	(1.40	)		Representation of bottom line performance
Consolidated Adjusted EBITDA* (2)	$	30,322		$	50,536		$	70,751		$	13,353			Indicator of consolidated operating performance of the Company
Consolidated Adjusted EBITDA (2)  ROCE (3)	3.86		%	6.44		%	9.02		%	1.82		%		Indicator of the profitability of our assets
Consolidated or Division-Level Safety Record (Recordable Incident Rate)	1.6			1.2			0.7			1.1				A cultural measurement important to management, our clients and the families of our employees
Individual Performance	NA			NA			NA			NA				Emphasizes the importance of consistent, personal performance and contribution to the Company, including the achievement of the 2016 Team Goals

*	In Thousands

(1)

“Adjusted Diluted Earnings (Loss) Per Share” as defined for the calculation of the performance achieved under the 2016 annual cash incentive award was defined as the Company’s 2016 earnings before loss on extinguishment of debt, impairments, valuation allowances, net gain on sales of certain assets and the financial statement impact of asset sales, issuance of equity and the amendment of the revolving credit facility, divided by the weighted-average number of (diluted) shares outstanding during the year, adjusted to remove the shares outstanding which were issued as a part of our public stock offering in 2016 .

(2)	“Adjusted EBITDA” as defined for the calculation of the performance achieved under the 2016 annual cash incentive award was defined as the Company’s 2016 earnings before interest, income taxes, depreciation, amortization, loss on extinguishment of debt, impairments, and net gain on the sale of certain assets.

(3)

“Adjusted EBITDA ROCE” as defined for the calculation of the performance achieved under the 2016 annual cash incentive award was defined as the Company’s 2016 Adjusted EBITDA (2) divided by the Company's average debt and equity for the year ended December 31, 2016 , adjusted to remove the impact of impairments, valuation allowances, certain asset sales, the amendment to the revolving credit facility and our public stock offering in 2016 .

After the end of the year, the Compensation Committee determined that for purposes of the annual cash incentive award, the Company’s adjusted diluted earnings per share was a loss of $1.40 per share. In determining the Company’s actual performance for 2016 , the Company’s adjusted diluted earnings per share was based on the Company’s 2016 loss per share reported in its financial statements and adjusted to account for significant events not considered by the Compensation Committee in setting the performance targets. Specifically, adjustments were made to mitigate the financial statement impact of impairments and valuation allowances, the sales of certain assets, and actions taken to enhance the liquidity of the Company (the amendment of the Company's revolving credit facility and issuance of common stock). The Company believes that performance goals should be made

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COMPENSATION DISCUSSION AND ANALYSIS

no easier (or harder) to achieve because of the favorable (or unfavorable) transactions which management executed during the year. Accordingly, these adjustments were made to preserve the level of incentives that were intended when the 2016 performance goals were established.

In order to align the Company’s performance and the named executive officers’ performance with the interests of our shareholders, the Compensation Committee subjectively weighted each of the above performance measures relative to its potential impact on the Company’s performance and creation of shareholder value. For all named executive officers, the performance measures included consolidated Adjusted Diluted Earnings Per Share. For our CEO, CFO and the Presidents of our Drilling and Production Services Segments, the performance measures included consolidated Adjusted EBITDA ROCE, consolidated Adjusted EBITDA and a Company-wide Safety Record.

However, for our Well Servicing Senior Vice President, the Compensation Committee included both Company-wide and division-level performance goals to provide incentive to drive the operational results of the division, while ensuring overall accountability to corporate performance. Accordingly, the Adjusted EBITDA performance measure for Mr. Freeman is based on division-level Adjusted EBITDA and the safety record performance measure is based on the division-level safety record. We do not publicly disclose these division-level measures because they are derived from internal analysis reflecting our confidential business strategy and we believe that the disclosure of these division-level measures could cause competitive harm to us without commensurate benefit to our shareholders. The targets are intended to be challenging and ambitious but also realistic enough to be reasonably attainable. Our achievement over the last four years in these two measures, as compared to the target level, was 104% on average, with average achievement in division-level EBITDA over the four years of 86% and average achievement in division-level safety of 123%.

Each named executive officer’s annual cash incentive award is derived from our actual performance with respect to the measures above, on a weighted basis. The weighting of the performance measures for the named executive officers’ target annual cash incentive award for 2016 was as follows:

	Weighting of Performance Measures (at Target Level) (1)
	Adjusted Diluted Earnings Per Share		Consolidated or Division-Level Adjusted EBITDA		Consolidated Adjusted EBITDA ROCE		Consolidated or Division-Level Safety Record		Individual Performance
Wm. Stacy Locke	20	%	25	%	15	%	20	%	20	%
Lorne E. Phillips	20	%	25	%	15	%	20	%	20	%
Carlos R. Peña	20	%	25	%	15	%	20	%	20	%
Brian L. Tucker	20	%	25	%	15	%	20	%	20	%
Joe P. Freeman	20	%	40	%	NA		20	%	20	%
(1) The weights set forth in the above table are based upon target performance. Consequently, if our performance falls below or above target with respect to a specific performance goal, the weighting of such performance goal toward the actual amount earned will correspondingly increase or decrease, as the case may be.

In assessing individual performance, the Compensation Committee considered the named executive officers’ achievement, as a team, of the 2016 Team Goals discussed in the section titled " The Role of Team Performance ."

At the end of 2016 , the Compensation Committee completed the evaluation of our results and the weighting of the performance measures to help ensure that the annual cash incentive award determinations were aligned with pay-for-performance principles. Based on Company performance measures and the achievement of the 2016 Team Goals, each of the named executive officers earned a cash incentive award below their target level. The Compensation Committee made the following annual cash incentive award determinations for our named executive officers for 2016 :

	Award Achievement Levels by Performance Measure
	Adjusted Diluted Earnings Per Share			Consolidated or Division-Level Adjusted EBITDA		Consolidated Adjusted EBITDA ROCE		Consolidated or Division-Level Safety Record			Individual Performance (1)			2016 Annual Cash Incentive Award
Wm. Stacy Locke
Award Achieved ($)	$	97,656		—		—		$	158,543		$	214,500		$	470,699
Award Achieved (% of Salary Paid)	14		%	—	%	—	%	22		%	30		%	66		%
Lorne E. Phillips
Award Achieved ($)	$	35,853		—		—		$	58,207		$	52,500		$	146,560
Award Achieved (% of Salary Paid)	10		%	—	%	—	%	16		%	14		%	40		%
Carlos R. Peña
Award Achieved ($)	$	32,984		—		—		$	53,550		$	48,300		$	134,834
Award Achieved (% of Salary Paid)	10		%	—	%	—	%	16		%	14		%	40		%
Brian L. Tucker
Award Achieved ($)	$	32,506		—		—		$	52,774		$	47,600		$	132,880
Award Achieved (% of Salary Paid)	10		%	—	%	—	%	16		%	14		%	40		%
Joe P. Freeman
Award Achieved ($)	$	26,224		—		NA		$	60,939		$	38,400		$	125,563
Award Achieved (% of Salary Paid)	8		%	—	%	NA		19		%	12		%	39		%
(1) The Compensation Committee awarded the CEO an above target amount for his individual performance component, as Mr. Locke successfully guided the Company through an extended downturn and preserved the equity of the Company's shareholders, in contrast with several of the Company's peers who filed for bankruptcy protection in the last two years.

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COMPENSATION DISCUSSION AND ANALYSIS

The named executive officers’ 2016 cash incentive awards are reported in the “Non-Equity Incentive Plan Compensation” column of the 2016 Summary Compensation Table.

Long-Term Incentive Compensation

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In 2016 , the Compensation Committee granted each of the named executive officers performance-linked awards (stock options and performance-based phantom stock unit awards ) and long-term cash incentive awards under our 2007 Incentive Plan, except for Mr. Freeman, who received an additional long-term cash incentive award in lieu of stock options. As discussed previously in the section titled " 2016 Compensation Highlights", the Company implemented the use of phantom stock unit awards in the long-term performance-based compensation program. The phantom stock unit awards offer incentive compensation linked to share value and are thus aligned with our shareholders' interests, while preserving the number of shares in the incentive plan. The phantom stock unit awards may be settled in cash or shares of common stock of the Company, at the discretion of the Compensation Committee. At the time the phantom stock unit awards were issued to the named executive officers in 2016, the number of shares available for issuance under the 2007 Incentive Plan was low. At the 2016 Annual Meeting of Shareholders, the Company's shareholders approved an amendment to the 2007 Incentive Plan to, among other things, increase the number of authorized shares under the plan by 3,800,000 shares.

In 2016, the Compensation Committee re-evaluated the market competitiveness of the long-term incentive award levels for all participants as compared to the competitive pay information derived by Pearl Meyer. As a result of this review, the Compensation Committee revised the overall plan levels downward in 2016, as compared to 2015.

In setting the target value of each named executive officer’s 2016 long-term incentive compensation, the Compensation Committee conducted an assessment of the competitive pay information derived by Pearl Meyer to subjectively develop a competitive aggregate grant date fair value for such awards.

As demonstrated below, the Compensation Committee then allocated the competitive aggregate grant date fair value for each participant's long-term incentive compensation among performance-linked long-term awards (performance-based phantom stock unit awards ( 40% ) and stock options ( 20% )) and long-term cash incentive awards ( 40% ).

Accordingly, the Compensation Committee granted the named executive officers the following long-term incentive awards in 2016 :

Name	Aggregate Grant Date Fair Value of Long-Term Performance-Linked Awards ($) (1)			Aggregate Value of Long-Term Cash Incentive Awards ($)				Total ($)
Wm. Stacy Locke	$	875,032		$	858,000			$	1,733,032
Lorne E. Phillips	$	305,957		$	300,000			$	605,957
Carlos R. Peña	$	260,368		$	255,300			$	515,668
Brian L. Tucker	$	256,594		$	251,600			$	508,194
Joe P. Freeman	$	85,493		$	192,000			$	277,493

(1)

The amounts reflect the aggregate grant date fair value of the stock options and target phantom stock unit awards granted in 2016 to the named executive officers, as applicable, computed in accordance with ASC Topic 718, except no assumptions for forfeitures were included. A discussion of the assumptions used in calculating the grant date fair value is set forth in Note 8 of the Notes to Consolidated Financial Statements of our 2016 Annual Report on Form 10-K filed with the SEC on February 17, 2017 . For more detail about how the awards were allocated between performance-linked awards and cash incentive awards, please see the next section entitled " Performance-Linked Awards ."

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     47

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COMPENSATION DISCUSSION AND ANALYSIS

Performance-Linked Awards

Stock options and phantom stock unit award performance is tied directly to the Company’s stock price; therefore, we believe they are closely correlated with our shareholders’ interests. These awards are intended to instill a sense of ownership in our named executive officers, incentivize them to have a long-term focus for our business, reward them for creating value for our shareholders, and align their financial interests with that of our shareholders.

The competitive aggregate grant date fair value allocated to stock options and phantom stock unit awards was converted into shares of our common stock (the “Target Shares”) by using a representative "stock price” for our common stock and an estimated fair value of stock options based on the representative stock price. The Compensation Committee determined the representative "stock price” by using the average of the closing prices of our common stock from December 23, 2015 to January 14, 2016 , which was $2.02 per share.

Accordingly, the Compensation Committee granted the named executive officers the following performance-linked awards in 2016 :

Name	Stock Options (#)		Target Phantom Stock Unit Awards (#)			Aggregate Grant Date Fair Value of Performance-Linked Awards ($) (1)
Wm. Stacy Locke	368,240		424,752			$	875,032
Lorne E. Phillips	128,755		148,515			$	305,957
Carlos R. Peña	109,571		126,386			$	260,368
Brian L. Tucker	107,983		124,554			$	256,594
Joe P. Freeman (2)	—		63,366			$	85,493

(1)

The amounts reflect the aggregate grant date fair value of the stock options and target phantom stock unit awards granted in 2016 to the named executive officers, as applicable, computed in accordance with ASC Topic 718, except no assumptions for forfeitures were included. A discussion of the assumptions used in calculating the grant date fair value is set forth in Note 8 of the Notes to Consolidated Financial Statements of our 2016 Annual Report on Form 10-K filed with the SEC on February 17, 2017 .

(2)	Mr. Freeman received an additional $64,000 long-term cash incentive award in lieu of stock options pursuant to the Company's policy further described in the section titled " Long-Term Cash Incentive Awards ."

The stock options granted to the named executive officers as set forth in the table above will vest annually over a three year period from the date of grant, in three equal annual installments, subject to the continued service of the respective named executive officer through the date of vesting.

The number of performance-based phantom stock unit awards set forth in the above table reflects the target number of phantom stock unit awards to be earned by each named executive officer following a three-year performance period ( January 1, 2016 to December 31, 2018 ). The actual number of phantom stock unit awards that each named executive officer may earn, which may be greater or less than his respective target number, will be based on a weighted average of our relative performance versus a defined group of ten peer companies (the “Performance Peer Group”) over the three-year performance period in each of the three metrics below, which are weighted as follows:

•	Total Shareholder Return (“TSR”), which represents 50% of the total award;

•	EBITDA growth, which represents 25% of the total award; and

•	EBITDA return on capital employed (“EBITDA ROCE”), which represents 25% of the total award.

In order to align the Company’s performance and the named executive officers’ performance with the interests of our shareholders, the Compensation Committee subjectively weighted each of the above performance measures relative to its potential impact on the Company’s performance and creation of shareholder value.

Accordingly, the actual number of performance-based phantom stock unit awards that each named executive officer may earn at the end of the three-year performance period may vary from zero to 200% of his respective target amount, as shown in the following table:

Our performance relative (on weighted average (2) ) to the EBITDA growth; EBITDA ROCE; and TSR of the Performance Peer Group	Percentage of Target Phantom Stock Unit Awards that may be Earned (1)		Percentage of Maximum Phantom Stock Unit Awards that may be Earned (1)
<25 th  Percentile	0	%	0	%
25 th  Percentile	25	%	12.5	%
50 th  Percentile	100	%	50	%
90 th  Percentile	200	%	100	%

(1)	If our performance falls between performance levels, the earned percentage will be linearly interpolated.

(2)	The total performance percentile achieved is a weighted average of the performance percentiles achieved for each of the three metrics, weighted 50% for TSR and 25% each for EBITDA growth and EBITDA ROCE performance.

Our executive compensation program is generally designed to achieve target total direct compensation (base salary, target annual cash incentive award and target long-term incentive awards) for our named executive officers at the market median compensation level, as determined by our compensation consultant. See additional disclosure in the section titled "The Role of our Compensation Consultant." Accordingly, under our long-term performance-based awards, if the Company’s performance over the relevant period were to fall exactly in the middle of the peer group, the participant would receive a target award equal to 50% of the maximum potential award. We believe this design drives improved performance because of the opportunity for above-target payouts for above-median performance.

Following the three-year performance period, our performance in each of the three weighted performance measures (i.e., EBITDA growth, EBITDA ROCE, and TSR) will be compared to the relative performance of the Performance Peer Group, and the applicable earning percentage (i.e., 0% to

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     48

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COMPENSATION DISCUSSION AND ANALYSIS

200% ) will be assigned to each such performance measure. Each named executive officer’s final phantom stock unit awards are equal to the product of (i) the weighted average of the three earning percentages and (ii) his respective target number of performance-based phantom stock unit awards .

The Performance Peer Group consisted of Nabors Industries, Helmerich & Payne, Patterson-UTI Energy, Parker Drilling, Superior Energy Services, Key Energy Services, Basic Energy Services, C&J Energy Services, RPC, Inc. and Seventy-Seven Energy, Inc., all of which the Compensation Committee believes we compete with for business on a daily basis. Because the companies in the Performance Peer Group are direct business competitors, the Compensation Committee subjectively determined that these companies provide a better comparison for EBITDA growth, EBITDA ROCE and TSR than the Custom Peer Group, which consists of a broader group of companies with which we compete for employee talent. Companies in the Performance Peer Group that declare bankruptcy are placed at the bottom of the ranking.

Following the end of the three-year performance period, the Compensation Committee will approve the final phantom stock unit awards that each named executive officer earned and such phantom stock unit awards will cliff vest in April 2019 . Upon vesting, the phantom stock unit awards will be converted to equity or cash, at the Company's discretion, and each unit will entitle the employee to either one share of stock or a cash payment equal to the stock price of our common stock on the date of vesting subject to a maximum of four times the stock price on the date of grant. We expect to settle these phantom stock unit awards in cash when they vest. See the 2016 Grants of Plan-Based Awards for each named executive officer's respective threshold, target and maximum number of phantom stock unit awards .

The aggregate grant date fair value of the named executive officer’s stock options and target phantom stock unit awards , as applicable, are reported in the “Option Awards” column and “Stock Awards” column, respectively, of the 2016 Summary Compensation table.

Under the 2013 performance-based restricted stock unit ("RSU") award (which had similar performance-based vesting terms as the phantom stock unit awards described above, but with a performance period of April 1 , 2013 to December 31, 2015 ), Messrs. Locke, Phillips, Peña, Tucker and Freeman each received approximately 72% of their target award shares, representing 72,996 , 21,130 , 19,209 , 9,143 and 9,306 shares of common stock, respectively, which vested in April 2016 .

We do not have a program, plan or practice to time our long-term equity incentive awards in coordination with the release of material, non-public information. In the event that material non-public information becomes known to the Compensation Committee prior to granting long-term equity incentive awards, the Compensation Committee will take the existence of such information under advisement and make an assessment in its business judgment whether to delay the grant of the long-term equity incentive award in order to avoid any impropriety.

Long-Term Cash Incentive Awards

In order to continue our practice of offering equity compensation awards to levels of management below the named executive officers, while still maintaining total equity awards granted at a consistent level with prior years, the Compensation Committee elected to again provide long-term cash incentive awards to executive officers rather than time-based equity awards. Accordingly, in 2016 , the Compensation Committee granted the named executive officer the following long-term cash incentive awards:

Name	Aggregate Long-Term Cash Incentive Awards ($)
Wm. Stacy Locke	$	858,000
Lorne E. Phillips	$	300,000
Carlos R. Peña	$	255,300
Brian L. Tucker	$	251,600
Joe P. Freeman (1)	$	192,000

(1)	This amount includes $64,000 of long-term incentive cash awards granted to Mr. Freeman in lieu of stock options.

The cash awards vest and become payable in one-third increments on April 30th of each of the three years following the grant date, assuming the named executive officer provides continuous service through the applicable vesting date; provided that, at the Compensation Committee’s sole discretion, up to 50% of any such payment may be paid in shares of the Company’s common stock instead of in cash. These awards have historically been paid in cash.

In 2012, we adopted a policy that allows any employee, including any named executive officer, who has attained (i) normal retirement age of 65, or (ii) at least the age of 60 with 5 or more years of service with the Company, to receive a long-term cash incentive award in lieu of their stock options and time-based equity awards. The Compensation Committee adopted this policy to provide strong retention incentives for employees close to retirement. In accordance with this policy, the Compensation Committee awarded Mr. Freeman an additional $64,000 of long-term cash incentive award in lieu of his annual stock option awards in 2016 .

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     49

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COMPENSATION DISCUSSION AND ANALYSIS

2016 Total Direct Compensation

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Our executive compensation program is generally designed to achieve target total direct compensation (base salary, target annual cash incentive award and target long-term incentive awards) for our named executive officers at the market median compensation level, as determined by our compensation consultant. Accordingly, under our long-term performance-based awards , if the Company’s performance over the relevant period were to fall exactly in the middle of the peer group, the participant would receive a target award equal to 50% of the maximum potential award. We believe this design drives improved performance because of the opportunity for above-target payouts for above-median performance.

Based upon the most recent competitive pay information derived by Pearl Meyer, our 2016 executive compensation program provided total direct compensation (i.e., base salary, target annual cash incentive award and target long-term incentive awards) that was competitive and aligned with the market for which we believe we compete for employee talent, as the following table illustrates.

As illustrated in the above graph, the 2016 target total direct compensation for each of the named executive officers was below the median compensation level of the market consensus, as determined by our compensation consultant (the "market median"). The Compensation Committee uses the competitive pay information as a “market check” to ensure, in its subjective judgment, that the named executive officers’ base salary, target total cash compensation, target long-term incentive awards and target total direct compensation remain competitive. Based on this market check, the Compensation Committee believes the 2016 total direct compensation of the named executive officers to be appropriate and aligned with Company performance. The Compensation Committee also considered the results of the 2016 market check in its determination of the compensation program for 2017 .

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     50

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COMPENSATION DISCUSSION AND ANALYSIS

Other Practices, Policies & Guidelines

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Stock Ownership Requirements

In order to strengthen the alignment of the interests of the named executive officers and shareholders and to increase visibility of the named executive officers’ and directors’ stock ownership, we have the following stock ownership requirements , which were increased in 2015 as follows:

	Minimum Stock Ownership
	Previous Requirement		Revised Requirement
Chief Executive Officer	3X annual base salary		5X annual base salary
All Other Named Executive Officers	2X annual base salary		3X annual base salary
Chairman of the Board	3X the Board member’s annual retainer fee		6X the Board member’s annual retainer fee
Non-Employee Directors	3X the Board member’s annual retainer fee		5X the Board member’s annual retainer fee

Generally, the ownership target is to be acquired no later than the December 31 following the fifth anniversary of the director’s initial appointment or election to the Board, or the fifth anniversary following the change in the ownership requirement. For purposes of the above calculation, unvested restricted stock and restricted stock units may be counted toward the applicable ownership requirement .

Because the stock ownership requirements were revised during 2015, all named executive officers and directors will be required to comply with the revised requirements by December 31, 2020. Until then, the previous requirement as shown in the table above is in effect. Additionally, because the fee structure for the non-employee directors was revised effective January 1, 2017, the annual retainer that was applicable for the year ended December 31, 2016 will serve as the annual retainer fee basis for the ownership calculations until the fifth anniversary following the change in annual retainer fees, which is January 1, 2022.

As of May 18, 2016 , all of our non-employee directors and named executive officers were in compliance with their stock ownership requirements and remain in compliance. Messrs. Tucker and Freeman initially became subject to the stock ownership guidelines in 2015 and thus have until December 31, 2020 to meet their respective ownership requirements.

Health, Welfare and Retirement Benefits

We offer a standard range of health and welfare benefits to substantially all of our U.S. employees, including the named executive officers. These benefits include medical, prescription drug and dental coverage, life and accidental death and dismemberment insurance, vacation, sick leave and other paid holidays. In addition, long-term disability insurance benefits and optional short-term coverage is available to all of our employees. These benefits are intended to aid in the health and well-being of our employees, as well as contribute directly to a productive and successful work life, which the Compensation Committee believes will enhance the financial results for us and our shareholders.

We also offer all of our U.S. employees the opportunity to participate in our defined contribution 401(k) plan. Under the plan, we make matching contributions equal to 50% of the participant’s contributions on the first 8% of compensation deferred under the plan. Under this matching scheme, employees become fully vested in our matching contributions after three years of employment. The 2016 Summary Compensation Table reflects our contributions to the 401(k) plan for each named executive officer in 2016 . In an effort to reduce costs in response to the downturn in our industry, the Compensation Committee temporarily suspended the matching contributions from February 1, 2016 through December 31, 2016.

In early 2013, the Compensation Committee approved the Pioneer Energy Services Corp. Nonqualified Retirement Savings and Investment Plan, an unfunded nonqualified deferred compensation plan for a select group of management or highly compensated employees, and our non-employee directors which became effective in April 2013. Under the plan, unless otherwise determined by the committee administering the plan, eligible employees may irrevocably elect to defer up to 80% of their base salary, up to 100% of their bonuses, and up to 100% of their restricted stock units. Non-employee directors may irrevocably elect to defer up to 100% of their director fees and up to 100% of their restricted stock units. A participant’s deferrals are credited to an account under the plan and that account is credited (or debited) with earnings and losses based on the actual rate of return of hypothetical investments. Participants are fully vested in their deferred contributions. The Company may make additional contributions to participants’ accounts under the plan with the approval of our Board or our Compensation Committee. The amount and timing of such contributions, as well as the vesting conditions, would also need approval by our Board or our Compensation Committee. A majority of our peers, as well as a prevalence of Fortune 1000 companies, offer a nonqualified deferred compensation plan. Therefore, the Compensation Committee believes that offering this plan increases the competitiveness of our executive compensation program and serves as an important tool for attracting and retaining high performing executives. Messrs. Tucker and Freeman have elected to participate in this plan.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     51

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COMPENSATION DISCUSSION AND ANALYSIS

Perquisites

We provide a limited number of perquisites to the named executive officers, including a car allowance (which as of January 1, 2016 has been temporarily suspended for all our named executive officers except for Mr. Freeman, who primarily works in our field location offices) , payment of life insurance premiums and Petroleum Club dues. The life insurance policy pays the beneficiary an amount equal to the applicable named executive officer’s annual salary up to a maximum of $300,000 .

Effective December 31, 2010, the Compensation Committee adopted a policy prohibiting the payment of country club memberships for any of the named executive officers.

The "All Other Compensation" column of the 2016 Summary Compensation Table shows the value of perquisites we provided to the named executive officers in 2016 .

Recoupment of Incentive Compensation Policy (Claw-back Policy)

The Board is dedicated to maintaining and enhancing a culture focused on integrity and accountability which discourages conduct detrimental to the Company’s sustainable growth. On March 26, 2015, the Board approved and adopted a Recoupment of Incentive Compensation Policy (“Recoupment Policy”). The Recoupment Policy applies to the Company’s current and former executive officers (as defined under Rule 3b-7 of the Securities Exchange Act of 1934, as amended) and any other employee or former employee of the Company and its subsidiaries designated by the Board from time to time (each, a “Covered Employee”). 

Under the Recoupment Policy, the Board may claw back incentive compensation paid or payable to a Covered Employee if the Company is required to file an adverse accounting restatement with the SEC due to material noncompliance with any financial reporting requirement under federal securities law. If triggered, then to the fullest extent permitted by law, the Board may require the Covered Employee to reimburse or forfeit (as applicable) the excess incentive compensation paid, granted or awarded to the Covered Employee during the three-year period ending on the date of filing of the accounting restatement based on the erroneous performance data. In making the determination to claw back such incentive compensation, the Board will take into account such factors as it deems appropriate, including, among other things, whether the Covered Employee engaged in fraud or misconduct that caused or was a significant contributing factor to the accounting restatement, and the amount of the excess incentive compensation.

In addition, under the Recoupment Policy the Board may claw back incentive compensation paid or payable to a Covered Employee if the Board determines that the Covered Employee violated the Company’s Corporate Code of Business Conduct and Ethics (“Code of Conduct”), and such violation is not waived pursuant to the terms of the Code of Conduct. If triggered, then to the fullest extent permitted by law, the Board may require the Covered Employee to reimburse or forfeit (as applicable) any incentive compensation paid, granted or awarded to the Covered Employee during the fiscal year in which such violation occurred and the immediately preceding fiscal year. The amount of any incentive compensation to be clawed back, if any, will be in the Board’s discretion, which will consider, among other things, the seriousness and magnitude of the Code of Conduct violation. 

The Recoupment Policy applies to all incentive compensation paid or payable to Covered Employees on or after May 21, 2015.

Anti-Hedging and Pledging Policy

The Company's insider trading policy prohibits the Company's employees, including the named executive officers, from engaging in hedging transactions involving the Company's securities. Additionally, the Company's insider trading policy prohibits the company's employees, including the named executive officers, from placing the Company's securities in a margin account or pledging the Company's securities as collateral for a loan.

Compliance with Internal Revenue Code Section 162(m)

Section 162(m) of the Internal Revenue Code of 1986 (as amended, the “Code”) limits the federal income tax deduction for annual compensation paid to a public company’s Chief Executive Officer and its next three most highly compensated executive officers, excluding the Chief Financial Officer, to $1,000,000. Qualified performance-based compensation is excluded from this deduction limitation if certain requirements are met. From time to time, the Compensation Committee will design compensation awards that may not be deductible under Section 162(m) of the Code. The Compensation Committee believes it is important to maintain cash and equity incentive compensation at the requisite level to attract and retain the individuals necessary to our success, even if all or part of that compensation may not be deductible by reason of the Section 162(m) limitation.

Accordingly, the Compensation Committee may deem it appropriate to provide one or more executive officers with the opportunity to earn incentive compensation, whether through cash incentive awards or equity incentive awards, which may not be deductible by reason of Section 162(m) or other provisions of the Code.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     52

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2017 COMPENSATION ACTIONS

On January 26, 2017 , the Compensation Committee approved the following grants of plan-based awards to the Company's executive officers:

Name	Target Annual Cash Incentive Award ($) (1)			Long-Term Cash Incentive Award ($) (2)			Shares Subject to Stock Options (#) (3)		Target Shares Subject to Performance-Based RSUs (#) (4)
Wm. Stacy Locke	$	745,000		$	855,000		133,960		212,054
Lorne E. Phillips	$	296,250		$	235,500		36,898		58,408
Carlos R. Peña	$	281,250		$	225,000		35,253		55,804
Brian L. Tucker	$	281,250		$	225,000		35,253		55,804
Joe P. Freeman	$	192,000		$	160,000		—		23,810
Bill W. Bouziden	$	192,000		$	128,000		7,521		23,810

(1)

Annual Cash Incentive Award - The amounts shown reflect the target payout under a cash incentive award granted to each of the executive officers in 2017 under the 2007 Incentive Plan, for which the payouts are based upon the target percentage of each named executive officer’s respective base salary expected to be paid in 2017 . The actual amount of the cash incentive award that each executive officer may earn can range from zero to 200% and will be determined by comparing our actual performance in 2017 against a scorecard of weighted performance measures (i.e., diluted earnings (loss) per share; consolidated or division-level Adjusted EBITDA; consolidated Adjusted EBITDA ROCE; consolidated or division-level safety record; and individual performance) and associated performance levels approved by the Compensation Committee.

(2)	Long-Term Cash Incentive Award - The award will vest in three equal annual installments from the date of grant, subject to the continued service of the respective executive officer.

(3)	Stock Option Award - These stock option awards were granted under our 2007 Incentive Plan and will vest in three equal annual installments from the date of grant, subject to the continued service of the respective executive officer.

(4)

Performance-Based RSU Award - The award amounts shown reflect the target number of shares of common stock that each of the executive officers may earn under a performance-based RSU award granted in 2017 under the 2007 Incentive Plan. The actual amount that the executive officers may earn can range from zero to 200% and will be based on the weighted average of our relative EBITDA growth, EBITDA ROCE, and TSR versus the Performance Peer Group over a three-year performance period.

We made the following key decisions related to our 2017 compensation program, while considering expected improvements in our operating results for 2017 as compared to 2015 and 2016, which were significantly impacted by the industry downturn :

▪

Increased Base Salaries. In consideration of the competitive pay information derived by Pearl Meyers, the Compensation Committee decided to increase the base salaries for Messrs. Locke, Phillips and Peña by 4% , 5% and 9% , respectively, after having held their base salaries flat for four years, and decided to increase the base salary for Mr. Tucker by 10% , after having held his salary flat since his promotion in 2015.

▪

Increased Target Annual and Long-Term Incentive Compensation. The Compensation Committee increased the target percentage for Messrs. Phillips, Peña and Tucker's annual cash incentive awards by 5% (for example, a target percentage of 70% of their base salary increased to 75%), and increased the target long-term incentive compensation for Messrs. Locke, Phillips, Peña and Tucker, based on the most recent competitive pay analysis. These increases also preserve the overall proportion of total compensation that is performance-linked, as a majority of this compensation is performance-based.

▪

Increased the Portion of Long-Term Incentive Compensation Allocated to Performance-Linked Awards. The Compensation Committee allocated a larger portion of our long-term incentive (LTI) awards to performance-linked awards, increasing the percentage to 70% performance-linked in 2017, from 60% in 2016, and reducing the percentage allocated to long-term cash incentive awards to 30% in 2017 from 40% in 2016. Consequently, all of the named executive officers were granted LTI awards in 2017 that were allocated approximately 20% to stock options, 50% to performance-based RSU awards, and 30% to long-term cash incentive awards.

▪	Reinstated Certain Temporarily Suspended Benefits. In 2016, in order to reduce costs, the Compensation Committee decided to temporarily suspend 401K employer matching contributions for all employees, effective February 1, 2016. Effective January 1, 2017, the Compensation Committee decided to reinstate 401K employer matching contributions for all employees.

▪	Held Director Compensation Flat. The Compensation Committee decided to grant restricted stock awards in 2017 with a grant date fair market value of approximately $115,000 to each non-employee member of the Board, which is an amount that has not increased since 2013. The Compensation Committee has also held all other cash compensation for the non-employee directors flat since 2014.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     53

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COMPENSATION COMMITTEE REPORT

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     54

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The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement with the management of Pioneer Energy Services Corp., and, based on such review and discussions, the Compensation Committee recommended to the Board of Pioneer Energy Services Corp. that the Compensation Discussion and Analysis be included in this proxy statement.

The Compensation Committee

Dean A. Burkhardt

John Michael Rauh

C. John Thompson

Scott D. Urban, Chairman

The information in the Report of the Compensation Committee shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended ("the Exchange Act"), nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except to the extent that the Company specifically requests that the information be treated as soliciting material or specifically incorporates the information by reference.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     55

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EXECUTIVE COMPENSATION

2016 Summary Compensation Table

The following table presents information concerning compensation for all services rendered to us in all capacities during the fiscal years ended December 31, 2016 , 2015 , and 2014 , by our named executive officers.

Name and Principal Position	Year	Salary			Bonus (1)			Option Awards (2)			Stock Awards (3) (4)			Non-Equity Incentive Plan Compen- sation (5)			Change in Pension Value and Nonqualified Deferred Compensation Earnings (6)			All Other Compen- sation (7)			Total
Wm. Stacy Locke, Director, President and Chief Executive Officer	2016	$	715,000		$	225,400		$	301,957		$	573,075		$	470,699		$	—		$	2,173		$	2,288,304
	2015	$	715,000		$	—		$	324,576		$	1,963,060		$	284,231		$	—		$	27,302		$	3,314,169
	2014	$	715,000		$	—		$	452,996		$	1,315,542		$	968,720		$	—		$	26,708		$	3,478,966
Lorne E. Phillips, Executive Vice President and Chief Financial Officer	2016	$	375,000		$	82,880		$	105,579		$	200,378		$	146,560		$	—		$	696		$	911,093
	2015	$	375,000		$	—		$	119,347		$	239,785		$	89,444		$	—		$	25,696		$	849,272
	2014	$	375,000		$	—		$	152,224		$	574,702		$	304,842		$	—		$	25,448		$	1,432,216
Carlos R. Peña, Executive Vice President, President of Production Services Segment, General Counsel, Secretary and Compliance Officer	2016	$	345,000		$	68,413		$	89,848		$	170,520		$	134,834		$	—		$	696		$	809,311
	2015	$	345,000		$	—		$	98,515		$	197,936		$	82,288		$	—		$	25,696		$	749,435
	2014	$	345,000		$	—		$	130,630		$	493,181		$	280,454		$	—		$	23,198		$	1,272,463
Brian L. Tucker, Executive Vice President and President of Drilling Services Segment	2016	$	340,000		$	55,216		$	88,546		$	168,048		$	132,880		$	—		$	696		$	785,386
	2015	$	340,000		$	58,333		$	79,512		$	159,754		$	101,217		$	—		$	26,246		$	765,062
Joe P. Freeman, Senior Vice President of Well Servicing	2016	$	320,000		$	131,665		$	—		$	85,493		$	125,563		$	—		$	14,821		$	677,542
	2015	$	320,000		$	138,635		$	—		$	73,451		$	76,109		$	—		$	25,421		$	633,616

(1)	For Messrs. Locke, Phillips, Tucker and Peña, the 2016 amounts reflect the first installment of the long-term cash incentive awards granted in 2015, which vest in three equal annual installments subject to their respective continued service through the vesting date.

For Mr. Tucker, the amount in 2015 reflects the third and final installment of a deferred cash bonus of $175,000 that Mr. Tucker received in connection with his employment with the Company in May 2012. This deferred bonus was payable in three equal installments of $58,333 , with the last installment being paid in May 2015.

For Mr. Freeman, the amount in 2016 reflects the aggregate of $38,080 , $45,135 , and $48,450 , which were the first, second and last installments of long-term cash incentive awards granted in 2015 , 2014 , and 2013 , respectively. The 2015 amount reflects the aggregate of $45,135 , $48,450 , and $45,050 , which were the first, second and last installments, respectively, of long-term cash incentive awards granted in 2014 , 2013 , and 2012 , respectively, and in all cases which vest in three equal annual installments subject to Mr. Freeman's continued service through the vesting date.

(2)

The amounts included in the “Option Awards” column represent the aggregate grant date fair value of the option awards granted to the respective named executive officers during the respective fiscal year, computed in accordance with ASC Topic 718, Stock Compensation, except that no assumption for forfeitures was included. For a discussion of valuation assumptions, see Note 8 to our consolidated financial statements included in our annual report on Form 10-K for the fiscal year ended December 31, 2016 . Please see the 2016 Grants of Plan-Based Awards Table for further information regarding the option awards we granted during 2016 .

(3)	For 2016 , these amounts reflect the grant date fair value of the phantom stock unit awards granted during 2016 to the respective named executive officers. For 2015 and 2014, these amounts reflect the aggregate grant date fair value of the performance-based RSU awards granted during 2014 and 2015, and time-based RSU awards granted during 2014, to the respective named executive officers.

The grant date fair values of the phantom stock unit awards and the performance-based RSU awards are based on the target performance level, and are consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under ASC Topic 718, Stock Compensation, except that no assumption for forfeitures was included. For a discussion of valuation assumptions, see Note 8 to our consolidated financial statements included in our annual report on Form 10-K for the fiscal year ended December 31, 2016 . Please see the 2016 Grants of Plan-Based Awards Table for further information regarding the phantom stock unit awards we granted during 2016 .

The aggregate grant date fair value of the stock awards granted in the respective years, assuming the highest level of performance conditions will be achieved, would be as follows:

		Stock Awards Granted In
	Name	2016			2015			2014
	Wm. Stacy Locke (a)	$	832,832		$	2,930,101		$	1,540,551
	Lorne E. Phillips	$	291,203		$	349,165		$	706,865
	Carlos R. Peña	$	247,811		$	288,226		$	606,596
	Brian L. Tucker	$	244,219		$	232,627		—
	Joe P. Freeman	$	124,244		$	106,956		—

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     56

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EXECUTIVE COMPENSATION

(a)	For Mr. Locke, $1,167,557 of the 2015 amount represents the aggregate grant date fair value (assuming the highest level of performance conditions will be achieved) of the Excess RSU Awards deemed for accounting purposes under ASC Topic 718 to have been granted in 2015.

(4)

In 2015, the Board determined that the Compensation Committee had inadvertently granted certain RSU awards to Mr. Locke in 2013 and 2014 in excess of the then-individual annual award limit of 200,000 shares (the “Annual Stock Award Limit”) under the 2007 Incentive Plan. In order to rectify this situation and confirm the validity of such RSU Awards, the Company sought shareholder ratification of the portion of the performance-based RSU awards that were granted in 2013 and 2014 in excess of the Annual Stock Award Limit (collectively, the “Excess RSU Awards”). Our shareholders ratified and approved the Excess RSU Awards at the Company’s 2015 Annual Meeting of Shareholders. Accordingly, the Excess RSU Awards are deemed for accounting purposes under ASC Topic 718 to have been newly granted as of the date of shareholder ratification and the aggregate grant date fair value of the Excess RSU Awards of $752,666 , computed in accordance with ASC Topic 718, except that no assumption for forfeitures was included, is included in the 2015 “Stock Awards” column for Mr. Locke. For further information on the Excess RSU Awards, see the section titled “ Long-Term Incentive Compensation ” of the Compensation Discussion and Analysis in our 2016 Proxy Statement filed with the SEC on April 18, 2016 .

(5)	The amounts reported for each year reflect the annual cash incentive awards earned in the respective year, but paid in the following year. (For example, the amounts reported for 2016 reflect the annual cash incentive awards earned in 2016 , but paid in 2017 .)

For Mr. Freeman, $38,055 of his annual cash incentive award which was earned in 2015 was deferred under Pioneer's Nonqualified Retirement Savings and Investment Plan.

(6)	Earnings reflected in the 2016 Nonqualified Deferred Compensation Table are not included as they are not above-market or preferential earnings.

(7)	The amounts shown in the “All Other Compensation” column for 2016 are presented in the table below. All of the amounts reflected in the below table were valued based on the Company's direct costs.

	Name	Auto Allowance			401K Matching Contributions			Life Insurance Premiums			Petroleum Club Dues			Total
	Wm. Stacy Locke	$	—		$	—		$	696		$	1,477		$	2,173
	Lorne E. Phillips	$	—		$	—		$	696		$	—		$	696
	Carlos R. Peña	$	—		$	—		$	696		$	—		$	696
	Brian L. Tucker	$	—		$	—		$	696		$	—		$	696
	Joe P. Freeman	$	14,400		$	—		$	421		$	—		$	14,821

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     57

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EXECUTIVE COMPENSATION

2016 Grants of Plan-Based Awards

The following table summarizes information concerning plan-based awards to the named executive officers during the fiscal year ended December 31, 2016 :

			Estimated Possible Payouts Under Non-Equity Incentive Plan Awards ($)										Estimated Future Payouts Under Equity Incentive Plan Awards   (#)							All Other Option Awards: Number of Securities Underlying Options (#)		Exercise or Base Price of Option Awards ($/sh)			Grant Date Fair Value of Stock and Option Awards (5)
Name		Grant Date	Threshold			Target			Maximum				Threshold		Target		Maximum
Wm. Stacy Locke	(1)	1/28/2016	$	321,750		$	715,000		$	1,430,000			—		—		—			—		—			—
	(2)	1/28/2016	—			$	858,000		—				—		—		—			—		—			—
	(3)	1/28/2016	—			—			—				42,475		424,752		849,504			—		—			$	573,075
	(4)	1/28/2016	—			—			—				—		—		—			368,240		$	1.31		$	301,957
Lorne E. Phillips	(1)	1/28/2016	$	118,125		$	262,500		$	525,000			—		—		—			—		—			—
	(2)	1/28/2016	—			$	300,000		—				—		—		—			—		—			—
	(3)	1/28/2016	—			—			—				14,852		148,515		297,030			—		—			$	200,378
	(4)	1/28/2016	—			—			—				—		—		—			128,755		$	1.31		$	105,579
Carlos R. Peña	(1)	1/28/2016	$	108,675		$	241,500		$	483,000			—		—		—			—		—			—
	(2)	1/28/2016	—			$	255,300		—				—		—		—			—		—			—
	(3)	1/28/2016	—			—			—				12,639		126,386		252,772			—		—			$	170,520
	(4)	1/28/2016	—			—			—				—		—		—			109,571		$	1.31		$	89,848
Brian L. Tucker	(1)	1/28/2016	$	107,100		$	238,000		$	476,000			—		—		—			—		—			—
	(2)	1/28/2016	—			$	251,600		—				—		—		—			—		—			—
	(3)	1/28/2016	—			—			—				12,455		124,554		249,108			—		—			$	168,048
	(4)	1/28/2016	—			—			—				—		—		—			107,983		$	1.31		$	88,546
Joe P. Freeman	(1)	1/28/2016	$	86,400		$	192,000		$	384,000			—		—		—			—		—			—
	(2)	1/28/2016	—			$	192,000		—				—		—		—			—		—			—
	(3)	1/28/2016	—			—			—				6,337		63,366		126,732			—		—			$	85,493

(1)

Annual Cash Incentive Award - The amounts shown reflect the range of possible payouts under a cash incentive award granted to each of the named executive officers in 2016 under the 2007 Incentive Plan, for which the payouts are based upon percentages of each named executive officer’s respective base salary paid in 2016 . For example, (i) the threshold, target and maximum levels for Mr. Locke are calculated as 45% , 100% and 200% , respectively, of his respective base salary paid in 2016 , (ii) the threshold, target and maximum levels for Mr. Freeman are calculated as 27% , 60% and 120% , respectively, of his respective base salary paid in 2016 , and (iii) the threshold, target and maximum levels for the other named executive officers are calculated as 32% , 70% and 140% , respectively, of their respective base salary paid in 2016 . The actual amount of the cash incentive award is determined by comparing our actual performance in 2016 against a scorecard of weighted performance measures (i.e., adjusted diluted earnings per share; consolidated or division-level Adjusted EBITDA; consolidated Adjusted EBITDA ROCE; consolidated division-level safety record; and individual performance) and associated performance levels approved by the Compensation Committee. Please see “Compensation Discussion and Analysis – Annual Cash Incentive Compensation” and " 2016 Summary Compensation Table " for more information regarding the 2016 annual cash incentive awards.

(2)	Long-Term Cash Incentive Award - The long-term cash awards were granted under the 2007 Incentive Plan and will vest and be payable over three years, subject to the continued service of the respective named executive officer through the date of vesting. See "Compensation Discussion and Analysis – Long-Term Incentive Compensation" for more information regarding the Long-Term Cash Incentive Awards.

(3)

Phantom Stock Unit Award - The award amounts shown reflect the range of possible phantom stock unit award s that each of the named executive officers may earn under a performance-based award granted in 2016 under the 2007 Incentive Plan. The actual number of phantom stock unit award s that the named executive officers earn will be based on the weighted average of our relative EBITDA growth, EBITDA ROCE, and TSR versus the Performance Peer Group over a three-year performance period. Please see “Compensation Discussion and Analysis – Long-Term Incentive Compensation ” for more information regarding the phantom stock unit award s. In general, any phantom stock unit award s that are earned by the named executive officers will cliff vest in April 2019 and will be converted to equity or cash, at the Company's discretion, and each unit will entitle the employee to either one share of stock or a cash payment equal to the stock price of our common stock on the date of vesting subject to a maximum of four times the stock price on the date of grant. The Company expects to settle these awards in cash.

(4)	Stock Option Award - These stock option awards were granted under our 2007 Incentive Plan and will vest in three equal annual installments from the date of grant.

(5)

For the phantom stock unit award s, these amounts reflect the aggregate grant date fair value of the phantom stock unit award s based upon the probable outcome of the performance conditions (for 2016 , at the target performance level), and is consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under ASC Topic 718, Stock Compensation, except that no assumptions for forfeitures was included.

For the stock options, these amounts reflect the aggregate grant date fair value of the stock options computed in accordance with ASC Topic 718, Stock Compensation, except that no assumptions for forfeitures were included.

For a discussion of valuation assumptions, see Note 8 to our consolidated financial statements included in our annual report on Form 10-K for the fiscal year ended December 31, 2016 .

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     58

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EXECUTIVE COMPENSATION

2016 Outstanding Equity Awards at Fiscal Year End

The following table provides information concerning stock options and restricted stock units held by the named executive officers which were outstanding as of December 31, 2016 .

		Option Awards										Stock Awards
		Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable			Option Exercise Price			Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)			Market Value of Shares or Units of Stock That Have Not Vested (8) ($)				Equity Incentive Plan Awards:
Name																			Number of Unearned Shares or Units That Have Not Vested (#)			Market or Payout Value of Unearned Shares or Units That Have Not Vested (8) ($)
Wm. Stacy Locke		200,000		—			$	14.07		5/13/2017		—			—				—			—
		180,000		—			$	17.07		8/27/2018		—			—				—			—
		236,000		—			$	3.84		3/1/2019		—			—				—			—
		181,800		—			$	8.86		2/1/2020		—			—				—			—
		155,919		—			$	9.01		2/1/2021		—			—				—			—
		191,697		—			$	8.92		1/30/2022		—			—				—			—
		92,796		—			$	7.58		1/31/2023		112,547		(4)	$	770,947			—			—
		57,743		28,872		(1)	$	8.44		1/30/2024		31,085		(5)	$	212,932			—			—
		45,080		90,160		(2)	$	4.10		1/29/2025		—			—				145,107		(6)	$	993,983
		—		368,240		(3)	$	1.31		1/28/2026		—			—				424,752		(7)	$	2,909,551
Lorne E. Phillips		100,000		—			$	4.73		2/1/2019		—			—				—			—
		90,000		—			$	3.84		3/1/2019		—			—				—			—
		75,400		—			$	8.86		2/1/2020		—			—				—			—
		64,665		—			$	9.01		2/1/2021		—			—				—			—
		54,152		—			$	8.92		1/30/2022		—			—				—			—
		26,862		—			$	7.58		1/31/2023		37,819		(4)	$	259,060			—			—
		19,404		9,702		(1)	$	8.44		1/30/2024		10,446		(5)	$	71,555			—			—
		16,576		33,152		(2)	$	4.10		1/29/2025		—			—				53,356		(6)	$	365,489
		—		128,755		(3)	$	1.31		1/28/2026		—			—				148,515		(7)	$	1,017,328
Carlos R. Peña		15,000		—			$	5.51		10/26/2018		—			—				—			—
		63,000		—			$	3.84		3/1/2019		—			—				—			—
		53,000		—			$	8.86		2/1/2020		—			—				—			—
		48,157		—			$	9.01		2/1/2021		—			—				—			—
		48,736		—			$	8.92		1/30/2022		—			—				—			—
		24,420		—			$	7.58		1/31/2023		32,455		(4)	$	222,317			—			—
		16,651		8,326		(1)	$	8.44		1/30/2024		8,964		(5)	$	61,403			—			—
		13,682		27,366		(2)	$	4.10		1/29/2025		—			—				44,043		(6)	$	301,695
		—		109,571		(3)	$	1.31		1/28/2026		—			—				126,386		(7)	$	865,744
Brian L. Tucker		55,000		—			$	7.02		6/4/2022		—			—				—			—
		11,623		—			$	7.58		1/31/2023		13,224		(4)	$	90,584			—			—
		6,784		3,393		(1)	$	8.44		1/30/2024		3,653		(5)	$	25,023			—			—
		11,043		22,087		(2)	$	4.10		1/29/2025		—			—				35,547		(6)	$	243,497
		—		107,983		(3)	$	1.31		1/28/2026		—			—				124,554		(7)	$	853,195
Joe P. Freeman		75,000		—			$	13.57		3/3/2018		—			—				—			—
		28,500		—			$	17.07		8/27/2018		—			—				—			—
		13,000		—			$	3.84		3/1/2019		13,452		(4)	$	92,146			—			—
		32,400		—			$	8.86		2/1/2020		—			—				16,343		(6)	$	111,950
		30,584		—			$	9.01		2/1/2021		—			—				63,366		(7)	$	434,057

(1)	The indicated options vested on January 30, 2017 .

(2)	Of the indicated options, half vested on January 29, 2017 , and the remaining options are scheduled to vest on January 29, 2018 .

(3)	Of the indicated options, one-third vested on January 28, 2017 , and installments of one-third each are scheduled to vest on January 28, 2018 and 2019 .

(4)	The amounts shown reflect the actual number of restricted shares each named executive officer earned under his respective 2014 performance-based RSU award, which are scheduled to vest on April 30, 2017 , and which includes the 2014 Excess RSU Awards for Mr. Locke.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     59

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EXECUTIVE COMPENSATION

(5)	The indicated time-based restricted stock units vested on January 30, 2017 .

(6)	The amounts shown reflect the target number of restricted shares each named executive officer could earn under his respective 2015 performance-based RSU award, which are scheduled to vest on April 30, 2018 .

(7)	The amounts shown reflect the target number of restricted shares each named executive officer could earn under his respective 2016 phantom stock unit awards , which are scheduled to vest on April 30, 2019 . We expect to settle these phantom stock unit awards in cash when they vest.

(8)	The market value of the restricted stock units is based on the closing price of our common stock on December 31, 2016 of $6.85 per share.

2016 Option Exercises and Stock Vested

The following table provides additional information about stock option exercises and shares acquired upon the vesting of stock awards, including the value realized, during 2016 , by the named executive officers.

	Option Awards					Stock Awards
Name	Number of Shares Acquired on Exercise (#)		Value Realized on Exercise (1) ($)			Number of Shares Acquired on Vesting (#)		Value Realized on Vesting (2) ($)
Wm. Stacy Locke	—		—			137,828		$	315,837
Lorne E. Phillips	—		—			41,344		$	93,407
Carlos R. Peña	—		—			37,054		$	84,188
Brian L. Tucker  (3)	—		—			16,980		$	39,171
Joe P. Freeman	—		—			9,306		$	28,942

(1)	Represents the amount realized based on the difference between the closing price of our common stock on the date of exercise and the exercise price.

(2)	Represents the amounts realized based on the closing price of our common stock on the vesting date for time-based and performance-based restricted stock unit (RSU) awards.

(3)	Of the 16,980 vested shares, Mr. Tucker elected to defer the value of 42 shares under the Company's Nonqualified Retirement Savings and Investment Plan . See the 2016 Nonqualified Deferred Compensation Table.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     60

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EXECUTIVE COMPENSATION

2016 Nonqualified Deferred Compensation

The following table provides additional information about the 2016 contributions, earnings and account balances of the named executive officers under the Company's Nonqualified Retirement Savings and Investment Plan :

Name	Executive Contributions in Last Fiscal Year ($) (1)			Registrant Contributions in Last Fiscal Year ($)		Aggregate Earnings in Last Fiscal Year ($) (2)			Aggregate Withdrawals/Distributions ($)			Aggregate Balance at Last Fiscal Year-End ($)
Wm. Stacy Locke	—			—		—			—			—
Lorne E. Phillips	—			—		—			—			—
Carlos R. Peña	—			—		—			—			—
Brian L. Tucker	$	58		—		$	9,108		—			$	119,194
Joe P. Freeman	—			—		$	7,102		$	(56,873	)	$	246,050
Franklin C. West	—			—		—			—			—
Joseph B. Eustace	—			—		—			—			—

(1)

Represents the value of 42 shares of common stock that vested pursuant to a restricted stock unit award granted to Mr. Tucker in 2013 that were deferred under the NRSIP. The value of Mr. Tucker's deferred shares of common stock is based upon the closing price of the Company’s common stock on the date of vesting, and is also included in the “Value Realized on Vesting” column of the “Stock Awards” column in the 2016 Option Exercises and Stock Vested Table. This amount is not reported in the 2016 Summary Compensation Table .

(2)

Represents (i) the net amounts credited to or (debited) from the plan accounts of the participants as a result of the performance of the investment funds selected by the participants, as more fully described in the narrative disclosure below and (ii) the increase or decrease of the fair market value of the participant's deferred shares of common stock. These amounts do not represent above-market or preferential earnings, and as a result, are not reported in the 2016 Summary Compensation Table .

On January 29, 2013, the Company implemented the Pioneer Energy Services Corp. Nonqualified Retirement Savings and Investment Plan (the "NRSIP"), an unfunded nonqualified deferred compensation plan for its non-employee directors and a select group of management or highly compensated employees. The NRSIP was effective on April 1, 2013. Unless otherwise determined by the committee administering the NRSIP, (i) eligible employees may irrevocably elect to defer up to 80% of their base salary, up to 100% of their bonuses, or up to 100% of their restricted stock units, and (ii) non-employee directors may irrevocably elect to defer up to 100% of their director fees or 100% of their restricted stock awards, under the NRSIP.

A participant's cash deferrals will be credited to an account under the NRSIP and that account will be credited (or debited) with earnings and losses based on the actual rate of return on the investment funds selected by the participants. Under the NRSIP in 2016 , participants were able to select from the following six investment funds:

Name of Fund	% Rate of Return for 2016
ClearBridge Small Cap Growth Fund - Class C	5.00	%
JP Morgan Mid Cap Value Fund - Class C	13.48	%
JP Morgan US Equity Fund - Class C	9.94	%
MFS Corporate Bond Fund - Class C	5.01	%
MFS International Value Fund - Class C	3.16	%
Ready Assets Government Liquidity Fund	0.00	%

As shown above, the rate of return in 2016 for these six funds ranged from 0.00% to 13.48% . Participants are fully vested in their deferred contributions. The Company may make additional contributions to a participant's account under the NRSIP in such amounts and at such times as approved by the Board of Directors of the Company or the Compensation Committee, which contributions shall vest as determined by the Board or the Compensation Committee.

A participant's account under the NRSIP will be distributed (i) upon his or her separation of service, including retirement or death or (ii) on another scheduled distribution date as provided by Section 409A of the Internal Revenue Code of 1986, as amended. Distributions will be paid in lump sum or in annual installments for two (2) to fifteen (15) years, in each case, as provided in the NRSIP. In addition, participants may make withdrawals from the NRSIP in the event of an unforeseeable financial emergency, as defined in the NRSIP, subject to approval of the committee administering the NRSIP. Any required federal, state or local tax withholding may be withheld from any payment made pursuant to the plan or from any other compensation payable to a participant.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     61

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POTENTIAL PAYMENTS UNDER TERMINATION OR CHANGE OF CONTROL

The Compensation Committee views change in control and non-change in control severance protection for officers as a necessary part of compensation to remain competitive in the market. A substantial portion of oilfield service companies provide such benefits. While the Compensation Committee recognizes there are variations in types, amounts, eligibility requirements and other terms and conditions among companies, the Compensation Committee believes that the aggregate potential value remains competitive and does not significantly vary from similar programs at peer group companies.

 

In 2009, the Company adopted a new Long-Term Disability Plan. This plan is available to all U.S. salaried employees and other full-time active employees and does not discriminate in scope, terms or operation, in favor of the named executive officers. In the event an employee has been disabled for more than 180 days, the Long-Term Disability Plan generally provides for payment of 50% of an employee’s base salary up to a maximum monthly benefit of $5,000 until the earlier of the employee reaching standard retirement age as determined by the Social Security Administration or the employee’s death.

Key Executive Severance Plan

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     62

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POTENTIAL PAYMENTS UNDER TERMINATION OR CHANGE OF CONTROL

The following is a brief description of the material terms and conditions of our Key Executive Severance Plan (the “KESP”).

Participation in the KESP is limited to our key executives who are considered to be senior management employees by the Compensation Committee and who are designated by the Compensation Committee, in its sole discretion, as participants in the KESP. The Compensation Committee, upon twelve months’ written notice, may also terminate an employee’s participation in the KESP; however, an individual participating immediately prior to a change in control may not be removed from participation in the KESP prior to the date which is two years following the date of the “change in control” of Pioneer (as defined below). Participants in the KESP will be designated by the Compensation Committee as either “Level I,” “Level II” or “Level III” participants, or as other participants. With regard to our named executive officers, Mr. Locke is designated as a Level I participant, Messrs. Phillips, Peña, and Tucker are designated as Level II participants, and Mr. Freeman is designated as a Level III participant.

In the event of an “involuntary termination” prior to a change in control of Pioneer and subject to certain conditions, including the requirement that a KESP participant execute an acceptable waiver and release of claims, a Level I or Level II participant will receive (1) a lump-sum cash payment equal to 200% of the participant’s annual base salary and annual target bonus, (2) accelerated vesting of stock options and other equity-based awards held on the date of termination of employment, but only to the extent such stock options or other equity-based awards would otherwise have vested within twelve months, and (3) continued life insurance and medical benefits coverage at active employee rates for twelve months. A Level III participant will receive (1) a lump-sum cash payment equal to 100% of the participant’s annual base salary, (2) accelerated vesting of stock options and other equity-based awards held on the date of termination of employment, but only to the extent such stock options or other equity-based awards would otherwise have vested within twelve months, and (3) continued life insurance and medical benefits coverage at active employee rates for twelve months. Other participants will receive (1) a lump-sum cash payment equal to 50% of the participant’s annual base salary, (2) accelerated vesting of stock options and other equity-based awards held on the date of termination of employment, but only to the extent such stock options or other equity-based awards would otherwise have vested within six months, and (3) continued life insurance and medical benefits coverage for six months. An “involuntary termination” means the termination of the participant’s employment (1) for any reason other than cause, death or disability or (2) by the participant for good reason, as defined in the KESP.

 

“Cause” means (1) with respect to any Level I or Level II Participant, that participant’s (A) commission of any act or omission constituting fraud under any law of the State of Texas, (B) conviction of, or a plea of nolo contendere to, a felony, (C) embezzlement or theft of property or funds of Pioneer or any of its affiliates or (D) refusal to perform his or her duties, as specified in any written agreement between the participant and Pioneer or in any specific directive adopted by a majority of the members of the Board at a meeting of the Board that is consistent with the participant’s status as an executive officer of the Company; and (2) with respect to any Level III or other participant, that participant’s (A) commission of any act or omission constituting fraud under any law of the State of Texas, (B) conviction of, or a plea of nolo contendere to, a felony, (C) embezzlement or theft of property or funds of Pioneer or any of its affiliates, (D) failure to follow the instructions of the Board (in either case, as approved by a majority of the members of such Board at a meeting of such Board) or any supervising or executive officer of Pioneer or any of its affiliates or (E) unacceptable performance, gross negligence or willful misconduct with respect to his or her duties to Pioneer or any of its affiliates.

“Good reason” for the participant to terminate his or her employment means, prior to the effective date of a change in control, the occurrence (without the participant’s written consent) of any of the following: (1) a reduction in the participant’s base salary or total compensation except for an across-the-board reduction similarly affecting all senior executives of Pioneer and all senior executives of any person in control of Pioneer; (2) failure by Pioneer to pay any portion of the participant’s compensation within fourteen days of the date it is due or any other material breach of a contract with the participant by Pioneer which is not remedied by Pioneer within 5 business days after the participant’s written notice to Pioneer of such breach; or (3) Pioneer’s failure to maintain a participant’s employment without material diminution in the participant’s duties and responsibilities, and such failure is not cured by Pioneer within 5 business days after the participant’s written notice to Pioneer of such failure. After the effective date of a change in control, “good reason” shall also include any of (4)-(9) below unless, in the case of any of (5), (7), (8), or (9), such act or failure is corrected within five business days following the giving of written notice of good reason by the participant, and in the case of (6) below, such act is not objected to in writing by the participant within fourteen days after notification thereof: (4) after a change in control, the determination by the participant, in his or her sole and absolute discretion, that the business philosophy or policies of Pioneer or its successor or the implementation thereof is not compatible with those of the participant; (5) the assignment to the participant of duties inconsistent with his or her status as an executive officer of Pioneer or a meaningful alteration, adverse

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to the participant, in the nature or status of his or her responsibilities (other than reporting responsibilities) from those in effect immediately prior to a change in control, including, without limitation, a material reduction in the budget for which the participant is responsible; (6) failure by Pioneer to continue in effect any compensation plan in which the participant participates immediately prior to a change in control that is material to the participant’s compensation, unless an equitable arrangement has been made with the participant with respect to such plan; (7) failure by Pioneer to continue the participant’s participation in a plan described in (6) above or a substitute or alternative plan on a basis not materially less favorable to the participant than as existed at the time of a change in control; (8) failure by Pioneer to continue to provide the participant with benefits substantially similar to those enjoyed by the participant prior to a change in control; or (9) a requirement by Pioneer that the participant relocate his or her residence outside the metropolitan area in which the participant was based immediately prior to a change in control, or a move of the participant’s principal business location more than 45 miles from the participant’s previous principal business location. The participant’s continued employment shall not of itself constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting good reason under the KESP.

Upon a change in control of Pioneer, all participants will be entitled to full vesting of all options, restricted stock and other equity awards. Upon an involuntary termination within two years following the effective date of a change in control, a Level I or Level II participant will receive (1) a lump-sum cash payment equal to 300% of the sum of the participant’s (A) annual base salary, (B) annual maximum bonus and (C) annual car allowance and club dues, and (2) continued life insurance and medical benefits coverage at active employee rates for 18 months. A Level III participant will receive (1) a lump-sum cash payment equal to 200% of the sum of the participant’s (A) annual base salary, (B) annual maximum bonus and (C) annual car allowance and club dues, and (2) continued life insurance and medical benefits coverage at active employee rates for twelve months. Other participants will receive (1) a lump-sum cash payment equal to 150% of the sum of the participant’s (A) annual base salary, (B) annual maximum bonus and (C) annual car allowance and club dues, and (2) continued life insurance and medical benefits coverage at active employee rates for twelve months. Furthermore, a terminated participant who is unable to sell securities on the open market may require the surviving entity to acquire any vested equity awards or any shares acquired pursuant to equity awards at a price equal to the then fair market value for such shares; such right must be exercised prior to twelve months after the participant’s involuntary termination within two years after the change in control.

A “change in control” shall conclusively be deemed to have occurred if an event set forth in any one of the following paragraphs shall have occurred:

(1)

any person, (other than (A) Pioneer; (B) any affiliate of Pioneer; (C) any employee benefit plan of Pioneer or of any affiliate and any person organized, appointed or established by Pioneer for or pursuant to the terms of any such plan or for the purpose of funding any such plan or funding other employee benefits for employees of Pioneer or any affiliate of Pioneer; or (D) any corporation or other entity owned, directly or indirectly, by the shareholders of Pioneer in substantially the same proportions as their ownership of capital stock of Pioneer) is or becomes the beneficial owner of voting stock of Pioneer (not including in the securities beneficially owned by such person any securities acquired directly from Pioneer after the date the KESP first became effective) representing 40% or more of the combined voting power of the voting stock of Pioneer then outstanding; provided, however , that a change of control will not be deemed to occur under this paragraph (1) if a person becomes the beneficial owner of voting stock of Pioneer representing 40% or more of the combined voting power of the voting stock of Pioneer then outstanding solely as a result of a reduction in the number of

 

shares of voting stock of Pioneer outstanding which results from Pioneer’s repurchase of voting stock of Pioneer, unless and until such time as that person or any affiliate or associate of that person purchases or otherwise becomes the beneficial owner of additional shares of voting stock of Pioneer constituting 1% or more of the combined voting power of the voting stock of Pioneer then outstanding, or any other person (or persons) who is (or collectively are) the beneficial owner of shares of voting stock of Pioneer constituting 1% or more of the combined voting power of the voting stock of Pioneer then outstanding becomes an affiliate or associate of that person, unless, in either such case, that person, together with all its affiliates and associates, is not then the beneficial owner of voting stock of Pioneer representing 40% or more of the voting stock of Pioneer then outstanding;

(2)

the following individuals cease for any reason to constitute a majority of the number of directors then serving: (A) individuals who, on the date the KESP first became effective, constitute the Board; and (B) any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors of Pioneer) whose appointment or election by the Board of Pioneer or nomination for election by Pioneer’s shareholders was approved or recommended by a majority vote of the directors then still in office who either were directors on the date the KESP first became effective or whose appointment, election or nomination for election was previously so approved or recommended;

(3)

there is consummated a merger or consolidation of Pioneer or any parent or direct or indirect subsidiary of Pioneer with or into any other corporation, other than: (A) a merger or consolidation which results in the voting stock of Pioneer outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities which entitle the holder thereof to vote generally in the election of members of the Board or similar governing body of Pioneer or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation; or (B) a merger or consolidation effected to implement a recapitalization of Pioneer (or similar transaction) in which no person (other than those persons listed in clauses (A) through (D) of paragraph (1) above) is or becomes the beneficial owner of voting stock of Pioneer (not including, for purposes of this determination, any voting stock of Pioneer acquired directly from Pioneer or its subsidiaries after the date the KESP first became effective other than in connection with the acquisition by Pioneer or one of its subsidiaries of a business) representing 40% or more of the combined voting power of the voting stock of Pioneer then outstanding; or

(4)

the shareholders of Pioneer approve a plan of complete liquidation or dissolution of Pioneer, or there is consummated an agreement for the sale or disposition of all or substantially all of Pioneer’s assets unless (A) the sale is to an entity, of which at least 50% of the combined voting power of the securities which entitle the holder thereof to vote generally in the election of members of the Board or similar governing body of such entity are owned by shareholders of Pioneer in substantially the same proportions as their ownership of the voting stock of Pioneer immediately prior to such sale; (B) no person other than Pioneer and any employee benefit plan or related trust of Pioneer or of such corporation then beneficially owns 40% or more of the voting securities of such new entity; and (C) at least a majority of the directors of such corporation were members of the incumbent Board at the time of the execution of the initial agreement or action providing for such disposition.

In addition, in the event any participant is subject to an excise tax under Section 4999 of the Internal Revenue Code, as amended, as a result of payments under the KESP or otherwise, the participant will be entitled to a gross-up payment such that after payment of all taxes on

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POTENTIAL PAYMENTS UNDER TERMINATION OR CHANGE OF CONTROL

the gross-up payment, the participant retains sufficient funds to pay the Section 4999 excise tax on his or her KESP and other payments (or such excise tax is paid on his or her behalf). Pioneer will be responsible for any attorneys’ fees incurred by a participant who is successful in pursuing litigation for benefits under the KESP. For any participant who is a “specified employee” within the meaning of Section 409A of the Code, payments under the KESP will generally be delayed six months following termination of employment.

 

At its March 30, 2011 meeting, the Compensation Committee adopted a policy prohibiting the Company from entering into any future change in control arrangements with executive officers that provide for excise tax gross-up payments, unless such arrangement is approved by shareholders. Pursuant to the policy, any participant who enters the Key Executive Severance Plan after March 30, 2011 will not be entitled to any excise tax gross-up payments.

The KESP may not be amended in a manner adverse to the rights of a participant without his or her consent.

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POTENTIAL PAYMENTS UNDER TERMINATION OR CHANGE OF CONTROL

Potential Payments upon Termination or Change in Control

The tables below reflect the amount of compensation that would be payable to each of the named executive officers in various scenarios involving termination of the named executive officer’s employment, including following a change in control, as outlined in the KESP and the terms of the respective award agreements. The amount of compensation payable to each named executive officer upon voluntary termination, involuntary not-for-cause termination (non-change in control), voluntary termination for good cause or involuntary termination following a change in control, involuntary for cause termination, and termination in the event of death or disability of each named executive officer is shown below, computed in accordance with the KESP and award terms. The amounts shown assume that the termination was effective on December 31, 2016 and thus include amounts earned through that time and are estimates of the amounts which would be paid out to the officers upon their termination. The actual amounts to be paid out can only be determined at the time of the officer’s separation from us and could be different if a severance arrangement is entered into with the employee, which is at the Compensation Committee's discretion. In addition to the amounts presented below, the officer would also have available (i) the value of exercisable options reflected in the 2016 Outstanding Equity Awards at Fiscal Year End table and (ii) the value of their account balance under the NRSIP as reflected in the 2016 Nonqualified Deferred Compensation Table.

As of December 31, 2016 , Messrs. Locke and Freeman were eligible for payments under certain of our plans in the case of retirement ( the tables presenting potential payments to Messrs. Locke and Freeman set forth the amount of compensation that would be payable upon retirement).

Wm. Stacy Locke’s Benefits and Payments Upon Termination as of 12/31/2016	Voluntary Termination			Normal Retirement			Involuntary Not for Cause Termination (Non-Change in Control)			Involuntary or Good Reason Termination (Following a Change in Control)			Involuntary For Cause Termination			Death			Disability (1)
Compensation:
Severance Payments	—			—			$	1,430,000		$	2,145,000		—			—			—
Annual Cash Incentive Payment (2)	—			$	470,699		$	1,430,000		$	4,290,000		—			$	470,699		$	470,699
Intrinsic Value of Unvested and Accelerated (3) :
Stock Options	—			—			$	803,987		$	2,287,990		—			$	2,287,990		$	2,287,990
Time-Based Restricted Stock Units	—			—			$	212,932		$	212,932		—			$	212,932		$	212,932
Performance-Based Restricted Stock Units (4)	—			—			$	770,947		$	1,764,930		—			$	1,764,930		$	1,764,930
Phantom Stock Units (5)	—			—			—			$	5,377,360		—			$	2,688,680		$	2,688,680
Accelerated Long-Term Cash Incentive Payment (6)	—			—			—			$	1,308,800		—			$	1,308,800		$	1,308,800
Benefits and Perquisites:
Excise Tax Gross-Up (7)	—			—			—			$	5,182,165		—			—			—
Health Care and Life Insurance Coverage	—			—			$	13,706		$	20,560		—			—			—
Life Insurance Proceeds (8)	—			—			—			—			—			$	300,000		—
Petroleum Club Dues	—			—			—			$	4,430		—			—			—
TOTAL	$	—		$	470,699		$	4,661,572		$	22,594,167		$	—		$	9,034,031		$	8,734,031

(1)	Disability payment does not include benefits payable under the Company’s Long-Term Disability Plan (which is available to all U.S. salaried employees), the value of which would depend on the life span or years remaining prior to the named executive officer reaching the standard retirement age based on the retirement age guidelines used by Social Security Administration.

(2)

In the event of retirement, death or disability before the annual cash incentive award is paid, the Compensation Committee has the discretion under the 2007 Incentive Plan to authorize payment (in full or on a prorated basis) of the amount the officer would have received, to the extent that the performance goals were achieved. We have assumed that the Compensation Committee would have authorized the payment of the cash incentive award in full, at the actual performance levels achieved, for purposes of the table above.

(3)	The intrinsic value of unvested and accelerated equity awards is calculated based on the stock price at December 31, 2016 , which was $6.85 .

(4)	The intrinsic value of unvested and accelerated performance-based restricted stock units is calculated based on the target performance level for the 2015 awards. For the performance-based restricted stock unit awards granted in 2014, the intrinsic value is calculated based on the actual performance level achieved.

(5)	The intrinsic value of unvested and accelerated phantom stock unit awards represents the amount which will vest upon the death or disability of the named executive officer or change in control of Pioneer under the performance phantom stock unit awards granted in 2016, and is calculated based on the average stock price for the 14 trading days prior to December 31, 2016 .

(6)

The Accelerated Long-Term Cash Incentive Payment represents the amount which will be payable upon the death or disability of the named executive officer or change in control of Pioneer under the long-term cash incentive awards granted in 2016 and 2015 . In the event of a change in control of Pioneer, and subject to certain conditions, the award will vest in full and be payable immediately. In the event of death or disability of the named executive officer at December 31, 2016 , one-third of the award amount will vest and be payable on each of the remaining applicable vesting dates.

(7)	At its March 30, 2011 meeting, the Compensation Committee adopted a policy prohibiting the Company from entering into any future change in control arrangements with executive officers that provide for excise tax gross-up payments, unless such arrangement is approved by shareholders.

(8)	The life insurance plan pays the beneficiary an amount equal to the applicable officer’s annual salary up to a maximum of $300,000 .

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POTENTIAL PAYMENTS UNDER TERMINATION OR CHANGE OF CONTROL

Lorne E. Phillips’ Benefits and Payments Upon Termination as of 12/31/2016	Voluntary Termination			Involuntary Not for Cause Termination (Non-Change in Control)			Involuntary or Good Reason Termination (Following a Change in Control)			Involuntary For Cause Termination			Death			Disability (1)
Compensation:
Severance Payments	—			$	750,000		$	1,125,000		—			—			—
Annual Cash Incentive Payment (2)	—			$	525,000		$	1,575,000		—			$	146,560		$	146,560
Intrinsic Value of Unvested and Accelerated (3) :
Stock Options	—			$	283,352		$	804,471		—			$	804,471		$	804,471
Time-Based Restricted Stock Units	—			$	71,555		$	71,555		—			$	71,555		$	71,555
Performance-Based Restricted Stock Units (4)	—			$	259,060		$	624,549		—			$	624,549		$	624,549
Phantom Stock Units (5)	—			—			$	1,880,200		—			$	940,100		$	940,100
Accelerated Long-Term Cash Incentive Payment (6)	—			—			$	465,760		—			$	465,760		$	465,760
Benefits and Perquisites:
Excise Tax Gross-Up (7)	—			—			$	1,974,248		—			—			—
Health Care and Life Insurance Coverage	—			$	13,706		$	20,560		—			—			—
Life Insurance Proceeds (8)	—			—			—			—			$	300,000		—
TOTAL	$	—		$	1,902,673		$	8,541,343		$	—		$	3,352,995		$	3,052,995
Carlos R. Peña’s Benefits and Payments Upon Termination as of 12/31/2016	Voluntary Termination			Involuntary Not for Cause Termination (Non-Change in Control)			Involuntary or Good Reason Termination (Following a Change in Control)			Involuntary For Cause Termination			Death			Disability (1)
Compensation:
Severance Payments	—			$	690,000		$	1,035,000		—			—			—
Annual Cash Incentive Payment (2)	—			$	483,000		$	1,449,000		—			$	134,834		$	134,834
Intrinsic Value of Unvested and Accelerated (3) :
Stock Options	—			$	239,970		$	682,280		—			$	682,280		$	682,280
Time-Based Restricted Stock Units	—			$	61,403		$	61,403		—			$	61,403		$	61,403
Performance-Based Restricted Stock Units (4)	—			$	222,317		$	524,012		—			$	524,012		$	524,012
Phantom Stock Units (5)	—			—			$	1,600,046		—			$	800,023		$	800,023
Accelerated Long-Term Cash Incentive Payment (6)	—			—			$	392,127		—			$	392,127		$	392,127
Benefits and Perquisites:
Excise Tax Gross-Up (7)	—			—			$	1,723,395		—			—			—
Health Care and Life Insurance Coverage	—			$	13,706		$	20,560		—			—			—
Life Insurance Proceeds (8)	—			—			—			—			$	300,000		—
TOTAL	$	—		$	1,710,396		$	7,487,823		$	—		$	2,894,679		$	2,594,679

(1)	Disability payment does not include benefits payable under the Company’s Long-Term Disability Plan (which is available to all U.S. salaried employees), the value of which would depend on the life span or years remaining prior to the named executive officer reaching the standard retirement age based on the retirement age guidelines used by Social Security Administration.

(2)

In the event of retirement, death or disability before the annual cash incentive award is paid, the Compensation Committee has the discretion under the 2007 Incentive Plan to authorize payment (in full or on a prorated basis) of the amount the officer would have received, to the extent that the performance goals were achieved. We have assumed that the Compensation Committee would have authorized the payment of the cash incentive award in full, at the actual performance levels achieved, for purposes of the table above.

(3)	The intrinsic value of unvested and accelerated equity awards is calculated based on the stock price at December 31, 2016 , which was $6.85 .

(4)	The intrinsic value of unvested and accelerated performance-based restricted stock units is calculated based on the target performance level for the 2015 awards. For the performance-based restricted stock unit awards granted in 2014, the intrinsic value is calculated based on the actual performance level achieved.

(5)	The intrinsic value of unvested and accelerated phantom stock unit awards represents the amount which will vest upon the death or disability of the named executive officer or change in control of Pioneer under the performance phantom stock unit awards granted in 2016, and is calculated based on the average stock price for the 14 trading days prior to December 31, 2016 .

(6)

The Accelerated Long-Term Cash Incentive Payment represents the amount which will be payable upon the death or disability of the named executive officer or change in control of Pioneer under the long-term cash incentive awards granted in 2016 and 2015 . In the event of a change in control of Pioneer, and subject to certain conditions, the award will vest in full and be payable immediately. In the event of death or disability of the named executive officer at December 31, 2016 , one-third of the award amount will vest and be payable on each of the remaining applicable vesting dates.

(7)	At its March 30, 2011 meeting, the Compensation Committee adopted a policy prohibiting the Company from entering into any future change in control arrangements with executive officers that provide for excise tax gross-up payments, unless such arrangement is approved by shareholders.

(8)	The life insurance plan pays the beneficiary an amount equal to the applicable officer’s annual salary up to a maximum of $300,000 .

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POTENTIAL PAYMENTS UNDER TERMINATION OR CHANGE OF CONTROL

Brian Tucker’s Benefits and Payments Upon Termination as of 12/31/2016	Voluntary Termination			Involuntary Not for Cause Termination (Non-Change in Control)			Involuntary or Good Reason Termination (Following a Change in Control)			Involuntary For Cause Termination			Death			Disability (1)
Compensation:
Severance Payments	—			$	680,000		$	1,020,000		—			—			—
Annual Cash Incentive Payment (2)	—			$	476,000		$	1,428,000		—			$	132,880		$	132,880
Intrinsic Value of Unvested and Accelerated (3) :
Stock Options	—			$	229,779		$	658,965		—			$	658,965		$	658,965
Time-Based Restricted Stock Units	—			$	25,023		$	25,023		—			$	25,023		$	25,023
Performance-Based Restricted Stock Units (4)	—			$	90,584		$	334,081		—			$	334,081		$	334,081
Phantom Stock Units (5)	—			—			$	1,576,854		—			$	788,427		$	788,427
Accelerated Long-Term Cash Incentive Payment (6)	—			—			$	362,032		—			$	362,032		$	362,032
Benefits and Perquisites:
Excise Tax Gross-Up (7)	—			—			—			—			—			—
Health Care and Life Insurance Coverage	—			$	15,763		$	23,644		—			—			—
Life Insurance Proceeds (8)	—			—			—			—			$	300,000		—
TOTAL	$	—		$	1,517,149		$	5,428,599		$	—		$	2,601,408		$	2,301,408

Joe Freeman’s Benefits and Payments Upon Termination as of 12/31/2016	Voluntary Termination			Normal Retirement			Involuntary Not for Cause Termination (Non-Change in Control)			Involuntary or Good Reason Termination (Following a Change in Control)			Involuntary For Cause Termination			Death			Disability (1)
Compensation:
Severance Payments	—			—			$	320,000		$	640,000		—			—			—
Annual Cash Incentive Payment (2)	—			$	125,563		—			$	768,000		—			$	125,563		$	125,563
Intrinsic Value of Unvested and Accelerated (3) :
Performance-Based Restricted Stock Units (4)	—			—			$	92,146		$	204,096		—			$	204,096		$	204,096
Phantom Stock Units (5)	—			—			—			$	802,214		—			$	401,107		$	401,107
Accelerated Long-Term Cash Incentive Payment (6)	—			—			—			$	313,295		—			$	313,295		$	313,295
Benefits and Perquisites:
Excise Tax Gross-Up (7)	—			—			—			—			—			—			—
Health Care and Life Insurance Coverage	—			—			$	8,582		$	8,582		—			—			—
Life Insurance Proceeds (8)	—			—			—			—			—			$	300,000		—
Auto Allowance	—			—			—			$	28,800		—			—			—
TOTAL	$	—		$	125,563		$	420,728		$	2,764,987		$	—		$	1,344,061		$	1,044,061

(1)	Disability payment does not include benefits payable under the Company’s Long-Term Disability Plan (which is available to all U.S. salaried employees), the value of which would depend on the life span or years remaining prior to the named executive officer reaching the standard retirement age based on the retirement age guidelines used by Social Security Administration.

(2)

In the event of retirement, death or disability before the annual cash incentive award is paid, the Compensation Committee has the discretion under the 2007 Incentive Plan to authorize payment (in full or on a prorated basis) of the amount the officer would have received, to the extent that the performance goals were achieved. We have assumed that the Compensation Committee would have authorized the payment of the cash incentive award in full, at the actual performance levels achieved, for purposes of the table above.

(3)	The intrinsic value of unvested and accelerated equity awards is calculated based on the stock price at December 31, 2016 , which was $6.85 .

(4)	The intrinsic value of unvested and accelerated performance-based restricted stock units is calculated based on the target performance level for the 2015 awards. For the performance-based restricted stock unit awards granted in 2014, the intrinsic value is calculated based on the actual performance level achieved.

(5)	The intrinsic value of unvested and accelerated phantom stock unit awards represents the amount which will vest upon the death or disability of the named executive officer or change in control of Pioneer under the performance phantom stock unit awards granted in 2016, and is calculated based on the average stock price for the 14 trading days prior to December 31, 2016 .

(6)

The Accelerated Long-Term Cash Incentive Payment represents the amount which will be payable upon the death or disability of the named executive officer or change in control of Pioneer under the long-term cash incentive awards granted in 2016 and 2015 , and the award granted in 2014 to Mr. Freeman. In the event of a change in control of Pioneer, and subject to certain conditions, the award will vest in full and be payable immediately. In the event of death or disability of the named executive officer at December 31, 2016 , one-third of the award amount will vest and be payable on each of the remaining applicable vesting dates.

(7)	At its March 30, 2011 meeting, the Compensation Committee adopted a policy prohibiting the Company from entering into any future change in control arrangements with executive officers that provide for excise tax gross-up payments, unless such arrangement is approved by shareholders.

(8)	The life insurance plan pays the beneficiary an amount equal to the applicable officer’s annual salary up to a maximum of $300,000 .

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     68

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POTENTIAL PAYMENTS UNDER TERMINATION OR CHANGE OF CONTROL

The terms for the payments for involuntary not-for-cause termination (non-change in control) and for involuntary or good reason termination (following a change in control) are summarized under the heading “Key Executive Severance Plan” of this section. In the event of a change in control termination, if the termination qualified as (i) a change in ownership or effective control or (ii) a change in ownership of a substantial portion of our assets, in either case as defined in Section 280G of the Internal Revenue Code, then severance payments and benefits paid to our named executive officers may be subject to an excise tax under Section 4999 of the Internal Revenue Code. At its March 30, 2011 meeting, the Compensation Committee adopted a policy prohibiting the Company from entering into any future change in control arrangements with executive officers that provide for excise tax gross-up payments, unless such arrangement is approved by shareholders. For certain arrangements entered into with executive officers prior to the adoption of this policy, in the event a named executive officer is subject to such excise tax, the named executive officer will be entitled to a gross-up payment, such that after payment of all taxes on the gross-up payment, the named executive officer retains sufficient funds to pay the excise taxes that result from the severance payments and benefits received.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     69

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REPORT OF THE AUDIT COMMITTEE

The Audit Committee of the Board of Pioneer Energy Services Corp. (the "Company") is presently comprised of the four directors named below. Each member of the Audit Committee is an independent director, as defined by applicable Securities and Exchange Commission rules and the NYSE listing standards. The Audit Committee met 5 times during the fiscal year ended December 31, 2016 .

In performing our oversight function, over the course of the year, among other things, we have:

•	reviewed and discussed with management and KPMG LLP ("KPMG") the quarterly and annual earnings press releases and Form 10-Q's and Form 10-K filed with the SEC;

•	reviewed and discussed with management and KPMG the Company's audited financial statements as of and for the fiscal year ended December 31, 2016 ;

•	reviewed and discussed with management, the Company's internal auditor and KPMG management's assessment of the effectiveness of the Company's internal controls over financial reporting and KPMG's evaluation of the Company's internal controls over financial reporting;

•	met in periodic executive sessions with management, including the CFO and internal auditor, and KPMG to discuss the results of their examinations, their evaluations of internal controls, and the overall quality of the Company's financial reporting;

•	discussed with KPMG the matters required to be discussed by the independent auditor with the Audit Committee under the Public Company Accounting Oversight Board (PCAOB) applicable auditing standards, including Auditing Standard No. 1301, Communications with Audit Committees ;

•	reviewed the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding KPMG’s communications with the Audit Committee concerning independence, and we have discussed with KPMG its independence; and

•	reviewed the terms for the engagement of KPMG, including the scope of audit, audit fees, auditor independence matters and to the extent to which KPMG may be retained to perform non-audit services.

Based on the reviews and discussions referred to above, we recommended to the Board of Pioneer Energy Services Corp. that the audited financial statements referred to above be included in the Company’s Report on Form 10-K for the fiscal year ended December 31, 2016 for filing with the Securities and Exchange Commission.

The Audit Committee

Dean A. Burkhardt

John Michael Rauh, Chairman

C. John Thompson

Scott D. Urban

The information above in the Report of the Audit Committee shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except to the extent that the Company specifically requests that the information be treated as soliciting material or specifically incorporates the information by reference.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     70

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Proposal 2	Approval of an Amendment to the Company's Restated Articles of Incorporation

The Board proposes and recommends the approval of an amendment to the Company’s Restated Articles of Incorporation to increase the authorized shares of common stock of the Company from 100,000,000 shares, par value $0.10 per share, to 200,000,000 shares, par value $0.10 per share . The Board has unanimously approved this amendment to the Company’s Restated Articles of Incorporation, subject to shareholder approval.

Effects of Increasing the Number of Authorized Shares of Common Stock

We are presently authorized to have 110,000,000 shares issued and outstanding, consisting of (i) 100,000,000 shares of common stock, par value $0.10 per share, and (ii) 10,000,000 shares of preferred stock, par value $1.00 per share. The proposed amendment does not change the express terms of the Company’s common stock. Additionally, no change in the express terms or in the number of authorized shares of preferred stock is proposed.

As of March 20, 2017 , 77,855,339 shares of common stock were issued (of which 77,280,191 were outstanding and 575,148 were held as treasury shares). In addition, there were approximately 5,295,710 and 877,419 shares of common stock reserved for issuance under our 2007 Incentive Plan and 2003 Incentive Plan, respectively (assuming the target level of performance is achieved for our outstanding performance-based restricted stock unit awards). Accordingly, based upon these issued and reserved shares of common stock, we currently have 15,971,532 shares of common stock remaining available for issuance for other corporate purposes.

If the proposed amendment is adopted, there would be 115,971,532 authorized shares of common stock available for issuance. Except for shares reserved for issuance under the 2007 Incentive Plan, the Board has no current plans to issue additional shares of common stock.

Text of the Amendment

The Company proposes to amend the first paragraph of Article Four of the Restated Articles of Incorporation so that it would read in its entirety as follows:

“The aggregate number of shares that the Corporation shall have the authority to issue is 210,000,000 shares, consisting of 200,000,000 shares of common stock, par value $0.10 per share (“Common Stock”), and 10,000,000 shares of preferred stock, par value $1.00 per share (“Preferred Stock”).”

The only changes that would be made to the first paragraph of Article Four, as currently in effect, would be to increase the total number of shares of common stock that we may issue from 100,000,000 shares to 200,000,000 shares and to reflect a corresponding increase in the aggregate number of shares of capital stock of all classes that may be issued from 110,000,000 to 210,000,000 shares.

Purpose of the Amendment

The Board believes that increasing the number of authorized shares of common stock affords the Company greater flexibility when considering and planning for its future financial needs, including for purposes of raising capital to fund the growth of the Company’s business and to repay the Company’s outstanding indebtedness. We believe that it is prudent to position the Company to respond promptly to potential opportunities, and that our ability to respond promptly is enhanced with a higher number of shares of authorized common stock available for issuance on an as-needed basis for possible capital raising transactions, acquisitions or other strategic transactions, stock splits, stock dividends and other corporate purposes determined by the Board to be in the best interest of our shareholders. Having the additional authorized shares immediately available would enable us to issue shares of common stock or other securities exercisable, exchangeable or convertible into common stock without the expense and delay of a shareholders’ meeting, except as may be required by stock exchange rules or applicable laws and regulations.

The Company has an effective shelf registration statement on file with the Securities and Exchange Commission under which it may issue additional securities from time to time, including common stock, to the extent it has available authorized but unissued and unreserved shares.

Although we have no present plans, arrangements, undertakings or commitments to issue any shares of common stock other than pursuant to our 2007 Incentive Plan and 2003 Incentive Plan, we may from time to time take advantage of favorable market conditions to issue additional shares of stock to fund growth of the Company's business or to repay outstanding indebtedness. The increase in the authorized shares of common stock proposed by this Proposal 2 will provide us the flexibility to access capital when needed or deemed advisable by the Board.

Potential Adverse Effects of the Amendment

If approved, the amendment will have no immediate effect on the rights of existing shareholders and, subject to stock exchange rules and applicable laws and regulations, the additional shares of common stock proposed to be authorized, together with existing authorized and unissued shares of common stock, will be available for issuance without requirement for further shareholder approval. Future issuances of shares of common stock or other securities exercisable, exchangeable or convertible into common stock could have a dilutive effect on earnings per share and the voting power and economic interest of our current shareholders. Furthermore, although there are no current plans to do so, we could issue common stock in various transactions that would make a change in control of the Company more difficult or would otherwise discourage attempts to acquire control of the

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     71

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Company. The proposed amendment does not result from any specific effort to obtain control of the Company by tender offer, proxy contest or otherwise, and we have no present intention to use the increased shares of authorized common stock for anti-takeover purposes.

Rights of Additional Authorized Shares

Any authorized shares of common stock, if and when issued, would be part of our existing class of common stock and would have the same rights and privileges as the shares of common stock currently outstanding. Our shareholders do not have preemptive rights with respect to the common stock, nor do they have cumulative voting rights. Accordingly, should the Board issue additional shares of common stock, existing shareholders would not have any preferential rights to purchase any of such shares, and their percentage ownership of our then outstanding common stock could be reduced.

Effectiveness of Amendment

If the proposed amendment is adopted, it will become effective upon the filing of a certificate of amendment to the Company’s Restated Articles of Incorporation with the Secretary of State of the State of Texas.

Our Board unanimously recommends a vote “FOR” the approval of the amendment to the Company’s Restated Articles of Incorporation to increase authorized shares of common stock from 100,000,000 to 200,000,000.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     72

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Proposal 3	Advisory Vote on Executive Compensation

This advisory vote on executive compensation gives shareholders the opportunity to approve our named executive officers’ compensation, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K. In response to the majority of the votes cast for an advisory vote on executive compensation every year at our 2011 Annual Meeting of Stockholders, we determined that the advisory vote on executive compensation would be conducted every year, until we hold the next advisory vote on the frequency of advisory votes on executive compensation at our 2017 Annual Meeting of Shareholders (see Proposal 4).

Our 2016 Executive Compensation Program is described in detail on pages 30 to 46 .

Business Highlights

Early in 2016, our Board approved a business plan that reflected aggressive goals for earnings per share (“EPS”), adjusted earnings before interest, taxes, depreciation, amortization and impairments (“Adjusted EBITDA”), adjusted EBITDA return on capital employed (ROCE) and safety. These goals served as targets for our annual cash incentive plan. As 2016 progressed, the downturn proved more severe and more prolonged than was previously expected at the time these goals were set, and our financial and operational performance in 2016 fell below our targets for all these measures except for safety, and therefore the annual cash incentive awards earned by our named executive officers were negatively affected and below target.

However, the Company achieved operating results that met its cash flow and debt compliance requirements, the Company continued to be a going concern and thus, shareholder value was preserved. In comparison, five of the peers in the Company's Custom Peer Group filed for bankruptcy during 2015 and 2016.

Despite the downturn in the industry, the Compensation Committee believes that management performed well during 2016 and delivered strong results for the 2016 Team Goals. Key highlights of our 2016 performance include the following:

		Executed on our strategy to transform our drilling fleet into a highly capable, pad optimal fleet focused on the horizontal drilling market:
		•	Sold three drilling rigs and other drilling equipment for aggregate proceeds of over $12 million, with an additional six drilling rigs, other drilling equipment and 13 wireline units held for sale at year end;
		•	Current fleet is 100% high spec, multi-well pad-capable with 16 AC rigs in the United States engineered to optimize pad drilling and 8 SCR rigs in Colombia; and
		•	Achieved 81% utilization of our domestic AC rig fleet by year end, and 50% utilization of our fleet in Colombia.
		Achieved award winning safety results:
		•	Our 2016 lost time incident rate is the lowest in company history, and was also the third consecutive year with improving rates; and
		•	Received the 2016 Division IV Association of Energy Service Companies 3 rd  place award for wireline services and received the 1 st  place award for coiled tubing services.
		Improved liquidity and financial flexibility:
		•	Completed equity offering in December 2016 with net proceeds of $65.4 million, which were used to reduce outstanding borrowings;
		•	Amended our revolving credit facility in June 2016 to provide for enhanced liquidity through maturity in 2019; and
		•	Paid down $49 million of debt outstanding during 2016.
		Positioned for industry recovery:
		•	Reallocated our assets to regions with increasing demand, hired field personnel and acquired job materials to prepare for expected demand improvement in 2017;
		•	Committed to trade in 20 older well servicing rigs for 20 new-model rigs, and to purchase four new completion-oriented wireline units; and
		•	Current fleets and crews are highly capable and ready for recovery.

Results of 2016 Say on Pay

At our 2016 Annual Meeting of Shareholders, the advisory vote on our executive compensation ("say on pay") received the support of 98% of the votes cast. The Board is extremely pleased with this result, and has continued its efforts to continually improve our executive compensation program, listen to shareholders, and focus on performance-based compensation.

Fifty percent of our Chief Executive Officer's target total direct compensation is performance-linked, including :

▪	Annual Cash Incentive Awards. The annual cash incentive award is based on operational and financial performance.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     73

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PROPOSAL 3 Advisory Vote on Executive Compensation

▪	Stock Options. The value of these awards is tied directly to the Company’s stock price and thus is closely correlated with our shareholders’ interests.

▪	Performance-Based Phantom Stock Unit Awards. The performance-based phantom stock unit awards are earned based on our relative performance versus a pre-defined group of ten peer companies over the three-year performance period in each of the following three metrics: total shareholder return, EBITDA growth and EBITDA ROCE.

2016 Compensation Highlights

The Compensation Committee took the following key actions in 2016 :

•	Held Base Salaries Flat. The Compensation Committee continued to hold the salaries of the named executive officers flat in 2016.

•

Revised Performance Measures for Annual Cash Incentive Awards. The Compensation Committee increased the performance level required to achieve a maximum award payout from 130% of target to 140% of target, and lowered the threshold (minimum performance level) from 75% of target to 60% of target. This change effectively makes it more difficult for an award participant to receive a maximum award payout, while providing an award payout at a reduced threshold performance level. Considering the difficult operating environment during the industry downturn, in 2016 the Compensation Committee adjusted the performance levels to provide greater incentive for our employees to perform well, while preserving the overall award opportunity and ensuring that the potential for a maximum payout was set at a level representing a stretch goal.

•

Increased Target Level Annual Cash Incentive Awards for Named Executive Officers. In 2016 , the Compensation Committee restored the 2014 annual cash incentive award levels that were reduced during 2015 by 50% and then increased the annual cash incentive awards' target levels for all the named executive officers except our CEO by 10% for each participant (for example, an increase from a target level of 60% to a target level of 70%), in order to better align the incentive award targets with the competitive pay information derived by Pearl Meyer as well to increase the competitiveness of the target total cash compensation of the named executive officers.

Based on Company performance measures and the achievement of the 2016 Team Goals, each of the named executive officers earned a cash incentive award below their target level.

•	Revised Long-Term Incentive Award Target Levels. In 2016, the Compensation Committee re-evaluated the market competitiveness of the long-term incentive award levels for all participants as compared to the competitive pay information derived by Pearl Meyer. As a result of this review, the Compensation Committee revised the overall plan levels downward in 2016, as compared to 2015.

•	Granted Long-Term Incentive Awards. All of the named executive officers were granted long-term incentive awards in 2016 that were allocated approximately 20% to stock options, 40% to performance-based phantom stock unit awards , and 40% to long-term incentive cash awards.

In order to continue our practice of offering equity compensation awards to levels of management below the named executive officers, while still maintaining total equity awards granted at a consistent level with prior years, the Compensation Committee elected to again provide long-term cash incentive awards to executive officers rather than time-based equity awards.

The Company implemented the use of phantom stock unit awards in the long-term performance-based compensation program. The phantom stock unit awards offer incentive compensation linked to share value and are thus aligned with our shareholders' interests, while preserving the number of shares in the incentive plan. The phantom stock unit awards may be settled in cash or shares of common stock of the Company, at the discretion of the Compensation Committee. At the time the phantom stock unit awards were issued to the named executive officers in 2016, the number of shares available for issuance under the 2007 Incentive Plan was low. At the 2016 Annual Meeting of Shareholders, the Company's shareholders approved an amendment to the 2007 Incentive Plan to, among other things, increase the number of authorized shares under the plan by 3,800,000 shares. The number of performance-based phantom stock unit awards that each named executive officer may earn is based on our relative EBITDA growth, EBITDA ROCE, and total shareholder return versus a defined group of ten peer companies over a three-year performance period.

Under the 2013 performance-based restricted stock unit ("RSU") award (which had similar performance-based vesting terms as the phantom stock unit awards described above, but with a performance period of April 1 , 2013 to December 31, 2015 ), Messrs. Locke, Phillips, Peña, Tucker and Freeman each received approximately 72% of their target award shares, which vested in April 2016 .

•

Temporarily Suspended Certain Benefits. In order to reduce costs, the Compensation Committee decided to temporarily suspend car allowances for members of the corporate management team (including all the named executive officers except for Joe Freeman who primarily works in our field location offices), effective January 1, 2016, and to temporarily suspend 401K employer matching contributions for all employees, effective February 1, 2016.

•

Restored Restricted Stock Awards for Director Compensation and Held Cash Compensation Flat in 2016. The Compensation Committee granted each non-employee director a restricted stock award with a grant date fair market value of approximately $115,000 , which represents a restoration of 2014 award levels that were reduced during 2015 by 24% in order to reduce costs in light of the industry downturn. Additionally, with the exception of the annual retainer for the Chairman of the Board, the Compensation Committee has held all other cash compensation for the non-employee directors flat since 2013.

•

Approved Amendments to the 2007 Incentive Plan. The Board (and our shareholders) approved an amendment and restatement of the 2007 Incentive Plan that, among other things, limits the aggregate grant date fair value for financial reporting purposes of awards granted under the 2007 Incentive Plan during any single calendar year to a non-employee director as compensation for his or her services as a director to $300,000 in total value.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     74

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PROPOSAL 3 Advisory Vote on Executive Compensation

You have the opportunity to vote “for” or “against” or “abstain” from voting on the following non-binding resolution:

“RESOLVED, that the shareholders approve, on an advisory basis, the compensation of the named executive officers as disclosed in our Proxy Statement for the 2017 Annual Meeting of Shareholders pursuant to Item 402 of Regulation S-K, including the compensation discussion and analysis, the compensation tables, and the narrative discussion of this proxy statement.”

While your vote on this proposal is advisory and will not be binding on us, the Board or the Compensation Committee, we value the opinion of our shareholders and will take the results of this advisory vote into account when making future decisions regarding our executive compensation program.

The Board recommends a vote FOR the approval, on an advisory basis, of the compensation paid to the named executive officers, as disclosed in this Proxy Statement pursuant to Item 402 of regulation S-K.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     75

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Proposal 4	Advisory Vote on the Frequency of the Advisory Vote on Executive Compensation

The Company is asking shareholders to vote, on an advisory basis, on the recommended frequency for which the Company is to hold future shareholder advisory votes on our executive compensation. We are required to hold an advisory vote on the frequency of future shareholder advisory votes on our executive compensation at least once every six years. Our shareholders last voted, on an advisory basis, on the frequency of the advisory vote on our executive compensation in 2011.

Shareholders may indicate whether they recommend, on an advisory basis, an advisory vote on executive compensation once every one, two or three years, or they may abstain from voting on this proposal. The majority of the votes cast in 2011 were for an advisory vote on executive compensation that occurs once every year (an annual vote).

After careful consideration, and in light of the strong shareholder support in 2011 for an annual vote, the Board has determined that an annual vote on our executive compensation is appropriate for the Company. We recognize the importance of receiving input from our shareholders on important issues, including our executive compensation.

The Board recommends that our shareholders select “1 Year” when voting on this Proposal 4 . While your vote on this proposal is advisory and will not be binding on the Company, the Board or the Compensation Committee, we value the opinion of our shareholders and will take the results of this advisory vote into account when making decisions regarding the frequency of future shareholder advisory votes on executive compensation.

Our Board unanimously recommends a vote of "1 Year" for the frequency of future shareholder advisory votes on executive compensation.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     76

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Proposal 5	Ratification of the Appointment of Our Independent Registered Public Accounting Firm

The Audit Committee of our Board has selected KPMG LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2017 . KPMG LLP has served as our independent public accountants since 1979. Although shareholder ratification is not required, the Board has directed that such appointment be submitted to the shareholders for ratification at the annual meeting. If our shareholders do not ratify the appointment of KPMG LLP at the annual meeting, the Audit Committee will consider such event in its selection of our Company’s independent registered public accounting firm for the 2018 fiscal year. Additionally, even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the 2017 fiscal year if it determines that such a change would be in the best interests of the Company and its shareholders. Representatives of KPMG LLP are expected to be present at the meeting, are expected to be given an opportunity to make a statement if they so desire and will be available to respond to appropriate questions of any shareholders.

Principal Accounting Fees and Services

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The aggregate fees billed by KPMG LLP in the fiscal years ended December 31, 2016 and 2015 for services are as follows (amounts in thousands):

Type of Fees	Fiscal Year Ended December 31, 2016			Fiscal Year Ended December 31, 2015
Audit Fees	$	1,292		$	1,240

Audit Fees include aggregate fees billed for professional services rendered by KPMG LLP for the audit of our annual financial statements, audit of our internal control over financial reporting and review of financial statements included in our Forms 10-Q and services that are normally provided by the principal auditor (e.g., comfort letters, statutory audits, consents and assistance with and review of documents filed with the SEC) in the fiscal years ended December 31, 2016 and 2015 . There were no tax or other non-audit services provided by KPMG LLP.

Audit Committee’s Pre-Approval Policies and Procedures

The Audit Committee has established a policy for the pre-approval of audit and non-audit services performed for us by the independent auditors, which also specifies the types of services that the independent auditors may and may not provide to us. The policy provides for general pre-approval of services and specific case-by-case approval of certain services. The services that are pre-approved include audit services and audit-related services, such as due diligence services pertaining to potential business acquisitions and dispositions, and may also include other services. The Audit Committee approved all of the fees and services described above. At the present time, we use a third party other than KPMG LLP to prepare our tax returns and assist with tax-compliance issues. The term of any pre-approval is twelve months and is generally subject to certain specific budgeted amounts or ratios, as determined by the Audit Committee. The Audit Committee may revise the list of general pre-approved services from time to time based on subsequent determinations. Unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committee. Any proposed services which were addressed in the pre-approval, but which exceed pre-approved cost levels or budgeted amounts, will also require specific pre-approval by the Audit Committee. The Audit Committee does not delegate its responsibilities concerning pre-approval of services to management. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for services performed to date.

During the fiscal year ended December 31, 2016 , no pre-approval requirements were waived pursuant to the limited waiver provisions in applicable rules of the SEC.

Our Board unanimously recommends a vote “FOR” the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017 .

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     77

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OTHER INFORMATION

Expenses Related to this Proxy Solicitation

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We will pay all expenses relating to this proxy solicitation. We retained Okapi Partners to assist in the solicitation of proxies. Okapi Partners will receive an aggregate fee of $9,000 , plus out-of-pocket expenses. We also agreed to indemnify Okapi Partners against certain liabilities arising out of or in connection with this engagement. In addition to solicitation by mail, employees of Okapi Partners , and our officers, directors and regular employees may solicit proxies in person or by telephone or other electronic communication without extra compensation for that activity. We also expect to reimburse banks, brokers and other persons for reasonable out-of-pocket expenses in forwarding proxy materials to beneficial owners of our common stock and obtaining the proxies of those owners.

Date for Submission of Shareholder Proposals

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Under the currently effective rules the SEC has established, any shareholder who wishes to have a qualified proposal considered for inclusion in our proxy statement for our 2018 Annual Meeting of Shareholders must send notice of the proposal to our Corporate Secretary at our principal executive offices, 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209, so that we receive such notice by no later than December __, 2017 , unless the date of our 2018  Annual Meeting of Shareholders is more than 30 days from the anniversary date of our 2017 Annual Meeting of Shareholders, in which case the deadline is a reasonable time before we print and mail our proxy materials for the 2018  Annual Meeting of Shareholders. If you submit a shareholder proposal, you must provide your name and address, the number of shares of common stock you hold of record or beneficially, the date or dates on which you acquired those shares and documentary support for any claim of beneficial ownership.

In addition, our bylaws establish an advance notice procedure for shareholder proposals to be brought before an annual meeting. In general, the procedure provides that shareholders must submit proposals to us in writing containing certain information specified in our bylaws not more than 180 days and not less than 90 days prior to the first anniversary of our preceding year’s annual meeting. Accordingly, in order to be brought before our 2018 Annual Meeting of Shareholders, any such proposal must be submitted so that we receive the proposal no earlier than the close of business on November 18, 2017 and no later than the close of business on February 16, 2018 . Shareholders should submit any such proposals to our Corporate Secretary at Pioneer Energy Services Corp., 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209. These requirements are in addition to the SEC’s requirements that a shareholder must comply with to have a shareholder proposal included in our proxy statement.

Householding

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The SEC permits a single set of annual reports and proxy statements to be sent to any household at which two or more shareholders reside if they appear to be members of the same family. Each shareholder continues to receive a separate proxy card. This procedure, referred to as householding, reduces the volume of duplicate information shareholders receive and reduces our mailing and printing expenses. A number of brokerage firms have instituted householding.

As a result, if you hold your shares through a broker and you reside at an address at which two or more shareholders reside, you will likely be receiving only one annual report and proxy statement unless any shareholder at that address has given the broker contrary instructions. However, if any such beneficial shareholder residing at such an address wishes to receive a separate annual report or proxy statement in the future, or if any such beneficial shareholder that elected to continue to receive separate annual reports or proxy statements wishes to receive a single annual report or proxy statement in the future, that shareholder should contact their broker or send a request to our Corporate Secretary at our principal executive offices, 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209, telephone number (855) 884-0575. We will deliver, promptly upon written or oral request to the Corporate Secretary, a separate copy of the 2016 annual report and this proxy statement to a beneficial shareholder at a shared address to which a single copy of the documents was delivered.

Annual Report and Additional Materials

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Our annual report for the fiscal year ended December 31, 2016 is being distributed with this proxy statement. Copies of our annual report on Form 10-K for such period (including the financial statements and the financial statement schedules, if any, required to be filed with the Securities and Exchange Commission pursuant to Rule 13a-1 for our most recent fiscal year, but excluding exhibits) may be obtained without charge upon written or oral request to our Corporate Secretary at our principal executive offices, 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209, telephone number (855) 884-0575.

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     78

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Other Matters

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Our Board does not intend to bring any other matters before the annual meeting and has not been informed that any other matters are to be properly presented by others. If any other matters properly come before the annual meeting, the persons named in the enclosed form of proxy will vote all proxies according to their discretion.

	By Order of the Board
	Carlos R. Peña
	Executive Vice President, President of Production Services Segment, General Counsel, Secretary and Compliance Officer

San Antonio, Texas

April __, 2017

PIONEER ENERGY SERVICES CORP. – 2017 Proxy Statement     79

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