UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.     )

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

APERGY CORPORATION

(Name of Registrant as specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

Notice of Annual Meeting of Shareholders

To be Held May 12, 2020

April 2, 2020

Dear Fellow Shareholders:

The 2020 Annual Meeting of Shareholders (the “Meeting”) of Apergy Corporation (“Apergy” “we,” “our,” “us” or the “Company”) will be a virtual meeting conducted exclusively via live webcast at www.meetingcenter.io/282266664 on Tuesday, May 12, 2020 at 8:00 a.m. Central Time. At the Meeting, shareholders will be asked to consider and act upon the following matters:

These items are fully described in the following pages, which are made a part of this notice.

All holders of record at the close of business on March 16, 2020 are entitled to vote at the Meeting or any postponement or adjournment thereof.

We plan to mail a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access the proxy materials and our 2019 Annual Report (which includes our 2019 Annual Report on Form 10-K), how to vote online, and how to obtain a paper copy of the proxy materials. Our 2019 Annual Report and our proxy materials are first being made available on or about April 2, 2020.

In light of on-going developments related to the coronavirus (COVID-19) and after careful consideration, our Board of Directors (the “Board”) has determined to hold a virtual annual meeting in order to facilitate shareholder attendance and participation by enabling shareholders to participate from any location and at no cost. We believe this is the right choice for Apergy at this time, as it enables engagement with our shareholders, regardless of size, resources, or physical location while safeguarding the health of our shareholders, Board and management. You will be able to attend the Meeting online, vote your shares electronically and submit questions during the meeting by visiting www.meetingcenter.io/282266664. To participate in the virtual meeting, you will need the control number printed on your Notice, proxy or voting instruction card. The password for the meeting is APY2020. The Meeting webcast will begin promptly at 8:00 a.m., Central Time. We encourage you to access the Meeting prior to the start time. If you experience technical difficulties during the check-in process or during the Meeting, support is available at https://support.vevent.com.

Your vote is very important. Whether or not you plan to attend the virtual Meeting online, we urge you to review the proxy materials and vote your shares as soon as possible. We hope you will read the Proxy Statement and the 2019 Annual Report and submit your proxy, or use telephone or Internet voting, prior to the Meeting. Even if you plan to attend the virtual Meeting online, please submit a proxy as soon as possible to ensure your shares are voted at the Meeting in accordance with your instructions.

On behalf of the Board and our management team, I extend our appreciation for your support.

JULIA WRIGHT

Senior Vice President, General Counsel and Secretary

PROXY STATEMENT 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.

Annual Meeting of Shareholders Information

Voting Matters and Board Recommendation

How to Cast Your Vote

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Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP (“PwC”) served as our independent registered public accountants for the year ended December 31, 2019 and provided certain tax and other services to us. Representatives of PwC are expected to be present online at the virtual Meeting with the opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions from shareholders. As a matter of good corporate governance, we are requesting our shareholders ratify the selection of PwC as our independent registered public accountants for the year ending December 31, 2020.

Board and Board Committees

Messrs. Fisher and Somasundaram have served on our Board since April 2018 and the remaining directors joined the Board in May 2018 at the time of our spin-off from Dover Corporation.

The standing committees of our Board are the Audit Committee (AUD), Compensation Committee (COMP), and Governance and Nominating Committee (G&N).

Our Board is currently divided into three classes which will be phased out effective at our 2022 annual meeting.

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Governance Highlights

The following actions are reflective of our commitment to transparency and good corporate governance:

Shareholder Engagement

2019 was our first full year as an independent, publicly traded Company. It was important to us to engage with our shareholders and maintain regular, constructive dialogue and solicit valuable feedback on our efforts to increase shareholder value. In 2019, we held meetings with shareholders representing 53% of our outstanding shares of common stock.

Business Highlights

2019 was an eventful and transformative year for Apergy. We executed well during a period of changing market conditions and continued to invest in delivering superior products and services to our customers. In addition, in December 2019, we announced the entry of a definitive agreement with Ecolab Inc. (“Ecolab”) for our merger with ChampionX, the upstream energy business of Ecolab created through their previous acquisitions of NALCO and Champion. Following the completion of the transaction, expected in the second quarter of 2020, Apergy, together with ChampionX, will have approximately $3.5 billion in pro forma 2019 sales, with a strong balance sheet and robust free cash flow generation. The combined company will provide greater scale, a larger geographic footprint, enhanced customer touch points, and reduced leverage supported by strong cash flow generation through the oil and gas cycle.

Executive Compensation Highlights

The Compensation Committee is committed to targeting reasonable and competitive total compensation for our executive officers, with a significant portion of compensation being performance based. In 2019:

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Our compensation program is designed to align with and drive achievement of our business strategies. Core elements include a base salary, a short-term incentive, and long-term incentives which:

Named Executive Officers

For 2019, our Named Executive Officers (“NEOs”) were:

Important Dates for 2021 Annual Meeting of Shareholders

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Corporate Citizenship

Apergy believes that how we perform as a corporate citizen is important to our success and also intrinsic as a purpose-driven company. At Apergy, we focus on collaboration with our customers, protecting the health and safety of our workforce, minimizing our impact on the environment through our products and practices, creating a culture of respect and inclusion, and supporting our local communities. Together, these characteristics are central to our role as a good corporate citizen.

Driven to Improve – Employees

In 2019, we conducted an employee engagement survey distributed globally to all employees. The survey focused on five dimensions:

We were pleased to receive survey responses from more than 75% of all employees. Our executive leadership team reviewed the results of each dimension and by question, on a consolidated basis and by function and operating business. Several strengths emerged from the responses:

The results of the survey were shared with the Company in the fourth quarter of 2019 and in keeping with our culture of continuous improvement, we have begun to develop action plans to maintain the strengths identified in the surveys, as well as identify and implement improvements for the areas receiving less favorable responses. Overall, the survey provided valuable feedback on our efforts to fulfill our purpose of improving lives, including providing a rewarding workplace for our employees. We are pleased to see that employees feel engaged with our purpose and connect with our customers, suppliers and communities on a differentiated basis with the goal of achieving extraordinary results.

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Driven to Improve – Our Communities

Apergy’s vision is clear: improving lives. We are proud to share that Apergy employees contributed in excess of 5,000 hours of volunteer time in 2019, benefitting more than 100,000 people globally through our efforts. The following are just a few of the many examples of the ways in which we worked to give back and enhance the lives of people in our neighborhoods and communities:

Some of the additional organizations we were honored to support in 2019 include:

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Distinctive Strategic Vision and Operating Philosophy

At Apergy, we operate with a customer-centric culture and have a relentless focus on working collaboratively with our customers to solve problems. This culture is a result of our distinctive strategic vision that is focused on improving the lives of our customers, our employees, our shareholders, and the communities where we live and work. We believe that staying committed to this purpose and our operating culture will differentiate us in the marketplace and will align the goals of the organization towards achieving extraordinary results. Our vision and philosophy is best represented as below:

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TABLE OF CONTENTS

Apergy Corporation

2445 Technology Forest Boulevard

Building 4, 12^th Floor

The Woodlands, Texas 77381

www.apergy.com

PROXY STATEMENT

GENERAL INFORMATION ABOUT THE ANNUAL MEETING

We are providing this Proxy Statement to our shareholders in connection with the solicitation of proxies by Apergy’s Board of Directors (the “Board”) for use at our 2020 Annual Meeting of Shareholders (the “Meeting”). We plan to mail a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access the proxy materials and our 2019 Annual Report (which includes our 2019 Annual Report on Form 10-K), how to vote online, and how to obtain a paper copy of the proxy materials. Our 2019 Annual Report and our proxy materials are first being made available on or about April 2, 2020.

Date, Place and Time of Meeting

The 2020 Annual Meeting of Shareholders will be conducted virtually and exclusively via live webcast at www.meetingcenter.io/282266664 on Tuesday, May 12, 2020 at 8:00 a.m. Central Time. The password for the meeting is APY2020.

Record Date

The record date for determining shareholders eligible to vote online at the virtual Meeting was March 16, 2020. As of the close of business on that date, we had outstanding 77,493,876 shares of common stock. Each share of common stock is entitled to one vote on each matter and shareholders may not cumulate their votes.

A list of shareholders entitled to vote online at the virtual Meeting will be available for examination by any shareholder for any purpose relevant to the Meeting electronically on the virtual meeting website during the Meeting for those in attendance, and during ordinary business hours at our offices at 2445 Technology Forest Boulevard, Building 4, 12^th Floor, The Woodlands, Texas 77381 for ten days prior to the Meeting.

Quorum

For purposes of the Meeting, there will be a quorum if the holders of a majority of the shares of our common stock outstanding on the record date are present online at the virtual Meeting or by proxy. Abstentions and broker non-votes will be counted for purposes of determining whether a quorum is present.

Attending the Meeting

In light of on-going developments related to the coronavirus (COVID-19) and after careful consideration, the Board has determined to hold a virtual annual meeting in order to facilitate shareholder attendance and participation by enabling shareholders to participate from any location and at no cost.

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If your shares are registered directly in your name with our transfer agent, you do not need to register to attend the Meeting virtually. To participate in the virtual Meeting, you will need the control number included on your Notice, proxy or voting instruction card. The password for the meeting is APY2020.

If your shares are held in a stock brokerage account or by a bank or other nominee, you must register in advance to attend the Meeting virtually. To register, please request proof of your proxy power reflecting your Apergy holdings from your broker and submit it along with your name and email address to Computershare. Requests for registration must be labeled “Legal Proxy” and be received no later than 4:00 p.m., Central time on May 7, 2020. You will receive a confirmation of your registration by email after Computershare receives your registration materials. Registration materials and information should be sent:

The Meeting webcast will begin promptly at 8:00 a.m., Central Time. We encourage you to access the Meeting prior to the start time. Online check-in will begin at 7:30 a.m., Central Time, and you should allow ample time for the check-in procedures. If you experience technical difficulties during the check-in process or during the Meeting, support is available at https://support.vevent.com.

You will be able to attend the Meeting online, vote your shares electronically and submit questions during the Meeting by visiting www.meetingcenter.io/282266664. We will try to answer as many shareholder-submitted questions as time permits that comply with the meeting rules of conduct. However, we reserve the right to edit profanity or other inappropriate language, or to exclude questions that are not pertinent to meeting matters or that are otherwise inappropriate. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition.

Electronic Delivery of Proxy Materials

As permitted under SEC rules, we are mailing a Notice about the Internet Availability of our Proxy Statement and our Annual Report to shareholders (of which our 2019 Annual Report on Form 10-K is a part) instead of a paper copy of those proxy materials. We believe that this process expedites receipt of our proxy materials by shareholders, while lowering the costs and reducing the environmental impact of the Meeting. All shareholders will have the ability to access the proxy materials over the Internet and to request a paper copy by mail or an electronic copy by e-mail by following the instructions in the Notice. In addition, shareholders will have the ability to receive proxy materials over the Internet in future years.

Items of Business

There are five items scheduled to be voted on at the Meeting:

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Vote Required

A plurality of the votes cast at the Meeting is required to elect directors. Accordingly, the two nominees receiving the highest number of affirmative votes will be elected as Class II directors. Each of the other proposals require the affirmative vote of a majority of the shares present online or by proxy and entitled to vote at the Meeting. The votes on Say-on-Pay and Say-When-on-Pay are non-binding, but the Board will consider the results of the vote, including the Say-When-on-Pay choice receiving the greatest number of votes, in making future decisions.

Voting Procedures

Most holders of our common stock hold their shares beneficially through a broker, bank or other nominee rather than of record directly in their own name. As summarized below, there are some differences in the way to vote shares held of record and those owned beneficially.

If your shares are registered directly in your name with our transfer agent, you are considered the shareholder of record of those shares. As a shareholder of record, you may vote online at the virtual Meeting, or by proxy over the Internet, by telephone or by mail by following the instructions provided in our proxy materials. If you are a shareholder of record and vote electronically, by mail or by telephone without making any specific selection, then your shares will be voted FOR Items 1, 2, 3 and 5 and FOR a ONE-YEAR frequency for future Say-on-Pay votes.

If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of the shares held in “street name,” and you must follow the instructions provided by your broker or other nominee to vote your shares. As the beneficial owner, you have the right to direct your broker or other nominee on how to vote your shares and you are also invited to attend the virtual Meeting online. Your broker or other nominee will provide a voting instruction card for you to use in directing your broker or other nominee as to how to vote your shares, as well as instructions if you want to vote online at the Meeting. We strongly encourage you to instruct your broker or nominee how you wish to vote.

If you are a beneficial owner of shares and do not provide your broker or other nominee with voting instructions, the broker or other nominee will have discretionary authority to vote only on a routine matter. Brokers may vote on routine matters, such as ratification of the independent auditor, without customer voting instructions. However, brokers may not vote on non-routine matters, such as the election of directors, approval of executive compensation and frequency of advisory votes on executive compensation, without customer voting instructions. Broker-held shares that are not voted on non-routine matters are referred to as “broker non-votes”.

Effect of Abstentions and Broker Non-Votes

Broker non-votes will not affect the outcome of the vote on Items 1, 2, 3, 4 or 5.

If you specify that you wish to “abstain” from voting on an item, then your shares will not be voted on that particular item. Abstentions will not affect the outcome of the vote on Item 1. However, they will have the same effect as a vote against Item 2, Item 3, Item 4 and Item 5.

Revoking Your Proxy

If you are a shareholder of record, whether you give your proxy over the Internet, by telephone or by mail, you may revoke it at any time before it is exercised. You may enter a new vote by voting online at the virtual Meeting, electronically, by mail or by telephone so long as it is received prior to the Meeting. If you hold your shares beneficially in “street name” through a broker or other nominee, you must follow the instructions provided by your broker or nominee as to whether and how you may revoke your proxy.

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Shareholders Sharing the Same Address

SEC rules permit us to deliver only one copy of the Notice to multiple shareholders of record who share the same address and have the same last name, unless we have received contrary instructions from one or more of the shareholders. This delivery method, called “householding,” reduces our printing and mailing costs. Shareholders who participate in householding will continue to receive separate Notices.

If you are a shareholder of record who currently receives a single copy of the Notice and wishes to receive a separate copy of the Notice, or if you are currently receiving multiple copies of the Notice at the same address and wish to receive only a single copy, please write to or call the Secretary of Apergy Corporation at 2445 Technology Forest Boulevard, Building 4, 12th Floor, The Woodlands, Texas 77381, telephone: 281-403-5772.

Shareholders who are beneficial owners holding their shares in “street name” who are currently receiving multiple copies of the Notice and wish to receive only a single copy in the future, or who currently receive a single copy and wish to receive separate copies in the future, should contact their bank, broker or other holder of record to request that only a single copy or separate copies, as the case may be, be delivered to all shareholders at the shared address in the future.

Proxy Solicitation Costs

We will pay the cost of printing and mailing proxies, but we will not pay a fee to any of our officers or employees or to officers or employees of any of our subsidiaries as compensation for soliciting proxies.

Inspector of Election

A representative of Computershare will serve as the inspector of election.

Voting Results

We will announce preliminary voting results during the virtual Meeting and report final voting results within four business days of the Meeting on a Current Report on Form 8-K. You can access that Current Report on Form 8-K and our other reports we file with the SEC at our website www.investors.apergy.com or at the SEC’s website www.sec.gov. The information provided on these websites is for information purposes only and is not incorporated by reference into this Proxy Statement.

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Corporate Governance

Apergy is committed to conducting business in accordance with the highest level of ethical and corporate governance standards. Our Board periodically reviews its corporate governance practices and takes other actions to address changes in regulatory requirements, developments in governance best practices and matters raised by shareholders. The following describes some of the actions Apergy has taken to help ensure our conduct earns the respect and trust of shareholders, customers, business partners, employees and the communities in which we live and work.

Governance Guidelines and Codes

The Board has adopted written Corporate Governance Guidelines that set forth the responsibilities of the Board and the qualifications and independence of its members and the members of its standing committees. In addition, the Board adopted, among other codes and policies, a Code of Business Conduct and Ethics setting forth standards applicable to all of Apergy’s companies and employees, a Code of Ethics for our Chief Executive Officer and Senior Financial Officers applicable to our Chief Executive Officer, Chief Financial Officer, principal accounting officer and controller, and charters for each of its standing committees. All of these documents are available on our website at www.apergy.com. Any waivers to our Code of Business Conduct and Ethics for directors or employees can only be made by our Board. There were no waivers of the Code of Business Conduct and Ethics in 2019.

Board Leadership Structure

Our Board has adopted a structure whereby the Chairman of the Board is an independent director. Our Board believes that having a chairman who is independent of management provides strong leadership for the Board and helps ensure critical and independent thinking with respect to our Company’s strategy and performance. Our Chief Executive Officer (“CEO”) is also a member of the Board as the management representative. We believe this is important to make information and insight directly available to the directors in their deliberations. Our Board believes that this structure provides an appropriate, well-functioning balance between non-management and management directors that combines experience, accountability and effective risk oversight.

Risk Oversight

Senior management is responsible for day-to-day management of risks facing Apergy, including the creation of appropriate risk management policies and procedures. The Board is responsible for overseeing management in the execution of these responsibilities and for assessing the Company’s overall approach to risk management. The Board regularly assesses significant risks to the Company in the course of its review and oversight of the Company’s strategy and the Company’s annual operating plan. As part of its responsibilities, the Board and its standing committees also regularly review material strategic, operational, cybersecurity, financial, legal, compensation and compliance risks with executive officers. The Audit Committee also performs an oversight role with respect to financial, legal and compliance risks, and reports on its findings and assessments at each regularly scheduled Board meeting. The Compensation Committee considers risk in connection with its design of compensation programs, and has engaged an independent compensation consultant to assist in mitigating compensation-related risk. The Governance and Nominating Committee oversees and monitors risks relating to the Company’s governance structure and processes.

Compensation and Risk

We believe that our compensation programs are designed with appropriate risk mitigators, including:

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Change in Director Occupation

Directors who retire or substantially change their principal position of employment are required to tender their resignation from the Board to the Governance and Nominating Committee, which the Committee then considers and recommends to the Board whether to accept or reject the resignation. In 2019, Mamatha Chamarthi offered her resignation from the Board in connection with her offer to become the Chief Information Officer – North America and Asia Pacific of FCA Fiat Chrysler. The Governance and Nominating Committee, together with the other non-executive directors other than Ms. Chamarthi, determined not to accept Ms. Chamarthi’s resignation in consideration of the expansive experience provided by her new role at FCA Fiat Chrysler and the unique perspective such experience would provide on the Board, as well as other relevant matters.

Succession Protocols

The Governance and Nominating Committee reviews emergency CEO succession protocols, developed by management, to ensure effective communications with the Board and other stakeholders in the event that the CEO is unable to perform the powers and duties of the office either temporarily or permanently due to resignation, retirement, death, illness or other disability. The Governance and Nominating Committee also proposes revisions to the emergency CEO succession protocols from time to time as appropriate.

Director Attendance at Shareholders Meetings

Recognizing that director attendance at our Meeting can provide our shareholders with an opportunity to communicate with the directors about matters affecting the Company, our directors are encouraged to attend the Meeting. All of our directors attended the 2019 annual meeting of shareholders.

Stock Ownership Guidelines

Our Board has adopted a policy that requires executive officers to hold a number of shares with a value at least equal to a pre-determined multiple of each executive officer’s annual salary within five years from the date the executive becomes subject to the guidelines. This policy is discussed in the “Additional Executive Compensation Governance Considerations” section of the Compensation Discussion and Analysis. In addition, each independent director is expected to hold a number of shares with a value at least equal to five times the base annual cash compensation paid to each such director during the period he or she is a director. See the section titled “Director Compensation” for additional information.

Anti-Hedging and Anti-Pledging Policy

The Board has adopted a Securities Trading Policy which prohibits directors, officers, and certain other employees from pledging (subject to limited exceptions) or hedging shares of Apergy stock.

Directors’ Meetings

During 2019, the Board met thirteen times. Each director attended at least 75% of the meetings of the Board and the Board committees on which the director served. The Board conducts executive sessions in conjunction with its

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regularly scheduled meetings at least quarterly without management representatives present. Mr. Rabun, as Chairman of the Board, presides at these sessions. If Mr. Rabun is determined to no longer be an independent director or is not present at any of these sessions, the non-employee directors of the Board shall elect a Lead Director to preside.

Procedures for Approval of Related Person Transactions

We generally do not engage in transactions in which our executive officers or directors, any of their immediate family members or any shareholders holding 5% or more of our outstanding common stock have a material interest. Should a proposed transaction or series of similar transactions involve any such persons and in an amount that exceeds $120,000, the transaction would be reviewed by the Governance and Nominating Committee in accordance with the Related Person Transactions Policy and Procedures adopted by our Board, which are posted on our website.

Under the procedures, our General Counsel determines whether a proposed transaction requires review under the policy and, if so, presents the transaction to the Governance and Nominating Committee for review and consideration at its next regularly scheduled meeting. The Governance and Nominating Committee reviews the relevant facts and circumstances of the transaction and approves, rejects or ratifies the transaction. If the proposed transaction is immaterial, the Chair of the Governance and Nominating Committee may approve the transaction and report the transaction at the next meeting of the Governance and Nominating Committee. If it is impractical to postpone the proposed transaction until the next meeting of the Governance and Nominating Committee, the Chair of such Committee decides whether to (i) approve the transaction and report the transaction at the next meeting Governance and Nominating Committee or (ii) call a special meeting of the Governance and Nominating Committee to review the transaction. Should the proposed transaction involve the CEO or enough members of the Governance and Nominating Committee to prevent a quorum, the disinterested members of the committee will review the transaction and make a recommendation to the Board, and the disinterested members of the Board will then approve, reject or ratify the transaction. No director may participate in the review of any transaction in which he or she is a related person.

There were no related party transactions during 2019 that are required to be reported in this Proxy Statement.

Communication with the Board

Shareholders and other interested parties may contact any member of the Board, as a group or individually, any committee, or the independent directors as a group, by writing to them at Apergy Corporation, c/o Secretary, 2445 Technology Forest Boulevard, Building 4, 12^th Floor, The Woodlands, Texas 77381. Our General Counsel and Secretary, an employee, reviews all communications directed to any committee and the Board. The Chair of the Audit Committee is promptly notified of any substantive communication involving accounting, internal controls, or audit matters. The Chairman of the Board is promptly notified of any other significant communication, and any Board-related matters which are addressed to a named director are promptly sent to that director. Copies of all communications are available for review by any director. Some communications, such as advertisements, business solicitations, junk mail, resumes, and any communication that is overly hostile, threatening, or illegal will not be forwarded to the Board. Communications may be made anonymously or confidentially. Confidentiality shall be maintained unless disclosure is:

Director Independence

Our Corporate Governance Guidelines provide that a significant majority of the Board and all of the members of the Audit, Compensation, and Governance and Nominating Committees must be independent from management and must meet all of the applicable criteria for independence established by the NYSE and the SEC. Our Board makes an annual determination of the independence of each director. No director may be deemed independent unless the Board determines that neither the director nor any of the director’s immediate family members has a material

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relationship with Apergy, directly or as an officer, shareholder or partner of an organization that has a material relationship with Apergy.

Our Board has determined that each director, except for Mr. Somasundaram, has no material relationship with Apergy and meets the independence requirements of the NYSE and the SEC.

Committees of the Board of Directors

Our Board has a standing Audit Committee, Governance and Nominating Committee, and a Compensation Committee. The charters adopted by the Board for each committee, that describe each committee’s responsibilities, authority and resources in greater detail, are available on our website at www.investors.apergy.com.

Board and Committee Evaluations

The Board and each of its committees conduct an annual evaluation to determine whether the Board is functioning effectively both at the Board and at the committee levels. The Board recognizes that a robust evaluation process is an essential component of strong corporate governance practices and ensuring Board effectiveness. The Governance and Nominating Committee oversees an annual evaluation process led by the committee’s Chairman and the Chairman of the Board. Each director completes a detailed written annual evaluation of the Board and the committees on which he or she serves. These Board evaluations are designed to assess the skills, qualifications, and experience represented on the Board and its committees, and to determine whether the Board and committees are functioning effectively. The process also evaluates the relationship between management and the Board, including the level of access to management, responsiveness of management, and the effectiveness of the Board’s evaluation of management performance. The results of this Board evaluation are discussed in executive session by the full Board. The results of each committee evaluation are discussed in executive session by each committee and then reported to the full Board in executive session. Changes to the Board’s and its committees’ practices are implemented as appropriate.

Audit Committee

Committee Chair

Additional Committee Members: Stephen M. Todd and Stephen K. Wagner

Primary Responsibilities: The Audit Committee is responsible for, among other matters:

The responsibilities and duties of the Audit Committee include reviewing and discussing with management and the independent auditors Apergy’s annual audited financial statements and quarterly financial statements prior to inclusion in Apergy’s Annual Report on Form 10-K or other public filings in accordance with applicable rules and regulations of the SEC.

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The Audit Committee holds regular quarterly meetings at which it meets separately with each of the Company’s independent auditors, head of internal audit, and Chief Financial Officer to assess certain matters, including the status of the independent audit process, and management’s assessment of the effectiveness of disclosure controls and procedures. In addition, the Audit Committee, as a whole, will review and meet to discuss the contents of each Form 10-Q and review and approve the Form 10-K (including the financial statements) prior to its filing with the SEC.

Independence: All members of the Audit Committee qualify as independent directors for audit committee membership according to the rules and regulations of the SEC and NYSE. All members of the Audit Committee are financially literate and qualify as an “audit committee financial expert,” as defined under SEC rules.

Please see the Audit Committee Report on page 20 for additional information on the manner in which the committee fulfilled its responsibilities in 2019.

Governance and Nominating Committee

Committee Chair

Additional Committee Members: Gary P. Luquette and Daniel W. Rabun

Primary Responsibilities: The Governance and Nominating Committee is responsible for, among other matters:

Qualification and Nominations of Directors

The Governance and Nominating Committee considers and recommends to the Board nominees for election to, or for filling any vacancy on, the Board or its committees in accordance with our by-laws, our Corporate Governance Guidelines, and the Governance and Nominating Committee’s charter. The Governance and Nominating Committee periodically reviews the requisite skills and characteristics of Board members as well as the size, composition, functioning and needs of our Board as a whole. To be considered for Board membership, a nominee for director must be an individual who has the highest personal and professional integrity, who has demonstrated exceptional ability and judgment, and who will be most effective, in conjunction with the other members of our Board, in serving the long-term interests of our shareholders.

The Governance and Nominating Committee also considers directors’ qualifications as independent directors (the Board requires that a substantial majority of its members be independent and all of the members of the Audit, Compensation, and Governance and Nominating Committees be independent), the financial literacy of members of the Audit Committee, the qualification of Audit Committee members as “audit committee financial experts,” the qualification of Compensation Committee members as “non-employee directors” and the diversity, skills, background and experiences of Board members in the context of the needs of the Board. The Governance and Nominating Committee may also consider such other factors as it may deem to be in the best interests of Apergy and our shareholders. For director nominees who are current directors, the Governance and Nominating Committee considers their history of attendance at Board and committee meetings, as well as preparation for, participation in

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and contributions to the effectiveness of those meetings in determining whether to nominate them for re-election.

The Board believes that a diverse membership having a variety of skills, styles, experience and competencies is an important feature of a well-functioning board. Accordingly, the Board believes that diversity of viewpoints, backgrounds and experience (inclusive of gender, race and age) should be a consideration in Board succession planning and recruiting, consistent with nominating only the most qualified candidates for the Board who bring the required skills, competencies and fit to the boardroom. The Board remains committed to considering board candidate slates that are as diverse as possible and, to that end, requires that diversity be a central component of search criteria for director candidates.

Whenever the Governance and Nominating Committee concludes, based on the reviews or considerations described above or due to a vacancy, that a new nominee to our Board is required or advisable, it will consider recommendations from directors, management, shareholders and, if it deems appropriate, consultants retained for that purpose. It is the policy of the Governance and Nominating Committee to consider director candidates recommended by the Company’s shareholders and apply the same criteria in considering those director candidates that it employs in considering candidates proposed from any other source. Shareholders who wish to recommend an individual for nomination should send that person’s name and supporting information to the committee, in care of the Secretary of Apergy. Shareholders who wish to directly nominate an individual for election as a director, without going through the Governance and Nominating Committee must comply with the procedures in our by-laws discussed under “Shareholder Proposals and Nominations for the 2021 Annual Meeting.”

Compensation Committee

Committee Chair

Additional Committee Members: Mamatha Chamarthi and Daniel W. Rabun

Primary Responsibilities: The Compensation Committee is responsible for, among other matters:

The Compensation Committee, meeting in executive session together with the independent directors of our Board, will approve the compensation of our CEO.

Independence: Each member of the Compensation Committee qualifies as an independent director for compensation committee membership as defined by the rules of the NYSE and our Corporate Governance Guidelines. In addition, the members of the Compensation Committee qualify as “non-employee directors” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934 (the “Exchange Act”).

Compensation Committee Interlocks and Insider Participation: None of the members of the Compensation Committee has served as an officer or employee of the Company. Further, none of the Company’s executive officers has served as a member of the board of directors or compensation committee of any entity that had one or more of its executive officers serving on the Board or the Compensation Committee.

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Item 1: Election of Directors

Our Board is currently divided into three approximately equal classes:

The Board has nominated Gary P. Luquette and Daniel W. Rabun for election at the Meeting to continue as Class II directors for a two-year term expiring at our 2022 annual meeting of shareholders.

Directors elected to succeed Class III directors in 2021 will serve for a one-year term expiring at our 2022 annual meeting of shareholders. Beginning at our 2022 annual meeting, all of our directors will stand for election each year for annual terms and our Board will no longer be divided into three classes.

Each of our current directors joined the Board in connection with our spin-off from our former parent company in May 2018 and were selected by Dover Corporation (“Dover”). Messrs. Todd and Wagner also serve on the Board of Dover. Last year, our shareholders elected Ms. Chamarthi and Mr. Todd to the Board to serve until our 2022 annual meeting of shareholders. As previously announced in connection with our proposed merger with ChampionX, immediately after the merger our Board will be increased to nine members with two additional directors designated by Ecolab. One of the Ecolab designees shall be appointed as a Class I director, and one of the Ecolab designees shall be appointed as a Class II director. None of the nominees nor any current Class III directors have been elected by our public shareholders.

In recommending Messrs. Luquette and Rabun for re-election to the Board, the Governance and Nominating Committee considered their personal and professional ethics, integrity and values, expertise, skills and understanding of the Company’s business environment, diversity of viewpoints, background and experience, and preparation for and participation at Board and committee meetings. Please see “Governance and Nominating Committee – Qualification and Nominations of Directors” for additional information on the criteria and process the Governance and Nominating Committee considers in nominating candidates for election to the Board. A description of Messrs. Luquette’s and Rabun’s individual qualifications are included in their biographical information below.

The Board recommends that you vote FOR the election of both Mr. Luquette and Mr. Rabun.

Each nominee has indicated approval of his nomination and his willingness to serve if elected. If any nominee for election becomes unavailable to serve as a director before the Meeting, an event which we do not anticipate, the persons named as proxies may vote for a substitute nominee or nominees as may be designated by our Board for election at the Meeting. Proxies cannot be voted for more than the number of nominees proposed for re-election. The two nominees receiving the highest number of votes cast will be elected as Class II directors.

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Nominees for Director Standing for Election

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Continuing Directors with Terms Expiring in 2021

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Continuing Directors with Terms Expiring in 2022

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Summary of Director Qualifications and Experience

The following table illustrates the breadth and variety of business and other experience that each of our directors brings to Apergy.

Director Compensation

We use a combination of cash and stock-based incentives to attract and retain qualified candidates to serve on the Board. In setting director compensation, we consider the significant amount of time that directors expend to fulfill their duties, the skill level required of the members of the Board and competitive practices among peer companies. We generally target our director compensation near the median of the same group of peer companies used for executive compensation. Employee directors do not receive additional compensation for their service on the Board. If a director serves for less than a full calendar year, the compensation to be paid to that director may be prorated as deemed appropriate by the Compensation Committee.

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To further align the interests of the independent directors of the Board with the Company’s shareholders, the Board has adopted stock ownership guidelines for the non-employee directors. Under the guidelines, each non-employee director is expected to own Company common stock with a value at least equal to five times the base annual cash compensation paid to such director during the period he or she serves as a director, not including any additional cash compensation paid to chairs of the Board or committees. Shares of Apergy common stock owned, RSUs subject only to time-based vesting, and shares deferred under our 2018 Equity and Cash Incentive Plan (see below) are included when determining whether an executive has met the required ownership levels. Non-employee directors are expected to meet these requirements within five years after the date of their election or appointment to the Board. Each of our directors are within the five-year transition period for meeting these requirements.

For 2019, non-employee director compensation was set as follows:

Non-employee directors are also reimbursed for all reasonable travel and out-of-pocket expenses associated with attending Board and committee meetings and continuing education seminars.

Non-employee directors may elect to defer all or a portion of their annual stock-based awards under our 2018 Equity and Cash Incentive Plan. When directors elect to defer their stock award, their deferred compensation account is credited with a number of “deferred stock units.” Each stock unit is equal in value to a share of our common stock but because it is not an actual share of our common stock it does not have any voting rights. Depending on the director’s election, a non-employee director may receive the deferred compensation on the date of the director’s retirement or an earlier specified date.

2019 Director Compensation Table

The following table shows information regarding the compensation earned or paid during 2019 to non-employee directors who served on the Board during the year. The compensation paid to Mr. Somasundaram is shown in the table entitled 2019 Summary Compensation Table and the related tables. Mr. Somasundaram does not receive any additional compensation for his service as a member of the Board.

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Security Ownership of Certain Beneficial Owners and Management

The following tables set forth certain information regarding the beneficial ownership, as of March 16, 2020 (except as otherwise noted), of our common stock by:

The beneficial ownership set forth in the table is determined in accordance with the rules of the SEC. The percentage of beneficial ownership is based on 77,493,876 shares of common stock outstanding on March 16, 2020. In computing the number of shares beneficially owned by any shareholder and the percentage ownership of such shareholder, shares of common stock subject to stock-settled stock appreciation rights (“SSARs”) held by that person that are currently exercisable or exercisable within 60 days of March 16, 2020, and restricted stock units that become vested within 60 days of March 16, 2020 have been included.

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Item 2:    Ratify Appointment of Independent Registered Public Accounting Firm

The Audit Committee is responsible for the appointment, compensation, retention, oversight of the work, and evaluation of the independent registered public accountants retained to audit our financial statements. The Audit Committee has appointed PricewaterhouseCoopers LLP (“PwC”) to serve as our independent registered public accounting firm for 2020. In making this decision, the Audit Committee considered a variety of factors, including PwC’s knowledge of the Company’s business and technical expertise, the quality and candor of PwC’s communications with the Audit Committee, PwC’s independence, the quality and timeliness of the services provided by PwC (including feedback from management), and the appropriateness of PwC’s fees.

Representatives of PwC are expected to be present online at the virtual Meeting with the opportunity to make a statement if they desire to do so, and are expected to be available to respond to appropriate questions from shareholders.

Although shareholder ratification of PwC’s appointment is not required by our by-laws or otherwise, our Board is submitting the ratification of PwC’s appointment for 2020 to our shareholders as a matter of good corporate governance. If shareholders do not ratify the appointment of PwC, the Audit Committee will reconsider whether or not to retain PwC as Apergy’s independent registered public accounting firm for 2020, but will not be obligated to terminate the appointment. Even if shareholders ratify the appointment of PwC, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in Apergy’s interests.

The Board recommends that you vote FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2020.

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Audit Committee Report

The Audit Committee assists the Board in overseeing the Company’s accounting and financial reporting processes, the audit of its financial statements and internal control over financial reporting, the Company’s compliance with legal and regulatory requirements, the performance of the Company’s internal audit function, and the qualifications, independence, performance and compensation of the Company’s independent auditors. Management is responsible for the Company’s financial statements and financial reporting processes, including the systems of internal control over financial reporting and disclosure controls and procedures. The Company’s independent auditors are responsible for performing an independent audit of the Company’s financial statements and of its internal control over financial reporting and expressing an opinion as to the conformity of the Company’s financial statements with generally accepted accounting principles and the effectiveness of its internal control over financial reporting.

In 2019, in fulfilling these responsibilities, among other things the Audit Committee:

As discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, the Company has identified certain material weaknesses in its internal control over financial reporting that led management to conclude that the Company’s internal control over financial reporting and disclosure controls and procedures were not effective as of December 31, 2019. These material weaknesses are in the process of being remediated. The Audit Committee oversaw the identification and disclosure of the nature and underlying causes of the material weaknesses, the impact of the material weaknesses on the Company’s financial statements and the planned measures to remediate the material weaknesses. The Audit Committee is continuing to oversee the Company’s remediation of the material weaknesses, including receiving regular reports from management and input from PwC.

The Audit Committee also oversaw the identification and correction of certain errors through the revision of prior period financial statements discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

As noted above, the Audit Committee oversees the audits of the Company’s financial statements and internal control over financial reporting and the relationship with the independent auditors. In fulfilling its oversight responsibilities for the fiscal year ended December 31, 2019, among other things, the Audit Committee reviewed and discussed with senior members of the Company’s financial management team and PwC, the Company’s independent auditors, the overall audit scope and plan, the results of the external audit, the quality of the Company’s financial reporting, critical audit matters, and the effectiveness of the Company’s internal control over financial reporting and disclosure controls and procedures. The Committee also discussed with PwC the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC. In addition, the Committee has received the written disclosures and the letter from PwC required by the applicable requirement of the Public Company Accounting Oversight Board regarding PwC’s independence and has discussed with PwC its

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independence from the Company and its management. The Committee considered whether the provision of non-audit services by PwC to the Company is compatible with maintaining the independence of PwC, and concluded that the independence of PwC was not compromised by the provision of such services. Additionally, the Committee pre-approved all audit and non-audit services provided to the Company by PwC.

Based on its review of the financial statements and the aforementioned discussions, the Audit Committee recommended to the full Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

Respectfully submitted by the Audit Committee,

Kenneth M. Fisher, Chair

Stephen M. Todd

Stephen K. Wagner

March 1, 2020

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Fees Paid to PricewaterhouseCoopers LLP

PwC began serving as our independent registered public accounting firm in 2017. We incurred the following fees for services performed by PwC for the years indicated. All PwC services for 2018 and 2019 were approved in advance by our Audit Committee (or, prior to the spin-off, by Dover Corporation’s audit committee) in accordance with the pre-approval policies described below.

Pre-Approval of Services Provided by Independent Registered Public Accounting Firm

Consistent with its charter and applicable SEC rules, our Audit Committee pre-approves all audit and permissible non-audit services provided by PwC to us and our subsidiaries. With respect to certain services which PwC has customarily provided, the Audit Committee has adopted specific pre-approval policies and procedures, which the Audit Committee reviews at least annually. In developing these policies and procedures, the Audit Committee considered the need to ensure the independence of PwC while recognizing that, in certain situations, PwC may possess the expertise and be in the best position to advise us and our subsidiaries on issues and matters other than accounting and auditing.

The policies and procedures adopted by the Audit Committee require pre-approval by the Audit Committee of audit-related and certain non-audit-related tax and other routine and recurring services that are proposed to be performed by the independent auditor. The pre-approval of such services by the Audit Committee is effective for a fiscal year, specific as to a particular service or category of services and is subject to a limitation on fees. In addition, pre-approved services which are expected to exceed the limitation on fees require separate, specific pre-approval. For each proposed service, the independent auditor and management are required to provide information regarding the engagement to the Audit Committee at the time of approval. In evaluating whether to approve such services, the Audit Committee considers whether each service is compliant with the SEC’s rules and regulations on auditor independence.

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Item 3:    Advisory Vote to Approve Compensation of Our Named Executive Officers

We are asking our shareholders to approve, on an advisory basis, the Company’s executive compensation as reported in this Proxy Statement. As described below in the “Compensation Discussion and Analysis” section, the Compensation Committee has structured our executive compensation program to achieve the following key objectives:

We urge you to read the “Compensation Discussion and Analysis” beginning on page 25, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the 2019 Summary Compensation Table and other related compensation tables, appearing on pages 43-53, which provide detailed information on the compensation of our named executive officers. The Compensation Committee and the Board believe that the policies and procedures articulated in the “Compensation Discussion and Analysis” and the compensation of our named executive officers reported in this Proxy Statement are effective in achieving our long-term business objectives.

In accordance with Section 14A of the Exchange Act, and as a matter of good corporate governance, we are asking shareholders to approve the following advisory resolution at the Meeting:

RESOLVED, that the shareholders of Apergy Corporation (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers disclosed in the Compensation Discussion and Analysis, the 2019 Summary Compensation Table and the related compensation tables and narrative discussion in the Proxy Statement for the Company’s 2020 annual general meeting of shareholders.

This advisory resolution, commonly referred to as a “Say-on-Pay” resolution, is non-binding on our Board. Although non-binding, our Board and the Compensation Committee will review and consider the voting results when making future decisions regarding our executive compensation program.

The Board recommends that you vote FOR the advisory vote to approve the compensation of our named executive officers as disclosed in this Proxy Statement.

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Item 4:    Advisory Vote on the Frequency of Say-on-Pay Votes

As required by Section 14A(a)(2) of the Exchange Act, the Board is providing shareholders with an opportunity to provide a non-binding advisory vote to determine whether the Say-on-Pay vote should occur every one, two, or three years, or abstain.

We believe that Say-on-Pay votes should be conducted every year so that shareholders may annually express their views on the Company’s executive compensation program.

The Board recommends that shareholders vote to hold the Say-on-Pay vote every year. Shareholders are not voting, however, to approve or disapprove of this recommendation of the Board. The proxy card provides shareholders with the opportunity to choose among four choices. Specifically, shareholders are entitled to vote on whether the advisory Say-on-Pay vote should be held every one, two, or three years, or to abstain from voting.

While the result of this advisory vote on the frequency of the Say-on-Pay vote is non-binding, the Board values the views that our shareholders express in their votes. It will consider the outcome of the vote when deciding how frequently to conduct the Say-on-Pay vote.

The Board recommends that you vote to hold the advisory vote on named executive compensation every ONE YEAR.

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Compensation Discussion and Analysis

This Compensation Discussion and Analysis provides a detailed description of our compensation philosophy, objectives, policies, and practices in place during 2019, and explains the factors considered by the Compensation Committee of our Board (our “Compensation Committee” or the “Committee”) in making compensation decisions during 2019. This Compensation Discussion and Analysis focuses on the compensation of our NEOs for 2019, namely:

Overview of Key Compensation Decisions for 2019

The Compensation Committee is committed to targeting reasonable and competitive total compensation for our NEOs, with a significant portion of that compensation being performance based. The Compensation Committee met in February 2019 to review the compensation of our NEOs and considered the Company’s performance in the prior year, competitive market data from its Core Peer Group and Supplemental Industry Group, as described further below, and the Company’s strategic objectives in making compensation decisions for 2019. Apergy delivered solid financial results in 2018, and, a result of this performance, with consideration given to the competitive compensation data of our Core Peer Group and Supplemental Industry Group and the recommendations of our CEO, the Compensation Committee determined that increases in elements of compensation for our NEOs were reasonable and appropriate. A detailed discussion of the elements of our compensation program and the increases for 2019 is provided below.

During 2018, the Company undertook a study of long-term value creation for oilfield equipment and technology investors and developed our value creation algorithm. The algorithm has three key components:

To reinforce our commitment to value creation for our shareholders, the key components of the algorithm were incorporated into elements of the 2019 compensation program for our executives:

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Compensation Principles and Best Practices

Our compensation program is designed to align with and drive achievement of our business strategies and provide competitive opportunities. Accordingly, we believe our compensation philosophy supports our vision of unlocking energy and improving lives. The Compensation Committee designs our compensation program with the following objectives in mind:

Management and the Compensation Committee believe that providing significant perquisites to executive officers would not be consistent with our overall compensation philosophy. As a result, we do not provide our NEOs with social or health club memberships, company cars or allowances, financial counseling, or any other perquisites. Our NEOs participate in the same group benefit programs as we provide to our other employees in the United States, and on the same terms.

As part of our compensation review process, during 2019, our CEO made recommendations to the Compensation Committee regarding the compensation and incentives for our NEOs other than himself. In doing so, he:

Based on the CEO’s recommendations and in concert with him, our Compensation Committee’s role is to annually review and approve the compensation and incentive awards for our NEOs. In addition, the Committee regularly reviews the components of our compensation program to ensure they continue to align with the above objectives and that the program is administered in a manner consistent with established compensation policies.

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The following is a summary of our key compensation policies and practices in place during 2019 for our NEOs:

We encourage you to read the following detailed discussion and analysis of our executive compensation program, including the tables that follow the Compensation Discussion and Analysis.

Compensation Consultant

Under its charter, our Compensation Committee is authorized to retain a compensation consultant and has the sole authority to approve the consultant’s fees and other retention terms. In 2019, our Compensation Committee used the services of one compensation consulting firm, Meridian Compensation Partners, LLC (“Meridian”). Our Compensation Committee engaged and managed its relationship with the Meridian executive compensation consultants directly. In addition, Meridian reported directly to the Compensation Committee with respect to all executive and non-executive director compensation matters.

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The nature and scope of Meridian’s engagement by the Compensation Committee included advising the Compensation Committee, as it needed, with respect to all executive compensation matters under the Compensation Committee’s purview. The material elements of the instructions or directions given to Meridian with respect to the performance of its duties to the Compensation Committee included engaging Meridian to:

In connection with its engagement of Meridian and based on the information presented to it, the Compensation Committee assessed the independence of Meridian pursuant to applicable SEC and NYSE rules and concluded that Meridian’s work for the Compensation Committee did not raise any conflict of interest for 2019. Outside of providing executive and director advisory services to our Compensation Committee, Meridian provided no other services to us or our affiliates.

Peer Group

In the design and administration of our 2019 executive compensation programs for NEOs, our Compensation Committee considered competitive market data from our Core Peer Group. The Committee also used its discretion and business judgment in determining overall compensation.

Our Core Peer Group is comprised of 12 companies with primary operations in the oil and gas industry, against which we believe we compete for executive talent. The Core Peer Group used for 2019 compensation decisions consisted of the companies in the table below, which includes revenue and asset data relevant at the time these companies were utilized in determining 2019 compensation. Revenues are based on trailing 12-months as of the most recently reported quarter as of September 2018.

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The Compensation Committee will assess our Core Peer Group at least annually.

In addition to publicly available data for the Core Peer Group, a supplemental group of companies was selected to provide additional data for assessing the competitiveness of our compensation programs for our NEOs. This Supplemental Industry Group consisted of 21 companies that were participants in the Equilar Executive Compensation Survey (which was used by Meridian to analyze peer company compensation data that is not publicly available). The companies were generally selected based on company size, considering enterprise value and revenue, and the nature of their principal business operations with specific emphasis on organizations operating in the energy industry or related sectors, such as exploration & production, and manufacturing. The Supplemental Industry Group includes companies with revenues generally between 0.4 times and 4.0 times Apergy’s consolidated revenue. Apergy’s revenue was near the 25^th percentile of the Supplemental Industry Group revenues, and Apergy was near the median of the Supplemental Industry Group in enterprise value. The companies that comprised the Supplemental Industry Group for 2019 compensation decisions were: Archrock, Inc., Carrizo Oil & Gas, Inc., Chart Industries, Inc., Cimarex Energy Co., Denbury Resources Inc., EP Energy Corporation, ESCO Technologies Inc., Flowserve Corporation, Franklin Electric Co., Inc., Frank’s International N.V., Helmerich & Payne, Inc., Matrix Service Company, MRC Global Inc., Murphy Oil Corporation, Newfield Exploration Company, Oceaneering International, Inc., Oil States International, Inc., Pentair Plc, Trinity Industries, Inc., Weatherford International Plc, and WPX Energy, Inc.

Summary of 2019 Compensation to Named Executive Officers

The table below reflects target annual compensation and is not intended to replace the more detailed information provided in the 2019 Summary Compensation Table.

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Performance-Based Compensation

A significant portion of our NEOs’ target annual compensation in 2019 was performance-based compensation. The charts below show the percentage of our CEO’s and other NEOs’ 2019 total target annual compensation that is performance-based compensation and the percentage that is not performance-based compensation. The charts reflect target annual compensation and are not intended to replace the more detailed information provided in the 2019 Summary Compensation Table.

Elements of Our Executive Compensation Program

Our executive compensation program has been designed to ensure that Apergy is able to attract and retain appropriate executives for applicable positions and that our compensation plans support Apergy’s strategies, focus efforts, help achieve business success, and align with our shareholders’ interests. There is no pre-established formula for the allocation between cash and non-cash compensation or short-term and long-term compensation. Instead, each year our Compensation Committee determines, in its discretion and business judgment, the appropriate level and mix of cash and non-cash compensation and short-term and long-term incentive compensation for our NEOs to reward near-term performance and to encourage commitment to our long-range strategic business goals. To determine the appropriate combination of elements, we consider our philosophy to condition the majority of NEO compensation on Company performance.

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As illustrated in the charts below, our 2019 executive compensation program consisted of the following core elements (at target): base salary, short-term incentives (annual), and long-term incentives (service-based and performance-based). The charts are not intended to replace the more detailed information provided in the 2019 Summary Compensation Table.

In addition to the elements outlined above, our 2019 executive compensation program included the following supplemental benefits: severance and change-in-control protection and other generally available benefits, which are not reflected in the circle charts above. Each element of our executive compensation program is described below.

Base Salary

We pay our NEOs market-competitive base salaries for the skills and experience necessary to meet the requirements of each NEO’s role. To determine the salaries for our NEOs, our Compensation Committee considered market comparisons, as well as the following factors:

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No specific formula is applied to determine the weight of each factor, and the factors are considered by our Compensation Committee in its discretion. Salary reviews are conducted annually in which individual performance is evaluated; however, individual salaries are not necessarily adjusted each year. Our Compensation Committee generally establishes base salaries at competitive levels, with reference to pay levels of comparable positions in the Core Peer Group and the Supplemental Industry Group at the 25^th, 50^th and 75^th percentiles, and consideration for the factors identified above. In February 2019, the Compensation Committee reviewed our NEO’s compensation, considering the factors described above and compared to our Core Peer Group and Supplemental Industry Group. For 2019, base salaries for each of the NEOs were increased in recognition of the responsibilities of their positions, their contributions to the success of the Company in 2018, internal pay equity, and their relative position to the market.

In the fourth quarter of 2019, U.S. onshore activity deteriorated more than we anticipated, resulting in lower than expected operational results in the quarter. While both our Production & Automation Technologies and Drilling Technologies segments were impacted by slowing U.S. activity, our Drilling Technologies segment experienced a steeper than expected decline driven by the sharp decrease in the U.S. rig count, as well as the related destocking of polycrystalline diamond cutter inventories by our customers. To provide leadership from the top to the operating companies that were taking proactive cost management actions in response to such market conditions, each of our executive officers, including the NEOs, voluntarily reduced their base salary by 10% for 12 weeks beginning September 16, 2019. As a result, the salary received by our NEOs in 2019 as reflected in the 2019 Summary Compensation Table is lower than the base salary approved by the Compensation Committee in February 2019 and reflected in the table above for 2019 Base Salary.

Short-Term Incentive (Annual)

Our Compensation Committee established the Executive Officer Annual Incentive Plan (the “EAIP”) to reward NEOs for achieving targeted financial results which correlate to value creation for our shareholders and to provide a means to link cash compensation to Apergy’s short-term performance. We provide short-term incentives to motivate and reward achievement of, and performance in excess of, Apergy’s annual goals.

In February 2019, our Compensation Committee met to determine the 2019 target awards as a percentage of base salary for our NEOs under the EAIP. The target awards among our NEOs were generally set to be competitive with our Core Peer Group and Supplemental Industry Group, with reference to the target awards of similar positions at the 25^th, 50^th and 75^th percentiles. 2019 target EAIP awards for each of the NEOs were increased in recognition of the responsibilities of their positions, their contributions to the success of the Company in 2018, internal pay equity, and their relative position to the market:

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The short-term incentive award opportunities are based on a percentage of base salary assuming attainment of specified threshold, target, and maximum levels of each performance measure, as described in more detail below. Payouts range from 0%-200% based on the percentage achievement of each performance measure.

Also in February 2019, our Compensation Committee established the terms of awards under our EAIP for 2019, including the financial metrics and goals for each award. The Compensation Committee retained the design of Apergy’s 2018 EAIP structure for the NEOs with 80% weighting on financial and quantitative targets and 20% weighting on personal performance, with metrics aligned with our corporate objectives and designed to ensure a balanced view of Company performance.

The financial and quantitative measures for Apergy’s EAIP structure are as follows:

In addition to his duties as Chief Digital Officer, Mr. Raza is responsible for a certain subset of product lines within our Production & Automation Technologies segment, including products within our Quartzdyne, Windrock, Norriseal-Wellmark and Timberline businesses. Consequently, a portion of Mr. Raza’s EAIP is based upon the results of that subset of product lines and are referred to for purposes of this Proxy Statement, as “PAT Subset.”

While the EAIP awards for NEOs are determined primarily based on predetermined formulaic financial metrics aligned with the Company’s strategic and financial goals, an executive’s individual performance or specific function and functional objectives account for 20% of the EAIP award.

The Compensation Committee added an Adjusted EBITDA Margin hurdle to the EAIP measures for 2019 to further align the interests of our NEOs with those of our shareholders. The Safety, Productivity and personal performance elements of the EAIP measures for our NEOs cannot be achieved at greater than target unless Apergy’s consolidated Adjusted EBITDA Margin for 2019 meets or exceeds 23%.

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The Compensation Committee used the following performance metrics in the design of Apergy’s EAIP structure to ensure a balanced view of Company performance:

When establishing target levels for the incentive reward schedule for 2019, the Compensation Committee considered, among other things, projected Company performance, strategic business objectives, and forecasted general business and industry conditions. Generally, award target levels are intended to be competitive with total compensation at the 50th percentile of our Peer Group for good performance, and above the 50th percentile for

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consistent, outstanding performance, but our Compensation Committee also considers other factors as noted earlier in this Compensation Discussion and Analysis. Payouts for each metric can range from 0% for achievement at threshold to 200% for achievement of maximum levels and higher.

In February 2020, our Compensation Committee met to review and approve the actual results and payouts for 2019 EAIP and considered the following factors:

All dollar amounts in the tables below are in millions.

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Mr. Somasundaram successfully executed on the Company’s strategic initiatives despite market challenges that presented in the second half of 2019 with the decline in North American rig counts and capital discipline of customers. In 2019, Mr. Somasundaram implemented the value creation framework developed at the end of 2018, and effectively utilized the framework to acquire digital technology strategic to our artificial lift offering, divest of the Company’s pressure vessel business and negotiate the merger with ChampionX announced in December 2019. Mr. Somasundaram devoted significant amount of time in the second half of the year in evaluating and negotiating the transformative merger with ChampionX. Mr. Somasundaram demonstrated disciplined capital allocation consistent with the value creation framework in paying down $105 million of the Company’s term loan in 2019. Through his leadership, the Company executed and made progress on its growth initiatives, including achieving measurable year-over-year growth in diamond bearings adoption, growth in the Company’s digital offerings with the launch of several new products and addition of capabilities and partnerships, and achievement of double digit growth internationally, while achieving high customer satisfaction and employee engagement. Even though Mr. Somasundaram executed well on the strategic initiatives, in consideration of the material weaknesses in internal control over financial reporting at December 31, 2019, the Compensation Committee evaluated and agreed with Mr. Somasundaram’s recommendation to adjust his total 2019 EAIP as set forth above given his accountability as the Company’s principal executive officer.

Mr. Nutt implemented and executed the Company’s value creation framework and effectively utilized the framework to evaluate growth opportunities throughout the year and maintain the Company’s capital allocation discipline. The value creation framework also led to improvements in the Company’s working capital management in 2019 as processes were designed and implemented to provide sustainability of the improvements. Mr. Nutt also committed substantial attention to the Company’s internal control environment, focusing on both internal audit and external audit performance and aligning the organization towards maintaining effective controls. It was in the course of this work that the material weaknesses in internal control over financial reporting were identified and immediate efforts were initiated to develop remediation measures. While not identified as a strategic goal at the beginning of the year, Mr. Nutt’s efforts were also key to the negotiation and execution of the merger agreement with Ecolab for the ChampionX business. As a result, the Compensation Committee determined that the weighted achievement for Strategic Initiatives, and the adjusted total 2019 EAIP for Mr. Nutt set forth above was appropriate.

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Ms. Wright provided valuable impact in developing a strategic framework for the Company’s intellectual property portfolio and identifying and executing on opportunities to leverage resources and reduce legal expenses across the organization. The Compensation Committee also considered Ms. Wright’s efforts to reduce the Company’s risk exposure through certain policies, procedures and training throughout the Company and her support of the Audit Committee in connection with the identification and disclosure of the material weaknesses in internal control over financial reporting. While not identified as a strategic goal at the beginning of the year, Ms. Wright’s efforts were instrumental to the negotiation and execution of the merger agreement with Ecolab for the ChampionX business. In consideration of these factors, the Committee determined that the weighted achievement for Strategic Initiatives, and adjusted total 2019 EAIP as set forth above was appropriate in light of Ms. Wright’s personal performance in 2019.

In determining the appropriateness of the weighted achievement for Strategic Initiative for Mr. Mahoney, the Compensation Committee considered Mr. Mahoney’s efforts in international expansion within the Production & Automation Technologies segment, the growth and performance of the Company’s rod lift products, the performance of the Company’s electronic submersible pump business including share gain in the Permian Basin. In consideration of the factors described above, and material weaknesses within the Production & Automation Technologies segment, the Compensation Committee determined that Mr. Mahoney’s weighted achievement for Strategic Initiatives, and adjusted total 2019 EAIP as set forth above was appropriate.

The Compensation Committee considered the financial performance of the Company’s Spotlight^™ product, the sustainability of its performance and development of its capabilities, the expansion of the Company’s asset integrity management platform, the vitality of new digital product launches and customer adoption, as well as the factors described above in determining that the weighted achievement for Strategic Initiatives, and the adjusted total 2019 EAIP for Mr. Raza as set forth above was appropriate.

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If results for a metric fall between levels, linear interpolation is used to derive the final payout for that metric. In all instances, actual bonus payments under the EAIP for 2019 were subject to upward or downward adjustment at the discretion of the Compensation Committee based upon its evaluation of an NEO’s individual achievements or contributions to performance of the functions with his or her areas of responsibility. In addition, adjustments are permitted as deemed appropriate by the Committee to account for unanticipated or other significant events that warrant adjustment.

Plan awards earned for a given year generally are paid in the first quarter of the following year after the public release of our year-end financial results and after determination of the award payments by the Compensation Committee for all NEOs other than our CEO, and by the Board for our CEO. No award payment is made until the calculation of the payment award is approved by the Committee or the Board, as appropriate. Cash award payments for 2019 performance were made in March 2020.

Long-Term Equity Incentive Compensation

Long-term equity incentives are designed to motivate management to enable the Company to achieve long-term performance improvements and serve to link a significant portion of compensation to shareholder returns. The Company issues awards of long-term equity compensation from time to time consistent with the objectives and philosophy of our compensation programs under our 2018 Equity and Cash Incentive Plan (“LTIP”). We generally grant long-term equity awards annually in the first quarter to incentivize future performance.

LTIP awards provide our NEOs with a benefit that generally increases only when the value of our shares increases, which aligns their interests with increasing shareholder value. Long-term incentives are equity-based and include restricted stock units (“RSUs”) and performance share awards (“PSAs”). In determining the form or forms of LTIP award grants, the Committee considers, among other factors, the role of the executive and the ability of the executive to impact our success, as well as the appropriateness of a particular security for the individual executive.

In determining the total value of LTIP awards to be granted to each NEO, the Compensation Committee determines the award value as a nominal dollar amount in accordance with market data and considers, without giving particular weight to any specific factor, the position of the executive officer (both in terms of function and responsibilities), tenure, anticipated future contributions, and the long-term incentive compensation of similarly situated executives in our Peer Group. For 2019, each NEO’s annual LTIP awards were granted 50% as RSUs and 50% as PSAs.

Restricted Stock Unit Awards

RSUs complement the overall compensation mix for our executives by:

The RSUs granted in 2019 vest in one-third increments on the first, second, and third anniversary of the date of grant. RSUs are paid in shares of Apergy common stock and do not carry voting rights, but do earn dividend equivalents during the vesting period, to the extent any dividends are declared on our common stock.

Performance Share Awards

PSAs are intended to align the NEOs’ interests with those of our shareholders with a focus on long-term results. The PSAs awarded in 2019 are structured to be paid out, if at all, in shares of Apergy common stock, at the end of a three-year performance period based on (a) the cumulative total shareholder return (“TSR”) of our common stock relative to the TSR Performance Peer Group (listed below, and which is comprised of the same companies as our Core Peer Group for the 2019 year), and (b) return on invested capital (“ROIC”), an element the Compensation Committee added to the PSAs for 2019. In addition, an absolute TSR collar was added to the 2019 PSAs, which

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limits the amount paid on PSAs if absolute TSR is negative over the performance period. This further aligns NEOs’ interests with those of our shareholders, to limit returns on PSAs during periods where shareholder returns are also limited. The PSAs reinforce sustained long-term performance and value creation, as well as strategic planning processes, while balancing short- and long-term decision making. The Compensation Committee believes that relative TSR is an appropriate long-term performance metric because it generally reflects all elements of a company’s performance, provides a reliable means to measure relative performance, and ensures the best alignment of the interests of management and shareholders, while the absolute TSR collar ensures that relative TSR results are consistent with shareholder return. The Committee believes that ROIC is an absolute performance metric that complements the TSR elements as a measure of efficient use of capital and an indication of the Company’s progress in its value creation framework, consistent with creating shareholder value.

For the grant of the 2019 PSAs, the TSR Performance Peer Group was unchanged from 2018 and included Apergy and the following companies (or a suitable replacement selected by the Compensation Committee, if a peer company is acquired or is not the surviving company in a merger):

C&J Energy Services Inc. merged with Keane Group on October 31, 2019. In February 2020, the Compensation Committee determined to replace C&J Energy Services Inc. with Patterson-UTI Energy, Inc. in the TSR Performance Peer Group for both the 2019 PSAs and the PSAs granted in 2018.

Vesting of the 2019 PSAs is determined over a three-year performance period with a single vesting opportunity at the end of the period and based 50% on the TSR of each company in the 2019 TSR Performance Peer Group (subject to the absolute TSR collar) and 50% on Apergy’s ROIC over the performance period.

The relative TSR measurement will be calculated using the 20-trading day average stock price of each company ending December 31, 2018 compared to the 20-trading day average stock price of each company ending December 31, 2021. The payout range for the TSR portion of the 2019 PSAs is 0%-200% based on Apergy’s relative TSR rank as follows, subject to the absolute TSR collar:

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The absolute TSR collar implemented for the 2019 PSAs limits the extremes of the payout for relative TSR if it is misaligned with absolute TSR and is calculated using the 20-trading day average stock price of each company ending December 31, 2018 compared to the 20-trading day average stock price of each company ending December 31, 2021, which is then annualized. If the absolute TSR for the performance period is greater than 15%, the percentage payout for the 2019 PSAs would be at least 50%, or if such absolute TSR is less than 0%, the percentage payout for the 2019 PSAs would be capped at 100%, in each case regardless of relative TSR results for the performance period. No adjustment is made to the percentage payout based on relative TSR if the absolute TSR for the performance period is between 0% and 15%. As an example, if the Company’s relative TSR for the performance period ranks 5^th among the TSR Performance Peer Group but the Company’s absolute TSR for the performance period is negative, the percentage payout for the TSR portion of the PSA would be capped at 100%.

ROIC is generally measured as net income divided by the debt plus equity of the Company. The Compensation Committee adopted a formula for ROIC for the 2019 PSAs of operating profit times (1 – tax rate) divided by average net debt plus equity of the Company for the performance period of the 2019 through 2021 fiscal years. The percentage payout attributable to the ROIC portion of the 2019 PSAs ranges from 50%-200% as follows:

2019 LTIP Compensation

The Compensation Committee approved the following LTIP awards for the NEOs for 2019. These values may not match the accounting values presented in the Grants of Plan-Based Awards in 2019 Table.

2019 LTIP awards for certain of the NEOs were increased as reflected above in recognition of the responsibilities of their positions, their contributions to the success of the Company in 2018, internal pay equity, and their relative position to the market.

Other Benefits

Our NEOs participate in the same retirement and health and welfare programs as our other employees in the United States. In 2019, our NEOs participated in the Company’s 401(k) plan. The employer matching contributions we made pursuant to this plan are reflected in the column titled “All Other Compensation” in the 2019 Summary Compensation Table, and the notes following the table. Their health care and insurance coverage is the same as that provided to other active employees in the United States.

We do not currently provide any perquisites to our NEOs.

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Executive Severance and Change-in-Control Plans

We do not maintain individual severance or change-in-control agreements with our NEOs. However, we maintain the Apergy Corporation Executive Severance Plan (“ESP”) and the Apergy Corporation Senior Executive Change-in-Control Severance Plan (“CICSP”) to accomplish several objectives, including:

NEOs may not receive benefits under both plans as a result of the same severance event. Among other benefits, the ESP continues the NEO’s base salary for a period of twelve months and provides each NEO with a pro-rated portion of the NEO’s EAIP award paid with respect to the prior year (or, if the NEO has been employed for less than one year, an amount determined in the Compensation Committee’s discretion) if he or she is involuntarily terminated without cause. The CICSP provides a payment equal to two times the sum of executive’s base salary and his or her target EAIP award for the year in which the executive’s employment terminates or the year of the change-in-control, whichever is higher. The executive’s employment must end within eighteen months after a change-in-control either involuntarily without cause or due to the executive’s resignation for good reason to be eligible for payment under the CICSP. We believe this “double trigger” requirement is in the best interest of shareholders and is considered best practice.

Both the ESP and CICSP allow for clawback of amounts paid under the plans if the executive breaches customary confidentiality, noncompetition, non-solicitation and non-disparagement covenants entered into at the time of termination.

Details of potential payments under these plans are outlined in the “Potential Payments Upon Termination or Change-in-Control” section. These plans do not provide any excise tax gross-up protections.

Additional Executive Compensation Governance Considerations

Stock Ownership

The Compensation Committee believes requiring executives to retain shares of Apergy common stock helps align executive performance with shareholder value creation. Our stock ownership guidelines require executives to own Apergy common stock, valued as a multiple of the executive’s base salary, within five years from the date the executive becomes subject to the guidelines, as shown below:

Shares of Apergy common stock owned and RSUs subject only to time-based vesting are included when determining whether an executive has met the required ownership levels. Compliance with the stock ownership guidelines is reviewed annually. All NEOs are within the five-year period transition period for meeting these requirements.

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Clawback Policy

Our Executive Compensation Clawback Policy sets out the terms under which we may seek to recover certain compensation from our NEOs. The policy allows the Company to recoup incentive compensation, both cash bonuses and equity awards, that is paid to an executive and it is subsequently determined that such compensation would not have been earned had such compensation been calculated on the basis of restated financial results if the Board determines the restatement was the result of fraud, intentional misconduct or gross negligence of such executive. The Board will apply a three-year lookback period from the date of the restatement in applying any clawback of compensation, which may extend into the period following an executive’s employment with us.

Anti-Hedging Policy

Our Securities Trading Policy prohibits our Board and officers, as well as persons who assist in the preparation of or have access to our consolidated financial results (“Designated Persons”) from engaging in any transaction designed to hedge or offset any decrease in the market value of Apergy securities they hold. This includes any financial instrument or derivative security such short sales, puts, calls, straddles, prepaid variable forward contracts, equity swaps, collars and exchange funds.

Anti-Pledging Policy

Our Securities Trading Policy also prohibits Designated Persons from pledging Apergy securities as collateral for a loan or other obligation, subject to limited exceptions, and from holding Apergy securities in a margin account. No director or executive currently pledges any shares of Apergy common stock held by them.

No Employment Agreements

We do not enter into employment agreements with any of our NEOs.

Conclusion

In a highly competitive market for executive talent, we believe our customers’ and employees’ interests, as well as those of our shareholders and other stakeholders, are well served by our compensation program. These programs are reasonably positioned among our Peer Group and encourage and promote our compensation objectives with a strong emphasis on pay for performance. Going forward, we will continue to review our compensation plans periodically to determine what revisions, if any, should be made.

Compensation Committee Report

The Committee has reviewed and discussed the Compensation Discussion & Analysis with management.

Based on such review and discussion with management, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in our Annual Report on Form 10-K for the year ended December 31, 2019.

Respectfully submitted by the Compensation Committee:

Gary P. Luquette, Chair

Mamatha Chamarthi

Daniel W. Rabun

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Executive Compensation Tables

The following tables and accompanying narrative disclosures provide information regarding the compensation earned by or paid to our NEOs during 2019 for services performed for us.

2019 Summary Compensation Table