Executive compensation

Overview

Executives are required to carefully consider current and future risks, such as those related to climate change, and to make decisions across a broad range of business investments that generate sustainable shareholder value over the long term. The Company’s executive compensation program design aligns executives’ pay with the results of their decisions and the returns of our shareholders over the long term. The program is designed to drive long-term accountability, reward outstanding performance, and promote retention.

The Company’s strategic objectives have been established to drive sustainable value while positioning the Company for long-term success in a lower-emissions future. These objectives are translated into annual plan goals through a comprehensive process which incorporates Corporate and functional plans. Goals are incorporated in the corporate plan, which is reviewed and approved by the Board and provides the framework for the organization’s commitments.

Integrating energy transition risk management into executive compensation

The executive compensation program is designed to incentivize long-term, sustainable decision-making. Key design features include performance shares with long vesting periods and compensation that is strongly tied to the company’s performance.

The program is based on four strategic objectives that are established to drive sustainable growth in shareholder value while positioning the company for long-term success in a lower-emission future. These objectives are interdependent, with long-term business success determined by delivery in each of the strategic objectives.

Strategic objectives are integrated into the corporate plan, which is reviewed and finalized by the Board each year. This approach helps ensure accountability at all levels in the organization, as accomplishments versus the plan goals and objectives inform the level of compensation.

Financial and operating metrics tie to the company's strategic objectives and are assessed over near- and long-term time horizons. Details on the executive compensation program can be found in the company’s annual Proxy Statement.

To learn more, please review the Compensation Discussion & Analysis included in the annual Proxy Statement.