DEF 14A of SM Energy Co, Apr 4, 2024

DEF 14A of SM Energy Co

Filed Apr 4, 2024 · FY20230000893538-24-000022

Open on EDGAR

  1. Executive Compensation Philosophy and Design

    Executive Compensation Philosophy and Design Our executive compensation program is designed to align executive pay with the Company's financial, operational and environmental, social and governance (“ESG”) performance, and to incentivize the creation of positive stockholder returns throughout industry cycles. Total compensation opportunities for our NEOs are weighted heavily toward variable, performance-based awards. The primary elements of our executive compensation program include a fixed base salary targeted at the median of our comparative peer group, an annual cash incentive opportunity linked to achievement of individual and corporate performance, and a long-term equity-based compensation opportunity allocated between restricted stock units (“RSUs”), vesting ratably over a three-year period, and performance share units (“PSUs”) tied to Company performance against our peer group and other established corporate goals over a three-year period. The following table depicts the components of our 2023 compensation program:

  2. Executive Compensation Philosophy and Design

    | | Compensation Element | Duration | Description | Purpose | | FIXED | Base Salary (cash) | Short-term (annual) | Fixed compensation based on position, experience, and expertise; generally targeted at median of peer group. | Attract and retain qualified employees; provide a level of fixed pay based on skills, competencies, experience, and individual performance. | | AT-RISK | Annual Cash Bonus | Short-term (annual) | Annual cash incentive opportunity dependent upon individual and corporate performance in key financial, operational, and ESG-based metrics. | Drive superior annual performance; incentivize achievement of financial, operational, and ESG-based goals aligned with the Company’s annual business plan. Aligns payout with stockholder outcomes through modifiers that increase/decrease payout based on absolute total shareholder return (“TSR”) and adjusted free cash flow generation. | | | Restricted Stock Units | Long-term (3-year) | Time-based restricted equity that vests ratably over a three-year period. | Promotes retention and stock ownership; incentivizes long-term sustainable value creation through stock price performance. | | | Performance Share Units | Long-term (3-year) | Performance-based equity award based upon goals pertaining to adjusted free cash flow generation, absolute TSR, relative TSR, and ESG performance. | Incentivizes long-term sustainable value creation that is aligned with our strategic plan; requires a threshold level of performance to receive any payout under all metrics. |

  3. Director Nominee Core Competencies and Composition Highlights

    Director Nominee Core Competencies and Composition Highlights

  4. Director Nominee Core Competencies and Composition Highlights

    | DIRECTOR INDEPENDENCE | DIRECTOR TENURE | DIRECTOR DIVERSITY | | Eight of nine director nominees are independent. | Our director nominees provide an effective balance of fresh perspectives and experience. | Our Board is committed to maintaining an appropriately diverse and broadly inclusive membership, with five of nine director nominees gender or ethnically diverse. |

  5. Director Nominee Core Competencies and Composition Highlights

    | * As of December 31, 2023 (with the exception of Mr. Brookman, who joined the Board on February 16, 2024); a full year of credit is given for the year in which the respective directors are appointed. | Including three female and two Hispanic nominees. |

  6. Director Nominee Core Competencies and Composition Highlights

    As discussed above, the ESG Committee utilizes the framework of our Corporate Governance Guidelines to select nominees based on their skills, achievements, and experience. The overall objective is to identify a group of directors who can best collectively contribute to our long-term success. All nominees discussed below are seasoned leaders who bring to our Board a vast array of oil and gas industry, public and private company, and other business experience, all at the senior executive officer level, and who meet the director qualification standards set forth in our Corporate Governance Guidelines. In addition, the nominees, whose experiences cover various aspects of the energy and related industries, represent diverse backgrounds, skill sets, and viewpoints, with a blend of historical and newer perspectives on our Company, and have a demonstrated ability to work collaboratively with open and candid discussion. Set forth below for each director nominee is a summary of such director’s specific qualifications, experiences, attributes, and skills. We believe that each of our director nominees possesses knowledge and experience applicable to the topics set forth above. The marks above are intended to designate areas in which each director nominee has particularly prominent qualifications, characteristics, skills, or experience that they bring to the Board, and the lack of a mark is not intended to suggest such nominee is devoid of experience in such area. The skills and experiences set forth above, combined with the biographical and other information set forth below regarding each nominee’s principal occupation, business experience and public company directorships, led the ESG Committee and our Board to conclude that these individuals should continue to serve as our directors at this time in light of our business, structure, long-term strategy, and the overall energy industry environment. There are no family relationships between any of our directors and any executive officer.

  7. Director Nominees

    Director Nominees

  8. Director Nominees

    | | Business Experience •President and Chief Executive Officer (2014 – present), ECOS Consulting LLC, an energy efficiency solutions provider •Chief Executive Officer, Center for Automotive Research (2017 – 2022), a non-profit think tank that provides leading edge research to promote the sustainability of the automotive and mobility industry •Assistant Vice President of Mobility Research and Business Development (2015 – 2017), a division of the Ohio State University, College of Engineering •Senior Vice President, R&D Americas (2011 – 2014), Nissan North America, Inc. •Held a variety of technical and managerial positions with Nissan Motor Company Limited (1988 – 2011), a global automobile manufacturer •Started her career in 1978 at General Motors Company, a global automobile manufacturer, and held positions of increasing responsibility, ultimately serving as Engineer, Vehicle Test, General Motors Truck & Bus until 1988 Key Attributes, Experience and Skills •Senior Executive Leadership Experience gained over her 35 years in the automotive industry while serving in senior roles at Nissan and leading the Center for Automotive Research and ECOS Consulting, which allows her to bring to our Board a diverse technical and executive leadership background, including a unique perspective on the future of transportation fuels •Finance, Capital Management and Accounting Expertise •Human Resources Management Experience and Expertise •Corporate Governance Experience gained from her service on other public company boards including Advance Auto Parts and Eve Mobility Acquisition Corp. •Enterprise Risk Management and Hedging Experience •Cybersecurity, Data Analytics and Technology Experience Education •BS, Mechanical Engineering, Kettering University •MS, Mechanical Engineering, University of Michigan Other Public Company Boards •Advance Auto Parts (NYSE: AAP) (2020 – present), a leading automotive aftermarket parts provider •Vesuvius plc (LSE: VSVS) (2023 - present), a global leader in metal flow engineering •EVe Mobility Acquisition Corp. (NYSE: EVE) (2021 – 2024), a blank check company targeting the acquisition of a business operating in the automotive and mobility industry | | Carla J. Bailo | | | Director since 2018 | | | Member, Audit and ESG (Chair) Committees | | | Number of other public company boards: Two | | | Age: 63 | |

  9. Director Nominees

    | | Business Experience •Advisory Board, OmniEarth (2014 - 2018), which provides advanced analytics of earth imaging and offers a unique solution as a service platform to assess and manage data that can be used in a predictive role •Director, GeoScale (2014 - 2017), a privately held firm that provides advanced technology solutions and services to the E&P sector for solving subsurface problems in complex geologic formations •Senior Executive Advisor, Welltec A/S (2011 - 2016), a privately held Danish corporation that develops and provides well technology and related services for the oil and gas industry •Senior Vice President, Technology (R&D) (2007 - 2010), Vice President, Exploration and Business Development (2005 - 2007) ConocoPhillips (NYSE: COP), a multinational/integrated energy company •Started his career in 1976 as a geologist with Phillips Petroleum Company and thereafter served in various roles of increasing responsibility with Phillps Petroleum and its successor, ConocoPhillips, including serving as President, Canada and President, Australasia Key Attributes, Experience and Skills •Exploration and Production Industry Experience, Business Development Expertise, Strategic Planning and Project Management Experience, and Geology & Exploration Expertise gained during his more than 45 years in the energy industry, including extensive experience in the development of exploration and development programs, project management, and in strategic planning and research programs for upstream, downstream, and “new” stream technologies •Human Resources Management Expertise and Experience •Cybersecurity, Data Analytics and Technology Education • BA, Geology, University of Minnesota, Duluth • MS, Geology, Purdue University •PhD, Geology/Earth Sciences, Purdue University Other Public Company Boards • None | | Stephen Brand | | | Director since 2011 | | | Member, Compensation (Chair) and ESG Committees | | | Number of other public company boards: None | | | Age: 74 | |

  10. Director Nominees

    | | Business Experience •President and Chief Executive Officer of PDC Energy, Inc. (2015 - 2023), an independent exploration and production company acquired by Chevron Corporation in 2023 •Joined PDC Energy, Inc. in 2005 as Senior Vice President - Exploration and Production and served in various roles of increasing responsibility, including President and Chief Operating Officer (2014) and Executive Vice President and Chief Operating Officer (2013) •Started his career in 1984 with Ladd Petroleum; joined Patina Oil and Gas (predecessor to Snyder Oil) as a Petroleum Engineer in 1988 and served in various roles of increasing responsibility ending his service as Vice President of Operations in 2005 Key Attributes, Experience and Skills •Senior Executive Leadership Experience, Enterprise Risk Management and Hedging Experience, Exploration and Production Industry Experience and Operations Management Expertise gained during his more than 40 years in the energy industry holding roles in various aspects of oil and gas exploration and production, including President and Chief Executive Officer of PDC Energy, where he developed strong experience in upstream operations and a deep understanding of drilling and asset management technologies •Corporate Governance Experience obtained during his service as President and CEO of PDC Energy •Finance and Capital Management Expertise Education • BS, Petroleum Engineering, Colorado School of Mines • MS, Finance, University of Colorado Other Public Company Boards • None | | Barton R. Brookman | | | Director since February 2024 | | | Member, Audit and ESG Committees | | | Number of other public company boards: None | | | Age: 61 | |

  11. Director Nominees

    | | Business Experience •Spent nearly 28 years at Phelps Dodge Corporation, a North America mining company, where he held various finance and accounting positions of increasing responsibility, including Executive Vice President and Chief Financial Officer (2004 - 2007) and Senior Vice President and Chief Financial Officer (1999 - 2004) Key Attributes, Experience and Skills •Senior Executive Leadership Experience, Enterprise Risk Management and Hedging Experience, and Finance, Capital Management and Accounting Expertise acquired while serving in senior leadership positions with responsibility for the oversight of all financial operations including during his almost decade as CFO at Phelps Dodge and his public company audit committee experience •Corporate Governance Experience obtained through his board service with Elevance Health and UNS Energy Corporation •Cybersecurity, Data Analytics and Technology Education •BS, University of Arizona Other Public Company Boards •Elevance Health Inc., fka Anthem, Inc. (NYSE: ELV) (2004 – present), a provider of health plans and other healthcare related solutions | | Ramiro G. Peru | | | Director since 2014 | | | Member, Audit (Chair) and Executive Committees | | | Number of other public company boards: One | | | Age: 68 | |

  12. Director Nominees

    | | Business Experience •Spent more than 35 years at Occidental Petroleum Corporation (NYSE: OXY), an international energy company now operating under the name Oxy, serving in various exploration and geological roles across the globe with increasing responsibility and most recently served as Executive Vice President of Worldwide Exploration of Occidental Oil and Gas Corporation and Vice President of Occidental Petroleum (2007 – 2016) Key Attributes, Experience and Skills •Exploration and Production Industry Experience, Strategic Planning and Project Management Expertise and Geology & Exploration Expertise gained during her more than 42 years in various aspects of the oil and gas exploration and production industry, which resulted in the development of strong experience in the Permian Basin and a deep understanding of geology and project management •Finance, Capital Management and Accounting Expertise •Cybersecurity, Data Analytics and Technology Education •BS, Geology, Texas A&M University Other Public Company Boards •EQT Corporation (NYSE: EQT) (2018 – present), a leading independent natural gas producer •California Resources Corporation (NYSE: CRC) (2017 – 2020), a leading producer of oil and natural gas focused exclusively on California | | Anita M. Powers | | | Director since 2021 | | | Member, Audit and Compensation Committees | | | Number of other public company boards: One | | | Age: 68 | |

  13. Director Nominees

    | | Business Experience •President and Chief Executive Officer (2005 – 2015), Executive Vice President and Chief Operating Officer (2004 – 2005), Tesco Corporation (NASDAQ: TESO), an oilfield services company •Held various executive roles, including Vice President Integrated Project Management and Vice President of Marketing for the Americas Schlumberger Corporation (1999 – 2004), global technology company driving energy innovation now operating as SLB •Spent nearly 20 years in various operational and managerial roles at Unocal Corporation, an integrated E&P company Key Attributes, Experience and Skills •Senior Executive Leadership Experience, Enterprise Risk Management and Hedging Experience, Exploration and Production Industry Experience and Operations Management Expertise gained during his more than 41 years holding roles in various aspects of the oil and gas exploration and production industry, including President and Chief Executive Officer and Executive Vice President and Chief Operating Officer of Tesco Corporation and Vice President of Integrated Project Management of Schlumberger, where he developed strong experience in upstream operations and a deep understanding of drilling and asset management technologies •Executive Compensation and Human Resources Management Expertise and Experience acquired during his participation in compensation, benefits and related decisions in senior executive, public company roles •Corporate Governance Experience obtained during his service on other public company boards •Cybersecurity, Data Analytics and Technology Education •BS, Mechanical Engineering, The University of Southern California Other Public Company Boards •Newmont Mining Company (NYSE: NEM) (2015 – present), the world’s leading gold company and a producer of copper, silver, zinc and lead •California Resources Corporation (NYSE: CRC) (2020 – present), a leading producer of oil and natural gas focused exclusively on California •Basic Energy Services (NYSE: BAS) (2016 – 2021), provider of well site services to oil and gas companies | | Julio M. Quintana | | | Director since 2006 | | | Chairman of the Board; Member, Executive Committee | | | Number of other public company boards: Two | | | Age: 64 | |

  14. Director Nominees

    | | Business Experience •Senior Vice President and Chief Financial Officer (2012 – 2014), DCP Midstream GP LLC, the general partner of DCP Midstream, LP (formerly DCP Midstream Partners, LP), a Fortune 500 midstream natural gas company •Group Vice President and Chief Financial Officer (2002 – 2012), Vice President and Treasurer (2000 – 2002), DCP Midstream LLC •Vice President & Treasurer (1996 – 2000), Kinder Morgan, Inc. (formerly KN Energy, Inc.), one of the largest energy infrastructure companies in North America Key Attributes, Experience and Skills •Exploration and Production Industry Experience gained during her more than 35 years in various aspects of the oil and gas industry, including exploration and production, midstream, refining, and marketing •Senior Executive Leadership Experience, Enterprise Risk Management and Hedging Experience, and Finance, Capital Management and Accounting Expertise acquired while serving in senior leadership positions with responsibility for the oversight of all financial operations including her more than a decade as CFO at DCP Midstream •Corporate Governance Experience obtained through her service on other public company boards •Cybersecurity, Data Analytics and Technology Education •BS, Accounting, Northwest Missouri State University Other Public Company Boards •Newpark Resources, Inc. (NYSE:NR) (2018 – present), a leading provider of sustainable technologies and services across the energy industry •The Williams Companies, Inc. (NYSE: WMB) (2020 – present), an owner and operator of energy infrastructure delivering natural gas •Antero Midstream Corporation (NYSE: AM) (2019 – 2022), an Appalachian Basin midstream company •AMGP GP LLC, the general partner of Antero Midstream GP, LP (NYSE: AMGP) (2017 - 2019) | | Rose M. Robeson | | | Director since 2014 | | | Member, Compensation and ESG Committees | | | Number of other public company boards: Two | | | Age: 63 | |

  15. Director Nominees

    | | Business Experience •Spent more than 20 years holding positions of increasing responsibility including Executive Vice President, Exploration and Production (2001 – 2003), Vice President, Operations—International, Gulf of Mexico, and Alaska (2001), Vice President—International Operations (1998 – 2000), Vice President—Algeria (1995 – 1998), Vice President—U.S. Onshore Operations (1993 – 1995) at Anadarko Petroleum Corporation, a large independent oil and natural gas exploration and production company Key Attributes, Experience and Skills •Exploration and Production Industry Experience, Enterprise Risk Management and Hedging Experience, and Geology & Exploration Expertise gained over his 42 years of strong and broad experience in the oil and gas industry, with particular expertise in the exploration and production sector of the industry, where he served as a senior executive, which enables him to contribute significant independent insights on our business and operations, and the economic environment and long-term strategic issues that we face •Corporate Governance Experience obtained while serving on the boards of other companies Education •BS, Mechanical Engineering, Texas A&M University Other Public Company Boards •Tetra Technologies, Inc. (NYSE: TTI) (2007 – 2022) Chairman (2015 – 2022), a solutions provider to the upstream energy industry for completion fluids and water management, •CSI Compressco Partners GP, Inc., the general partner of CSI Compressco, L.P. (NASDAQ: CCLP) (2011 - 2021), a publicly traded limited partnership providing wellhead compression-based production enhancement services. CSI Compressco GP, Inc. was a minority-owned subsidiary of Tetra Technologies, Inc. until January 2021. •Legacy Reserves GP, LLC, which is the general partner of Legacy Reserves LP (NASDAQ: LGCY) (2006 – 2018), a limited partnership focused on the acquisition and development of producing oil and natural gas properties | | William D. Sullivan | | | Director since 2004 | | | Member, Compensation and Environmental, Social and Governance Committee | | | Number of other public company boards: None | | | Age: 67 | |

  16. Director Nominees

    | | Business Experience •Chief Executive Officer (November 2020 – present), President (July 2020 – present), Chief Operating Officer (2019 – November 2020), Executive Vice President (2019 – July 2020), Executive Vice President—Operations (2014 – 2019), Senior Vice President—Portfolio Development and Technical Services (2012 – 2014), SM Energy •Worked for 28 years at BP and ARCO, integrated energy businesses, where he held positions including most recently President of BP Energy Co. and Regional Business Unit Leader of North American Gas & Power (2010 – 2012), COO-NGL, Power & Financial Products (2009 – 2010), Managing Director Gas Europe & Africa, and Sr. VP of the Tangguh LNG Project. Started his career as a reservoir engineer with ARCO Alaska, Inc., and progressed through a series of positions of increasing responsibility in engineering, operations management, new ventures development, and business unit management at ARCO and then BP, when it acquired ARCO in 2000. Key Attributes, Experience and Skills •Senior Executive Leadership Experience, Operations Management Expertise and Enterprise Risk Management and Hedging Experience acquired while serving as CEO and COO at the Company and in senior leadership roles at BP including LNG and gas marketing and trading in London, Madrid, and Houston, and E&P in Indonesia and at ARCO in Indonesia, the Permian Basin and Alaska; all of which are critical to our success as we execute our business plan following our strategic transformation to a Company operating top tier assets •Exploration and Production Industry Experience and Geology & Exploration Expertise gained during his more than 39 years in the oil and gas industry •Cybersecurity, Data Analytics and Technology gained during his more than 39 years in the oil and gas industry Education •BS, Mechanical Engineering, University of Colorado Boulder •MSE, Mechanical Engineering, The University of Texas at Austin Other Public Company Boards •None | | Herbert S. Vogel | | | Director since 2020 | | | Member, Executive Committee | | | Number of other public company boards: None | | | Age: 63 | |

  17. Director Nominees

    | INFORMATION ABOUT OUR EXECUTIVE OFFICERS |

  18. Director Nominees

    The following table sets forth the names, ages (as of April 1, 2024) and positions of SM Energy’s executive officers:

  19. Director Nominees

    | Name | Age | Position | | Herbert S. Vogel | 63 | President, Chief Executive Officer and Director | | A. Wade Pursell | 59 | Executive Vice President and Chief Financial Officer | | James B. Lebeck | 43 | Executive Vice President and General Counsel | | Kenneth J. Knott | 59 | Senior Vice President—Business Development and Land | | Mary Ellen Lutey | 52 | Senior Vice President—Exploration, Development and EHS | | Patrick A. Lytle | 43 | Vice President—Chief Accounting Officer and Controller | | Julie T. Gray | 61 | Vice President—Marketing |

  20. Director Nominees

    Herbert S. Vogel. Mr. Vogel was appointed President and Chief Executive Officer of the Company in November 2020. Mr. Vogel previously served as the President and Chief Operating Officer of the Company since July 2020, as Executive Vice President and Chief Operating Officer of the Company since May 2019, and Executive Vice President—Operations of the Company since August 2014. Mr. Vogel joined the Company in March 2012 as Senior Vice President—Portfolio Development and Technical Services, and has over 39 years of experience in the oil and gas industry. He joined the Company after his retirement from BP, where he most recently served as the President of BP Energy Co. and Regional Business Unit Leader of North American Gas & Power. His previous roles included COO-NGL, Power & Financial Products in Houston, Managing Director Gas Europe & Africa in London, and Sr. VP of the Tangguh LNG Project in Indonesia. Mr. Vogel started his career as a reservoir engineer with ARCO Alaska, Inc., and progressed through a series of positions of increasing responsibility in engineering, operations management, new ventures development, and business unit management at ARCO and BP. A. Wade Pursell. Mr. Pursell joined the Company in September 2008 as Executive Vice President and Chief Financial Officer. Mr. Pursell was Executive Vice President and Chief Financial Officer for Helix Energy Solutions Group, Inc., a global provider of life-of-field services and development solutions to offshore energy producers and an oil and gas producer, from February 2007 to September 2008. From October 2000 to February 2007, he was Senior Vice President and Chief Financial Officer of Helix. He joined Helix in May 1997, as Vice President—Finance and Chief Accounting Officer. From 1988 through May 1997, Mr. Pursell was with Arthur Andersen LLP, serving lastly as an Experienced Manager specializing in the offshore services industry. Mr. Pursell has over 36 years of experience in the energy industry. James B. Lebeck. Mr. Lebeck was appointed Executive Vice President and General Counsel in January 2024. He rejoined the Company as Senior Vice President and General Counsel in January 2023. Mr. Lebeck has more than 16 years of experience in the energy industry. Prior to rejoining the Company, Mr. Lebeck was Vice President and Chief Legal Officer of Encino Energy from 2018 to 2023. From 2011 until 2018, Mr. Lebeck served in roles of increasing responsibility at the Company, ultimately serving as Deputy General Counsel. Prior to 2011, he practiced law at Davis Graham & Stubbs LLP in Denver and Vinson & Elkins LLP in Houston and clerked for the U.S. Court of Appeals for the Tenth Circuit in Denver. Kenneth J. Knott. Mr. Knott was appointed Senior Vice President—Business Development and Land in August 2014. He was appointed Vice President Land and Assistant Secretary in October 2012 and was appointed Vice President of Business Development & Land and Assistant Secretary in August 2008. Mr. Knott joined the Company in November 2000 as Senior Landman for the Gulf Coast region in Lafayette, Louisiana, and later assumed the position of Gulf Coast Regional Land Manager when the office was moved to Houston in March 2004. Mary Ellen Lutey. Ms. Lutey was appointed Senior Vice President—Exploration, Development and EHS in November 2020. Ms. Lutey has held various positions of increasing responsibility since first joining the Company in 2008. Most recently, she served as Senior Vice President—Development and EHS starting in December 2019. Prior to that, starting in May 2015, she was appointed Senior Vice President and Regional Manager for the South Texas and Gulf Coast business unit responsible for engineering, geoscience, operations, resource development and EHS. From December 2012 to May 2015, she served as Vice President and Regional Manager for the Company’s Mid-Continent business unit. She joined SM Energy in June 2008 as North Rockies Asset Manager. In May 2023, Ms. Lutey joined the Board of Directors of NuVista Energy Ltd. (TSX: NVA), a Canadian exploration and production company focusing on operations in the Western Canadian Sedimentary Basin. Ms. Lutey has over 31 years of technical, operating and leadership experience in the energy industry. Before joining SM Energy, Ms. Lutey worked for Chesapeake Energy and ConocoPhillips and its predecessor companies. From 1994 to 2006, she worked for Burlington Resources in numerous technical and leadership positions with responsibility in engineering, geoscience, business development, strategic planning, and resource development in the United States and Canada. Patrick A. Lytle. Mr. Lytle was appointed Vice President—Chief Accounting Officer and Controller in April 2021. Since November 2018, he served as the Company’s Controller and Principal Accounting Officer. Mr. Lytle has held roles of increasing responsibility since first joining the Company in 2007, including Senior Director, Financial Planning and Analysis and Assistant Secretary of the Company. Prior to that, he was the Director of Financial Planning and Financial Reporting. Prior to joining the Company, Mr. Lytle was an Audit Manager with Hiratsuka & Schmitt, LLP. Mr. Lytle is a certified public accountant in the State of Colorado. Julie T. Gray. Ms. Gray was appointed Vice President—Marketing in July 2023, having previously served as Director – Marketing since 2016. Ms. Gray joined the company in 2003 as Marketing Manager. Ms. Gray has over 30 years of commodities marketing experience in the oil and gas industry. Prior to joining SM Energy, Ms. Gray worked for Southern Union Gas Company since 1990, serving in the roles of Vice President of its marketing subsidiary, Mercado Gas Services, and Manager of Gas Supply. Prior to that, Ms. Gray was employed by Access Energy Corporation as a Marketing Representative. Ms. Gray began her career as a Gas Contract Analyst with Samson Resources Company. No familial relationships exist between any executive officer and any director, any other executive officer, or any person nominated to become such, except that Ms. Lutey’s husband is the Company’s Vice President— Chief Information Officer. Further details regarding the compensation paid to Ms. Lutey’s husband are described under “Certain Relationships and Related Transactions.” No executive officer has been involved in any legal proceeding that occurred within the last ten years and that is material to an evaluation of their ability or integrity as an executive officer.

  21. Director Nominees

    | COMPENSATION DISCUSSION AND ANALYSIS |

  22. Director Nominees

    This compensation discussion and analysis (“CD&A”) describes the key objectives, elements and rationale for each component of the executive compensation program for our Chief Executive Officer, our Chief Financial Officer and each of our three other most highly compensated executive officers employed at the end of the 2023 fiscal year, whom we collectively refer to in this CD&A as our “NEOs” or “Named Executive Officers.”

  23. Director Nominees

    | 2023 Named Executive Officers | | | Herbert S. Vogel | President, Chief Executive Officer and Director | | A. Wade Pursell | Executive Vice President and Chief Financial Officer | | James B. Lebeck | Executive Vice President and General Counsel | | Kenneth J. Knott | Senior Vice President—Business Development and Land | | Mary Ellen Lutey | Senior Vice President—Exploration, Development and EHS |

  24. Director Nominees

    This CD&A is divided into the following sections:

  25. Director Nominees

    | Section 1 | — | Preliminary Note About This Year’s Summary Compensation Table | | Section 2 | — | Aligning Strategy with Stockholder Value Creation: Our Compensation Philosophy and Objectives | | Section 3 | — | 2023 Business Highlights and Continuation of our Capital Return Program | | Section 4 | — | Competitive Positioning: Selection and Purpose of Our Comparative Peer Group | | Section 5 | — | Primary Elements of 2023 Compensation and Executive Compensation Results | | Section 6 | — | Compensation Determination Process | | Section 7 | — | Other Compensation Matters |

  26. SECTION 1—Preliminary Note About This Year’s Summary Compensation Table

    SECTION 1—Preliminary Note About This Year’s Summary Compensation Table •Changes to our LTIP Design in 2020 and 2021. During 2020 and 2021, in response to the global COVID-19 pandemic (the “Pandemic”) and its impact on our Company, our industry, and the broader macroeconomic environment, the Compensation Committee modified the design of our Long-Term Incentive Plan (“LTIP”) by suspending the issuance of PSUs and replacing them with performance-based cash awards. ◦The Compensation Committee made this change in order to avoid the potential for significant dilution at a time when stock prices, particularly in our industry, were severely depressed. Our Compensation Committee believed that our stock price would rebound as global health systems adjusted to the challenges presented by the Pandemic and markets stabilized—which turned out to be the case. ◦By replacing PSUs with performance-based cash awards, the Compensation Committee acted in the best interests of our stockholders to avoid the significant dilution, transfer of value, and depletion of our existing equity pool, which would have occurred if PSUs had been awarded at that time. Additionally, the Compensation Committee granted 2020 LTIP awards at 50 percent of target value, and delayed the grant of awards until December of 2020 when our stock price had begun to rebound. •The Impact of Such Changes on This Year’s Summary Compensation Table. Although the grant of performance-based cash awards was disclosed in detail in our 2021 Proxy Statement (including in the “Grant of Plan-Based Awards” table), such awards were not presented in the corresponding Summary Compensation Table. ◦This is because, pursuant to Item 402(c)(2)(vii) of Regulation S-K, non-equity incentive awards are to be presented in the Summary Compensation Table for the year in which the underlying performance metrics are satisfied and earned, which occurred in 2023, rather than the year in which the award is made. Accordingly, the Summary Compensation Table set forth in this Proxy Statement shows, in accordance with SEC rules, both the grant date fair value of our NEO’s 2023 LTIP awards (inclusive of RSUs and PSUs, which we discuss in more detail below), as well as the settlement of the 2020 performance-based cash awards that were granted in lieu of PSUs in 2020, at 50 percent of target value. ◦While at first glance the Summary Compensation Table may appear to reflect a large increase in 2023 total compensation for our NEOs who received performance-based cash awards in 2020, this is not the case. Rather, it more accurately reflects (i) the value of the earned 2020 performance-based cash awards (granted at 50 percent of target value) that were not, pursuant to SEC rules, disclosed in the Summary Compensation Table in the 2021 Proxy Statement; and (ii) the value of the 2023 LTIP awards (inclusive of PSUs), for which the grant date value is also disclosed, as required by SEC rules. We believe it is important to clarify this potential for misconception and welcome any questions our stockholders may have about the Summary Compensation Table or the 2024 Proxy Statement more generally.

  27. SECTION 2—Aligning Strategy with Stockholder Value Creation: Our Compensation Philosophy and Objectives

    | WHAT WE DO: | | | | | • | Pay-for-Performance: A significant majority of our executive pay is variable and linked to meeting our short-term and long-term financial, operational, and ESG-based goals, aligning incentives with long-term stockholder value creation. | • | Caps on Incentive Awards: Performance-based equity awards are capped at target payout if absolute TSR is negative for the performance period. Beginning in 2020, the annual cash bonus for executives with the title of Senior Vice President and above is also subject to a downward adjustment if absolute TSR is negative by 10 percent or more. | | • | Proper Incentives: Our STIP includes mechanisms to modify payout based on TSR and adjusted free cash flow performance to align incentives with our stockholders’ priorities. | • | Clawback Policy: In 2023, we adopted a clawback policy applicable to our executive officers that requires the repayment of certain incentive-based compensation following an accounting restatement resulting from material noncompliance with financial reporting requirements, and that otherwise conforms to recently enacted SEC rules and NYSE listing standards. | | • | Performance-Weighted Compensation: A significant portion of executive compensation is in the form of performance-based awards, with 60 percent of our CEO’s 2023 target LTIP value delivered in performance-based awards. | • | Equity Ownership Requirements: We require executive officers and directors to maintain meaningful ownership of our stock to ensure their interests are appropriately aligned with the long-term financial interests of our stockholders. | | • | Compensation Risk Assessment: The Compensation Committee annually reviews an analysis of our incentive compensation plans prepared by its independent compensation consultant to ensure our plans are designed appropriately and do not encourage excessive risk taking, while considering market changes and peer group comparisons. | • | ESG-Based Incentives: Quantitative and qualitative ESG metrics, including measures related to safety performance and training, spill performance, and greenhouse gas emissions (gross and methane intensity) comprise substantial weightings in our incentive plans. | | • | Target the Median: We generally target pay opportunities for our executives at the market median. | • | Independent Compensation Consultant: The Compensation Committee retains an independent compensation consultant. |

  28. SECTION 2—Aligning Strategy with Stockholder Value Creation: Our Compensation Philosophy and Objectives

    | WHAT WE DO NOT DO: | | | | | • | No Tax Gross-ups: We do not provide golden parachute excise tax payments or other tax gross-ups. | • | Prohibited Transactions: We do not permit officers, employees, or directors to enter into transactions that hedge the value of our securities owned by them, hold our securities in margin accounts, pledge our securities to secure indebtedness, or buy or sell options or derivatives with respect to our securities. | | • | Limited Severance: We typically do not provide severance benefits in the event of termination without cause, unless it is related to a change of control. | | | | • | No Single-Trigger Change of Control Severance: We do not provide “single-trigger” cash severance or equity vesting acceleration upon a change of control. | • | No Excess Perquisites: Executive perquisites are minimal and comprise a very small portion of the executive compensation package. | | • | No Dividends on Unvested Equity: We do not pay dividends on unvested restricted stock units or performance share units. | • | No Unlimited Cash Bonuses: Annual cash incentive awards are capped regardless of performance against our short-term metrics. | | • | No Guaranteed Base Salary Increases: Base salary levels are reviewed annually and periodically adjusted based on market conditions, competitiveness, and internal considerations. | • | No Employment Contracts: The employment of our executives is “at will,” and there are no written employment agreements with any executive officers. |

  29. SECTION 4—Competitive Positioning: Selection and Purpose of Our Comparative Peer Group

    SECTION 4—Competitive Positioning: Selection and Purpose of Our Comparative Peer Group Comparative Peer Group The establishment of an appropriate peer group is crucial to the design of our executive compensation program. This ensures that the total compensation opportunities provided to our executive officers are competitive in our market, considering factors such as business competition, investment dollars, and executive talent. The Compensation Committee selected our peer companies based on (i) industry, including companies in the exploration and production sector of the energy industry; (ii) organization size, with financial characteristics such as revenue, market capitalization, and enterprise value similar to those of the Company; and (iii) market competition, comprising companies that compete with us for executive talent and investors. The Compensation Committee, aided by analysis from the Compensation Committee’s independent compensation consultant, Frederic W. Cook & Co., Inc. (“FW Cook”), assesses the composition of the peer group annually to ensure it continues to remain appropriate, reflecting changes in business profile and relative size. In April 2023, the Compensation Committee approved the peer group used for 2023 compensation comparisons, which included the following companies:

  30. SECTION 4—Competitive Positioning: Selection and Purpose of Our Comparative Peer Group

    | 2023 Peer Group | | | | Antero Resources | Comstock Resources | Permian Resources | | Callon Petroleum Company | Denbury Resources Inc. | Range Resources Corporation | | Chesapeake Energy | Magnolia Oil & Gas Corporation | Southwestern Energy Company | | Chord Energy | Matador Resources Company | Vital Energy | | Civitas Resources | Northern Oil & Gas | | | CNX Resources Corporation | PDC Energy, Inc. | |

  31. SECTION 4—Competitive Positioning: Selection and Purpose of Our Comparative Peer Group

    The following chart depicts the changes to our 2023 peer group as compared to our 2022 peer group:

  32. SECTION 4—Competitive Positioning: Selection and Purpose of Our Comparative Peer Group

    | 2022 Peers Removed from 2023 Peer Group | New 2023 Peers | | EQT Corporation | Northern Oil and Gas |

  33. SECTION 5—Primary Elements of 2023 Compensation and Executive Compensation Results

    | | Compensation Element | Duration | Description | Purpose | | FIXED | Base Salary (cash) | Short-term (annual) | Fixed compensation based on position, experience, and expertise; generally targeted at median of peer group. | Attract and retain qualified employees; provide a level of fixed pay based on skills, competencies, experience, and individual performance. | | AT-RISK | Annual Cash Bonus | Short-term (annual) | Annual cash incentive opportunity dependent upon individual and corporate performance in key financial, operational, and ESG-based metrics. | Drive superior annual performance; incentivize achievement of financial, operational, and ESG-based goals aligned with the Company’s annual business plan. Aligns payout with stockholder outcomes through modifiers that increase/decrease payout based on absolute TSR and adjusted free cash flow generation. | | | Restricted Stock Units | Long-term (3-year) | Time-based restricted equity that vests ratably over a three-year period. | Promotes retention and stock ownership; incentivizes long-term sustainable value creation through stock price performance. | | | Performance Share Units | Long-term (3-year) | Performance-based equity award based upon goals pertaining to adjusted free cash flow generation, absolute TSR, relative TSR, and ESG performance. | Incentivizes long-term sustainable value creation that is aligned with our strategic plan; requires a threshold level of performance to receive any payout under all metrics. |

  34. 2023 Incentive Plan Results

    2023 Incentive Plan Results The graphic below illustrates the relationship between our STIP and LTIP performance metrics and our incentive plan results.

  35. 2023 Incentive Plan Results

    | HOW WE MEASURE PERFORMANCE | 2023 PERFORMANCE RESULTS | | PAYOUT RESULTS | | 2023 STIP METRICS(3) | 2023 STIP PERFORMANCE | | 2023 STIP PAYOUT RESULTS | | QUANTITATIVE | METRIC WEIGHTING | RESULTS(1) | | | Cash Flow | 25% | 2% above target | INITIAL STIP MULTIPLIER | | | | 1.24 multiplier(2) | (prior to application of TSR Modifier) | | Proved Developed Reserve Additions | 20% | 88% above target | 1.60x | | | | 2.00 multiplier(2) | | | Finding & Development Costs | 15% | 50% above target | FINAL STIP MULTIPLIER | | | | 2.00 multiplier | (with application of TSR Modifier) | | ESG | 15% | 16% above target | 1.65x | | | | 1.65 multiplier | | | Production Volume | 15% | 4% above target | LTIP PAYOUT RESULTS | | | | 1.36 multiplier(2) | CASH PERFORMANCE AWARD MULTIPLIER | | Cash Operating Costs | 10% | 10% above target | 1.81x | | | | 1.40 multiplier | ▪Free Cash Flow Generation: Performance ($1.67 billion) exceeded the maximum performance level ($675 million), resulting in a capped 2.0 multiplier. ▪Net Debt-to-Adjusted EBITDAX: Performance (0.74x) exceeded the maximum performance level (1.5x), resulting in a capped 2.0 multiplier. ▪ESG Metrics: Performance for all 3 ESG metrics approximated target, resulting in a 1.05 multiplier. | | QUALITATIVE | QUANTITATIVE MULTIPLIER | 1.60x multiplier | | | Exploration Success & Inventory Additions | Modifier (+/- 10%) | 0.00 | | | | | adjustment | | | | Initial STIP Multiplier Absolute TSR Modifier Final Multiplier | 1.60x 1.60 to 1.65x 1.65x | | | 2020-2023 LTIP METRICS(3) | 2020-2023 LTIP PSU PERFORMANCE | | AVG. LTIP PAYOUTS OVER TIME | | | METRIC WEIGHTING | RESULTS | 5yr. Trailing Average: 1.14x 10yr. Trailing Average: 0.84x (Target = 1.00x) | | Free Cash Flow Generation | 40% | 2.0 multiplier | | | Net Debt-to-Adjusted EBITDAX | 40% | 2.0 multiplier | | | ESG Metrics | 20% | 1.05 multiplier | | | | Final LTIP Multiplier | 1.81x | | | (1) Expressed as a percentage of performance compared to our 2023 targets. (2) Performance measured on an adjusted free cash flow basis; the multiplier is given after application of the adjusted free cash flow modifier. (3) The definitions and methods of calculating results for each of our STIP and LTIP performance metrics are given in greater detail below. | | | |

  36. Base Salary

    Base Salary Base salary is intended to provide a foundation of cash compensation that recognizes the level of responsibility, authority, and experience of each individual executive, and compensates such executive for day-to-day contributions to our success. The Compensation Committee generally sets base salaries at or near the median of our peers, but considers individual circumstances such as responsibilities, skills, and experience. The table below reflects the 2023 base salaries of each of our NEOs, which were effective as of April 2, 2023, and a comparison to their respective 2022 base salaries. Our NEOs base salary increases in 2023 reflect market adjustments based on competitive benchmarking analysis.

  37. Short-Term Incentive Plan

    Short-Term Incentive Plan Short-Term Incentive Plan—Objectives Our STIP is designed to incentivize the successful execution of our annual business plan, measured by achievement of annual Company performance goals and the individual performance of each NEO. These performance objectives are established in the first quarter of each year by the Compensation Committee in consultation with management and FW Cook. At the discretion of the Compensation Committee, these goals may be adjusted from time-to-time during the year due to significant changes in our business. We did not modify our STIP performance goals during 2023. STIP awards are paid in cash under our Cash Bonus Plan, which was last approved by our stockholders in May 2013. The Compensation Committee determines amounts earned under the STIP not only by the extent to which management achieved the designated performance goals, but also by evaluating how management achieved those goals, as well as overall market and industry conditions. The Compensation Committee’s exercise of judgment and discretion protects the STIP from having an illogical outcome if circumstances change during the year such that the formulaic goals do not reflect reasonable outcomes. For the 2023 plan year, the Compensation Committee made no changes to the prior year’s STIP design, determining that it appropriately incentivized stockholder value creation in the current environment. The 2023 STIP metrics, including weighting and target and actual performance, are reflected in the table below under the heading titled “Short-Term Incentive Plan - 2023 Performance.” Consistent with prior years, the Compensation Committee believes that generation of free cash flow is an important component of our business strategy and absolute TSR reflects the experience of our stockholders. Accordingly, the Compensation Committee continued to incorporate these metrics into the 2023 STIP design through two mechanisms: •Adjusted Free Cash Flow: The cash flow, production volume and proved developed reserve addition metrics are calculated on an adjusted free cash flow basis. Any adjustment to these metrics on the basis of the Company’s generation of adjusted free cash flow is limited to a range of 80 percent to 120 percent of the unadjusted result. •Absolute TSR Modifier: The STIP multiplier is subject to a modifier that increases payout for all employees, or decreases payout for our NEOs, if absolute TSR for the year increases or decreases by an amount between 10 and 30 percent in either direction. Specifically, if absolute TSR increases by an amount between 10 percent and 30 percent, then payout for all employees may be increased by up to 1.2 times (subject to an overall payout cap of 2.0 times), and if absolute TSR for the year decreases between negative 10 percent and negative 30 percent, then payout for our NEOs may be reduced by down to 0.8 times. The modifier is determined by interpolating the change in TSR within the stated range, capping upside adjustment at 1.2 times and limiting downside adjustment for our NEOs to 0.8 times. Each NEO is assigned a target bonus as a percentage of his or her base salary, based on the pay level that the Compensation Committee deems to be competitive and appropriate assuming all of our performance goals are achieved at the “target” level. Actual bonuses can range from zero to two times a participant’s target percentage (subject to a maximum award permitted under our Cash Bonus Plan for any participant of $2,000,000), regardless of the level of outperformance that may be achieved in any given year. Actual awards are based on the Compensation Committee’s assessment of the Company’s performance and the individual performance of each of our NEOs. Target bonuses for 2023 as a percentage of base salary for each of the NEOs were as set forth in the following table, and were not adjusted from 2022 targets based on the competitive market and relative positioning for each NEO.

  38. Short-Term Incentive Plan

    | Name | 2023 Target STIP Level, % of Base Salary | | Vogel | 120% | | Pursell | 100% | | Lebeck | 75% | | Knott | 75% | | Lutey | 75% |

  39. Short-Term Incentive Plan

    Short-Term Incentive Plan— 2023 Performance In determining 2023 annual cash bonus awards for our NEOs, the Compensation Committee assessed Company performance with respect to the six quantitative metrics and one qualitative metric described below. The Compensation Committee’s evaluation of our performance under the quantitative metrics is set forth below, and resulted in an initial multiplier of 1.60 times each NEO’s target bonus level:

  40. Short-Term Incentive Plan

    | Quantitative Goals | | | | | | | | Performance Measure | Factor Weight | Threshold | Target | Max | Actual Result | STIP Multiplier | | Cash Flow ($ in millions)(1) | 0.25 | 1,426.00 | 1,677.00 | 2,096.85 | 1,708.00 | 0.31 | | Proved Developed Reserve Additions (MMBOE)(1) | 0.20 | 45.00 | 53.00 | 66.20 | 99.50 | 0.40 | | ESG | 0.15 | 0.85 | 1.00 | 1.25 | 1.16 | 0.25 | | Finding and Development Costs ($ per BOE) | 0.15 | 24.42 | 21.23 | 15.93 | 10.72 | 0.30 | | Production Volume (MMBOE)(1) | 0.15 | 45.20 | 53.20 | 66.50 | 55.40 | 0.20 | | Cash Operating Costs ($ per BOE) | 0.10 | 15.34 | 13.34 | 10.00 | 11.96 | 0.14 | | Preliminary Result | | | | | | 1.60 |

  41. Short-Term Incentive Plan

    (1) Performance measured on an adjusted free cash flow basis; the multiplier is given after application of the adjusted free cash flow modifier. Our method of calculating our results, and the reasons that we believe such performance metrics incentivize superior business performance and stockholder value creation, are as follows:

  42. Short-Term Incentive Plan

    | Performance Measure | Description | | Cash Flow | Our cash flow target is calculated based on Adjusted EBITDAX, which represents net income (loss) before interest expense, interest income, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property abandonment and impairment expense, non-cash stock-based compensation expense, derivative gains and losses net of settlements, gains and losses on divestitures, gains and losses on extinguishment of debt, and certain other items. This measure is important because our cash flow is the primary source of funding for our ongoing capital program, working capital needs and our Capital Return Program, as well as a key factor in stockholder value creation. | | Proved Developed Reserve Additions | The proved developed reserve additions target represents the proved developed reserves estimated to be added from projects funded under our capital program during 2023. This measure is important because proved developed reserves are the primary source of future production and cash flow for us and, as such, relate directly to the value of our Company. | | ESG | In 2022, we modified the ESG component of our STIP from a qualitative to a quantitative performance metric. We maintained the quantitative nature of this metric in 2023, with goals to reduce our total recordable incident rate, spill volumes, GHG emissions intensity reduction and methane emissions intensity reduction. This measure is important because it highlights the Company’s commitment to sustainability and the importance of integrating ESG performance into our Company’s culture. | | Finding and Development Costs | Finding and development costs are a measure of the efficiency of our capital program in generating value. The finding and development costs target represents the estimated cost of proved developed reserve additions on a dollar per barrel of oil equivalent (“BOE”) basis projected under our 2023 business plan. | | Production Volume | The production volume target represents the volume of oil, gas, and NGLs forecast to be produced under our 2023 business plan. This measure is important because proceeds from the sale of production generate essentially all of our revenue. | | Cash Operating Costs | Our cash operating costs are calculated as the sum of our lease operating expenses, ad valorem taxes, transportation costs, production taxes, and general and administrative expenses (less stock compensation expense), on a per BOE basis. |

  43. Short-Term Incentive Plan

    Qualitatively, our goals were to grow the Company’s total resources by 80 MMBOE, advance our plans for upcoming inventory opportunities, recommend exploration plays and acquisition targets that are capable of competing with the Company’s future inventory, enhance our existing processes to track continental United States exploration activity, and demonstrate application of new technologies that enhance returns or inventory. With respect to these qualitative measures, the Compensation Committee may adjust the initial multiplier either upward or downward by up to 0.10. A determination of 0.00 represents performance in line with expectations during the year. Following its evaluation of the Company’s quantitative STIP metrics and initial determination of a 1.60 multiplier, the Compensation Committee determined that the Company’s performance in achieving its qualitative inventory goals was in line with expectations, and made no adjustment to the quantitative result. Based on the Company’s 2023 TSR of positive 13 percent (inclusive of dividends), the TSR modifier resulted in an upward adjustment of 0.05, yielding a total pool multiplier of 1.65, as shown in the following table:

  44. Short-Term Incentive Plan

    | STIP Multiplier | | | Initial STIP Multiplier: Quantitative Metrics | 1.60 | | STIP Multiplier: Adjusted for Qualitative Metric | 0.00 | | Final STIP Multiplier: Applying TSR Modifier (+13% TSR) | 1.65 |

  45. Short-Term Incentive Plan

    The table below sets forth our NEO’s base salaries actually earned in 2023, their target STIP payouts as a percentage of base salary, the STIP multiplier applied to each NEO’s STIP calculation, and their actual STIP payouts.

  46. Short-Term Incentive Plan

    | Name | Salary Paid in 2023 | Target STIP %(1) | STIP Multiplier | STIP | | Vogel | $814,200 | 120% | 1.65 | $1,612,116 | | Pursell | $532,834 | 100% | 1.65 | $879,000 | | Lebeck | $396,923 | 75% | 1.65 | $491,100 | | Knott | $378,499 | 75% | 1.65 | $468,300 | | Lutey | $378,499 | 75% | 1.65 | $468,300 |

  47. Short-Term Incentive Plan

    ____________________________ (1) Expressed as a percentage of base salary.

  48. Long-Term Incentive Plan

    Long-Term Incentive Plan Long-Term Incentive Plan—Design Our LTIP is an equity compensation program that typically utilizes PSUs and RSUs to compensate our NEOs and other key employees for execution of our long-term business strategy. Awards of PSUs and RSUs are issued pursuant to our 2006 Equity Incentive Compensation Plan, as amended (the “Equity Plan”), which our stockholders have approved. RSUs are generally granted with a three-year vesting schedule, with one-third of the RSUs in each grant vesting on each of the first three anniversaries of the award date. RSUs are settled in shares of our common stock at the time of vesting. PSUs are performance-based awards that are settled in shares of our common stock, with the number of resulting shares falling within a range of zero to 200 percent of the number of PSUs originally granted, dependent on the Company’s performance with respect to certain metrics determined by the Compensation Committee over a three-year performance period. Other types of long-term incentive based awards, such as the performance-based cash grants that we awarded in lieu of PSUs in 2020 and 2021, and that are discussed in more detail below, are occasionally granted with the structure of such awards being dependent upon the circumstances in which they were granted, the Compensation Committee’s design of such awards, and the business objectives sought to be achieved at the time of issuance. 2020-2023 LTIP Performance Period Results As discussed in greater detail at the beginning of the CD&A, in 2020, our Compensation Committee granted performance-based cash awards to our NEOs in lieu of PSUs to avoid the potential for significant dilution at a time when stock prices, particularly in our industry, were severely depressed as a result of the Pandemic. Additionally, the Compensation Committee granted LTIP awards at 50 percent of target value and delayed the grant of such awards until December of 2020 (rather than the typical July 1 award timeframe), which allowed for some recovery of our stock price, resulting in even less potential for excessive dilution (from the RSU grants). At the completion of the 2020-2023 performance period on June 30, 2023, performance-based cash awards were earned and settled at 181 percent of target. The three performance metrics applicable to this period are set forth in the table below, and we achieved the stated result based upon our actual performance with regard to these metrics, as compared to the targets set at the beginning of the performance period. Notably, the Company’s actual performance with regard to the Free Cash Flow Generation and Net Debt-to-Adjusted EBITDAX performance metrics, which in tandem comprised 80 percent of the weighting of the plan, significantly exceeded the high-end of the performance range, and therefore were capped at 200 percent of target payout.

  49. Long-Term Incentive Plan

    | LTIP Multiplier (2020-2023) | | | | | | | Description | Target Performance | Actual Performance | Payout Result | | Free Cash Flow Generation(1) (40%) | Measurement of gross free cash flow generation during the period beginning on July 1, 2020, and ending on June 30, 2023. | Threshold (25%): $225 Million Target (100%): $450 Million Maximum (200%): $675 Million | $1.677 Billion | 200% | | Net Debt-to-Adjusted EBITDAX(2) (40%) | Determination of the Company’s Net Debt-to-Adjusted EBITDAX ratio at the end of the performance period on June 30, 2023. | Threshold (25%): 3.0x Target (100%): 2.0x Maximum (200%): 1.5x | 0.74x | 200% | | ESG Metrics (20%) | Measurement of the Company’s performance with regard to the following metrics: GHG Emissions Intensity Reduction(3) (10%) Employee and Contractor Safety(4) (5%) Spill Performance(5) (5%) | GHG Emissions Intensity Reduction: Threshold: 25% reduction Target: 50% reduction Maximum: 75% reduction Employee and Contractor Safety and Spill Performance: Threshold: Second quartile Target: Top quartile Maximum: Top decile | GHG Emissions Intensity Reduction: 41% Employee/Contractor Safety: 74th percentile Spill Performance: 86th percentile | 105% | | LTIP Multiplier: | | | | 1.81x | | (1) Free Cash Flow is measured as net cash provided by operating activities less net cash used in investing activities excluding acquisitions and before all returns of capital. (2) Net Debt: total principal amount of outstanding senior unsecured notes plus amounts drawn on the revolving credit facility less cash and cash equivalents. Adjusted EBITDAX: net income (loss) before interest expense, interest income, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property abandonment and impairment expense, non-cash stock-based compensation expense, derivative gains/ losses net of settlements, gains/losses on divestitures, gains/losses on extinguishment of debt, and certain other items. (3) Reduction in metric tons of CO2e per gross MBoe produced (scope 1 + scope 2) from FY 2019 to FY 2022. (4) Total recordable incident rate as compared to the AXPC three-year average relative ranking. (5) Spill volumes (bbls/1000 bbls produced) as compared to the AXPC three-year average relative ranking. | | | | |

  50. Long-Term Incentive Plan

    2023-2026 LTIP Performance Period Design and Awards As noted in greater detail above, during 2020 and 2021, the Compensation Committee replaced the issuance of PSUs with performance-based cash awards under our LTIP in order to limit the potential for excessive dilution and value transfer during the Pandemic. In 2022, following recovery of commodity prices and the Company’s stock price, the Compensation Committee returned to its pre-Pandemic practice of granting equity-based PSUs rather than cash-based performance awards. The Compensation Committee retained this design in 2023, and granted LTIP awards to our NEOs with a 50 percent weighting to PSUs and a 50 percent weighting to RSUs (except for our CEO, who received a 60 percent weighting to PSUs and 40 percent weighting to RSUs). For the 2023-2026 performance period, the Compensation Committee made no changes to the prior year’s PSU performance metrics after determining that such metrics appropriately incentivized execution of our long-term business strategy and achievement of the metrics that the Compensation Committee believes are most important to our stockholders. The performance metrics and weighting comprising the PSU awards for the 2023-2026 performance period are as follows: (1) adjusted free cash flow generation (25 percent); (2) relative TSR (25 percent); (3) absolute TSR (25 percent); and (4) ESG performance (25 percent), which is further broken down by greenhouse gas emission intensity reduction (10 percent), employee and contractor safety (10 percent), and spill performance (five percent). In determining the total LTIP grant values for 2023, the Compensation Committee considered various factors, including share price performance, historical fair value transfer (or the percentage of market capitalization transferred to employees annually in the form of stock-based awards, “FVT”) under our long-term incentive compensation system compared to our peer group companies, input from FW Cook on expected trends in LTIP design and FVT for the subject period as well as the value of our compensation peers’ long term incentive awards following FW Cook’s executive compensation benchmarking review, and shares available under our Equity Plan. Following such consideration, the Compensation Committee made the following 2023 LTIP awards, which did not utilize more than half of the available shares under our Equity Plan:

  51. Long-Term Incentive Plan

    | Name | 2023 LTIP Grant Value | | Vogel | $4,999,989 | | Pursell | $2,249,983 | | Lebeck | $1,000,016 (1) | | Knott | $750,005 | | Lutey | $750,005 |

  52. Long-Term Incentive Plan

    (1) The amount reflected does not include a grant of 14,698 RSUs made in connection with Mr. Lebeck’s hiring in January 2023. Reflecting the Company’s pay-for-performance philosophy, the 2023 LTIP grants to our NEOs were weighted to performance-based awards. For our CEO, 60 percent of the long-term incentive target value consisted of PSU awards and 40 percent consisted of time-based RSUs, and for our other NEOs, 50 percent of the target long-term incentive value consisted of PSU awards with 50 percent consisting of RSUs. Participants were awarded RSUs and PSUs during the third quarter of 2023, with the PSUs subject to the measurement period beginning July 1, 2023, and ending June 30, 2026 (except for performance measures related to greenhouse gas emissions, which will be measured from January 1, 2023, through December 31, 2025). The increase in value of our NEOs’ 2023 LTIP grants as compared to 2022 LTIP grants reflects market adjustments based on competitive benchmarking analysis. The graphic below reflects the structure of our 2023 long-term incentive awards to our NEOs: (1) ESG performance metrics include reduction in greenhouse gas emissions intensity, employee and contractor safety, and spill performance. With respect to each metric, a threshold level of performance is required in order to receive any payout, a target level of performance is set to achieve target payout, and a maximum level of performance is established in order to receive maximum payout, with payout interpolated for performance falling between the minimum and maximum levels. No payout is awarded for performance below the minimum level, negative absolute TSR caps the payout at target, above median relative TSR is required for target payout with respect to the relative TSR metric and, in all cases, payout is capped if actual performance meets or exceeds the maximum level. With respect to the ESG metrics, reduction in greenhouse gas emissions intensity and employee and contractor safety each comprise 10 percent of the overall weighting of the award, whereas spill performance accounts for five percent of the overall weighting. The greenhouse gas emissions intensity reduction target is based on the Company’s projected greenhouse gas emission intensity reduction goals, and the targets for safety and spill metrics are based upon the top quartile of the trailing three-year average of reporting American Exploration Production Council members. The Compensation Committee believes that the inclusion of absolute TSR, relative TSR and adjusted free cash flow metrics incentivizes management’s continuing efforts to deliver stockholder value by aligning incentives with the long-term interests of our stockholders, while the use of ESG-focused metrics recognizes the importance of, and incentivizes management to deliver, sustainable and responsible deployment of capital for the long-term benefit of all stakeholders.

  53. SECTION 6—Compensation Determination Process

    Independent Compensation Consultant FW Cook serves as the independent executive compensation consultant for, and reports directly to, the Compensation Committee. The Compensation Committee may replace FW Cook or hire additional consultants or other advisors as it deems necessary. A Principal of FW Cook regularly attends Compensation Committee meetings and communicates with the Compensation Committee between meetings, as requested. The services that FW Cook provides, based upon direction from the Compensation Committee, include advising the Compensation Committee on the design of our executive compensation programs and the evolving best practices related thereto, providing market information and analysis regarding the competitiveness of our executive compensation opportunities, conducting compensation risk assessments, and providing analysis concerning the equity compensation practices of our peers. To facilitate the delivery of these services to the Compensation Committee, FW Cook interfaces with our management. FW Cook does not provide to us directly, or indirectly through affiliates, any non-executive compensation services, such as pension consulting or human resource outsourcing. The total consulting fees we pay to FW Cook are less than one percent of the total annual revenues of FW Cook, and FW Cook and the FW Cook consultants working with us are prohibited from owning any shares of our common stock directly, although such shares may be owned within mutual funds in which such persons hold an interest. In addition, no officer, director, stockholder or employee of FW Cook has any known personal relationship with any of our officers, directors, stockholders, or employees that would present a potential conflict to their independence. After consideration of disclosures and representations made by FW Cook concerning the foregoing, the Compensation Committee determined in 2023 that FW Cook’s work did not raise any potential conflicts of interest. FW Cook has agreed to advise the Compensation Committee if any potential conflict of interest arises that could cause FW Cook’s independence to be questioned, and not to undertake any project for our management, except at the request of the Compensation Committee and as agent for the Compensation Committee. In 2023, FW Cook did not provide any services to us other than those requested by the Compensation Committee and related to FW Cook’s engagement as the independent consultant to the Compensation Committee. Independence of the Compensation Committee Based upon the independence tests set forth in Section 303A.02 of the Corporate Governance Standards of the NYSE Listed Company Manual, our Board has determined that all members of the Compensation Committee are independent. Compensation Risk Assessment Each year, the Compensation Committee, in consultation with FW Cook, reviews and evaluates our compensation policies and practices for all employees to assess to what extent, if any, these policies and practices could result in risk taking incentives, whether our compensation policies and practices mitigate such risk taking incentives by properly aligning the interests of our employees with the interests of our stockholders, and whether risks arising from our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on us. In 2023 and 2024, the Compensation Committee determined that the risks arising from our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on us. Role of Management in Determination Process Under the oversight of our Chief Executive Officer and our Vice President—Human Resources, management provides recommendations to the Compensation Committee on matters of compensation philosophy and plan design. Our Chief Executive Officer recommends pay levels for executives, other than himself, based on competitive market data, past performance, and future potential. Our Human Resources department supports management and the Compensation Committee by providing information on historical compensation levels, employee evaluations and its analysis of comparative industry data, and by interfacing with FW Cook. While members of the management team attend Compensation Committee meetings, they are not generally present during executive sessions, and individual members of the management team are never present during discussions of their respective compensation. The Compensation Committee and our Board, as required under the charter of the Compensation Committee, make all final decisions with respect to compensation of our executive officers. Tally Sheets To enhance the analytical data the Compensation Committee uses to evaluate the compensation of our President and Chief Executive Officer and Executive Vice President and Chief Financial Officer, and to provide the Compensation Committee with a consolidated view of the aggregate value of all material elements of compensation for those executives, our Human Resources department provides the Compensation Committee and FW Cook with a tally sheet summary of all of the compensation and benefit arrangements for each of those executives, including severance arrangements and all benefits provided in connection with termination of employment. The tally sheets show the amount the executive would receive under various foreseeable circumstances (e.g., termination with or without cause, resignation, and retirement or termination in connection with change of control). The Compensation Committee does not assign a specific weighting to the tally sheets in its overall decision-making process concerning compensation, but rather uses the information provided to gain additional perspective and as a reference.

  54. SECTION 7—Other Compensation Matters

    Employee Stock Purchase Plan The purpose of our existing Employee Stock Purchase Plan (“ESPP”) is to provide an opportunity for eligible employees, including our NEOs, to purchase shares of our common stock at a discount to the market price. The plan cycle consists of two periods each year, with plan periods for the six months ending June 30 and December 31 of each year. The ESPP allows employees to purchase our common stock through payroll deductions of up to 15 percent of their base compensation. The purchase price of the stock is the lower of 85 percent of the fair market value of the stock at the beginning or ending of the period. The maximum amount an employee can purchase through the plan is the lesser of (1) $25,000 per year, pursuant to the Internal Revenue Code of 1986, as amended (“IRC”), restrictions, or (2) 2,500 shares per offering period (5,000 shares per year). Retirement Programs—Pension, Supplemental Executive Retirement Plan, 401(k) and Non-Qualified Deferred Compensation Plans Our executives are eligible to participate in our qualified, non-contributory defined benefit pension plan (the “Qualified Pension Plan”) and a 401(k) plan on the same basis as our eligible employees. Certain of our executives are also eligible to participate in our Supplemental Executive Retirement Plan (“SERP”) and Non-Qualified Deferred Compensation Plan (the “NQDC”). The SERP is an unfunded, non-qualified plan that is intended to restore the benefits that would otherwise accrue to certain executive-level employees in the absence of IRC limits on the Qualified Pension Plan. The NQDC is intended to provide executives with tax planning opportunities and the opportunity to receive the full benefit of matching contributions in excess of IRC limits applicable to our 401(k) plan. We provide these plans to remain competitive in the hiring and retention of qualified personnel, and to support our succession planning objectives with a goal of providing retirement replacement income. For certain executive-level employees, the Qualified Pension Plan, in combination with the SERP, provides a benefit after 25 years of credited service to the Company equal to 35 percent of final average compensation (or a lesser prorated percentage for qualifying employees that have not reached 25 years of credited service). Final average compensation is the average of the highest three consecutive years of the ten years preceding termination of employment. For each NEO, the level of compensation used to determine benefits payable under the Qualified Pension Plan and the SERP is that executive’s average base salary, excluding bonuses and equity compensation awarded under the LTIP. Our 401(k) plan is a defined contribution plan also intended to be qualified under the IRC and subject to the Employee Retirement Income Security Act of 1974, as amended. The 401(k) plan allows eligible employees to contribute up to 60 percent of their income on a pretax basis through contributions to the 401(k) plan, subject to annual limits determined by IRC regulations. With respect to employees who were hired prior to January 1, 2015, and who are eligible to participate in the Qualified Pension Plan, we match 100 percent of employee deferrals in cash on a dollar-for-dollar basis, up to six percent of the employee’s base salary and cash bonus. With respect to employees hired after January 1, 2015, who are not eligible to participate in the Qualified Pension Plan, we match 150 percent of employee deferrals on a dollar-for-dollar basis up to six percent of the employee’s base salary and cash bonus, which results in a nine percent cap on the Company’s matching contributions. Company contributions vest ratably on an annual basis over an employee’s first three years of employment with the Company. The NQDC is designed to provide executives with the opportunity to defer a portion of base salary and cash bonuses paid pursuant to the Cash Bonus Plan. Each year, participating employees may elect to defer (i) between zero percent and 50 percent of their base salary, and (ii) between zero percent and 100 percent of the cash bonus paid pursuant to the Cash Bonus Plan. The NQDC requires us to make contributions for each eligible employee equal to 100 percent of the deferred amount for such employee, limited to six percent of such employee’s base salary and cash bonus. Each eligible employee’s interest in the contributions we make will vest ratably on an annual basis over an employee’s first three years of employment with the Company. A participant’s account will be distributed based upon the participant’s payment election made at the time of deferral. A participant may elect to have distributions made in a lump sum or in annual installments ranging for a period from one to 10 years. Benefits and Perquisites The NEOs and all other executives are eligible to participate in our various competitive medical and dental programs on the same basis as all other employees. These plans are intended to provide benefits that support the well-being and overall health of executives and employees. Our NEOs are also provided, at no cost, consistent with all employees, group term life insurance up to two times their respective base salaries up to $2,000,000. Timing of Equity Grants Equity grants awarded as part of the LTIP and pursuant to our Equity Plan are generally made during the third quarter of each year. The Compensation Committee generally approves these grants at its June meeting. The Compensation Committee, our Board or our CEO have in the past, and may in the future, make limited off-cycle grants of equity on other dates for newly hired or other executives and other employees as part of compensation packages designed to recruit, retain, or reward such persons; however, our CEO may only make such grants to non-executives. On January 23, 2023, our Board approved an award of 14,698 RSUs, with a vesting date of January 23, 2026, in connection with the hiring of Mr. James Lebeck, the Company’s Executive Vice President and General Counsel. No Written Employment Agreements The employment of all executives is “at will,” subject to and in accordance with the terms and conditions of written offers of employment. There are no written employment agreements with any executive officers. Change of Control Severance Benefits Change of control severance protection is provided to executives at the level of Vice President and above, including each of our NEOs, and certain other key employees, through change of control executive severance agreements. See “Potential Payments Upon Termination or Change of Control—Change of Control Arrangements” for more information about these agreements and potential payments in the event of a termination of employment following a change of control. No excise tax “gross up” payments are provided. Clawback Policy

  55. SECTION 7—Other Compensation Matters

    Equity holdings include the value of unvested RSUs for purposes of these calculations, but exclude the value of unvested PSUs. Until a director or executive achieves the required ownership level, except for net settlements of equity awards for purposes of paying tax withholding obligations, such person may not sell equity without the prior approval of the Compensation Committee for the Chief Executive Officer or any Executive Vice President, and by the Chief Executive Officer for all other officers. The Compensation Committee will continue to review compliance with these guidelines annually, and more often as appropriate. Securities Trading Policy and Prohibitions on Certain Hedging Transactions We maintain a Securities Trading Policy, the overall goal of which is to inform our officers, employees, and directors of the risks of trading in public company securities at a time when they may be in possession of material, non-public information. In addition, our policy provides mechanisms to specifically address trading by officers, certain other employees and directors during prescribed periods of time when the risk of being in possession of material, non-public information is perceived to be highest, and generally prohibits our officers, certain other employees, and directors from trading in any of our securities without obtaining pre-clearance. Our policy also prohibits officers, employees, and directors from engaging in transactions designed to mitigate, off-set, or avoid the risks associated with a decrease in the market value of our securities, including: (a) entering into transactions that “hedge” the value of our stock through the use of financial instruments, such as prepaid variable forward contracts, equity swaps, collars, exchange funds, or any other instrument that permits an officer, director, or employee to own Company securities without the full risks and rewards of ownership; (b) holding our securities in margin accounts; (c) pledging our securities to secure indebtedness; (d) buying or selling options or derivatives with respect to our securities; (e) short selling Company securities; and (f) placing standing or limit orders on Company securities (other than pursuant to approved Rule 10b5-1 Plans).

  56. Summary Compensation Table

    Summary Compensation Table As noted at the beginning of the CD&A, in response to the Pandemic and its impact on our stock price, the Compensation Committee modified the design of our LTIP in 2020 and 2021 by suspending the issuance of PSUs and replacing them with performance cash awards. This change in plan design was made to avoid the potential for significant dilution and disproportionate FVT at a time when stock prices, particularly in our industry, were severely depressed. Although the grant of performance-based cash awards were disclosed in detail in our 2021 Proxy Statement, such awards were not presented in the corresponding Summary Compensation Table because, pursuant to SEC rules, non-equity incentive awards are to be presented in the Summary Compensation Table for the year in which the underlying performance metrics are satisfied and earned, which occurred in 2023, rather than the year in which the award is made. Accordingly, the Summary Compensation Table set forth below (the “SCT”) shows both the grant date fair value of our NEO’s 2023 LTIP awards (inclusive of RSUs and PSUs), as well as the settlement of the 2020 performance based cash awards that were granted in lieu of PSUs in 2020, at 50 percent of target value. While at first glance this may appear to reflect a large increase in 2023 total compensation for our NEOs who received performance-based cash awards in 2020, this is not the case. Rather, it more accurately reflects (i) the value of the 2020 performance-based cash awards (which were made at 50 percent of target) that were not, pursuant to SEC rules, disclosed in the 2021 Proxy Statement; and (ii) the grant date fair value of the 2023 LTIP awards. We feel it is important to clarify the figures reported for 2023 in the SCT to reduce the potential for misunderstandings, and direct your attention to “Section 1 - Preliminary Note About This Year’s Summary Compensation Table” at the beginning of the CD&A for additional disclosure on this topic. The SCT sets forth the annual and long-term compensation of our NEOs during each of the last three years. In addition to base salaries, the table reflects performance-based cash awards granted in 2020 (for which the underlying performance metrics are satisfied and earned in 2023), as well as RSUs and PSUs granted in 2021, 2022, and 2023 and cash bonuses and other compensation earned during the same periods.

  57. Summary Compensation Table

    | Name and Principal Position | Year | Salary | Stock Awards(1) | Non-Equity Incentive Plan Compensation(2) | Change In Pension Value and Non-Qualified Deferred Compensation Earnings(3) | All Other Compensation(4) | Total | | Herbert S. Vogel | 2023 | $814,200 | $4,999,989 | $4,815,816 | $295,736 | $134,889 | $11,060,630 | | President, Chief Executive Officer and Director | 2022 | $773,077 | $4,500,021 | $1,103,954 | $188,143 | $167,841 | $6,733,036 | | | 2021 | $715,385 | $1,600,013 | $1,716,923 | $245,600 | $17,400 | $4,295,321 | | A. Wade Pursell | 2023 | $532,834 | $2,249,983 | $1,784,000 | $116,994 | $20,011 | $4,703,822 | | Executive Vice President and Chief Financial Officer | 2022 | $505,923 | $2,149,991 | $602,048 | $— | $18,300 | $3,276,262 | | | 2021 | $473,830 | $999,992 | $852,894 | $87,057 | $17,400 | $2,431,173 | | James B. Lebeck | 2023 | $396,923 | $1,500,042 | $826,000 | $— | $167,116 | $2,890,081 | | Executive Vice President and General Counsel | 2022 | $— | $— | $— | $— | $— | $— | | | 2021 | $— | $— | $— | $— | $— | $— | | Kenneth J. Knott | 2023 | $378,499 | $750,005 | $717,175 | $85,311 | $61,755 | $1,992,745 | | Senior Vice President—Business Development and Land | 2022 | $359,382 | $649,987 | $320,748 | $— | $68,474 | $1,398,591 | | | 2021 | $340,608 | $287,498 | $476,851 | $58,734 | $17,400 | $1,181,091 | | Mary Ellen Lutey | 2023 | $378,499 | $750,005 | $728,488 | $60,869 | $61,965 | $1,979,826 | | Senior Vice President—Exploration, Development and EHS | 2022 | $359,382 | $649,987 | $320,748 | $— | $68,474 | $1,398,591 | | | 2021 | $340,608 | $287,498 | $476,851 | $48,064 | $17,400 | $1,170,421 |

  58. Summary Compensation Table

    (1) The amounts in this column represent the aggregate grant date fair values of PSU and RSU awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, “Compensation—Stock Compensation” (“FASB ASC Topic 718”), excluding the effect of estimated forfeitures related to service-based vesting conditions. These grant date fair values have been determined based on the assumptions and methodologies discussed in Note 10 of the Notes to Consolidated Financial Statements included in our 2023 Annual Report. PSU awards are subject to market-based performance conditions relating to our total stockholder return and relative stockholder return compared to a peer company index over a three-year performance period. No PSUs were awarded in 2020 or 2021. The value disclosed for Mr. Lebeck is inclusive of the grant of 14,698 RSUs awarded upon hire. For additional information about long-term performance based-awards granted in 2023 see “2023-2026 LTIP Performance Period Design and Awards.” (2) The amounts in this column represent the aggregate of: (i) the cash bonuses paid in 2024, 2023, and 2022, but earned during the 2023, 2022, and 2021 performance periods, respectively, under the STIP, and (ii) the payout of the performance-based cash awards granted in 2020 and paid in 2023. Additionally, the value disclosed for Mr. Lebeck is inclusive of a $335,000 payment made upon hire. See “Section 1—Preliminary Note About This Year’s Summary Compensation Table“ above for additional detail. The following table provides a detailed breakout of STIP bonuses paid in 2024 but earned in 2023, as well as the payout of the performance-based cash awards granted in 2020 and paid in 2023 for each NEO:

  59. Summary Compensation Table

    | Name | 2023 STIP Value | Performance-based cash awards granted in 2020 | | Herbert S. Vogel | $1,612,116 | $3,203,700 | | A. Wade Pursell | $879,000 | $905,000 | | James B. Lebeck | $491,000 | $— | | Kenneth J. Knott | $468,300 | $248,875 | | Mary Ellen Lutey | $468,300 | $260,188 |

  60. Summary Compensation Table

    (3) The amounts shown in this column are attributable to the increase, if any, in the actuarial value of each NEO’s combined benefits under our qualified and non-qualified benefit plans determined using interest rate and mortality assumptions consistent with those used in our financial statements. No NEO received preferential or above market earnings on deferred compensation. (4) For 2023, amounts consist of the following contributions and other compensation: (i) for Mr. Vogel: $115,089 to the Company’s Non-Qualified Compensation Plan and $19,800 to the Company’s 401(k) Profit Sharing Plan; (ii) for Mr. Pursell: $19,800 to the Company’s 401(k) Profit Sharing Plan and an anniversary gift card valued at $211; (iii) for Mr. Lebeck: $29,700 to the Company’s 401(k) Profit Sharing Plan and $137,416 in relocation compensation; (iv) for Mr. Knott: $41,955 to the Company’s Non-Qualified Compensation Plan and $19,800 to the Company’s 401(k) Profit Sharing Plan; and (v) for Mr. Lutey: $41,955 to the Company’s Non-Qualified Compensation Plan, $19,800 to the Company’s 401(k) Profit Sharing Plan and an anniversary gift card valued at $211.

  61. Grants of Plan-Based Awards in 2023

    Grants of Plan-Based Awards in 2023 Pursuant to our STIP, and in accordance with our Cash Bonus Plan, the Compensation Committee established the quantitative and qualitative metrics for our 2023 STIP on February 17, 2023. As discussed above, the bonus payments associated with the 2023 STIP were earned in 2023, but were paid in 2024. In addition, pursuant to our LTIP and in accordance with the Equity Plan, the Compensation Committee approved grants of RSUs and PSUs to our NEOs on June 12, 2023. These grants were made effective as of July 1, 2023, and are summarized in the table below.

  62. Grants of Plan-Based Awards in 2023

    | Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | Estimated Future Payouts Under Equity Incentive Awards | | All Other Stock Awards: Number of Shares of Stock or Units(5) | Grant Date Fair Value of Stock and Option Awards(6) | | | | Target (1) | Maximum (2) | Target (3) | Maximum (4) | | | | Herbert S. Vogel | 2/17/23 | $977,040 | $2,000,000 | — | — | — | — | | | 7/1/23 | — | — | — | — | 63,231 | $1,999,997 | | | 7/1/23 | — | — | 100,240 | 200,480 | — | $2,999,992 | | A. Wade Pursell | 2/17/23 | $532,834 | $2,000,000 | — | — | — | — | | | 7/1/23 | — | — | — | — | 35,567 | $1,124,984 | | | 7/1/23 | — | — | 37,590 | 75,180 | — | $1,124,998 | | James B. Lebeck | 2/17/23 | $297,692 | $2,000,000 | — | — | — | — | | | 1/23/23 | — | — | — | — | 14,698 | $500,026 | | | 7/1/23 | — | — | — | — | 15,808 | $500,007 | | | 7/1/23 | — | — | 16,707 | 33,414 | — | $500,009 | | Kenneth J. Knott | 2/17/23 | $283,874 | $2,000,000 | — | — | — | | | | 7/1/23 | — | — | — | — | 11,856 | $375,005 | | | 7/1/23 | — | — | 12,530 | 25,060 | — | $374,999 | | Mary Ellen Lutey | 2/17/23 | $283,874 | $2,000,000 | — | — | — | — | | | 7/1/23 | — | — | — | — | 11,856 | $375,005 | | | 7/1/23 | — | — | 12,530 | 25,060 | — | $374,999 |

  63. Grants of Plan-Based Awards in 2023

    (1) This amount represents the salary amount actually paid to each of our NEOs in 2023, multiplied by the applicable STIP target percentage. (2) This amount represents the maximum award possible under the stockholder-approved Cash Bonus Plan; however, as described above in “Section 4—Primary Elements Of Compensation and Select Executive Compensation Decisions,” actual bonuses range from zero to two times a participant’s target percentage. (3) This amount represents the number of shares of common stock to be issued upon settlement of PSUs granted under our Equity Plan, assuming we achieve the target performance level established by the Compensation Committee, resulting in an earned percentage of 100 percent. PSUs represent the right to receive, upon settlement of the PSUs after the completion of a three-year performance period ending June 30, 2026, a number of shares of our common stock that may be from zero percent to 200 percent of the number of PSUs granted on the award date, depending on the extent to which we have achieved the performance criteria and the extent to which the PSUs have vested. The performance criteria for the PSUs are based on the Company’s TSR relative to the TSR of certain peer companies, the Company’s absolute TSR, adjusted free cash flow (“FCF”) generation, and the achievement of certain ESG targets, in each case as defined by the award agreement. The PSUs will vest on July 1, 2026. The PSUs granted to Mr. Vogel are subject to the three-year performance period; however because he was of retirement eligible age, as defined in the award agreement, on the award date, if retirement occurs before the end of the performance period, these PSUs will vest in pro-rata increments on a daily basis over the three-year performance period beginning on the award date. For additional detail regarding the 2023 performance-based equity awards, please see “2023-2026 LTIP Performance Period Design and Awards.” (4) This amount represents the number of shares of common stock to be issued upon settlement of PSUs granted under our Equity Plan, assuming we achieve the maximum performance level established by the Compensation Committee, resulting in an earned percentage of 200 percent. (5) This amount represents RSUs granted under our Equity Plan. The RSUs vest one-third on July 1, 2024, one-third on July 1, 2025, and one-third on July 1, 2026 (with the exception of Mr. Vogel, who is entitled to one-sixth vesting as noted below). Prior to vesting, the RSUs are subject to transfer restrictions and may be forfeited to us upon termination of employment. The RSUs are not eligible for dividends and are not credited with dividend equivalents. Holders of RSUs have no rights as stockholders of common stock until such time as the RSUs are settled for shares of common stock on the settlement date. The RSUs granted to Mr. Vogel are subject to pro rata vesting due to Mr. Vogel attaining retirement eligible age, as defined in the award agreement, on the award date. As such, the awards vest one-sixth on January 1, 2024, one-sixth on July 1, 2024, one-sixth on January 1, 2025, one-sixth on July 1, 2025, one-sixth on January 1, 2026, and one-sixth on July 1, 2026. Shares are only released on the July 1 dates. (6) Represents the grant date fair value of the RSU grant based on the closing market price on the grant date. The grant date fair value of a PSU is calculated using a Geometric Brownian Motion Model, and the aggregate grant date fair value represented in this column for PSUs is calculated based upon the number of PSUs granted.

  64. CEO Pay Ratio

    CEO Pay Ratio Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), certain U.S. public companies must disclose the ratio of the CEO’s annual total compensation to the median annual total compensation of all employees (excluding the CEO). We identified our current median employee in November 2021, using the consistently applied compensation measure determined by calculating the sum of 2021 annual base salary, long-term incentive plan grant value and actual cash bonus paid to each employee, including any overtime pay. In making this determination we annualized bonus, base salary, and any overtime pay for employees that were not employed for the entirety of 2021. As permitted by the Dodd-Frank Act and because our employee population did not experience a meaningful change, no changes to employee compensation arrangements occurred that resulted in a significant modification to our disclosures, and the median employee did not experience a change in circumstances, we utilized the compensation of the same median employee in this Proxy Statement. We determined that the amount of the annual total compensation of our median employee for 2023 was $191,873. This amount represents the total compensation that would have been reported in the Summary Compensation Table in accordance with the requirements of Item 402(c)(x) of Regulation S-K for the median employee if the employee had been an NEO for fiscal year 2023. We then determined that the amount of our CEO’s annual total compensation for 2023 was $11,060,630, which represents the amount reported for our CEO in the “Total” column of the 2023 Summary Compensation Table.

  65. CEO Pay Ratio

    | Name and Principal Position | Year | Salary | Stock Awards(1) | Non-Equity Incentive Plan Compensation(2) | Change In Pension Value and Non-Qualified Deferred Compensation Earnings(3) | All Other Compensation(4) | Total | | Herbert S. Vogel | 2023 | $814,200 | $4,999,989 | $4,815,816 | $295,736 | $134,889 | $11,060,630 | | President, Chief Executive Officer and Director | | | | | | | | | Median Employee | 2023 | $122,228 | $19,050 | $39,529 | $— | $11,066 | $191,873 |

  66. CEO Pay Ratio

    ____________________________ (1) The amounts in this column represent the aggregate grant date fair values of PSU and RSU awards computed in accordance with FASB ASC Topic 718. These grant date fair values have been determined in accordance with Note 1 to the Summary Compensation Table set forth above. (2) The amounts in this column represents (i) the cash bonuses paid in 2024, but earned during 2023, under the STIP, and (ii) the payout of the performance-based cash awards granted in 2020 and paid in 2023. (3) The amounts shown in this column are attributable to the increase, if any, in the actuarial value of each individual’s combined benefits under our qualified and non-qualified benefit plans determined using interest rate and mortality assumptions consistent with those used in our financial statements. Neither individual received preferential or above market earnings on deferred compensation. (4) Amounts consist of our respective contributions to our 401(k) Profit Sharing Plan, contributions to our Non-Qualified Deferred Compensation Plan, and any anniversary gift cards. Based on the foregoing, for 2023, the ratio of the annual total compensation of our CEO to the annual total compensation for our median employee is 58:1. This pay ratio is a reasonable estimate, calculated in a manner consistent with SEC rules and based on our payroll and employment records. As noted above under the heading “Section 1 - Preliminary Note About This Year’s Summary Compensation Table” and immediately prior to the SCT, the total compensation for our CEO, as required by SEC rules, reflects both the grant date fair value of our CEO’s 2023 LTIP awards (inclusive of RSUs and PSUs), as well as the settlement value of the 2020 performance-based cash awards that were granted in lieu of PSUs in 2020. Conversely, because our median employee did not receive a performance-based cash award in 2020 (the median employee’s 2020 LTIP grant did not include a performance-based component), the total compensation for our median employee does not include 2020 performance-based cash awards. We believe it is important to note this distinction, as the increase in CEO pay ratio between 2023 and 2022 is largely attributable to the fact that, for our CEO, both 2023 LTIP awards as well as the settlement of the 2020 performance-based cash awards are accounted for in the calculation; whereas, for our median employee, there is no corresponding performance-based cash item due to the median employee’s 2020 LTIP grant having been made exclusively in the form of time-based cash vesting.

  67. Outstanding Equity Awards at 2023 Year-End

    Outstanding Equity Awards at 2023 Year-End The following table shows outstanding equity awards for our NEOs as of December 31, 2023:

  68. Outstanding Equity Awards at 2023 Year-End

    | | Stock Awards | | | | | | Equity Incentive Plan Awards: | | | | | Name | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(1) | Number of Unearned Shares, Units or Other Rights That Have Not Vested | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(1) | | Herbert S. Vogel | | | | | | RSUs (2) | 20,907 | $809,519 | — | $— | | RSUs (4) | 35,212 | $1,363,409 | — | $— | | RSUs (6) | 63,231 | $2,448,304 | — | $— | | PSUs (8) | — | $— | 101,229 | $3,919,587 | | PSUs (10) | — | $— | 100,240 | $3,881,293 | | A. Wade Pursell | | | | | | RSUs (2) | 13,067 | $505,954 | — | $— | | RSUs (3) | 21,029 | $814,243 | — | $— | | RSUs (5) | 35,567 | $1,377,154 | — | $— | | PSUs (7) | — | $— | 40,304 | $1,560,571 | | PSUs (9) | — | $— | 37,590 | $1,455,485 | | James B. Lebeck | | | | | | RSUs (5) | 15,808 | $612,086 | — | $— | | RSUs (11) | 14,698 | $569,107 | — | $— | | PSUs (9) | — | $— | 16,707 | $646,895 | | Kenneth J. Knott | | | | | | RSUs (2) | 3,757 | $145,471 | — | $— | | RSUs (3) | 6,358 | $246,182 | — | $— | | RSUs (5) | 11,856 | $459,064 | — | $— | | PSUs (7) | — | $— | 12,185 | $471,803 | | PSUs (9) | — | $— | 12,530 | $485,162 | | Mary Ellen Lutey | | | | | | RSUs (2) | 3,757 | $145,471 | — | $— | | RSUs (3) | 6,358 | $246,182 | — | $— | | RSUs (5) | 11,856 | $459,064 | — | $— | | PSUs (7) | — | $— | 12,185 | $471,803 | | PSUs (9) | — | $— | 12,530 | $485,162 |

  69. Outstanding Equity Awards at 2023 Year-End

    ____________________________ (1) The market value of RSUs and PSUs that have not vested is calculated using the closing price of $38.72 of our common stock on December 29, 2023. The market value of PSUs is calculated based upon an earned percentage of 100 percent. (2) These RSUs vest in 1/3 increments with the remaining vesting scheduled to occur 1/3 on July 1, 2024. (3) These RSUs vest in 1/3 increments with the remaining vesting scheduled to occur 1/3 on July 1, 2024, and 1/3 on July 1, 2025. (4) These RSUs vest(ed) in 1/6 increments with the remaining vesting scheduled to occur (or having occurred) 1/6 on January 1, 2024, 1/6 on July 1, 2024, 1/6 on January 1, 2025, and 1/6 on July 1, 2025. (5) These RSUs vest in 1/3 increments with the vesting scheduled to occur 1/3 on July 1, 2024, 1/3 on July 1, 2025, and 1/3 on July 1, 2026. (6) These RSUs vest(ed) in 1/6 increments with the remaining vesting scheduled to occur (or having occurred) 1/6 on January 1, 2024, 1/6 on July 1, 2024, 1/6 on January 1, 2025, 1/6 on July 1, 2025, 1/6 on January 1, 2026 and 1/6 on July 1, 2026. (7) These PSUs vest on July 1, 2025. The PSUs are subject to a three-year performance period ending June 30, 2025. The award is reported at an earned percentage of 100 percent. (8) These PSUs vest on July 1, 2025. The PSUs are subject to a three-year performance period ending June 30, 2025. The award is reported at an earned percentage of 100 percent. However, for retirement eligible employees, if retirement occurs before the end of the performance period, these PSUs vest in pro-rata increments on a daily basis over the three-year performance period beginning at the grant date. (9) These PSUs vest on July 1, 2026. The PSUs are subject to a three-year performance period ending June 30, 2026. The award is reported at an earned percentage of 100 percent. (10) These PSUs vest on July 1, 2026. The PSUs are subject to a three-year performance period ending June 30, 2026. The award is reported at an earned percentage of 100 percent. However, for retirement eligible employees, if retirement occurs before the end of the performance period, these PSUs vest in pro-rata increments on a daily basis over the three-year performance period beginning at the grant date. (11) These RSUs cliff vest on January 23, 2026.

  70. 2023 Stock Vested

    2023 Stock Vested

  71. 2023 Stock Vested

    | | Stock Awards | | | | Name | Number of Shares Acquired on Vesting(1) | Value Realized on Vesting(2) | | | Herbert S. Vogel | 104,287 | | 3,298,598 | | A. Wade Pursell | 51,452 | | 1,627,427 | | James B. Lebeck | — | | — | | Kenneth J. Knott | 14,600 | | 461,798 | | Mary Ellen Lutey | 14,948 | | 472,805 |

  72. 2023 Stock Vested

    ____________________________ (1) This column represents the number of shares of common stock issued upon the vesting and settlement of RSUs and PSUs during 2023. As discussed above, each RSU represents a right to receive one share of our common stock upon settlement pursuant to the terms of the award agreement, and each PSU represents the right to receive, upon settlement of the PSU after the completion of a three-year performance period, a number of shares of our common stock that ranges from zero percent to 200 percent of the number of PSUs, depending on the extent to which we have achieved our performance goals. (2) The value realized on vesting and settlement of the RSUs and PSUs is computed by multiplying the number of shares of common stock issued upon the vesting and settlement of RSUs or settlement of PSUs by the per share closing market price of the underlying shares on the day prior to settlement date, or, if the day prior to the settlement date was not a market trading date, then on the last market trading date which preceded the day prior to the settlement date. The per share closing market prices utilized for this computation were $31.63 on June 30, 2023, for the vesting and settlement of the third vesting tranche of the 2020 RSU awards, the vesting and settlement of the second vesting tranche of the 2021 RSU awards, and the vesting and settlement of the first vesting tranche of the 2022 RSU awards, all of which were settled on July 1, 2023. No PSUs vested in 2023.

  73. Pension Benefits

    Pension Benefits Our Qualified Pension Plan is a qualified, noncontributory defined benefit plan, which is available to substantially all of our employees who joined SM Energy prior to January 1, 2015, and meet age and service requirements. In addition, we sponsor the SERP to provide an equivalent benefit on earnings above the qualified plans IRC limits (the 2023 limit was $330,000 in annual base salary income, for certain executive officers with a title of at least vice president). The following table represents the value of the NEO’s pension benefits as of December 31, 2023:

  74. Pension Benefits

    | Name | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit | Payment During Last Fiscal Year | | Herbert S. Vogel | Qualified Pension Plan | 12 | $593,901 | $— | | | Non–Qualified SERP Pension Plan | 12 | $883,715 | $— | | A. Wade Pursell | Qualified Pension Plan | 15 | $614,364 | $— | | | Non–Qualified SERP Pension Plan | 15 | $393,464 | $— | | James B. Lebeck | Qualified Pension Plan | — | $— | $— | | | Non–Qualified SERP Pension Plan | — | $— | $— | | Kenneth J. Knott | Qualified Pension Plan | 23 | $812,090 | $— | | | Non–Qualified SERP Pension Plan | 23 | $135,859 | $— | | Mary Ellen Lutey | Qualified Pension Plan | 16 | $444,197 | $— | | | Non–Qualified SERP Pension Plan | 16 | $74,699 | $— |

  75. Non-Qualified Deferred Compensation for 2023

    Non-Qualified Deferred Compensation for 2023 This Non-Qualified Deferred Compensation table sets forth the NEOs participation in the Non-Qualified Deferred Compensation Plan. This plan allows eligible employees to defer part of their salary and annual incentive bonus on a voluntary basis.

  76. Non-Qualified Deferred Compensation for 2023

    | Name | Executive Contributions in Last FY(1) | Registrant Contributions in Last FY(2) | Aggregate Earnings in Last FY(3) | Aggregate Withdrawals in Last FY | Aggregate Balance at Last FYE | | Herbert S. Vogel | $115,089 | $115,089 | $205,681 | $— | $1,997,966 | | A. Wade Pursell | $— | $— | $162,041 | $— | $941,111 | | James B. Lebeck | $— | $— | $— | $— | $— | | Kenneth J. Knott | $54,785 | $41,955 | $159,305 | $— | $1,161,300 | | Mary Ellen Lutey | $41,955 | $41,955 | $143,968 | $— | $972,250 |

  77. Non-Qualified Deferred Compensation for 2023

    ____________________________ (1) The amounts in this column are also included in the Summary Compensation Table under the Salary column or the Non-Equity Incentive Plan Compensation column, as applicable. (2) The amounts in this column represent the matching contributions. The matching contributions are included in the “All Other Compensation” column of the Summary Compensation Table. We match deferred compensation up to an amount equal to six percent of base salary plus any STIP cash bonus. (3) The earnings reflected in this column represent deemed investment earnings or losses from voluntary deferrals and Company contributions, as applicable. The Non-Qualified Deferred Compensation Plan does not guarantee a return on deferred amounts. Our SERP is a non-qualified deferred compensation plan. The SERP is a non-contributory plan, and additional information about the SERP, including the present value of the accumulated benefits under the SERP for each NEO, is set forth in the “Pension Benefits” section above. In addition, annual increases in the actuarial value of benefits under the SERP are included in the Change In Pension Value and Non-Qualified Deferred Compensation Earnings column of the Summary Compensation Table above.

  78. Potential Payments Upon Termination or Change of Control

    Potential Payments Upon Termination or Change of Control Change of Control Arrangements Change of control severance protection is provided through change of control executive severance agreements to executives at the level of vice president and above, including each of our NEOs, and to certain other key employees. These agreements have a “double trigger” mechanism, which requires first that a qualifying change of control event has occurred, and second that the executive has been terminated or that certain other conditions are met, as summarized below, before severance benefits will be provided. A “Change of Control” is defined to include (a) an acquisition of more than 50 percent of the common stock or assets of the Company in a reorganization, merger, or consolidation of our Company, or (b) a change in more than 50 percent of the composition of the Board, other than as a result of the election of new members of the Board by a vote of the incumbent members of the Board or by our stockholders pursuant to the recommendation of the incumbent members of the Board. Executive officers are entitled to receive severance payments in the event that their employment is terminated within two and one-half years after a Change of Control (a) without “cause” by our Company or (b) for “good reason” by the officer, each as defined in the agreements. The term “good reason” incorporates the concept of a change in the executive’s status, authority, position, offices, titles, duties, or responsibilities that are reasonably viewed as a diminution of duties at any time within the ninety (90) days preceding a Change of Control or within two and one-half years thereafter. The term “good reason” also contemplates a reduction in the executive’s base salary and benefits over this same time frame, or the requirement that an executive relocate his or her base of employment outside a 25-mile radius from the executive’s location at the time of the Change of Control. Particularly in view of the propensity for mergers, acquisitions, and consolidations in our industry, we believe that change of control executive severance agreements promote stability and continuity among our executives, allowing them to remain neutral in the face of a transaction that would benefit our stockholders, but would result in their involuntary termination. Such agreements are customary for executives in our industry and are offered by companies who compete with us for executive talent. The double trigger feature provides a sufficient level of protection for the executive as well as a retention incentive benefiting the Company and our stockholders without creating an unreasonable impediment to a potential acquirer of the Company. We believe that the severance payment amounts under these agreements for our executives are comparable to payment amounts offered under similar arrangements by other companies in our industry, and are designed to facilitate reasonable compensation and insurance and benefits protection during a reasonable period of time to allow the executive to obtain comparable employment. With respect to our NEO’s, the following table sets forth the estimated gross taxable compensation payable upon (i) a Change of Control without termination; (ii) termination in connection with a Change of Control; (iii) death or disability; and (iv) voluntary termination or retirement. The amounts set forth below assume a termination date of December 31, 2023, under the executive severance and change of control agreements that were in place at that time. Subsequent to December 31, 2023, the Company entered into new executive severance and change of control agreements with certain officers, including our NEOs, and a footnote to the table below discloses the amount that would have been payable to each of our NEOs in the event of a change of control termination if the new agreements had been in effect on December 31, 2023. In the event the executive is subject to golden parachute excise taxes under Section 4999 of the IRC, severance benefits may be reduced to avoid excise taxes, if doing so would increase the net after tax benefits to the executive. No excise tax “gross-up” payments are provided.

  79. Potential Payments Upon Termination or Change of Control

    | Potential Payments upon Termination or Change of Control | | | | | | | Name | Base Salary | Cash Bonus | Accelerated Vesting of RSUs and Performance-Based Awards | Continued Employee Benefits | Total | | Herbert S. Vogel | | | | | | | Change of Control/No Termination | $— | $— | $— | $— | $— | | Change of Control Termination(1) | $1,653,600 | $2,976,480 | $12,721,242 | $34,765 | $17,386,087 | | Termination upon Death or Disability(2) | $— | $— | $12,721,242 | $— | $12,721,242 | | Voluntary Termination/Retirement | $— | $— | $— | $— | $— | | A. Wade Pursell | | | | | | | Change of Control/No Termination | $— | $— | $— | $— | $— | | Change of Control Termination(1) | $1,082,160 | $1,623,240 | $5,897,356 | $61,044 | $8,663,800 | | Termination upon Death or Disability(2) | $— | $— | $5,897,356 | $— | $5,897,356 | | Voluntary Termination/Retirement | $— | $— | $— | $— | $— | | James B. Lebeck | | | | | | | Change of Control/No Termination | $— | $— | $— | $— | $— | | Change of Control Termination(1) | $860,000 | $967,500 | $1,681,201 | $53,191 | $3,561,892 | | Termination upon Death or Disability(2) | $— | $— | $1,681,201 | $— | $1,681,201 | | Voluntary Termination/Retirement | $— | $— | $— | $— | $— | | Kenneth J. Knott | | | | | | | Change of Control/No Termination | $— | $— | $— | $— | $— | | Change of Control Termination(1) | $768,712 | $864,801 | $1,838,216 | $58,027 | $3,529,756 | | Termination upon Death or Disability(2) | $— | $— | $1,838,216 | $— | $1,838,216 | | Voluntary Termination/Retirement | $— | $— | $— | $— | $— | | Mary Ellen Lutey | | | | | | | Change of Control/No Termination | $— | $— | $— | $— | $— | | Change of Control Termination(1) | $768,712 | $864,801 | $1,838,216 | $58,027 | $3,529,756 | | Termination upon Death or Disability(2) | $— | $— | $1,838,216 | $— | $1,838,216 | | Voluntary Termination/Retirement | $— | $— | $— | $— | $— |

  80. Potential Payments Upon Termination or Change of Control

    (1) Subsequent to December 31, 2023, the Company entered into new executive severance and change of control agreements (the “New CoC Agreements”) with certain officers, including our NEOs. A form of the New CoC Agreements was filed with the Company’s 2023 Form 10-K. As required by SEC rules, the above table reflects the outcome of a change of control of the Company effective as of December 31, 2023, pursuant to the executive severance and change of control agreements that were in place at that time; however, if the New CoC Agreements were in place as of December 31, 2023, Messrs. Vogel, Pursell, Lebeck and Knott, and Ms. Lutey, would have been entitled to total payments of $19,205,047, $9,204,880 $3,938,142, $3,866,068, and $3,866,068, respectively, in the event of a change of control termination. (2) The amounts reflected in the “Accelerated Vesting of RSUs and Performance-Based Awards” column represents (i) the market-value of all unvested RSUs as of December 31, 2023, and (ii) the target value of all unvested performance-based awards (inclusive of PSUs and performance-based cash awards) as of the applicable date of the award. Upon termination due to death or disability, (i) RSUs immediately vest and are settled; and (ii) performance-based awards immediately vest, but the payout of such awards is not settled and released until the end of the respective performance period and determination of the final settlement factor.

  81. Pay Versus Performance

    Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid (“CAP”) (as defined by SEC rules) and certain financial performance of the Company. The Compensation Committee did not consider the pay versus performance disclosure when making its incentive compensation decisions. For further information about how we align executive compensation with the Company’s performance, see “Compensation Discussion and Analysis” above. The amounts in the table below are calculated in accordance with SEC rules and do not represent amounts actually earned or realized by NEOs.

  82. Pay Versus Performance

    | Pay Versus Performance | | | | | | | | | | | | | Herbert S. Vogel | | Javan D. Ottoson | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year (1) | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO (2) | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO (2) | Average Summary Compensation Table Total for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEO NEOs (2) | Total Shareholder Return | Peer Group Total Shareholder Return (3) | Net Income (Loss) | Adjusted Free Cash Flow (4) | | | | | | | | | | | (in thousands) | | | 2023 | $11,060,630 | $12,463,744 | $— | $— | $2,891,619 | $3,247,712 | $354.89 | $163.02 | $817,880 | $285,403 | | 2022 | $6,733,036 | $11,113,208 | $— | $— | $2,083,619 | $3,751,637 | $313.93 | $161.56 | $1,111,952 | $804,025 | | 2021 | $4,295,321 | $14,520,242 | $— | $— | $1,639,759 | $5,005,015 | $263.18 | $105.95 | $36,229 | $482,538 | | 2020 | $2,325,154 | $(320,679) | $1,879,774 | $(6,639,951) | $1,132,654 | $(27,157) | $54.57 | $63.98 | $(764,614) | $240,883 |

  83. Pay Versus Performance

    ____________________________ (1) Our principal executive officer (“PEO”), Herbert S. Vogel, succeeded Javan D. Ottoson as Chief Executive Officer in November of 2020. The remaining NEOs (“Non-PEO NEOs”) for each year presented above consisted of the following: •2023: A. Wade Pursell, James B. Lebeck, Kenneth J. Knott, Mary Ellen Lutey •2022 and 2021: A. Wade Pursell, David W. Copeland, Mary Ellen Lutey, Lehman E. Newton, III •2020: A. Wade Pursell, David W. Copeland, Mary Ellen Lutey, Kenneth J. Knott (2) See “Adjustments to Determine Compensation Actually Paid” table below for additional detail. (3) The peer group used for comparison of cumulative total shareholder return is the Dow Jones Exploration and Production Index - DJUSOS. (4) We deemed adjusted free cash flow to be the most important financial performance measure used to link Company performance to compensation actually paid to our PEO and non-PEO NEOs for all years presented above. See “Performance Measure” table below for additional detail. The following table sets forth the adjustments made during each year presented in the Pay Versus Performance table to arrive at compensation actually paid to our PEO and non-PEO NEOs:

  84. Pay Versus Performance

    | Adjustments to Determine Compensation Actually Paid | | | | | | | | | | | | 2023 | | 2022 | | 2021 | | 2020 | | | | | PEO (Herbert S. Vogel) | Average for Non-PEO NEOs | PEO (Herbert S. Vogel) | Average for Non-PEO NEOs | PEO (Herbert S. Vogel) | Average for Non-PEO NEOs | PEO (Herbert S. Vogel) | PEO (Javan D. Ottoson) | Average for Non-PEO NEOs | | Total Compensation as reported in SCT | $11,060,630 | $2,891,619 | $6,733,036 | $2,083,619 | $4,295,321 | $1,639,759 | $2,325,154 | $1,879,774 | $1,132,654 | | Deduction of “Change in Pension Value and Nonqualified Deferred Compensation Earnings” reported in SCT | (295,736) | (65,794) | (188,143) | (23,199) | (245,600) | (93,022) | (170,465) | (321,131) | (154,328) | | Service cost for pension plans | 128,937 | 45,633 | 107,434 | 61,727 | 103,247 | 59,304 | 82,313 | 144,709 | 63,939 | | Deduction of “Stock Awards” reported in SCT | (4,999,989) | (1,312,508) | (4,500,021) | (1,174,993) | (1,600,013) | (537,496) | (1,179,998) | — | (254,687) | | Fair value of awards granted during year, unvested as of year-end | 6,486,117 | 1,668,271 | 5,205,221 | 1,332,750 | 1,849,015 | 621,144 | 1,207,623 | — | 260,649 | | Change in fair value of awards granted in prior years that were outstanding and unvested as of year-end | 399,804 | 83,338 | 575,601 | 151,575 | 7,337,985 | 2,397,458 | (1,360,713) | — | (581,562) | | Change in fair value of awards granted in prior years that vested during the year | (316,019) | (62,847) | 3,180,080 | 1,320,158 | 2,780,287 | 917,868 | (1,224,593) | (2,576,757) | (493,822) | | Deduction of fair value as of prior year-end of awards forfeited during the year | — | — | — | — | — | — | — | (5,766,546) | — | | Compensation Actually Paid | $12,463,744 | $3,247,712 | $11,113,208 | $3,751,637 | $14,520,242 | $5,005,015 | $(320,679) | $(6,639,951) | $(27,157) |

  85. Pay Versus Performance

    Unvested equity awards presented in the table above are computed in accordance with FASB ASC Topic 718. The following is an unranked list of the most important performance measures that link compensation actually paid to our PEO and non-PEO NEOs to Company performance. See the CD&A section above for additional discussion of why we think these measures are important.

  86. Pay Versus Performance

    | Performance Measure | Description | | Adjusted Free Cash Flow | Net cash provided by (used in) operating activities less capital expenditures, less budgeted stockholder returns actually paid in the period. | | Relative TSR | Measurement of the compounded annual growth rate of the Company’s TSR compared to that of the applicable peer group. | | Adjusted EBITDAX | Adjusted EBITDAX represents net income (loss) before interest expense, interest income, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property abandonment and impairment expense, non-cash stock-based compensation expense, derivative gains and losses net of settlements, gains and losses on divestitures, gains and losses on extinguishment of debt, and certain other items. |

  87. Pay Versus Performance

    In accordance with Item 402(v) of Regulation S-K, we are providing the following charts depicting the relationships between compensation actually paid to the PEO and non-PEO NEOs, and the following financial performance metrics: adjusted free cash flow, TSR, and net income (loss). The graph presenting TSR includes a comparison of the Company’s TSR to the peer group TSR. As described in greater detail in the CD&A, we utilize multiple performance measures to align executive compensation with annual and long-term performance, and all of those measures are not presented in the following charts.

  88. Pay Versus Performance

    | PROPOSAL 2—ADVISORY VOTE ON EXECUTIVE COMPENSATION |

  89. Pay Versus Performance

    Our stockholders are entitled to cast an advisory vote at the Annual Meeting to approve the compensation of our named executive officers, as disclosed in this Proxy Statement. As an advisory vote, this Proposal 2 is not binding on our Board or the Compensation Committee, will not overrule any decisions made by our Board or the Compensation Committee, and will not require our Board or the Compensation Committee to take any action. Although the vote is non-binding, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation decisions and executive compensation program design. In particular, to the extent there is any significant vote against our named executive officers’ compensation as disclosed in this Proxy Statement, we will consider our stockholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns. As described in the CD&A, our executive compensation programs are designed to provide a competitive level of compensation necessary to attract, motivate and retain talented and experienced executives and to motivate them to achieve short-term and long-term corporate goals that enhance stockholder value. In order to align executive pay with both our financial performance and the creation of sustainable stockholder value, a significant portion of our named executive officers’ compensation is allocated to performance-based short-term and long-term incentive programs that are dependent on our performance (and thereby “at-risk”). In addition, as an executive officer’s responsibility and ability to affect our financial results increases, the portion of his or her total compensation deemed “at-risk” increases in relation to base salary. Furthermore, our NEOs’ targeted total direct compensation (base salary plus target cash bonus plus long-term incentive compensation) is generally designed to approximate the median of our peer group. As discussed in greater detail in the CD&A, during 2023 we returned approximately $300 million of capital to our stockholders through fixed dividend payments and stock repurchases, delivered excellent financial and operating results, continued to reduce leverage and reduced Net Debt(1) below $1 billion, and increased our net proved reserves to achieve a Company record. We believe that our Capital Return Program, which we intend to fund with cash flows from operations, will be sustainable, and will create long-term value for our stockholders. Our STIP measures and rewards annual performance using metrics that we believe are the key drivers of long-term stockholder value creation. Upon evaluation of our performance with respect to the six quantitative and one qualitative metrics that are described in greater detail in the CD&A, as well as application of the TSR modifier (which resulted in an upward adjustment based on a positive 13 percent TSR for the year), the Compensation Committee applied a 1.65 times multiplier to our NEOs target cash bonus awards. With respect to the 2020-2023 LTIP performance period, we exceeded the maximum performance level (which capped payout) for both the free cash flow and Net Debt-to-Adjusted EBITDAX performance metrics and performed slightly above target with respect to the ESG performance metric, which resulted in a PSU multiplier of 1.81 times. Over a five year period, our average LTIP multiplier is 1.14 times, and over a ten year period is 0.84 times, reflecting the rigorous nature of our LTIP. As discussed in more detail in the CD&A, ESG focused metrics have been increasingly incorporated into our short-term and long-term incentive plan designs. Beginning with our 2022 STIP plan design, and continuing in 2023, ESG metrics comprise a quantitative component of the calculation, as opposed to the qualitative assessment that we utilized in prior years. Beginning with our 2022 LTIP design and continuing in 2023, ESG metrics are given equal weighting as compared to all other metrics, and require a threshold level of performance to receive any payout. As you consider this Proposal 2, we urge you to read the CD&A, which more thoroughly discusses how our compensation policies and procedures are designed to reflect and implement our compensation philosophy. The Compensation Committee and the Board believe that these policies and procedures are effective in implementing our compensation philosophy and in achieving our goals, and significantly align the interests of our management with those of our stockholders. ___________________________ (1) Net Debt, a non-GAAP metric used by management and the investment community to assess the Company’s financial condition, is calculated as the total principal amount of outstanding senior notes plus amounts drawn, if any, on the Company’s senior secured revolving credit facility, less cash and cash equivalents. In light of these circumstances, we are asking stockholders to vote “FOR” the following resolution: “RESOLVED, that the stockholders approve, on an advisory basis, the compensation philosophy, policies and procedures and the compensation of the named executive officers as disclosed in the Proxy Statement for SM Energy Company’s 2024 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including under the “Compensation Discussion and Analysis” section, and in the Summary Compensation Table and the other related tables and disclosures in the Proxy Statement.”

  90. Pay Versus Performance

    | ☑ | Our Board recommends voting “FOR” the advisory vote to approve named executive officer compensation. |

  91. Pay Versus Performance

    | DIRECTOR COMPENSATION |

  92. 2023 Non-Employee Director Compensation(1)

    2023 Non-Employee Director Compensation(1)

  93. 2023 Non-Employee Director Compensation(1)

    | Name | Fees Earned or Paid in Cash | Stock Awards(2)(3)(4) | Option Awards(5) | Non-Equity Incentive Plan Compensation | Change in Pension Value and Non-Qualified Deferred Compensation Earnings | All Other Compensation(6) | Total | | Carla J. Bailo | $105,000 | $180,008 | $— | $— | $— | $100 | $285,108 | | Stephen R. Brand | $110,000 | $180,008 | $— | $— | $— | $25,000 | $315,008 | | Ramiro G. Peru | $115,000 | $180,008 | $— | $— | $— | $2,000 | $297,008 | | Anita M. Powers | $— | $270,026 | $— | $— | $— | $— | $270,026 | | Julio M. Quintana | $90,000 | $305,032 | $— | $— | $— | $9,000 | $404,032 | | Rose M. Robeson | $90,000 | $180,008 | $— | $— | $— | $— | $270,008 | | William D. Sullivan | $— | $270,026 | $— | $— | $— | $5,000 | $275,026 |

  94. 2023 Non-Employee Director Compensation(1)

    ____________________________ (1) Barton R. Brookman joined the Board on February 16, 2024, and did not serve or receive any compensation for services as a director of the Company in 2023. (2) The Company issued to Ms. Bailo, Mr. Brand, Mr. Peru, Ms. Powers, Mr. Quintana, Ms. Robeson and Mr. Sullivan their respective equity retainer of 6,541 shares of our common stock on May 26, 2023, after each such director’s election to the Board on May 26, 2023. Ms. Powers and Mr. Sullivan elected to receive their 2023 cash retainer in shares of our common stock, which resulted in a grant on May 26, 2023, of 3,271 additional shares of our common stock under our Equity Plan. We issued to Mr. Quintana an additional 4,543 shares of our common stock on May 26, 2023, for serving as the non-executive Chairman of the Board. These stock awards are for the annual service period from May 26, 2023, through May 23, 2024. The shares became unrestricted on December 31, 2023. The value of the stock awards represents the grant date fair value. (3) The grant date fair value of each share of our common stock issued to non-employee directors over their past two years of service to us is set forth in the following table and is computed in accordance with FASB ASC Topic 718, based on the grant date fair value. There were no forfeitures by directors during fiscal year 2023.

  95. 2023 Non-Employee Director Compensation(1)

    | Grant Date | Shares | Value | Grantee | | 5/26/2023 | 6,541 | $180,008 | Bailo, Brand, Peru, Robeson | | 5/26/2023 | 9,812 | $270,026 | Powers, Sullivan | | 5/26/2023 | 11,084 | $305,032 | Quintana | | 5/27/2022 | 3,621 | $180,036 | Bailo, Brand, Peru, Quintana, Robeson | | 5/27/2022 | 5,432 | $270,079 | Powers | | 5/27/2022 | 5,934 | $295,038 | Sullivan |

  96. 2023 Non-Employee Director Compensation(1)

    (4) As of December 31, 2023, the restrictions on the shares granted to our non-employee directors during 2023 expired. (5) For the year ended December 31, 2023, no stock options were issued to directors, nor have any stock options been issued to the directors since December 2004. As of December 31, 2023, the non-employee directors do not hold any outstanding stock options. (6) The amounts in this column represent matching charitable contributions made on the behalf of Ms. Bailo and Messrs. Brand, Peru, Quintana, and Sullivan for the year 2023 under our matching charitable gift program.