DEF 14A of SM Energy Co

Filed Apr 8, 2026 · FY20250000893538-26-000048

Open on EDGAR

TABLE OF CONTENTS
| PROXY STATEMENT SUMMARY | 1 | CEO Pay Ratio | 52 | | | | Pay Versus Performance | 54 | | CORPORATE GOVERNANCE | 7 | | | | Overview | 7 | PROPOSAL 2—ADVISORY VOTE ON EXECUTIVE | | | Board and Committee Independence | 7 | COMPENSATION | 57 | | Board Leadership Structure | 7 | | | | Stockholder Engagement | 8 | DIRECTOR COMPENSATION | 59 | | Corporate Responsibility and our Commitment to | | 2025 Non-Employee Director Compensation | 59 | | Sustainability | 8 | General Overview | 59 | | Human Capital | 8 | | | | Board and Committee Meetings | 9 | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL | | | Committee Functions | 10 | OWNERS AND MANAGEMENT | 60 | | Risk Oversight | 11 | Common Stock | 60 | | Director Nominations and Qualifications | 12 | Section 16(a) Beneficial Ownership Reporting | 62 | | Communications with our Board | 14 | Restricted Stock Units and Performance Share Units | 62 | | PROPOSAL 1—ELECTION OF DIRECTORS | 15 | REPORT OF THE AUDIT COMMITTEE | 62 | | Director Nominee Core Competencies and Composition | | Audit Committee Pre-Approval Policy and Procedures | 63 | | Highlights | 16 | | | | Director Nominees | 17 | INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 64 | | INFORMATION ABOUT OUR EXECUTIVE OFFICERS | 25 | PROPOSAL 3—RATIFICATION OF THE APPOINTMENT OF | | | | | DELOITTE & TOUCHE LLP AS OUR | | | COMPENSATION DISCUSSION AND ANALYSIS | 27 | INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 66 | | Section 1—Aligning Strategy with Stockholder Value | | | | | Creation: Our Compensation Philosophy and Objectives | 27 | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | 67 | | Section 2—2025 Business Highlights and Capital Return | | Policies and Procedures on Transactions with Related Persons | 67 | | Program | 29 | Transactions with Related Persons | 67 | | Section 3—Competitive Positioning: Selection and Purpose | | Compensation Committee Interlocks and Insider Participation | 68 | | of Our Comparative Peer Group | 30 | | | | Section 4—Primary Elements of 2025 Compensation and | | VOTING, ATTENDANCE, AND OTHER MATTERS | 69 | | Executive Compensation Results | 30 | Who Can Vote | 69 | | Section 5—Compensation Determination Process | 39 | Quorum | 69 | | Section 6—Other Compensation Matters | 41 | How to Vote | 69 | | Section 7—CEO and Officer Transitions | 44 | Stockholders of Record and Street Name Holders | 69 | | Compensation Committee Report | 44 | Participating in the Virtual Annual Meeting | 70 | | | | Annual Meeting Webcast | 70 | | EXECUTIVE COMPENSATION TABLES | 45 | Submitting Questions at the Annual Meeting | 70 | | Summary Compensation Table | 45 | Experiencing Technical Difficulties | 70 | | Grants of Plan-Based Awards in 2025 | 45 | Voting Requirements; Vote Treatment | 70 | | Outstanding Equity Awards at 2025 Year-End | 47 | Stockholders Sharing the Same Address | 71 | | 2025 Stock Vested | 48 | Revoking a Proxy | 72 | | Pension Benefits | 48 | Payment of Proxy Solicitation Costs | 72 | | Non-Qualified Deferred Compensation for 2025 | 49 | Stockholder Proposals for the 2027 Annual Meeting | | | Potential Payments Upon Termination or Change of Control | 49 | of Stockholders | 72 | | Equity Compensation Plans | 52 | Other Available Information | 73 |
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 sustainability 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 objectives, 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 relative to our peer group and other established corporate goals over a three-year period. The following table depicts the primary components of our 2025 compensation program:
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 against key financial, operational, and sustainability-based metrics. | Drive superior annual performance; incentivize achievement of financial, operational, and sustainability-based goals aligned with the Company’s annual business plan; requires a threshold level of performance to receive any payout. 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, generally subject to continued employment. | 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 on absolute TSR and relative TSR over a three-year period; generally subject to continued employment. | Incentivizes long-term sustainable value creation that is aligned with our strategic plan; requires a threshold level of performance to receive any payout. |
Director Nominee Core Competencies and Composition Highlights
Director Nominee Core Competencies and Composition Highlights As discussed above, the G&S 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 G&S 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. The information presented below is as of April 1, 2026.
Director Nominees
Director Nominees
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 1985 with Ladd Petroleum; joined Snyder Oil (predecessor to Patina Oil and Gas) as a Petroleum Engineer in 1988 and served in various roles of increasing responsibility ending his service as Senior Vice President of Operations in 2005 Key Attributes, Experience and Skills •Senior Executive Leadership Experience, Public Company CEO, 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 CEO of PDC Energy, where he developed strong experience in upstream operations and a deep understanding of drilling and asset management technologies •Corporate Governance Experience and Executive Compensation and Human Resources 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, Compensation and G&S Committees | | | Number of other public company boards: None | | | Age: 63 | |
Director Nominees
| | Business Experience •Vice President and Treasurer of Marathon Oil Corporation (2014 - 2019), an independent exploration and production company acquired by ConocoPhillips in 2024 •Assistant Treasurer of Marathon Oil Corporation (2007 - 2014) •Prior to leadership roles in treasury, served as Senior Tax Counsel at Enron North America •Tax Attorney at Bracewell & Patterson •Senior Accountant with Touche Ross & Company Key Attributes, Experience and Skills •Senior Executive Leadership Experience, Exploration and Production Industry Experience, and Enterprise Risk Management and Hedging Expertise gained during his more than three decades of energy industry experience spanning finance, tax, accounting and corporate governance. •Corporate Governance Experience obtained through his service on other public company boards •Finance and Capital Management and Accounting Expertise Education •BS, Accounting, Southern University •Juris Doctor, Tulane Law School •Master of Laws, New York University School of Law Other Public Company Boards •Sitio Royalties Corp. (NYSE: STR) (2022 - 2025), an oil and gas mineral and royalty company •Civitas Resources, Inc. (NYSE: CIVI) (2021 - 2026), an independent oil and gas producer •Extraction Oil & Gas, Inc. (NYSE: XOG) (Jan. 2021 - Oct. 2021), an independent oil and gas producer | | Morris R. Clark | | | Director since January 2026 | | | Member, Audit Committee | | | Number of other public company boards: None | | | Age: 58 | |
Director Nominees
| | Business Experience •President and Chief Executive Officer of Driltek Inc. (2020 - present), a privately held global onshore and offshore upstream operations and decommissioning company •Founder of Cygnet Resources, a real property investment company •Prior to Driltek, served as Vice President of Business Development for California Resources Corporation (2014 - 2020), and independent energy and carbon management company •Started career in a variety of leadership and technical roles at Occidental Petroleum, including Reservoir Management Team Leader (2012 - 2014), Manager of California State Government Affairs (2010 - 2012), and Reservoir and Production Engineer (2006 - 2010) Key Attributes, Experience and Skills •Senior Executive Leadership Experience, Exploration and Production Industry Experience, and Operations Management gained as President and CEO of leading offshore upstream operations and decommissioning company •Corporate Governance Experience Education •BS, Engineering, California Polytechnic State University Other Public Company Boards •Civitas Resources, Inc. (NYSE: CIVI) (2021 - 2026), an independent oil and gas producer | | Carrie M. Fox | | | Director since January 2026 | | | Member, Audit Committee | | | Number of other public company boards: None | | | Age: 42 | |
Director Nominees
| | Business Experience •President of EOG Resources, Inc. (2021 - 2024), an independent exploration and production company •Joined EOG Resources, Inc. in 1981 and served in roles of increasing responsibility including Vice President, Engineering and Acquisitions (2006 - 2008), Vice President and General Manager of Calgary, Alberta office (2008 - 2012), Executive Vice President, Operations (2012 - 2013), Executive Vice President, Exploration and Production (2013 - 2017), and Chief Operating Officer (2017 - 2023) Key Attributes, Experience and Skills •Senior Executive Leadership Experience, Exploration and Production Industry Experience, Geology and Exploration and Operations Management gained during his more than 40 years of oil and gas industry experience, including more than 15 years in executive leadership roles at EOG Resources, Inc. •Enterprise Risk Management and Hedging Experience •Corporate Governance Experience Education •BS, Petroleum Engineering, Texas Tech University Other Public Company Boards •Civitas Resources, Inc. (NYSE: CIVI) (2025 - 2026), an independent oil and gas producer | | Lloyd W. Helms, Jr. | | | Director since January 2026 | | | Member, Audit Committee | | | Number of other public company boards: None | | | Age: 68 | |
Director Nominees
| | Business Experience •President (Sept. 2025) and Chief Executive Officer (Jan. 2026) of SM Energy Company •Joined SM Energy as Executive Vice President and Chief Operating Officer (Sept. 2024) •Prior to joining SM Energy, served as Executive Vice President - Strategic Planning, Field Development and Marketing (June 2023 - June 2024) and Senior Vice President (January 2021 - June 2023) for Pioneer Natural Resources Company, an independent exploration and production company •Worked in roles of increasing responsibility at Pioneer (2005 - 2024), holding leadership positions focusing on both Permian Basin and South Texas •Prior to joining Pioneer, held various engineering roles at Hess Corporation and Total E&P USA Key Attributes, Experience and Skills •Senior Executive Leadership Experience, Public Company CEO, Exploration and Production Industry Experience, Geology and Exploration and Operations Management gained during her more than 24 years of oil and gas industry experience •Finance, Capital Management and Accounting •Strategic Planning and Project Management and Enterprise Risk Management and Hedging Experience •Corporate Governance Experience and Executive Compensation and Human Resources Education •BS, Petroleum Engineering, Texas A&M University Other Public Company Boards •None | | Elizabeth A. McDonald | | | Director since January 2026 | | | Member, Executive Committee | | | Number of other public company boards: None | | | Age: 47 | |
Director Nominees
| | Business Experience •Spent nearly 28 years at Phelps Dodge Corporation, a North American mining company, holding 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 •UNS Energy Corporation (2007 - April 2025), a provider of natural gas and electric service in Arizona and a subsidiary of Fortis, Inc (NYSE: FTS) | | Ramiro G. Peru | | | Director since 2014 | | | Member, Audit (Chair) and Executive Committees | | | Number of other public company boards: One | | | Age: 70 | |
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), a 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 •Calumet Inc. (NYSE: CLMT) (2025 - present), manufacturer of lubricating oils, solvents, waxes, packaged and synthetic specialty products, fuels and fuel-related products •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 – 2024), 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, G&S and Executive Committees | | | Number of other public company boards: Two | | | Age: 66 | |
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 •NPK International Inc. (NYSE: NPKI; formerly Newpark Resources, Inc.) (2018 – present), a leading provider of site access solutions for critical infrastructure markets •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 | | Rose M. Robeson | | | Director since 2014 | | | Member, Audit and Compensation Committees | | | Number of other public company boards: Two | | | Age: 65 | |
Director Nominees
| | Business Experience •Interim Chief Executive Officer of Civitas Resources, Inc. (2025 - 2026), an independent exploration and production company •Chairman, President and Chief Executive Officer (2013 - 2022) of DCP Midstream, LLC, a Fortune 500 midstream natural gas company •Senior leadership roles at DCP Midstream GP, LLC, the general partner of DCP Midstream, LP (formerly DCP Midstream Partners, LP), including Chief Executive Officer (2013 - 2022), President (2016 - 2022), Chief Operating Officer (2012 - 2013), President, Gathering and Processing (2012); and President, Midcontinent Business Unit and Chief Development Officer (2010 - 2011) •Vice President of Mergers & Acquisitions (2003 - 2006) for Duke Energy and President (2006 - 2010) of Duke Energy Generation Services •Earlier in his career, held positions of increasing responsibility at General Electric, ultimately serving as staff executive for corporate mergers and acquisitions Key Attributes, Experience and Skills •Senior Executive Leadership Experience, Public Company CEO and Board Chair Expertise, Exploration and Production Industry Experience and Operations Management gained during his more than 25 years of oil and gas industry experience, including his experience as CEO of DCP Midstream, LLC and Civitas Resources, Inc. •Corporate Governance Expertise and Executive Compensation and Human Resources Experience obtained through his service on other public company boards •Finance, Capital Management and Accounting and Strategic Planning and Project Management •Enterprise Risk Management and Hedging Experience •Sustainability and EHS Experience Education •Masters, Business Economics, Erasmus University Rotterdam in The Netherlands Other Public Company Boards •Civitas Resources, Inc. (NYSE: CIVI) (2025 - 2026), an independent oil and gas producer •DCP Midstream GP, LLC (2014 - 2022), the general partner of DCP Midstream, LP (formerly DCP Midstream Partners, LP •DCP Midstream, LLC (NYSE: DCP) (2013 - 2022), a Fortune 500 midstream natural gas company | | Wouter T. van Kempen | | | Director since January 2026 | | | Member, G&S (Chair) and Compensation Committees | | | Number of other public company boards: None | | | Age: 56 | |
Director Nominees
| | Business Experience •President and Chief Executive Officer of Resermine, Inc., a leader in subsurface artificial intelligence and machine learning solutions with a focus on enhancing oil recovery, which he founded in 2017 •Associate Professor of Petroleum and Geological Engineering (Jan. 2019 - Dec. 2020) at the University of Oklahoma •From 2015 to 2017, held academic appointments as a Postdoctoral Fellow in The Institute of Computational & Engineering Sciences at The University of Texas at Austin, and as a Postdoctoral Research Associate at Princeton University •Held various positions of increasing responsibility at Shell International Exploration and Production Inc. (2004 - 2015), including Senior Reservoir Engineer; Research Reservoir Engineer; Concept Engineer; and Operations Engineer, Panna-Mukta Field Key Attributes, Experience and Skills •Senior Executive Leadership Experience and Operations Management Expertise acquired while serving as Chief Executive Officer of Resermine, Inc. •Geology & Exploration Experience gained during his 20+ years in the oil and gas industry, with specific expertise in subsurface recovery solutions •Cybersecurity, Data Analytics and Technology Expertise focused on innovative solutions applicable to the upstream oil and gas industry Education • BS and MS, Technology and Chemical Engineering, Indian Institute of Technology, Bombay, India • Ph.D, Engineering, The University of Texas at Austin Other Public Company Boards • None | | Ashwin Venkatraman | | | Director since November 2024 | | | Member, Audit Committee | | | Number of other public company boards: None | | | Age: 45 | |
Director Nominees
| | Business Experience •Chairman and Chief Executive Officer of Altria Group, Inc. (2018 - 2020), which holds diversified positions across the tobacco and cannabis industries •Joined Altria in 1992 as Assistant Controller and served in roles of increasing responsibility including Executive Vice President and Chief Financial Officer (2011 - 2015) and Executive Vice President and Chief Operating Officer (2015 - 2018) •Started career at Salomon Brothers and Bain & Company Key Attributes, Experience and Skills •Senior Executive Leadership Experience and Operations Management gained during his more than 30 years in executive management •Enterprise Risk Management and Hedging Experience •Corporate Governance Experience Education •Bachelor of Arts, Colgate University •Masters, Business Administration, University of Chicago Other Public Company Boards •Civitas Resources, Inc. (2021 - 2026), an independent oil and natural gas producer | | Howard A. Willard III | | | Director since January 2026 | | | Member, Compensation (Chair) and G&S Committees | | | Number of other public company boards: None | | | Age: 62 | |
Director Nominees
| INFORMATION ABOUT OUR EXECUTIVE OFFICERS |
Director Nominees
The following table sets forth the names, ages (as of April 1, 2026) and positions of SM Energy’s executive officers:
Director Nominees
| Name | Age | Position | | Elizabeth A. McDonald | 47 | President, Chief Executive Officer and Director | | A. Wade Pursell | 61 | Executive Vice President and Chief Financial Officer | | Blake D. McKenna | 39 | Executive Vice President and Chief Operating Officer | | James B. Lebeck | 45 | Executive Vice President - Chief Corporate Development Officer, General Counsel and Corporate Secretary |
Director Nominees
Elizabeth A. McDonald. Ms. McDonald joined SM Energy as Executive Vice President and Chief Operating Officer in September 2024. In September 2025, Ms. McDonald was appointed President of SM Energy. In January 2026, Ms. McDonald was appointed to President and Chief Executive Officer and to the Board of Directors. Ms. McDonald has more than 24 years of experience in the oil and gas industry. Prior to joining SM Energy, Ms. McDonald most recently served as Executive Vice President – Strategic Planning, Field Development and Marketing from June 2023 to June 2024, and Senior Vice President from January 2021 to June 2023, for Pioneer Natural Resources Company, an independent oil and gas producer. For approximately the last twenty years, Ms. McDonald worked in roles of increasing responsibility at Pioneer, holding leadership positions focusing on both the Permian Basin and South Texas. Prior to joining Pioneer, Ms. McDonald held various engineering roles at Hess Corporation and Total E&P USA. Ms. McDonald currently serves as an Industry Board Member for the Harold Vance Department of Petroleum Engineering at Texas A&M University and is a member of Advancing Women Executives in Energy. A. Wade Pursell. Mr. Pursell joined SM Energy as Executive Vice President and Chief Financial Officer in September 2008. Mr. Pursell has more than 38 years of experience in the oil and gas industry. Prior to joining SM Energy, Mr. Pursell was with Helix Energy Solutions Group, Inc. (NYSE: HLX). While at Helix, Mr. Pursell served in several roles including Executive Vice President and Chief Financial Officer, Vice President and Chief Financial Officer, and Vice President-Finance and Chief Accounting Officer. Mr. Pursell was with Arthur Andersen LLP, from 1988 through 1997, where he served in roles of increasing responsibility, culminating as an Experienced Manager specializing in the offshore services industry. Mr. Pursell currently serves on the Board of Directors of Junior Achievement – Rocky Mountain. Blake D. McKenna. Mr. McKenna was appointed Executive Vice President and Chief Operating Officer in January 2026. He joined SM Energy as Senior Vice President - Strategic Planning and Corporate Reserves in April 2025 and was subsequently appointed Senior Vice President - Texas in May 2025. Mr. McKenna previously co-founded and served as President and Chief Operating Officer at XCL Resources from April 2018 to April 2025. Mr. McKenna has more than 19 years of experience in the energy industry. Prior to XCL Resources, Mr. McKenna was with Vitesse Energy and EOG Resources, serving in several roles of increasing responsibility including production engineering, completion engineering and reservoir engineering in conventional and unconventional fields across many different basins. James B. Lebeck. Mr. Lebeck was appointed Executive Vice President - Chief Corporate Development Officer, General Counsel and Corporate Secretary in January 2026, having previously served as Executive Vice President - Corporate Development and General Counsel since September 2024, and Executive Vice President and General Counsel since February 2024. Mr. Lebeck rejoined SM Energy as Senior Vice President and General Counsel in January 2023. Mr. Lebeck has more than 18 years of experience in the energy industry. Prior to rejoining SM Energy, 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 SM Energy, 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. Mr. Lebeck currently serves on the Coordinating Committee of the American Exploration and Production Council (AXPC). No familial relationships exist between any executive officer and any director, any other executive officer, or any person nominated to become such. 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.
Director Nominees
| COMPENSATION DISCUSSION AND ANALYSIS |
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 the following individuals, whom we collectively refer to in this CD&A as our “NEOs” or “Named Executive Officers.”
Director Nominees
| 2025 Named Executive Officers | | | Elizabeth A. McDonald(1) | President, Chief Executive Officer and Director | | A. Wade Pursell | Executive Vice President and Chief Financial Officer | | James B. Lebeck | Executive Vice President - Chief Corporate Development Officer, General Counsel and Corporate Secretary | | Herbert S. Vogel(1) | Former President, Chief Executive Officer and Director | | Kenneth J. Knott(2) | Advisor; Former Senior Vice President - Business Development and Land |
Director Nominees
___________________________________ (1) In September 2025, Ms. McDonald was appointed President and Chief Operating Officer, and in January 2026, upon closing of the Merger, Ms. McDonald was appointed President and Chief Executive Officer and to the Board of Directors. Mr. Vogel’s employment as Chief Executive Officer terminated in advance of his otherwise planned retirement in a manner that qualified for severance benefits under the Company’s change of control executive severance agreements. Please see the “CEO and Officer Transitions” section of this CD&A for additional information. (2) In January 2026, in connection with the Merger, Mr. Knott concluded his service as Senior Vice President - Business Development and Land and his employment is expected to terminate in 2026 in a manner that qualifies for severance benefits under the Company’s change of control executive severance agreements. Please see the “CEO and Officer Transitions” section of this Proxy Statement for additional information. Mr. Knott continues to serve as a non-executive advisor to the Company supporting transition and integration matters related to the Merger. This CD&A is divided into the following sections:
Director Nominees
| Section 1 | — | Aligning Strategy with Stockholder Value Creation: Our Compensation Philosophy and Objectives | | Section 2 | — | 2025 Business Highlights and Capital Return Program | | Section 3 | — | Competitive Positioning: Selection and Purpose of Our Comparative Peer Group | | Section 4 | — | Primary Elements of 2025 Compensation and Executive Compensation Results | | Section 5 | — | Compensation Determination Process | | Section 6 | — | Other Compensation Matters | | Section 7 | — | CEO and Officer Transitions |
SECTION 1—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 sustainability-based goals, aligning incentives with long-term stockholder value creation. | • | Equity Ownership Requirements: We require executive officers and directors to maintain meaningful ownership of our stock so that their interests are appropriately aligned with the long-term financial interests of our stockholders. | | • | Performance-Weighted Compensation: A significant portion of executive compensation is in the form of performance-based awards, with 60 percent of Mr. Vogel’s 2025 target LTIP value delivered in performance-based awards and 88 percent of his total target direct compensation variable and tied to performance. | • | Clawback Policy: We maintain 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 SEC rules and NYSE listing standards. | | • | Compensation Risk Assessment: The Compensation Committee annually reviews an analysis of our incentive compensation plans prepared by its independent compensation consultant to help ensure that they are designed appropriately and do not encourage excessive risk taking, while considering market changes and peer group comparisons. | • | Sustainability-Based Incentives: Quantitative and qualitative sustainability metrics, including measures related to safety performance and spill performance are incorporated into our short-term incentive plan. | | • | Target the Median: We generally target pay opportunities for our executives at the market median, while also taking into consideration individual performance and experience. | • | Caps on Incentive Awards: Performance-based equity awards are capped at target payout if absolute TSR is negative for the performance period. | | • | Independent Compensation Consultant: The Compensation Committee retains an independent compensation consultant. | • | Peer Group: The Compensation Committee selects a comparative peer group to support our goal of providing executive compensation that is competitive in our market. |
SECTION 1—Aligning Strategy with Stockholder Value Creation: Our Compensation Philosophy and Objectives
| WHAT WE DO NOT DO: | | | | | • | No Excise Tax Gross-ups: We do not provide golden parachute excise tax payments or gross-ups. | • | No Hedging/Pledging: 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 Paid on Unvested Equity: We do not pay dividends or dividend equivalents on equity awards unless and until they vest. | • | 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. |
SECTION 3—Competitive Positioning: Selection and Purpose of Our Comparative Peer Group
SECTION 3—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 supports our goal of providing total compensation opportunities to our executive officers that 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 so that it continues to remain appropriate, reflecting changes in business profile and relative size. In March 2025, the Compensation Committee approved the peer group used for 2025 compensation comparisons, which included the following companies:
SECTION 3—Competitive Positioning: Selection and Purpose of Our Comparative Peer Group
| 2025 Peer Group | | | | Antero Resources Corporation | Gulfport Energy Corporation | Ovintiv Inc. | | California Resources Corporation | Kosmos Energy Ltd. | Permian Resources Corporation | | Chord Energy Corporation | Magnolia Oil & Gas Corporation | Range Resources Corporation | | Civitas Resources, Inc. | Matador Resources Company | Talos Energy Inc. | | CNX Resources Corporation | Murphy Oil Corporation | Vital Energy, Inc. | | Comstock Resources, Inc. | Northern Oil & Gas, Inc. | |
SECTION 3—Competitive Positioning: Selection and Purpose of Our Comparative Peer Group
Marathon Oil Corporation was removed from the Company’s 2025 peer group following its acquisition by ConocoPhillips.
SECTION 4—Primary Elements of 2025 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 against key financial, operational, and sustainability-based metrics. | Drive superior annual performance; incentivize achievement of financial, operational, and sustainability-based goals aligned with the Company’s annual business plan; requires a threshold level of performance to receive any payout. Aligns payout with stockholder outcomes through modifiers that increase/decrease payout based 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, generally subject to continued employment. | 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 on absolute TSR and relative TSR over a three-year period; generally subject to continued employment. | Incentivizes long-term sustainable value creation that is aligned with our strategic plan; requires a threshold level of performance to receive any payout. |
2025 Incentive Plan Results
2025 Incentive Plan Results The graphic below illustrates the relationship between our STIP and LTIP performance metrics and our incentive plan results.
2025 Incentive Plan Results
| HOW WE MEASURE PERFORMANCE | 2025 PERFORMANCE RESULTS | | PAYOUT RESULTS | | 2025 STIP METRICS(1) | 2025 STIP PERFORMANCE | | 2025 STIP PAYOUT RESULTS | | QUANTITATIVE METRICS | METRIC WEIGHTING | RESULTS(2) | | | EBITDAX (Cash Flow) | 25% | 4% below target | STIP MULTIPLIER | | | | 0.87 multiplier(3) | | | Proved Developed Reserve Additions | 20% | 6% below target | 0.93x | | | | 0.80 multiplier(3) | | | Finding & Development Costs | 15% | 5% below target | 2025 LTIP PAYOUT RESULTS | | | | 0.83 multiplier | PSU MULTIPLIER | | Sustainability | 15% | 7% above target | | | | | 1.25 multiplier | 0.28x | | Production Volume | 15% | 1% above target | ▪Free Cash Flow Generation: Performance ($1.57 billion) exceeded the threshold level of performance ($900 million), resulting in a 0.12 multiplier after weighting. ▪Absolute TSR: Performance was below the threshold performance requirement, resulting in no credit towards the multiplier. ▪Relative TSR: Performance was below the threshold performance requirement, resulting in no credit towards the multiplier. ▪Sustainability Metrics: Performance for 2 of 3 sustainability metrics fell short of target and performance for 1 sustainability metric exceeded target, resulting in a 0.16 multiplier after weighting. | | | | 1.04 multiplier(3) | | | Cash Operating Costs | 10% | 3% above target | | | | | 1.12 multiplier | | | QUALITATIVE METRICS | QUANTITATIVE MULTIPLIER | 0.96x multiplier | | | Exploration Success & Inventory Additions | Modifier (up to +/- 0.10) | 0.10 adjustment | | | Uinta Basin Integration | Modifier (up to +/- 0.10) | 0.10 adjustment | | | | Initial STIP Multiplier Absolute TSR Modifier(4) Final Multiplier | 1.16x (20%) 0.93x | | | 2022-2025 LTIP METRICS(1) | 2022-2025 LTIP PSU PERFORMANCE | | AVG. LTIP PAYOUTS OVER TIME | | | METRIC WEIGHTING | WEIGHTED RESULTS | 5yr. Trailing Average: 1.36x 10yr. Trailing Average: 0.79x (Target = 1.00x) | | Free Cash Flow Generation | 25% | 0.12 multiplier | | | Absolute TSR | 25% | 0.00 multiplier | | | Relative TSR | 25% | 0.00 multiplier | | | Sustainability Metrics | 25% | 0.16 multiplier | | | | Final LTIP Multiplier | 0.28x | | | ________________________________ (1) The definitions and methods of calculating results for each of our STIP and LTIP performance metrics are outlined in greater detail below. (2) Expressed as a percentage of performance attained for the year compared to our 2025 targets. (3) Performance measured on an adjusted free cash flow basis; the multiplier is given after application of the adjusted free cash flow modifier. (4) Absolute TSR was below threshold (30%), which resulted in a 20% multiplier reduction for officers at the level of Senior Vice President and higher. | | | |
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 the Company’s annual performance goals. 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. The Compensation Committee did not modify our STIP performance goals or target performance levels during 2025. STIP awards are paid in cash under the SM Energy Company Cash Bonus Plan (the “Cash Bonus Plan”). 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 2025 plan year, the Compensation Committee made no changes to the prior year’s STIP design (other than adding a qualitative evaluation of the Company’s performance in integrating the Uinta Basin asset), determining that it appropriately incentivized stockholder value creation in the current environment. The 2025 STIP metrics, including weighting and target and actual performance, are reflected in the table below under the heading titled “Short-Term Incentive Plan - 2025 Performance.” Consistent with prior years, the Compensation Committee determined 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 2025 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 STIP multiplier cap of 2.0 times), and if absolute TSR for the year decreases by an amount between negative 10 percent and negative 30 percent, then payout for our NEOs may be reduced down to 0.8 times. The modifier is determined by interpolating the change in TSR within the stated range, capping the 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, 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 as of December 31, 2025, as a percentage of base salary for each of the NEOs, were as set forth in the following table.
Short-Term Incentive Plan
| Name | 2025 Target STIP Level, % of Base Salary | | McDonald | 100% | | Pursell | 100% | | Lebeck | 80% | | Vogel | 120% | | Knott | 75% |
Short-Term Incentive Plan
Short-Term Incentive Plan— 2025 Performance In determining 2025 annual cash bonus awards for our NEOs, the Compensation Committee assessed Company performance with respect to six quantitative metrics and two qualitative metrics. The Compensation Committee’s evaluation of our performance under the quantitative metrics is set forth below, and resulted in an initial multiplier of 0.96 times each NEO’s target bonus level:
Short-Term Incentive Plan
| Quantitative Goals | | | | | | | | Performance Measure | Factor Weight | Threshold | Target | Max | Actual Result | Weighted STIP Multiplier | | EBITDAX ($ in millions)(1) | 0.25 | 1,987 | 2,349 | 2,936 | 2,255 | 0.22 | | Proved Developed Reserve Additions (MMBOE)(1) | 0.20 | 75.10 | 88.80 | 111.00 | 83.80 | 0.16 | | Finding and Development Costs ($ per BOE) | 0.15 | 18.39 | 15.94 | 11.95 | 16.78 | 0.12 | | Sustainability | 0.15 | 0.85 | 1.00 | 1.25 | 1.07 | 0.19 | | Production Volume (MMBOE)(1) | 0.15 | 63.10 | 74.60 | 93.20 | 75.50 | 0.16 | | Cash Operating Costs ($ per BOE) | 0.10 | 16.02 | 13.89 | 10.41 | 13.52 | 0.11 | | Preliminary Result | | | | | | 0.96 | | _________________________________ (1) Performance measured on an adjusted free cash flow basis; the multiplier is given after application of the adjusted free cash flow modifier. | | | | | | |
Short-Term Incentive Plan
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:
Short-Term Incentive Plan
| Performance Measure | Description | | EBITDAX (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 2025. 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. | | 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 2025 business plan. | | Sustainability | The sustainability component of the STIP is based on quantitative goals to reduce our total recordable incident rate, spill volumes, GHG emissions intensity and methane emissions intensity. This measure is important because it highlights the Company’s commitment to sustainability and the importance of integrating sustainability performance into our Company’s culture. In addition to the quantitative performance targets, the Company’s sustainability goal included meeting routine and non-routine flaring goals, recycling water in Texas operations, preparing for compliance with SEC climate change disclosure rules (which rules have not been implemented to date), and evaluating and incorporating modern technology in sustainability goals. | | Production Volume | The production volume target represents the volume of oil, gas, and NGLs forecast to be produced under our 2025 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. |
Short-Term Incentive Plan
In addition to the quantitative metrics described above, the Compensation Committee assessed Company performance with respect to two qualitative metrics: inventory growth and integration of the Company’s recently acquired Uinta Basin assets. Our inventory growth goals were as follows: •grow the Company’s total resources by 100 MMBOE; •advance our plans for upcoming inventory opportunities, including testing exploration wells and applying advanced technology on existing acreage; •identify exploration plays and make investment-ready recommendations; •identify and recommend acreage or acquisition targets of sufficient scale and capable of competing with 2027-2029 inventory; •enhance our existing processes to track industry-wide exploration activity to identify new prospects; and •demonstrate application of new technologies that enhance returns or inventory. Our Uinta Basin integration goal did not designate specific factors or benchmarks, but was based on the Compensation Committee’s holistic evaluation of management’s efforts to, and achievements in, effectively and efficiently integrating the Uinta Basin asset. In evaluating this effort, the Compensation Committee reviewed progress toward key integration objectives, including operational alignment and realization of anticipated strategic and operational benefits. With respect to each of 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 0.96 multiplier, the Compensation Committee determined that the Company achieved and exceeded its qualitative inventory growth goals. Although total resources added during the year did not exceed the target goal of 100 MMBOE, the Compensation Committee acknowledged the transformative nature of the Merger with Civitas and its expected future impact on the Company’s total resources and determined that the Company was successful in accomplishing all of its other growth goals. Furthermore, the Compensation Committee determined that the Company achieved and exceeded its qualitative Uinta Basin integration goals by outperforming budget with regard to certain critical operating results (including production, cash flow, operating expenses per BOE, and adding proved reserves); exceeding budget with regard to critical sustainability metrics (including water recycling, spill rate, flaring and emissions); accomplishing a significant offer acceptance rate with low turnover; and establishing a foundational methodology for IT system integrations for future acquisitions, which has proved valuable as part of our integration efforts following the Merger with Civitas. As a result, the Compensation Committee adjusted the quantitative STIP result by the maximum amount of 0.10 for inventory growth and by the maximum amount of 0.10 for Uinta Basin integration. As stated above, the STIP multiplier may be further adjusted if the Company’s TSR for the annual performance period (inclusive of dividends) increases by an amount greater than 10 percent or decreases by an amount less than negative 10 percent. Any increase or decrease within the range of positive 10 percent and negative 10 percent has no impact on the multiplier. The Company’s 2025 TSR was equal to negative 50 percent (inclusive of dividends); therefore, the maximum downward adjustment was applied to the multiplier based on the TSR modifier (equal to 80 percent of the pre-adjusted multiplier). Accordingly, the total pool multiplier for the 2025 STIP was 0.93, as shown in the following table:
Short-Term Incentive Plan
| STIP Multiplier | | | Initial STIP Multiplier: Quantitative Metrics | 0.96 | | STIP Multiplier: Adjusted for Qualitative Metric (inventory) | 0.10 | | STIP Multiplier: Adjusted for Qualitative Metric (Uinta Integration) | 0.10 | | STIP Multiplier: Applying TSR Modifier(1) | -0.23 | | Final STIP Multiplier: | 0.93 | | _________________________ (1) Absolute TSR was -50%, which reduced the Final STIP Multiplier to 80% of its unmodified result. | |
Short-Term Incentive Plan
The table below sets forth our NEO’s base salaries actually earned in 2025, their target STIP payouts as a percentage of base salary, the STIP multiplier applied to each NEO’s STIP calculation, and their final STIP payouts.
Short-Term Incentive Plan
| Name | Salary Paid in 2025 | Target STIP %(1) | STIP Multiplier | STIP | | McDonald | $576,369 | 100% | 0.93 | $536,024 | | Pursell | $581,957 | 100% | 0.93 | $541,220 | | Lebeck | $462,485 | 80% | 0.93 | $344,089 | | Vogel | $889,262 | 120% | 0.93 | $992,416 | | Knott | $413,393 | 75% | 0.93 | $288,342 | | _______________________ (1) Expressed as a percentage of base salary. | | | | |
Long-Term Incentive Plan
Long-Term Incentive Plan Long-Term Incentive Plan—Design Our LTIP is an equity compensation program that 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 in 2025 were issued pursuant to our stockholder-approved 2025 Equity Incentive Compensation Plan, as it may be amended from time to time (the “Equity Plan”). 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, subject to continued employment. RSUs are settled in shares of our common stock shortly after 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, and also generally subject to continued employment. 2022-2025 LTIP Performance Period Results At the completion of the 2022-2025 performance period on June 30, 2025, PSU awards were earned and settled at 28 percent of target. The four 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. The Company’s actual performance with regard to each metric fell short of target, and the absolute and relative TSR metrics fell below the threshold level of performance resulting in no contribution to the overall multiplier.
Long-Term Incentive Plan
| LTIP Multiplier (2022-2025) | | | | | | | | Metric (weighting) | Description | 3-Year Performance Goals | | | Actual Performance | Payout Result | | | | Threshold (25% Payout) | Target (100% Payout) | Maximum (200% Payout) | | | | Free Cash Flow Generation(1) (25%) | Measurement of gross free cash flow generation during the period beginning on July 1, 2022, and ending on June 30, 2025. | $900 Million | $3 Billion | $4.3 Billion | $1.574 Billion | 0.12 | | Relative TSR (25%) | The Company’s TSR is compared to peer performance to determine the Company’s relative TSR percentile | 30th Percentile | 55th Percentile | 80th Percentile | 5th Percentile | 0.00 | | Sustainability Metrics (25%) | Measurement of the Company’s performance with regard to the following metrics: (10%) GHG Emissions Intensity Reduction(2) (10%) Employee and Contractor Safety(3) (5%) Spill Performance(4) | GHG Emissions Intensity Reduction: | | | 12% Reduction | 0.16 | | | | 10% Reduction | 20% Reduction | 40% Reduction | | | | | | Employee and Contractor Safety: | | | 53rd Percentile | | | | | 2nd Quartile | Top Quartile | Top Decile | | | | | | Spill Performance: | | | 86th Percentile | | | | | 2nd Quartile | Top Quartile | Top Decile | | | | Absolute TSR (25%) | Annualized stockholder return comparing the trailing 20-day average stock price of the Company’s stock as of June 30, 2022, to the trailing 20-day average of the Company’s stock price as of June 30, 2025, adjusted for cumulative dividends paid. | +0% | +10% | +20% | (14%) | 0.00 | | LTIP Multiplier: | | | | | | 0.28x |
Long-Term Incentive Plan
__________________________ (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) Reduction in metric tons of CO2e per gross MBoe produced (scope 1 + scope 2) from January 2022 through December 2024. (3) Total recordable incident rate as compared to the AXPC three-year average relative ranking. (4) Spill volumes (bbls/1000 bbls produced) as compared to the AXPC three-year average relative ranking. 2025-2028 LTIP Performance Period Design and Awards For the 2025-2028 performance period, the Compensation Committee evaluated LTIP designs among peer companies and considered a variety of alternatives presented by FW Cook (including maintaining the current design). Ultimately, the Compensation Committee, in consultation with FW Cook, established revised PSU performance metrics, weighting each of absolute and relative TSR at 50 percent. In making this decision, the Compensation Committee recognized that free cash flow and sustainability performance were less prevalent among peer companies’ LTIP designs and remained components of the Company’s STIP design. Furthermore, the Compensation Committee elected to retain the LTIP design feature that caps payout at target if absolute TSR is negative during the performance period, in order to align payouts to the experience of the Company’s stockholders in lower commodity price environments. With respect to both TSR metrics, a threshold level of performance is required in order to receive any payout based on that metric: absolute TSR must be positive, and relative TSR must rank higher than the 25th percentile. Further, a target level of performance is required to achieve target payout: for absolute TSR the target is 10 percent annualized return, and for relative TSR the target is ranking in the 55th percentile. Finally, a maximum level of performance is established beyond which payout is capped at 200 percent: for absolute TSR the maximum performance is 20 percent annualized return, and for relative TSR the maximum performance is ranking at or above the 80th percentile. We interpolate payout levels for performance falling between the threshold and maximum levels. No payout is awarded for performance below the threshold level, and negative absolute TSR caps the payout at target. The table below illustrates the LTIP’s absolute and relative TSR design:
Long-Term Incentive Plan
| | | Relative TSR (% Rank) | | | | | | | < 25th P | 25th P | 55th P | > 80th P | | Absolute TSR (CAGR) | 0% | 0% | 25% | 50% | 100% | | | 10% | 50% | 75% | 100% | 150% | | | 20% | 100% | 125% | 150% | 200% |
Long-Term Incentive Plan
In determining the total LTIP grant values for 2025, 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 review, and shares available under our Equity Plan. Following such consideration, the Compensation Committee approved the following 2025 target LTIP award values:
Long-Term Incentive Plan
| Name | 2025 LTIP Grant Value | | McDonald | $2,299,995 | | Pursell | $2,499,989 | | Lebeck | $1,699,987 | | Vogel | $5,500,001 | | Knott | $800,002 |
Long-Term Incentive Plan
RSUs and PSUs were approved in June 2025 and awarded on July 1, 2025, consistent with our typical equity grant timing, with the PSUs subject to the measurement period beginning July 1, 2025, and ending June 30, 2028. The graphic below reflects the structure of our 2025 long-term incentive awards to our NEOs:
SECTION 5—Compensation Determination Process
SECTION 5—Compensation Determination Process Responsibilities of the Compensation Committee Our executive compensation is determined by the Compensation Committee. During 2025, the Compensation Committee was comprised of four independent directors and continued to operate under the framework of a written charter. Members of the Compensation Committee are appointed by our Board for, among other things, the purposes of: •reviewing and approving our general compensation strategy and objectives, as well as disclosure required by SEC and listing exchange rules and regulations; •reviewing and recommending our compensation plans, policies and programs to the Board for its approval; •reviewing the performance and approving the compensation of our directors and executive officers, including our Chief Executive Officer; and •overseeing the administration of our employee compensation and benefit plans. In 2025, the Compensation Committee met eight times to administer the matters noted above and address other matters required under its charter. 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. After consideration of various independence factors, the Compensation Committee determined in 2025 that FW Cook’s work did not raise any potential conflicts of interest. In 2025, 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 2025 and 2026, 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 (Mr. Vogel for 2025 compensation and Ms. McDonald for 2026 compensation) recommends pay levels for executives, other than himself or herself, 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, Executive Vice President and Chief Financial Officer, Executive Vice President and Chief Operating Officer, and Executive Vice President - Chief Corporate Development Officer, General Counsel and Corporate Secretary 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. Say-On-Pay Results and Stockholder Feedback We value the opinions of our stockholders regarding our executive compensation policies and practices. Our Board and management team are committed to maintaining an open dialogue with our stockholders, including regarding our executive compensation program. At the 2025 annual meeting of stockholders, approximately 93 percent of the votes cast in our say-on-pay advisory vote were in favor of our executive compensation policies and practices. Given the support shown, we did not make any changes to our 2025 compensation program in specific response to the say-on-pay vote.
SECTION 6—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). These policies and procedures, as well as procedures that the Company follows, are reasonably designed to promote compliance with insider trading laws, rules and regulations and applicable listing standards. A copy of our adopted Securities Trading Policy is filed as Exhibit 19.1 to our 2024 Annual Report.
Section 7—CEO and Officer Transitions
Section 7—CEO and Officer Transitions As noted above, on January 30, 2026, we completed the Merger with Civitas. In connection with the Merger, the Board appointed Ms. McDonald to serve as the President and Chief Executive Officer of the Company, and Mr. Vogel’s employment as Chief Executive Officer was terminated in advance of his otherwise planned retirement in a manner that qualified for severance benefits under the Company’s change of control executive severance agreements. The Merger with Civitas constituted a “change of control” of the Company under our change of control executive severance agreements and equity awards, and thus, Mr. Vogel received the severance benefits provided pursuant to the terms of such agreements and awards (see “Potential Payments Upon Termination or Change of Control—Change of Control Arrangements” for more information). In connection with her appointment as President and Chief Executive Officer, the Board approved the following compensation package for Ms. McDonald effective as of January 30, 2026: an annual base salary of $900,000, a short-term incentive plan target of 120 percent of annual base salary, and a long-term incentive plan target of $5,300,000 (to be granted 40 percent in the form of RSUs and 60 percent in the form of PSUs). In addition, in connection with the Merger, Mr. Knott’s service as Senior Vice President – Business Development and Land concluded and at the time of this filing, Mr. Knott continues to serve as a non-executive advisor to the Company supporting transition and integration matters related to the Merger. Mr. Knott’s employment with the Company is expected to be terminated in 2026 in a manner that qualifies for severance benefits under the Company’s change of control executive severance agreements.
Summary Compensation Table
Summary Compensation Table The Summary Compensation Table (the “SCT”) sets forth the annual and long-term compensation of our NEOs during each of the last three years.
Summary Compensation Table
| Name and Principal Position | Year | Salary | Bonus(1) | Stock Awards(2) | Non-Equity Incentive Plan Compensation(3) | Change In Pension Value and Non-Qualified Deferred Compensation Earnings(4) | All Other Compensation(5) | Total | | Elizabeth A. McDonald | 2025 | $576,369 | $875,000 | $2,299,995 | $536,024 | $— | $187,784 | $4,475,172 | | President, Chief Executive Officer and Director | 2024 | $161,539 | $875,000 | $2,300,009 | $211,615 | $— | $11,631 | $3,559,794 | | A. Wade Pursell | 2025 | $581,957 | $— | $2,499,989 | $541,220 | $215,853 | $21,000 | $3,860,019 | | Executive Vice President and Chief Financial Officer | 2024 | $558,874 | $— | $2,499,999 | $2,422,124 | $165,015 | $20,700 | $5,666,712 | | | 2023 | $532,834 | $— | $2,249,983 | $1,784,000 | $116,994 | $20,011 | $4,703,822 | | James B. Lebeck | 2025 | $462,485 | $— | $1,699,987 | $344,089 | $— | $48,291 | $2,554,852 | | Executive Vice President - Chief Corporate Development Officer, General Counsel and Corporate Secretary | 2024 | $444,141 | $— | $1,600,001 | $459,641 | $— | $68,858 | $2,572,641 | | | 2023 | $396,923 | $— | $1,500,042 | $826,000 | $— | $167,116 | $2,890,081 | | Herbert S. Vogel | 2025 | $889,262 | $— | $5,500,001 | $992,416 | $342,029 | $154,904 | $7,878,612 | | Former President, Chief Executive Officer and Director | 2024 | $853,989 | $— | $5,499,984 | $5,398,471 | $319,552 | $168,666 | $12,240,662 | | | 2023 | $814,200 | $— | $4,999,989 | $4,815,816 | $295,736 | $134,889 | $11,060,630 | | Kenneth J. Knott | 2025 | $413,393 | $— | $800,002 | $288,342 | $171,059 | $69,206 | $1,742,002 | | Advisor, Former Senior Vice President - Business Development and Land | 2024 | $396,996 | $— | $800,019 | $875,923 | $121,847 | $72,618 | $2,267,403 | | | 2023 | $378,499 | $— | $750,005 | $717,175 | $85,311 | $61,755 | $1,992,745 |
Summary Compensation Table
______________________________________ (1) Ms. McDonald received a sign-on bonus of $1,750,000 in 2024 that was intended to serve as a make-whole award to replace forfeited compensation opportunities she would have been due from her prior employer. A total of 50% was paid with her first paycheck and the remainder was paid on the first anniversary of her start date. (2) 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 2025 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 and the grant date fair value is based on the probable outcome of such conditions. The grant date value of the 2025 PSUs for each NEO assuming maximum performance are as follows: (i) Ms. McDonald: $2,181,840; (ii) Mr. Pursell: $2,371,567; (iii) Mr. Lebeck: $1,612,657; (iv) Mr. Vogel: $6,261,005; and (v) Mr. Knott: $758,910. For additional information about long-term performance based-awards granted in 2025 see “2025-2028 LTIP Performance Period Design and Awards.” (3) The amounts in this column represent the aggregate of: (i) the cash bonuses paid in 2026, 2025, and 2024, but earned with respect to the 2025, 2024, and 2023 performance periods, respectively, under the STIP, and (ii) the payout of the performance-based cash awards granted in 2021 and 2020 and paid in 2024 and 2023, respectively. (4) 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 defined 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. (5) For 2025, amounts consist of the following Company contributions and other compensation: (i) for Ms. McDonald: $34,582 to the Company’s NQDC and $31,500 to the Company’s 401(k) Profit Sharing Plan, and $121,702 for relocation reimbursement, of which $31,951 was a gross up for relocation tax benefit; (ii) for Mr. Pursell: $21,000 to the Company’s 401(k) Profit Sharing Plan; (iii) for Mr. Lebeck: $31,500 to the Company’s 401(k) Profit Sharing Plan and $16,791 for relocation reimbursement; (iv) for Mr. Vogel: $133,904 to the Company’s NQDC and $21,000 to the Company’s 401(k) Profit Sharing Plan; and (v) for Mr. Knott: $48,206 to the Company’s NQDC and $21,000 to the Company’s 401(k) Profit Sharing Plan.
Grants of Plan-Based Awards in 2025
Grants of Plan-Based Awards in 2025 Pursuant to our STIP, and in accordance with our Cash Bonus Plan, the Compensation Committee established the quantitative and qualitative metrics for our 2025 STIP on February 13, 2025. As discussed above, the bonus payments associated with the 2025 STIP were earned in 2025, but were paid in 2026. 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 9, 2025. These grants were made effective as of July 1, 2025. These grants are summarized in the table below.
Grants of Plan-Based Awards in 2025
| Name | Grant Date | Approval 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(7) | Grant Date Fair Value of Stock and Option Awards(8) | | | | | Threshold(1) | Target(2) | Maximum(3) | Threshold(4) | Target(5) | Maximum(6) | | | | Elizabeth A. McDonald | | | $288,185 | $576,369 | $1,152,738 | — | — | — | — | — | | | 7/1/25 | 6/9/25 | — | — | — | — | — | — | 44,163 | $1,150,005 | | | 7/1/25 | 6/9/25 | — | — | — | 10,474 | 41,894 | 83,788 | — | $1,149,990 | | A. Wade Pursell | | | $290,979 | $581,957 | $1,163,914 | — | — | — | — | — | | | 7/1/25 | 6/9/25 | — | — | — | — | — | — | 48,003 | $1,249,998 | | | 7/1/25 | 6/9/25 | — | — | — | 11,384 | 45,537 | 91,074 | — | $1,249,991 | | James B. Lebeck | | | $184,994 | $369,988 | $739,976 | — | — | — | — | — | | | 7/1/25 | 6/9/25 | — | — | — | — | — | — | 32,642 | $849,998 | | | 7/1/25 | 6/9/25 | — | — | — | 7,741 | 30,965 | 61,930 | — | $849,989 | | Herbert S. Vogel | | | $533,557 | $1,067,114 | $2,134,229 | — | — | — | — | — | | | 7/1/25 | 6/9/25 | — | — | — | — | — | — | 84,485 | $2,199,989 | | | 7/1/25 | 6/9/25 | — | — | — | 30,055 | 120,219 | 240,438 | — | $3,300,012 | | Kenneth J. Knott | | | $155,022 | $310,045 | $620,090 | — | — | — | — | — | | | 7/1/25 | 6/9/25 | — | — | — | — | — | — | 15,361 | $400,000 | | | 7/1/25 | 6/9/25 | — | — | — | 3,643 | 14,572 | 29,144 | — | $400,001 |
Grants of Plan-Based Awards in 2025
______________________________________________ (1) This amount represents the award earned under the Cash Bonus Plan, assuming we achieve the threshold performance for each metric under the plan, resulting in an earned percentage of 50 percent of target. However, as described above in “Section 4—Primary Elements Of Compensation and Executive Compensation Results,” actual bonuses range from zero to two times a participant’s target percentage. (2) This amount represents the salary amount actually paid to each of our NEOs in 2025, multiplied by the applicable STIP target percentage. (3) This amount represents the maximum possible award; as described above in “Section 4—Primary Elements Of Compensation and Executive Compensation Results,” actual bonuses range from zero to two times a participant’s target percentage. (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 threshold performance level established for each metric under the plan, resulting in an earned percentage of 25 percent. (5) 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, 2028, 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 annualized absolute TSR and the Company’s TSR relative to the TSR of certain peer companies, in each case as defined by the award agreement. The PSUs will vest on July 1, 2028. The PSUs granted to Messrs. Vogel, Pursell and Knott are subject to the three-year performance period; however because these individuals were of retirement eligible age, as defined in their respective award agreements, on the award date, if retirement occurs before the end of the performance period, a pro-rata portion of the applicable PSUs will remain eligible to vest (pro-rated based on the number of days elapsed during the three-year performance period beginning on the award date) based on actual performance of the performance metrics. For additional detail regarding the 2025 performance-based equity awards, please see “2025-2028 LTIP Performance Period Design and Awards.” (6) 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. (7) This amount represents RSUs granted under our Equity Plan. The RSUs vest one-third on July 1, 2026, one-third on July 1, 2027, and one-third on July 1, 2028 (with the exception of Mr. Vogel, Mr. Knott and Mr. Pursell 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. Dividends are credited to the holder and paid at the expiration of the vesting period or forfeited if the RSUs are forfeited. 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, Mr. Knott and Mr. Pursell are subject to pro rata vesting due to them attaining retirement eligible age, as defined in the award agreement, on the award date. As such, the awards vest one-sixth on January 1, 2026, one-sixth on July 1, 2026, one-sixth on January 1, 2027, one-sixth on July 1, 2027, one-sixth on January 1, 2028, and one-sixth on July 1, 2028. Shares are only released with respect to vested RSUs on the July 1 dates (or upon their earlier termination of employment). (8) 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 Monte Carlo simulation (using 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.
Outstanding Equity Awards at 2025 Year-End
Outstanding Equity Awards at 2025 Year-End The following table shows outstanding equity awards for our NEOs as of December 31, 2025:
Outstanding Equity Awards at 2025 Year-End
| Name | Stock Awards | | | | | | Equity Incentive Plan Awards: | | | | | | 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) | | Elizabeth A. McDonald | | | | | | RSUs (2) | 19,380 | $362,406 | — | $— | | RSUs (3) | 44,163 | $825,848 | — | $— | | PSUs (4) | — | $— | 26,895 | $502,937 | | PSUs (5) | — | $— | 41,894 | $783,418 | | A. Wade Pursell | | | | | | RSUs (6) | 11,855 | $221,689 | — | $— | | RSUs (7) | 19,087 | $356,927 | — | $— | | RSUs (8) | 48,003 | $897,656 | — | $— | | PSUs (4) | — | $— | 29,234 | $546,676 | | PSUs (9) | — | $— | 37,590 | $702,933 | | PSUs (10) | — | $— | 45,537 | $851,542 | | James B. Lebeck | | | | | | RSUs (3) | 32,642 | $610,405 | — | $— | | RSUs (6) | 5,269 | $98,530 | — | $— | | RSUs (7) | 12,216 | $228,439 | — | $— | | RSUs (11) | 14,698 | $274,853 | — | $— | | PSUs (4) | — | $— | 18,710 | $349,877 | | PSUs (5) | — | $— | 30,965 | $579,046 | | PSUs (9) | — | $— | 16,707 | $312,421 | | Herbert S. Vogel (16) | | | | | | RSUs (8) | 84,485 | $1,579,870 | — | $— | | RSUs (12) | 21,076 | $394,121 | — | $— | | RSUs (13) | 33,593 | $628,189 | — | $— | | PSUs (10) | — | $— | 120,219 | $2,248,095 | | PSUs (14) | — | $— | 100,240 | $1,874,488 | | PSUs (15) | — | $— | 77,177 | $1,443,210 | | Kenneth J. Knott | | | | | | RSUs (6) | 3,952 | $73,902 | — | $— | | RSUs (7) | 6,109 | $114,238 | — | $— | | RSUs (8) | 15,361 | $287,251 | — | $— | | PSUs (4) | — | $— | 9,355 | $174,939 | | PSUs (9) | — | $— | 12,530 | $234,311 | | PSUs (10) | — | $— | 14,572 | $272,496 |
Outstanding Equity Awards at 2025 Year-End
(1) The market values of RSUs and PSUs that have not vested are calculated using the closing price of $18.70 of our common stock on December 31, 2025. (2) These RSUs were granted on September 9, 2024, and vest in 1/3 increments with the remaining vesting scheduled to occur 1/3 on July 1, 2026, and 1/3 on July 1, 2027. (3) These RSUs were granted on July 1, 2025, and vest in 1/3 increments with the vesting scheduled to occur 1/3 on July 1, 2026, 1/3 on July 1, 2027, and 1/3 on July 1, 2028. (4) These PSUs were granted on October 1, 2024, and vest on July 1, 2027. The PSUs are subject to a three-year performance period ending June 30, 2027. The award is reported at an earned percentage of 100 percent. (5) These PSUs were granted on July 1, 2025, and vest on July 1, 2028. The PSUs are subject to a three-year performance period ending June 30, 2028. The award is reported at an earned percentage of 100 percent. (6) These RSUs were granted on July 1, 2023, and vest in 1/3 increment with the remaining vesting scheduled to occur on July 1, 2026. (7) These RSUs were granted July 1, 2024, and vest in 1/3 increments with the remaining vesting scheduled to occur 1/3 on July 1, 2026, and 1/3 on July 1, 2027. (8) These RSUs were granted July 1, 2025, and vest(ed) in 1/6 increments with the remaining vesting scheduled to occur (or having occurred) 1/6 on January 1, 2026, 1/6 on July 1, 2026, 1/6 on January 1, 2027, 1/6 on July 1, 2027, 1/6 on January 1, 2028, and 1/6 on July 1, 2028. (9) These PSUs were granted on July 1, 2023, and 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 were granted on July 1, 2025, and vest on July 1, 2028. The PSUs are subject to a three-year performance period ending June 30, 2028. The award is reported at an earned percentage of 100 percent, based on year-end trending performance. However, for retirement eligible employees, if retirement occurs before the end of the performance period, a pro-rated portion of these PSUs will remain eligible to vest (pro-rated based on the number of days elapsed during the three-year performance period beginning on the award date) based on actual performance of the performance metrics. (11) These RSUs were granted on January 23, 2023, and vested on January 23, 2026. (12) These RSUs were granted on July 1, 2023, and vest(ed) in 1/6 increments with the remaining vesting scheduled to occur (or having occurred) 1/6 on January 1, 2026, and 1/6 on July 1, 2026. (13) These RSUs were granted on July 1, 2024, and vest(ed) in 1/6 increments with the remaining vesting scheduled to occur (or having occurred) 1/6 on January 1, 2026, 1/6 on July 1, 2026, 1/6 on January 1, 2027, and 1/6 on July 1, 2027. (14) These PSUs were granted on July 1, 2023, and 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, based on year-end trending performance. However, for retirement eligible employees, if retirement occurs before the end of the performance period, a pro-rated portion of these PSUs will remain eligible to vest (pro-rated based on the number of days elapsed during the three-year performance period beginning on the award date) based on actual performance of the performance metrics. (15) These PSUs were granted on October 1, 2024, and vest on July 1, 2027. The PSUs are subject to a three-year performance period ending June 30, 2027. The award is reported at an earned percentage of 100 percent, based on year-end trending performance. However, for retirement eligible employees, if retirement occurs before the end of the performance period, a pro-rated portion of these PSUs will remain eligible to vest (pro-rated based on the number of days elapsed during the three-year performance period beginning on the award date) based on actual performance of the performance metrics. (16) For a description of the treatment of Mr. Vogel’s equity awards upon his termination in advance of his otherwise planned retirement, see “Potential Payments upon Termination or Change of Control-Change of Control Arrangements” below.
2025 Stock Vested
2025 Stock Vested
2025 Stock Vested
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting(1) | Value Realized on Vesting(2) | | Elizabeth A. McDonald | 9,690 | $258,820 | | A. Wade Pursell | 43,350 | $1,071,179 | | James B. Lebeck | 11,376 | $281,101 | | Herbert S. Vogel | 84,200 | $2,080,582 | | Kenneth J. Knott | 13,642 | $337,094 |
2025 Stock Vested
____________________________ (1) This column represents the number of shares of common stock issued upon the vesting and settlement of RSUs and PSUs during 2025. As discussed above, each RSU and PSU represents a right to receive one share of our common stock upon settlement pursuant to the terms of the award agreement. (2) The value realized on vesting and settlement of the RSUs is computed by multiplying the number of shares of common stock issued upon the vesting and settlement of RSUs 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 $24.71 on June 30, 2025, for the vesting and settlement of the third vesting tranche of the 2022 RSU awards, the vesting and settlement of the second vesting tranche of the 2023 RSU awards, and the vesting and settlement of the first vesting tranche of the 2024 RSU awards, all of which were settled on July 1, 2025; and $24.71 on June 30, 2025, for the vesting and full settlement of the July 1, 2022 PSU awards, which were settled based upon an earned percentage of 28%. Additionally, one-third of Ms. McDonald’s RSUs granted on September 9, 2024, vested on September 9, 2025, at a per share closing market price of $26.71.
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 2025 limit was $350,000 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, 2025:
Pension Benefits
| Name | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit | Payment During Last Fiscal Year | | Elizabeth A. McDonald | Qualified Pension Plan | — | $— | $— | | | Non–Qualified SERP Pension Plan | — | $— | $— | | A. Wade Pursell | Qualified Pension Plan | 17 | $840,209 | $— | | | Non–Qualified SERP Pension Plan | 17 | $548,486 | $— | | James B. Lebeck | Qualified Pension Plan | — | $— | $— | | | Non–Qualified SERP Pension Plan | — | $— | $— | | Herbert S. Vogel | Qualified Pension Plan | 14 | $851,819 | $— | | | Non–Qualified SERP Pension Plan | 14 | $1,287,378 | $— | | Kenneth J. Knott | Qualified Pension Plan | 25 | $1,065,174 | $— | | | Non–Qualified SERP Pension Plan | 25 | $175,681 | $— |
Non-Qualified Deferred Compensation for 2025
Non-Qualified Deferred Compensation for 2025 This Non-Qualified Deferred Compensation table sets forth the NEOs participation in the NQDC. This plan allows eligible employees to defer part of their salary and annual incentive bonus on a voluntary basis.
Non-Qualified Deferred Compensation for 2025
| 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 | | Elizabeth A. McDonald | $34,582 | $34,582 | $8,955 | $— | $78,119 | | A. Wade Pursell | $— | $— | $168,903 | $— | $1,253,161 | | James B. Lebeck | $— | $— | $14,220 | $— | $93,827 | | Herbert S. Vogel | $133,904 | $133,904 | $152,464 | $— | $2,948,183 | | Kenneth J. Knott | $52,107 | $48,206 | $252,473 | $— | $1,775,154 |
Non-Qualified Deferred Compensation for 2025
____________________________ (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 NQDC 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.
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. The Merger, which closed on January 30, 2026, constituted a Change of Control event under these agreements. 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, the requirement that an executive relocate his or her base of employment outside a 25-mile radius from the executive’s primary work location at the time of the Change of Control, failure of the Company to pay certain compensation and benefits, a material breach of the agreement, or failure of any successor to assume the agreement. Upon a qualifying termination under the change of control severance agreements, the NEOs are entitled to receive a lump sum payment equal to 2.5 times (or 3.0 times for Mr. Vogel) the sum of (i) the greater of the NEO’s base salary as in effect on the termination date or as of immediately prior to the Change of Control and (ii) the greater of the NEO’s target short term incentive plan award as in effect on the termination date or as of immediately prior to the Change of Control. In addition, the NEOs would be entitled to a pro-rata target short term incentive plan award for the year of termination and a lump sum payment equal to 24 times the Company’s then monthly contribution for medical, dental, and vision insurance on behalf of the NEO and the NEO’s family. 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. Outstanding equity awards held by the NEOs are generally subject to “double trigger” vesting, meaning that outstanding awards will only accelerate in the event of a Change of Control to the extent that the NEO’s employment or engagement is terminated without cause or the NEO resigns for good reason following the Change of Control. In such case, outstanding RSUs and PSUs will fully accelerate, with performance goals deemed to have been achieved at target levels. Upon a termination due to death or disability, (i) RSUs will immediately vest, and (ii) the PSUs will remain outstanding and be eligible to vest based on actual performance of the performance goals. For retirement eligible employees (those who are at least 60 years of age and have completed at least 10 years of service as of the grant date), (i) with respect to PSUs, upon their retirement, a pro-rated portion of the PSUs will remain eligible to vest (pro-rated based on the number of days that have elapsed during the three-year performance period) based on actual performance; and (ii) with respect to RSUs, the RSUs vest on a modified vesting schedule in 1/6th increments, with any unvested RSUs forfeited upon termination (unless otherwise accelerated in accordance with the foregoing termination provisions). With respect to our NEOs, 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, 2025, under the executive severance and change of control agreements that were in place at that time, and thus do not take into account the Merger with Civitas (which constituted a Change of Control for purposes of the change of control severance agreements and outstanding equity awards), nor the early termination of Mr. Vogel’s employment in January 2026 in advance of his otherwise planned retirement. 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.
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 (1) | Continued Employee Benefits | Total | | Elizabeth A. McDonald | | | | | | | Change of Control/No Termination | $— | $— | $— | $— | $— | | Change of Control Termination | $1,456,000 | $1,456,000 | $2,526,243 | $62,340 | $5,500,583 | | Termination upon Death or Disability | $— | $— | $2,526,243 | $— | $2,526,243 | | Voluntary Termination/Retirement | $— | $— | $— | $— | $— | | A. Wade Pursell | | | | | | | Change of Control/No Termination | $— | $— | $— | $— | $— | | Change of Control Termination | $1,470,115 | $1,470,115 | $3,908,200 | $64,630 | $6,913,060 | | Termination upon Death or Disability | $— | $— | $3,908,200 | $— | $3,908,200 | | Voluntary Termination/Retirement | $— | $— | $— | $— | $— | | James B. Lebeck | | | | | | | Change of Control/No Termination | $— | $— | $— | $— | $— | | Change of Control Termination | $1,168,311 | $934,650 | $2,679,314 | $61,424 | $4,843,699 | | Termination upon Death or Disability | $— | $— | $2,679,314 | $— | $2,679,314 | | Voluntary Termination/Retirement | $— | $— | $— | $— | $— | | Herbert S. Vogel | | | | | | | Change of Control/No Termination | $— | $— | $— | $— | $— | | Change of Control Termination | $2,695,699 | $3,234,837 | $5,867,917 | $58,235 | $11,856,688 | | Termination upon Death or Disability | $— | $— | $5,867,917 | $— | $5,867,917 | | Voluntary Termination/Retirement | $— | $— | $— | $— | $— | | Kenneth J. Knott | | | | | | | Change of Control/No Termination | $— | $— | $— | $— | $— | | Change of Control Termination | $1,044,297 | $783,223 | $1,268,617 | $36,807 | $3,132,944 | | Termination upon Death or Disability | $— | $— | $1,268,617 | $— | $1,268,617 | | Voluntary Termination/Retirement | $— | $— | $— | $— | $— |
Potential Payments Upon Termination or Change of Control
(1) 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, 2025, (ii) the target value of all unvested PSU awards as of December 31, 2025, based on the settlement conditions in each respective award agreement; and (iii) for both RSUs and PSUs, the value of dividend equivalent rights on such unvested awards. Upon termination due to death or disability, (i) RSUs immediately vest and are settled; and (ii) performance-based awards remain outstanding and such awards are not settled and released until the end of the respective performance period and determination of the final settlement factor. As described above, Mr. Vogel’s employment terminated in advance of his otherwise planned retirement in a manner that qualified for severance benefits under the Company’s change of control executive severance agreements and the Merger constituted a Change in Control under the Company’s change of control executive severance agreements and outstanding equity awards. As such, Mr. Vogel received the following payments and benefits in connection with his termination: (1) accelerated vesting of performance share awards totaling a value of $2,997,879 (based on our closing price per share on January 29, 2026 of $18.87) in accordance with each award agreement; (2) accelerated vesting of restricted share awards totaling a value of $2,002,805 (based on our closing price per share on January 29, 2026 of $18.87) in accordance with each award agreement; (3) severance benefits of $5,930,537, reflecting 3.0 times his base salary and target bonus; (4) a pro-rata 2026 target STIP award of $88,626, and (5) a $58,235 payment to offset the costs of continued medical, dental, and vision insurance coverage.
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 as of December 19, 2025, using the consistently applied compensation measure determined by calculating the sum of 2025 annual base salary 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 2025. We determined that the amount of the annual total compensation of our median employee for 2025 was $202,421. 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 2025. We then determined that the amount of our former CEO’s annual total compensation for 2025 was $7,878,612, which represents the amount reported for our former CEO in the “Total” column of the 2025 Summary Compensation Table.
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 | 2025 | $889,262 | $5,500,001 | $992,416 | $342,029 | $154,904 | $7,878,612 | | Former President, Chief Executive Officer and Director | | | | | | | | | Median Employee | 2025 | $128,500 | $31,795 | $30,917 | $— | $11,209 | $202,421 |
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 2 to the Summary Compensation Table set forth above. (2) The amounts in this column represent the cash bonuses paid in 2026, but earned during 2025, under the STIP. (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 NQDC, and any anniversary gift cards. Based on the foregoing, for 2025, the ratio of the annual total compensation of our CEO to the annual total compensation for our median employee is 39:1. This pay ratio is a reasonable estimate, calculated in a manner consistent with SEC rules and based on our payroll and employment records. The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
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.
Pay Versus Performance
| Pay Versus Performance | | | | | | | | | | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year (1) | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO (2)(3) | 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 (4) | Net Income | Adjusted Free Cash Flow (5) | | | | | | | | | (in millions) | | | 2025 | $7,878,612 | $(4,392,669) | $3,152,219 | $125,782 | $328.58 | $249.26 | $648 | $481 | | 2024 | $12,240,662 | $11,928,971 | $3,516,638 | $3,473,519 | $663.43 | $244.11 | $770 | $306 | | 2023 | $11,060,630 | $12,463,744 | $2,891,619 | $3,247,712 | $650.33 | $254.80 | $818 | $285 | | 2022 | $6,733,036 | $11,113,208 | $2,083,619 | $3,751,637 | $575.24 | $252.51 | $1,112 | $804 | | 2021 | $4,295,321 | $14,520,242 | $1,639,759 | $5,005,015 | $482.24 | $165.60 | $36 | $483 |
Pay Versus Performance
____________________________ (1) Herbert S. Vogel, served as principal executive officer (“PEO”) for each of the years shown. The remaining NEOs (“Non-PEO NEOs”) for each year presented above consisted of the following: •2025 and 2024: A. Wade Pursell, Elizabeth A. McDonald, James B. Lebeck, Kenneth J. Knott •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 (2) See “Adjustments to Determine Compensation Actually Paid” table below for additional detail. (3) Compensation Actually Paid to the PEO for 2025 is negative primarily due to a decline in the Company’s stock price during the year, which reduced the fair value of outstanding equity awards under the SEC’s required valuation methodology as calculated under Item 402(v) of Regulation S-K and does not reflect a recovery of compensation from the PEO. (4) The peer group used for comparison of cumulative total shareholder return is the Dow Jones Exploration and Production Index - DJUSOS. (5) 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. See “Performance Measure” table below for additional detail. The following table sets forth the adjustments made during 2025 in the Pay Versus Performance table to arrive at compensation actually paid to our PEO and non-PEO NEOs:
Pay Versus Performance
| Adjustments to Determine Compensation Actually Paid | | | | | 2025 | | | | PEO (Herbert S. Vogel) | Average for Non-PEO NEOs | | Total Compensation as reported in SCT | $7,878,612 | $3,152,219 | | Deduction of “Change in Pension Value and Nonqualified Deferred Compensation Earnings” reported in SCT | (342,029) | (96,728) | | Service cost for pension plans | 143,513 | 35,891 | | Deduction of “Stock Awards” reported in SCT | (5,500,001) | (1,824,993) | | Fair value of awards granted during year, which remain unvested as of year-end | 3,232,881 | 1,112,368 | | Year-over-year change in fair value of awards granted in prior years that were outstanding and unvested as of year-end | (7,700,131) | (1,864,073) | | Change in fair value from prior year-end to vesting date of awards granted in prior years that vested during the year | (2,105,514) | (388,902) | | Compensation Actually Paid | $(4,392,669) | $125,782 |
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.
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. | | Absolute TSR | Measurement of the compounded annual growth rate of the Company’s TSR. | | 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 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. |
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.
Pay Versus Performance
| PROPOSAL 2—ADVISORY VOTE ON EXECUTIVE COMPENSATION |
Pay Versus Performance
Our stockholders are being asked 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. We currently hold annual advisory votes to approve the compensation of our named executive officers and in accordance with such policy, the next advisory vote will be held at our 2027 annual meeting of stockholders. 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 incentivize 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 2025 we executed our core strategic objectives by achieving record operating cash flow and production, reducing net debt, returning capital to our stockholders, and expanding our top-tier inventory through the successful integration of the Uinta Basin asset and entering into the Merger with Civitas, which closed in January, 2026. 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 two qualitative metrics that are described in greater detail in the CD&A, the Compensation Committee applied a 0.93 times multiplier to our NEOs’ target cash bonus awards. With respect to the 2022-2025 LTIP performance period, our TSR performance fell below the threshold payout level on both an absolute and relative basis, resulting in zero payout for those metrics. With respect to the free cash flow generation metric, our performance exceeded the threshold level but fell short of target. With respect to the sustainability metric, our performance exceeded the threshold level for all three components, with two components (GHG emissions intensity reduction and employee and contractor safety) falling short of target, and one component (spill performance), exceeding target. Taken together, our 2022-2025 LTIP performance resulted in a PSU multiplier of 0.28 times. Over a five year period, our average LTIP multiplier is 1.36 times, and over a ten year period is 0.79 times, reflecting the rigorous nature of our LTIP. 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. 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 2026 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.”
Pay Versus Performance
| ☑ | Our Board recommends voting “FOR” the advisory vote to approve named executive officer compensation. |
Pay Versus Performance
| DIRECTOR COMPENSATION |
2025 Non-Employee Director Compensation*
2025 Non-Employee Director Compensation*
2025 Non-Employee Director Compensation*
| Name | Fees Earned or Paid in Cash | Stock Awards(1)(2)(3) | Option Awards(4) | Non-Equity Incentive Plan Compensation | Change in Pension Value and Non-Qualified Deferred Compensation Earnings | All Other Compensation(5) | Total | | Carla J. Bailo | $115,000 | $185,023 | $— | $— | $— | $— | $300,023 | | Stephen R. Brand(6) | $— | $— | $— | $— | $— | $— | $— | | Barton R. Brookman | $— | $280,038 | $— | $— | $— | $5,000 | $285,038 | | Ramiro G. Peru | $120,000 | $185,023 | $— | $— | $— | $25,000 | $330,023 | | Anita M. Powers | $— | $280,038 | $— | $— | $— | $— | $280,038 | | Julio M. Quintana | $95,000 | $325,030 | $— | $— | $— | $8,667 | $428,697 | | Rose M. Robeson | $115,000 | $185,023 | $— | $— | $— | $— | $300,023 | | William D. Sullivan | $— | $280,038 | $— | $— | $— | $5,000 | $285,038 | | Ashwin Venkatraman | $95,000 | $185,023 | $— | $— | $— | $— | $280,023 |
2025 Non-Employee Director Compensation*
____________________________ (1) The Company issued to Ms. Bailo, Mr. Brookman, Mr. Peru, Ms. Powers, Mr. Quintana, Ms. Robeson, Mr. Sullivan, and Mr. Venkatraman their respective equity retainer of 7,982 shares of our common stock on May 22, 2025, after each such director’s election to the Board on May 22, 2025. Mr. Brookman, Ms. Powers, and Mr. Sullivan elected to receive their 2025 cash retainer in shares of the Company’s common stock, which resulted in a grant on May 22, 2025, of 4,099 additional shares of the Company’s common stock under the Company’s Equity Plan. The Company issued to Mr. Quintana an additional 6,040 shares of the Company’s common stock on May 22, 2025, for serving as the non-executive Chairman of the Board. These stock awards are for the annual service period from May 22, 2025, through May 21, 2026. The shares became unrestricted on December 31, 2025. The value of the stock awards represents the grant date fair value as calculated under the valuation provisions required by FASB ASC Topic 718. (2) The grant date fair value of each share of our common stock issued to non-employee directors over their past year 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 2025.
2025 Non-Employee Director Compensation*
| Grant Date | Shares | Value | Grantee | | 5/22/2025 | 7,982 | $185,023 | Bailo, Peru, Robeson, Venkatraman | | 5/22/2025 | 12,081 | $280,038 | Brookman, Powers, Sullivan | | 5/22/2025 | 14,022 | $325,030 | Quintana |
2025 Non-Employee Director Compensation*
(3) As of December 31, 2025, the restrictions expired on the shares granted to our non-employee directors during 2025. As such, none of our non-employee directors held any unvested awards as of December 31, 2025. (4) For the year ended December 31, 2025, no stock options were issued to directors, nor have any stock options been issued to the directors since December 2004. As of December 31, 2025, the non-employee directors do not hold any outstanding stock options. (5) The amounts in this column represent matching charitable contributions made on the behalf of Messrs. Brookman, Peru, Quintana and Sullivan for the year 2025 under our matching charitable gift program. (6) Dr. Brand retired from the Board effective as of the adjournment of the Company’s 2025 annual meeting of stockholders. * Each of Morris R. Clark, Carrie M. Fox, Lloyd W. Helms, Jr., Wouter T. van Kempen and Howard A. Willard III served as directors of Civitas prior to the Merger. In connection with their service as directors of Civitas during 2025 through the closing of the Merger, they received compensation from Civitas (including cash compensation and the grant date value of equity awards) as follows: Mr. Clark $506,675; Ms. Fox $481,675; Mr. Helms $533,734, Mr. van Kempen $510,341; and Mr. Willard $551,974. In addition, Mr. van Kempen served as Interim Chief Executive Officer of Civitas from August 6, 2025, through the closing of the Merger and received total compensation (including cash compensation, the grant date value of equity awards, cash severance payments and the Merger-related retention bonus described below) of $19,529,669 in connection with his service in such capacity. Prior to the closing of the Merger, the Civitas Compensation Committee approved retention bonuses for all of Civitas’ employees from the $50,000,000 retention bonus pool established pursuant to the Merger Agreement, including $21,000,000 to Civitas’ executive officers, which bonuses were incremental to any cash compensation, grant date equity awards and cash severance payments previously awarded. SM Energy was not involved in the decisions with respect to the retention bonus pool and the specific allocations of the $21,000,000 among the executive officers were not disclosed to SM Energy until after the Merger closing. These awards included the following amounts for the executive officers of Civitas: Mr. van Kempen $6,000,000; Travis Counts $6,000,000; Clay Carrell $5,000,000 and Marianella Foschi $4,000,000.

DEF 14A of SM Energy Co

TABLE OF CONTENTS

Executive Compensation Philosophy and Design

Executive Compensation Philosophy and Design

Director Nominee Core Competencies and Composition Highlights

Director Nominees

Director Nominees

Director Nominees

Director Nominees

Director Nominees

Director Nominees

Director Nominees

Director Nominees

Director Nominees

Director Nominees

Director Nominees

Director Nominees

Director Nominees

Director Nominees

Director Nominees

Director Nominees

Director Nominees

Director Nominees

Director Nominees

Director Nominees

Director Nominees

SECTION 1—Aligning Strategy with Stockholder Value Creation: Our Compensation Philosophy and Objectives

SECTION 1—Aligning Strategy with Stockholder Value Creation: Our Compensation Philosophy and Objectives

SECTION 3—Competitive Positioning: Selection and Purpose of Our Comparative Peer Group

SECTION 3—Competitive Positioning: Selection and Purpose of Our Comparative Peer Group

SECTION 3—Competitive Positioning: Selection and Purpose of Our Comparative Peer Group

SECTION 4—Primary Elements of 2025 Compensation and Executive Compensation Results

2025 Incentive Plan Results

2025 Incentive Plan Results

Short-Term Incentive Plan

Short-Term Incentive Plan

Short-Term Incentive Plan

Short-Term Incentive Plan

Short-Term Incentive Plan

Short-Term Incentive Plan

Short-Term Incentive Plan

Short-Term Incentive Plan

Short-Term Incentive Plan

Short-Term Incentive Plan

Long-Term Incentive Plan

Long-Term Incentive Plan

Long-Term Incentive Plan

Long-Term Incentive Plan

Long-Term Incentive Plan

Long-Term Incentive Plan

Long-Term Incentive Plan

SECTION 5—Compensation Determination Process

SECTION 6—Other Compensation Matters

Section 7—CEO and Officer Transitions

Summary Compensation Table

Summary Compensation Table

Summary Compensation Table

Grants of Plan-Based Awards in 2025

Grants of Plan-Based Awards in 2025

Grants of Plan-Based Awards in 2025

Outstanding Equity Awards at 2025 Year-End

Outstanding Equity Awards at 2025 Year-End

Outstanding Equity Awards at 2025 Year-End

2025 Stock Vested

2025 Stock Vested

2025 Stock Vested

Pension Benefits

Pension Benefits

Non-Qualified Deferred Compensation for 2025

Non-Qualified Deferred Compensation for 2025

Non-Qualified Deferred Compensation for 2025

Potential Payments Upon Termination or Change of Control

Potential Payments Upon Termination or Change of Control

Potential Payments Upon Termination or Change of Control

CEO Pay Ratio

CEO Pay Ratio

CEO Pay Ratio

Pay Versus Performance

Pay Versus Performance

Pay Versus Performance