DEF 14A of Oneok Inc /New/
Filed Apr 2, 2025 · FY20240001039684-25-000048
instructions, your shares will not be voted in the election of directors or in certain other important
instructions, your shares will not be voted in the election of directors or in certain other important
SHAREHOLDER ACTIONS
| Approval of the ONEOK, Inc. 2025 Equity Incentive Plan We are seeking approval of the ONEOK, Inc. 2025 Equity Incentive Plan. | | | | Our Board recommends that shareholders VOTE IN FAVOR of the approval of the ONEOK, Inc. 2025 Equity Incentive Plan. |
Proposal 1 – Election of Directors
Proposal 1 – Election of Directors Our By-laws provide for majority voting for directors in uncontested elections. We expect that the election of directors at our 2025 annual meeting will be uncontested. Under the majority voting standard, the election of directors is decided by the affirmative vote of a majority of the votes cast with respect to that nominee’s election by the shareholders present online or by proxy at the meeting and entitled to vote for the election of directors. In other words, to be elected a nominee must receive a number of “for” votes that exceeds the number of “against” votes cast with respect to that director’s election. Abstentions and broker non-votes, if any, do not count as “for” or “against” votes cast with respect to the election of directors. Under Oklahoma law, if an incumbent director who is a nominee does not receive, in an uncontested election, the requisite majority vote to be elected at an annual meeting, that director remains in office as a “holdover” director. However, our Corporate Governance Guidelines require that such a director must promptly, following certification of the shareholder vote, tender his or her resignation to our Board. The Board, excluding the director who tendered the resignation, will then evaluate the resignation in light of the best interests of our company and our shareholders in determining whether to accept or reject the resignation, or whether other action should be taken. In reaching its decision, the Board may consider any factors it deems relevant, including the director’s qualifications, the director’s past and expected future contributions to the company, the overall composition of the Board and whether accepting the tendered resignation would cause the company to fail to comply with any applicable rule or regulation (including NYSE listing requirements and the federal securities laws). The Board will act on the tendered resignation and publicly disclose its decision and rationale within 90 days following certification of the shareholder vote.
Incentive Plan
Incentive Plan In accordance with our By-laws, approval of Proposal 3 requires the affirmative vote of a majority of the voting power of the shareholders present online or by proxy and entitled to vote on the proposal at the meeting. Abstentions will have the same effect as votes against Proposal 3. If you do not provide voting instructions to your brokerage firm or similar person holding your shares, they will not be permitted to vote your shares on Proposal 3. Broker non-votes do not count as shares entitled to vote for purposes of determining the outcome of the vote on Proposal 3.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The Executive Compensation Committee reviews director compensation on an annual basis in consultation with Meridian Compensation Partners, the Committee’s independent compensation consultant. This review includes consideration of director compensation data compiled by Meridian Compensation Partners for the same peer group used to assess compensation for our executive officers in order to assess the competitive levels and types of compensation for our directors. We refer to this peer group as our “Energy Peers,” as discussed in further detail in the Compensation Discussion & Analysis. In addition to considering director compensation data compiled by Meridian Compensation Partners, the Committee also considers relevant factors, such as our company’s financial and operational performance, when reviewing director compensation. After completing its review, the Committee submits its recommendation for director compensation to the full Board for approval. Following its review in February 2024, the Committee recommended, and the full Board approved, the changes to the compensation paid to each of our non-management directors shown in the table below, which were effective as of May 1, 2024. Changes to director compensation during 2024 were intended to align average total compensation with the market median when compared to our Energy Peers. Prior to this increase, director compensation was last increased in February 2022.
DIRECTOR COMPENSATION
| | Cash Retainer(1) | Stock Retainer(2) | Committee Chair Cash Retainers | | Board Chair Cash Retainer | Lead Director Cash Retainer | | May 2024 through April 2025 | $110,000 | $170,000 | Audit | $25,000 | $185,000 | $25,000 | | | | | Executive Compensation | $20,000 | | | | | | | Corporate Governance | $20,000 | | |
DIRECTOR COMPENSATION
| | Cash Retainer(1) | Stock Retainer(2) | Committee Chair Cash Retainers | | Board Chair Cash Retainer | Lead Director Cash Retainer | | May 2023 through April 2024 | $100,000 | $150,000 | Audit | $25,000 | $165,000 | $25,000 | | | | | Executive Compensation | $20,000 | | | | | | | Corporate Governance | $20,000 | | |
DIRECTOR COMPENSATION
(1)Directors may elect to receive cash retainers, including committee chair retainers, in fully vested shares of common stock. (2)The number of shares of common stock issued for the annual stock retainer is determined based on the closing price of our company’s common stock on the NYSE on the date of the Board meeting immediately following the company’s annual shareholder meeting. All directors are reimbursed for reasonable expenses incurred in connection with attendance at Board and committee meetings. Our one management director, Pierce H. Norton II, receives no compensation for his service as a director. Our Board has established minimum share-ownership guidelines for members of our Board that provide that, within five years after joining the Board, each non-management director will own shares of our common stock having a minimum value of five times the annual cash retainer paid for service on our Board. Our share-ownership guidelines provide that a director may not sell shares of his or her stock unless such director holds shares that meet the minimum ownership guidelines after giving effect to such sale. All directors were in compliance with these guidelines in 2024. Our shareholder-approved 2018 EIP imposes meaningful caps on the value of stock awards granted to our directors each year.
DIRECTOR COMPENSATION
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DIRECTOR COMPENSATION
Governance of the Company The following table sets forth the compensation paid to our non-management directors in 2024.
DIRECTOR COMPENSATION
| Director | Fees Earned or Paid in Cash(1) | Stock Awards(1),(2),(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(4) | All Other Compensation(5) | Total | | Brian L. Derksen | $135,000 | $170,000 | $— | $5,000 | $310,000 | | Julie H. Edwards | $295,000 | $170,000 | $353 | $1,000 | $466,353 | | Lori A. Gobillot | $110,000 | $170,000 | $— | $1,000 | $281,000 | | Mark W. Helderman | $110,000 | $170,000 | $— | $1,000 | $281,000 | | Randall J. Larson | $130,000 | $170,000 | $— | $1,000 | $301,000 | | Steven J. Malcolm(6) | $33,333 | $— | $— | $22,500 | $55,833 | | Jim W. Mogg(6) | $20,000 | $— | $706 | $15,000 | $35,706 | | Pattye L. Moore | $110,000 | $170,000 | $242 | $11,000 | $291,242 | | Eduardo A. Rodriguez | $130,000 | $170,000 | $— | $4,500 | $304,500 | | Gerald B. Smith | $110,000 | $170,000 | $— | $23,500 | $303,500 | | Wayne T. Smith | $110,000 | $170,000 | $— | $11,000 | $291,000 |
DIRECTOR COMPENSATION
(1)Mr. Helderman elected to receive fully vested shares of common stock in lieu of the cash retainer, and accordingly was issued 1,347 shares of our common stock with a grant date fair value of $81.66, which shares were fully vested when granted. Fractional shares are rounded down to the nearest whole share, with the difference being paid in cash. Non-management directors may defer all or a part of their annual cash and stock retainers under our Deferred Compensation Plan for Non-Employee Directors. During the year ended December 31, 2024, $884,000 of the total amount payable for directors’ fees was deferred under this plan at the election of six of our directors. Deferred amounts are treated, at the election of the participating director, either as phantom stock or as a cash deferral. Phantom stock deferrals are treated as though the deferred amount is invested in our common stock based on the closing price on the NYSE on the date the deferred amount was earned. Phantom stock earns the equivalent of dividends declared on our common stock, reinvested in phantom shares of our common stock based on the closing price of our common stock on the payment date of each common stock dividend. The shares of our common stock reflected in a non- management director’s phantom stock account under our Deferred Compensation Plan for Non-Employee Directors are issued to the director on the last day of the director’s service as a director or a later date selected by the director. Cash deferrals earn interest at a rate equal to Moody’s seasoned AAA corporate bond yield index on the first business day of the plan year plus 100 basis points. At January 2, 2024, Moody’s rate was 4.75%; therefore, cash deferrals in 2024 earned interest at a rate of 5.75%. Cash deferrals are paid to the director on the last day of the director’s service as a director or at a later date selected by the director. The following table sets forth, for each non-management director during 2024, the amount of director compensation deferred during 2024 and cumulative deferred compensation as of December 31, 2024.
DIRECTOR COMPENSATION
| Director | Board Fees Deferred to Phantom Stock in 2024(a) | Dividends Earned on Phantom Stock and Reinvested in 2024(b) | Total Phantom Stock Held at December 31, 2024 | Board Fees Deferred to Cash in 2024(c) | Total Board Fees Deferred to Cash at December 31, 2024 | | Brian L. Derksen | $170,000 | $131,009 | 35,043 | $— | $— | | Julie H. Edwards | $— | $16,751 | 4,346 | $1,537 | $27,697 | | Lori A. Gobillot | $170,000 | $14,406 | 4,787 | $— | $— | | Mark W. Helderman | $— | $— | — | $— | $— | | Randall J. Larson | $— | $— | — | $— | $— | | Steven J. Malcolm | $— | $— | — | $— | $— | | Jim W. Mogg | $— | $235,477 | — | $— | $— | | Pattye L. Moore | $170,000 | $749,483 | 195,525 | $721 | $12,998 | | Eduardo A. Rodriguez | $34,000 | $57,928 | 15,240 | $— | $— | | Gerald B. Smith | $170,000 | $43,630 | 12,370 | $— | $— | | Wayne T. Smith | $170,000 | $10,302 | 3,723 | $— | $— |
DIRECTOR COMPENSATION
(a)Reflects the value of the annual cash and stock retainers (with the number of shares of common stock calculated based on the closing price on the NYSE on the grant date) deferred by a director under our Deferred Compensation Plan for Non-Employee Directors. (b)Dividend equivalents paid on phantom stock are reinvested in additional shares of phantom stock (with the number of shares of common stock calculated based on the closing price of our common stock on the NYSE on the date the dividend equivalent was paid.) (c)The amounts for Ms. Edwards and Ms. Moore reflect interest accrued on prior cash deferrals. No board fees were deferred to cash in 2024 by Ms. Edwards or Ms. Moore. Cash deferrals earn interest at a rate equal to Moody’s seasoned AAA corporate bond yield index on the first business day of the plan year plus 100 basis points. At January 2, 2024, Moody’s rate was 4.75%; therefore, cash deferrals in 2024 earned interest at a rate of 5.75%. Cash deferrals are paid to the director on the last day of the director’s service as a director or at a later date selected by the director.
DIRECTOR COMPENSATION
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DIRECTOR COMPENSATION
Governance of the Company (2)The amounts in this column reflect the aggregate grant date fair value, computed in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation-Stock Compensation (“ASC Topic 718”), with respect to stock awards received by directors for service on our Board. Each of our non-management directors was issued 2,082 shares of our common stock with a grant date fair value of $81.66 during 2024 for service on our Board, which shares were fully vested when granted. Fractional shares are rounded down to the nearest whole share, with the difference being paid in cash. However, if a non-management director defers all or part of his or her annual stock retainer under our Deferred Compensation Plan for Non-Employee Directors, the value of fractional shares is reflected in the amount deferred to phantom stock. (3)For the aggregate number of shares of our common stock and phantom stock held by each member of our Board at March 1, 2025, see “Stock Ownership— Holdings of Officers and Directors” at page 72. (4)Reflects above-market earnings on Board fees deferred to cash under our Deferred Compensation Plan for Non-Employee Directors which provides for payment of interest on cash deferrals at a rate equal to Moody’s seasoned AAA corporate bond yield index on the first business day of the plan year plus 100 basis points. At January 2, 2024, Moody’s rate was 4.75%; therefore, cash deferrals in 2024 earned interest at a rate of 5.75%. Cash deferrals are paid to the director on the last day of the director’s service as a director or at a later date selected by the director. (5)Reflects charitable contributions made by our company or the ONEOK Foundation, Inc., on behalf of members of our Board as follows: (a) a $1,000 annual contribution to the non-profit organization of his or her choice; (b) matching contributions up to $10,000 per year to non-profit organizations of his or her choice pursuant to our Board matching grant program; and (c) matching contributions to the United Way pursuant to our annual United Way contribution program. (6)Steven J. Malcolm and Jim W. Mogg did not stand for re-election at our 2024 annual meeting of shareholders. As such, their cash compensation reflected is for board service from January 2024 to April 2024.
Short-Term Incentive Environmental Metric
Short-Term Incentive Environmental Metric We established an internal environmental performance metric in 2014 that became a part of the short-term incentive compensation plan performance criteria for all our employees. Our AREER is defined as the total number of releases and excess emission events that trigger a federal, state or local environmental reporting requirement (with some exceptions to account for events outside our control, planned maintenance and disparities in reporting requirements across our operations) per 200,000 work-hours. This metric promotes a continued reduction in spills and emission events that are reportable to a federal, state or local agency. Since the implementation of the AREER metric in 2014, we have seen substantial reductions overall in our rate of reportable environmental events. In 2024, we set an AREER target of 0.74, which was established after taking into account the Magellan acquisition, and achieved a result of 0.33, which was 55% below the target goal (representing above target performance).
Short-Term Incentive Environmental Metric
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Short-Term Incentive Environmental Metric
Corporate Sustainability
BOARD REFRESHMENT
| | | “Our Board refreshment process remains a priority for ONEOK’s Corporate Governance Committee and Board as we plan for the continued near and long-term success of the company.” – Randall J. Larson, Corporate Governance Committee Chair |
DIRECTOR NOMINEES
DIRECTOR NOMINEES
DIRECTOR NOMINEES
| | | | | | BRIAN L. DERKSEN, 73 Director since: 2015 | INDEPENDENT COMMITTEES: Audit (Chair), Corporate Governance |
DIRECTOR NOMINEES
| CAREER HIGHLIGHTS: •Served as Global Deputy Chief Executive Officer of Deloitte Touche Tohmatsu Limited (“DTTL”) from 2011 until 2014. •Served as Deputy Chief Executive Officer of Deloitte LLP (“Deloitte U.S.”) from 2003 to 2011. •Served as Managing Partner of the financial advisory business and the Mid-America region of Deloitte U.S. In fulfilling his roles for DTTL and Deloitte U.S., he acted in his capacity as a partner in Deloitte U.S. He retired as a partner of Deloitte U.S. in May 2014. •Certified Public Accountant. •During the period from November 2014 through May 2015, he was engaged to serve as an independent consultant in the information technology sector. •Holds a Bachelor of Science degree from the University of Saskatchewan (Canada) and a Master of Business Administration degree from Duke University’s Fuqua School of Business. | OTHER BOARDS: •A member of the board of directors since 2018 of Brookshire Grocery Company, a privately held company with approximately 200 grocery stores. He also has served as the Audit Committee Chair since 2018 as well as the independent lead director since April 2022. SKILLS AND QUALIFICATIONS: •Extensive experience and expertise in accounting, auditing, financial reporting, taxation and management consulting. •Extensive senior executive experience provides him with particular expertise in leadership, strategic vision and corporate governance matters. | | | |
DIRECTOR NOMINEES
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DIRECTOR NOMINEES
PROPOSAL 1: Election of Directors
DIRECTOR NOMINEES
| | | | | | JULIE H. EDWARDS, 66 Director since: 2007 | Independent Board Chair |
DIRECTOR NOMINEES
| CAREER HIGHLIGHTS: •Board Chair of ONEOK, Inc. •Retired in 2007 from Southern Union Company where she served as Senior Vice President-Corporate Development from November 2006 to January 2007 and as Senior Vice President and Chief Financial Officer from July 2005 to November 2006. •Served as an executive officer of Frontier Oil Corporation, having served as Chief Financial Officer from 1994 to 2005 and as Treasurer from 1991 to 1994. •Served as an investment banker with Smith Barney, Harris, Upham & Co., Inc. in New York and Houston, after joining the company as an associate in 1985, when she graduated from the Wharton School of the University of Pennsylvania with an M.B.A. •Served as an exploration geologist in the oil industry, having earned a Bachelor of Science in Geology and Geophysics from Yale University in 1980. •Served on the ONEOK Board of Directors in 2004 and 2005 and was also a member of the Board of Directors of ONEOK Partners GP, L.L.C., from 2009 until the consummation of the merger transaction with ONEOK in June 2017. •Previously served as a member of the board of directors of Noble Corporation, plc a U.K.-based offshore drilling contractor, until February 2021 where she was on the Compensation and Finance Committees and was Chair of the Nominating and Governance Committee, and was a member of the board of directors of NATCO Group, Inc., an oil field services and equipment manufacturing company, from 2004 until its sale to Cameron International Corporation in November 2009. | OTHER BOARDS: •None. SKILLS AND QUALIFICATIONS: •Broad experience and understanding of various segments within the energy industry (exploration and production, refining and marketing, natural gas transmission, processing and distribution, production technology and contract drilling), and significant senior accounting, finance, capital markets, corporate development and management experience and expertise. •Demonstrated leadership and has been effective in her role as past chair of our Audit Committee and immediate past chair of our Corporate Governance Committee. •Achieved the Computer Emergency Response Team (CERT) Certificate in Cybersecurity Oversight in August 2024 from the Carnegie Mellon University, Software Engineering Institute. | | | |
DIRECTOR NOMINEES
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DIRECTOR NOMINEES
PROPOSAL 1: Election of Directors
DIRECTOR NOMINEES
| | | | | | LORI A. GOBILLOT, 63 Director since: 2023 | INDEPENDENT COMMITTEES: Audit, Corporate Governance |
DIRECTOR NOMINEES
| CAREER HIGHLIGHTS: •Served as Vice President, Integration Management, at United Airlines, Inc., from 2010 until 2012. •Served in officer roles in both legal and business functions at Continental Airlines/United Airlines during her career at the airlines from 1999 to 2012. •Served as an attorney with the law firm of Vinson & Elkins from 1993-1999. •Earned a Bachelor of Business Administration degree from the University of Texas and a Juris Doctor from the University of Texas School of Law. •Prior to attending law school, she was engaged in real estate development with Trammell Crow Company and consulting with Arthur Anderson. | OTHER BOARDS: •Serves on the board of directors of Republic Airways Holdings, Inc., since 2017, where she is Chair of the Compensation Committee. •Served on the board of directors of Magellan Midstream Partners L.P. from 2016 until the completion of the acquisition by the Company, where she served on the Compensation Committee, the Nominating and Governance Committee and the Sustainability Committee. •Served on the board of directors of Bristow Group Inc. from 2012-2019, where she was Chair of the Compensation Committee and served on the Corporate Governance and Nominating Committee. •Serves as President and a member of the board of directors of A Lighted Path, since 2023, a nonprofit that focuses on improving outcomes for challenged youth. SKILLS AND QUALIFICATIONS: •Extensive executive, legal and project management experience at a capital intensive and highly regulated FORTUNE® 200 company. •Extensive experience in corporate governance and executive compensation. •Extensive board leadership experience in aviation and energy. | | | |
DIRECTOR NOMINEES
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DIRECTOR NOMINEES
PROPOSAL 1: Election of Directors
DIRECTOR NOMINEES
| | | | | | MARK W. HELDERMAN, 67 Director since: 2019 | INDEPENDENT COMMITTEES: Audit, Corporate Governance |
DIRECTOR NOMINEES
| CAREER HIGHLIGHTS: •Held positions of increasing responsibility from 1997 through January 2019, at Sasco Capital Inc., an independent, institutional investment firm focused primarily on corporate turnarounds, restructurings and transformations, until he retired as Managing Director and Co-Portfolio Manager. •Worked in equity research and sales for Roulston Research Company from 1989 to 1996 and for McDonald & Company from 1986 to 1989, both in Cleveland, Ohio. | OTHER BOARDS: •None SKILLS AND QUALIFICATIONS: •More than 30 years of experience in the U.S. equities markets, including constructive engagement with senior management teams to develop a deep understanding of their corporate vision, value creation philosophy, commitment to long-term sustainable value and shareholder alignment. •Experience in more than 50 strategic, transformational restructurings spanning several industries including the energy value chain from upstream exploration and production, onshore and offshore oil field services, midstream, downstream petrochemicals and refining, regulated utilities and merchant energy. •More than 20 years of broad experience as an analyst in the commodity, energy, industrial and utility sectors. •Extensive financial experience and expertise. | | | |
DIRECTOR NOMINEES
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DIRECTOR NOMINEES
PROPOSAL 1: Election of Directors
DIRECTOR NOMINEES
| | | | | | RANDALL J. LARSON, 67 Director since: 2015 | INDEPENDENT COMMITTEES: Executive Compensation, Corporate Governance (Chair) |
DIRECTOR NOMINEES
| CAREER HIGHLIGHTS: •Served as Chief Executive Officer of the general partner of TransMontaigne Partners L.P. from September 2006 to August 2009; as Chief Financial Officer from January 2003 to September 2006; and Controller from May 2002 to January 2003. •Served as a partner with KPMG LLP in its Silicon Valley and National (New York City) offices from July 1994 to May 2002. •Served as a Professional Accounting Fellow in the Office of Chief Accountant of the United States Securities and Exchange Commission from July 1992 to July 1994. •Holds a Bachelor of Business Administration degree from the University of Wisconsin—Eau Claire, and a Master of Business Administration degree from the University of Wisconsin—Madison. | OTHER BOARDS: •Served on the board of directors, where he was chair of the Audit Committee and a member of the Conflicts Committee, of Valero Energy Partners GP LLC prior to its merger with Valero Energy Corp. •Served as a director of the general partner of MarkWest Energy Partners, L.P. prior to its merger with MPLX LP where he was Chair of the Audit Committee and a member of the Compensation Committee. •Served as a director of the general partner of Oiltanking Partners, L.P. where he was Chair of the Audit Committee and a member of the Conflicts Committee from August 2011 through February 2014. SKILLS AND QUALIFICATIONS: •Broad experience and understanding of the energy industry and significant senior public accounting, finance, capital markets and corporate development experience and expertise. •Extensive executive, managerial, industry and financial experience and expertise. | | | |
DIRECTOR NOMINEES
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DIRECTOR NOMINEES
PROPOSAL 1: Election of Directors
DIRECTOR NOMINEES
| | | | | | PATTYE L. MOORE, 67 Director since: 2002 | INDEPENDENT COMMITTEES: Executive Compensation, Corporate Governance |
DIRECTOR NOMINEES
| CAREER HIGHLIGHTS: •Served as the non-executive chair of the board of Red Robin Gourmet Burgers, a restaurant chain, from February 2010 to November 2019. Ms. Moore retired from the Red Robin Board at the end of 2019. •Served as interim Chief Executive Officer of Red Robin from April 2019 to October 2019. •Served on the board of directors of Sonic Corp. from 2000 through January 2006 and was the President of Sonic from January 2002 to November 2004. •Held numerous senior management positions during her 12 years at Sonic, including Executive Vice President, Senior Vice President-Marketing and Brand Development and Vice President-Marketing. •Is a business strategy consultant, speaker and the author of Confessions from the Corner Office, a book on leadership instincts, published by Wiley & Sons in 2007. | OTHER BOARDS: •Serves as a director of ONE Gas, Inc. where she serves on the Audit, Corporate Governance and Executive Committees. •Serves on the board of directors of QuikTrip Corporation, a privately held company. •Served as chair of the board of the National Arthritis Foundation. SKILLS AND QUALIFICATIONS: •Extensive senior management, marketing, business strategy, brand development and corporate governance experience. •Extensive experience in leadership, management development, strategic planning, corporate governance and executive compensation. •Extensive experience as a member of the board of directors of numerous nonprofit organizations. •Named an NACD Board Leadership Fellow by the National Association of Corporate Directors and is a recipient of the 2017 Directorship 100 award. | | | |
DIRECTOR NOMINEES
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DIRECTOR NOMINEES
PROPOSAL 1: Election of Directors
DIRECTOR NOMINEES
| | | | | | PIERCE H. NORTON II, 65 Director since: 2021 | Non-Independent (Chief Executive Officer) |
DIRECTOR NOMINEES
| CAREER HIGHLIGHTS: •President and CEO of ONEOK, Inc. •Served as President and Chief Executive Officer of ONE Gas, Inc. from January 2014 until June 2021, and a member of the ONE Gas, Inc. Board of Directors. •Prior to the separation of ONE Gas in January 2014, Norton served as Executive Vice President, commercial, of ONEOK and ONEOK Partners. •Served as Executive Vice President and Chief Operating Officer of ONEOK and ONEOK Partners with responsibilities for natural gas gathering and processing, natural gas pipelines, natural gas liquids, natural gas distribution and energy services business segments. •Served as President of the ONEOK Distribution Companies – Oklahoma Natural Gas, Kansas Gas Service and Texas Gas Service. •Holds a Bachelor of Science in Mechanical Engineering from the University of Alabama in Tuscaloosa and is a graduate of Harvard Business School’s Advanced Management Program. •University of Alabama College of Engineering Distinguished Fellow. •2023 Tulsa Community College Vision Dinner Honoree. •2021 American Gas Association Distinguished Service Award. •2017 OK Ethics Executive Pilot Award. •2011 IABC Tulsa Bronze Quill Communicator of the Year. | OTHER BOARDS: •Board member of the American Petroleum Institute (API). •2024 Tulsa Area United Way Annual Campaign Tri-Chair. •Former member of the American Gas Association’s board of directors and served as its 2017 Chairman. •Former board member of the Tulsa Community College Foundation and past-chair of the Audit Committee. •Former board member of the Tulsa Community Foundation and past- chair of the Audit Committee. •Former board member of the Interstate Natural Gas Association of America. •Former board member of the Texas Pipeline Association. •Former board member of the North Dakota Petroleum Council. •Former board member of the Western Energy Alliance. SKILLS AND QUALIFICATIONS: •Mr. Norton served in a variety of roles of continually increasing responsibility at ONEOK and ONEOK Partners from November 2004 to January 2014. In these roles, he had direct responsibility for and extensive experience in strategic and financial planning, acquisitions and divestitures, operations, management supervisions and development and compliance. •Extensive engineering management, construction management, marketing, finance, corporate governance and executive compensation experience. | | | |
DIRECTOR NOMINEES
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DIRECTOR NOMINEES
PROPOSAL 1: Election of Directors
DIRECTOR NOMINEES
| | | | | | EDUARDO A. RODRIGUEZ, 69 Director since: 2004 | INDEPENDENT COMMITTEES: Executive Compensation (Chair), Corporate Governance |
DIRECTOR NOMINEES
| CAREER HIGHLIGHTS: •Serves as President of Strategic Communications Consulting Group since 2005. •Served as Executive Vice President and a member of the board of directors of Hunt Building Corporation, a privately held company engaged in construction and real estate development headquartered in El Paso, Texas. •Spent 20 years in the electric utility industry at El Paso Electric Company, when it was a publicly traded, investor-owned utility, where he served in various senior-level executive positions, including General Counsel, Senior Vice President for Customer and Corporate Services, Executive Vice President and Chief Operating Officer. | OTHER BOARDS: •Serves as a director of ONE Gas, Inc. where he serves on the Audit, Executive Compensation and Executive Committees and is chair of the Corporate Governance Committee and Lead Independent Director. SKILLS AND QUALIFICATIONS: •Extensive senior management, operational, entrepreneurial and legal experience in a variety of industries. •A licensed attorney in the states of Texas and New Mexico and is admitted to the United States District Court for the Western District of Texas. •Mr. Rodriguez has practiced law for more than 40 years. •Extensive legal and business, strategic planning, corporate governance and regulatory compliance experience and expertise. | | | |
DIRECTOR NOMINEES
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DIRECTOR NOMINEES
PROPOSAL 1: Election of Directors
DIRECTOR NOMINEES
| | | | | | GERALD B. SMITH, 74 Director since: 2020 | INDEPENDENT COMMITTEES: Executive Compensation, Corporate Governance |
DIRECTOR NOMINEES
| CAREER HIGHLIGHTS: •Serves as Chairman of Smith Graham & Co., an investment management firm he founded in 1990 and served as Chief Executive Officer until 2023. •Served as a director of Cooper Industries plc from 2000 until 2012 and served as Lead Independent Director of Cooper Industries plc from 2007 until 2012. •Served as Senior Vice President and Director of Fixed Income of Underwood Neuhaus & Company. | OTHER BOARDS: •Serves as a director of Eaton Corporation plc since 2012 where he serves on the Executive and Finance Committees and is Chair of the Audit Committee. •Served as a director and Chair of the Investment Committee of the New York Life Insurance Company until April 2023. •Served as a Chairman of the Texas Southern University Foundation Board until 2023 when he became Chairman Emeritus. •Served as a director and Chair of the Budget Planning Committee of the Federal Reserve Bank of Dallas until December 2023 and is a former director of the Federal Reserve Bank of Dallas, Houston branch. •Served as a director of the Greater Houston Partnership. •Former board of trustees member and Chair of the Investment Oversight Committee for the Charles Schwab Family of Funds. •Former Board Member of ONEOK, Inc. from 2009 to 2013 and also served on the Audit and Executive Compensation Committees. •Former Board Member of ONEOK Partners, L.P. from 2006 to 2013 where he served as Chair of the Audit Committee. SKILLS AND QUALIFICATIONS: •Mr. Smith has expertise in finance, portfolio management and marketing through executive positions in the financial services industry. •Experience as director of companies in the oil and gas and energy services businesses has provided him with valuable insight into markets in which ONEOK also participates. •Past experience as lead independent director of Cooper provides ongoing institutional knowledge of legacy Cooper businesses and provides him valuable insight on financial, operational and strategic matters. | | | |
DIRECTOR NOMINEES
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DIRECTOR NOMINEES
PROPOSAL 1: Election of Directors
DIRECTOR NOMINEES
| | | | | | WAYNE T. SMITH, 65 Director since: 2023 | INDEPENDENT COMMITTEES: Audit, Corporate Governance |
DIRECTOR NOMINEES
| CAREER HIGHLIGHTS: •Served as Chairman and Chief Executive Officer of BASF Corporation from May 2015 through May 2021. •Served as a Member of the Board of Management Directors of BASF SE from 2012 through May 2021. •Served as Vice President and General Manager of Specialty Construction Chemicals of W.R. Grace and Company from 2000 to 2004. •Served as Vice President and General Manager of the Packaged Products business of the BOC Group from 1998-2000. •Holds a Bachelor of Science degree in chemical engineering from Syracuse University and a Master of Business Administration from the Wharton School of the University of Pennsylvania. •Served on the Dean’s Leadership Council for the College of Engineering and Computer Science at Syracuse University. | OTHER BOARDS: •Serves as a director of Air Products and Chemicals, Inc., where he maintains the role of Chairman of the Board. •Served on the board of directors of Inter Pipeline. SKILLS AND QUALIFICATIONS: •Mr. Smith has more than 35 years of experience in the chemicals industry. •Extensive experience across broad value chains in the chemical industry, including petrochemicals, polymers and highly specialized chemicals. | | | |
DIRECTOR NOMINEES
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DIRECTOR NOMINEES
| Ratify the Selection of PricewaterhouseCoopers LLP as Our Independent Registered Public Accounting Firm for the Year Ending December 31, 2025 | | | | Our Board unanimously recommends a vote FOR the ratification of the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2025. |
Specific Compensation Program Features
Specific Compensation Program Features Our compensation philosophy and related governance features are complemented by several specific elements that are designed to align our executive compensation with long-term shareholder interests. •The components of our executive compensation program have remained substantially the same for several years. We believe our program is designed effectively, well aligned with the interests of our shareholders, strongly performance-based and key to achieving our business goals. •The main objectives of our executive compensation program are to pay-for-performance, to align our executive officers’ interests with those of our shareholders and to attract, retain, and engage qualified executives. •All compensation decisions regarding our named executive officers are initially made by the Committee and are then submitted to the Board for approval. •The Committee is composed solely of persons who qualify as independent directors under the listing standards of the NYSE. •We provide the following elements of compensation for our executive officers, including the named executive officers: base salary, an annual short-term cash incentive award and long-term equity incentive awards. •The Committee references the median level of the market when determining all elements of compensation, including when considering the possibility of above or below-target short-term incentive and long-term incentive payments for executive and company performance that exceeds or is below expectations. •We implement our pay-for-performance philosophy with a short-term incentive program providing for cash payments based on achievement of financial and operational goals established annually by the Committee and long-term, performance-based equity incentive awards providing for vesting levels based on our total shareholder return over a three-year performance period as compared to the total shareholder return of a specified peer group of energy companies for the same period. •We encourage alignment of our named executive officers’ interests with those of our shareholders through the award of long-term incentive equity grants, of which approximately 80% are performance units and approximately 20% are time-vesting restricted units. •Our executive officers, including the named executive officers, receive no significant recurring perquisites or other personal benefits. •We have market competitive stock ownership guidelines for our executive officers, including the named executive officers, and members of our Board. •We have adopted a clawback policy in compliance with Exchange Act Rule 10D-1 and the corresponding NYSE listing standards. Our clawback policy permits the recovery of incentive-based cash and any equity compensation in the event of fraud, negligence or intentional misconduct that directly or indirectly results in a material restatement of all or a portion of our financial statements. •Our Board has adopted a Securities/Insider Trading Policy prohibiting officers, members of our Board and certain employees designated as insiders under the policy from engaging in short sales, derivative or speculative transactions in our securities, or purchasing or using, directly or indirectly through family members or other persons or entities, financial instruments (including puts or calls, prepaid variable forward contracts, equity swaps, collars and exchange funds) that are designed to hedge or offset any decrease in the market value of our securities. This policy further provides that employees, including our officers and directors, may not purchase or sell our stock when they are in possession of material non-public information and that officers, directors and employees in certain designated work groups may trade in our securities only during "open window" periods (beginning on the third business day after our public release of quarterly or annual earnings and continuing until the first day of the following calendar quarter) and must pre-clear all purchases and sales of our securities. Further, the policy provides that the company will not engage in any transactions involving our securities while it is aware of material non-public information relating to the company or our securities. For the purposes of this policy, “our securities” refers to the common stock, preferred stock and debt issued by us or our respective divisions and subsidiaries, securities of other companies with a significant relationship to us, as well as derivative securities that relate to or derive their value from our common stock, debt or such other companies’ stock. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of our Securities/Insider Trading Policy, a copy of which is filed as Exhibit 19.1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. •Our Securities/Insider Trading Policy also prohibits officers and directors from holding our securities in a margin account or pledging our securities as collateral for a loan. An exception to this prohibition may be granted by the chief executive officer if an officer or director wishes to pledge shares of our stock as collateral for a loan (but not including a margin account), the officer or director clearly demonstrates the financial capacity to repay the loan without resorting to the pledged securities, and the terms of the loan prohibit the sale of any of our stock held as collateral when the officer or director is not permitted to trade in our stock. We are not aware of any officer or member of our Board who has pledged any of his or her shares of our common stock.
Specific Compensation Program Features
Executive Compensation Discussion and Analysis •We do not grant awards of stock options or similar option-like rights or instruments and, accordingly, do not have any policy or practice in place on the timing of awards of options or similar option-like rights or instruments in relation to the disclosure of material non-public information. If, in the future we anticipate granting awards of stock options or similar option-like rights or instruments, we may establish a policy regarding how the Board or Committee determines when to grant such awards and how it will take into account material non-public information when determining the timing and terms of such awards. •The Committee engages a compensation consultant that the Committee has determined to be independent under the Securities and Exchange Commission rules and NYSE listing standards to provide advice and expertise on the design and implementation of our executive and director compensation programs. The Committee monitors executive compensation trends and developments regarding prevailing types and levels of compensation so we can remain competitively positioned to attract and retain the executive talent necessary to achieve our strategic, financial and operational goals.
Pay-for-Performance
Pay-for-Performance We structure our executive compensation program to align the interests of our named executive officers with the interests of our shareholders. We believe a named executive officer’s compensation should be tied directly to the achievement of our strategic, financial and operating goals, all of which are designed to deliver value to our shareholders. Therefore, a significant part of each named executive officer’s pay is “at-risk,” in the form of an annual, short-term, cash incentive award and long-term, equity-based incentive awards. The amount of the annual short-term cash incentive award earned depends on our company’s performance measured against financial and operating objectives, as well as the named executive officer's meeting key leadership and development standards. The portion of our named executive officers’ compensation in the form of equity awards ties their compensation directly to creating shareholder value over the long-term. We believe this combination of annual short-term cash incentive awards and long-term equity awards aligns the incentives of our named executive officers with the interests of our shareholders.
Competitive Pay
Competitive Pay We believe a competitive executive compensation program is an important tool to help us attract, retain, and engage talented executives capable of leading our company in the competitive business environment in which we operate. We seek to establish total compensation opportunities for our named executive officers that are within a competitive range of the median of compensation opportunities awarded at our peer companies as further discussed below. For example, to recognize an individual’s unique qualifications or performance, we may choose to set their total compensation level above the median. However, if the executive is new to the role, we may set total compensation below the median level. Similarly, exceptional performance may result in compensation above the median. Earned compensation from these opportunities will vary based on company and individual performance as well as our stock price performance.
Competitive Pay
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Competitive Pay
Executive Compensation Discussion and Analysis Our compensation program is designed with the following principles in mind: •Pay our executives based on their responsibilities, the capabilities and experience they possess, the performance they demonstrate and market conditions. •Motivate our executives to conduct our business and manage our assets in a safe and environmentally responsible manner.
The Executive Compensation Committee
The Executive Compensation Committee The Committee has the responsibility for reviewing, approving and recommending our executive compensation program to the Board for approval. The role of the Committee is to oversee our compensation and benefit plans and policies, delegate responsibility for the administration of these plans and review and approve annually all compensation decisions relating to our executive officers, including compensation decisions for our named executive officers. The Committee’s practice is to review our executive officer compensation program and make specific decisions in February of each year, including review and approval of: base salaries; the achievement of annual short-term cash incentive goals for the prior year and corresponding payouts; annual short-term cash incentive program thresholds, targets and maximums for the current fiscal year; the level of vesting of long-term incentive grants that were eligible to vest during the year; and new long-term incentive grants. This review coincides with our Board's review of our financial and operating results for the most recently completed year and allows the Committee to consider those results, as well as our financial and operating plan for the upcoming year, as it makes compensation decisions. The Committee submits its recommendations regarding the compensation of our chief executive officer, our other named executive officers and our non-management directors to the Board for approval. The Committee recognizes the importance of maintaining sound basic principles for the development and administration of our compensation and benefit programs. The Committee has adopted practices to enhance the Committee’s ability to carry out its responsibilities effectively, as well as to ensure we maintain strong links between executive pay and performance. Examples of practices the Committee has adopted include: •Holding executive sessions without company management present at every meeting of the Committee; •Reviewing total compensation tally sheets for the named executive officers on an annual basis;
The Role of the Independent Compensation Consultant
The Role of the Independent Compensation Consultant The Committee has the authority under its charter to engage the services of outside advisors, experts and others to assist the Committee in the performance of its duties. During 2024, the Committee continued the engagement of Meridian Compensation Partners to serve as the Committee’s independent compensation consultant on matters related to executive and director compensation. The independent compensation consultant reports directly to the Committee and provides no other services to us. The Committee annually reviews and establishes the scope of the engagement of the Committee’s independent compensation consultant, which is reflected in an annual engagement letter between the consultant and the Committee. During 2024, the scope of the assignment and the material instructions regarding the services of the consultant were to: •Provide input to the Committee’s decision-making with respect to executive compensation matters in light of our business strategy, pay philosophy, prevailing market practices, shareholder interests and relevant regulatory mandates; •Provide advice on our executive pay philosophy; •Provide advice on the composition of our compensation peer group for competitive benchmarking; •Provide comprehensive competitive market studies as background against which the Committee can consider the company’s chief executive officer and senior management base salaries, annual bonus opportunities, long-term incentive awards, benefits, perquisites and severance protections; •Provide incentive plan design advice for both annual and long-term incentive programs and other compensation and benefit programs to meet our objectives; •Apprise the Committee of emerging best practices and changes in the regulatory and corporate governance environment;
The Role of the Independent Compensation Consultant
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The Role of the Independent Compensation Consultant
Executive Compensation Discussion and Analysis •Provide consulting and competitive market data on director compensation matters; •Conduct periodic meetings with our management as required from time to time to discuss executive compensation issues and prepare for Committee meetings; •Assist with the preparation of our annual proxy statement “Executive Compensation Discussion and Analysis”; •Review tally sheets regarding the company’s chief executive officer and other senior officers as developed by management; and •Periodically review the Committee’s charter. In addition, the engagement letter provides for the consultant to be available to assist the Committee with respect to other executive compensation matters that may arise throughout the year. The independent compensation consultant attended each regularly scheduled meeting of the Committee in 2024. During a portion of each regular meeting, the independent compensation consultant met with the Committee in executive session without members of management present. The independent compensation consultant also communicated with members of the Committee outside of the Committee’s meetings as desired by the Committee members. The independent compensation consultant reviewed briefing materials, including those with respect to individual compensation matters prepared by management for the Committee, reviewed recommendations and proposals being submitted to the Committee and provided perspective, advice and recommendations to the Committee regarding the recommendations of management. The independent compensation consultant also gathered and provided competitive market data and other background information for consideration by the Committee. It is the Committee’s view that its independent compensation consultant should be able to render candid and direct advice independent of management’s influence and numerous steps have been taken to satisfy this objective. The independent compensation consultant is engaged by and reports directly to the Committee on matters related to compensation. As noted above, representatives of the independent compensation consultant meet separately with the Committee members outside the presence of management at each regular meeting and also speak separately with the Committee chair and other Committee members between meetings, as necessary or desired. The independent compensation consultant interacts from time to time directly with our senior vice president and chief human resource officer, vice president, deputy general counsel - compliance & ethics and corporate secretary, and our compensation department as necessary to support the work of the independent compensation consultant on behalf of the Committee. These interactions are limited to those that are on the Committee’s behalf or related to matters that will be presented to the Committee for review and approval. At least annually, the Committee conducts a review of the independent compensation consultant’s performance and independence. This review includes an evaluation of the services that the independent compensation consultant has provided to the Committee, the related fees and the procedures implemented by the independent compensation consultant with respect to maintaining its independence. During 2024, Meridian Compensation Partners did not advise us or deliver any services other than the referenced compensation consulting services provided to the Committee. We incurred fees and expenses of $392,359 with Meridian Compensation Partners for compensation-related services to the Committee in 2024. In February 2024, the Committee considered the independence of Meridian Compensation Partners in light of Securities and Exchange Commission rules and NYSE listing standards regarding the independence of consultants to compensation committees. The Committee requested and received a letter from Meridian Compensation Partners addressing the consulting firm’s independence, including the following factors: (i) other services provided to us by the consultant; (ii) fees paid by us as a percentage of the consulting firm’s total revenue; (iii) policies or procedures maintained by the consulting firm that are designed to prevent conflicts of interest; (iv) any business or personal relationships between the individual consultants involved in the engagement and any member of the Committee; (v) any company stock owned by the individual consultants involved in the engagement; and (vi) any business or personal relationships between our executive officers and the consulting firm or the individual consultants involved in the engagement. The Committee discussed these considerations and concluded that the work of the consultant did not raise any conflict of interest and that the consultant was independent of the Committee and our company, and is providing effective counsel and services to the Committee.
Competitive Assessment
Executive Compensation Discussion and Analysis The Committee considers a number of factors in structuring our compensation program and making compensation decisions, including the compensation practices of selected peer companies in the energy industry, which we refer to as our “Energy Peers.” The Committee’s independent compensation consultant annually reviews the peer group with the Committee to assess its continued appropriateness and applicability to our company. The 2024 Energy Peers were recommended by Meridian Compensation Partners and management and were selected because they have significant lines of business in the energy industry that are similar to our businesses in focus, ownership structure, affiliations and geography and because the size of their operations (e.g., enterprise value, market value, and earnings before interest, taxes, depreciation and amortization) and the skills and experience required of their senior management to effectively operate their businesses are also similar to our businesses. Companies that have similar lines of business but have a history of anomalous pay practices, as determined by the Committee in consultation with our independent compensation consultant, are excluded from consideration as a potential Energy Peer. For 2024, the following changes were made to the Energy Peers we used for 2023 due to the company's increased size after the Magellan acquisition: Removals: Magellan Midstream Partners, L.P. was removed from the group due to our acquisition of Magellan on September 25, 2023. EnLink Midstream, LLC, Equitrans Midstream Corporation, and NuStar Energy, L.P. were removed from the group due to their smaller size when compared to ONEOK following our acquisition of Magellan. Additions: Diamondback Energy, Inc., Hess Corporation, Marathon Petroleum Corporation, and Phillips 66 were added to the group due to their size- appropriateness (primarily enterprise value, total assets, and gross profit) and relevant midstream operations when compared to ONEOK following our acquisition of Magellan. The Committee believes that reference to the Energy Peers is appropriate when reviewing our compensation program because we compete with these companies for executive talent.
Compensation Mix and At-Risk Pay
Compensation Mix and At-Risk Pay In determining the overall mix of 2024 compensation for our named executive officers, the Committee considered the competitive market data assembled by its independent compensation consultant in order to assess an appropriate allocation between cash and non-cash compensation. A significant portion of total executive compensation is variable and “at-risk” based on both the annual and long-term performance of our company, which aligns the interests of our executives with the interests of our shareholders. In 2024, consistent with our pay-for-performance philosophy, we granted to our named executive officers performance units (having a value equal to approximately 80% of the aggregate equity grant value) and time-vesting restricted units (having a value equal to approximately 20% of the aggregate equity grant value). In addition, the payment of long-term incentive compensation in the form of our common stock helps to align the interests of our executive officers with the interests of our shareholders and assists our executives in establishing a meaningful ownership position in our company in keeping with our share-ownership guidelines.
Annual Cash Compensation
Annual Cash Compensation As in prior years, annual cash compensation in 2024 for the named executive officers consisted of two components: base salary and a variable, at-risk, 2024 short-term incentive award based on both the company’s financial and operating performance and the executive officer’s individual performance. •Base Salary. Annual base salary is designed to compensate executives for their level of responsibility, experience, tenure, sustained individual performance and contributions to our company. Salaries are reviewed annually. While the Committee considers our overall financial performance in establishing levels of executive compensation each year, there are no specific, objective financial results that are quantified by the Committee in establishing or changing the base salaries of our named executive officers. •2024 Short-Term Incentive Awards. Variable, at-risk, 2024 short-term incentive awards were made under our Annual Officer Incentive Plan and designed to communicate collective annual corporate goals, to provide our named executive officers with a direct financial interest in our performance and profitability and to reward annual performance. The 2024 performance goals established under the Annual Officer Incentive Plan and the company’s performance relative to such goals are described under “2024 Short-Term Incentive Awards.”
Long-Term Equity Incentive Awards
Long-Term Equity Incentive Awards Grants of equity-based compensation are made pursuant to the 2018 EIP. Typically, these grants consist of restricted units and performance units to our named executive officers and other eligible participants. These annual grants are designed to provide a meaningful incentive to enhance long- term shareholder value. A higher ratio of performance units to restricted units is granted to higher-level officers and those with more direct ability to impact the performance of the company.
Nonqualified Deferred Compensation Plan
Nonqualified Deferred Compensation Plan Our 2020 Nonqualified Deferred Compensation Plan (“NQDC Plan”), the successor plan to our two prior nonqualified deferred compensation plans ("Prior NQDC Plans," and collectively with the NQDC Plan, the "NQDC Plans"), is available to a select group of management and highly compensated employees, including our named executive officers. The NQDC Plan permits participants to defer receipt of a portion of their compensation to be earned during the following year until a later date permitted under the NQDC Plan and provides notional employer contributions to compensate participants who are subject to certain limits established by the Internal Revenue Code of 1986, as amended (the “Tax Code”), with respect to their qualified plan benefits. Because these arrangements are, by their nature, tied to cash compensation and qualified plan benefits, they are not considered by the Committee when establishing salary and short-term and long-term incentive measures and amounts. Historically, officers also were eligible to defer the receipt of their performance unit awards into the Prior NQDC Plans.
2024 COMPENSATION DECISIONS
| | Base Salary | | Short-Term Incentive Target | | Long-Term Incentive Target | | | Name | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | | Pierce H. Norton II | $925,000 | $835,000 | 150% | 125% | $8,000,000 | $5,000,000 | | Walter S. Hulse, III | $650,000 | $600,000 | 110% | 100% | $3,250,000 | $2,200,000 | | Kevin L. Burdick | $550,000 | $500,000 | 95% | 95% | $1,800,000 | $1,600,000 | | Sheridan C. Swords | $525,000 | $500,000 | 95% | 85% | $1,800,000 | $1,250,001 | | Lyndon C. Taylor | $600,000 | $550,000 | 95% | 90% | $1,850,000 | $500,000 |
2024 COMPENSATION DECISIONS
Executive Compensation Discussion and Analysis •Increasing Mr. Swords' base salary by $25,000 (5.0%), short-term incentive target by 10 percentage points, and his long-term incentive target by $549,999 (44.0%). •Increasing Mr. Taylor's base salary by $50,000 (9.1%), short-term incentive target by 5 percentage points, and his long-term incentive target by $1,350,000 (270.0%). Mr. Taylor's long-term incentive target increase for fiscal year 2024 is primarily attributable to the timing of his hire date occurring in October 2023. As Mr. Taylor joined the Company late in the fiscal year, his initial long-term incentive target reflected his partial-year service. The subsequent long-term incentive target in February 2024 represents the full annual target consistent with the Company's typical annual grant cycle for executive officers. We believe these actions establish target total compensation opportunities for our named executive officers within a competitive range of the median of compensation opportunities awarded at our Energy Peers. We believe this positioning allows us to attract, motivate, and retain highly-qualified executives in our industry. An individual’s competitive positioning will consider additional factors beyond market data (which increased after the changes to the Energy Peers following the acquisition of Magellan), and these actions with respect to our named executive officers reflect company performance; each named executive officer’s individual performance and contributions; the skills and experience of each named executive officer and the scarcity and market demand for such skills and experiences; and other relevant factors, e.g. succession planning, and internal equity.
2024 SHORT-TERM INCENTIVE AWARDS
2024 SHORT-TERM INCENTIVE AWARDS The purpose of our Annual Officer Incentive Plan is to align the named executive officers’ interests with shareholders’ interests by providing them with a financial incentive tied directly to key measures of our financial and operational performance. The 2024 annual short-term cash incentive plan measures and their weighting were developed and recommended to the Committee by executive management, were reviewed and approved by the Committee, and were approved by our Board in February 2024.
Goal Setting
Goal Setting The Committee also approved threshold, target and maximum levels for each financial and operational measure. These levels were set based on the expectation of: (i) a high likelihood the threshold level of performance would be achieved; (ii) a reasonable likelihood the target would be achieved; and (iii) a low likelihood the maximum would be achieved.
Goal Setting
Executive Compensation Discussion and Analysis In setting the threshold, target and maximum levels for each financial and operational measure for the 2024 Annual Officer Incentive Plan, the Committee considered the September 2023 Magellan acquisition and its expected impact on each measure in 2024. For example, the EPS measure would be impacted by, among other things, the expected full year contributions of the Refined Products and Crude segment on net income and the additional ONEOK shares issued as part of the Magellan acquisition. The ROIC measure would be impacted by, among other things, the expected full year contributions of the refined products and crude segment on EBIT and higher expected invested capital associated with the Magellan acquisition. The TRIR and AREER measures would be impacted by use of a three-year weighted average of ONEOK and Magellan incident and event rates. As a result, the goals set for the 2024 Annual Officer Incentive Plan were established without regard for the 2023 Annual Officer Incentive Plan, which were not comparable. Based upon the company’s performance against these measures, annual short-term cash incentive awards for 2024 company performance could range from zero to a maximum of 200% of target. In determining the actual annual short-term incentive award to be paid to each named executive officer, assuming the company’s performance measures are met, the award may be adjusted based for individual performance, which is measured based on the individual’s contributions to achieving our corporate goals. As in past years, tying the annual short-term cash incentive award to individual performance raises the level of personal accountability for each named executive officer. The 2024 metrics and targets are summarized as follows:
Goal Setting
| ONEOK, Inc. Corporate Performance Criteria 2024 Fiscal Year | Threshold (Pays 0%) | Target (Pays 100%) | Maximum (Pays 200%) | Weighting | Target Payout | Maximum Payout | | Earnings per share (EPS) | $4.25 | $4.80 | $5.36 | 40% | 40% | 80% | | Return on invested capital (ROIC) | 11.69% | 12.81% | 13.92% | 40% | 40% | 80% | | Total recordable incident rate (TRIR) | 0.60 | 0.40 | 0.30 | 10% | 10% | 20% | | Agency reportable environmental event rate (AREER) | 1.11 | 0.74 | 0.56 | 10% | 10% | 20% | | | | | Total | 100% | 100% | 200% |
Goal Setting
For each performance measure in the table above, no incentive amount would be paid for that measure if the company’s actual result did not meet the threshold level. If our actual result was between the stated performance levels, the percentage payable was interpolated between the stated payout percentages on a linear basis. The cumulative corporate payout percentage achieved for 2024 was 183.5% of target. In addition to taking into account the established corporate criteria, annual short-term cash incentive awards to the named executive officers are subject to further adjustment through the application of an individual performance modifier generally ranging from zero to 125% of the payout percentage established by the scorecard above. The individual performance modifier is set by the Committee annually, taking into consideration management’s recommendation regarding individual performance and contribution. However, the Committee itself sets Mr. Norton’s individual performance modifier after considering his performance and contribution. Management makes no recommendation to the Committee regarding Mr. Norton’s individual performance modifier. The Annual Officer Incentive Plan provides that, in the event of a change in control, each participant in the plan shall be paid a short-term incentive award that is not less than the prorated portion of the incentive award the participant would have otherwise received for that plan year through the date of such change in control; provided, however, that the company will assume that all thresholds and targets as specified for the plan year have been met and that the short-term incentive award will be reduced by any amount otherwise payable by the company to the participant under any other plan, agreement or arrangement based on substantially the same performance goals applicable for that period of time and performance, including our Change in Control Severance Plan.
ONEOK STIP
ONEOK STIP In February 2024, the company’s acquisitions of EnLink and Medallion were not among the considerations when the annual short-term cash incentive plan performance goals were approved by the Committee and our Board. In November 2024, the Committee, along with executive management and Meridian Compensation Partners, began reviewing the potential impact of the EnLink and Medallion acquisitions. It was apparent that the consummation of the acquisition of the managing member interest in EnLink on October 15, 2024, and the consummation of the Medallion acquisition on October 31, 2024 would impact the plan’s financial measures – EPS and ROIC. As to the plan’s operational measures – TRIR and AREER – both remained measurable through year-end with minimal impact due to the acquisitions.
ONEOK STIP
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ONEOK STIP
Executive Compensation Discussion and Analysis In November 2024, executive management and Meridian Compensation Partners recommended for the Committee’s consideration that the projected EPS and ROIC payout factors for the 2024 short-term incentive plan should exclude the impact of the EnLink and Medallion acquisitions, but include any smaller acquisitions during 2024. Executive management and Meridian Compensation Partners believed the recommended approach and adjustments described below are well within market practice for similar situations. In addition, the recommended approach retained certain "Guiding Principles" to inform any Committee decision related to the determination of payouts for the plan's financial measures. Such principles included: •Maintaining the company’s pay-for-performance philosophy; •Holding management accountable for financial results through year-end; •Treating participants fairly; •Avoiding or limiting complexity; •Limiting the need for Committee discretion; •Communicating the impact to participants to eliminate uncertainty; and •Supporting employee engagement during a time of significant transition. After thorough discussion, review, and consideration, the Committee and our Board at their respective meetings on November 6, 2024 concurred in the recommended approach to exclude the impact of the EnLink and Medallion acquisitions when calculating the EPS and ROIC payout factors for the 2024 annual short-term incentive plan. As a result, the following measurement approach designed to exclude the impact of the EnLink and Medallion acquisitions was used:
ONEOK STIP
| Metric | Measurement Approach | Comment | | EPS | Full-year earnings (net of adjustments described below) for legacy ONEOK business, divided by weighted- average diluted shares outstanding from 1/1/2024 through 12/31/2024. | Neutralizes impact of acquisitions. | | ROIC | Full-year EBIT (net of adjustments described below) for legacy ONEOK business, divided by daily average invested capital from 1/1/2024 through 10/31/2024. | Neutralizes impact of acquisitions, including changes to capital base. |
ONEOK STIP
Such approach included: •Exclusion of transaction costs (e.g., fees paid to financial, legal, accounting and other advisors, severance costs, etc.); and •Adjustment for impact of borrowing funds to pay the cash portion of the purchase price (both interest income and interest expense).
2024 Results
•To determine the short-term awards payable to each of our named executive officers for 2024, the company’s 183.5% modifier was multiplied by the named executive officer’s base salary, times his or her target short-term incentive percentage as set forth in the table above, and times his or her individual performance modifier as described above. The annual calculation for our named executive officers may be summarized as follows: SHORT-TERM INCENTIVE AWARD CALCULATION:
2024 Results
| $55,000X | 0.06X | 0.9X | 1.835 | = | $5,450 | | Base salary at December 31 | STI target based on a percentage of base salary | Individual employee performance modifier (0 to 125%) | Company performance modifier (0 to 200%) | | Employee incentive award (rounded to nearest $100) |
2024 LONG-TERM INCENTIVE AWARDS
2024 LONG-TERM INCENTIVE AWARDS
Overview
Overview The objectives of our long-term incentive program are to motivate and reward executives and other key employees for sustained long-term performance and to promote their retention. We do not grant stock options, and no options are held by named executive officers. Participation in our 2018 EIP is limited to those officers and employees who are in a position to contribute significantly to our long-term growth and profitability. The 2018 EIP is administered by the Committee, and the Committee is authorized to make all future grants of long-term incentive awards, as well as to make all decisions and interpretations required to administer the plan. Equity-based long-term incentive awards are generally approved and granted on an annual cycle, typically in the first quarter of each year. Awards made by the Committee in February 2024 were based upon competitive market data provided to the Committee by the Committee’s independent compensation consultant; the Committee’s assessment of our overall performance and the individual executive’s performance and contribution as well as Mr. Norton’s recommendations for named executive officers other than himself. The Committee also considered the size of equity grants made in prior years to each executive.
PERFORMANCE UNITS VESTING LEVELS 2024 — 2026 PERFORMANCE PERIOD
PERFORMANCE UNITS VESTING LEVELS 2024 — 2026 PERFORMANCE PERIOD
PERFORMANCE UNITS VESTING LEVELS 2024 — 2026 PERFORMANCE PERIOD
| ONEOK TSR Ranking vs. Peer Group | Percentage of Performance Units Earned | | 90th Percentile and above | 200% | | 75th Percentile | 150% | | 50th Percentile | 100% | | 25th Percentile | 50% | | Below 25th percentile | 0% |
PERFORMANCE UNITS VESTING LEVELS 2024 — 2026 PERFORMANCE PERIOD
If our TSR ranking at the end of the performance period is between the stated percentage levels set forth in the table above, the percentages of performance units earned will be interpolated between the earnings levels. If a holder of performance units retires, becomes disabled or dies prior to vesting, the performance units will vest on the vesting date based on the performance results at the end of the performance period, prorated based on the period of time the holder was employed during the vesting period. If the holder is terminated involuntarily without cause, terminates voluntarily for good reason, or terminates on account of retirement, disability, or death, in each case before vesting and within two years after a qualifying change in control, the units will vest in the amount calculated pursuant to the next sentence if the change in control occurs during the performance period, or the amount calculated based on actual TSR performance if the change in control occurs after the performance period and before the vesting date. If the qualifying change in control occurs during the performance period, the amount to be paid with respect to the units shall be determined based on the greater of (i) the target number of performance units (prorated for termination before the vesting date, as described in the preceding sentence, based on the period of time employed during the vesting period), or (ii) the number of units calculated for the performance period based on actual TSR performance as of the date of the change in control (without proration), in each case giving effect to the accumulated dividend equivalents. If a qualifying change in control occurs after the holder terminates on account of retirement, disability, or death, and prior to vesting, the amount of units that vest will be calculated pursuant to the preceding sentence. In all other cases of termination of employment, performance units are forfeited. Dividend equivalents are accrued with respect to these performance units over the term of the vesting period and are paid when the units vest.
PAYOUT OF 2021-2024 PERFORMANCE UNITS
PAYOUT OF 2021-2024 PERFORMANCE UNITS Performance units granted under the 2018 EIP were eligible to be earned based on our cumulative TSR during the three-year performance period from February 17, 2021 to February 17, 2024, as compared with the cumulative TSR of a specified peer group of energy companies. As illustrated in the table below, the number of shares of common stock to be issued upon vesting ranged from zero to 200% of the number of units granted based on our relative TSR performance.
PERFORMANCE UNITS VESTING LEVELS FEBRUARY 2021 — FEBRUARY 2024 PERFORMANCE PERIOD
PERFORMANCE UNITS VESTING LEVELS FEBRUARY 2021 — FEBRUARY 2024 PERFORMANCE PERIOD
PERFORMANCE UNITS VESTING LEVELS FEBRUARY 2021 — FEBRUARY 2024 PERFORMANCE PERIOD
| ONEOK TSR Ranking vs. Peer Group | Percentage of Performance Units Earned | | 90th Percentile and above | 200% | | 75th Percentile | 150% | | 50th Percentile | 100% | | 25th Percentile | 50% | | Below 25th percentile | 0% |
PERFORMANCE UNITS VESTING LEVELS FEBRUARY 2021 — FEBRUARY 2024 PERFORMANCE PERIOD
Our cumulative TSR was at the 44th percentile relative to the specified peer group of energy companies during the performance period. As a result, in February 2024, the Committee certified a payout equal to 88% of the target number of units granted and the named executive officers were awarded an equivalent number of shares of our common stock. Additional information regarding payouts of the 2021-2024 performance units is provided in the "Stock Vested in Fiscal Year 2024" table on page 97.
PERFORMANCE UNITS VESTING LEVELS FEBRUARY 2021 — FEBRUARY 2024 PERFORMANCE PERIOD
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PERFORMANCE UNITS VESTING LEVELS FEBRUARY 2021 — FEBRUARY 2024 PERFORMANCE PERIOD
Executive Compensation Discussion and Analysis
CHANGE IN CONTROL BENEFITS
CHANGE IN CONTROL BENEFITS Our executive management and other employees have built our company into the successful enterprise that it is today, and we believe that it is important to protect their interests in the event of a change in control of our company. Further, it is our belief that the interests of our shareholders will be best served if the interests of our senior management are aligned with those of our shareholders, and that providing change in control benefits should mitigate any potential reluctance of executive management to pursue potential change in control transactions that may be in the best interests of our shareholders. We have a Change in Control Severance Plan that provides for certain payments (comprised of a single lump sum cash payment that may be up to three times the sum of a participant’s base salary and target short-term incentive bonus, plus reimbursement of COBRA healthcare premiums for up to 18 months) in the event of termination of employment involuntarily without cause or voluntarily for good reason of an executive officer of our company (including the named executive officers) within the two years following a change in control (a so-called “double-trigger” plan). The plan does not provide for additional pension benefits upon a change in control. Also, the plan provides plan participants a “net best” approach to excise taxes in determining the benefit payable to a participant under the plan. This approach provides a participant his or her “net best benefit,” which is the greater of (i) the full benefit payable to the participant net of the applicable federal excise tax, if any, or (ii) the benefit reduced to a level that would not trigger the payment of federal excise tax. To determine the levels of benefits to be paid to the named executive officers, the Committee consulted with Meridian Compensation Partners, its independent compensation consultant, to determine competitive practices in our industry with respect to change in control arrangements. The Committee determined that the levels of benefits provided under the plan, including the payment of various multiples of salary and target short-term incentive compensation, accomplished our objective of providing competitive benefits and that these benefits are consistent with the general practice among our peers. The Committee annually reviews the eligible participants and benefit levels under the plan. For additional information on this plan, see “Potential Post-Employment Payments and Payments Upon a Change in Control” below.
CHANGE IN CONTROL BENEFITS
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CHANGE IN CONTROL BENEFITS
Executive Compensation Discussion and Analysis
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| Name and Principal Position | Year | Salary | Stock Awards(1) | Non-equity Incentive Plan Compensation(2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(3) | All Other Compensation(4) | Total | | Pierce H. Norton II President and Chief Executive Officer | 2024 | $925,000 | $9,081,124 | $2,800,700 | $— | $430,509 | $13,237,333 | | | 2023 | $835,000 | $6,274,485 | $2,101,100 | $— | $336,989 | $9,547,574 | | | 2022 | $835,000 | $5,618,292 | $1,467,300 | $— | $218,432 | $8,139,024 | | Walter S. Hulse, III Chief Financial Officer, Treasurer and Executive Vice President, Corporate Development and Investor Relations | 2024 | $650,000 | $3,690,593 | $1,640,000 | $— | $278,685 | $6,259,278 | | | 2023 | $600,000 | $2,760,803 | $1,372,500 | $— | $190,814 | $4,924,117 | | | 2022 | $580,000 | $2,122,475 | $809,800 | $— | $179,137 | $3,691,412 | | Kevin L. Burdick Executive Vice President and Chief Enterprise Services Officer | 2024 | $550,000 | $2,045,043 | $1,150,500 | $— | $229,551 | $3,975,094 | | | 2023 | $500,000 | $2,007,859 | $1,043,100 | $— | $153,963 | $3,704,922 | | | 2022 | $500,000 | $1,997,646 | $607,100 | $— | $164,867 | $3,269,613 | | Sheridan C. Swords Executive Vice President and Chief Commercial Officer | 2024 | $525,000 | $2,045,043 | $1,052,500 | $336,265 | $89,080 | $4,047,888 | | | 2023 | $500,000 | $1,756,885 | $855,500 | $661,416 | $71,844 | $3,845,645 | | | 2022 | $500,000 | $1,560,634 | $613,400 | $— | $75,772 | $2,749,806 | | Lyndon C. Taylor Executive Vice President, Chief Legal Officer and Assistant Secretary(5) | 2024 | $600,000 | $2,101,875 | $1,307,400 | $— | $158,665 | $4,167,940 |
Summary Compensation Table
(1)The amounts included relate to restricted units and performance units granted under our 2018 EIP and reflect the aggregate grant date fair value calculated pursuant to ASC Topic 718. Material assumptions used in the calculation of the value of these equity grants are included in Note L of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. The aggregate grant date fair value of restricted units for purposes of ASC Topic 718 was determined based on the closing price of our common stock on the grant date. With respect to the performance units, as market condition awards, the grant date fair value for purposes of ASC Topic 718 is the full grant date fair value, as adjusted to reflect any increase or reduction in value that is appropriate for the probability that the market condition might or might not be met. For a discussion of the assumptions used to calculate the value of performance unit awards, refer to Note L of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. Using the maximum number of shares issuable upon vesting of the performance units (200% of the units granted), the aggregate grant date fair value of the performance units with respect to 2024 would be as follows:
Summary Compensation Table
| Name | 2024 | | Pierce H. Norton II | $14,957,532 | | Walter S. Hulse, III | $6,076,450 | | Kevin L. Burdick | $3,365,390 | | Sheridan C. Swords | $3,365,390 | | Lyndon C. Taylor | $3,458,962 |
Summary Compensation Table
Footnotes continue on the following page.
Summary Compensation Table
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Summary Compensation Table
Executive Compensation Discussion and Analysis
Summary Compensation Table
Summary Compensation Table
(Footnotes Continued)
| Name | Nonqualified Deferred Compensation Plan(a) | Match Under 401(k) Plan(b) | Company Profit-Sharing Contributions(c) | Holiday Gift | Relocation Expenses | Personal Use of Company Aircraft(d) | Charitable Contributions(e) | | Pierce H. Norton II | $348,389 | $20,700 | $24,150 | $40 | $— | $12,230 | $25,000 | | Walter S. Hulse, III | $217,967 | $19,000 | $24,150 | $40 | $— | $8,153 | $9,375 | | Kevin L. Burdick | $162,161 | $20,700 | $24,150 | $40 | $— | $— | $22,500 | | Sheridan C. Swords | $62,090 | $20,700 | $— | $40 | $— | $— | $6,250 | | Lyndon C. Taylor | $70,152 | $20,700 | $24,150 | $40 | $21,123 | $— | $22,500 |
2024 GRANTS OF PLAN-BASED AWARDS
2024 GRANTS OF PLAN-BASED AWARDS The following table reflects the grants of plan-based awards to the named executive officers during 2024.
Grants of Plan-Based Awards for Fiscal Year 2024
Grants of Plan-Based Awards for Fiscal Year 2024
Grants of Plan-Based Awards for Fiscal Year 2024
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2),(5) | | | All Other Stock Awards: Number of Shares of Stock or Units(3),(5) | Grant Date Fair Value of Stock and Option Awards(4) | | Name | Grant Date | Threshold | Target | Maximum | Threshold | Target | Maximum | | | | Pierce H. Norton II | | | | | | | | | | | Restricted Units | 2/21/2024 | | | | | | | 21,819 | $1,599,987 | | Performance Units | 2/21/2024 | | | | 43,638 | 87,277 | 174,554 | | $7,478,766 | | Short-Term Incentive | | $— | $1,385,700 | $3,464,300 | | | | | | | Employee Stock Awards | | | | | | | | 26 | $2,371 | | Walter S. Hulse, III | | | | | | | | | | | Restricted Units | 2/21/2024 | | | | | | | 8,864 | $649,997 | | Performance Units | 2/21/2024 | | | | 17,728 | 35,456 | 70,912 | | $3,038,225 | | Short-Term Incentive | | $— | $714,100 | $1,785,200 | | | | | | | Employee Stock Awards | | | | | | | | 26 | $2,371 | | Kevin L. Burdick | | | | | | | | | | | Restricted Units | 2/21/2024 | | | | | | | 4,909 | $359,977 | | Performance Units | 2/21/2024 | | | | 9,818 | 19,637 | 39,274 | | $1,682,695 | | Short-Term Incentive | | $— | $521,800 | $1,304,600 | | | | | | | Employee Stock Awards | | | | | | | | 26 | $2,371 | | Sheridan C. Swords | | | | | | | | | | | Restricted Units | 2/21/2024 | | | | | | | 4,909 | $359,977 | | Performance Units | 2/21/2024 | | | | 9,818 | 19,637 | 39,274 | | $1,682,695 | | Short-Term Incentive | | $— | $498,100 | $1,245,300 | | | | | | | Employee Stock Awards | | | | | | | | 26 | $2,371 | | Lyndon C. Taylor | | | | | | | | | | | Restricted Units | 2/21/2024 | | | | | | | 5,046 | $370,023 | | Performance Units | 2/21/2024 | | | | 10,091 | 20,183 | 40,366 | | $1,729,481 | | Short-Term Incentive | | $— | $569,300 | $1,423,200 | | | | | | | Employee Stock Awards | | | | | | | | 26 | $2,371 |
Grants of Plan-Based Awards for Fiscal Year 2024
(1)Reflects estimated payments that could be made under our Annual Officer Incentive Plan. The 2024 short-term incentive plan provides for awards based on financial and operational performance of the company, as well as individual performance during the relevant fiscal year. Company performance and individual performance criteria are established annually by the Committee. The Committee also establishes annual target and maximum awards for each officer expressed as a percentage of their base salaries. The actual amounts earned by the named executive officers in 2024 under the plan and paid in 2025 are set forth under the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table for Fiscal 2024 above. (2)Reflects the performance units that could be earned pursuant to awards granted under our 2018 EIP that will vest following the end of the applicable vesting period, at which time the holder will be entitled to receive a percentage (0 to 200%) of the performance units granted based on our TSR over the performance period of January 1, 2024 - December 31, 2026, compared with the TSR of the referenced peer group. One share of our common stock is payable in respect of each performance unit that vests. Performance units are also subject to accelerated vesting upon a qualifying termination of employment in connection with a change in control as described under "2024 Long-Term Incentive Awards" at pages 88-89. (3)Reflects restricted units granted under our 2018 EIP that will vest at the end of a designated period, typically three years from the date of grant, at which time the grantee will be entitled to receive the grant in shares of our common stock. Restricted units are also subject to accelerated vesting upon a qualifying termination of employment in connection with a change in control as described under "2024 Long-Term Incentive Awards" at pages 88-89. (4)Amounts represent the grant date fair value of restricted unit awards and performance unit awards granted during 2024, calculated in accordance with ASC Topic 718. For a discussion of the assumptions used to calculate the value of performance unit awards, refer to Note L of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. (5)The amounts shown for the 2024 PSUs and RSUs reflect the grant date fair value of the awards (with PSUs determined at payout percentage of target). The grant date fair value of the 2024 equity awards, assuming the highest level of performance (i.e. 200% of target for PSUs) are as follows: Mr. Norton, $16,557,519, Mr. Hulse, $6,726,447, Mr. Burdick, $3,725,367, Mr. Swords, $3,725,367, and Mr. Taylor, $3,828,985 The actual value, if any, that an executive may realize from a RSU or PSU award is contingent upon the satisfaction of the conditions to vesting applicable to that award, and is determined by reference to stock price, which may fluctuate. Thus, there is no assurance that the value, if any, eventually realized by the executive will correspond to the amount shown in the table.
Grants of Plan-Based Awards for Fiscal Year 2024
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Grants of Plan-Based Awards for Fiscal Year 2024
Executive Compensation Discussion and Analysis
OUTSTANDING EQUITY AWARDS
OUTSTANDING EQUITY AWARDS The following table shows the outstanding equity awards held by the named executive officers as of December 31, 2024.
Outstanding Equity Awards at 2024 Fiscal Year-end
Outstanding Equity Awards at 2024 Fiscal Year-end
Outstanding Equity Awards at 2024 Fiscal Year-end
| | Stock Awards | | | | | Name | Number of Shares or Units of Stock That Have Not Vested(1),(3) | Market Value of Shares or Units of Stock That Have Not Vested(4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(2),(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(4) | | Pierce H. Norton II | 56,243 | $5,646,797 | 336,522 | $33,786,809 | | Walter S. Hulse, III | 22,918 | $2,300,967 | 140,062 | $14,062,225 | | Kevin L. Burdick | 16,467 | $1,653,287 | 91,606 | $9,197,242 | | Sheridan C. Swords | 14,469 | $1,452,688 | 84,218 | $8,455,487 | | Lyndon C. Taylor | 13,449 | $1,350,280 | 41,799 | $4,196,620 |
Outstanding Equity Awards at 2024 Fiscal Year-end
(1)Represents restricted units, including accrued dividend equivalents, that have not yet vested as of December 31, 2024. Restricted units vest at the end of a designated period, typically three years from the date of grant at which time the grantee is entitled to receive one share of our common stock for each vested restricted unit (and any accrued dividend equivalent rights associated with such restricted unit). The following table reflects the vesting schedule for our outstanding restricted units.
STOCK VESTED
STOCK VESTED The following table sets forth stock awards granted in 2021, including restricted units and performance units, held by the named executive officers that vested in 2024.
Stock Vested in Fiscal Year 2024
Stock Vested in Fiscal Year 2024
Stock Vested in Fiscal Year 2024
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting(5) | Value Realized on Vesting(6) | | Pierce H. Norton II | 85,781 | $6,465,257 | | Walter S. Hulse, III | 39,766 | $2,862,758 | | Kevin L. Burdick | 37,426 | $2,694,315 | | Sheridan C. Swords | 29,240 | $2,104,958 | | Lyndon C. Taylor | — | $— |
Stock Vested in Fiscal Year 2024
(5)Includes restricted units granted in 2021 that vested in 2024 and were paid in shares of our common stock and performance units granted in 2021 that vested in 2024 at 88% of target and were paid in shares of our common stock. (6)The value received on vesting represents the market value of the shares received based on the closing price of our common stock on the NYSE on the date of vesting.
Stock Vested in Fiscal Year 2024
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Stock Vested in Fiscal Year 2024
Executive Compensation Discussion and Analysis
PENSION BENEFITS
PENSION BENEFITS The following table sets forth the estimated present value of accumulated benefits as of December 31, 2024, and payments made during 2024, in respect of each named executive officer under each of the referenced retirement plans.
Pension Benefits as of December 31, 2024
Pension Benefits as of December 31, 2024
Pension Benefits as of December 31, 2024
| Name | Plan Name(1) | Number of Years Credited Service | Present Value of Accumulated Benefit(2) | Payments During Last Fiscal Year | | Pierce H. Norton II | Supplemental Executive Retirement Plan | — | $— | $— | | | Retirement Plan | — | $— | $— | | Walter S. Hulse, III | Supplemental Executive Retirement Plan | — | $— | $— | | | Retirement Plan | — | $— | $— | | Kevin L. Burdick | Supplemental Executive Retirement Plan | — | $— | $— | | | Retirement Plan | — | $— | $— | | Sheridan C. Swords | Supplemental Executive Retirement Plan | 20 | $2,463,282 | $— | | | Retirement Plan | 20 | $913,100 | $— | | Lyndon C. Taylor | Supplemental Executive Retirement Plan | — | $— | $— | | | Retirement Plan | — | $— | $— |
Pension Benefits as of December 31, 2024
(1)No new participants have been added to our Supplemental Executive Retirement Plan, a nonqualified defined benefit pension plan, since 2005, and, in November 2013, our Board approved an amendment to the Supplemental Executive Retirement Plan that closed this plan to any additional participants as of January 1, 2014. The Retirement Plan, a qualified defined benefit pension plan, was closed to new participants as of January 1, 2005. Mr. Swords is the only named executive officer who participates in the Retirement Plan and the Supplemental Executive Retirement Plan. (2)A participating executive officer’s benefit is determined as of age 62 when an unreduced benefit can be received under the plans. The present value of the unreduced benefit is determined using the assumptions from the pension plan measurement date of December 31, 2024. Material assumptions used in the calculation of the present value of accumulated benefits are included in Note M of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.
Nonqualified Deferred Compensation Plan
Nonqualified Deferred Compensation Plan The following table sets forth certain information regarding the participation by the named executive officers in our NQDC Plans.
Nonqualified Deferred Compensation Plan
| Name | Executive Contributions in Last Fiscal Year | Registrant Contributions in Last Fiscal Year(1) | Aggregate Earnings in Last Fiscal Year(2) | Aggregate Withdrawals / Distributions | Aggregate Balance at Last Fiscal Year End(3) | | Pierce H. Norton II | $18,476 | $348,389 | $48,273 | $— | $907,724 | | Walter S. Hulse, III | $169,708 | $217,967 | $225,826 | $(11,601) | $2,461,313 | | Kevin L. Burdick | $27,465 | $162,161 | $136,544 | $— | $1,876,025 | | Sheridan C. Swords | $15,730 | $62,090 | $1,771,803 | $— | $6,648,080 | | Lyndon C. Taylor | $59,923 | $70,152 | $6,693 | $— | $151,491 |
Nonqualified Deferred Compensation Plan
(1)The “All Other Compensation” column of the Summary Compensation Table for Fiscal Year 2024 at page 93 includes these amounts paid under our NQDC Plan as our excess contributions, as well as quarterly and annual profit-sharing contributions with respect to our 401(k) Plan. (2)There were no above-market earnings in 2024, 2023, or 2022. (3)Of the total amounts shown in each NEO’s Aggregate Balance at Last Fiscal Year End, the following amounts have been reported as “Salary,” “Bonus,” “Non- Equity Incentive Plan Compensation,” or “All Other Compensation” in the Summary Compensation Table (in 2024 and in previous years) for Mr. Norton: $827,345; Mr. Hulse: $1,807,713; Mr. Burdick: $1,175,655; Mr. Swords: $466,412; and Mr. Taylor: $143,825. We maintain the NQDC Plan to provide a select group of management and highly compensated employees with the option to defer portions of their cash compensation and provide notional employer contributions that are not otherwise available due to limitations on employer and employee contributions to qualified defined contribution plans under the federal tax laws. In 2024, we made notional contributions to the NQDC Plan in the amount of 6% of eligible compensation above the applicable federal tax limit to all NQDC Plan participants, plus an additional 7% of eligible compensation above the applicable federal tax limit for NQDC Plan participants who do not participate in the SERP. The NQDC Plan also allows for supplemental credit amounts, which are amounts that can be contributed at the discretion of the Committee. No such supplemental credits were contributed in 2024. The participant, at the time a deferral election is made, must specify the distribution date for such deferrals, which may be a date specified by the participant or the date of the participant's separation from service. Deferred amounts may also be distributed upon the participant’s death or disability, or upon change in control.
Nonqualified Deferred Compensation Plan
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Nonqualified Deferred Compensation Plan
Executive Compensation Discussion and Analysis Short-term deferral accounts were available for amounts deferred prior to 2020 and are credited with a notional investment return based on the five- year United States Treasury bond rate as of the first business day of January each year, which was 3.93% for 2024. All other deferrals and company contributions deferred and earned prior to 2020, and all amounts contributed under the NQDC Plan, are credited with a notional investment return based on the amount of gains, losses and earnings for each of the investment options selected by the participant. For the year ended December 31, 2024, the notional investment return for the investment options were as follows:
Nonqualified Deferred Compensation Plan
| Fund Name | Plan Level Returns | | Vanguard Federal Money Market—Investor Shares Intermediate-Term Bond | 5.23% | | Vanguard Cash Reserves Federal Money Market Fund—Admiral Shares | 5.24% | | Baird Core Plus Bond Fund - Institutional | 2.54% | | Vanguard Total Bond Market Index—Admiral Shares Target-Date—Lifecycle | 1.24% | | Vanguard Target Retirement Income Fund—Investor Shares | 6.58% | | Vanguard Target Retirement 2020 Fund—Investor Shares | 7.75% | | Vanguard Target Retirement 2025 Fund—Investor Shares | 9.44% | | Vanguard Target Retirement 2030 Fund—Investor Shares | 10.64% | | Vanguard Target Retirement 2035 Fund—Investor Shares | 11.78% | | Vanguard Target Retirement 2040 Fund—Investor Shares | 12.88% | | Vanguard Target Retirement 2045 Fund—Investor Shares | 13.91% | | Vanguard Target Retirement 2050 Fund—Investor Shares | 14.64% | | Vanguard Target Retirement 2055 Fund—Investor Shares | 14.64% | | Vanguard Target Retirement 2060 Fund—Investor Shares | 14.63% | | Vanguard Target Retirement 2065 Fund—Investor Shares | 14.62% | | Vanguard Target Retirement 2070 Fund—Investor Shares(1) | 14.59% | | Fidelity Balanced—Class K Large Cap Value | 16.13% | | Vanguard Institutional Index—Instl Shares Large Cap Growth | 24.97% | | JPMorgan Large Cap Growth—Class R6 | 34.17% | | Vanguard PRIMECAP Fund —Admiral Shares | 13.52% | | Dodge & Cox Stock Fund—Class X | 14.63% | | Vanguard Extended Market Index Fund—Institutional Shares | 16.91% | | JPMorgan Small Cap Equity Fund—Class R6 | 10.30% | | Dodge & Cox International Stock Fund—Class X | 3.91% | | Vanguard FTSE All-World ex-US Index—Admiral Shares Diversified Emerging Markets | 5.44% | | Fidelity Emerging Markets Index Fund | 6.80% | | William Blair International Leaders Fund—R6 Class Shares | (0.50%) |
Nonqualified Deferred Compensation Plan
(1)Fund inception date - June 28, 2022. At the distribution date, cash is distributed to participants based on the fair market value of the deemed investment of the participant’s accounts at that date. Although the NQDC Plans are unfunded arrangements for purposes of ERISA and the Tax Code, assets have been set aside in a rabbi trust to offset the associated NQDC Plans' liabilities. Amounts may no longer be deferred under the Prior NQDC Plans but do continue to accrue notional interest and remain subject to the terms of those plans and participant elections as to the timing of distributions.
2024 CEO PAY RATIO
2024 CEO PAY RATIO Securities and Exchange Commission rules implementing the Dodd-Frank Act require public companies to disclose the ratio of CEO annual total compensation to median employee annual total compensation. Using the methodology described below, (i) the annual total compensation for our CEO in 2024 was $13,237,333 (ii) the annual total compensation for our median employee in 2024 was $158,449; and (iii) the resulting ratio of our CEO’s compensation to median employee compensation in 2024 was 84 to one. The median employee for 2024 was determined by ranking the gross salary of all active employees, excluding our CEO, as of December 31, 2024. As permitted by Securities and Exchange Commission Item 402(u) of Regulation S-K, we excluded the 165 legacy Medallion employees hired in connection with our acquisition of Medallion in October 2024 from the employee population for purposes of the CEO pay ratio calculation for 2024. The 1,063 EnLink employees hired in connection with our acquisition of EnLink were not included as part of the CEO pay ratio calculation for 2024 as that acquisition closed in January 2025. We calculated annual total compensation for the median employee in 2024 according to the same methodology used to calculate total compensation for our CEO in the Summary Compensation Table. We believe the foregoing pay ratio disclosure, including but not limited to any assumptions, estimates, adjustments, methodologies and existing internal records used to identify our median employee, is a reasonable estimate calculated in a manner consistent with Securities and Exchange Commission Item 402(u) of Regulation S-K. The Securities and Exchange Commission rules for identifying the median employee and calculating the ratio of our CEO annual total compensation to that employee’s annual total compensation allow companies to make reasonable assumptions and estimates, and to apply a variety of methodologies and exclusions that reflect their 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 may have different compensation practices, and may utilize different assumptions, estimates, methodologies and exclusions in calculating their own pay ratios.
2024 CEO PAY RATIO
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2024 CEO PAY RATIO
| Approval of the ONEOK, Inc. 2025 Equity Incentive Plan | | | | Our Board unanimously recommends a vote FOR the approval of the ONEOK, Inc. 2025 Equity Incentive Plan. |
EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO ITEM 402 OF REGULATION S-K, INCLUDING THE
| PAY VERSUS PERFORMANCE DISCLOSURE | | |
EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO ITEM 402 OF REGULATION S-K, INCLUDING THE
| Year | Summary Compensation Table Total for Terry K. Spencer (2) | Compensation Actually Paid to Terry K. Spencer (1),(2) | Summary Compensation Table Total for Pierce H. Norton II (3) | Compensation Actually Paid to Pierce H. Norton II (1),(2) | Average Summary Compensation Table Total for Non-PEO NEOs (4) | Average Compensation Actually Paid to Non-PEO NEOs (1),(4) | Value of Initial Fixed $100 Investment Based on: | | Net Income | Earnings Per Share (7) | | | | | | | | | Total Shareholder Return (5) | Peer Group Total Shareholder Return (5),(6) | | | | 2024 | $— | $— | $13,237,333 | $20,978,410 | $4,612,550 | $6,946,295 | $188.65 | $177.30 | $3,112,495,133 | $5.17 | | 2023 | $— | $— | $9,547,574 | $6,585,820 | $3,650,976 | $2,575,822 | $125.62 | $167.71 | $2,658,934,437 | $5.48 | | 2022 | $— | $— | $8,139,024 | $7,369,578 | $3,040,323 | $1,844,648 | $111.01 | $169.96 | $1,722,221,246 | $3.84 | | 2021 | $9,287,113 | $5,136,261 | $7,246,578 | $8,150,397 | $3,163,660 | $5,392,850 | $93.37 | $102.56 | $1,499,706,012 | $3.35 | | 2020 | $10,143,927 | $(5,589,662) | $— | $— | $2,525,762 | $(1,426,729) | $56.64 | $66.32 | $612,808,674 | $1.42 |
PAY VERSUS PERFORMANCE TABULAR LIST
PAY VERSUS PERFORMANCE TABULAR LIST