DEF 14A of Devon Energy Corp/De
Filed Apr 23, 2025 · FY20240001104659-25-037545
AGENDA ITEM 1. ELECTION OF DIRECTORS
AGENDA ITEM 1. ELECTION OF DIRECTORS Our Board has nominated ten directors for election at the Annual Meeting. Each Director will serve for a term ending at the next Annual Meeting and until his or her successor is duly elected and qualified, subject to such Director’s earlier death, disqualification, resignation, or removal. All nominees are currently Devon Directors. Within each nominee’s biography and the matrix on page 13, we have highlighted the notable qualifications, experience, and skills that contributed to his or her selection as a nominee to our Board. We have no reason to believe that any of the nominees for Director will be unable to serve if elected. However, if any of these nominees becomes unavailable, the persons named in the proxy intend to vote for any alternate designated by the current Board. Proxies cannot be voted for a greater number of persons than the nominees named.
AGENDA ITEM 1. ELECTION OF DIRECTORS
| Our Board of Directors recommends that stockholders vote “FOR” the election of the director nominees listed in the pages that follow. |
WHO WE ARE
WHO WE ARE
Our Nominees for Election
Our Nominees for Election
Our Nominees for Election
| Devon Board Service ■ Chair of the Board | John E. Bethancourt | Chair of the Board | AGE: 73 | DIRECTOR SINCE: 2014 | | | John E. Bethancourt joined the board of directors in January 2014 and became Board Chair in July 2024. He is a retired Chevron executive, serving most recently as executive vice president for technology and services, where he oversaw Chevron’s environmental, health and safety efforts, major project management, procurement and mining operations. Bethancourt began his career with Getty Oil Co. in 1974 and joined Texaco Inc. through a 1984 merger. He earned a bachelor’s degree in petroleum engineering from Texas A&M University. Qualifications Mr. Bethancourt is an experienced and accomplished leader. His broad competencies in matters impacting the energy industry strengthen the collective capabilities of the Board. His experience in areas relating to human resources, environmental matters, and energy-related infrastructure has provided valuable perspectives for the Board. Principal occupation or employment: ■ Former Executive Vice President for Technology and Services, Chevron Certain other directorships: ■ Previously served on the board of trustees of the Texas A&M Foundation ■ Past director of the Society of Petroleum Engineers ■ Former director of the National Action Council for Minorities in Engineering, Inc. Please refer to the Director Skills and Experience Matrix on page 13 for more information. | |
Our Nominees for Election
| Devon Board Service ■ Compensation ■ Governance, Environmental, and Public Policy | Barbara M. Baumann | AGE: 69 | DIRECTOR SINCE: 2014 | | | Barbara M. Baumann joined the board of directors in January 2014 and served as Devon’s Board Chair from January 2023 to July 2024. She is president of Cross Creek Energy Corp., an energy investments firm. She is currently on the board of National Fuel Gas Company and serves on the audit and financing committees. Baumann became chair of the independent board of trustees of the Putnam Mutual Funds in July 2024 after serving as vice-chair starting in 2022. Baumann also serves on the advisory council for First Reserve Corp., a private equity firm focused on energy. She is a member of the board of one of First Reserve Corp.’s portfolio companies, IOG Resources. Previously, Baumann served in various areas of finance and operations during an 18-year career with Amoco (later BP Amoco). Those roles included chief financial officer of Ecova Corp., Amoco’s wholly owned environmental-remediation unit, and vice president of Amoco’s San Juan Basin business unit. She earned a bachelor’s degree from Mount Holyoke College and a master’s in business administration from the Wharton School of the University of Pennsylvania. Qualifications Ms. Baumann brings to the Board her extensive knowledge of financial matters and the energy industry and her experience as an accomplished leader and business professional. Her history with board service, including as a member and leader on Devon’s Board, and insights on investor focus areas deepen our Board’s understanding of governance-related matters. Principal occupation or employment: ■ President and Owner, Cross Creek Energy Corporation Certain other directorships: ■ National Fuel Gas Company. Serves on the audit and financing committees ■ Putnam Mutual Funds (Chair, independent board of trustees) ■ First Reserve Corporation (advisory council) ■ IOG Resources Please refer to the Director Skills and Experience Matrix on page 13 for more information. | |
WHO WE ARE (cont.)
WHO WE ARE (cont.)
WHO WE ARE (cont.)
| Devon Board Service ■ Compensation ■ Governance, Environmental, and Public Policy | Ann G. Fox | AGE: 48 | DIRECTOR SINCE: 2019 | | | Ann G. Fox joined the board of directors in June 2019. She is president, chief executive officer, and a board member of Nine Energy Service, Inc. (Nine), a Houston-based oilfield services company. Fox joined Nine in 2013 and previously served as chief financial officer and vice president of strategic development. Prior to joining Nine, she worked for SCF Partners, a private equity firm supporting the oilfield services and equipment industries. Fox also has experience as an investment banking analyst and as a Marine, where she served several tours of duty in Iraq on a team that reported directly to Gen. David Petraeus. She received a bachelor’s degree in diplomacy and security in world affairs from Georgetown University and a master’s in business administration from Harvard University. Fox currently serves on the board of the American Petroleum Institute, the board of advisors of Rice University’s Baker Institute, and the board of trustees of Groton School. Qualifications Ms. Fox brings to the Board her significant and unique career experiences, knowledge of the energy industry and capital markets, and perspective as a leader. Her recognition of upstream business and operational developments contributes to the Board’s overall performance. Principal occupation or employment: ■ President and Chief Executive Officer, Nine Energy Service, Inc. Certain other directorships: ■ Nine Energy Service, Inc. ■ American Petroleum Institute ■ Baker Institute (board of advisors) ■ Groton School Please refer to the Director Skills and Experience Matrix on page 13 for more information. | |
WHO WE ARE (cont.)
| Devon Board Service ■ Dividend | Clay M. Gaspar | AGE: 53 | DIRECTOR SINCE: 2025 | | | Clay M. Gaspar was elected President and Chief Executive Officer of Devon Energy and appointed to the board of directors in March 2025. He previously served as Executive Vice President and Chief Operating Officer of the Company, a role he assumed in January 2021 following Devon’s merger with WPX Energy. While at WPX, Mr. Gaspar served as President and Chief Operating Officer and sat on the board of directors. His earlier career includes technical and leadership positions with Newfield Exploration, Anadarko Petroleum, and Mewbourne Oil. Mr. Gaspar serves on the boards of the Permian Strategic Partnership and the American Heart Association Southwest Region, is chairman of the Upstream Committee of the American Petroleum Institute, and is a member of the Texas A&M Engineering Advisory Council. Mr. Gaspar earned a bachelor’s degree in petroleum engineering from Texas A&M University, a master’s degree in petroleum and geosciences engineering from the University of Texas, and is a registered professional engineer in the state of Texas. Qualifications Mr. Gaspar is an experienced leader, with the vision and industry expertise to guide Devon forward. His understanding of WPX’s and the post-merger combined Company’s operations and assets provides valuable Board-level perspective. Principal occupation or employment: ■ President and Chief Executive Officer, Devon Energy Corporation Certain other directorships: ■ Permian Strategic Partnership ■ American Heart Association Southwest Region ■ Michigan Potash Company (advisory board member) ■ Previously served on WPX’s board of directors Please refer to the Director Skills and Experience Matrix on page 13 for more information. | |
WHO WE ARE (cont.)
WHO WE ARE (cont.)
WHO WE ARE (cont.)
| Devon Board Service ■ Audit ■ Reserves | Gennifer F. Kelly | AGE: 52 | DIRECTOR SINCE: 2023 | | | Gennifer F. Kelly joined the board of directors in January 2023. She is currently on the board of Delek Logistics, where she serves as chair of the technology committee and as a member of the conflicts and environmental, health and safety committees. Kelly has 25 years of oil and gas industry experience in both upstream and midstream sectors. She previously held the role of chief operating officer and SVP of Western Midstream Partners and vice president of marketing for Anadarko Petroleum Corporation. Prior to her role at Western Midstream, Kelly led operations transformation efforts, as well as strategic planning, portfolio management, and asset management teams for Anadarko. She holds a master’s degree in business administration and a bachelor’s degree in petroleum engineering from Louisiana State University. Qualifications Ms. Kelly brings to the Board her extensive knowledge of the energy industry, including strategic and regulatory matters. She is an experienced executive who has led significant corporate transformational efforts. She has diverse operations experience in production, drilling, and completions engineering, working extensively in East Texas, West Texas, and the Gulf of Mexico. She has a broad understanding of key matters considered by boards of directors of energy companies. Principal occupation or employment: ■ Former Chief Operating Officer and SVP of Western Midstream Partners Certain other directorships: ■ Delek Logistics Partners, LP. Serves on the technology (chair), conflicts and EHS committees ■ Lone Star College Foundation. Serves on the audit committee Please refer to the Director Skills and Experience Matrix on page 13 for more information. | |
WHO WE ARE (cont.)
| Devon Board Service ■ Chair, Governance, Environmental, and Public Policy ■ Compensation | Kelt Kindick | AGE: 70 | DIRECTOR SINCE: 2021 | | | Kelt Kindick joined the board of directors in January 2021 following Devon’s merger with WPX. Kindick became a member of WPX’s board of directors in 2013. In December 2012, Kindick retired from Bain & Company Inc., a management consulting firm, serving most recently as chief financial officer and partner. He joined Bain & Company in 1980, was elected partner in 1986, served as managing director of the firm’s Boston office from 1991 to 1996, and as chairman of the firm’s executive committee from 1998 to 1999. Kindick also served as chief financial officer of the Commonwealth of Massachusetts from 2003 to 2004. He received a bachelor’s degree from Franklin & Marshall College and a master’s in business administration from Harvard University. Qualifications Mr. Kindick brings to the Board his experience in strategic roles across a broad range of industries and in the public sector. His insights on governance, finance, and other key strategic matters enhances Board discussions. Principal occupation or employment: ■ Advisory Partner at Bain & Company (formerly Chief Financial Officer and Partner) Certain other directorships: ■ Previously served on WPX’s board of directors, including as lead director and chairman of its nominating, governance, environmental and public policy committee Please refer to the Director Skills and Experience Matrix on page 13 for more information. | |
WHO WE ARE (cont.)
WHO WE ARE (cont.)
WHO WE ARE (cont.)
| Devon Board Service ■ Chair, Reserves ■ Compensation ■ Governance, Environmental, and Public Policy | Karl F. Kurz | AGE: 63 | DIRECTOR SINCE: 2021 | | | Karl F. Kurz joined the board of directors in January 2021 following Devon’s merger with WPX. Kurz became a member of WPX’s board of directors in 2014. He currently serves as non-executive chairman of American Water Works Company, Inc. Kurz is on the board of Texas Pacific Land Corporation, where he is chair of the strategic acquisitions committee and a member of the compensation committee. From 2009 until his retirement in 2012, Kurz was a managing director, co-head of the energy group, and a member of the investment committee at CCMP Capital Advisors LLC, a leading global private equity firm focused on energy investments. Prior to joining CCMP, he spent nine years with Anadarko Petroleum Corporation, most recently serving as chief operating officer responsible for overseeing the company’s global exploration and production, marketing, midstream, land, technology, and service businesses. Kurz holds a bachelor’s of science, magna cum laude, in petroleum engineering from Texas A&M University, and he is a graduate of Harvard University’s Advanced Management Program. Qualifications Mr. Kurz brings to the Board his significant experience in the energy industry and expertise in petroleum engineering. He has served in leadership positions and provides candid perspectives on the Company and the industry. Principal occupation or employment: ■ Former Managing Director of CCMP Capital Advisors LLC and Chief Operating Officer of Anadarko Petroleum Corporation Certain other directorships: ■ American Water Works Company, Inc. Serves as non-executive chairman ■ Texas Pacific Land Corporation. Serves on the strategic acquisitions committee (chair) and compensation committee ■ Previously served on Royal Helium Ltd.’s board of directors and its compensation committee ■ Previously served on WPX’s board of directors and its audit committee Please refer to the Director Skills and Experience Matrix on page 13 for more information. | |
WHO WE ARE (cont.)
| Devon Board Service ■ Audit ■ Governance, Environmental, and Public Policy | Michael N. Mears | AGE: 62 | DIRECTOR SINCE: 2023 | | | Michael N. Mears joined the board of directors in January 2023. He is currently on the board of Sempra, where he serves as chair of the corporate governance committee and as a member of the executive and compensation and talent development committees. Mears was the chairman, president, and CEO of Magellan Midstream Partners from 2011 until his retirement in 2022. He joined Magellan Midstream Partners in 2002 when the company was formed and was the company’s chief operating officer from 2008 to 2011. Prior to Magellan, Mears worked in a range of management positions for its predecessor company, Williams Pipeline Co. He holds a bachelor’s degree in chemical and petroleum refining engineering from the Colorado School of Mines. Qualifications Mr. Mears has significant leadership experience in the energy industry. As a former chief executive officer of a large corporation, he is able to provide perspectives on a broad range of issues that are important for a corporation with Devon’s scale and operations. His background in marketing and energy-related infrastructure adds valuable perspectives to the Board. His commercial and operational expertise in the context of global energy markets and the energy transition make him a valuable member of our board. Principal occupation or employment: ■ Former Chairman, President, and CEO of Magellan Midstream Partners Certain other directorships: ■ Sempra Energy. Serves on the corporate governance (chair) and executive and compensation and talent development committees ■ Previously served on Magellan Midstream Partners’ board until his retirement in 2022 Please refer to the Director Skills and Experience Matrix on page 13 for more information. | |
WHO WE ARE (cont.)
WHO WE ARE (cont.)
WHO WE ARE (cont.)
| Devon Board Service ■ Chair, Compensation ■ Governance, Environmental, and Public Policy | Robert A. Mosbacher, Jr. | AGE: 73 | DIRECTOR SINCE: 2009 | | | Robert A. Mosbacher, Jr. was appointed to the board of directors in April 2009. Mosbacher previously served as a member of the board from 1999 until 2005, at which time he resigned to accept an appointment by the Bush administration to serve as president and chief executive officer of the Overseas Private Investment Corp. (OPIC), an independent agency of the U.S. government that supports private capital investment in emerging markets around the world. He is chairman of Mosbacher Energy Co., an independent oil and gas exploration and production company. He was chair of the Development Advisory Council for the U.S. International Development Finance Corporation, which supports investment in the developing world. Mosbacher also currently serves on the board of the National Archives Foundation. He has a bachelor’s degree in political science from Georgetown University and a law degree from Southern Methodist University. Qualifications Mr. Mosbacher brings to the Board his leadership experience in the energy industry as well as in state and federal government. His experience with the federal government at OPIC and service as a member of other boards and board committees provide him with strong insight. His strategic mindset and broad understanding of the Company provides important perspectives for the Board. Principal occupation or employment: ■ Chairman of Mosbacher Energy Company Certain other directorships: ■ Center for Global Development Please refer to the Director Skills and Experience Matrix on page 13 for more information. | |
WHO WE ARE (cont.)
| Devon Board Service ■ Chair, Audit ■ Reserves | Valerie M. Williams | AGE: 68 | DIRECTOR SINCE: 2021 | | | Valerie M. Williams joined the board of directors in January 2021 following Devon’s merger with WPX. Williams became a member of WPX’s board of directors in 2018. Williams is a member of the board of directors of Omnicom Group, Inc., a global advertising and public relations firm, where she serves on the audit and finance committees. She is also a member of the board of directors of DTE Energy, an electric and natural gas utility, where she serves as chair of its audit committee and as a member of the corporate governance committee. Williams is also a member of the independent board of trustees of Franklin Templeton funds, where she serves on the audit committee and nominating and governance committee of some of its open-end funds. Williams began her career with Ernst & Young LLP in 1981 and has over 35 years of audit and public accounting experience serving numerous global companies. Prior to her retirement in 2016, Williams most recently served as the firm’s southwest region assurance managing partner, a position she assumed in 2006. She held several senior leadership positions at Ernst & Young and also served on several strategic committees, including the firm’s partner advisory council, inclusiveness council, audit innovation task force, and the diversity task force. She received a bachelor’s degree from the University of North Texas and a master’s in business administration from the University of Houston. Qualifications Ms. Williams brings to the Board her significant financial reporting expertise developed through 35 years of audit and public accounting experience serving numerous global and multi-location companies, including companies in the energy and technology sectors. She has strong leadership skills and experience with accounting and financial reporting matters at complex organizations. She has been designated an “audit committee financial expert” by Devon’s Board. Principal occupation or employment: ■ Former Southwest Region Assurance Managing Partner at Ernst & Young LLP Certain other directorships: ■ Omnicom Group, Inc. Serves on the audit and finance committees ■ DTE Energy. Serves on the audit committee (chair) and corporate governance committee ■ Franklin Templeton Funds (independent board of trustees) ■ Previously served on WPX’s board of directors and its audit committee Please refer to the Director Skills and Experience Matrix on page 13 for more information. | |
WHO WE ARE (cont.)
WHO WE ARE (cont.)
Director Compensation
Director Compensation Director compensation is reviewed and determined annually by the Board acting upon the recommendation of the Compensation Committee. The Committee periodically obtains data on the director compensation of Devon’s principal competitors and other comparable companies. The Committee also engages an independent consultant (Meridian Compensation Partners, LLC) to supplement such data and provide additional information on director compensation and other compensation-related practices. Meridian is also retained by the Committee to advise on executive compensation. Aside from the foregoing, Meridian performs no other work for Devon. The standard arrangement for compensating our non-management Directors consists of cash and equity awards. Devon employees receive no additional compensation for serving as Directors. Non-management Directors are also eligible to participate in the Company’s charitable gift program subject to the same terms as employees. This program matches contributions (up to $10,000 per year) made to charitable organizations by Directors and employees.
Total Compensation for Non-Management Directors for 20241
| Name | Fees Earned or Paid in Cash ($) | Stock Awards2 ($) | Gift Matching Contribution ($) | Total ($) | | Barbara M. Baumann3 | 143,750 | 236,270 | 10,000 | 390,020 | | John E. Bethancourt3 | 151,250 | 311,307 | — | 462,557 | | Ann G. Fox | 100,000 | 230,023 | 10,000 | 340,023 | | Gennifer F. Kelly | 102,000 | 230,023 | 10,000 | 342,023 | | Kelt Kindick | 120,000 | 230,023 | 10,000 | 360,023 | | John Krenicki Jr. | 102,000 | 230,023 | 10,000 | 342,023 | | Karl Kurz | 107,500 | 230,023 | 10,000 | 347,523 | | Michael N. Mears | 102,000 | 230,023 | 10,000 | 342,023 | | Robert A. Mosbacher, Jr. | 120,000 | 230,023 | 10,000 | 360,023 | | Valerie M. Williams | 125,000 | 230,023 | — | 355,023 |
Compensation Discussion and Analysis
| 46 | Compensation Process Background | | 46 | Role of the Committee | | 46 | Role of the Compensation Consultant | | 47 | Use of Peer Groups | | 48 | Tally Sheet Review | | 48 | Additional Benefits and Compensation Information | | 48 | Retirement Benefits | | 48 | Other Benefits | | 49 | Post-Termination or Change-in-Control Benefits | | 49 | Stock Ownership Guidelines | | 50 | Compensation Program and Risk-Taking | | 50 | Policy for Recovery of Compensation (Clawback Policy) | | 50 | Practices Related to the Grant of Certain Equity Awards in Relation to the Release of Material Nonpublic Information |
Named Executive Officers
| 1 Dollar amounts shown in thousands. | | 2 The TTDC for Mr. Muncrief in 2024 was comprised of a $1,300,000 annual salary, a 140% bonus target, and a $10,250,000 LTI target. The TTDC for Mr. Gaspar upon his promotion into the role of President and Chief Executive Officer was $10,300,000, comprised of a $1,000,000 annual salary, 130% a bonus target, and a $8,000,000 LTI target. | | 3 As of December 31, 2024, the Executive Leadership team was comprised of the following: President and Chief Executive Officer, Richard E. Muncrief, Executive Vice President and Chief Financial Officer, Jeffrey L. Ritenour, Executive Vice President and Chief Operating Officer, Clay M. Gaspar, Executive Vice President and Chief Corporate Development Officer, David G. Harris, Executive Vice President and General Counsel, Dennis C. Cameron, and Executive Vice President Human Resources and Administration, Tana K. Cashion. | | 4 As of March 1, 2025, the Executive Leadership team was comprised of the following: President and Chief Executive Officer, Clay M. Gaspar, Executive Vice President and Chief Financial Officer, Jeffrey L. Ritenour, Executive Vice President and General Counsel, Dennis C. Cameron, Executive Vice President Human Resources and Administration, Tana K. Cashion, Senior Vice President E&P Asset Management, John D. Raines, Senior Vice President E&P Operations, Thomas Hellman, and Senior Vice President Technology, Robert F. (Trey) Lowe III. |
Compensation Philosophy and Objectives
■ motivate and reward executives to drive and achieve the Company’s goal of increasing stockholder value; ■ allocate incentives for the achievement of near-term and long-term objectives, in a manner that motivates executives to take measured and appropriate risk; and ■ attract and retain highly trained, experienced, and committed executives who have the skills, education, business acumen, and background to create value in a large and diversified oil and gas business. The primary components of Devon’s executive compensation program are base salary, a performance bonus, and long-term incentives (LTI). The Committee generally targets each component, as well as the aggregate of the components, at approximately the 50th percentile of the Company’s peer group. In making 2024 pay decisions for the President and CEO, the Committee targeted the 50th percentile of peer group data for the position by awarding a salary and bonus target slightly below the median and a target LTI grant slightly above the 50th percentile. Individual compensation levels may vary from these targets based on performance, expertise, experience, responsibilities, or other factors unique to the individual’s role within the Company. The Committee also provides retirement and other benefits typical for Devon’s peer group.
Good Compensation Governance Practiced by Devon
| | Award Performance-Based LTI — The Company awards 60% of NEO LTI in the form of Performance Share Units (PSUs) tied to TSR. A 100% of target payout on PSUs requires TSR that exceeds the peer group median and positive TSR for the performance period is required for a payout of more than 100% of target. | | | Utilize a Quantitative Process for Performance Bonuses — The goals, their weightings, thresholds, and maximums are determined at the beginning of the year and the Company may make appropriate adjustments to reflect material transactions or events that occur during the year. At the end of the year, the Committee evaluates performance on the goals, assigning each a score between 0% and 200%. The total performance score is determined by multiplying each goal’s score by its weighting and then summed with all other performance-bonus goals. | | | Tie Realizable Pay Opportunities to Company Performance — The Committee regularly reviews the realizable pay of the President and CEO and other executive officers in light of Company performance. This has resulted in pay that aligns with Company performance. | | | Require Executives to Hold Devon Stock — Board-adopted guidelines establish minimum stock ownership levels for the executive officers. | | | Provide for Clawback of Compensation — Pursuant to a Board-adopted policy aligned with requirements under Dodd-Frank legislation and NYSE listing standards, the Company must claw back excess executive incentive compensation if the financial or operational measures on which they are based are later subject to restatement. | | | Dialog to Promote Continuous Improvement — On an annual basis, the Committee or Board Chair, as appropriate, conducts in-depth, confidential, one-on-one interviews with each executive officer, which is a highly effective tool in the Committee’s oversight. |
Controversial Compensation Governance Not Practiced by Devon
| | Enter into Egregious Employment Agreements — The Company does not enter into contracts containing multi-year guarantees of salary increases or non-performance-based bonuses or equity compensation. | | | Allow Excessive Severance Benefits and/or Liberal Change-in-Control Payments — Employment agreements do not provide cash payments that exceed three times base salary plus target/average/last paid bonus; do not contain liberal change-in-control definitions; and, do not provide severance payments without job loss (i.e., no “single trigger” cash severance or equity vesting solely with a change-in-control). | | | Allow Risky Transactions in the Company’s Stock — Company policy prohibits the executives from engaging in short-term or speculative transactions or hedging or pledging Devon’s common stock. | | | Reprice or Replace Underwater Options — The Company does not reprice or replace underwater stock options. | | | Permit Abusive Perquisites Practices — Perquisites made available to the executives are limited. |
Annual Performance Bonus
Annual Performance Bonus In awarding performance bonuses, the Committee uses a formula that establishes a performance-bonus target for each NEO based on a percentage of his base salary. In establishing performance-bonus targets, the Committee considers industry benchmarks for the relevant officer position as well as the scope of responsibility associated with the position. For 2024, performance-bonus targets for NEOs ranged from 80% to 140% of base salary rate, which is consistent with the performance-bonus range of the company executives of Devon’s peers as set forth on page 47. Performance-bonus payouts depend on the Company’s performance in relation to the structured and measurable goals approved by the Board at the beginning of the year, as well as the individual executive’s contributions to the achievement of those goals. The goals were selected because they are critical to the Company’s near-term performance, its prospects for sustainable growth in returns, and the creation of long-term value for the Company and its stockholders. The table below provides detail on the Company’s performance on the goals set for 2024. As reflected in the table, the Board assigns a separate weighting to each performance measure to reflect the relative importance of the measure for the year. The Committee aggregates the weighted performance score for each measure to arrive at an overall Company performance score. In setting each measure’s threshold, target, and maximum, the Committee considers: ■ The Company’s performance on similar measures during the prior year ■ The Company’s annual operating and capital plan and budget ■ The outlook for commodity prices ■ Other relevant measures, including macroeconomic conditions After a review of market conditions and its asset portfolio, the Company decided to decrease its Total Capital Expenditures throughout 2024. In response, the Committee set the target for 2024 Total Capital Expenditures lower than that of 2023. Furthermore, even though the Total Capital Expenditures target was lowered from 2023 to 2024, the Total Production target was increased from 2023 to 2024 to set a challenging goal for the Company to optimize production with decreased capital. Finally, the lower prevailing outlook for commodity prices at the time of the Company’s 2024 goalsetting translated into lower targets for Free Cash Flow Goal and Cash Return on Capital Employed. See below for information on Devon’s 2024 targets as compared to 2023 performance on comparable measures. Devon believes these changes accurately reflect the environment in which the Company anticipated that it would operate in 2024, while retaining demanding goals and incentives for our NEOs.
Annual Performance Bonus
| Measure | Threshold | Target7 | Maximum | Outcome | Weight | Score5 | Weighted Score | | Free Cash Flow1 ($, Millions) | $1,485 | $2,235 | $3,235 | $2,943 | 25% | 171% | 42.75% | | Cash Return on Capital Employed1,2 (CROCE) | 21% | 31% | 41% | 36% | 25% | 147% | 36.75% | | Total Capital Expenditures1 ($, Millions) | $3,780 | $3,600 | $3,240 | $3,631 | 10% | 91% | 9.10% | | Total Oil and Gas Production (MBOE/day) | 656 | 691 | 760 | 737 | 10% | 167% | 16.70% | | Health & Safety3 | See Footnote 3 | | | | 15% | 190% | 28.50% | | Environmental Performance4 | See Footnote 4 | | | | 15% | 165% | 24.75% | | 2024 Company Performance Score6 | See Footnotes 5 and 6 | | | | | | 158% |
EXECUTIVE COMPENSATION (cont.)
| 1 The financial results considered by the Committee when determining the performance bonuses were based on the Company’s best reasonable estimates available at that time. Although the actual results varied from such estimates in certain instances, none of the variances were material in amount or significance. These financial measures are not calculated in accordance with GAAP. Please refer to Appendix A for additional information regarding these financial measures, including reconciliations to their most directly comparable GAAP measure. | | 2 CROCE is a capital returns measure. A reconciliation of this goal to the Company’s financial statements can be found in Appendix A. | | 3 The Company’s “Health and Safety” goal is comprised of (i) SIF (Serious Incident & Fatality) Actual Rate Reduction (90% of total), which included a goal to reduce the SIF Actual Rate from the 2023 outcome, and (ii) Utilization of SIF Learnings, which included a goal to elevate SIF learnings and implement process improvements from the 2023 levels (10% of total). The 2024 target for the Actual Rate Reduction was a reduction from the 2023 outcome to .016 per 200,000 hours worked, which resulted in a score of 200% target score. The Utilization of SIF Learnings, a continuous performance measure, generated a score of 100%. The total score for the “Health and Safety” goal, when sub-measures (i) and (ii) were weighted and combined, was 190%. | | 4 The “Environmental Performance” Goal consisted of (i) Methane Emissions Intensity Reduction (40% of total), (ii) Methane Emissions Detection Reduction (30% of total), and (iii) Spill Rate Reduction (30% of total). The goal of the Methane Emissions Intensity Reduction target was a decrease from the 2023 methane emissions intensity level of 1.62. The 2024 outcome was 1.32, which resulted in a score of 150% of target score. The Methane Emissions Detection Reduction target was a reduction in methane detections intensity from the 2023 actual levels of 10.8%. The 2024 outcome was 9.8%, resulting in a score of 150% target score. The Spill Rate Reduction target was a decrease in barrels spilled from the 2023 outcome of barrels of liquid spilled of 16.42. The 2024 outcome was 7.95, resulting in a score of 200% target score. The total score for the “Environmental Performance,” when sub-measures (i), (ii), and (iii) were weighted and combined, was 165%. | | 5 Outcomes that fall below the Threshold are scored at 0%; Outcomes between Threshold and Target are scored between 50% and 100%; Outcomes between Target and Maximum are scored between 100% and 200%; and Outcomes that exceed the Maximum are scored at 200%. | | 6 The sum of each measure’s weighted score was 158.55%. The Committee rounded the sum of the weighted scores down to the nearest whole percent, which resulted in the 2024 Company Performance Score of 158%. | | 7 The 2024 targets for these measures were set at the beginning of the year and the Company may make appropriate adjustments to reflect material transactions or events that occur during the year. As such, the original targets for Free Cash Flow, CROCE, Total Capital Expenditures, and Total Production were modified to reflect the incremental impact of the Grayson Mill transaction. The original targets were as follows: for Free Cash Flow ($ in Millions), $2,180; for CROCE, 34%; for Total Capital Expenditures ($ in Millions), $3,450; for Total Production, 665 MBOE/day. |
EXECUTIVE COMPENSATION (cont.)
Once the 2024 Company Performance Score was determined, the Committee determined the NEO performance bonuses as shown below. The process for determining performance bonuses relies on Company pre-established performance measures and the application of set formulas to arrive at the bonus amounts. However, the Committee maintains the authority to adjust the amount of an executive’s performance bonus within the range of the bonus pool (0% to 200% of target) based upon individual contributions, market conditions, or other factors. The Committee exercised no discretion in the determination of 2024 bonus payouts for NEOs.
EXECUTIVE COMPENSATION (cont.)
| Executive | 2024 Annual Salary Rate1X | Bonus Target %X | Company Performance Score | = | 2024 Performance Bonus1 | | Richard E. Muncrief | $1,300.0 | 140% | 158% | | $2,875.6 | | Jeffrey L. Ritenour | $707.5 | 90% | | | $1,006.1 | | Clay M. Gaspar | $707.5 | 100% | | | $1,117.9 | | David G. Harris | $707.5 | 90% | | | $1,006.1 | | Dennis C. Cameron | $624.0 | 80% | | | $788.7 |
Long-Term Incentives
Long-Term Incentives A key element of Devon’s compensation program is to align pay and performance by rewarding executive officers for long-term strategic accomplishments and enhancement of long-term stockholder value through equity-based incentives that vest over an extended period of time. LTI compensation plays an essential role in attracting and retaining executive officers and aligns their interests with the long-term interests of Devon’s stockholders. As shown on page 41, LTI is the largest component of NEOs’ total direct compensation (71% for the CEO and 68% for other NEOs).
Restricted Stock Awards (RSAs)
Restricted Stock Awards (RSAs)
Restricted Stock Awards (RSAs)
| Purpose: Awards of RSAs foster long-term stock ownership, strengthen alignment with stockholders, and promote executive retention during the vesting period. | | Additional Details: Devon grants RSAs that vest ratably over four years, 25% on each anniversary of the grant date. |
Performance Share Units (PSUs)
Performance Share Units (PSUs)
Performance Share Units (PSUs)
| Purpose: | | Awards of PSUs encourage executives to make decisions and take actions that promote Company performance and long-term stockholder return. | | Additional Details: ■ Executives may earn between 0% and 200% of the shares underlying the grant based on the Company’s TSR relative to peer companies1 over a three-year performance period (for 2024 grants, January 1, 2024 through December 31, 2026). ■ Payout will be determined as of the end of the performance period. The grid below further details the relationship between relative performance and payout levels. ■ Executives may earn the targeted number of shares (100%) only if the Company’s TSR outperforms that of at least half of peers (6th relative position or higher). ■ Without respect to Devon’s relative TSR position, executives may earn no more than the targeted number of shares (100%) if the Company’s TSR is negative during the performance period. |
PSU Payout Schedule
PSU Payout Schedule
PSU Payout Schedule
| Devon’s Relative TSR Position | 1st | 2nd | 3rd | 4th | 5th | 6th | Median | 7th | 8th | 9th | 10th | 11th | 12th | | % of Target Shares Earned | 200% | 200% | 175% | 150% | 125% | 100% | | 88% | 75% | 63% | 50% | 0% | 0% |
PSU Payout Schedule
| 1 The peer companies used for comparison for the PSU grants were selected in January 2024 at the time the grant was approved. The peers are APA Corporation, Chesapeake Energy Corporation (now named Expand Energy Corporation), ConocoPhillips, Coterra Energy Inc., Diamondback Energy, Inc., EOG Resources, Inc., Marathon Oil Corporation, Occidental Petroleum Corporation, Ovintiv Inc., the S&P 500 Index, and the SPDR® S&P® Oil & Gas Exploration & Production ETF. |
PSU Payout Schedule
At its January 2024 meetings, the Committee approved LTI grant values that were competitive with those most recently granted to similarly situated executives at peer companies. The Committee also determined that the pursuit of strategic Company goals and creation of stockholder value would again be promoted by linking 60% of the LTI awarded for the 2024 year to Company performance and 40% to long-term stock ownership, thereby strengthening the alignment between interests of executives and stockholders. Accordingly, the two types of LTI granted to NEOs were PSUs and time-based RSAs, respectively.
LTI Granted in 20241
LTI Granted in 20241
LTI Granted in 20241
| Executive | Item2 | Target Performance Share Units3 | Restricted Stock | Total | | Richard E. Muncrief | Share Number | 145,597 | 97,065 | 242,662 | | | Grant Value | $6,150 | $4,100 | $10,250 | | Jeffrey L. Ritenour | Share Number | 53,978 | 35,985 | 89,963 | | | Grant Value | $2,280 | $1,520 | $3,800 | | Clay M. Gaspar | Share Number | 58,239 | 38,826 | 97,065 | | | Grant Value | $2,460 | $1,640 | $4,100 | | David G. Harris | Share Number | 53,978 | 35,985 | 89,963 | | | Grant Value | $2,280 | $1,520 | $3,800 | | Dennis C. Cameron | Share Number | 36,932 | 24,622 | 61,554 | | | Grant Value | $1,560 | $1,040 | $2,600 |
LTI Granted in 20241
| 1 Dollar amounts shown in thousands. | | 2 For each NEO, the Committee first determines the total value of LTI to be awarded then divides the total value between 60% PSUs and 40% RSAs. | | 3 In accordance with applicable accounting requirements, Devon uses a different valuation method in the Summary Compensation Table (in this case, a Monte Carlo simulation) for PSUs than in this table. The Monte Carlo simulation for PSUs, when valued for purposes of inclusion in next year’s Summary Compensation Table as compensation for 2024, requires Devon to assign a higher value per unit than the closing price of the Company’s stock as of the grant approval date. |
LTI Granted in 20241
Additionally, at its January 2025 meetings, the Committee certified that the Company achieved the eighth highest TSR out of a twelve-company and Index peer group for the three-year period associated with the PSUs granted in February of 2022 with a performance period that ended December 31, 2024 when contemplating the thirty trading-day average beginning and ending prices outlined in the grant agreement. Pursuant to the grant’s applicable terms and conditions, the percent of target shares paid out and deemed vested for each participant was 75%. The Committee further noted that the PSUs were operating as designed, as evidenced by the cumulative $6.66 million decrease in value of the 2022 PSU granted to the NEOs. Further information about this grant is provided in the “Outstanding Equity Awards at Fiscal Year End” table on page 54.
LTI Granted in 20241
| Executive | 2022 PSU Grant Value1,2 | Value of PSU on Last Day of Performance Period1,3 | $ Difference1 | | % Difference | | Richard E. Muncrief | $5,250 | $2,468 | -$ | 2,782 | -53% | | Jeffrey L. Ritenour | $1,920 | $903 | -$ | 1,017 | | | Clay M. Gaspar | $2,280 | $1,072 | -$ | 1,208 | | | David G. Harris | $1,920 | $903 | -$ | 1,017 | | | Dennis C. Cameron | $1,200 | $564 | -$ | 636 | | | Total | $12,570 | $5,909 | -$ | 6,661 | |
LTI Granted in 20241
| 1 Dollar amounts shown in thousands. | | 2 The values shown are the grant date closing price, $52.22, multiplied by the target shares granted, which were: for Mr. Muncrief, 100,537; for Messrs. Ritenour and Harris, 36,768; for Mr. Gaspar, 43,662; and for Mr. Cameron, 22,980. | | 3 The values shown are the performance period end date closing price, $32.73, multiplied by the 75% of target shares earned. |
EXECUTIVE COMPENSATION (cont.)
| 2025 NEO Compensation | | | For further transparency, Devon’s Board decided to proactively disclose changes to certain aspects of NEO compensation structure. | | | The Company performance scorecard used to determine performance bonuses for 2025 will be based on the following measures and weighted as shown. | | | Measure | Weight | | Free Cash Flow (FCF) | 25% | | Cash Return on Capital Employed (CROCE) | 25% | | Total Capital Expenditures | 10% | | Total Oil and Gas Production | 10% | | Health & Safety | 15% | | Environmental Performance | 15% | | Devon’s Board decided that using substantially the same goals in 2025 as 2024 best promotes continued growth of shareholder returns. | | | In 2025, LTI for NEOs was again granted in the form of PSUs based on relative TSR (60%) and RSAs (40%). The peer group for the 2025 PSU grant is: APA Corporation, ConocoPhillips, Coterra Energy Inc., Diamondback Energy, Inc., EOG Resources, Inc., Expand Energy Corporation, Occidental Petroleum Corporation, Ovintiv Inc., Permian Resources Corporation, the S&P 500 Index, and the SPDR® S&P® Oil & Gas Exploration & Production ETF. | |
Role of the Compensation Consultant
Role of the Compensation Consultant For 2024, the Committee retained Meridian Compensation Partners, LLC (Compensation Consultant) as its independent compensation consultant. The Compensation Consultant evaluated the competitiveness of the Company’s program and
Use of Peer Groups
Use of Peer Groups In addition to the use of a peer group for PSU relative performance page 44, Devon uses a peer group to compare executive compensation levels, as shown below. To successfully compete for executive talent, the Committee, working with the Compensation Consultant, annually compares the compensation of the executive officers to the compensation of similarly situated executives at peer companies with business operations focused on the exploration and production of oil and gas and compensation practices common to the energy industry. In establishing a peer group, the Committee primarily seeks companies with asset and market values similar to the Company. The Committee also considers enterprise values, calculated as common equity value plus net long-term debt and preferred stock, and certain operational and financial measures indicative of size and scope. Additionally, the Committee considers operational comparability and geographic overlap of the assets of potential peer companies. The Committee believes these criteria are appropriate for determining peers because they provide a reasonable point of reference for comparing executives with similar positions and responsibilities. The peer companies used in setting 2024 pay are listed below, as are the peer companies selected at the end of 2024 for use in 2025.
Use of Peer Groups
| Peer Company | 2024 | 2025 | | APA Corporation | ● | ● | | ConocoPhillips | ● | ● | | Coterra Energy Inc. | ● | ● | | Diamondback Energy, Inc. | ● | ● | | EOG Resources, Inc. | ● | ● | | Hess Corporation | ● | ● | | Marathon Oil Corporation | ● | ● | | Occidental Petroleum Corporation | ● | ● | | Ovintiv, Inc | ● | ● | | Pioneer Natural Resources | ● | | | Devon Energy Corporation Percentile of Peer Group1 | | | | ● Market Capitalization | 47th | 42nd | | ● Enterprise Value | 47th | 43rd | | ● Assets | 51st | 53rd | | ● Revenue | 61st | 65th |
Use of Peer Groups
| 1 As of Devon’s peer selection at the end of 2024 for use in 2025, the Market Capitalization and Enterprise Value were calculated at the time of Devon’s peer selection, Assets were calculated from the then-most recent quarterly filing, and Revenue was calculated from the aggregate of the then-most recently disclosed four calendar quarters. |
Use of Peer Groups
Although there are other companies that have been considered by the Company and/or proposed by third parties, after consideration and discussion with its Compensation Consultant, Devon determined that inclusion of additional peers was not appropriate at this time. For example, after review, EQT Corporation and Texas Pacific Land Corp. did not meet the Committee’s criteria to be included in the peer companies selected for use in 2024 and 2025. At the time of Devon’s peer selection, EQT Corporation, as a natural gas company focused on operating primarily in the Marcellus Basin, was operationally and geographically distinct from Devon, and was deemed to not be an appropriate peer comparison for Devon. Additionally, EQT Corporation maintains certain compensation practices that are not common in the energy industry, such as providing a $1 salary as compensation to its chief executive officer. Texas Pacific Land Corp. was
EXECUTIVE COMPENSATION (cont.)
EXECUTIVE COMPENSATION (cont.) determined to be an inappropriate peer because at the time of Devon’s peer selection, it did not produce oil and gas, which Devon considers to be an operationally material factor in setting its peer group. The Committee’s peer group analysis consists of all components of total direct compensation, including base salary, annual performance bonus, and long-term equity incentives. The Compensation Consultant collected and summarized compensation data from the proxy statements of the peer group companies and the Compensation Consultant’s proprietary databases. Additionally, the Compensation Consultant introduced reference points from similarly sized companies in the broader oil and gas industry as well as non-energy industries to bring further context to the Committee’s decision making.
Post-Termination or Change-in-Control Benefits
Post-Termination or Change-in-Control Benefits Devon maintains an employment agreement with each of the NEOs. These agreements do not guarantee continued employment, but they do place certain restrictions on the executives during and after their employment with the Company. Through these agreements, each NEO is provided certain additional compensation if employment is involuntarily terminated other than for “cause” or if the NEO voluntarily terminates employment for “good reason,” as those terms are defined in the relevant agreements. Also, in these situations, the applicable NEO fully vests in any unvested LTI awards subject to certain covenants and agreements and proration as described below. The agreements also provide certain benefits in the event of a termination within a two-year period following a change-in-control. The employment agreements do not include “gross-up” provisions that obligate the Company to pay an additional amount to the NEO if benefits under the agreement or any other Company arrangement are subject to the tax imposed on excess parachute payments by Section 4999 of the Internal Revenue Code. The Company’s award agreements for LTI granted to the NEOs provide that officers who meet certain years-of-service and age criteria are eligible to continue to vest as scheduled in outstanding awards following retirement subject to certain covenants and agreements. See page 60 for additional details. The unvested shares underlying LTI awards are eligible for continued or accelerated vesting post termination in the case of a severance-related employment termination or a retirement. Such terminations occurring prior to the first anniversary of the grant date result in a pro-rata reduction in the number of shares eligible for continued or accelerated vesting post termination. Arrangements with post-termination and change-in-control benefits are typical in the oil and gas industry and necessary in order to compete for executive talent. Please refer to the “Potential Payments Upon Termination or Change-in-Control” section beginning on page 59 for detail on amounts that could be payable under certain scenarios and additional information on the Company’s employment agreements.
Practices Related to the Grant of Certain Equity Awards in Relation to the Release of Material Nonpublic Information
Practices Related to the Grant of Certain Equity Awards in Relation to the Release of Material Nonpublic Information Devon does not currently grant stock options or option-like equity awards to our employees or directors and therefore does not have a formal practice or policy with respect to the grant of stock options or option-like awards.
Practices Related to the Grant of Certain Equity Awards in Relation to the Release of Material Nonpublic Information
| Compensation Committee Report | | | The information contained in this Compensation Committee Report shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates such information by reference in such filing. | | | The Committee has reviewed and discussed the preceding Compensation Discussion and Analysis section with management and, based on such review and discussions, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in the Proxy Statement. | | | | Respectfully submitted, The Compensation Committee Robert A. Mosbacher, Jr., Chair Barbara M. Baumann Ann G. Fox Kelt Kindick Karl F. Kurz | | Pictured above (from left to right): Kelt Kindick, Barbara Baumann, Robert Mosbacher, Jr., Karl Kurz, Ann Fox | |
Summary Compensation Table
Summary Compensation Table The following table and accompanying footnotes summarize the compensation earned, awarded, paid, or attributed to the NEOs for the years indicated below. The NEOs are the President and Chief Executive Officer, the Chief Financial Officer, and three other executive officers of the Company serving as of December 31, 2024. This table should be read together with the Compensation Discussion and Analysis (starting on page 36 of this Proxy Statement), which includes information about Company performance for 2024, the Company’s compensation philosophy and objectives, the programs and plans that underlie executive officer compensation opportunities, and the Committee’s process for awarding compensation.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($)1 | Stock Awards ($)2 | Non-Equity Incentive Plan Compensation ($)3 | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)4 | All Other Compensation ($)5 | Total ($) | | Richard E. Muncrief President and Chief Executive Officer | 2024 | 1,292,308 | 12,397,599 | 2,875,600 | 0 | 474,543 | 17,040,050 | | | 2023 | 1,232,846 | 11,421,978 | 1,641,300 | 0 | 587,027 | 14,883,151 | | | 2022 | 1,132,577 | 10,404,927 | 2,442,100 | 0 | 545,173 | 14,524,777 | | Jeffrey L. Ritenour Executive Vice President and Chief Financial Officer | 2024 | 703,315 | 4,596,212 | 1,006,100 | 3,515 | 200,103 | 6,509,245 | | | 2023 | 674,362 | 4,217,399 | 556,600 | 24,719 | 247,109 | 5,720,189 | | | 2022 | 638,362 | 3,805,243 | 952,900 | 0 | 254,304 | 5,650,809 | | Clay M. Gaspar Executive Vice President and Chief Operating Officer | 2024 | 703,315 | 4,959,051 | 1,117,900 | 0 | 226,527 | 7,006,793 | | | 2023 | 674,362 | 4,685,973 | 687,100 | 0 | 290,219 | 6,337,654 | | | 2022 | 638,362 | 4,518,726 | 1,058,800 | 0 | 279,155 | 6,495,043 | | David G. Harris Executive Vice President and Chief Corporate Development Officer | 2024 | 701,622 | 4,596,212 | 1,006,100 | 0 | 213,494 | 6,517,428 | | | 2023 | 663,469 | 4,217,399 | 608,400 | 0 | 254,217 | 5,743,485 | | | 2022 | 628,108 | 3,805,243 | 937,600 | 0 | 250,059 | 5,621,010 | | Dennis C. Cameron Executive Vice President and General Counsel | 2024 | 620,308 | 3,144,788 | 788,700 | 0 | 189,440 | 4,743,236 | | | 2023 | 584,615 | 2,928,830 | 484,800 | 0 | 207,349 | 4,205,594 | | | 2022 | 496,154 | 2,378,276 | 660,000 | 0 | 192,956 | 3,727,386 |
Summary Compensation Table
| 1 At its January 2024 meetings, the Committee increased Mr. Muncrief’s annual base salary rate to $1,300,000, Mr. Ritenour’s annual base salary rate to $707,500, Mr. Gaspar’s annual base salary rate to $707,500, Mr. Harris’s annual base salary rate to $707,500, and Mr. Cameron’s annual base salary rate to $624,000. These rates took effect on February 10, 2024. | | 2 The dollar amounts reported in this column represent the aggregate grant date fair values of the stock awards, as determined pursuant to FASB ASC Topic 718, excluding the effect of estimated forfeitures. The assumptions used to value stock awards are discussed in Note 4 — Share-Based Compensation of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. For restricted stock, values are based on the closing price of the Company’s common stock on the grant date. In valuing the PSU awards, the Company used a Monte Carlo simulation. The grant date fair value of the PSU awards was determined based on the vesting at target of the units awarded, which is the performance the Company believed was probable on the grant date. If a maximum, rather than target, number of shares is used to determine the maximum award opportunity for the NEOs for the 2024 PSU awards, the grant date value of the awards is as follows: Mr. Muncrief, $16,595,146; Mr. Ritenour, $6,152,412; Mr. Gaspar, $6,638,081; Mr. Harris, $6,152,412; and Mr. Cameron, $4,209,509. | | 3 This column reflects performance cash bonuses awarded to the NEOs. | | 4 The dollar amounts reported in this column reflect the aggregate change in the actuarial present value of each participating NEO’s accumulated benefits under the Company’s Defined Benefit Plan during the applicable year. The amounts shown for each year do not reflect payments made to the executives during the applicable year. None of the NEOs received above market or preferential earnings on deferred compensation in any of the reported years. Messrs. Muncrief, Gaspar, Harris, and Cameron joined the Company after Devon’s Defined Benefit Plan was closed to new participants in 2007. At the time the plans closed to new participants, Mr. Ritenour elected to freeze his participation in these plans and instead participate in the Company’s enhanced defined contribution plan. Under the Defined Benefit Plan, Mr. Ritenour continues to earn years of vesting service only. | | 5 Details for the amounts shown in this column for 2024 are reflected in the supplemental table immediately below. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following Grants of Plan-Based Awards table sets forth information concerning performance bonuses, restricted stock, and performance share units granted during 2024 for the NEOs as described below. The long-term incentive awards reflected below are the only equity-based incentives granted to the NEOs in the year.
Grants of Plan-Based Awards
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards1 | | | Estimated Future Payouts Under Equity Incentive Plan Awards2 | | | All Other Stock Awards: Number of Shares of Stock or Units (# shares) | Grant Date Fair Value of Stock Awards3 ($) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (# shares) | Target (# shares) | Maximum (# shares) | | | | Richard E. Muncrief | 1/23/2024 | 910,000 | 1,820,000 | 3,640,000 | — | — | — | — | — | | | 2/10/2024 | — | — | — | — | — | — | 97,065 | 4,100,026 | | | 2/10/2024 | — | — | — | 72,798 | 145,597 | 291,194 | — | 8,297,573 | | Jeffrey L. Ritenour | 1/23/2024 | 318,375 | 636,750 | 1,273,500 | — | — | — | — | — | | | 2/10/2024 | — | — | — | — | — | — | 35,985 | 1,520,006 | | | 2/10/2024 | — | — | — | 26,989 | 53,978 | 107,956 | — | 3,076,206 | | Clay M. Gaspar | 1/23/2024 | 353,750 | 707,500 | 1,415,000 | — | — | — | — | — | | | 2/10/2024 | — | — | — | — | — | — | 38,826 | 1,640,010 | | | 2/10/2024 | — | — | — | 29,119 | 58,239 | 116,478 | — | 3,319,041 | | David G. Harris | 1/23/2024 | 318,375 | 636,750 | 1,273,500 | — | — | — | — | — | | | 2/10/2024 | — | — | — | — | — | — | 35,985 | 1,520,006 | | | 2/10/2024 | — | — | — | 26,989 | 53,978 | 107,956 | — | 3,076,206 | | Dennis C. Cameron | 1/23/2024 | 249,600 | 499,200 | 998,400 | — | — | — | — | — | | | 2/10/2024 | — | — | — | — | — | — | 24,622 | 1,040,033 | | | 2/10/2024 | — | — | — | 18,466 | 36,932 | 73,864 | — | 2,104,755 |
Outstanding Equity Awards at Fiscal Year End
Outstanding Equity Awards at Fiscal Year End The following table shows the outstanding equity awards held by the NEOs as of December 31, 2024, which consisted solely of outstanding RSA and PSU awards.
Outstanding Equity Awards at Fiscal Year End
| | Stock Awards | | | | | | | | Equity Incentive Plan Awards: | | | Name | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)1 | Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)1 | | Richard E. Muncrief | 44,3492 | 1,451,543 | | | | | 75,4023 | 2,467,907 | | | | | 33,5134 | 1,096,880 | | | | | 46,0356 | 1,506,726 | 58,0025 | 1,898,405 | | | 97,0658 | 3,176,937 | 72,7987 | 2,382,679 | | Jeffrey L. Ritenour | 12,6722 | 414,755 | | | | | 27,5763 | 902,562 | | | | | 12,2564 | 401,139 | | | | | 16,9986 | 556,345 | 21,4165 | 700,946 | | | 35,9858 | 1,177,789 | 26,9897 | 883,350 | | Clay M. Gaspar | 19,2612 | 630,413 | | | | | 32,7463 | 1,071,777 | | | | | 14,5544 | 476,352 | | | | | 18,8866 | 618,139 | 23,7965 | 778,843 | | | 38,8268 | 1,270,775 | 29,1197 | 953,065 | | David G. Harris | 12,6722 | 414,755 | | | | | 27,5763 | 902,562 | | | | | 12,2564 | 401,139 | | | | | 16,9986 | 556,345 | 21,4165 | 700,946 | | | 35,9858 | 1,177,789 | 26,9897 | 883,350 | | Dennis C. Cameron | 7,6032 | 248,846 | | | | | 17,2353 | 564,102 | | | | | 7,6604 | 250,712 | | | | | 11,8056 | 386,378 | 14,8735 | 486,793 | | | 24,6228 | 805,878 | 18,4667 | 604,392 |
Option Exercises and Stock Vested During 2024
Option Exercises and Stock Vested During 2024 The table below shows the number of shares of Devon’s common stock acquired during 2024 upon the exercise of stock options and the vesting of stock awards, each of which were granted to the NEOs in previous years.
Option Exercises and Stock Vested During 2024
| | Options Awards | Stock Awards | | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)1 | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)2 | | Richard E. Muncrief | 42,582 | 121,785 | 455,440 | 19,237,786 | | Jeffrey L. Ritenour | — | — | 146,612 | 6,192,891 | | Clay M. Gaspar | — | — | 197,423 | 8,339,148 | | David G. Harris | — | — | 146,612 | 6,192,891 | | Dennis C. Cameron | — | — | 80,337 | 3,393,435 |
Option Exercises and Stock Vested During 2024
| 1 The dollar amounts shown in this column are determined by multiplying the number of options exercised by the difference between the per-share market price of underlying common stock at exercise and the per-share exercise price of the options. | | 2 The dollar amounts shown in this column are determined by multiplying the number of shares of common stock acquired upon vesting by the closing per-share market price of Devon’s common stock on the vesting date. |
Pension Benefits
Pension Benefits Devon maintains a tax qualified defined benefit retirement plan and related trust for certain employees (Defined Benefit Plan). Mr. Ritenour, the only NEO eligible to participate in the plan, elected to have his benefit under the Defined Benefit Plan frozen. Messrs. Muncrief, Gaspar, Harris, and Cameron joined the Company after the Defined Benefit Plan was closed to new participants in 2007. As a result, they are not eligible for a benefit under any of Devon’s defined retirement benefit plans. The following table shows the estimated present value, as of December 31, 2024, of accumulated retirement benefits as provided to Mr. Ritenour under the Defined Benefit Plan. Please refer to the discussion titled “Benefit Plans” below for additional details on Devon’s defined benefit plans.
Nonqualified Deferred Compensation1
Nonqualified Deferred Compensation1 The following table shows the contributions, earnings, distributions, and balances for 2024 under Devon’s nonqualified deferred compensation plan and supplemental contribution restoration plans, to the extent the respective NEO participates in such plans. Additional information regarding each plan is provided following the table.
Nonqualified Deferred Compensation1
| Name | Executive Contributions in Last Fiscal Year ($)1 | Company Contributions for Last Fiscal Year ($)2 | Aggregate Earnings in Last Fiscal Year ($)3,4 | Aggregate Distributions in Last Fiscal Year ($)5 | Aggregate Balance at Last Fiscal Year End ($)3,6 | | Richard E. Muncrief Deferred Compensation Plan Supplemental Contribution Restoration Plans (SCRPs) WPX Deferred Compensation Plan WPX Restoration Plan | | | | | | | | 564,602 | 155,316 | 156,348 | 0 | 3,090,516 | | | N/A | 209,389 | 57,655 | 0 | 907,089 | | | N/A | N/A | 253,807 | 0 | 5,106,018 | | | N/A | N/A | 67,750 | 0 | 1,362,976 | | Jeffrey L. Ritenour Deferred Compensation Plan Supplemental Contribution Restoration Plans (SCRPs) | | | | | | | | 222,640 | 54,895 | 162,343 | (2,617) | 1,531,982 | | | N/A | 75,493 | 44,956 | 0 | 448,779 | | Clay M. Gaspar Deferred Compensation Plan Supplemental Contribution Restoration Plans (SCRPs) WPX Deferred Compensation Plan WPX Restoration Plan | | | | | | | | 83,425 | 62,725 | 95,287 | 0 | 725,121 | | | N/A | 85,933 | 35,504 | 0 | 401,419 | | | N/A | N/A | 251,737 | 0 | 1,641,228 | | | N/A | N/A | 118,689 | 0 | 849,300 | | David G. Harris Deferred Compensation Plan Supplemental Contribution Restoration Plans (SCRPs) | | | | | | | | 78,601 | 57,901 | 58,613 | 0 | 672,215 | | | N/A | 79,502 | 37,419 | 0 | 427,141 | | Dennis C. Cameron Deferred Compensation Plan Supplemental Contribution Restoration Plans (SCRPs) WPX Deferred Compensation Plan WPX Restoration Plan | | | | | | | | 66,306 | 45,606 | 27,091 | 0 | 440,920 | | | N/A | 63,109 | 15,326 | 0 | 255,248 | | | N/A | N/A | 32,056 | 0 | 389,018 | | | N/A | N/A | 31,207 | 0 | 499,324 |
Nonqualified Deferred Compensation1
| “N/A” indicates the plan does not permit the participant or, as applicable, the Company to make contributions. | | 1 The amounts in this column are already included in, and are not in addition to, the amounts in the “Salary” or “Non-Equity Incentive Plan Compensation” columns in the Summary Compensation Table on page 52. | | 2 The amounts in this column are already included in, and are not in addition to, the amounts in the “All Other Compensation” column of the Summary Compensation Table on page 52. Company contributions are made in arrears during the first month following the fiscal quarter during which the contributions were earned. Company contributions earned by the NEOs during 2024 were deposited in April, July, and October 2024 and January 2025. | | 3 Messrs. Muncrief, Gaspar, and Cameron participate in the WPX Deferred Compensation Plan and the WPX Restoration Plan. No new contributions may be made to these plans after December 31, 2021. | | 4 Earnings reflect the returns produced by the investments selected by the applicable NEO. For the Devon Plans, the investment options available to the NEOs are the same options available under the Company’s 401(k) Plan. As of December 31, 2024, investment options consisted of the following (returns for 2024 noted in parentheses): PIMCO Stable Income-Class IV (2.42%); Global Low Volatility Fund (11.36%); US Equity Index Fund (23.8%); International Equity Index Fund (5.11%); TCW Core Fixed Income (.75%); Fidelity Inflation Bond Index (2.01%); Vanguard Total Bond Market (1.25%); Vanguard Prime Money Market (5.23%); and BlackRock LifePath Target-Date Funds (ten funds ranging from 7.08% to 16.27%). For the WPX Deferred Compensation Plan and the WPX Restoration Plan, the investment options are the same in each plan. As of December 31, 2024, investment options consisted of the following (returns for 2024 noted in parentheses): iShares Total US Stock Market Index (23.84%); iShares MSCI Total International Index (5.37%); TCW Core Fixed Income (.75%); Vanguard Total Bond Market Index (1.24%); Vanguard Federal Money Market (5.23%); and BlackRock LifePath Target-Date Funds (five funds ranging from 7.15% to 14.36%). The Company does not guarantee a level of investment return. | | 5 In-service distributions (if any) are made in accordance with the elections made by the NEO at the time of enrollment in the plan. | | 6 For the referenced plans, the Aggregate Balance reflects the changes in the plan balance for the NEOs due to contributions (executive and Company), earnings, and distributions. The amounts previously reported in the Summary Compensation Table as compensation to the NEOs are as follows: Mr. Muncrief — $1,049,108; Mr. Ritenour — $1,309,601; Mr. Gaspar — $457,727; Mr. Harris — $766,942; and Mr. Cameron — $253,872. |
Nonqualified Deferred Compensation Plan
Nonqualified Deferred Compensation Plan The Nonqualified Deferred Compensation Plan is designed to allow each participating employee, including the NEOs, to contribute up to 70% of his or her base salary and up to 100% of his or her performance bonus and receive a Company match beyond the contribution limits prescribed by the Internal Revenue Service with regard to Devon’s 401(k) Plan. The Nonqualified Deferred Compensation Plan provides executives a tax-effective means to defer a portion of their cash compensation at a minimal cost to the Company. Unless otherwise distributed in accordance with the terms of a scheduled in-service withdrawal, a participant’s account is payable upon the earliest to occur of a change-in-control event or the participant’s separation from service, disability, or death. Payment will be made in the form of a single lump sum unless the participant elects installment payments. In the case of a change-in-control event or death, distribution will be made within ninety days. If the participant experiences a separation from service, distribution will be made within ninety days unless the participant is a specified employee under section 409A of the Internal Revenue Code, in which case payment will be delayed for six months. A participant may elect to schedule an in-service withdrawal at least two years after the plan year in which deferrals were made in the form of a lump sum or quarterly installment payments over a period of one or more years. Payment will be made (or commence in the case of installments) within thirty days of the first business day of January in the year elected. However, in the event of death, disability, the occurrence of a change-in-control event or separation from service, payment of the participant’s account is determined without regard to any scheduled in-service withdrawal, which will be cancelled. Investments under the plan mirror those provided to participants under the Company’s 401(k) Plan. Participants are always fully vested in any deferrals made to the plan; vesting of employer contributions follows the four-year graded vesting schedule under the Company’s 401(k) Plan. Vesting is accelerated due to death, disability, retirement, or attainment of normal retirement age (all as defined under the Company’s 401(k) Plan). The WPX Deferred Compensation plan operated on substantially the same terms as the Devon plan prior to the 2021 merger of the companies. In the year of the merger, contributions to the WPX plan ceased and NEO participants became participants in the Devon plan.
Potential Payments Upon Termination or Change-In-Control
Potential Payments Upon Termination or Change-In-Control Devon will be obligated to make certain payments to the NEOs or potentially accelerate the vesting of their equity awards and retirement benefits upon termination of their employment or upon a change-in-control of the Company pursuant to the following plans or agreements: ■ an “Employment Agreement” is applicable to the President and CEO and each of the EVPs, ■ the Defined Benefit Plan, ■ the 401(k) Plan, ■ the SCRPs, ■ the Nonqualified Deferred Compensation Plan, and ■ the Company’s Long-Term Incentive Plans (the Devon Energy Corporation 2017 Long-Term Incentive Plan, as amended (the 2017 LTIP), the 2022 LTIP, and the WPX Plan). Please refer to the discussion in the sections immediately above for information about each of the applicable pension plans and nonqualified deferred compensation plans that the NEOs participate in and may be eligible to receive benefits from in the event of a termination of employment or a change-in-control. As specified below, the Employment Agreement with Devon’s NEOs provide the following rights to compensation in the event of employment termination.
Accrued Payments Upon Termination of Employment
Accrued Payments Upon Termination of Employment Upon termination under the agreements, the NEO is entitled to receive the accrued amounts earned during his or her term of employment, including: (i) any earned but unpaid salary through the date of termination, (ii) the annual performance bonus amount only if the NEO has been employed the entire year upon which such annual performance bonus is based, and (iii) amounts he or she is otherwise entitled to under Devon’s employee benefit plans (together, the Accrued Amounts).
Potential Payments Upon Termination Or Change-In-Control1
Potential Payments Upon Termination Or Change-In-Control1
CEO Pay Ratio
CEO Pay Ratio Section 953(B) of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires certain public companies to disclose the median pay of Company employees, the method of determining median employee pay (the median of
Pay Versus Performance Disclosure
Pay Versus Performance Disclosure As required by Item 402(v) of Regulation S-K, Devon is providing the following information regarding the relationship between executive compensation and our financial performance for each of the last five completed calendar years. “Compensation actually paid” includes payments made to executives during the applicable year such as salary, performance bonus, and various benefits. The SEC’s valuation methods for this section emphasize the changes in fair value of equity awards under applicable financial accounting standards, and as such, references to “compensation actually paid” below reflects the change in equity award values on the applicable calculation dates and does not necessarily reflect what our NEOs received year-to-year by grant, vesting, or exercise. The three PvP tables below, along with three PvP charts and their respective footnotes, are Devon’s disclosure under the applicable regulation.
PvP Table 1: Named Executive Officer “Compensation Actually Paid”1,10
PvP Table 1: Named Executive Officer “Compensation Actually Paid”1,10
PvP Table 1: Named Executive Officer “Compensation Actually Paid”1,10
| Year | SCT Total Compensation for CEO2,4 | Compensation Actually Paid to CEO3,4 | Average SCT Total Compensation for Other NEOs2,5 | Average Compensation Actually Paid to Other NEOs3,5 | Value of a $100 Investment in Devon Based on Cumulative TSR6,10 | Value of a $100 Investment in the Peer Group Based on Cumulative TSR6,7,10 | Post-Tax Net Income8,10 | | CROCE9,10 | | 2024 | $17,040 | $6,709 | $6,194 | $2,599 | $163 | $157 | | 2.893B | 36% | | 2023 | $14,883 | $814 | $5,502 | $1,204 | $226 | $152 | | 3.739B | 42% | | 2022 | $14,525 | $41,216 | $5,374 | $12,292 | $285 | $143 | | 6.031B | 62% | | 2021-Muncrief | $11,915 | $48,059 | $4,596 | $15,151 | $191 | $121 | | 2.808B | 39% | | 2021-Hager | $3,391 | $32,289 | | | | | | | | | 2020 | $13,355 | $4,514 | $4,536 | $1,594 | $65 | $58 | -$ | 2.688B | 27% |
PvP Table 1: Named Executive Officer “Compensation Actually Paid”1,10
| 1 Dollar amounts are shown in thousands, except where otherwise indicated. Amounts in parentheses are negative. References to our CEO are also references to our principal executive officer (“PEO”) for purposes of this section. | | 2 “SCT Total” is the Summary Compensation Table’s total for the applicable year. | | 3 The calculation for “Compensation Actually Paid” is shown in “PvP Table 3”. | | 4 The CEO for each year is as follows: 2024, 2023, 2022: Richard E. Muncrief 2021: Richard E. Muncrief, from January 7th to the end of the year; David A. Hager, from January 1st to 6th. After January 6th, Mr. Hager assumed the position of Executive Chair of the Board of Directors until his retirement in early 2023. 2020: David A. Hager | | 5 The other NEOs for each year are as follows: 2024, 2023, 2022: Dennis C. Cameron, Clay M. Gaspar, David G. Harris, and Jeffrey L. Ritenour. 2021: Tana K. Cashion, Clay M. Gaspar, David G. Harris, Jeffrey L. Ritenour, and Lyndon C. Taylor. 2020: Tana K. Cashion, David G. Harris, Jeffrey L. Ritenour, and Lyndon C. Taylor. | | 6 “TSR” is Total Shareholder Return including reinvested dividends. It is a measure of finance performance indicating the growth or decline in an investment’s value over a specified period. For 2024, “Cumulative TSR” is measured from the last trading day of 2019 to the last day of 2024; for 2023, “Cumulative TSR” is measured from the last trading day of 2019 to the last trading day of 2023; for 2022, the range is the last trading day of 2019 to the last trading day of 2022; for 2021, the range is the last trading day of 2019 to the last trading day of 2021; and for 2020, the range is the last trading day of 2019 to the last trading day of 2020. For Devon, Cumulative TSR for 2024, 2023, 2022, 2021, and 2020 was: 63%, 126%, 185%, 91%, and -35%, respectively. For the Peer Group, Cumulative TSR was 57%, 52%, 43%, 21%, and -42% for the same periods. |
PvP Table 2: Other Measures Important in Linking Performance to “Compensation Actually Paid”
PvP Table 2: Other Measures Important in Linking Performance to “Compensation Actually Paid”
PvP Table 2: Other Measures Important in Linking Performance to “Compensation Actually Paid”
| Other Important Measures1 | | | | | | Free Cash Flow (FCF) | Health & Safety | Environmental Performance | Total Oil & Gas Production | Total Capital Expenditures |
PvP Table 2: Other Measures Important in Linking Performance to “Compensation Actually Paid”
| 1 These are the measures, in addition to CROCE, used to determine 2024 NEO performance bonuses. For more information on measures used to determine performance bonuses, see section “Annual Performance Bonus” in this Proxy Statement and similar disclosures in prior Proxy Statements. |
PvP Table 3: Converting Summary Compensation Table Total to “Compensation Actually Paid”1,2,3
PvP Table 3: Converting Summary Compensation Table Total to “Compensation Actually Paid”1,2,3
PvP Table 3: Converting Summary Compensation Table Total to “Compensation Actually Paid”1,2,3
| | | | Subtract (-) | Subtract (-) | Add (+) | | Add (+) | Equals (=) | | Year | Executive | SCT Total Compensation | Fair Value of Stock-Based Awards Granted During the Year | Change in Pension Value for the Year | The Change in the Fair Value from Start to End of the Year for All Stock Awards Outstanding4 | | Pension Service Cost and Cost of Additional Pension Benefits Due to Plan Amendment | “Compensation Actually Paid” | | 2024 | CEO | $17,040 | $12,398 | $0 | | 2,067 | $0 | $6,709 | | | Other NEO Average | $6,194 | $4,324 | $1 | | 730 | $0 | $2,599 | | 2023 | CEO | $14,883 | $11,422 | $0 | ($ | 2,647) | $0 | $814 | | | Other NEO Average | $5,502 | $4,012 | $6 | ($ | 279) | $0 | $1,204 | | 2022 | CEO | $14,525 | $10,405 | $0 | | 37,096 | $0 | $41,216 | | | Other NEO Average | $5,374 | $3,717 | $0 | | 10,635 | $0 | $12,292 | | 2021 | CEO-Muncrief | $11,915 | $8,311 | $0 | | 44,455 | $0 | $48,059 | | | CEO-Hager | $3,391 | $712 | $0 | | 29,610 | $0 | $32,289 | | | Other NEO Average | $4,596 | $1,881 | $0 | | 12,436 | $0 | $15,151 | | 2020 | CEO | $13,355 | $9,509 | $0 | | 668 | $0 | $4,514 | | | Other NEO Average | $4,536 | $2,405 | $1,038 | | 501 | $0 | $1,594 |
PvP Table 3: Converting Summary Compensation Table Total to “Compensation Actually Paid”1,2,3
| 1 Dollar amounts are shown in thousands, except where otherwise indicated. Amounts in parentheses are negative. References to our CEO are also references to our PEO for purposes of this section. | | 2 The CEO for each year is as follows: | | 2024, 2023, 2022: Richard E. Muncrief | | 2021: Richard E. Muncrief, from January 7th to the end of the year; David A. Hager, from January 1st to 6th. After January 6th, Mr. Hager assumed the position of Executive Chair of the Board of Directors until his retirement in early 2023. | | 2020: David A. Hager |
PvP Charts: Relationship Between Performance Measures and “Compensation Actually Paid”
PvP Charts: Relationship Between Performance Measures and “Compensation Actually Paid” The following charts illustrate the relationship between “Compensation Actually Paid” and performance on the measures identified in PvP Table 1 above.