DEF 14A of Conocophillips

Filed Apr 1, 2024 · FY20230001308179-24-000384

Open on EDGAR

Director Nominees
Director Nominees The Board recommends a vote FOR each of the 12 nominees listed below. All of the nominees are currently serving as directors.
Executive Compensation
| WHAT WE DO Executive compensation aligned with stockholder interests and primarily performance based (see pages 72 & 74) “Double trigger” vesting after a change in control for long-term incentive awards (see page 94) Significant stock ownership guidelines (see page 95) Payouts capped on executive incentive programs ESG and Human Capital metrics tied to executive and employee compensation (see page 82) Executives’ incentive compensation subject to clawback policy (see page 95) | | WHAT WE DON’T DO No excise tax gross-ups for change in control plan participants No current payment of dividend equivalents on unvested long-term incentives for executives No repricing of stock options No pledging, hedging, short sales, or derivative transactions No employment agreements for our named executive officers (“NEOs”) Don’t reward executives for excessive, inappropriate or unnecessary risk-taking |
NOMINEE SKILLS MATRIX
NOMINEE SKILLS MATRIX
NOMINEE SKILLS MATRIX
| | | | | | | Nominee Skills | | | | | | | | | | | | | | | | | | | | | | | | | | Nominees and Primary Occupation | | Other Current U.S. Public Company Directorships | Dir. Since | Age* | Ind. | | | | | | | | | | | | Dennis V. Arriola Former Chief Executive Officer, Avangrid, Inc. | ●Commercial Metals Company ●Meritage Homes Corporation | 2022 | 63 | ● | | | | | | | | | | | | Gay Huey Evans CBE Former Chairman, London Metal Exchange | ●S&P Global Inc. | 2013 | 69 | ● | | | | | | | | | | | | Jeffrey A. Joerres Former Executive Chairman and Chief Executive Officer, ManpowerGroup Inc. | ●Artisan Partners Asset Management Inc. ●The Western Union Company | 2018 | 64 | ● | | | | | | | | | | | | Ryan M. Lance Chairman and Chief Executive Officer, ConocoPhillips | ●Freeport-McMoRan, Inc. | 2012 | 61 | | | | | | | | | | | | | Timothy A. Leach Advisor to the Chief Executive Officer, ConocoPhillips | | 2021 | 64 | | | | | | | | | | | | | William H. McRaven Retired U.S. Navy Four-Star Admiral (SEAL) | | 2018 | 68 | ● | | | | | | | | | | | | Sharmila Mulligan Former Chief Strategy Officer, Alteryx | | 2017 | 58 | ● | | | | | | | | | | | | Eric D. Mullins Chairman and Chief Executive Officer, Lime Rock Resources | ●Valero Energy Company | 2020 | 61 | ● | | | | | | | | | | | | Arjun N. Murti Partner, Veriten LLC | | 2015 | 55 | ● | | | | | | | | | | | | Robert A. Niblock Lead Director Former Chairman, President, and Chief Executive Officer, Lowe’s Companies, Inc. | ●Lamb Weston Holdings, Inc. ●PNC Financial Services Group, Inc. | 2010 | 61 | ● | | | | | | | | | | | | David T. Seaton Former Chairman and Chief Executive Officer, Fluor Corporation | ●The Mosaic Company | 2020 | 62 | ● | | | | | | | | | | | | R.A. Walker Former Chairman and Chief Executive Officer, Anadarko Petroleum Corporation | | 2020 | 67 | ● | | | | | | | | | |
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| * As of April 1, 2024 |
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Generally, the Committee on Directors’ Affairs identifies candidates through business and organizational contacts of the directors and management, though third-party search firms occasionally assist as well. Stockholders are also welcomed to recommend director candidates for consideration. If you wish to recommend a candidate for nomination to the Board, please follow the procedures described under “Submission of Future Stockholder Proposals and Nominations” on page 129 for nominations made directly by a stockholder. Candidates recommended by stockholders are evaluated on the same basis as all other candidates. What vote is required to approve this proposal? Each nominee requires the affirmative vote of a majority of the votes cast at the Annual Meeting; the number of votes cast “for” a director must exceed the number of votes cast “against” that director. In a contested election (if the number of nominees exceeded the number of directors to be elected), directors would be elected by a plurality of the shares represented at the meeting and entitled to vote on the election of directors. What if a Director Nominee does not receive a majority of the votes cast? If a nominee who is serving as a director is not elected at the Annual Meeting and no one else is elected in place of that director, then, under Delaware law, the director continues to serve on the Board as a “holdover director.” However, under our By-Laws, a holdover director is required to tender a resignation to the Board. The Committee on Directors’ Affairs then would consider the resignation and recommend to the Board whether to accept or reject it or whether some other action should be taken. The Board would then make a decision, without participation by the holdover director. The Board is required to disclose publicly (by a news release, filing with the SEC, or other broadly disseminated means of communication) its decision regarding the tendered resignation and the rationale behind that decision within 90 days from the date the election results are certified. Who are this year’s Director Nominees? The following 12 directors are standing for election to hold office until the 2025 Annual Meeting of Stockholders. Each of the director nominees is a current director. Committee membership is effective as of May 13, 2024.
NOMINEE SKILLS MATRIX
| | Dennis V. Arriola Former Chief Executive Officer, Avangrid, Inc. Age: 63 Director Since: September 2022 | ConocoPhillips Committees: |
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Mr. Arriola is an Operating Partner at Sandbrook Capital. He previously served as Chief Executive Officer of Avangrid, Inc. from 2020 until 2022. He joined Avangrid from Sempra Energy, a publicly traded energy infrastructure company, where he served as executive vice president and group president, and chief sustainability officer. Throughout his career, Mr. Arriola has served in a broad range of leadership positions in gas and electric utilities as well as renewables, including as chairman, president and chief executive officer of Southern California Gas Co., senior vice president and chief financial officer of both San Diego Gas & Electric and Southern California Gas Co., vice president of communications and investor relations for Sempra, and regional vice president and general manager of Sempra’s South American operations. Mr. Arriola serves on the board of directors of Meritage Homes, Commercial Metals Company, and the Automobile Club of Southern California. He previously served on the boards of Avangrid, Inc., the California Latino Economic Institute, the U.S. Chamber of Commerce, the California Business Roundtable, the Edison Electric Institute, and the boards of several Sempra operating companies, including Infraestructura Energética Nova, a publicly traded company in Mexico, Luz del Sur SAA, a publicly traded company in Peru, and Chilquinta Energía in Chile. Skills and Qualifications: Mr. Arriola’s extensive experience in the energy sector, including leadership positions in companies with global operations in gas and electric utilities as well as renewables, brings valuable perspective to the Board. The Board believes that his career experience, including in sustainability, will greatly enhance the Board’s ability to guide ConocoPhillips in executing its strategy. Other current U.S. public company directorships:
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| ● | Commercial Metals Company | | ● | Meritage Homes Corporation |
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| | CEO or senior officer | | Financial reporting | | Industry | | | Global | | Regulatory/government | | Public company board service | | | Environmental/sustainability | | Human capital management | | |
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| | Gay Huey Evans CBE Former Chairman, London Metal Exchange Age: 69 Director Since: March 2013 | ConocoPhillips Committees: |
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Ms. Huey Evans is the former Chairman of the Board of Directors of the London Metal Exchange. She is also a member of His Majesty’s Treasury Board, Sub-Committee, and Nominations Committee and a non-executive director S&P Global Inc. She also currently serves as a Senior Advisor of Chatham House, as an advisor of Quantexa, and as a Trustee of Benjamin Franklin House. She was Vice Chairman, Investment Banking and Investment Management at Barclays Capital from 2008 to 2010. She was previously head of governance of Citi Alternative Investments (EMEA) from 2007 to 2008 and President of Tribeca Global Management (Europe) Ltd. From 2005 to 2007, both part of Citigroup. From 1998 to 2005, she was director of the markets division and head of the capital markets sector at the U.K. Financial Services Authority. She previously held various senior management positions with Bankers Trust Company in New York and London. Ms. Huey Evans previously served on the boards of IHS Markit, Itau BBA International Limited, Aviva plc, The London Stock Exchange Group plc., Falcon Private Wealth Ltd, and Standard Chartered plc. She also previously served as Trustee of the Beacon Awards, which celebrate British philanthropy and as Trustee of Wellbeing of Women, where she was Chair of the Investment Committee. Skills and Qualifications: Ms. Huey Evans’ in-depth knowledge of, and insight into, global capital markets from her extensive experience in the international financial services industry brings valuable expertise to ConocoPhillips’ businesses. Ms. Huey Evans was awarded a CBE in 2021 for services to the economy and philanthropy, and an OBE in 2016 for services to financial services and diversity. She is a passionate advocate for ensuring markets build trust through accessibility and transparency and for increased diversity in business. Other current U.S. public company directorships:
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| ● | S&P Global Inc. |
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| | CEO or senior officer | | Financial reporting | | Global | | | Regulatory/government | | Public company board service | | |
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| | Jeffrey A. Joerres Former Executive Chairman and Chief Executive Officer, ManpowerGroup Inc. Age: 64 Director Since: July 2018 | ConocoPhillips Committees: |
NOMINEE SKILLS MATRIX
Mr. Joerres served as Chief Executive Officer of ManpowerGroup Inc. from 1999 to 2014, as Chairman of the Board from 2001 to 2014, and as Executive Chairman from May 2014 to December 2015. Mr. Joerres joined ManpowerGroup in 1993 and served as vice president of marketing and senior vice president of European operations and marketing and major account development. He currently serves on the boards of The Western Union Company and Artisan Partners Asset Management Inc. He previously served as a director of Johnson Controls International plc and Artisan Funds, Inc. Additionally, Mr. Joerres is on the board of the Green Bay Packers and Kohler Co. He is a minority owner in the Milwaukee Bucks. Mr. Joerres is a former director and Chairman of the Federal Reserve Bank of Chicago and previously served on the board of the Boys and Girls Clubs of Milwaukee. Skills and Qualifications: Mr. Joerres’s extensive global leadership, human capital management experience, and substantial involvement on both public and private boards enable him to provide guidance to the Board with respect to ConocoPhillips’ people and operations. Other current U.S. public company directorships:
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| ● | Artisan Partners Asset Management Inc. | | ● | The Western Union Company |
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| | CEO or senior officer | | Financial reporting | | Global | | | Regulatory/government | | Public company board service | | Human capital management |
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| | Ryan M. Lance Chairman and Chief Executive Officer, ConocoPhillips Age: 61 Director Since: April 2012 | ConocoPhillips Committees: |
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Mr. Lance was appointed Chairman and Chief Executive Officer in May 2012, having previously served as Senior Vice President, Exploration and Production—International since May 2009. Mr. Lance previously served as President, Exploration and Production—Europe, Asia, Africa, and the Middle East from September 2007 to April 2009. From February 2007 to September 2007, he served as Senior Vice President, Technology, and prior to that, Mr. Lance served as Senior Vice President, Technology and Major Projects beginning in 2006. He served as President, Downstream Strategy, Integration and Specialty Businesses from 2005 to 2006. Skills and Qualifications: Mr. Lance’s service as Chairman and Chief Executive Officer of ConocoPhillips makes him well qualified to serve both as a director and Chairman of the Board. Mr. Lance’s extensive experience in the industry as an executive in our exploration and production businesses, and as the global representative of ConocoPhillips, makes his service as a director invaluable. Other current U.S. public company directorships:
NOMINEE SKILLS MATRIX
| ● | Freeport-McMoRan, Inc. |
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| | CEO or senior officer | | Industry | | Global | | | Regulatory/government | | Public company board service | | Environmental/sustainability | | | Human capital management | | | | |
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| | Timothy A. Leach Advisor to the Chief Executive Officer, ConocoPhillips Age: 64 Director Since: January 2021 |
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Mr. Leach was appointed Advisor to the Chief Executive Officer for ConocoPhillips in May 2022. He previously served as executive vice president, Lower 48. Prior to joining ConocoPhillips, Mr. Leach served as chairman and chief executive officer of Concho Resources Inc. from its formation in February 2006, until its acquisition by ConocoPhillips in January 2021. During his time at Concho, Mr. Leach also served as president from July 2009 until May 2017. Mr. Leach previously served as an appointed member of the Texas A&M University System Board of Regents from 2017 to 2023 and served as chairman from 2021 to 2023. Skills and Qualifications: Mr. Leach brings invaluable contributions to the Board with his extensive industry experience and valuable expertise in strategic leadership of a public company.
NOMINEE SKILLS MATRIX
| | CEO or senior officer | | Financial reporting | | Industry | | | Regulatory/government | | Public company board service | | Environmental/sustainability | | | Human capital management | | | | |
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| | William H. McRaven Retired U.S. Navy Four-Star Admiral (SEAL) Age: 68 Director Since: October 2018 | ConocoPhillips Committees: |
NOMINEE SKILLS MATRIX
William H. McRaven is a Senior Advisor at Lazard Financial. He is also a retired U.S. Navy Four-Star Admiral (SEAL) and the former Chancellor of the University of Texas System. During his time in the military, he commanded special operations forces at every level, eventually taking charge of all U.S. Special Operations. His military career included combat during Desert Storm and both the Iraq and Afghanistan wars. As the Chancellor of the University of Texas System from January 2014 until May 2018, he led one of the nation’s largest and most respected systems of higher education, with over 230,000 students and 100,000 faculty, staff, and health care professionals. Admiral McRaven is a recognized national authority on U.S. foreign policy and has advised Presidents George W. Bush and Barack Obama and other U.S. leaders on defense issues. He currently serves on the advisory boards of Palantir Technologies Inc. and Haveli Investments. He also serves on the Council on Foreign Relations, the National Football Foundation, the International Crisis Group, and The Mission Continues. Skills and Qualifications: Admiral McRaven’s international, logistical, and administrative experience brings valuable expertise on global business issues and government relations to the Board.
NOMINEE SKILLS MATRIX
| | CEO or senior officer | | Financial reporting | | Global | | | Regulatory/government | | Human capital management | | |
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| | Sharmila Mulligan Former Chief Strategy Officer, Alteryx Age: 58 Director Since: July 2017 | ConocoPhillips Committees: |
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Ms. Mulligan served as the Chief Strategy Officer at Alteryx from April 2019 to August 2021 following the company’s acquisition of ClearStory Data, where she served as founder and chief executive officer since its inception in September 2011. From 2009 to 2011, Ms. Mulligan served as executive vice president for Aster Data Systems, Inc. until its acquisition by Teradata Corporation. Prior to Aster Data, Ms. Mulligan was a vice president of software solutions for HP Inc. Prior to HP, Ms. Mulligan was executive vice president of products and marketing at Opsware Inc. from 2002 until its eventual acquisition by HP in 2007. Prior to Opsware Inc., Ms. Mulligan led product management and held vice president positions at Netscape Communications, Microsoft, and General Magic. Ms. Mulligan serves on the advisory board and board of visitors of Northwestern University and the University of Richmond and is an advisor to, and investor in, numerous enterprise software and consumer technology companies. Ms. Mulligan previously served on the board of directors of Lattice Engines, Inc. until its acquisition. Skills and Qualifications: Ms. Mulligan’s experience in cloud computing, scalable data analytics, and a broad range of big data technologies plus Internet of Things and Artificial Intelligence innovation adds exceptional value to the Board. Her experience as a CEO enables her to provide the Board with beneficial strategic leadership qualities.
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| | CEO or senior officer | | Financial reporting | | Technology | | | Human capital management | | | | |
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| | Eric D. Mullins Chairman and Chief Executive Officer, Lime Rock Resources Age: 61 Director Since: September 2020 | ConocoPhillips Committees: |
NOMINEE SKILLS MATRIX
Mr. Mullins is Chairman and Chief Executive Officer of Lime Rock Resources, a private equity fund that he co-founded in 2005. He previously served as co-chief executive officer of Lime Rock Resources. Lime Rock is focused on acquiring and developing low-risk oil and gas properties. Prior to co-founding Lime Rock, Mr. Mullins served as a managing director with Goldman Sachs in the Natural Resources Group from 1999 to 2004, as vice president from 1994 to 1999, and as an associate from 1990 to 1994. Mr. Mullins serves on the board of directors for Valero Energy Company. He also serves as vice chair on the board of directors of the Greater Houston Partnership and on the board of trustees of the Baylor College of Medicine. Mr. Mullins previously served on the boards of Anadarko Petroleum Company, Pacific Gas & Electric Company, PG&E Corporation, and LRR Energy, L.P. Skills and Qualifications: Mr. Mullins brings to the Board valuable industry experience as well as management, accounting and finance expertise. The Board believes that his career experiences and knowledge in financing and strategic matters for companies greatly assist and enhance the Board’s ability to provide effective strategic oversight. Other current U.S. public company directorships:
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| ● | Valero Energy Company |
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| | CEO or senior officer | | Financial reporting | | Industry | | | Global | | Public company board service | | Environmental/sustainability | | | Human capital management | | | | |
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| | Arjun N. Murti Partner, Veriten LLC Age: 55 Director Since: January 2015 | ConocoPhillips Committees: |
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Mr. Murti is a Partner at Veriten LLC and a Senior Advisor at Warburg Pincus. He previously served as a partner at Goldman Sachs from 2006 to 2014. Prior to becoming partner, he served as managing director from 2003 to 2006 and as vice president from 1999 to 2003. During his time at Goldman Sachs, Mr. Murti worked as a sell-side equity research analyst covering the energy sector. He was co-director of equity research for the Americas from 2011 to 2014. Previously, Mr. Murti held equity analyst positions at JP Morgan Investment Management from 1995 to 1999 and at Petrie Parkman from 1992 to 1995. Mr. Murti serves on the advisory board of ClearPath, Columbia Center on Global Energy Policy, and as a trustee of Kent Place School. Skills and Qualifications: Mr. Murti brings to the Board a deep understanding of financial oversight and accountability with his experience as a Partner at Goldman Sachs. He has spent more than 30 years in the financial services industry with an extensive focus, both domestic and global, on the energy industry. This experience provides the Board valuable insight into financial management and analysis.
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| | Financial reporting | | Industry | | Global | | | Environmental/sustainability | | Human capital management | | |
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| | Robert A. Niblock, Lead Director Former Chairman, President and Chief Executive Officer, Lowe’s Companies, Inc. Age: 61 Director Since: February 2010 Lead Director Since: May 2019 | ConocoPhillips Committees: |
NOMINEE SKILLS MATRIX
Mr. Niblock served as Chairman of the Board and Chief Executive Officer of Lowe’s Companies, Inc. from January 2005 until July 2018 and as President of Lowe’s from 2011 until July 2018, after having served in that role from 2003 to 2006. Mr. Niblock became a member of the board of directors of Lowe’s when he was named Chairman-and CEO-elect in 2004. Mr. Niblock joined Lowe’s in 1993 and during his career with the company, he also served as vice president and treasurer, senior vice president, and executive vice president and CFO. Before joining Lowe’s, Mr. Niblock had a nine-year career with accounting firm Ernst & Young. Mr. Niblock serves on the board of directors of Lamb Weston Holdings, Inc. and PNC Financial Services Group, Inc. He previously served as a member of the board of directors of the Retail Industry Leaders Association from 2003 until 2018 and served as its secretary from 2012 until 2018. He also served as its chairman in 2008 and 2009 and as vice chairman in 2006 and 2007. Skills and Qualifications: The Board values his experience as a CEO and in financial reporting matters. Mr. Niblock’s experience as a CEO of a large public company allows him to provide the Board with valuable operational and financial expertise. Other current U.S. public company directorships:
NOMINEE SKILLS MATRIX
| ● | Lamb Weston Holdings, Inc. | | ● | PNC Financial Services Group, Inc. |
NOMINEE SKILLS MATRIX
| | CEO or senior officer | | Financial reporting | | Public company board service | | | Human capital management | | | | |
NOMINEE SKILLS MATRIX
| | David T. Seaton Former Chairman and Chief Executive Officer, Fluor Corporation Age: 62 Director Since: March 2020 | ConocoPhillips Committees: |
NOMINEE SKILLS MATRIX
Mr. Seaton is the former Chairman and Chief Executive Officer of Fluor Corporation. He became CEO and joined Fluor’s board of directors in February 2011 and was elected to the role of Chairman of the board in February 2012. Mr. Seaton held numerous positions in both operations and sales globally since joining the company in 1985. Mr. Seaton serves on the board of directors of The Mosaic Company and the National Association of Manufacturers. He also serves as a senior advisor for the Boston Consulting Group’s Infrastructure Practice and 8VC Enterprises LLC. He has served in leadership positions of numerous business associations, including the Business Roundtable, the International Business Council, the American Petroleum Institute, and the U.S.-Saudi Arabian Business Council. In 2011, he was appointed by the U.S. Secretary of Energy to serve as a member of the National Petroleum Council. Mr. Seaton is the former chairman of the National Board of Governors of the Boys and Girls Clubs of America, and previously served in leadership positions for the Boys and Girls Clubs of America and United Way of Greater Dallas. Skills and Qualifications: As a former CEO of a multinational engineering and construction company, Mr. Seaton brings valuable experience and expertise in operational and financial matters. The Board believes Mr. Seaton’s international business experience with global issues facing a large, multinational public company make him well qualified to serve as a member of the Board. Other current U.S. public company directorships:
NOMINEE SKILLS MATRIX
| ● | The Mosaic Company |
NOMINEE SKILLS MATRIX
| | CEO or senior officer | | Financial reporting | | Industry | | | Global | | Regulatory/government | | Public company board service | | | Environmental/sustainability | | Human capital management | | |
NOMINEE SKILLS MATRIX
| | R.A. Walker Former Chairman and Chief Executive Officer, Anadarko Petroleum Corporation Age: 67 Director Since: March 2020 | ConocoPhillips Committees: |
NOMINEE SKILLS MATRIX
Mr. Walker was the Chairman and Chief Executive Officer of Anadarko Petroleum Corporation until August of 2019, when the company was purchased by Occidental Petroleum. He joined Anadarko in 2005 as senior vice president and chief financial officer, later serving as president and chief operating officer, before becoming CEO in 2012. Prior to his time at Anadarko, he worked in the oil and gas industry, investment and commercial banking, and as an institutional investor. Mr. Walker is currently senior advisor of Jefferies Financial Group Inc. He previously served on the board of directors of BOK Financial Corporation, CenterPoint Energy Corporation, Enable Midstream Partners, LP, and Health Care Services Corporation. Skills and Qualifications: In addition to his former role as Chairman and CEO of Anadarko, Mr. Walker has significant energy industry, commercial and investment banking, and asset management experience, as well as technology, regulatory, governmental, and international business experiences. He has served on and chaired numerous boards of public and private companies, industry trade associations and philanthropic organizations, bringing a broad range of experience and expertise to the Board.
NOMINEE SKILLS MATRIX
| | CEO or senior officer | | Financial reporting | | Industry | | | Global | | Regulatory/government | | Technology | | | Public company board service | | Environmental/sustainability | | Human capital management |
NOMINEE SKILLS MATRIX
| FOR | The Board recommends you vote FOR each nominee standing for election as director. |
COMPENSATION, BENEFITS, AND HEALTH AND WELL-BEING
COMPENSATION, BENEFITS, AND HEALTH AND WELL-BEING The HRCC oversees many of our employee compensation programs. Our compensation programs are competitive with local markets and are comprised of a base pay rate, the annual Variable Cash Incentive Program (“VCIP”) and, for eligible employees, the Restricted Stock Unit (“RSU”) program. From the CEO to the frontline worker, every employee participates in VCIP, which aligns employee compensation with ConocoPhillips’ success on critical performance metrics and also recognizes individual performance. Our RSU program is designed to attract and retain employees, reward performance, and align employee interest with stockholders by encouraging stock ownership. Our retirement and savings plans are intended to support employees’ financial futures and are competitive within local markets. Our benefits program provides coverage for families requiring disability support, elder care, and child care, including onsite child care, where access locally is a challenge.
Director Compensation
Director Compensation Our non-employee director compensation program consists primarily of an equity component and a cash component, which is detailed below. Objectives and Principles The Board’s goal in designing non-employee director compensation is to provide a competitive program that will enable us to attract and retain highly skilled individuals with relevant experience to oversee ConocoPhillips’ strategic direction. Our compensation program also reflects the time and talent required to serve on the board of a complex, multinational corporation. The Board seeks to provide sufficient flexibility in the form of compensation to meet directors’ varying needs while ensuring that a substantial portion of compensation is linked to the long-term success of ConocoPhillips. The Board approves levels of compensation after a recommendation from the Committee on Directors’ Affairs, which conducts an annual review with an independent compensation consultant. In 2023, the Committee on Directors’ Affairs met with an independent compensation consultant to review the non-employee director compensation program and to determine whether to recommend any changes to that program. The review included comparisons of director compensation levels with the compensation reference group. See “Process for Determining Executive Compensation — Setting Target Compensation — Compensation Reference Group” beginning on page 79. The consultant noted that our director compensation program was within the limits set out in the stockholder-approved 2023 Omnibus Stock and Performance Incentive Plan under which director awards are made. Effective July 1, 2023, the Board approved, on the basis of benchmarking data, the following compensation changes:
Director Compensation
| ● | Increase the cash compensation for the Lead Director from $45,000 to $50,000 | | ● | Increase the cash compensation for the Chair of the Committee on Directors’ Affairs from $15,000 to $20,000 |
Director Compensation
Equity Compensation Non-employee directors receive an annual grant of restricted stock units with an aggregate value of $220,000 on the date of grant. The restricted stock units are fully vested at grant and are credited with dividend equivalents in the form of additional restricted stock units, but they cannot be sold or otherwise transferred. In the case of any newly elected directors, the initial annual equity grant is prorated for the year of election from and including the month of election. Prior to each annual grant, a director may elect the schedule on which the transfer restrictions will lapse. When restrictions lapse, a director will receive unrestricted shares of ConocoPhillips stock in exchange for his or her restricted stock units. Regardless of the schedule a director elects, all restrictions on a director’s restricted stock units will lapse in the event of the director’s retirement, disability, or death, or upon a change in control of ConocoPhillips, unless the director has elected to defer receipt of the shares until a later date. Directors forfeit restricted stock units if, before restrictions lapse (and prior to any change in control), the Board finds sufficient cause for forfeiture. Cash Compensation The non-employee director compensation program, as approved by the Board, consists of the following cash compensation:
Director Compensation
| ● | Non-employee director annual cash compensation — $115,000 | | ● | Lead Director — $50,000(1) | | ● | Chair of the Audit and Finance Committee — $35,000 | | ● | Chair of the Human Resources and Compensation Committee — $27,500 | | ● | Chair of the Public Policy and Sustainability Committee — $27,500 | | ● | Chair of the Committee on Directors’ Affairs — $20,000(1) | | ● | All other Audit and Finance Committee members — $10,000 | | ● | All other Human Resources and Compensation Committee members — $7,500 | | ● | All other Public Policy and Sustainability Committee members — $7,500 | | ● | All other Committee on Directors’ Affairs members — $5,000 |
Director Compensation
This cash compensation is payable in monthly installments. Each director may elect, on an annual basis, to receive all or part of the cash compensation in unrestricted stock or restricted stock units or to have the amount credited to a deferred compensation account. Any such unrestricted stock or restricted stock units will be issued on the last business day of each month and valued using the average of the high and the low market prices of ConocoPhillips common stock on such date. The restricted stock units issued in lieu of cash compensation are subject to the same restrictions as the annual restricted stock units described under “Equity Compensation” above.
Director Compensation
| (1) For the period January 2023 to June 2023, the additional cash compensation for the Lead Director and Chair of Committee on Directors’ Affairs was $45,000 and $15,000, respectively. |
Director Compensation
Deferral of Compensation Non-employee directors can elect to defer their cash compensation into the Deferred Compensation Plan for Non-Employee Directors of ConocoPhillips (“Director Deferral Plan”). Deferred amounts are deemed to be invested in various mutual funds and similar investment choices, including ConocoPhillips common stock, as selected by the director from a prescribed list. Matching Gift Program Active non-employee directors are eligible to participate in the ConocoPhillips Matching Gift Program. This program provides a dollar-for-dollar match of a donation of cash or securities (up to a maximum of $10,000 annually per donor) to tax-exempt charities and educational institutions, excluding religious, political, fraternal, or athletic organizations. The Board believes the Matching Gift Program is consistent with ConocoPhillips’ commitment to social responsibility. Other Compensation We provide transportation or reimburse the cost of transportation when a non-employee director travels on ConocoPhillips business, including to attend meetings of the Board or a committee. From time to time, spouses and other guests of directors may be invited to attend certain meetings at the request of the Board. The Board believes this creates a collegial environment that enhances the effectiveness of the Board. If spouses or other guests are invited to attend meetings, ConocoPhillips reimburses directors for the out-of-pocket cost of the additional travel and related incidental expenses. Any such reimbursement is treated by the Internal Revenue Service as taxable income to the applicable director. Non-employee directors do not receive gross-ups to compensate for the resulting income taxes except in connection with the presentation of a retirement gift. Stock Ownership Each non-employee director is expected to own ConocoPhillips stock in the amount of the aggregate annual equity grants received during his or her first five years on the Board. Directors are expected to reach this level of target ownership within five years after joining the Board. Actual shares of stock, restricted stock, or restricted stock units, including deferred stock units, may be counted in satisfying the stock ownership guidelines. The holdings of each of our directors currently meet or exceed these guidelines. Non-Employee Director Compensation Table(1)
Director Compensation
| Name | Fees Earned or Paid in Cash(2) | Stock Awards(3)(4) | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation on Earnings | All Other Compensation(5) | Total | | D.V. Arriola | $132,500 | $220,050 | $— | $— | $— | $10,000 | $362,550 | | C.M. Devine (retired)(6) | 53,125 | 220,050 | — | — | — | 30,790 | 303,965 | | J. Freeman (resigned)(7) | 98,333 | 220,050 | — | — | — | — | 318,383 | | G. Huey Evans | 129,583 | 220,050 | — | — | — | 26,218 | 375,851 | | J.A. Joerres | 147,500 | 220,050 | — | — | — | — | 367,550 | | W.H. McRaven | 132,500 | 220,050 | — | — | — | — | 352,550 | | S. Mulligan | 132,500 | 220,050 | — | — | — | — | 352,550 | | E.D. Mullins | 138,049 | 220,050 | — | — | — | 10,000 | 368,099 | | A.N. Murti | 157,500 | 220,050 | — | — | — | — | 377,550 | | R.A. Niblock | 188,274 | 220,050 | — | — | — | 10,000 | 418,324 | | D.T. Seaton | 127,500 | 220,050 | — | — | — | — | 347,550 | | R.A. Walker | 132,500 | 220,050 | — | — | — | — | 352,550 |
Director Compensation
| (1) Ryan Lance and Timothy Leach serve as directors and also as employees of ConocoPhillips. They are not included in this table because all of the compensation they receive from the company is for services they provide as employees; they do not receive any additional compensation for their services as directors. The compensation Mr. Lance received as an employee is summarized starting on page 98. Mr. Leach is not an executive officer, and the compensation he received as an employee in 2023 is summarized below. |
Director Compensation
| ● | Salary: $723,348(a) | | ● | Bonus: $1,500,000(b) | | ● | Stock Awards: $2,201,851(c) | | ● | Non-Equity Incentive Plan Compensation: $780,492(d) | | ● | Change in Pension Value and Nonqualified Deferred Compensation Earnings: $0 | | ● | All Other Compensation: $377,660(e) | | ● | Total: $5,583,351 |
Director Compensation
| (a) Includes any amounts that were voluntarily deferred under the Key Employee Deferred Compensation Plan. | | (b) Includes the first installment of the payment due under the non-compete, non-solicitation, and confidentiality agreement as outlined in Exhibit 10.1 to our Quarterly Report on Form 10-Q for the period ending June 30, 2022. If Mr. Leach breaches this agreement, he is required to repay any amounts previously paid to him under the agreement. | | (c) Amount represents the aggregate grant date fair value of awards made under the Performance Share Program (“PSP”) and the Executive Restricted Stock Unit Program (“ERSUP”), as determined in accordance with FASB ASC Topic 718. See the “Employee Benefit Plans” section of Note 16 in the Notes to Consolidated Financial Statements in ConocoPhillips’ 2023 Annual Report on Form 10-K for a discussion of the relevant assumptions used in this determination. For the awards granted for PSP 23 and for 2023 restricted stock units (“RSUs”) under the ERSUP, the grant date fair value was $112.50, but as noted in the Equity Grant Practices outlined on page 95 awards are granted using the average of the closing prices on the 10 trading days preceding the date of grant ($112.658). The difference between these values can increase or decrease the reported amounts from year to year even if target compensation does not change. For 2023, Mr. Leach received a grant of 6,835 RSUs under the ERSUP with a value of $768,938. Mr. Leach received a target grant of 12,737 performance stock units for PSP 23 for the January 2023 – December 2025 performance period with a value of $1,432,913. The PSP grant is valued at target because it is most probable at the setting of the target for the applicable performance periods that targets will be achieved. If payout was made at maximum levels for company performance the number of performance stock units and value would double from the target, although the value of the actual payout would be dependent upon the stock price and accrued dividend equivalent units at the time of the payout. If payout was made at minimum levels, the number of performance stock units and value would be reduced to zero. | | (d) The amount shown includes amounts paid under the Variable Cash Incentive Program (“VCIP”). | | (e) Includes $107,926 related to pre-approved personal travel on company aircraft, based on the approximate aggregate incremental cost to ConocoPhillips for such personal use, including travel for any family member or personal guest. Approximate aggregate incremental cost has been determined by calculating the variable costs for each aircraft during the year, dividing that amount by the total number of miles flown by that aircraft, and multiplying the result by the miles flown for personal use during the year. However, where there were identifiable costs related to a particular trip — such as fuel, airport landing fees or food and lodging for aircraft personnel who remained at the location of the personal trip — those amounts are separately determined and included. The amounts shown include incremental costs associated with flights to the hangar or other locations without passengers (commonly referred to as “deadhead” flights) arising from the non-business use of the aircraft. Mr. Leach has entered into an aviation lease agreement with the company under which reimbursement, subject to FAA limitations, is provided for certain flights which are personal in nature. Amounts included reflect aggregate incremental cost net of reimbursements. Lease reimbursements are allocated to the flight to which they relate but may be paid in a different year due to lease administration. Also includes $4,349 for the aggregate incremental cost of premiums paid by ConocoPhillips for executive group life insurance (coverage equal to two times annual salary) versus the cost of basic life insurance provided to non-executive employees (coverage equal to annual salary). Also includes $59,400 of company contributions under the company’s tax qualified savings plan. Under the terms of its tax-qualified defined contribution plan, ConocoPhillips makes matching contributions and nonelective allocations to the accounts of its eligible employees, including Mr. Leach. Mr. Leach is fully vested in his benefits under the company’s tax-qualified defined contribution plan. Also includes $126,641 of company contributions to non-qualified defined contribution plans. Under the terms of its nonqualified defined contribution plans, ConocoPhillips makes contributions to the accounts of its eligible employees, including Mr. Leach. His contributions under the nonqualified defined contribution plans include matching and company retirement (in lieu of pension) contributions that cannot be made to the company’s tax qualified defined contribution plan due to limitations imposed by the Internal Revenue Code. Mr. Leach is fully vested in his benefit under the company’s nonqualified defined contribution plans. The company’s defined contribution nonqualified deferred compensation plans allow hypothetical investment of deferred amounts in a broad range of mutual funds or other market-based investments, including ConocoPhillips stock. As market-based investments, none of these provide above-market return. Also includes $4,730 of other perquisites and personal benefits including the cost of presentations made to employees and their spouses at company meetings or events, reimbursements for the cost of spousal and other guests attendance at such meetings or events, and the aggregate incremental cost of any other personal benefits or perquisites not integrally and directly related to the performance of the executive’s duties arising from such presentations, meetings, or events, primarily food, drink and transportation. Also includes $60,780 in security costs, primarily related to protection services provided under our Comprehensive Security Program if a risk assessment indicated that enhanced procedures were warranted. Amounts also include $13,834 for tax gross up payments by ConocoPhillips relating to certain taxes incurred by the employee. These taxes arise primarily when ConocoPhillips requests family members or other guests to accompany the employee to a function, and, as a result, the employee is deemed to make a personal use of company assets (for example, when a spouse accompanies an employee on a company aircraft). ConocoPhillips believes such expenses are appropriately characterized as a business expense, and, if the employee has imputed income in accordance with the applicable tax laws, ConocoPhillips will generally reimburse any increased tax costs. |
Director Compensation
| As of December 31, 2023, Mr. Leach had 26,439(i) Shares or Units of Stock that Have Not Vested and 51,039(ii) Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested. Outstanding equity awards made to Mr. Leach include long-term incentive awards payable under the PSP and long-term time-vested awards under the ERSUP. Awards continue to have restrictions upon transferability. The market value of these awards as of December 31, 2023 (see footnotes i and ii below) is based on a market value of $116.07 per share (the closing stock price of the company’s common stock on December 29, 2023). The number of shares or units shown is rounded to the nearest whole share, but the related value is based on the actual number of shares (including fractional shares), with aggregate value rounded to the nearest dollar. |
Director Compensation
| (i) Includes 19,624 RSUs related to the grant in 2022 under the ERSUP and 6,815 RSUs related to the grant in 2023 under the ERSUP. These awards have a market value as of December 31, 2023, of $3,068,804. Under the ERSUP, stock awards are made in the form of RSUs. The terms and conditions of those units require restriction on transferability, which lapse three years from the anniversary of the grant date. Forfeiture is expected to occur at separation from service if the separation is not the result of death, disability, layoff, or retirement after the executive has reached the age of 55 with five years of service, or after a change in control, although the HRCC has the authority to waive forfeiture. Upon lapse of restrictions, settlement is made in stock. RSUs have no voting rights. Dividend equivalents, if any, on RSUs held are reinvested in additional RSUs. Dividend equivalents are paid at the same time and the same rate as dividends on common stock are paid, not at a preferential rate. | | (ii) Includes 37,849 target performance unit awards under the PSP for the ongoing performance period beginning January 2022 and 13,189 target performance unit awards under the PSP for the ongoing performance period beginning January 2023. Based on target performance, these awards have a market value as of December 31, 2023, of $5,924,055. There is no assurance that these awards will be granted at, below, or above target after the end of the relevant performance periods because determination of whether to make an actual grant to, and the amount of any actual grant for Mr. Leach is within the discretion of the HRCC. Mr. Leach’s awards under the PSP are made in the form of performance stock units that are subject to restrictions on transferability that lapse three years after the grant date. Forfeiture is expected to occur if the separation is not the result of death, disability, layoff, or retirement after the executive has reached the age of 55 with five years of service, or after a change in control, although the HRCC has the authority to waive forfeiture. The awards will be settled in cash and have no voting rights. The awards accrue dividend equivalents that, during the performance period, are reinvested in additional performance stock units. Dividends or dividend equivalents are not paid at preferential rates, and dividend equivalents are paid at the same time as dividends on common stock. |
Director Compensation
| In 2023, Mr. Leach had 70,918 shares acquired on award vesting and delivery at a realized value of $8,521,585. This value includes restricted stock units for the ERSUP award in 2023 for which restrictions were lapsed in order to satisfy required tax withholding. Also includes restricted stock units for an inducement award granted in 2021 for which the second half vested on the second anniversary of the grant date. |
Director Compensation
| (2) The non-employee director compensation program, as approved by the Board, consists of the following cash compensation: | | ●Non-employee director annual cash compensation — $115,000 ●Lead Director — $50,000(a) ●Chair of the Audit and Finance Committee — $35,000 ●Chair of the Human Resources and Compensation Committee — $27,500 ●Chair of Public Policy and Sustainability Committee — $27,500 ●Chair of Committee on Directors’ Affairs — $20,000(a) ●All other Audit and Finance Committee members — $10,000 ●All other Human Resources and Compensation Committee members — $7,500 ●All other Public Policy and Sustainability Committee members — $7,500 ●All other Committee on Directors’ Affairs members — $5,000 |
Director Compensation
| (a) For the period January 2023 to June 2023 the additional cash compensation for the Lead Director and Chair of Committee on Directors’ Affairs was $45,000 and $15,000 respectively. |
Director Compensation
| Amounts shown include prorated amounts attributable to time served on the board and committee assignments, which may occur during the year. Amounts shown in the Fees Earned or Paid in Cash column include any amounts that were voluntarily deferred to the Director Deferral Plan, received in ConocoPhillips common stock, or received in restricted stock units. Mr. Mullins received 100 percent of his cash compensation in restricted stock units in 2023, and Mr. Niblock received 50 percent of his cash compensation in restricted stock units in 2023, with an aggregate grant date fair value as shown in the table. All other directors received their cash compensation in cash or deferred such amounts into the Director Deferral Plan. | | (3) Amounts represent the aggregate grant date fair value of stock awards granted under our non-employee director compensation program. For active non-employee directors, on January 15, 2023, each received a 2023 annual grant of restricted stock units with an aggregate value of $220,000 based on the average of the high and low price for our common stock, as reported on the NYSE, on the grant date. These grants are made in whole shares, with fractional share amounts rounded up, resulting in a grant of shares with a value of $220,050 to each non-employee director who was a director on January 15, 2023. |
Director Compensation
| (4) The following table reflects, for each non-employee director, the aggregate number of stock awards outstanding as of December 31, 2023: |
Director Compensation
| Name | Number of Deferred Shares or Units of Stock | | D.V. Arriola | 2,583 | | C.M. Devine (retired) | 18,777 | | J. Freeman (resigned) | 25,914 | | G. Huey Evans | 44,162 | | J.A. Joerres | 19,077 | | W.H. McRaven | 17,967 | | S. Mulligan | 20,556 | | E.D. Mullins | 16,131 | | A.N. Murti | 49,318 | | R.A. Niblock | 83,997 | | D.T. Seaton | 10,057 | | R.A. Walker | 10,057 |
Director Compensation
The following table lists delivery of non-employee director stock awards in 2023:
Director Compensation
| Name | Number of Shares Acquired on Award Delivery | Value Realized Upon Award Delivery | | D.V. Arriola | — | $— | | C.M. Devine (retired) | 3,628 | 396,305 | | J. Freeman (resigned) | 1,849 | 197,217 | | G. Huey Evans | — | — | | J.A. Joerres | — | — | | W.H. McRaven | — | — | | S. Mulligan | 1,849 | 197,217 | | E.D. Mullins | — | — | | A.N. Murti | — | — | | R.A. Niblock | — | — | | D.T. Seaton | — | — | | R.A. Walker | — | — |
Director Compensation
| (5) The following table reflects, for each non-employee director, the items contained in All Other Compensation. |
Director Compensation
| Name | Tax Reimbursement Gross-Up(a) | Retirement Gifts(b) | Other Compensation(c) | Matching Gift Amounts(d) | Total | | D.V. Arriola | $— | $— | $— | $10,000 | $10,000 | | C.M. Devine (retired) | 10,640 | 10,150 | — | 10,000 | 30,790 | | J. Freeman (resigned) | — | — | — | — | — | | G. Huey Evans | — | — | 26,218 | — | 26,218 | | J.A. Joerres | — | — | — | — | — | | W.H. McRaven | — | — | — | — | — | | S. Mulligan | — | — | — | — | — | | E.D. Mullins | — | — | — | 10,000 | 10,000 | | A.N. Murti | — | — | — | — | — | | R.A. Niblock | — | — | — | 10,000 | 10,000 | | D.T. Seaton | — | — | — | — | — | | R.A. Walker | — | — | — | — | — |
Director Compensation
| (a) The amounts shown are for payments by ConocoPhillips relating to certain taxes incurred by the director for imputed income. These occurred when a retirement presentation was made to Ms. Devine upon her retirement from the Board. ConocoPhillips has a practice of making gift presentations to its retiring directors, especially those of long service. The fair value of the retirement presentation was imputed to Ms. Devine’s income. In such circumstances, if a director is imputed income in accordance with applicable tax laws, ConocoPhillips generally will reimburse the director for the resulting increased tax costs. All such tax reimbursements have been included above, regardless of whether the corresponding perquisite or personal benefit is required to be reported pursuant to SEC rules and regulations. | | (b) The amount shown is the fair value of the retirement presentation and cost for Ms. Devine. ConocoPhillips has a practice of making gift presentations to its retiring directors, especially those of long service. | | (c) The amounts shown are imputed amounts when, following a board meeting, the director was returned to a location other than their point of origin or their tax home and therefore considered to be a personal accommodation or when, in route to or from a board meeting, a personal accommodation was made to make more efficient use of a director’s time and travel requirements. | | (d) ConocoPhillips maintains a Matching Gift Program under which we match certain gifts by directors to charities and educational institutions, excluding religious, political, fraternal, or athletic organizations, that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code of the United States or meet similar requirements under the applicable law of other countries. For active directors, the program matches up to $10,000 in each program year. Administration of the program can cause us to pay more than $10,000 in a single fiscal year due to a lag in processing claims. The amounts shown are for the actual payments by ConocoPhillips in 2023. As indicated above, Mr. Lance and Mr. Leach are eligible for the Matching Gift Program as employees rather than as directors. |
Director Compensation
| (6) Ms. Devine retired from the Board effective May 16, 2023. The amounts in the table above include her prorated compensation reflecting the portion of 2023 that she served as a director. | | (7) Ms. Freeman resigned from the Board effective August 3, 2023. The amounts in the table above include her prorated compensation reflecting the portion of 2023 that she served as a director. |
Director Compensation
Audit and Finance Committee Report The Audit and Finance Committee (the “Audit Committee”) assists the Board in fulfilling its responsibility to provide independent, objective oversight for ConocoPhillips’ financial reporting functions and internal control systems. The Audit Committee currently consists of six non-employee directors. The Board has determined that each member of the Audit Committee satisfies the requirements of the NYSE as to independence and financial literacy. The Board has determined that at least one member, Arjun N. Murti, is an audit committee financial expert as defined by the SEC. The responsibilities of the Audit Committee are set forth in the written charter adopted by the Board and last amended on October 4, 2019. The charter is available on our website at www.conocophillips.com under “Investors > Corporate Governance.”
Director Compensation
| THE AUDIT COMMITTEE’S RESPONSIBILITIES INCLUDE: ●Discussing with management, the independent auditors, and the internal auditor the integrity of ConocoPhillips’ accounting policies, internal controls, financial statements, financial reporting practices, and select financial matters, including capital structure, complex financial transactions, financial risk management, retirement plans, and tax planning; ●Reviewing, and coordinating the review by other committees of, significant corporate risk exposures and steps management has taken to monitor, control, and report such exposures; ●Reviewing the qualifications, independence, and performance of our independent auditors and the qualifications and performance of our internal auditors and chief compliance officer; ●Reviewing ConocoPhillips’ overall direction and compliance with legal and regulatory requirements and internal policies, including our Code of Business Ethics and Conduct; ●Assisting the Board in fulfilling its oversight of enterprise risk management, particularly with respect to: (1) market-based risks; (2) financial reporting; (3) effectiveness of information systems and cybersecurity; and (4) commercial trading; ●Discussing with management and the Chief Compliance Officer the implementation and effectiveness of our global compliance and ethics program; and ●Maintaining open and direct lines of communication with the Board and management, our Compliance and Ethics Office, the internal auditors, and the independent auditors. |
Director Compensation
Management is responsible for preparing ConocoPhillips’ financial statements in accordance with generally accepted accounting principles, or GAAP, and for developing, maintaining, and evaluating our internal controls over financial reporting and other control systems. The independent registered public accounting firm is responsible for auditing the annual financial statements prepared by management, assessing the internal control over financial reporting, and expressing an opinion with respect to each. One of the Audit Committee’s primary responsibilities is to assist the Board in its oversight of the integrity of ConocoPhillips’ financial statements. The following report summarizes certain of the Audit Committee’s activities in this regard for 2023. Review with Management. The Audit Committee reviewed and discussed with management the audited consolidated financial statements included in ConocoPhillips’ Annual Report on Form 10-K for the year ended December 31, 2023, which included a discussion of the quality — not just the acceptability — of the accounting principles, the reasonableness of significant judgments, and the clarity of the disclosures. The Audit Committee also discussed management’s assessment of the effectiveness of our internal control over financial reporting as of December 31, 2023, included in the financial statements. Audit and Finance Committee Report Discussions with Internal Audit. The Audit Committee reviewed ConocoPhillips’ internal audit plan and discussed the results of internal audit activity throughout the year. ConocoPhillips’ General Auditor met with the Audit Committee at every in-person meeting in 2023 and was available to meet without management present at each of these meetings. Discussions with the Independent Registered Public Accounting Firm. The Audit Committee met throughout the year with Ernst & Young LLP (“EY”), ConocoPhillips’ independent registered public accounting firm, including meeting with EY at each in-person meeting; EY was also available to meet without management present at each of these meetings. The Audit Committee has discussed with EY the matters required to be discussed by standards of the Public Company Accounting Oversight Board, or PCAOB. The Audit Committee has received the written disclosures and the letter from EY required by PCAOB rules and has discussed with EY its independence from ConocoPhillips. In addition, the Audit Committee considered the non-audit services EY provides to ConocoPhillips and concluded that EY’s independence has been maintained. Recommendation to the ConocoPhillips Board of Directors. Based on its review and discussions noted above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in ConocoPhillips’ Annual Report on Form 10-K for the year ended December 31, 2023.
Executive Overview
| 2023 Element of Pay | | Overview | Key Benchmarks/Performance Measures | | Annual | | | | | Salary | | Fixed cash compensation to attract and retain executives and balance at-risk compensation Range: Salary grade minimum/maximum | ● Benchmarked to compensation reference group median; adjusted for experience, responsibility, performance, and potential | | Variable Cash Incentive Program (“VCIP”) | | Variable annual cash compensation to motivate and reward executives for achieving annual goals and Strategic Milestones and Energy Transition Milestones that are critical to our strategic priorities Range: 0% –200% of target | ● Health, Safety, and Environmental (20%) ● Operational (30%) ● Financial—Relative Adjusted ROCE (30%) ● Strategic Milestones (10%) ● Energy Transition Milestones (10%) | | | | | One-year performance period | | Long-Term Incentive Program (“LTIP”) | | | | | | Performance Share Program (“PSP”) (65% of LTIP) | Variable long-term equity-based compensation to motivate and reward executives for achieving multi-year strategic priorities Granted at beginning of three-year performance period with final cash payout following the conclusion of the performance period based on HRCC assessment of the pre-established corporate performance metrics and stock price value as of the settlement date Range: 0% –200% of total target award, inclusive of corporate performance adjustments | ● Relative TSR (60%) ● Financial—Relative Adjusted ROCE (40%) ● Stock value | | | | | Three-year performance period | | | Executive Restricted Stock Unit Program (35% of LTIP) | Long-term equity-based compensation designed to encourage executive retention and promote stock ownership while incentivizing absolute performance that is aligned with stockholder interests Annual award settles in stock on third anniversary of grant date based on the stock value on the settlement date Range: 0% –100% of target | ● Stock value | | | | | Three-year cliff vesting | | | | | |
2023 SHORT-TERM INCENTIVE (VCIP) PAYOUT: 130% OF TARGET
2023 SHORT-TERM INCENTIVE (VCIP) PAYOUT: 130% OF TARGET The HRCC carefully considered the final results of the metrics and, based on multiple reviews throughout the year, approved a payout that reflected the degree of difficulty in achieving the results against the aggressive targets that were established. No individual performance adjustments were made for the NEOs. Following is a summary of the key items considered and deliberated. For additional details, refer to pages 85-91.
PSP 21 LONG-TERM INCENTIVE PAYOUT: 151% OF TARGET
PSP 21 LONG-TERM INCENTIVE PAYOUT: 151% OF TARGET
TRACK RECORD OF CONTINUOUS IMPROVEMENT RESPONSIVE TO STOCKHOLDER FEEDBACK
| ● | Effective for the 2024 short-term incentive program and PSP, the Financial metric will include both a relative and absolute measure for Adjusted ROCE to better align payouts with the stockholder experience; payouts will continue to be determined on a formulaic basis | | ● | Effective for the 2023 short-term incentive program, we eliminated relative Total Shareholder Return (but retained in the long-term program) and increased the weighting of our Financial and Operational measures to further strengthen the link between performance of the company and payouts | | ● | Effective for the 2023 short-term incentive program, we created a separately weighted measure for “Energy Transition Milestones” which enhances the link between our climate commitments and our executive compensation programs | | ● | Effective in 2023, we increased the CEO’s stock ownership guideline from six to eight times salary | | ● | Effective for the 2022 short-term incentive program, we eliminated positive individual performance adjustments for NEOs | | ● | Effective in 2021, the company eliminated all grandfathered tax gross-up benefits under our Change in Control Severance Plan(1) | | ● | Effective in 2021, the company strengthened our stock ownership guidelines by no longer counting unvested PSP target units toward ownership guidelines while maintaining robust guidelines for NEOs; further, the company does not count unexercised stock options towards ownership guidelines |
Components of Executive Compensation
Components of Executive Compensation The four primary elements of our executive compensation program are designed to provide a target total value for compensation that is competitive with our peers and attracts and retains the talented executives necessary to manage a large and complex organization such as ConocoPhillips. Base Salary Base salary is a central component of compensation for all of our salaried employees. Management, with the assistance of Mercer, its outside compensation consultant, thoroughly examines the scope and complexity of executive jobs throughout ConocoPhillips and benchmarks the competitive compensation practices for such jobs. As a result of this work, management has developed a compensation structure that assigns all positions to specific salary grades. For our executives, the base salary midpoint increases as the salary grade increases, but at a lesser rate than the overall target incentive compensation percentages increase. The result is a higher percentage of at-risk compensation as an executive’s salary grade rises. We set base salaries to be competitive within our compensation reference group and, for certain staff positions, Fortune 50-150 Industrials, taking into account responsibilities and duties, individual performance, and time in position. See “Process for Determining Executive Compensation — Setting Target Compensation — Compensation Reference Group” beginning on page 79 for a discussion of our benchmarking exercise. Performance-Based Pay Programs
ANNUAL INCENTIVE
ANNUAL INCENTIVE All of our employees throughout the world — including our executives — participate in our annual short-term incentive program, called the Variable Cash Incentive Program (“VCIP”). It is our primary vehicle for recognizing company and individual performance for the prior year. We believe that having an annual “at risk” compensation element gives employees a financial stake in the achievement of our business objectives and motivates them to achieve those objectives. For all employees, the base VCIP award is comprised of corporate performance categories including HSE, Operational, Financial, Strategic Milestones, and Energy Transition Milestones. The HRCC has discretion to adjust base awards up or down depending on individual performance, but the final award, inclusive of any adjustments, may not exceed 200 percent of the target. Beginning with the 2022 program, the HRCC eliminated individual performance adjustments in the short-term incentive program for NEOs.
LONG-TERM INCENTIVES
LONG-TERM INCENTIVES Our primary long-term incentive compensation programs for executives are the Performance Share Program (“PSP”) and the Executive Restricted Stock Unit Program, which replaced the Stock Option Program effective with equity grants made in 2018. The HRCC approved replacing stock options with three-year, time-vested restricted stock units under the Executive Restricted Stock Unit Program in response to stockholder feedback and to be consistent with market trends. In addition, the HRCC increased the weighting of the long-term incentive award in the form of performance-based restricted stock units under the PSP from 60 percent to 65 percent and assigned a weight of 35 percent to the Executive Restricted Stock Unit Program. Approximately 60 of our current employees participate in these programs.
PERFORMANCE SHARE PROGRAM
PERFORMANCE SHARE PROGRAM The PSP rewards executives based on ConocoPhillips’ performance over a three-year period. Each year, the HRCC establishes performance metrics for a new three-year performance period. Thus, performance results in any given year are considered in three overlapping performance periods. We believe the use of a multi-year performance period helps to focus management on longer-term results. PSP award targets are set in shares at the beginning of the performance period, and actual cash payouts, based on the HRCC’s evaluation of performance, are calculated using our stock value after the conclusion of the three-year performance period. Thus, the value of the performance shares is tied to stock price performance throughout the performance period. Targets for participants whose salary grades are changed during a performance period are prorated to align incentive levels with the individual’s changing level of responsibility. Changes in salary not accompanied by a change in salary grade do not affect the targets. The targets for the CEO are set annually by the HRCC. The award is calculated on a formulaic basis using a relative TSR metric and a relative Financial metric, with respective weightings of 60 and 40 percent. At the end of the performance period, the final award may not exceed 200 percent of the total target award (the initial target award set in restricted stock units, at the beginning of the performance period, together with any promotional awards and reinvested dividend equivalents during the performance period). The final award is determined by the HRCC following several detailed reviews of company performance and is based on the HRCC’s evaluation of ConocoPhillips’ formulaic performance relative to the preestablished metrics (discussed under “Process for Determining Executive Compensation — Corporate Performance Criteria” on page 81).
Performance metrics and peers for performance share programs
Performance metrics and peers for performance share programs The performance metrics and peers established by the HRCC for the PSP 21 (2021-2023), PSP 22 (2022-2024), PSP 23 (2023-2025), and PSP 24 (2024-2026) awards granted in 2021, 2022, 2023, and 2024 respectively, have been established as follows:
Performance metrics and peers for performance share programs
| Metrics | Performance Peers(1) | | PSP 21, PSP 22, & PSP 23 ●Relative Total Shareholder Return (60%) ●Relative Adjusted ROCE (40%) PSP 24 ●Relative Total Shareholder Return (60%) ●Relative & Absolute Adjusted ROCE (40%) | ●S&P 500 Total Return Index(2) ●APA Corporation ●Chevron Corporation ●Devon Energy Corporation ●Diamondback Energy(3) ●EOG Resources, Inc. ●Exxon Mobil Corporation ●Hess Corporation(4) ●Marathon Oil Corporation(5) ●Occidental Petroleum Corporation ●Pioneer Natural Resources(6) |
Performance metrics and peers for performance share programs
| (1) Each peer is a performance peer for PSP 21, PSP 22, PSP 23, and PSP 24, unless otherwise noted. | | (2) For relative TSR metric only. | | (3) Performance peer for PSP 24 award only. Diamondback Energy was added to the performance peer group to reflect our significant footprint in the Permian Basin and due to the anticipated completion of the acquisition of Pioneer Natural Resources by Exxon Mobil Corporation in 2024. | | (4) On October 23, 2023, Chevron Corporation announced a planned acquisition of Hess Corporation. Effective upon the completion of the acquisition only the combined company (Chevron Corporation) will be retained for any ongoing performance programs. | | (5) Performance peer for PSP 21 and PSP 22 awards only. | | (6) Performance peer for PSP 23 and PSP 24 awards only. Pioneer Natural Resources was added to the performance peer group to better reflect our significant footprint in the Permian Basin. On October 11, 2023, Exxon Mobil announced a planned acquisition of Pioneer Natural Resources. Effective upon the completion of the acquisition only the combined company (Exxon Mobil) will be retained for any ongoing performance programs. |
Performance metrics and peers for performance share programs
EXECUTIVE RESTRICTED STOCK UNIT PROGRAM Like the PSP, the Executive Restricted Stock Unit Program is designed to reward our executives for long-term share performance and encourage executive retention while incentivizing absolute performance that is aligned with stockholder interests. The restricted stock units vest three years following the date of grant, which is competitive with industry peers. The combination of the PSP and the Executive Restricted Stock Unit Program, along with our Stock Ownership Guidelines described under “Executive Compensation Governance — Alignment of Interests — Stock Ownership and Holding Requirements” on page 95, provides a comprehensive package of long-term incentives for our executives that align their interests with stockholders. STOCK OPTION PROGRAM In response to stockholder feedback and consistent with market trends, the HRCC discontinued the Stock Option Program effective with equity grants made in 2018 and substituted the Executive Restricted Stock Unit Program. The practice under the Stock Option Program was to set option exercise prices no lower than the fair market value of ConocoPhillips stock at the time of the grant. Because an option’s value is derived solely from an increase in our stock price, options only reward recipients if the value of our stock appreciates. All previously granted and unexercised stock options are vested and exercisable and expire 10 years following the grant date. OFF-CYCLE AWARDS ConocoPhillips may make awards outside the PSP or the Executive Restricted Stock Unit Program. Currently, off-cycle awards are generally granted to certain incoming executives for one or more of the following reasons: (1) to induce an executive to join ConocoPhillips (occasionally replacing compensation the executive will lose by leaving the prior employer); (2) to induce an executive of an acquired company to remain with ConocoPhillips for a certain period of time following the acquisition; or (3) to provide a pro rata equity award to an executive who joins ConocoPhillips during an ongoing performance period in which the executive is ineligible to participate under the standard PSP or Executive Restricted Stock Unit Program provisions. In these cases, the HRCC has sometimes approved a shorter period for restrictions on transfers of restricted stock units than those issued under the PSP or Executive Restricted Stock Unit Program. Any off-cycle awards to Senior Officers must be approved by the HRCC.
Process for Determining Executive Compensation
| ROLES AND RESPONSIBILITIES | | HUMAN RESOURCES AND COMPENSATION COMMITTEE (HRCC) ●Annually reviews and determines compensation for the CEO and for each of the NEOs. ●Makes critical decisions on competitive compensation levels, program design, performance targets and associated peer groups, corporate and individual performance, and appropriate pay adjustments necessary to reflect short-and long-term performance. ●Considers annual benchmark data provided by the consultants, dialogues with our largest stockholders, and evaluates four in-depth management reviews of ongoing corporate performance. ●The HRCC also has sole authority to retain, terminate, and obtain advice and assistance from a compensation consultant, external legal, accounting, and other advisors and consultants. The HRCC conducts an annual review of the HRCC’s independent consultant and has discretion to replace the independent consultant. The HRCC approves in advance all the work to be done by the independent consultant. | | MANAGEMENT ●ConocoPhillips’ Human Resources department supports the HRCC in the execution of its responsibilities and manages the development of the materials for each committee meeting, including market data, individual and company performance metrics, and compensation recommendations. ●The CEO considers performance and makes individual recommendations on base salary, annual incentive, and long-term equity compensation with respect to Senior Officers, including all NEOs other than himself. These recommendations are reviewed, discussed, modified, and approved, as appropriate, by the HRCC. No member of the management team, including the CEO, has a role in determining his or her own compensation. | | COMPENSATION CONSULTANTS The HRCC retained FW Cook as its independent executive compensation consultant in 2023. Management also retained Mercer to provide other consulting services. The consultants compile compensation data, conduct analyses, supplement internal resources for market analysis, and assist in the evaluation of the compensation of the CEO and Senior Officers. The HRCC considered whether any conflict of interest exists with either FW Cook or Mercer in light of SEC rules. The HRCC assessed the following factors relating to each consultant in its evaluation: ●Other services provided to us by the consultant; ●Fees paid by us as a percentage of the consulting firm’s total revenue; ●Policies or procedures maintained by the consulting firm that are designed to prevent a conflict of interest; ●Any business or personal relationships between the individual consultants involved in the engagement and a member of the HRCC or executive officers; and ●Any ConocoPhillips stock owned by the individual consultants involved in the engagement. Both FW Cook and Mercer provided the HRCC with appropriate assurances addressing such factors. Based on this information, the HRCC concluded the work of the consultants did not raise any conflict of interest. The HRCC also took into consideration all factors relevant to FW Cook’s independence from management, including those specified in Section 303A.05(c) of the NYSE Listed Company Manual, and determined that FW Cook is independent and performs no other services for ConocoPhillips. ConocoPhillips is prohibited from employing any FW Cook consultant who worked on our account for a period of one year after that individual leaves the employment of the independent consultant. |
HRCC ANNUAL COMPENSATION CYCLE
| | FEBRUARY ●Approval of prior year’s incentive payouts ●Set target compensation and performance targets for the current year (see “Setting Increasingly Challenging Targets” on page 80) | | | MARCH – APRIL ●Publication of our Annual Proxy Statement detailing performance and compensation information for the prior year ●Stockholder outreach; feedback shared with the HRCC/Board | | | MAY ●Annual Meeting with annual stockholder say on pay vote | | | JULY ●First performance review; feedback is given on current year’s performance ●Independent third-party benchmarks CEO pay and reviews market trends to advise HRCC as it considers compensation program design changes for upcoming year | | | OCTOBER ●Stockholder outreach ●Review of market best practices and initial program design concept for upcoming year ●Compensation program risk analysis | | | DECEMBER ●Feedback received during stockholder outreach shared with HRCC/Board ●Approval of program design for upcoming year ●Second performance review; feedback is given on current year’s performance | | | JANUARY – FEBRUARY ●Third and fourth performance reviews; feedback is given on prior year’s performance ●Independent third-party review of peer target compensation and payouts for prior year performance period |
RELATIVE TOTAL SHAREHOLDER RETURN (PSP ONLY)
RELATIVE TOTAL SHAREHOLDER RETURN (PSP ONLY) We believe our Operational and Financial measures and Strategic and Energy Transition Milestones have a strong, positive correlation to TSR in our sector. Thus, as we pursue these measures, we expect to achieve superior returns to stockholders. TSR is the best overall indicator of our long-term success. By integrating compensation metrics with strategic priorities, we believe we are strongly aligned with stockholder interests across time periods and through cycles. We believe it is important to include TSR in our PSP because it is the most tangible, visible measure of the value we have created for stockholders during the relevant period. TSR represents the percentage change in stock price from the beginning to the end of a performance period, plus the percentage impact from common stock dividends paid during the performance period assuming dividends are reinvested into the stock. Consistent with market practice, we calculate TSR for compensation purposes based on a 20-trading day simple average prior to the beginning of a period and a 20-trading day simple average prior to the end of the stated period. We measure TSR relative to our performance peer group to mitigate the influence of sector-wide factors, such as commodity price volatility, on our stock price. MEASURING PERFORMANCE — PERFORMANCE PEER GROUP Our performance peer group is used to evaluate relative business results in both our annual incentive and performance share programs. This includes both relative TSR and relative Adjusted ROCE. The HRCC believes our performance is best measured against both large independent E&P companies with diverse portfolios and some of the largest publicly held integrated oil and gas companies that we compete against in our business operations. In addition, the S&P 500 Total Return Index is included in our performance peer group (for the relative TSR metric only) because the HRCC believes that we should be measured against the companies that we compete with for capital in the broader market. We believe that our performance peer group is representative of the companies that investors use for relative performance comparisons. Additionally, the inclusion of the index as a performance peer further aligns executive pay with long-term stockholder interests as we will be required to outperform both industry peers and a market-based index to receive a maximum payout. The following tables show the performance peer groups that were established for evaluating relative metrics for the periods indicated. PERFORMANCE PEER GROUP FOR 2023 VCIP VCIP performance period running from January 2023 through December 2023
RELATIVE TOTAL SHAREHOLDER RETURN (PSP ONLY)
| (1) For relative TSR metric only. |
SETTING TARGETS FOR 2023
SETTING TARGETS FOR 2023 The HRCC reviews and approves targets for the performance metrics annually. The process begins with our rigorous internal budget, which is set each year across the organization and then approved by our Board. For setting VCIP targets, the outputs from the internal budget are reviewed for alignment with the value proposition, as well as degree of difficulty. The HRCC believes that targets should reflect a reasonable chance of achievability, but also be challenging. Significant effort is invested to ensure that the metrics and targets reflect both a desire for continuous improvement and a realistic assessment of changes in the market environment and our portfolio. For the relative Financial metric, the HRCC established a matrix to inform payout decisions, see page 84. In the case of HSE, Operations, Strategic Milestones, and Energy Transition Milestones metrics, the HRCC relies on a rigorous and transparent review process with management and exercises its judgment based on its knowledge of the business to assess degree of difficulty and determine the appropriate payout (see “HRCC Review Process” beginning on page 88). The HRCC does not believe either a matrix or a threshold-maximum approach is appropriate for all metrics given the significant volatility of the business in any given year and the influence of non-operated activities over which ConocoPhillips has limited control. Having a threshold-maximum approach could incentivize behaviors that are counter to the best interest of ConocoPhillips and its stockholders. Based on our 2023 outreach, we believe the majority of stockholders were satisfied with the level of disclosure around our process, and we have continued to enhance transparency around our targets and results and have sought to continuously improve our disclosures around payout decisions. Absolute VCIP targets for 2023 were aligned with the production, capital, and operating and overhead external guidance ConocoPhillips provided externally. See “HRCC Annual Compensation Cycle” on page 78. The HSE, Operations, Financial, Strategic Milestones, and Energy Transition Milestones targets set by the HRCC are as follows:
ENERGY TRANSITION MILESTONES (ABSOLUTE) – 10% weighting
| Metric Category | Category Weighting | Metric | VCIP Target | VCIP Results and Performance Summary | Payout | Weighted Payout | | HSE | | Total Recordable Rate (“TRR”) (relative) | Top-quartile performance and industry leader | Continued focus on safety performance, achieving top-quartile TRR; opportunities for improvement remain | 85% | 17% | | | | Process Safety Events (“PSE”) | Continuous Improvement | Zero spills >100 barrels; fewer process safety events as compared to prior year; increase in serious incidents, including a fatality | | | | Operations(1) | | Production | 1,790 | Exceeded target by 1% with adjusted production 1,813 MBOED; strong performance driven by L48 | 125% | 37% | | | | Capital ($B) | $11.2 | Delivered capital scope with $11.1B, within 1% of target | | | | | | Operating and Overhead Costs ($B) | $8.2 | Managed operating and overhead costs to $8.6B, 4% above target | | | | | | Operational Milestones | See Operational Milestones discussed on page 87 | Achieved or exceeded all operational milestones, except for nxtgenERP, which was delayed to complete additional testing to address potential impacts to business effectiveness | | | | Financial(2) | | Relative Adjusted ROCE | Based on our relative performance | Finished 4th in peer group (58th percentile) | 122% | 37% | | Strategic Milestones | | LNG | Progress LNG business through advancing new PALNG, NFE, and NFS projects, securing several regasification and offtake agreements, and building out LNG organization | Achieved all objectives; expanded global LNG business; secured several regasification and offtake agreements; built out LNG organization by staffing key roles to enable integration and development of commercial strategies | 200% | 20% | | | | E&S Risks | Implement action plans for priority E&S risks and track progress against mitigations | Identified priority E&S risks and successfully tracked progress against mitigations | | | | | | DEI | Launch our refreshed Global DEI strategy and identify how to assess progress on each component of diversity, equity, and inclusion | Achieved all objectives; refreshed our DEI strategy globally and successfully progressed elements of our DEI priorities | | | | Energy Transition Milestones | | Progress Plan for Net-Zero Energy Transition | Demonstrate progress toward our Plan for the Net-Zero Energy Transition | Achieved all objectives; advanced opportunities and increased our target trajectory range for 2030 from 40-50% to 50-60%(3)of gross operated emissions intensity reduction | 190% | 19% | | | | Emissions | Achieve an annual GHG emissions intensity aligned with our 2030 target trajectory range, including any updates to the 2030 target | Achieved, even with the increase in our target trajectory range | | | | | | Abatement | Execute approved MACC projects | Achieved under the allotted budget | | | | | | Advance LCT Opportunities | Advance multiple low carbon opportunities | Advanced multiple low carbon opportunities | | | | | | | | | Total Payout | 130% |
ENERGY TRANSITION MILESTONES (ABSOLUTE) – 10% weighting
| Name | 2023 Eligible Earnings | Target VCIP | Corporate Payout | Total Payout | | R.M. Lance | $1,742,500 | 165% | 130% | 3,737,663 | | W.L. Bullock, Jr. | 1,004,976 | 113%(1) | 130% | 1,469,777 | | K.B. Rose | 947,320 | 95% | 130% | 1,169,940 | | N.G. Olds | 840,056 | 95% | 130% | 1,037,469 | | D.E. Macklon | 901,468 | 95% | 130% | 1,113,313 |
FINANCIAL – 40% weighting
| Metric Category | Category Weighting | Metric | PSP Results and Performance Summary | Payout | Weighted Payout | | TSR | | Total Shareholder Return (relative to peers) | 4th in peer group (71st percentile; 160% payout per matrix) for 2021-2023 based on 20-day average methodology | 160% | 96% | | Financial(1) | | Adjusted ROCE (relative to peers) | 4th in peer group (63rd percentile; 137% payout per matrix) | 137% | 55% | | | | | Total Payout | | 151% |
FINANCIAL – 40% weighting
Long-Term Incentive: Executive Restricted Stock Unit Program All 2023 awards under the Executive Restricted Stock Unit Program were made at target. Approximately 60 of our current employees participate in this program. The 2023 grants to NEOs can be found in note 3 of the Summary Compensation Table on page 98.
Other Executive Compensation and Benefits
| ● | Voluntary Deferred Compensation Plans — The purpose of our voluntary nonqualified deferred compensation plans is to allow executives to defer a portion of their salary and incentive compensation so that such amounts are not immediately taxable. | | ● | Make-Up Plans — The purpose of our nonqualified defined contribution make-up plans is to provide benefits that an executive would otherwise lose due to limitations imposed by the Internal Revenue Code on high-income participants qualified plans. |
Other Executive Compensation and Benefits
Additional information on these plans is provided under Nonqualified Deferred Compensation beginning on page 107. Defined Benefit Plans — In addition to the ConocoPhillips Retirement Plan, which is our qualified defined benefit plan for U.S.-based employees, we also maintain nonqualified defined benefit plans for our executives. The primary purpose of these plans is to provide benefits that an executive would otherwise lose due to limitations imposed by the Internal Revenue Code on high-income participants in qualified plans. The U.S. nonqualified defined benefit plan available to our NEOs is the Key Employee Supplemental Retirement Plan (“KESRP”). This type of plan is common among our competitors and we believe the lack of such a plan would put ConocoPhillips at a disadvantage in attracting and retaining talented executives. Effective January 1, 2019, the ConocoPhillips Retirement Plan was closed to new hires and rehires who will instead receive an enhanced benefit under the ConocoPhillips Savings Plan and a related make-up plan. Additional information on the KESRP is provided under Pension Benefits beginning on page 105. Severance Plans and Changes in Control We maintain plans to address severance of our executives in certain circumstances as described under Executive Severance and Changes in Control beginning on page 109. Plans of this nature are common within the industry. Our plans are designed to aid ConocoPhillips in attracting and retaining executives. Under each of our severance and change in control severance plans, the executive must terminate from service with ConocoPhillips to receive severance pay. Excise tax gross-up benefits are not available under these plans. Vesting of awards under the PSP, Executive Restricted Stock Unit Program, and Stock Option Program that are assumed by an acquirer will accelerate only upon the occurrence of both a change in control event and a qualifying termination of employment of the employee (usually called a “double trigger”). Broadly Available Plans Our NEOs are eligible to participate in the same basic benefits package as our other U.S. salaried employees. This includes expatriate benefits; relocation services; medical, dental, vision, life, and accident plans; health savings accounts; and flexible spending arrangements for health care and dependent care expenses.
Executive Compensation Governance
Executive Compensation Governance Alignment of Interests — Stock Ownership and Holding Requirements We place a premium on aligning the interests of our executives with those of our stockholders. All executives are subject to stock ownership guidelines, with an eight times base salary guideline for the CEO (increased from six times effective in 2023) and three to four times base salary guideline for other NEOs. Executives have five years from the date they become subject to the Stock Ownership Guidelines to comply. Holdings counted toward the guidelines include: (1) shares of stock owned individually, jointly, or in trusts controlled by the employee; (2) restricted stock and restricted stock units; (3) shares owned in qualified savings or stock ownership plans, whether vested or not; and (4) stock or units in nonqualified deferred compensation plans, whether vested or not. Holdings not counted toward the guidelines include PSP target units and unexercised stock options. Employees subject to the guidelines who have not reached the required level of stock ownership are expected to hold shares received upon vesting or earn-out of restricted stock, restricted stock units (net of shares for taxes), and shares received upon exercise of stock options (net of shares tendered or withheld for payment of exercise price and shares for taxes), so they meet their requirement in a timely manner. The multiple of equity held by each of our NEOs currently exceeds our established guidelines. Clawback Policy The HRCC has approved a Clawback Policy providing that ConocoPhillips will recoup any incentive compensation (cash or equity) paid or payable to any executive to the extent such recoupment is required or contemplated by the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the Sarbanes-Oxley Act, or any other applicable law or listing standards. To comply with NYSE listing standards and final SEC rules under the Dodd-Frank Act, the HRCC adopted a restated Clawback Policy effective October 2, 2023. The Clawback Policy requires the Board to recoup incentive compensation (cash or equity) paid in the event of certain business circumstances, including a financial restatement. The policy operates in addition to provisions already contained in our award documents for the PSP, the Executive Restricted Stock Unit Program, the Stock Option Program, and other compensation programs using company equity. Those documents permit the HRCC or other granting committee to suspend rights to exercise, refuse to honor the exercise of awards already requested, or cancel awards granted if an executive engages in any activity we determine is detrimental to ConocoPhillips, including acts of misconduct (such as embezzlement, fraud, theft, or disclosure of confidential information) or other acts that harm our business, reputation, or employees, as well as misconduct that results in ConocoPhillips having to prepare an accounting restatement. To date, no NEOs have been subject to any clawbacks. Anti-Pledging and Anti-Hedging Pursuant to our insider trading policy, ConocoPhillips directors, officers and all other employees are prohibited from pledging company stock, holding company stock in a margin account, or entering into hedging transactions, including the use of financial instruments such as prepaid variable forwards, equity swaps, collars, and exchange funds. This policy, together with the Stock Ownership Guidelines discussed above, helps ensure that our NEOs and other Senior Officers remain subject to the risks, as well as the rewards, of stock ownership. Equity Grant Practices When the HRCC awards Performance Share Units, Executive Restricted Stock Units, or other equity grants to the NEOs, the fair market value of the units or the exercise price of the options or other equity is determined based on an average of the stock’s high and low prices on the date of grant (or the preceding business day, if the markets are closed on the date of grant). For purposes of granting such awards, we use an average of the closing prices on the 10 trading days preceding the date of grant. Grants of Performance Share Units and Executive Restricted Stock Units are generally made at the HRCC’s February meeting (the date of which is determined at least a year in advance) or, in the case of new hires, on the date of commencement of employment or the date of HRCC approval, whichever is later. Statutory and Regulatory Considerations In designing, implementing, and determining compensation under our compensation programs, we act in accordance with our compensation philosophy and believe that attracting, retaining, and motivating our employees with compensation programs that support long-term value creation is in the best interests of our stockholders. However, we also take into account the various tax, accounting, and disclosure rules associated with various forms of compensation. We have reviewed and considered the deductibility of executive compensation under Section 162(m) of the Internal Revenue Code and designed deferred compensation programs with the intent that they comply with or are exempt from Section 409A of the Internal Revenue Code. We generally seek to preserve tax deductions for executive compensation where possible and commensurate with our practice of aligning pay with performance. Nonetheless, ConocoPhillips has awarded compensation that is not fully tax deductible when the HRCC believes that doing so is in the best interest of our stockholders, and ConocoPhillips reserves the right to do so in the future. Human Resources and Compensation Committee Report Review with Management. The HRCC has reviewed and discussed the “Compensation Discussion and Analysis” presented in this Proxy Statement with members of management. Discussion with Independent Executive Compensation Consultant. The HRCC has discussed with FW Cook, an independent executive compensation consulting firm, ConocoPhillips’ executive compensation programs, as well as specific compensation decisions made by the HRCC. FW Cook was retained directly by the HRCC, independent of management. The HRCC has received written disclosures from FW Cook confirming no other work has been performed for ConocoPhillips by FW Cook, has discussed with FW Cook its independence from ConocoPhillips, and believes FW Cook to have been independent of management. Recommendation to the ConocoPhillips Board of Directors. Based on its review and discussions noted above, the HRCC recommended to the Board that the “Compensation Discussion and Analysis” be included in ConocoPhillips’ Proxy Statement on Schedule 14A (and, by reference, included in ConocoPhillips’ Annual Report on Form 10-K for the year ended December 31, 2023).
Summary Compensation Table
Summary Compensation Table The Summary Compensation Table below reflects amounts earned with respect to 2023 and, with regard to non-equity incentive plan compensation, for the performance period ending in 2023. The table does not include the cost of benefits that are generally available to our U.S.-based salaried employees, such as our medical, dental, vision, life, and accident plans, disability, and health savings accounts and flexible spending account arrangements for health care and dependent care expenses. All of our NEOs are U.S.-based salaried employees.
Summary Compensation Table
| Name and Principal Position | Year | Salary(1) | Bonus(2) | Stock Awards(3) | Option Awards | Non-Equity Incentive Plan Compensation(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(5) | All Other Compensation(6) | Total | | R.M. Lance Chairman and Chief Executive Officer | 2023 | $1,742,500 | $ - | $14,842,125 | $ - | $3,737,663 | $- | $448,385 | $20,770,673 | | | 2022 | 1,685,833 | - | 14,308,868 | - | 3,425,614 | - | 552,024 | 19,972,339 | | | 2021 | 1,615,000 | - | 14,405,706 | - | 5,038,800 | 2,515,751 | 311,383 | 23,886,640 | | W.L. Bullock, Jr. Executive Vice President and Chief Financial Officer | 2023 | 1,004,976 | - | 5,141,485 | - | 1,469,777 | 2,350,206 | 226,476 | 10,192,920 | | | 2022 | 953,556 | - | 3,903,751 | - | 1,211,016 | 870,570 | 595,849 | 7,534,742 | | | 2021 | 897,456 | - | 4,455,707 | - | 1,705,166 | 163,849 | 938,332 | 8,160,510 | | K.B. Rose Senior Vice President, Legal, General Counsel, and Corporate Secretary | 2023 | 947,320 | - | 3,242,925 | - | 1,169,940 | 178,260 | 180,104 | 5,718,549 | | | 2022 | 915,976 | - | 3,223,715 | - | 1,105,125 | 144,046 | 153,171 | 5,542,033 | | | 2021 | 821,724 | - | 3,001,461 | - | 1,389,535 | 96,376 | 99,931 | 5,409,027 | | N.G. Olds Executive Vice President, Lower 48 | 2023 | 840,056 | - | 2,764,013 | - | 1,037,469 | 1,473,838 | 239,438 | 6,354,814 | | | 2022 | 760,668 | - | 3,148,392 | - | 879,104 | 434,433 | 123,171 | 5,345,768 | | | 2021 | - | - | - | - | - | - | - | - | | D.E. Macklon Executive Vice President, Strategy, Sustainability and Technology | 2023 | 901,468 | - | 2,829,150 | - | 1,113,313 | 658,202 | 119,479 | 5,621,612 | | | 2022 | 848,544 | - | 2,939,466 | - | 1,023,768 | - | 122,658 | 4,934,436 | | | 2021 | 798,624 | - | 3,231,408 | - | 1,350,473 | 53,897 | 86,430 | 5,520,832 |
Summary Compensation Table
| (1) Includes any amounts that were voluntarily deferred under the Key Employee Deferred Compensation Plan (“KEDCP”). | | (2) Our primary short-term incentive compensation arrangement for employees (the Variable Cash Incentive Program or “VCIP”) has performance measures established by the HRCC and communicated to employees, including the NEOs, at a time when the outcome of the performance is substantially uncertain for the 2023 performance period. The HRCC must determine the level of achievement under such performance measures before there is any payout to NEOs. Because of this process, amounts paid under the VCIP are shown in the Non-Equity Incentive Plan Compensation column of the table, rather than the Bonus column. | | (3) Amounts shown represent the aggregate grant date fair value of awards made during each of the years indicated under the Performance Share Program (“PSP”) and the Executive Restricted Stock Unit Program as determined in accordance with FASB ASC Topic 718. See the “Employee Benefit Plans” section of Note 16 in the Notes to Consolidated Financial Statements in ConocoPhillips’ 2023 Annual Report on Form 10-K for a discussion of the relevant assumptions used in this determination. For the awards granted for PSP 23 and 2023 Executive RSUs, the grant date fair value was $112.50, but as noted in the Equity Grant Practices outlined on page 95 awards are granted using the average of the closing prices on the 10 trading days preceding the date of grant ($112.658). The difference between these values can increase or decrease the reported amounts from year to year even if target compensation does not change. A detailed breakdown of 2023 awards in the Stock Awards column of the Summary Compensation Table is on the following page: |
Grants of Plan-Based Awards Table
Grants of Plan-Based Awards Table The Grants of Plan-Based Awards Table shows participation by the NEOs in the incentive compensation arrangements described below. The columns under the heading Estimated Future Payouts Under Non-Equity Incentive Plan Awards show information regarding VCIP. The amounts shown in the table are those applicable to the 2023 program year, using a minimum of zero and a maximum of 200 percent of VCIP target for each participant; the amounts shown do not represent actual payouts for that program year. Actual payouts for the 2023 program year were made in February 2024 and are shown in the Summary Compensation Table on page 98 under the Non-Equity Incentive Plan Compensation column. Awards are eligible to be voluntarily deferred under the KEDCP. The columns under the heading Estimated Future Payouts Under Equity Incentive Plan Awards show information regarding PSP. The amounts shown in the table are those set for 2023 compensation tied to the 2023 through 2025 program period and any promotional grants for previous performance periods and do not represent actual payouts for that program year. These awards accrue dividend equivalents that, during the performance period, are reinvested in additional restricted stock units and paid upon the applicable vesting of the underlying award. Dividend equivalents are not paid at preferential rates and are credited at the same time dividends are paid on common stock. Awards settled in cash are eligible to be voluntarily deferred under the KEDCP. For the 2023 program year under the PSP, the HRCC set the targets and granted awards at the regularly scheduled February 2023 meeting of the HRCC. The All Other Stock Awards column reflects awards granted under the Executive Restricted Stock Unit Program. The Executive Restricted Stock Unit Program awards shown were granted on the same day the target was approved, vest at the end of a three-year period, and accrue dividend equivalents that, during the performance period, are reinvested in additional restricted stock units and settle in stock upon the applicable vesting of the underlying award. Dividend equivalents are not paid at preferential rates and are credited at the same time dividends are paid on common stock. For the 2023 program year under the Executive Restricted Stock Unit Program, the HRCC set the targets and granted awards at the regularly scheduled February 2023 meeting of the HRCC.
Grants of Plan-Based Awards Table
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | | | All Other Stock Awards: Number of Shares of Stock or Units(4) (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Options Awards Average Price ($Sh) | Exercise or Base Price of Options Awards Closing Price ($Sh) | Grant Date Fair Value of Stock and Options Awards(5) | | Name | Grant Date(1) | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | | R.M. Lance | | $ - | $2,875,125 | $5,750,250 | - | - | - | - | - | $ - | $ - | $- | | | 2/14/2023 | - | - | - | - | 85,754 | 171,508 | - | - | - | - | 9,647,325 | | | 2/14/2023 | - | - | - | - | - | - | 46,176 | - | - | - | 5,194,800 | | W.L. Bullock, Jr. | | - | 1,130,598 | 2,261,196 | - | - | - | - | - | - | - | - | | | 2/14/2023 | - | - | - | - | 21,709 | 43,418 | - | - | - | - | 2,442,263 | | | 2/14/2023 | - | - | - | - | - | - | 11,690 | - | - | - | 1,315,125 | | | 3/1/2023 | - | - | - | - | 3,785 | 7,570 | - | - | - | - | 399,147 | | | 3/1/2023 | - | - | - | - | 4,488 | 8,976 | - | - | - | - | 473,282 | | | 3/1/2023 | - | - | - | - | 4,852 | 9,704 | - | - | - | - | 511,668 | | K.B. Rose | | - | 899,954 | 1,799,908 | - | - | - | - | - | - | - | - | | | 2/14/2023 | - | - | - | - | 19,352 | 38,704 | - | - | - | - | 2,177,100 | | | 2/14/2023 | - | - | - | - | - | - | 9,474 | - | - | - | 1,065,825 | | N.G. Olds | | - | 798,053 | 1,596,106 | - | - | - | - | - | - | - | - | | | 2/14/2023 | - | - | - | - | 16,494 | 32,988 | - | - | - | - | 1,855,575 | | | 2/14/2023 | - | - | - | - | - | - | 8,075 | - | - | - | 908,438 | | D.E. Macklon | | - | 856,395 | 1,712,790 | - | - | - | - | - | - | - | - | | | 2/14/2023 | - | - | - | - | 16,346 | 32,692 | - | - | - | - | 1,838,925 | | | 2/14/2023 | - | - | - | - | - | - | 8,802 | - | - | - | 990,225 |
Grants of Plan-Based Awards Table
| (1) The grant date shown is the date on which the HRCC approved the target awards or, in the case of prorated promotional awards under the PSP, the effective date of the promotion. In the case of Mr. Bullock, his promotion was effective March 1, 2023. | | (2) Threshold and maximum awards are based on the program provisions under VCIP. Actual awards earned can range from zero to 200 percent of the target awards for corporate performance inclusive of negative discretionary adjustments for individual performance. Amounts reflect estimated cash payouts under VCIP after the close of the performance period at the threshold, target, and maximum level of performance. The estimated amounts are calculated based on the applicable annual target and base salary for each NEO in effect for the 2023 performance period, including any salary increases during the year. While the program terms would also automatically adjust for salary decreases, these are not reflected in the table above. If threshold levels of performance are not met, then the payout can be zero. The HRCC also retains the discretionary authority to make negative individual performance adjustments to awards to NEOs under VCIP. Actual payouts under VCIP for 2023 are based on actual base salaries earned in 2023 and are reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table on page 98. | | (3) Threshold and maximum awards under the PSP are based on the program provisions. Actual awards earned under the PSP can range from zero to 200 percent of the awards. Ms. Rose and Mr. Olds received an additional 10 percent initial award for PSP 23 (2023-2025) in recognition of their differential performance in 2022. | | (4) This reflects awards for the Executive Restricted Stock Unit Program. Executive Restricted Stock Unit awards can only be adjusted downward. | | (5) For equity incentive plan awards, these amounts represent the grant date fair value at target level under PSP as determined pursuant to FASB ASC Topic 718 and reflected in the Stock Awards column in the Summary Compensation Table on page 98. Actual value realized upon vesting of the PSP or Executive Restricted Stock Unit awards depends on market prices at the time of settlement for such awards. See the “Employee Benefit Plans” section of Note 16 in the Notes to Consolidated Financial Statements in ConocoPhillips’ 2023 Annual Report on Form 10-K for a discussion of the relevant assumptions used in this determination. |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The Outstanding Equity Awards at Fiscal Year-End table is used to show equity awards measured in ConocoPhillips stock held by the NEOs. The following table reflects outstanding stock option awards and unvested and unearned stock awards (both time-based and performance-contingent) as of December 31, 2023, assuming a market value of $116.07 per share (the closing stock price of the company’s common stock on December 29, 2023).
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards(1) | | | | Stock Awards(3) | | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable(2) | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(9) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested | | R.M. Lance | 607,000 | - | - | $69.2450 | 02/17/2025 | - | $- | - | $- | | | 819,900 | - | - | 33.1250 | 02/16/2026 | - | - | - | - | | | 506,800 | - | - | 49.7550 | 02/14/2027 | - | - | - | - | | | - | - | - | - | - | 629,114(4) | 73,021,318 | 198,909 | 23,087,362 | | W.L. Bullock, Jr. | 45,200 | - | - | 69.2450 | 02/17/2025 | - | - | - | - | | | 81,000 | - | - | 33.1250 | 02/16/2026 | - | - | - | - | | | 71,200 | - | - | 49.7550 | 02/14/2027 | - | - | - | - | | | - | - | - | - | - | 152,145(5) | 17,659,418 | 62,858 | 7,295,883 | | K.B. Rose | - | - | - | - | - | 92,313(6) | 10,714,766 | 46,033 | 5,343,001 | | N.G. Olds | 24,300 | - | - | 49.7550 | 02/14/2027 | - | - | - | - | | | - | - | - | - | - | 77,232(7) | 8,964,278 | 38,989 | 4,525,491 | | D.E. Macklon | - | - | - | - | - | 94,395(8) | 10,956,404 | 40,628 | 4,715,685 |
Outstanding Equity Awards at Fiscal Year-End
| (1) All options shown in the table have a maximum term for exercise of ten years from the grant date. Under certain circumstances, the terms for exercise may be shorter, and, in certain circumstances, the options may be forfeited and cancelled. All awards shown in the table have associated restrictions on transferability. | | (2) The options shown in this column vested and became exercisable in 2020 or prior years (although under certain termination circumstances, the options may still be forfeited). Options became exercisable in one-third increments on the first, second, and third anniversaries of the grant date. | | (3) Stock awards made to the NEOs in 2023 include: (a) long-term incentive awards under the PSP; or (b) long-term time-vested awards under the Executive Restricted Stock Unit Program. Stock awards shown in the columns entitled Number of Shares or Units of Stock That Have Not Vested and Market Value of Shares or Units of Stock That Have Not Vested continue to have restrictions upon transferability. Stock awards shown reflect the closing price of ConocoPhillips common stock ($116.07), as reported on the NYSE, on December 29, 2023, the last trading day of 2023. The number of shares or units shown is rounded to the nearest whole share, but the related value is based on the actual number of shares (including fractional shares), with aggregate value rounded to the nearest dollar. Amounts include PSP awards for the performance period that ended in December 2023 (PSP 21), shown at target. At its February 2024, meeting, the HRCC approved final payout levels for the NEOs with regard to that performance period, as follows: Mr. Lance, 339,301 units; Mr. Bullock, 106,856 units; Ms. Rose, 73,017 units; Mr. Olds, 65,048 units; and Mr. Macklon, 75,201 units; see note 3 of the Summary Compensation Table. Under the PSP, stock awards are made in the form of restricted stock units (RSUs) or restricted stock, the former having been used in the most recent awards. The terms and conditions of both are substantially the same, requiring restriction on transferability until separation from employment, although for performance periods beginning after 2008 and before 2013, restrictions will lapse five years from the anniversary of the grant date unless the employee has elected prior to the beginning of the performance period to defer the lapsing of such restrictions until separation from employment. For performance periods beginning after 2012, restrictions will lapse three years after the grant, and awards will be settled in cash. Except in cases where the five-year provision applies, forfeiture is expected to occur if the separation is not the result of death, disability, layoff, or retirement after the executive has reached the age of 55 with five years of service, or after a change in control, although the HRCC has the authority to waive forfeiture. Restricted stock awards have voting rights and pay dividends. RSU awards have no voting rights. RSUs granted under PSP prior to 2018 pay dividend equivalents, but no dividend equivalents are paid or accrued for awards made under the PSP until after the applicable performance period has ended. RSUs granted under the PSP in 2018 and later accrue dividend equivalents that, during the performance period, are reinvested in additional RSUs. Dividends or dividend equivalents are not paid at preferential rates, and dividend equivalents are paid at the same time as dividends on common stock. Restricted stock held by the NEOs prior to November 17, 2001, was converted to RSUs prior to the completion of the merger of Conoco Inc. and Phillips Petroleum Company, with the original restrictions still in place. Awards for ongoing performance periods under PSP 22 (January 2022–December 2024) and PSP 23 (January 2023–December 2025)) are shown at target levels in the columns entitled Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested, and Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested. There is no assurance that these awards will be granted at, below, or above target after the end of the relevant performance periods, as the determination of whether to make an actual grant and the amount of any actual grant for NEOs is within the discretion of the HRCC. |
Outstanding Equity Awards at Fiscal Year-End
| Amounts also include Executive Restricted Stock Unit Program awards granted in February 2021, 2022, and 2023. Under the Executive Restricted Stock Unit Program, stock awards are made in the form of RSUs. The terms and conditions of those units require restriction on transferability, which lapse three years from the anniversary of the grant date. Forfeiture is expected to occur at separation from service if the separation is not the result of death, disability, layoff, or retirement after the executive has reached the age of 55 with five years of service, or after a change in control, although the HRCC has the authority to waive forfeiture. Upon lapse of restrictions, settlement is made in stock. RSU awards have no voting rights. Dividend equivalents, if any, on RSUs held are reinvested in additional RSUs. Dividend equivalents are paid at the same time and the same rate as dividends on common stock, not at a preferential rate. Awards under the Executive Restricted Stock Unit Program are shown in the columns entitled Number of Shares or Units of Stock That Have Not Vested. Amounts also include restricted stock and RSU awards granted with respect to prior periods. The plans and programs under which such grants were made provide that awards made in the form of restricted stock and RSUs be held in such form until the recipient retires (with respect to awards made before 2009) or the earlier of eight years or retirement (with respect to awards made from 2009 through 2012), with the possible election to hold until retirement, or three years (with regard to awards made in 2013 or later), with payouts for the last to be made in cash (unless voluntarily deferred to an account in the Key Employee Deferred Compensation Plan). If such awards immediately vested upon completion of the relevant performance period as is more typical for restricted stock programs, the amounts reflected in this column would be zero for awards made in years prior to 2012. | | (4) Includes 6,780 restricted shares for LTIP X — PSP I initial payout, for which restrictions lapse at retirement; 106,204 RSUs related to grants for PSP I final payout — PSP VI, for which restrictions lapse following separation from service; 71,789 RSUs for PSP VIII and PSP VIII Tail; Mr. Lance elected to defer lapsing of restrictions for PSP VIII and PSP VIII Tail until separation of service; 116,510 Executive RSUs related to the grant in 2021, for which restrictions lapse three years from the grant date and that will be settled in shares; 57,087 Executive RSUs related to the grant in 2022, for which restrictions lapse three years from the grant date and that will be settled in shares; 46,041 Executive RSUs related to the grant in 2023, for which restrictions lapse three years from the grant date and that will be settled in shares; and 224,703 RSUs related to grants for the PSP 21 target award. The actual payouts with regard to the targets for PSP 21 were approved by the HRCC at its February 2024 meeting, and, pursuant to that decision, Mr. Lance received a payout of 339,301 units. Restrictions on the PSP 21 award lapsed on February 13, 2024, and the award settled in cash, although the employee may have elected, prior to the beginning of the performance period, to have some or all of the settlement deferred into the KEDCP. For certain awards, Mr. Lance has voluntarily elected to defer the lapsing of restrictions until separation from service, and those awards continue to appear in the table. Subsequent elections may also impact the final timing of the payout of these awards. | | (5) Includes 24,356 RSUs related to grants for PSP I final payout — PSP VI, for which restrictions lapse following separation from service; 31,177 Executive RSUs related to the grant in 2021, for which restrictions lapse three years from grant date and that will be settled in shares; 14,191 Executive RSUs related to the grant in 2022, for which restrictions lapse three years from grant date and that will be settled in shares; 11,655 Executive RSUs related to the grant in 2023, for which restrictions lapse three years from the grant date and that will be settled in shares; and 70,766 RSUs related to grants for the PSP 21 target award. The actual payouts with regard to the targets for the PSP 21 award were approved by the HRCC at its February 2024 meeting, and, pursuant to that decision, Mr. Bullock received a payout of 106,856 units. Restrictions on the PSP 21 award lapsed on February 13, 2024, and the award settled in cash, although the employee may have elected, prior to the beginning of the performance period, to have some or all of the settlement deferred into the KEDCP. Subsequent elections may also impact the final timing of the payout of these awards. | | (6) Includes 22,792 Executive RSUs related to the grant in 2021, for which restrictions lapse three years from the program grant date and that will be settled in shares; 11,720 Executive RSUs related to the grant in 2022, for which restrictions lapse three years from the program grant date and that will be settled in shares; 9,446 Executive RSUs related to the grant in 2023, for which restrictions lapse three years from the grant date and that will be settled in shares; and 48,356 RSUs related to grants for the PSP 21 target award. The actual payouts with regard to the targets for PSP 21 were approved by the HRCC at its February 2024 meeting, and, pursuant to that decision, Ms. Rose received 73,017 units. Restrictions on the PSP 21 award lapsed on February 13, 2024, and the award settled in cash, although the employee may have elected, prior to the beginning of the performance period, to have some or all of the settlement deferred into the KEDCP. Subsequent elections may also impact the final timing of the payout of these awards. | | (7) Includes 16,731 Executive RSUs related to the grant in 2021, for which restrictions lapse three years from the program grant date and that will be settled in shares; 9,061 Executive RSUs related to the grant in 2022, for which restrictions lapse three years from the program grant date and that will be settled in shares; 8,362 Executive RSUs related to the grant in 2023, for which restrictions lapse three years from the grant date and that will be settled in shares; 43,078 RSUs related to grants for the PSP 21 target award. The actual payouts with regard to the targets for the PSP 21 award were approved by the HRCC at its February 2024 meeting, and, pursuant to that decision, Mr. Olds received a payout of 65,048 units. Restrictions on the PSP 21 award lapsed on February 13, 2024, and the award settled in cash, although the employee may have elected, prior to the beginning of the performance period, to have some or all of the settlement deferred into the KEDCP. Subsequent elections may also impact the final timing of the payout of these awards. | | (8) Includes 24,380 Executive RSUs related to the grant in 2021, for which restrictions lapse three years from the program grant date and that will be settled in shares; 11,098 Executive RSUs related to the grant in 2022, for which restrictions lapse three years from the program grant date and that will be settled in shares; 9,115 Executive RSUs related to the grant in 2023, for which restrictions lapse three years from the grant date and that will be settled in shares; and 49,802 RSUs related to grants for the PSP 21 target award. The actual payouts with regard to the targets for PSP 21 were approved by the HRCC at its February 2024 meeting, and, pursuant to that decision, Mr. Macklon received 75,201 units. Restrictions on the PSP 21 award lapsed on February 13, 2024, and the award settled in cash, although the employee may have elected, prior to the beginning of the performance period, to have some or all of the settlement deferred into the KEDCP. Subsequent elections may also impact the final timing of the payout of these awards. | | (9) Reflects potential RSU awards under ongoing performance periods for the PSP for the performance periods beginning January 2022 (Mr. Lance, 110,109 target units; Mr. Bullock, 36,477 target units; Ms. Rose, 25,993 target units; Mr. Olds, 21,909 target units; and Mr. Macklon, 23,701 target units) and January 2023 (Mr. Lance, 88,800 target units; Mr. Bullock, 26,381 target units; Ms. Rose, 20,039 target units; Mr. Olds, 17,080 target units; and Mr. Macklon, 16,927 target units). There is no assurance that these awards will be granted at, below, or above target after the end of the relevant performance periods because determination of whether to make an actual grant to, and the amount of any actual grant for, NEOs is within the discretion of the HRCC. |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The Option Exercises and Stock Vested table is used to show equity awards measured in ConocoPhillips stock where there was an option exercised by, or a stock award that vested to, a NEO during 2023.
Option Exercises and Stock Vested
| | Option Awards(1) | | Stock Awards(1) | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized Upon Exercise | Number of Shares Acquired on Vesting (#) | Value Realized Upon Vesting | | R.M. Lance | 569,400 | $32,272,738 | 309,369(2) | $32,477,219 | | W.L. Bullock, Jr. | - | - | 73,584(2) | 7,725,018 | | K.B. Rose | - | - | 66,876(3) | 7,034,023 | | N.G. Olds | - | - | 37,061(4) | 3,888,406 | | D.E. Macklon | - | - | 57,327(4) | 6,014,793 |
Option Exercises and Stock Vested
| (1) The number of shares or units shown is rounded to the nearest whole share, but the related value is based on the actual number of shares (including fractional shares), with aggregate value rounded to the nearest dollar. | | (2) Includes RSUs for the Executive Restricted Stock Unit Program award granted in 2020 and for PSP 20, for which restrictions were lapsed following the third anniversary of the grant date. PSP 20 settled in cash, although the employee may have elected prior to the beginning of the performance period to have some or all of the settlement deferred into the KEDCP. Includes Executive RSUs granted in 2023 for which restrictions were lapsed in order to satisfy required tax withholding. | | (3) Includes RSUs for the Executive Restricted Stock Unit Program award granted in 2020 and for PSP 20, for which restrictions were lapsed following the third anniversary of the grant date. PSP 20 settled in cash, although the employee may have elected prior to the beginning of the performance period to have some or all of the settlement deferred into the KEDCP. Includes Executive RSUs granted in 2021, 2022, and 2023 for which restrictions were lapsed in order to satisfy required tax withholding. | | (4) Includes RSUs for the Executive Restricted Stock Unit Program award granted in 2020 and for PSP 20, for which restrictions were lapsed following the third anniversary of the grant date. PSP 20 settled in cash, although the employee may have elected prior to the beginning of the performance period, to have some or all of the settlement deferred into the KEDCP. |
Pension Benefits
Pension Benefits Our defined benefit pension plan for U.S. based employees is the ConocoPhillips Retirement Plan (“CPRP”). The CPRP is intended to be tax-qualified under section 401(a) of the Internal Revenue Code. Our NEOs also participate in the nonqualified ConocoPhillips Key Employee Supplemental Retirement Plan (“KESRP”). The CPRP consists of multiple titles with different terms, each corresponding to a different pension formula. NEOs are only eligible to participate in one title at any time but may have frozen benefits under one or more other titles. Benefits are identified by title in the table below, and all NEOs are vested in their benefits under the CPRP. Each title allows for payment in the form of several annuity types or a single lump sum, but all of the options are considered actuarially equivalent. Effective January 1, 2019, the CPRP was closed to additional benefit accrual for new hires and rehires who instead are eligible for an enhanced benefit under the ConocoPhillips Savings Plan and a related make-up plan. Normal retirement for all of the CPRP titles is defined as the later of age 65 or the employment termination date, but participants in Title II may receive their vested benefits upon termination of employment at any age. Under Title I, early retirement can occur at age 55 with five years of service. Under Title IV, early retirement can occur at age 50 with ten years of service. Under Title I, early retirement benefits are unreduced for benefits that commence at or after age 60, but are reduced by five percent per year (prorated by month) for each year before age 60 that benefits are paid. Under Title IV, early retirement benefits are unreduced for benefits that commence at or after age 60, but are reduced by five percent per year (prorated by month) for each year from age 50 to age 57 that benefits are paid before age 60 and four percent per year (prorated by month) for each year from age 57 that benefits are paid before age 60. Messrs. Lance, Bullock, and Olds were eligible for early retirement at the end of 2023 under the terms of Title I or Title IV, as applicable. The annual pension benefit under Title I and Title IV is an amount payable in the form of a single life annuity beginning at normal or early retirement equal to 1.6% multiplied by the participant’s pension compensation multiplied by years of credited service, minus a Social Security benefit offset equal to 1.5% multiplied by the participant’s annual primary Social Security benefit multiplied by years of credited service. For Title I, pension compensation is calculated using the three highest consecutive years in the last ten years before retirement. For Title IV, pension compensation is calculated using the higher of the highest consecutive 36-months of compensation or the highest nonconsecutive three years of compensation. Eligible pension compensation is limited to the annual maximum permitted under the Internal Revenue Code and generally includes salary and annual incentive compensation and other items (such as overtime) that are not applicable to or are not material for our NEOs. Under Title I, if an executive receives layoff benefits, eligible pension compensation includes annualized salary for the year of layoff, rather than actual salary, and years of credited service are increased by the layoff benefit period. Pension benefits under Title II are based on monthly pay and interest credits to a notional cash balance account. Pay credits are equal to a percentage of eligible pension compensation as described above. Participants whose combined age and years of service total less than 44 receive a 6% pay credit, those whose combined age and years of service total 44 through 65 receive a 7% pay credit, and those whose combined age and years of service total 66 or more receive a 9% pay credit. Mr. Macklon began participating in Title II of CPRP when he transferred to the U.S. payroll. Previously while he was on the U.K. payroll, he participated in the ConocoPhillips Pension Plan (the “U.K. Plan”). The U.K. Plan is a U.K. registered plan with His Majesty’s Revenue and Customs (“HMRC”). Mr. Macklon has a deferred, vested benefit under the noncontributory portion of the U.K. Plan. Under applicable provisions of the U.K. Plan, a member is entitled to receive full benefits upon attainment of normal pension age (60 in the case of Mr. Macklon) subsequent to termination. Early retirement may occur after reaching age 55. Early retirement benefits are unreduced on and after age 60, but are actuarially reduced each month before age 60 that benefits are paid. In general, annual pension benefits under the U.K. Plan are calculated as the product of 1.75% of final pensionable salary multiplied by years of credited service. Final pensionable salary is generally basic annual salary plus pensionable allowances earned in the 12 months before active membership in the U.K. Plan ends. The U.K. Plan allows participants to choose between taking a full annuity or a reduced annuity plus a lump sum allowance of up to 25 percent of the value of the benefit (capped at the greater of £268,275, or 25% of the protected lifetime allowance in effect when the allowance was prospectively eliminated in 2023). Both choices are actuarially equivalent. The KESRP is designed to replace benefits that would otherwise not be received due to certain voluntary reductions of compensation under the Key Employee Deferred Compensation Plan of ConocoPhillips (“KEDCP”) and to limitations contained in the Internal Revenue Code that apply to the CPRP. The KESRP determines a benefit without regard to such limits, and then reduces that benefit by the amount of benefit payable from the CPRP. Thus, in operation the combined benefits payable from the related plans for an eligible employee equal the benefit that would have been paid if there had been no KEDCP deferrals or limitations imposed by the Internal Revenue Code. For participants in Title I of the CPRP, the KESRP pension compensation is calculated using the three highest annual amounts for salary and VCIP in the last ten calendar years before retirement plus the year of retirement. Applicable pension compensation for participants in Title II and Title IV of the CPRP, is calculated on the same basis as for the CPRP. Benefits under the KESRP are generally paid in a single lump sum at the later of age 55 or six months after separation from service. When payment is made, interest at then-current six-month Treasury-bill rates will be credited on any delayed benefits. Distribution may also be made upon a determination of death or disability. Each of the NEOs who are eligible for benefits in the KESRP is vested. Benefits due under the KESRP are paid from ConocoPhillips’ general assets, although we also maintain grantor trusts that may be used to pay such benefits. The trusts and the funds held in them are assets of ConocoPhillips. In the event of bankruptcy or insolvency of the company, trust assets would be held for the benefit of the company’s general creditors, and participants would be unsecured general creditors. For participants in the U.K. Plan, there is a plan similar to the KESRP, known as the ConocoPhillips Unfunded Pension Plan (“U.K Unfunded Plan”), which operates on the same principles but with respect to limits imposed through HMRC on registered plans like the U.K. Plan. Mr. Macklon is a participant in the U.K. Unfunded Plan with regard to the time he worked in the U.K. from September 1, 2013 to December 31, 2016, at which time he transferred to the U.S. payroll (Mr. Macklon was a participant in the U.K. Plan prior to September 1, 2013). Mr. Macklon is vested in his benefit under the U.K. Unfunded Plan, and such benefit is payable when he attains 55 years of age in the form of a lump sum, or series of lump sums payable over a five-or ten-year period.
Pension Benefits
Except where otherwise noted, assumptions used in calculating the present value of accumulated benefits in the table are found in Note 16 in the Notes to Consolidated Financial Statements in ConocoPhillips’ 2023 Annual Report on Form 10-K.
Pension Benefits
| Name | Plan Name | Number or Years of Accumulated Benefit | Present Value of Accumulated Benefit | Payments During Last Fiscal Year | | R.M. Lance(1) | Title I -ConocoPhillips Retirement Plan | 40 | $1,936,231 | $ - | | | ConocoPhillips Key Employee Supplemental Retirement Plan | 40 | 50,150,338 | - | | W.L. Bullock, Jr. | Title IV -ConocoPhillips Retirement Plan | 37 | 2,199,757 | - | | | ConocoPhillips Key Employee Supplemental Retirement Plan | 37 | 14,354,453 | - | | K.B. Rose(2) | Title II -ConocoPhillips Retirement Plan | 5 | 123,573 | - | | | ConocoPhillips Key Employee Supplemental Retirement Plan | 5 | 513,455 | - | | N. G. Olds | Title IV -ConocoPhillips Retirement Plan | 31 | 1,402,498 | - | | | ConocoPhillips Key Employee Supplemental Retirement Plan | 31 | 6,026,053 | - | | D.E. Macklon(3) | Title II -ConocoPhillips Retirement Plan | 32 | 191,438 | - | | | ConocoPhillips UK Pension Plan | 22 | 1,694,076 | - | | | UK Unfunded Pension Plan | 25 | 1,465,060 | - | | | ConocoPhillips Key Employee Supplemental Retirement Plan | 32 | 699,944 | - |
Pension Benefits
| (1) Mr. Lance was previously an employee of ARCO Alaska, which was acquired by Phillips Petroleum Company in 2000. Mr. Lance’s Title I benefit is calculated by including his 16 years of service with ARCO but then reducing the resulting benefit by amounts payable by the BP Retirement Accumulation Plan which remains liable for his benefits accumulated while working for ARCO Alaska. This benefit including ARCO service and the offset is payable because it exceeds the pension otherwise payable taking into account only ConocoPhillips service (and without the BP Retirement Accumulation Plan offset). | | (2) Ms. Rose became an employee of ConocoPhillips on September 4, 2018. Under Title II, and related provisions in the KESRP, Ms. Rose received pay credits equal to seven percent of her pension compensation in 2023 because her combined age and years of service was 62. | | (3) Mr. Macklon became an employee of ConocoPhillips on September 2, 1991. Under Title II, and related provisions in the KESRP, Mr. Macklon received pay credits equal to 9 percent of his pension compensation in 2023 because his combined age and years of service exceed 65. |
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation Our NEOs participate in two nonqualified deferred compensation plans, the Key Employee Deferred Compensation Plan of ConocoPhillips (“KEDCP”) and the Defined Contribution Make-Up Plan of ConocoPhillips (“DCMP”). The KEDCP permits participants to defer up to 50% of base salary, 100% of VCIP and 100% of cash settled PSP awards for performance periods ending in 2015 or later. Each of the NEOs is eligible to participate in, and is fully vested in, the KEDCP. Under the KEDCP, participants may elect for payment of deferred amounts to begin one(a) to five years after separation from service or on a specified date.(b) Payments may be received in a single lump sum payment or in annual, semiannual, or quarterly installment payments over a period of one to 15 years. The DCMP is a nonqualified restoration plan under which ConocoPhillips makes certain employer contributions that cannot be made in the qualified ConocoPhillips Savings Plan (“CPSP”), a defined contribution 401(k) plan, due to certain voluntary reductions of compensation under the KEDCP or due to compensation limitations imposed by the Internal Revenue Code. Employees make no contributions to the DCMP, and each of the NEOs is fully vested in the DCMP. Under the DCMP, participants may elect for payment of deferred amounts to begin one(a) to five years after separation from service. Payments may be received in a single lump sum payment or in annual, semiannual, or quarterly payments over a period of one to 15 years.
Nonqualified Deferred Compensation
| (a) Different distribution rules applied to amounts deferred and vested prior to 2005. For these amounts payment could begin as early as immediately following separation from service and certain changes to distribution elections are permitted. For amounts deferred under an election made prior to 2020, payments could begin as early as six months following separation from service. | | (b) A date certain payment election is not permitted for salary earned before 2015. |
Nonqualified Deferred Compensation
Each participant directs investments of the notional accounts representing deferrals under KEDCP and DCMP. Participants may make changes in the notional investments at any time. Because each participant chooses the notional investment fund for deferred amounts and may change allocations, the return on the investment will depend on how well each underlying fund performs during the period the participant chose it as an investment vehicle. The aggregate performance of such investment vehicle is reflected in the Nonqualified Deferred Compensation Table under the column Aggregate Earnings in Last Fiscal Year. Benefits due under each of the plans discussed above are paid from ConocoPhillips’ general assets, although we also maintain grantor trusts that may be used to pay benefits under the plans. The trusts and the funds held in them are assets of ConocoPhillips. In the event of bankruptcy or insolvency of the company, trust assets would be held for the benefit of the company’s general creditors, and participants would be unsecured general creditors.
Nonqualified Deferred Compensation
| | Applicable Plan (1) | Beginning Balance | Executive Contributions in Last FY (2) | Registrant Contributions in Last FY (3) | Aggregate Earnings in Last FY (4) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE (5) | | R.M. Lance | DCMP | $3,252,653 | $ - | $160,745 | $126,412 | $ - | $3,539,810 | | | KEDCP | 12,284,899 | - | - | 701,707 | - | 12,986,606 | | W.L. Bullock, Jr. | DCMP | 604,605 | - | 75,932 | 26,980 | - | 707,517 | | | KEDCP | 314,616 | - | - | 8,645 | - | 323,261 | | K.B. Rose | DCMP | 212,146 | - | 69,318 | 6,878 | - | 288,342 | | | KEDCP | - | - | - | - | - | - | | N. G. Olds | DCMP | 189,037 | - | 56,954 | 9,348 | - | 255,339 | | | KEDCP | 259,926 | - | - | 7,142 | - | 267,068 | | D. E. Macklon | DCMP | 254,038 | - | 64,026 | 29,872 | - | 347,936 | | | KEDCP | - | - | - | - | - | - |
Nonqualified Deferred Compensation
| (1) A variety of notional investments are available to participants in the KEDCP and DCMP. As of December 31, 2023, there were a total of 82 notional investment options, 17 of which mirrored those available in ConocoPhillips’ primary tax-qualified defined contribution plan for employees (the ConocoPhillips Savings Plan, a 401(k) plan) and 65 of which mirrored other mutual fund options approved by an administrator designated by the relevant plan. As market-based investments, none of these provide above market returns. | | (2) Reflects any deferrals by the NEO under the KEDCP in 2023. | | (3) Reflects contributions by ConocoPhillips under the DCMP relating to eligible compensation earned in 2023 (included in the All Other Compensation column of the Summary Compensation Table on page 98 for 2023). The following amounts were contributed in January 2024, relating to company contributions under the DCMP for 2023 service: for Mr. Lance, $43,775; for Mr. Bullock, $25,325; for Ms. Rose, $23,800; for Mr. Olds, $21,264; and for Mr. Macklon, $22,751. In addition, contributions by ConocoPhillips under the DCMP in earlier years (included in the All Other Compensation column of the Summary Compensation Table for those respective years) were as follows: in 2022 for Mr. Lance, $165,700; for Mr. Bullock, $77,827; for Ms. Rose, $73,317; for Mr. Olds, $54,680; for Mr. Macklon, $65,225; in 2021 for Mr. Lance, $133,125; for Mr. Bullock, $64,958; for Ms. Rose, $58,497; for Mr. Macklon, $55,569. | | (4) None of these earnings are included in the Summary Compensation Table for 2023. Aggregate earnings reflect the net impact of notional investment gains and losses and, consequently, may be a negative amount. | | (5) Reflects contributions by our NEOs, contributions by ConocoPhillips, and earnings on balances prior to 2023; plus, contributions by our NEOs, contributions by ConocoPhillips, and earnings for 2023; less any distributions (shown in the appropriate columns of this table, with amounts that are included in the Summary Compensation Table for 2023 shown in notes 2 and 3 above). This also includes contributions by ConocoPhillips made in January 2024, allocated to 2023. See note 3 above. |
Executive Severance and Changes in Control
| Executive Benefits and Payments Upon Termination | Involuntary Not-for-Cause Termination (Not CIC) | Involuntary Not-for-Cause or Good Reason Termination (CIC) | Death | Disability | | R.M. Lance* | | | | | | Base Salary | $3,502,000 | $5,253,000 | $- | $- | | Short-term Incentive | 5,778,300 | 12,696,621 | - | - | | Variable Cash Incentive Program | - | - | - | - | | January 2021 -December 2023 (performance period) | - | - | - | - | | January 2022 -December 2024 (performance period) | - | 4,260,104 | - | - | | January 2023 -December 2025 (performance period) | - | 6,871,367 | - | - | | Other Restricted Stock/Units | - | - | - | - | | Incremental Retirement | - | - | - | - | | Post-employment Health & Welfare | 111,448 | 167,171 | - | - | | Life Insurance | - | - | 3,502,100 | - | | | $9,391,748 | $29,248,263 | $3,502,100 | $- |
Executive Severance and Changes in Control
| Executive Benefits and Payments Upon Termination | Involuntary Not-for-Cause Termination (Not CIC) | Involuntary Not-for-Cause or Good Reason Termination (CIC) | Death | Disability | | W.L. Bullock, Jr.* | | | | | | Base Salary | $2,026,032 | $3,039,048 | $- | $- | | Short-term Incentive | 2,329,936 | 4,374,274 | - | - | | Variable Cash Incentive Program | - | - | - | - | | January 2021 -December 2023 (performance period) | - | - | - | - | | January 2022 -December 2024 (performance period) | - | 1,411,289 | - | - | | January 2023 -December 2025 (performance period) | - | 2,041,344 | - | - | | Other Restricted Stock/Units | - | - | - | - | | Incremental Retirement | 74,338 | - | - | - | | Post-employment Health & Welfare | 54,585 | 81,878 | - | - | | Life Insurance | - | - | 2,026,100 | - | | | $4,484,891 | $10,947,833 | $2,026,100 | $- |
Executive Severance and Changes in Control
| Executive Benefits and Payments Upon Termination | Involuntary Not-for-Cause Termination (Not CIC) | Involuntary Not-for-Cause or Good Reason Termination (CIC) | Death | Disability | | K.B. Rose* | | | | | | Base Salary | $1,903,968 | $2,855,952 | $- | $- | | Short-term Incentive | 1,808,770 | 3,741,990 | - | - | | Variable Cash Incentive Program | - | - | - | - | | January 2021 -December 2023 (performance period) | - | - | - | - | | January 2022 -December 2024 (performance period) | - | 1,005,674 | - | - | | January 2023 -December 2025 (performance period) | - | 1,550,653 | - | - | | Other Restricted Stock/Units | - | - | - | - | | Incremental Retirement | 269,433 | 408,676 | - | - | | Post-employment Health & Welfare | 91,188 | 136,783 | - | - | | Life Insurance | - | - | 1,904,000 | - | | | $4,073,359 | $9,699,728 | $1,904,000 | $- |
Executive Severance and Changes in Control
| Executive Benefits and Payments Upon Termination | Involuntary Not-for-Cause Termination (Not CIC) | Involuntary Not-for-Cause or Good Reason Termination (CIC) | Death | Disability | | N.G. Olds* | | | | | | Base Salary | $1,701,120 | $2,551,680 | $- | $- | | Short-term Incentive | 1,616,064 | 2,764,255 | - | - | | Variable Cash Incentive Program | 808,032 | 808,032 | 808,032 | 808,032 | | January 2021 -December 2023 (performance period) | 7,550,121 | 7,550,121 | 7,550,121 | 7,550,121 | | January 2022 -December 2024 (performance period) | 1,695,349 | 2,543,024 | 1,695,349 | 1,695,349 | | January 2023 -December 2025 (performance period) | 660,822 | 1,982,467 | 660,822 | 660,822 | | Other Restricted Stock/Units | 3,883,321 | 3,964,201 | 3,964,201 | 3,964,201 | | Incremental Retirement | 1,542,358 | 1,644,558 | - | - | | Post-employment Health & Welfare | 71,001 | 106,502 | - | - | | Life Insurance | - | - | 1,701,200 | - | | | $19,528,188 | $23,914,840 | $16,379,725 | $14,678,525 |
Executive Severance and Changes in Control
| Executive Benefits and Payments Upon Termination | Involuntary Not-for-Cause Termination (Not CIC) | Involuntary Not-for-Cause or Good Reason Termination (CIC) | Death | Disability | | D.E. Macklon* | | | | | | Base Salary | $1,820,112 | $2,730,168 | $- | $- | | Short-term Incentive | 1,729,106 | 3,561,362 | - | - | | Variable Cash Incentive Program | 864,553 | 864,553 | 864,553 | 864,553 | | January 2021 -December 2023 (performance period) | 8,728,580 | 8,728,580 | 8,728,580 | 8,728,580 | | January 2022 -December 2024 (performance period) | 1,834,004 | 2,751,006 | 1,834,004 | 1,834,004 | | January 2023 -December 2025 (performance period) | 654,893 | 1,964,679 | 654,893 | 654,893 | | Other Restricted Stock/Units | 5,087,725 | 5,175,887 | 5,175,887 | 5,175,887 | | Incremental Retirement | 286,240 | 416,470 | - | - | | Post-employment Health & Welfare | 55,303 | 82,955 | - | - | | Life Insurance | - | - | 1,820,200 | - | | | $21,060,516 | $26,275,660 | $19,078,117 | $17,257,917 |
Executive Severance and Changes in Control
| | SCT Total(1) for CEO(2) | Compensation Actually Paid(3) to CEO(2) | Average SCT Total(1) for Non- CEO NEOs(4) | Average Compensation Actually Paid(3) to Non-CEO NEOs(4) | Value of initial fixed $100 investment based on: | | Net Income / (Loss) (Millions of dollars) | CSM: 1-Year Relative ROCE(7) | | Year | | | | | Company TSR(5) | Peer Group TSR(6) | | | | 2023 | $20,770,673 | $35,636,692 | $6,971,974 | $9,288,633 | $208.09 | $167.19 | 10,957 | 58th | | 2022 | 19,972,339 | 74,688,355 | 6,133,798 | 14,617,414 | 203.11 | 181.75 | 18,680 | 64th | | 2021 | 23,886,640 | 59,903,247 | 7,379,438 | 12,790,641 | 119.06 | 105.85 | 8,079 | 62nd | | 2020 | 28,054,551 | 31,889 | 7,352,737 | 1,715,641 | 64.02 | 67.14 | (2,701) | 70th |
Executive Severance and Changes in Control
| (3) Compensation Actually Paid (CAP) for the CEO and average CAP for the non-CEO NEOs is determined by making the following adjustments to total compensation shown in the SCT. |
Linking Pay and Performance
| COMPENSATION ACTUALLY PAID VS. COMPANY AND PEER TSR | | |
Linking Pay and Performance
| COMPENSATION ACTUALLY PAID VS. NET INCOME | | |
Linking Pay and Performance
| COMPENSATION ACTUALLY PAID VS. 1-YEAR RELATIVE ADJUSTED ROCE | | |

DEF 14A of Conocophillips

Director Nominees

Executive Compensation

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COMPENSATION, BENEFITS, AND HEALTH AND WELL-BEING

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