EOG RESOURCES INC
For the period ended May 22, 2024. Filed Mar 28, 2024.
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May 22, 2024 · Filed Mar 28, 2024
Contents
Compensation Process
During each year, the Compensation Committee periodically reviews our executive compensation program and determines whether each component continues to promote our compensation objectives.
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The Compensation Committee’s Decision-Making Process
The Compensation Committee oversees a rigorous process to set performance goals, evaluate progress toward such goals, monitor external trends, measure competitiveness and determine compensation outcomes. The Compensation Committee meets at least once per calendar quarter, with standing agenda items that support a disciplined process and address the responsibilities outlined in the Compensation Committee’s charter.
| Quarter | Agenda Items |
|---|
| First Quarter | • Discuss final company, CEO and NEO performance reviews for prior year • Determine annual bonus payouts for prior year based on audited financial results against pre-established goals • Establish NEO base salaries for new year • Approve the company’s financial, strategic, operational and organizational goals for new year (which also serve as the CEO’s individual performance goals) • Evaluate and approve benchmarking peer group |
|---|---|
| Second Quarter | • Participate in annual stockholder meeting and review voting results • Review of governance trends and industry compensation updates • Assess progress toward goals |
| Third Quarter | • Review of industry and broad market compensation data and external compensation trends • Determine and award annual long-term incentive awards • Assess progress toward goals |
| Fourth Quarter | • Early view of full-year company performance • Review stock ownership guidelines applicable to non-employee directors and officers and assess compliance with guidelines • Review of human capital management metrics and trends |
Role of Chief Executive Officer and Other Officers
The Compensation Committee considers input from our CEO in making determinations regarding our executive compensation program and the individual compensation of each executive officer, other than our CEO. Our CEO meets with each executive officer at the beginning of the year to identify and discuss individual performance goals related to the executive officer’s expected contribution to the achievement of our performance goals for the upcoming year. Further, in approving our performance goals for the upcoming year, the Compensation Committee affirms that such performance goals shall also be our CEO’s individual performance goals for the upcoming year.
Our CEO provides performance feedback to each executive officer throughout the year. Our CEO and his officer team also provide information to the Compensation Committee regarding the performance of the company for the Compensation Committee’s determination of annual bonuses. The Compensation Committee makes the final determination of NEO compensation. Our CEO makes no recommendations regarding, and does not participate in discussions about, his own compensation.
Role of Independent Consultants
For 2023, the Compensation Committee continued its engagement of Meridian Compensation Partners LLC (“Meridian”) as its independent compensation consultant. Meridian reports solely to the Compensation Committee, and the Compensation Committee determines Meridian’s compensation and the scope of Meridian’s engagement, which includes:
| • | Attending and participating in meetings of the Compensation Committee |
| • | Providing input into compensation program design discussions and individual compensation actions, as needed |
| • | Providing benchmarking (e.g., peer company and general industry) data on executive compensation for the Compensation Committee to use in its decision-making process |
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| • | Reviewing and providing feedback on our SEC filings relating to executive compensation, including our Compensation Discussion and Analysis disclosures |
| • | Keeping the Compensation Committee apprised of trends and other developments affecting executive compensation |
Meridian meets periodically with members of our management in carrying out these duties. The Compensation Committee has evaluated the independence of Meridian based on the SEC’s factors affecting independence and has concluded that Meridian is independent and that there are no conflicts of interest associated with Meridian’s engagement.
Compensation Assessment Tools
In order to attract, motivate and retain talented executive officers, we must ensure that our executive compensation program remains competitive with the types and ranges of compensation paid by our peer companies who compete for the same executive talent. On an annual basis, the Compensation Committee reviews and discusses compensation data for our CEO and our other NEOs as compared to compensation data for similarly situated executive officers at peer companies selected by the Compensation Committee.
The Compensation Committee selects peer companies with similar market capitalizations and similar lines of business to EOG (i.e., independent exploration and production companies). The peer group changes from time to time as a result of fluctuations in company size, changes in the business lines of our peers, acquisitions, developments in the oil and gas industry and other factors.
In February and May 2023, the Compensation Committee reviewed the peer group with the assistance of Meridian. No changes were made to the core benchmarking peer group for 2023. The Compensation Committee considered the following peer group of eight companies in making 2023 compensation decisions:
| 2023 Peer Group | ||
| APA Corporation | ConocoPhillips | Devon Energy Corporation |
|---|---|---|
| Diamondback Energy, Inc. | Hess Corporation | Marathon Oil Corporation |
| Occidental Petroleum Corporation | Pioneer Natural Resources Company |
| Enterprise Value (MM)(a) | Market Cap (MM)(a) | Total Assets (MM)(a) | |
|---|---|---|---|
| EOG Resources, Inc. | $74,578 | $75,193 | $41,487 |
| Relative Percentile Rank Position | 75% | 88% | 75% |
| (a) | Enterprise Value and Market Cap are as of August 15, 2023 and Total Assets is based on most recent annual or quarterly public disclosure as of August 15, 2023. |
|---|
As indicated above, as of August 2023, EOG was at or above the 75th percentile of this peer group in terms of enterprise value, market capitalization and total assets.
In September 2023, Meridian provided the Compensation Committee with a Top Officer Benchmarking Study based on Meridian’s 2023 North America Oil and Gas Exploration & Production Compensation Survey. The report provided information on the amounts, opportunities and forms of compensation used across our peer group. As a secondary reference, the Compensation Committee also reviewed data from a broader group of oil and gas companies of varying sizes in addition to general industry compensation survey data.
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