Ovintiv Inc.
For the period ended May 1, 2025. Filed Mar 20, 2025.
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May 1, 2025 · Filed Mar 20, 2025
Contents
2024 Compensation Program
Base Salary
Base salaries for the NEOs are determined using market data from our Peer Group (as defined on page 49 of this Proxy Statement) and are reviewed every year at the HRC Committee’s February meeting. Base salary levels are set taking into account the market median, with adjustments to account for factors such as an individual’s time in role, experience level and expertise. In 2024, each NEO received a modest base salary increase intended to keep their base salary positioned in the median market range.
The table below shows the 2024 year-end base salary for each NEO.
| NEO | Position | Base Salary(1) |
|---|---|---|
| Brendan McCracken | President & Chief Executive Officer | $1,140,000 |
| Corey Code | Executive Vice-President & Chief Financial Officer | $ 578,684 |
| Greg Givens | Executive Vice-President & Chief Operating Officer | $ 690,000 |
| Meghan Eilers | Executive Vice-President, Midstream, Marketing and General Counsel | $ 500,000 |
| Rachel Moore | Executive Vice-President, Corporate Services | $ 454,550 |
Note:
| (1) | Amounts paid in Canadian dollars have been converted to U.S. dollars using an exchange rate of C$1.00 = US$0.730 (average exchange rate for 2024). |
Annual Bonus
All employees participate in our annual bonus plan, which provides an opportunity to earn a cash award based on performance against a combination of Company metrics and individual objectives for the year. The annual bonus is designed to motivate employees to pursue our key business performance objectives. In setting the targets and ranges for each metric, we employ stress tests to ensure that there is appropriate alignment between performance and payouts.
The portion of the annual bonus tied to Company performance versus individual performance varies by job level. For NEOs, a Company score is calculated following the end of the year based on Ovintiv’s performance against the metrics set out in the Company Scorecard (the “Company Score”). The Company Score provides the baseline payout percentage for annual bonuses and includes an automatic 10 points downward adjustment should the Company experience a serious safety event during the year. Additionally, the Board retains discretion to adjust final payouts either up or down (within a range of-25% to +25%), to reflect unforeseen circumstances that occurred in the year.
Employee Deferred Share Unit Plan
Under the Employee Deferred Share Unit Plan (“Employee DSU Plan”), executives can convert either 25% or 50% of their annual bonus award into DSUs. To defer part of an annual bonus award into DSUs, an executive must make an election prior to December 31 of the preceding calendar year. Once an election is made, the number of DSUs credited to an executive is calculated as follows:
DSUs are settled in cash and are payable only after an executive separates from service of Ovintiv. No NEOs participated in the Employee DSU Plan in 2024.
| Ovintiv Inc. | 2025 Proxy Statement | 45 |
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Company Scorecard Metrics and Performance
The following metrics were selected in 2024 for our Company Scorecard. These metrics align with the key components of our strategic plan and our key environmental and safety initiatives and serve as the building blocks of strong financial returns for shareholders.
| Scorecard Metric(1) | Key Goals |
|---|---|
| Free Cash Flow(2) | • Achieve Free Cash Flow of $1.625 Billion |
| Capital Efficiency(3) | • Achieve Capital Efficiency of $20,300/BOE/d |
| Environment & Safety | • Achieve TRIF of 0.18(4) Achieve Recordable Injury Severity of 0.15(5) • Achieve GHG Intensity of 12.80(6) • Achieve Spill Intensity of 0.023(7) |
| Total Costs(8) | • Achieve Total Costs of $13.67/BOE |
| Total Production | • Achieve annual production of 573 MBOE/d |
Notes:
| (1) | Company Scorecard performance metrics and targets are updated annually to reflect changes in priorities given the macro environment. |
| (2) | Free Cash Flow† is a non-GAAP measure as defined in Schedule A of this Proxy Statement. |
| (3) | Capital Efficiency is defined as capital invested per barrel of oil equivalent per day (“BOE/d”) for wedge and carry-in production in calendar year. |
| (4) | TRIF equals Recordable Injuries X 200,000 divided by Total Exposure Hours. |
| (5) | Recordable Injury Severity is calculated as a simple average of the severity of all recordable injures experienced in the year; severity is determined using the US Workers Compensation Injury Classification System. |
| (6) | GHG Intensity equals Scope 1 & 2 MT CO2e/Mboe. |
| (7) | Spill Intensity equals Produced Liquids Spilled (bbls) divided by Total Produced Liquids (mbbls). |
| (8) | Total Costs† is a non-GAAP measure as defined in Schedule A of this Proxy Statement. |
Our HRC Committee rigorously tested multiple scenarios to determine the appropriate threshold, target and maximum performance goal for each metric. Considerations included benchmark and geographical pricing sensitivities, operational efficiency, results of scenario analysis, funding and corporate financial statement implications and comparison to peer companies and industry trends.
The threshold, target and maximum ranges shown below reflect the Company Scorecard as approved by the Board for 2024.
Notes:
| (1) | Scorecard targets based on 2024 Budget and adjusted for acquisitions and divestitures. |
| (2) | For additional information regarding non-GAAP measures, refer to Schedule A of this Proxy Statement. |
| (3) | Recordable Injury Severity = primary injury severity + (50% * supplemental injury severitie(s)). |
| (4) | 10-point deduction override in the event of a fatality, regardless of performance against safety target. |
| 46 | 2025 Proxy Statement | Ovintiv Inc. |
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SAFETY: A FOUNDATIONAL VALUE Safety is one of our foundational values, and a strong safety culture is foundational to our everyday work. Our focus through 2024 was to continue to enhance our safety culture and processes with several key initiatives centered on serious injury prevention. Our unwavering commitment is to ensure every person working on our sites goes home to their family safe at the end of the day.
Board Discretion
The final bonus paid to NEOs is the product of the NEO’s target bonus and the Company Score subject to the Board’s discretion to adjust that result within a range of-25% to +25% if there are material unforeseen events or major dislocations in the industry during the year. In addition, the Board can adjust individual NEO scores within a range of-20% to +20% to reflect individual performance. Regardless of any Board discretionary adjustments, the maximum payout is capped at 200%.
Use of Board Discretion
The Board made no discretionary adjustments to NEO 2024 bonuses.
2024 Annual Bonus Results
Following application of the above Company Score, the annual bonus payments to our CEO and other NEOs for 2024 are shown below.
| Bonus Target(% of Base Salary)(1) · TargetBonus(2)(3)($) · Total ActualBonus(2)($) | ||||
|---|---|---|---|---|
| Target · Maximum | ||||
| Brendan McCracken | 125% | 250% | $1,412,500 | $2,005,750 |
| Corey Code | 100% | 200% | $572,294 | $812,658 |
| Greg Givens | 100% | 200% | $683,750 | $970,925 |
| Meghan Eilers | 70% | 140% | $346,500 | $492,030 |
| Rachel Moore | 70% | 140% | $314,351 | $446,379 |
Notes:
| (1) | Annual bonus targets as a percentage of salary were unchanged in 2024 for all NEOs. |
| (2) | Canadian dollar amounts have been converted to U.S. dollars using an exchange rate of C$1.00 = US$0.730 (average exchange rate for 2024). |
| (3) | Target bonus is based on 2024 blended salary amounts with salary adjustments occurring on April 1, 2024. |
Long-Term Incentive Awards
LTI awards make up the largest portion of target compensation for our executives. These awards, which are primarily performance-based, are designed to incentivize delivery of our strategy and long-term value creation and payout of these awards correlates with Ovintiv’s stock price performance. LTI awards are granted annually, following approval by the HRC Committee. In setting the target value of LTI awards, the HRC Committee reviews individual performance, retention risk, internal equity and overall market competitiveness.
As described on page 48 of this Proxy Statement, the Company’s 2024 compensation program employed two LTI vehicles: RSUs and PSUs. In 2024, 50% of LTI awards granted to the Company’s NEOs were in the form of RSUs and 50% were in the form of PSUs. Compensation from RSUs is based solely on the Company’s stock price over the performance period. PSUs are performance-based, and compensation is only earned if the Company’s stock price performance is above the 25 th percentile relative to the PSU Performance Peer Group and if strategic milestones are met.
| Ovintiv Inc. | 2025 Proxy Statement | 47 |
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LTI Awards Granted in 2024
Details of LTI awards granted to the NEOs in 2024 are shown below. The realized value of the 2024 LTI awards will be determined at the time of vesting based on the NEO’s continued service over the vesting period and company and stock price performance.
| RSUs · PSUs | ||||
|---|---|---|---|---|
| # of Units | Target Value(1) ($) | Target # of Units | Target Value(1)(2) ($) | |
| Brendan McCracken | 95,046 | $4,700,025 | 95,046 | $4,700,025 |
| Corey Code | 29,798 | $1,460,430 | 29,798 | $1,460,430 |
| Greg Givens | 35,390 | $1,750,036 | 35,390 | $1,750,036 |
| Meghan Eilers | 20,223 | $1,000,027 | 20,223 | $1,000,027 |
| Rachel Moore | 14,899 | $ 730,215 | 14,899 | $ 730,215 |
Notes:
| (1) | Amounts awarded in Canadian dollars have been converted to U.S. dollars using an exchange rate of C$1.00 = US$0.730 (average exchange rate for 2024). Target value is the value approved by the HRC Committee, which is then converted to a number of units based on preceding the 5-day volume weighted average price of shares of Ovintiv common stock as reported on the NYSE/TSX on the date of grant. |
| (2) | Actual payouts will range from 0 to 200% of the units granted plus reinvested dividends based on Relative TSR (50%) and Return on Invested Capital (50%) performance over the three-year performance period ending December 31, 2026. |
2024 PSUs
The performance metrics for 2024 PSU awards are Relative TSR and ROIC, creating strong alignment between executive compensation and the shareholder experience. The performance metrics for 2024 PSU awards, together with the weighting and rationale for each metric, are set out below.
| 2024 PSU Metric | Weighting | Measurement | Rationale for Metric |
|---|---|---|---|
| Relative TSR | 50% | Three-year TSR relative to our Peer Group | Aligned with the interest and experience of our shareholders |
| Return on Invested Capital | 50% | Three-year return on the 2024 capital program from wedge production and cash flow | Aligned with capital discipline and performance and removes impact of prices |
2022 PSU Settlement
Vesting and payout of 2022 PSU awards was assessed by the HRC Committee at its February 2025 meeting. The following table summarizes the payout ranges, the results achieved, and the final payouts for the 2022 PSU awards based on Relative TSR, ROIC and Return on Inventory Renewal Capital performance over the three-year period beginning January 1, 2022, and ending December 31, 2024. The Return on Inventory Renewal Capital goal consisted of an inventory addition target (which was exceeded) and a full cycle rate of return metric represented below.
| 48 | 2025 Proxy Statement | Ovintiv Inc. |
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2024 Peer Group
We use one peer group for purposes of benchmarking executive compensation and assessing PSU performance (our “Peer Group”). In order to remain competitive and retain top talent, we define our compensation market as a group of North American industry peers of a similar size, industry focus and geography as Ovintiv, and select our
Peer Group accordingly. The HRC Committee is careful to include relevant E&P-focused companies, as their performance is similarly linked to changes in commodity prices during similar measurement periods. All members of our Peer Group meet the following criteria:
| Peer Group: Evaluation Criteria | ||
|---|---|---|
| Financial and operational comparability | • total assets • production • product mix | • enterprise value • market capitalization • revenues |
| Nature and scope of operations | • primarily North American operations • operate in similar North American plays | • upstream E&P |
| Identified as competitive peer | • competitor for executive talent • competitor for investment capital | • identified internally or externally as a peer to Ovintiv |
| 2024 Peer Group | ||
|---|---|---|
| Antero Resources Corporation | Diamondback Energy, Inc. | Occidental Petroleum Corporation |
| APA Corporation | EOG Resources Inc. | Permian Resources Group |
| Canadian Natural Resources Ltd. | Enerplus Corporation(2) | Pioneer Natural Resources Company(4) |
| Chesapeake Energy Corporation(1) | Hess Corporation | Range Resources Corporation |
| Civitas Resources Inc. | Marathon Oil Corporation(3) | S&P 400 Index |
| Coterra Energy Inc. | Murphy Oil Corporation | XOP |
| Devon Energy Corporation | ||
Note:
| (1) | In October 2024, Chesapeake Energy Corporation acquired Southwestern Energy and was rebranded as Expand Energy Corporation. |
| (2) | In May 2024, Enerplus Corporation was acquired by Chord Energy Company. |
| (3) | In November 2024, Marathon Oil Corporation was acquired by ConocoPhillips. |
| (4) | In May 2024, Pioneer Natural Resources Company was acquired by ExxonMobil Corporation. |
The HRC Committee assesses market competitiveness of compensation for the CEO and other members of the ELT each year using data from the Peer Group. To remain competitive, we set annual target compensation for our executives around the median (or 50 th percentile) of executives with comparable roles within our Peer Group. Target compensation may be set above or below the median based on various factors, including time in role, sustained performance over time, readiness for promotion, skill set and experience relative to external market counterparts.
| Ovintiv Inc. | 2025 Proxy Statement | 49 |
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The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.