CONOCOPHILLIPS
For the period ended May 13, 2025. Filed Mar 31, 2025.
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What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
May 13, 2025 · Filed Mar 31, 2025
Contents
2024 Compensation Program Structure
Each year the HRCC, advised by its independent compensation consultant and informed by feedback from stockholders, undertakes a rigorous process to establish and review executive compensation. The HRCC believes a substantial portion of our executive compensation should be equity-based and focused on rewarding long-term performance and furthermore, that this approach most closely aligns the interests of our top executives with those of our stockholders.
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 company like ConocoPhillips. The following chart summarizes the principal components of our executive compensation program and the performance drivers of each element.
| 2024 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 milestones that are critical to our strategic priorities Range: 0% – 200% of target | ● Health, Safety, and Environmental (20%) ● Operational (30%) ● Financial — Absolute and Relative Adjusted ROCE (30%) ● Strategic Milestones (10%) ● Energy Transition Milestones (10%)(1) One-year performance period | ||
| Long-Term Incentive Program (“LTIP”) | ||||
| Variable long-term equity-based compensation to motivate and reward executives for achieving multi-year strategic priorities Granted at the beginning of a 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—Absolute and Relative Adjusted ROCE (40%)(2) ● Stock value Three-year performance period | |||
| 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 stock value on the settlement date Range: 0% – 100% of target | ● Stock value Three-year cliff vesting | |||
| (1) | Beginning with the VCIP commencing in 2025, the Energy Transition Milestones metric is consolidated into the Strategic Milestones metric with a total weighting of 20% (see page 67). |
| (2) | The financial metric for PSP 22 and PSP 23 is Relative Adjusted ROCE only. |
64ConocoPhillips
2024 SHORT-TERM INCENTIVE (VCIP) PAYOUT
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 topages 83-89.
| Metric & Weighting · Highlights · Payout · Weighted Payout | |||||
|---|---|---|---|---|---|
| HSE 20% weighting | ● Remained an industry leader among our peers ● Experienced an increase in serious incidents, including one fatality ● Top quartile Total Recordable Rate (“TRR”) performance among our peers ● Fewer process safety events compared to prior year | 80% | 16% | ||
| Operational 30% weighting | ● Exceeded production target; however, capital expenditures and operating and overhead costs came in slightly above target ● Achieved almost all operational milestones | 100% | 30% | ||
| Financial (Absolute and Relative Adjusted ROCE)* 30% weighting | ● Significantly exceeded target absolute Adjusted ROCE by achieving 14.9%; 198% payout per matrix (99% weighted) ● Finished 5th (48th percentile) relative to performance peers; 94% payout per matrix (47% weighted) | 146% | 44% | ||
| Strategic Milestones 10% weighting | ● Announced and completed the acquisition of Marathon Oil ● Advanced our LNG strategy with agreements in Europe and Asia ● Implemented plans to mitigate priority sustainability risks ● Successfully piloted framework and launched learning path to all supervisors and employees | 150% | 15% | ||
| Energy Transition Milestones 10% weighting | ● Achieved our target emissions intensity reduction and abatement exit rate ● Emissions reduction projects outperformed our target and came in under budget ● Advanced several low carbon opportunities through key stage gates | 150% | 15% | ||
| 2024 VCIP PAYOUT | 120% of target | ||||
| * | See page 80 for how Adjusted ROCE is calculated. See Appendix A for non-GAAP reconciliations. |
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2025 Proxy Statement65
PSP 22 LONG-TERM INCENTIVE PAYOUT
| Metric & Weighting · Highlights · Payout · Weighted Payout | ||||
|---|---|---|---|---|
| TSR (relative)* 60% weighting | ● Finished 5th (51st percentile) relative to performance peers with three-year TSR of approximately 15.8% ● Payout formulaic following matrix (see page 80) | 102% | 61% | |
| Financial (Relative Adjusted ROCE) 40% weighting | ● Finished 4th (61st percentile) relative to performance peers ● Payout formulaic following matrix (see page 80) | 132% | 53% | |
| PSP 22 PAYOUT | 114% of target | |||
| * | See methodology for calculating TSR on page 81. |
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For additional details, refer topages 89–90.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.