EXECUTIVE COMPENSATION (contd)
process, and (iii) the value of (a) the restricted stock awards based on the closing price of Devons common stock as of 2019 year end without respect to interim vesting and
(b) the performance share units based on a payout percentage for Devons position within the peer group for the relevant performance period up to December 31, 2019. Following year end, the performance share units granted in 2016 paid
out at 0% of target, the Performance Share Units granted in 2017 paid out at 60% of target, and the performance share units granted in 2018 and 2019, respectively, were trending to pay out at 80% and 150% of target, respectively.
% TSR Change covers, (i) for the first column, the period from December 31, 2015 to December 31, 2019, (ii) for the second
column, the period from December 31, 2016 to December 31, 2019, (iii) for the third column, the period from December 31, 2017 to December 31, 2019 and (iv) for the fourth column, the period from December 31, 2018
to December 31, 2019.
% Difference between Realizable and Target Pay reflects the difference, expressed as a percentage of Target,
between Target and Realizable pay as of December 31, 2019 for each respective column.
% Difference between W-2 and Target Pay reflects the difference, expressed as a percentage of Target, between Target and W-2 pay as of December 31, 2019 for each respective column.
The chart above shows CEO realizable pay at 18.3% below target based upon Devons December 31, 2019 closing stock price of $25.97. As of
March
31, 2020, Devons closing stock price was $6.91, which would result in CEO realizable pay at 58.7% below target.
Compensation Process Background
The Committee is responsible for and directs the process of reviewing and determining compensation
for the named executive officers. The Committee retains an external compensation consultant to provide assistance with the process. The role of the Committee and the compensation consultant, which includes the development of a peer group the
Committee uses for benchmarking and comparing the executive officers compensation, is further described in the following sections.
Role of the Committee
The Committee establishes the Companys executive compensation philosophy and administers the overall executive compensation program. The Committee
operates under a written charter approved by the Board of Directors, a copy of which is available at the Companys website, www.devonenergy.com.
Every year, the Committee conducts an individual, in-depth, confidential interview with each executive officer
to discuss the officers analysis of the Companys overall performance for the year, performance within the officers area of responsibility, and any issues or concerns the officer may have regarding the Companys operations and
results. The Committee believes this is a highly effective tool in the Committees oversight of the executive compensation process. In addition, the President and CEO discusses with the Committee his evaluation of each executive officers
performance, development, and potential to take on greater or different responsibilities. The President and CEO also provides compensation recommendations to the Committee for all executive officers (other than himself).
The Committee considers the various factors described in this CD&A, including its interviews with executive officers and the President and
CEOs evaluations of each executive officers performance