UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities
Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant |
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Filed by a Party other than the Registrant |
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Check
the appropriate box: |
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Preliminary Proxy Statement |
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CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material under §240.14a-12 |
HALLIBURTON COMPANY
(Name of Registrant as Specified in its
Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
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to Exchange Act Rule 0-11 |
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(set forth the amount on which the filing fee is calculated and state
how it was determined): |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the date of its filing. |
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(4) Date Filed: |
Wednesday, May 16, 2018
9:00 a.m. Central Daylight
Time
3000 N. Sam Houston Parkway East
Life Center - Auditorium
Houston, Texas 77032
To Our Valued Stockholders:
April 3, 2018
“We
are optimistic and enthusiastic about 2018”
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David J. Lesar |
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Jeffrey A. Miller |
Executive Chairman
of the Board |
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President and Chief
Executive Officer |
On behalf of our Board of Directors, we
thank you for your investment and continued confidence in our Company. Last year was one of transition for Halliburton. We started
down the path of a successful recovery from one of the steepest industry downturns. And on June 1, 2017, following our vigorous
management succession plan, our Board unanimously selected Jeff Miller to succeed Dave Lesar as chief executive officer.
Mr. Lesar, having led the Company for nearly 17 years, continues to serve Halliburton and our valued stockholders, customers,
and employees as executive chairman of the Board.
We are pleased with Halliburton’s
accomplishments in 2017 and the progress we made in executing our strategy to deliver industry-leading returns by doing what we
do best – collaborating and engineering solutions to maximize asset value for our customers. Thanks to the exceptional performance
and commitment of Halliburton’s over 50,000 employees, we were the first major energy services company to return to profitability
in North America and we continued to outperform our peers with industry-leading returns and generated strong cash flow. As the
international market worked its way through its own downturn, Halliburton gained market share in key regions by focusing on the
most active markets while maintaining a presence in other areas that will serve us well going forward.
We are optimistic and enthusiastic about
2018. As the macro environment for oil continues to improve, our North America customers are back to work driving what we believe
will be strong growth in our unconventionals activity. We also expect the start of an international recovery in mature fields,
although deepwater will remain a challenge. Our collaborative approach and differentiating technologies enable us to deliver the
most efficient wells for our customers no matter the geography. These, along with our comprehensive service offerings and diligent
cost control efforts which enhance both our value proposition and business opportunities, position us well for the continuing
recovery in North America and the future recovery of the international market.
As we continue to serve our customers in
this evolving environment, we know we have the right leadership, employees, and strategy to guide our Company forward. Halliburton
is the execution company. We will continue to deliver superior performance for our stockholders, customers, and employees.
We are pleased to invite you to attend the
Annual Meeting of Stockholders of Halliburton Company. The meeting will be held on Wednesday, May 16, 2018, at 9 a.m. Central
Daylight Time at our corporate office at 3000 N. Sam Houston Parkway East, Life Center-Auditorium, Houston, Texas 77032.
Please refer to the proxy statement for
detailed information on the proposals presented this year.
The representation of your shares and your
vote at the meeting are very important. We encourage you to review the proxy materials and submit your vote today. If you attend
the meeting, you may vote in person even if you have previously voted.
We appreciate the important role that our
stockholders play in our success and are grateful for your continued trust and support. We look forward to greeting you at our
Annual Meeting.
Sincerely,
David J. Lesar
Executive Chairman of the Board
Jeffrey A. Miller
President and Chief Executive Officer
www.halliburton.com |
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HALLIBURTON | 2018 Proxy Statement ii |
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Proxy Statement Summary
This summary highlights information contained
elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should
read the entire proxy statement carefully before voting. Page references are supplied to help you find further information in
this proxy statement.
Eligibility to Vote (page
1)
You can vote if you were a stockholder of record at the close
of business on March 19, 2018.
How to Cast Your Vote (page
1)
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You can vote by any of the following methods: |
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INTERNET
www.proxyvote.com
until 11:59 p.m.
Eastern Daylight Time
on May 15, 2018 |
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BY TELEPHONE
until 11:59 p.m.
Eastern Daylight Time
on May 15, 2018 |
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BY MAIL
Completing, signing, and returning
your proxy or voting instruction card
before May 16, 2018 |
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IN PERSON
at the annual meeting: If you are a stockholder of record, we have a record of your ownership. If your shares
are held in the name of a broker, nominee, or other intermediary, you must bring proof of ownership with you to the meeting.
Attendees will be asked to present valid picture identification, such as a driver’s license or passport. |
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Selection of Principal Independent Public Accountants (page
20)
During the year ended December 31, 2017, KPMG LLP served as our
principal independent public accountants and provided certain tax and other services to us. Representatives of KPMG are expected
to be present at the Annual Meeting and be available to respond to appropriate questions from stockholders.
As a matter of good corporate governance, we are requesting our
stockholders to ratify the selection of KPMG LLP as our principal independent public accountants for the year ending December
31, 2018.
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HALLIBURTON | 2018
Proxy Statement iii |
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Voting Matters (pages
9, 20, 23)
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Board Vote Recommendation | |
Page Reference (for more detail) | |
Election of Directors | |
FOR Each
Nominee | |
| 9 | |
Ratification of Selection of Principal Independent Public Accountants | |
FOR | |
| 20 | |
Advisory Approval of Executive Compensation | |
FOR | |
| 23 | |
Governance of the Company (page
2)
Corporate Governance
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Corporate Governance Guidelines and Committee Charters |
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Code of Business Conduct |
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Related Persons Transactions Policy |
The Board of Directors and Standing Committees of Directors
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Board Leadership |
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Board Risk Oversight |
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Independent Committees |
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Members of the Committees of Our Board of Directors |
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Board Attendance |
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Evaluation of Board and Director Performance |
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Stockholder Nominations of Directors |
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Qualifications of Directors |
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Process for the Selection of New Directors |
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Communication to the Board |
We create success for Halliburton and for our stockholders
and customers by adhering to the values that define us.
www.halliburton.com |
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HALLIBURTON | 2018
Proxy Statement iv |
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Board Nominees (pages
9-13)
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HALLIBURTON | 2018
Proxy Statement v |
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2017 Overview (page
28)
(For more detail please see Form 10-K.)
Our business strengthened during 2017. We
grew our global market share and moved quickly to reactivate equipment in North America to meet customer demand and enhance overall
margins. We continued to focus on cost efficiencies and aligning our business with customers in the fastest growing market segments
to collaborate and engineer solutions to maximize their asset value.
The diligence of the senior leadership team
and remarkable execution by our employees worldwide, combined with the rigorous goals set by the Board of Directors to keep management
focused on creating long-term value for our stockholders, drove exceptional results for the 2017 performance year:
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We generated $20.6 billion of total company revenue, a 30% increase from 2016,
with our Completion and Production segment improving 47% and our Drilling and Evaluation segment improving 8%. These results
were primarily driven by increased activity, utilization, and pricing in the U.S. land market associated with stimulation,
well completion, and drilling services. |
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We improved our North America and Completion and Production operating margins by over 1,000
basis points from 2016 levels, continuing to execute on our strategy of achieving normalized margins. |
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We acquired three businesses, Summit ESP, Ingrain Inc., and Optimization Petroleum Technology.
The addition of these three businesses strengthen our artificial lift, wireline, and Landmark portfolios for our global customers. |
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We continued to focus on cash flow execution, generating approximately $2.5 billion in operating
cash flow, retiring $1.4 billion in debt, and maintaining our dividend rate with a total payment of approximately $626 million
in dividends to our stockholders. |
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We delivered superior TSR over the one-, three-, and five-year periods ending December 31,
2017, relative to our direct peers, the Oilfield Services Index (OSX), and our performance peer group. The details are depicted
in the chart below: |
Total Stockholder
Return (TSR)
(In percentages)
www.halliburton.com |
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HALLIBURTON | 2018
Proxy Statement vi |
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Named Executive Officers (page
24)
For 2017, our NEOs were:
Name |
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Age |
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Occupation |
Jeffrey A. Miller |
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54 |
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President and Chief Executive Officer |
Christopher T. Weber |
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45 |
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Executive Vice President and Chief Financial Officer |
James S. Brown |
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63 |
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President - Western Hemisphere |
Lawrence J. Pope |
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50 |
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Executive Vice President, Administration and Chief Human Resources Officer |
Joe D. Rainey |
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61 |
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President - Eastern Hemisphere |
Robb L. Voyles |
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60 |
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Executive Vice President, Secretary and General Counsel |
David J. Lesar |
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64 |
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Executive Chairman of the Board |
Mark A. McCollum(1) |
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59 |
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Former Executive Vice President and Chief Financial Officer |
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(1) |
Effective as of March 6, 2017, Mr. McCollum resigned his position as our Chief
Financial Officer and as an employee. |
Executive Compensation (pages
23-56)
Objectives (page
29)
Our executive compensation program is composed
of base salary, a short-term incentive, and long-term incentives, and is designed to achieve the following objectives:
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Provide a clear and direct relationship between executive pay and our performance on both a short-term
and long-term basis; |
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Emphasize operating performance drivers; |
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Link executive pay to measures that drive stockholder value; |
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Support our business strategies; and |
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Maximize the return on our human resource investment. |
2017 Executive Total Compensation Mix (page
30)
(1) |
Reflects the compensation mix of NEOs other than Mr. McCollum who resigned
his position as Chief Financial Officer and as an employee on March 6, 2017. |
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HALLIBURTON | 2018
Proxy Statement vii |
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Notice of Annual Meeting
of Stockholders to be held
May 16, 2018
April 3, 2018
Halliburton Company, a Delaware corporation,
will hold its Annual Meeting of Stockholders on Wednesday, May 16, 2018, at 9:00 a.m. Central Daylight Time at its corporate office
at 3000 N. Sam Houston Parkway East, Life Center - Auditorium, Houston, Texas 77032.
At the meeting,
the stockholders will be asked to consider and act upon the matters discussed in the attached proxy statement as follows:
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To elect the twelve nominees named in the attached proxy statement as Directors
to serve for the ensuing year and until their successors shall be elected and shall qualify. |
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To consider and act upon a proposal to ratify the appointment of KPMG LLP as principal independent
public accountants to examine the financial statements and books and records of Halliburton for the year ending December 31,
2018. |
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To consider and act upon advisory approval of our executive compensation. |
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To transact any other business that properly comes before the meeting or any adjournment or
adjournments of the meeting. |
These items are fully described in the following
pages, which are made a part of this Notice. The Board of Directors has set the close of business on March 19, 2018, as the record
date for the determination of stockholders entitled to notice of and to vote at the meeting and at any adjournment of the meeting.
Internet Availability of Proxy Materials
On or about April 3, 2018, we mailed our
stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our 2018 proxy statement
and 2017 Annual Report on Form 10-K and how to vote online. The notice also provides instruction on how you can request a paper
copy of these documents if you desire. If you received your annual materials via email, the email contains voting instructions
and links to the proxy statement and Form 10-K on the Internet.
If You Plan to Attend
Attendance at the meeting is
limited to stockholders and one guest each. Admission will be on a first-come, first-served basis. Registration will begin at
8:00 a.m., and the meeting will begin at 9:00 a.m. Each stockholder holding stock in a brokerage account will need to bring
a copy of a brokerage statement reflecting stock ownership as of the record date. Please note that you will be asked to present
valid picture identification, such as a driver’s license or passport.
By order of the Board of Directors,
Robb L. Voyles
Executive Vice President, Secretary and
General Counsel
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You are urged to vote your shares as promptly as possible by following the voting
instructions in the Notice of Internet Availability of Proxy Materials. |
General Information
We are providing these proxy materials to
you in connection with the solicitation by the Board of Directors of Halliburton Company of proxies to be voted at our 2018 Annual
Meeting of Stockholders and at any adjournment or postponement of the meeting. By executing and returning the enclosed proxy,
by following the enclosed voting instructions, or by voting via the Internet or by telephone, you authorize the persons named
in the proxy to represent you and vote your shares on the matters described in the Notice of Annual Meeting.
The Notice of Internet Availability of Proxy
Materials is being sent to stockholders on or about April 3, 2018. Our Annual Report on Form 10-K, including financial statements,
for the fiscal year ended December 31, 2017, accompanies this proxy statement. The Annual Report on Form 10-K shall not be considered
as a part of the proxy solicitation materials or as having been incorporated by reference.
Subject to space availability, all stockholders
as of the record date, or their duly appointed proxies, may attend the Annual Meeting and each may be accompanied by one guest.
Admission to the Annual Meeting will be on a first-come, first-served basis. Registration will begin at 8:00 a.m. and the Annual
Meeting will begin at 9:00 a.m. Please note that we will ask you to present valid picture identification, such as a driver’s
license or passport, when you check in at the registration desk.
If you hold your shares in “street
name” (that is, through a broker or other nominee), you will need to bring a copy of a brokerage statement reflecting your
stock ownership as of the record date.
You may not bring cameras, recording
equipment, electronic devices, large bags, briefcases, or packages into the Annual Meeting.
If you attend the Annual Meeting, you may
vote in person. If you are not present, you can only vote your shares if you have voted via the Internet, by telephone, or returned
a properly executed proxy; in these cases, your shares will be voted as you specify. If you return a properly executed proxy and
do not specify a vote, your shares will be voted in accordance with the recommendations of the Board. You may revoke the authorization
given in your proxy at any time before the shares are voted at the Annual Meeting.
The record date for determination of the
stockholders entitled to vote at the Annual Meeting is the close of business on March 19, 2018. Our common stock, par value $2.50
per share, is our only class of capital stock that is outstanding. As of March 19, 2018, there were 875,150,051 shares of our
stock outstanding. Each outstanding share of common stock is entitled to one vote on each matter submitted to the stockholders
for a vote at the Annual Meeting. We will keep a complete list of stockholders entitled to vote at our principal executive office
for ten days before, and will have the list available at, the Annual Meeting. Our principal executive office is located at 3000
N. Sam Houston Parkway East, Administration Building, Houston, Texas 77032.
Votes cast by proxy or in person at the
Annual Meeting will be counted by the persons we appoint to act as election inspectors for the Annual Meeting. Except as set forth
below, the affirmative vote of the majority of shares present in person or represented by proxy at the Annual Meeting and entitled
to vote on the subject matter will be the act of the stockholders. Shares for which a stockholder has elected to abstain on a
matter will count for purposes of determining the presence of a quorum and, except as set forth below, will have the effect of
a vote against the matter.
Each Director shall be elected by the vote
of the majority of the votes cast by holders of shares represented in person or by proxy and entitled to vote in the election
of Directors, provided that if the number of nominees exceeds the number of Directors to be elected and all stockholder-proposed
nominees have not been withdrawn before the tenth (10th) day preceding the day we mail the Notice of Internet Availability
of Proxy Materials to stockholders for the Annual Meeting, the Directors shall be elected by the vote of a plurality of the shares
represented in person or by proxy at the Annual Meeting and entitled to vote on the election of Directors. A majority of the votes
cast means that the number of shares voted “for” a Director must exceed the number of votes cast “against”
that Director; we will not count abstentions. As a condition to being nominated by the Board for continued service as a Director,
each Director nominee has signed and delivered to the Board an irrevocable letter of resignation limited to and conditioned on
that Director failing to achieve a majority of the votes cast at an election where Directors are elected by majority vote. For
any Director nominee who fails to be elected by a majority of votes cast, where Directors are elected by majority vote, his or
her irrevocable letter of resignation will be deemed tendered on the date the election results are certified. Such resignation
shall only be effective upon acceptance by the Board.
The election inspectors will treat broker
non-vote shares, which are shares held in street name that cannot be voted by a broker on specific matters in the absence of instructions
from the beneficial owner of the shares, as shares that are present and entitled to vote for purposes of determining the presence
of a quorum. In determining the outcome of any matter for which the broker does not have discretionary authority to vote, however,
those shares will not have any effect on that matter. A broker may be entitled to vote those shares on other matters.
In accordance with our confidential voting
policy, no particular stockholder’s vote will be disclosed to our officers, Directors, or employees, except:
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as necessary to meet legal requirements and to assert claims for and defend claims
against us; |
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when disclosure is voluntarily made or requested by the stockholder; |
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when the stockholder writes comments on the proxy card; or |
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in the event of a proxy solicitation not approved and recommended by the Board. |
The proxy solicitor, the election inspectors,
and the tabulators of all proxies, ballots, and voting tabulations are independent and are not our employees.
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HALLIBURTON | 2018
Proxy Statement 1 |
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Corporate Governance
Corporate Governance Guidelines and
Committee Charters
Our Board has long maintained a formal statement
of its responsibilities and corporate governance guidelines to ensure effective governance in all areas of its responsibilities.
Our Corporate Governance Guidelines, which were revised in December 2017, are available on our website at www.halliburton.com
by clicking on the tab “About Us”, and then the “Corporate Governance” link. The guidelines
are reviewed periodically and revised as appropriate to reflect the dynamic and evolving processes relating to corporate governance,
including the operation of the Board.
In order for our stockholders to understand
how the Board conducts its affairs in all areas of its responsibility, the full text of the charters of our Audit; Compensation;
Health, Safety and Environment; and Nominating and Corporate Governance Committees are also available on our website.
Except to the extent expressly stated otherwise,
information contained on or accessible from our website or any other website is not incorporated by reference into and should
not be considered part of this proxy statement.
Code of Business Conduct
Our Code of Business Conduct, which applies
to all of our employees and Directors and serves as the code of ethics for our principal executive officer, principal financial
officer, principal accounting officer or controller, and other persons performing similar functions, is available on our website.
Any waivers to our Code of Business Conduct for our Directors or executive officers can only be made by our Audit Committee. There
were no waivers of the Code of Business Conduct in 2017.
Related Persons Transactions Policy
Our Board has adopted a written policy governing
related persons transactions as part of the Board’s commitment to good governance and independent oversight. The policy
covers transactions involving any of our Directors, executive officers, nominees for Director, greater than 5% stockholders, or
any of their immediate family members, among others.
The types of transactions covered by this
policy are transactions, arrangements, or relationships, or any series of similar transactions, arrangements, or relationships,
including any indebtedness or guarantee of indebtedness, in which (1) we or any of our subsidiaries were or will be a participant,
(2) the aggregate amount involved exceeds $120,000 in any calendar year, and (3) any related person had, has, or will have a direct
or indirect material interest.
Under the policy, we generally only enter
into or ratify related persons transactions when the Board determines such transactions are in our best interests and the best
interests of our stockholders. In determining whether to approve or ratify a related persons transaction, the Board will consider
the following factors and other factors it deems appropriate:
• |
whether the related persons transaction is on terms comparable to terms generally
available with an unaffiliated third party under the same or similar circumstances; |
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the benefits of the transaction to us; |
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the extent of the related person’s interest in the transaction; and |
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whether there are alternative sources for the subject matter of the transaction. |
www.halliburton.com |
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HALLIBURTON | 2018
Proxy Statement 2 |
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The Board of Directors
and Standing Committees of Directors
The Board has standing Audit; Compensation;
Health, Safety and Environment; and Nominating and Corporate Governance Committees. Each standing committee is comprised of Directors
who, in the business judgment of the Board, are independent, after considering all relevant facts and circumstances, including
the independence standards set forth in our Corporate Governance Guidelines.
Our independence standards meet NYSE independence
requirements. Our independence standards and compliance with those standards are periodically reviewed by the Nominating and Corporate
Governance Committee. In connection with its independence determination, the Board considered that during 2017, we provided services
in the ordinary course of business to Sempra Energy, of which Ms. Reed is the Chairman and Chief Executive Officer. The Board
concluded that the relationship was not material and did not affect the independence of Ms. Reed. There were no relevant transactions,
relationships, or arrangements not disclosed in this proxy statement that were considered by the Board in making its determination
as to the independence of the Directors.
Board Leadership
Our Board believes that it is important
to maintain flexibility to determine the appropriate leadership of the Board and whether the roles of Chairman and Chief Executive
Officer should be combined or separate. Our Corporate Governance Guidelines provide that the Board consider annually whether it
is appropriate for the same individual to fill both of those roles. When making that determination, the Board considers issues
such as industry and financial expertise, in-depth knowledge of Halliburton and its business, and succession planning. Currently,
the positions of Chairman and Chief Executive Officer are held by separate persons. Jeffrey A. Miller was named President and
Chief Executive Officer of Halliburton on June 1, 2017. Mr. Miller’s promotion was the result of vigorous management succession
planning by the Board. Mr. Miller succeeded David J. Lesar, who will continue to serve as Executive Chairman. In this role, Mr.
Lesar will continue to focus on leadership of the Board and the strategic direction of the Company, actively engage with stockholders,
and advise the Halliburton management team. The Board believes that this leadership structure, along with the role of the Lead
Independent Director, is optimal at this time for Halliburton and its stockholders.
J. Landis Martin, who has served as our
Lead Independent Director since 2008, is retiring from the Board on May 16, 2018. The Board intends to elect a new Lead Independent
Director subsequent to the Annual Meeting. The Lead Independent Director’s role and responsibilities are set forth in the
Lead Independent Director Charter adopted by the Board and include presiding over the executive sessions of the non-management
Directors. Our Lead Independent Director Charter is available on our website at www.halliburton.com.
With the exception of our Chairman, Mr. Lesar, and our President and Chief Executive Officer, Mr. Miller, the Board is composed
of independent Directors.
Board Risk Oversight
We have implemented an Enterprise Risk Management
system to identify and analyze enterprise-level risks and their potential impact on us. At least annually, the Audit Committee
of the Board receives a report on risk assessment and risk management. In addition, each of the Board’s Committees evaluates
and monitors the risks within its areas of responsibility. Our executive officers are assigned responsibility for the various
categories of risk. Our Chief Executive Officer, who is primarily responsible for managing our day-to-day business, is ultimately
responsible to the Board for all risk categories.
Halliburton Board Leadership
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David J. Lesar is our Executive Chairman |
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The Board will elect a new Lead Independent Director subsequent to the Annual Meeting |
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11 of our 13 Directors are independent |
All members of the Audit; Compensation; Health, Safety and Environment;
and Nominating and Corporate Governance Committees are independent
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HALLIBURTON | 2018
Proxy Statement 3 |
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Independent Committees
The Board believes that it has a strong
governance structure in place to ensure independent oversight on behalf of all stockholders. All standing committees of the Board
are comprised solely of independent Directors. We have established processes for the effective oversight of critical issues entrusted
to independent Directors, such as:
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the integrity of our financial statements; |
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CEO and senior management compensation; |
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CEO and senior management succession planning; |
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the election of our Lead Independent Director; |
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membership of our independent Board committees; |
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Board, Committee, and Director evaluations; and |
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nominations of Directors. |
Members of the Committees of Our Board
of Directors
Audit Committee |
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Compensation Committee |
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Health, Safety and
Environment Committee |
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Nominating and Corporate
Governance Committee |
Alan M. Bennett* |
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William E. Albrecht |
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Abdulaziz F. Al Khayyal |
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Abdulaziz F. Al Khayyal |
James R. Boyd |
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James R. Boyd* |
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William E. Albrecht |
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Alan M. Bennett |
Nance K. Dicciani |
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Milton Carroll |
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Nance K. Dicciani |
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Milton Carroll |
Murry S. Gerber |
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Murry S. Gerber |
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José C. Grubisich |
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J. Landis Martin |
José C. Grubisich |
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Robert A. Malone |
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Robert A. Malone* |
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Debra L. Reed* |
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Debra L. Reed |
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J. Landis Martin |
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Audit Committee
Attendance |
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Committee Members |
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Responsibilities |
Meetings in 2017: 8 |
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Alan M. Bennett (Chair)
James R. Boyd
Nance K. Dicciani
Murry S. Gerber
José C. Grubisich |
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• Recommending to the Board the appointment of the independent
public accounting firm to audit our financial statements (the principal independent public accountants);
• Together with the Board, being responsible for the appointment,
compensation, retention, oversight of the work, and evaluation of the principal independent public accountants;
• Reviewing the scope of the principal independent public
accountants’ examination and the scope of activities of the internal audit department;
• Reviewing our significant financial policies and accounting
systems and controls;
• Reviewing financial statements; and
• Approving the services to be performed by the principal
independent public accountants.
The Board has determined that Alan M. Bennett, James
R. Boyd, Nance K. Dicciani, Murry S. Gerber, and José C. Grubisich are independent under our Corporate Governance
Guidelines and are “audit committee financial experts” as defined by the Securities and Exchange Commission,
or SEC. A copy of the Audit Committee Charter is available on our website at www.halliburton.com.
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www.halliburton.com |
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HALLIBURTON | 2018
Proxy Statement 4 |
|
Compensation Committee
Attendance |
|
Committee Members |
|
Responsibilities |
Meetings in 2017: 6 |
|
William E. Albrecht
James R. Boyd (Chair)
Milton Carroll
Murry S. Gerber
Robert A. Malone
Debra L. Reed |
|
• Developing an overall executive compensation philosophy
and strategy;
• Overseeing the effectiveness of our compensation program
in attracting, retaining, and motivating key employees;
• Utilizing our compensation program to reinforce business
strategies and objectives to enhance stockholder value;
• Administering our compensation program, including our
incentive plans, in a fair and equitable manner consistent with established policies and guidelines; and
• Additional roles and activities with respect to executive
compensation as described under Compensation Discussion and Analysis.
A copy of the Compensation Committee Charter is available
on our website at www.halliburton.com.
|
Health, Safety and Environment Committee
Attendance |
|
Committee Members |
|
Responsibilities |
Meetings in 2017: 5 |
|
Abdulaziz F. Al Khayyal
William E. Albrecht
Nance K. Dicciani
José C. Grubisich
Robert A. Malone (Chair)
J. Landis Martin |
|
• Reviewing and assessing our health, safety, environmental,
and sustainable development policies and practices;
• Overseeing the communication, implementation, and compliance
with these policies, as well as applicable goals and legal requirements; and
• Assisting the Board with oversight of our risk-management
processes relating to health, safety, the environment, and sustainability.
A copy of our Health, Safety and Environment
Committee Charter is available on our website at www.halliburton.com.
|
Nominating and Corporate Governance Committee
Attendance |
|
Committee Members |
|
Responsibilities |
Meetings in 2017: 4 |
|
Abdulaziz F. Al Khayyal
Alan M. Bennett
Milton Carroll
J. Landis Martin
Debra L. Reed (Chair) |
|
• Reviewing and recommending revisions to our Corporate
Governance Guidelines;
• Overseeing our Director self-evaluation process and performance
reviews;
• Identifying and screening candidates for Board and committee
membership;
• Reviewing the overall composition profile of the Board
for the appropriate mix of skills, characteristics, experience, and expertise; and
• Reviewing and making recommendations on Director compensation.
A copy of our Nominating and Corporate Governance Committee
Charter is available on our website at www.halliburton.com.
|
|
HALLIBURTON | 2018
Proxy Statement 5 |
|
Board Attendance
During 2017, the Board held 6 meetings and
met in Executive Session, without management present, on 5 occasions.
Committee meetings were held as follows:
Audit Committee |
8 |
Compensation Committee |
6 |
Health, Safety and Environment Committee |
5 |
Nominating and Corporate Governance Committee |
4 |
Nine members of the Board attended 100%
of the total number of meetings of the Board and the committees on which he or she served during 2017 and all members of the Board
attended at least 79% of those meetings.
All of our Directors attended the 2017 Annual
Meeting, as required by our Corporate Governance Guidelines.
Evaluation of Board and Director Performance
The Nominating and Corporate Governance
Committee annually reviews and evaluates the performance of the Board in order to improve the effectiveness of the Board. The
Committee assesses the Board’s contribution as a whole and identifies areas in which improvements may be made. In addition,
each Committee conducts an annual self-evaluation. The results of the evaluations are reviewed and discussed with the Board and
its Committees.
The Nominating and Corporate Governance
Committee also annually reviews the individual performance and qualifications of each Director who wishes to be considered for
nomination for reelection to the Board.
Stockholder Nominations of Directors
Our By-laws provide that stockholders may
nominate persons for election to the Board at a meeting of stockholders. In September 2016, our Board of Directors amended
our By-laws to implement proxy access.
Stockholder nominations require written
notice to the Corporate Secretary at the address of our principal executive offices set forth on page 1 of this proxy statement,
and for the Annual Meeting of Stockholders in 2019, must be received not less than 90 days nor more than 120 days prior to the
anniversary date of the 2018 Annual Meeting of Stockholders, or no later than February 15, 2019, and no earlier than January 16,
2019. The stockholder notice must contain, among other things, certain information relating to the stockholder and the proposed
nominee as described in our By-laws. In addition, the proposed nominee may be required to furnish other information as we may
reasonably require to determine the eligibility of the proposed nominee to serve as a Director.
The proxy access provision permits up to
20 stockholders owning 3% or more of our outstanding common stock continuously for at least three years to nominate and include
in our proxy materials for a meeting of stockholders up to two directors or 20% of the Board, whichever is greater, provided that
the stockholder(s) and the nominee(s) satisfy the requirements specified in the By-laws.
Our By-laws further provide that if a stockholder
owning at least 1% of our issued and outstanding common stock continuously for at least one year as of the date the written notice
of the nomination is submitted to us, proposes a nominee not submitted under the proxy access provision, our Corporate Secretary
will (i) obtain from such nominee any additional relevant information the nominee wishes to provide in consideration of his or
her nomination, (ii) report on each such nominee to the Nominating and Corporate Governance Committee, and (iii) facilitate
having each such nominee meet with the Nominating and Corporate Governance Committee as the Committee deems appropriate.
www.halliburton.com |
|
HALLIBURTON | 2018
Proxy Statement 6 |
|
Qualifications of Directors
Candidates nominated for election or reelection to the Board
should possess the following qualifications:
• |
Personal characteristics: |
|
• |
high personal and professional ethics, integrity, and values; |
|
• |
an inquiring and independent mind; and |
|
• |
practical wisdom and mature judgment; |
• |
Broad training and experience at the policy-making level in business, government,
education, or technology; |
• |
Expertise that is useful to us and complementary to the background and experience of other
Board members, so that an optimum balance of experience and expertise of members of the Board can be achieved and maintained; |
• |
Willingness to devote the required amount of time to carry out the duties and responsibilities
of Board membership; |
• |
Commitment to serve on the Board for several years to develop knowledge about our business; |
• |
Willingness to represent the best interests of all of our stockholders and objectively evaluate
management performance; and |
• |
Involvement only in activities or interests that do not create a conflict with the Director’s
responsibilities to us and our stockholders. |
The Nominating and Corporate Governance
Committee is responsible for assessing the appropriate mix of skills and characteristics required of Board members and periodically
reviews and updates the criteria. In selecting Director nominees, the Board considers the personal characteristics, experience,
and other criteria as set forth in our Corporate Governance Guidelines, as well as our specific needs and the needs of our Board
at the time.
We value all types of diversity, including
diversity of our Board. In evaluating the overall qualifications of a potential nominee, the Committee and Board take into account
overall Board diversity in personal background, race, gender, age, and nationality.
Process for the Selection of New Directors
The Board is responsible for filling vacancies
on the Board and ensuring regular refreshment of the Board. Our Corporate Governance Guidelines provide that each non-management
Director shall retire from the Board immediately prior to the annual meeting of stockholders following his or her seventy-second
(72nd) birthday. The Board has delegated to the Nominating and Corporate Governance Committee the duty of selecting
and recommending candidates to the Board for approval. The Nominating and Corporate Governance Committee will consider candidates
for Board membership recommended by Board members, our management, and stockholders. The Committee may also retain an independent
executive search firm to identify candidates for consideration and to gather additional information about the candidate’s
background, experience, and reputation. A stockholder who wishes to recommend a candidate should notify our Corporate Secretary.
The Nominating and Corporate Governance
Committee, in consultation with the Board, will determine the specific criteria for a new Director candidate. After the Nominating
and Corporate Governance Committee identifies a candidate, the Committee will determine the appropriate method to evaluate the
candidate. The preliminary determination regarding a candidate is based on the likelihood that the candidate will meet the Board
membership criteria listed in our Corporate Governance Guidelines. The Committee will determine, after discussion with the Chairman
of the Board and other Board members, whether a candidate should continue to be considered. If a candidate warrants additional
consideration, the Committee and others, as appropriate, will interview the candidate. Once the evaluation and interviews are
completed, the Committee will recommend to the Board whether the candidate should be appointed to the Board or proposed for election
by stockholders and the Board will act on such recommendation.
IDENTIFICATION OF
QUALIFIED
CANDIDATES |
|
DUE DILIGENCE
SCREENING |
|
MEETINGS WITH
SHORTLISTED
CANDIDATES |
|
DECISION AND
NOMINATION |
|
|
|
|
|
|
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Nominating and Corporate Governance Committee identifies candidates to become Board members |
|
Review of qualifications to determine if candidate meets Board membership criteria |
|
Committee members and, as appropriate, other Board members and management interview the shortlisted
candidates |
|
Selection of Director nominees best qualified to serve the interests of Halliburton stockholders |
|
HALLIBURTON | 2018
Proxy Statement 7 |
|
Communication to the Board
To foster better communication from our
stockholders and other interested persons, we maintain a process for stockholders and others to communicate with the Audit Committee
and the Board. The process has been approved by both the Audit Committee and the Board, and meets the requirements of the New
York Stock Exchange, or NYSE, and the SEC. The methods of communication with the Board include telephone, mail, and e-mail.
|
|
888.312.2692
or
770.613.6348 |
|
|
Board of Directors
c/o Director of Business Conduct
Halliburton Company
P.O. Box 42806
Houston, Texas 77242-2806
USA |
|
|
BoardofDirectors@halliburton.com |
Our Director of Business Conduct, an employee,
reviews all communications directed to the Audit Committee and the Board. The Chairman of the Audit Committee is promptly notified
of any substantive communication involving accounting, internal accounting controls, or auditing matters. The Lead Independent
Director is promptly notified of any other significant communication, and any Board-related matters which are addressed to a named
Director are promptly sent to that Director. Copies of all communications are available for review by any Director. Some communications,
such as advertisements, business solicitations, junk mail, resumes, and any communication that is overly hostile, threatening, or illegal, will not
be forwarded to the Board. Communications may be made anonymously or confidentially. Confidentiality shall be maintained unless
disclosure is:
• |
required or advisable in connection with any governmental investigation or report; |
• |
in the interests of Halliburton, consistent with the goals of our Code of Business Conduct;
or |
• |
required or advisable in our legal defense of a matter. |
Information regarding these methods of communication
is also on our website at www.halliburton.com.
www.halliburton.com |
|
HALLIBURTON | 2018
Proxy Statement 8 |
|
Proposal No. 1 Election
of Directors
In considering whether a current
Director should be nominated for election as a Director, the Nominating and Corporate Governance Committee and the Board
considered, among other matters, the expertise and experience of the Director, the annual performance evaluation of the
Director, the Director’s attendance at, preparation for, and engagement in Board and Committee meetings, the diversity
of the Board, the tenure of the Director, and the overall distribution of tenure among Directors to ensure sufficient
experience with the company’s operations, performance, and technology and the cycles of the industry. A summary of the
qualifications and experience of our non-management Directors is provided in the table below.
|
|
AFTER CONSULTATION WITH THE NOMINATING AND CORPORATE GOVERNANCE
COMMITTEE, THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF
EACH OF THE DIRECTOR NOMINEES LISTED BELOW. |
The twelve nominees are all current Directors. If any
nominee is unwilling or unable to serve, favorable and uninstructed proxies will be voted for a substitute nominee designated
by the Board. If a suitable substitute is not available, the Board will reduce the number of Directors to be elected. Each
nominee has indicated approval of his or her nomination and his or her willingness to serve if elected. The Directors elected
will serve for the ensuing year and until their successors are elected and qualify.
NON-MANAGEMENT DIRECTOR QUALIFICATIONS AND
EXPERIENCE
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TENURE |
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|
Year Elected |
2014 |
2016 |
2006 |
2006 |
2006 |
2009 |
2012 |
2013 |
2009 |
2001 |
Mandatory Retirement |
2026 |
2024 |
2023 |
2019 |
2023 |
2020 |
2025 |
2029 |
2024 |
2028 |
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GENERAL |
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Independence |
● |
● |
● |
● |
● |
● |
● |
● |
● |
● |
Diversity |
● |
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|
● |
● |
|
● |
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● |
Board or Board Committee Leadership |
● |
● |
● |
● |
● |
● |
● |
● |
● |
● |
Public Company Experience |
● |
● |
● |
● |
● |
● |
● |
● |
● |
● |
Private Company Experience |
● |
● |
|
● |
● |
|
● |
● |
● |
|
Not-for-Profit Experience |
● |
● |
● |
● |
● |
● |
● |
● |
● |
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Government Experience |
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● |
● |
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Academia |
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● |
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● |
● |
● |
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Community Leadership/Philanthropic |
● |
● |
● |
● |
● |
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● |
● |
● |
● |
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DECISION-MAKING
EXPERIENCE AT EXECUTIVE LEVEL OR OTHER SUBSTANTIAL EXPERIENCE |
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Energy Industry |
● |
● |
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● |
● |
● |
● |
● |
● |
● |
Accounting/Finance |
● |
● |
● |
● |
|
● |
● |
● |
● |
● |
Technology/Engineering |
● |
● |
|
● |
● |
● |
● |
● |
● |
● |
Mergers & Acquisitions |
● |
● |
● |
● |
● |
● |
● |
● |
● |
● |
Human Resources/Compensation |
● |
● |
● |
● |
|
● |
● |
● |
● |
● |
Compliance |
● |
● |
● |
● |
|
● |
● |
● |
● |
● |
Strategic Planning |
● |
● |
● |
● |
● |
● |
● |
● |
● |
● |
International Business |
● |
● |
● |
● |
|
● |
|
● |
● |
● |
Health, Safety & Environment and Sustainability |
● |
● |
|
● |
|
● |
● |
● |
● |
● |
Corporate Governance |
● |
● |
● |
● |
● |
● |
● |
● |
● |
● |
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HALLIBURTON | 2018
Proxy Statement 9 |
|
Information about Nominees for Director
ABDULAZIZ F. AL KHAYYAL
Age 64 Director
since: 2014 INDEPENDENT |
|
Professional
Experience:
• Retired Senior Vice President of Industrial Relations
of Saudi Arabian Oil Company (Saudi Aramco) (the world’s largest producer of crude oil)
• Senior Vice President of Industrial Relations of Saudi
Aramco from 2007 to 2014 and served as a director of Saudi Aramco from 2004 to 2014
|
Skills
and Expertise:
The Board determined that Mr. Al Khayyal should be nominated
for election as a Director because of his exceptional knowledge of the energy industry, including significant international
industry experience and executive experience with the world’s largest producer of crude oil.
|
Other
Company Directorships:
• Marathon
Petroleum Corporation (since 2016)
|
Former
Directorships in the Past 5 Years:
• None
|
|
|
|
|
WILLIAM E. ALBRECHT
Age 66 Director
since: 2016 INDEPENDENT |
|
Professional
Experience:
• Non-Executive
Chairman of the Board of California Resources Corporation (a publicly traded oil and natural gas exploration and production
company) since 2016 and Executive Chairman of the Board from 2014 to 2016
• Vice President
of Occidental Petroleum Corporation from 2008 to 2014
• President
of Oxy Oil & Gas, Americas from 2012 to 2014
|
Skills
and Expertise:
The Board determined that Mr. Albrecht should be nominated
for election as a Director because of his extensive experience in the domestic oil and natural gas industry and executive
experience with a public oil and gas exploration and production company and an international offshore drilling company.
|
Other
Company Directorships: • Chairman
of the Board and has been a director of Rowan Companies plc (since 2015) |
Former
Directorships in the Past 5 Years:
• None
|
|
|
|
|
ALAN M. BENNETT
Age
67 Director
since: 2006 INDEPENDENT |
|
Professional
Experience:
• Retired President
and Chief Executive Officer of H&R Block, Inc. (a tax and financial services provider)
• President
and Chief Executive Officer of H&R Block, Inc. from 2010 to 2011
• Interim Chief
Executive Officer of H&R Block, Inc. from 2007 to 2008
• Senior Vice
President and Chief Financial Officer of Aetna, Inc. from 2001 to 2007
|
Skills
and Expertise:
The Board determined that Mr. Bennett should be nominated
for election as a Director because of his business and financial expertise, ranging from internal audit to corporate controller
to chief financial officer of a large, public company. He is a certified public accountant and also has chief executive
officer experience.
|
Other Company Directorships: • Fluor Corporation (since 2011)
• TJX Companies,
Inc. (since 2007)
|
Former
Directorships in the Past 5 Years:
• None
|
|
|
|
|
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 10 |
|
JAMES R. BOYD
Age 71 Director
since:
2006 INDEPENDENT |
|
Professional
Experience:
• Retired Chairman
of the Board of Arch Coal, Inc. (one of the largest United States coal producers)
|
Skills
and Expertise:
The Board determined that Mr. Boyd should be nominated
for election as a Director because of his experience as chairman and lead director of a large, public company and experience
in corporate business development, operations, and strategic planning.
|
Other
Company Directorships:
• None
|
Former
Directorships in the Past 5 Years:
• Arch Coal,
Inc. (1990-2013)
|
|
|
|
|
MILTON CARROLL
Age 67 Director
since: 2006 INDEPENDENT |
|
Professional
Experience:
• Executive
Chairman of the Board of CenterPoint Energy, Inc. (a public utility holding company) since 2013 In that role, Mr. Carroll’s
primary function is to provide leadership for the CenterPoint Board and to coordinate its activities.
• Non-Executive
Chairman of the Board of CenterPoint Energy, Inc. from 2002 to 2013
|
Skills
and Expertise:
The Board determined that Mr. Carroll should be nominated
for election as a Director because of his public company board experience, corporate governance expertise, and knowledge
of the oil and gas services industry. The Board also determined that Mr. Carroll’s duties as Chairman of CenterPoint
do not impede his ability to fulfill his responsibilities as a Director.
|
Other
Company Directorships:
• Western Gas
Holdings, LLC, the general partner of Western Gas Partners L.P. (since 2008)
• Chairman
of Health Care Service Corporation (a customer-owned health insurance company) (since 2002)
|
Former
Directorships in the Past 5 Years:
• LRE GP, LLC,
the general partner of LRR Energy, L.P. (2011-2014)
• LyondellBasell
Industries (2010-2016)
|
|
|
|
|
NANCE K. DICCIANI
Age 70 Director
since: 2009 INDEPENDENT |
|
Professional
Experience:
• Non-Executive
Chair of the Board of AgroFresh Solutions, Inc. (a global leader in advanced proprietary technologies for the horticultural
market) since 2015
• Interim Co-Principal
Executive Officer of AgroFresh Solutions, Inc. from March 2016 to October 2016
• President
and Chief Executive Officer of Honeywell International Specialty Materials (a diversified technology and manufacturing
company) from 2001 to 2008
|
Skills
and Expertise:
The Board determined that Ms. Dicciani should be nominated
for election as a Director because of her technical expertise in the chemical industry, international operations expertise,
and executive experience as a chief executive officer of a multi-billion dollar strategic business group of a major multinational
corporation.
|
Other
Company Directorships:
• Praxair,
Inc. (since 2008)
• LyondellBasell
Industries (since 2013)
|
Former
Directorships in the Past 5 Years:
• Rockwood
Holdings, Inc. (2008-2014)
|
|
|
|
|
|
HALLIBURTON | 2018
Proxy Statement 11 |
|
MURRY S. GERBER
Age 65 Director
since:
2012 INDEPENDENT |
|
Professional
Experience:
• Retired Executive
Chairman of the Board of EQT Corporation (a leading producer of unconventional natural gas)
• Executive
Chairman of the Board of EQT Corporation from 2010 to 2011
• Chairman
and Chief Executive Officer of EQT Corporation from 2000 to 2010
• Chief Executive
Officer and President of EQT Corporation from 1998 to 2007
|
Skills
and Expertise: The Board determined that Mr. Gerber should be nominated
for election as a Director because of his executive leadership skills and extensive business experience in the energy industry
and domestic unconventional oil and natural gas basins. |
Other
Company Directorships:
• BlackRock,
Inc. (since 2000)
• United States
Steel Corporation (since 2012)
|
Former
Directorships in the Past 5 Years:
• None
|
|
|
|
|
JOSÉ C. GRUBISICH
Age 61 Director
since: 2013 INDEPENDENT |
|
Professional
Experience:
• Managing
Partner of Olímpia Investimentos e Participações (a Brazilian investment company) since 2017
• Chief Executive
Officer of Eldorado Brasil Celulose (a leader in the world cellulose market) from 2012 to 2017
• President
and Chief Executive Officer of ETH Bioenergia S.A. (an integrated producer of ethanol and electricity from biomass) from
2008 to 2012
|
Skills
and Expertise:
The Board determined that Mr. Grubisich should be nominated
for election as a Director because of his significant international business experience in Latin America and executive
leadership experience.
|
Other
Company Directorships:
• Vallourec
S.A. (since 2012)
|
Former
Directorships in the Past 5 Years:
• None
|
|
|
|
|
DAVID J. LESAR
Age 64 Director
since: 2000 CHAIRMAN |
|
Professional
Experience:
• Executive
Chairman of the Board of Halliburton since 2017
• Chairman
and Chief Executive Officer of Halliburton from 2015 to 2017
• Chairman,
President and Chief Executive Officer of Halliburton from 2000 to 2014
|
Skills
and Expertise:
The Board determined that Mr. Lesar should be nominated
for election as a Director because of his energy industry expertise, financial expertise, and in-depth knowledge of Halliburton
and its business.
|
Other
Company Directorships:
• None
|
Former
Directorships in the Past 5 Years:
• Agrium, Inc.
(2010-2015)
|
|
|
|
|
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 12 |
|
ROBERT A. MALONE
Age 66 Director
since: 2009 INDEPENDENT |
|
Professional
Experience:
• Executive
Chairman, President and Chief Executive Officer of First Sonora Bancshares, Inc. (a bank holding company) since 2014
• Executive
Chairman, President and Chief Executive Officer of The First National Bank of Sonora, Texas (a community bank owned by
First Sonora Bancshares, Inc.) since 2009
• Executive
Vice President of BP plc, and Chairman of the Board and President, BP America Inc. (one of the nation’s largest
producers of oil and natural gas) from 2006 to 2009
|
Skills
and Expertise:
The Board determined that Mr. Malone should be nominated
for election as a Director because of his energy industry expertise and executive leadership experience, including crisis
management and safety performance.
|
Other
Company Directorships:
• Non-Executive
Chairman of the Board of Peabody Energy Corporation (since 2016) and director (since 2009)
• Teledyne
Technologies Incorporated (since 2015)
• BP Midstream
Partners GP LLC, the general partner of BP Midstream (since 2017)
|
Former
Directorships in the Past 5 Years:
• None
|
|
|
|
|
JEFFREY A. MILLER
Age 54 Director
since: 2014 PRESIDENT
AND CHIEF EXECUTIVE OFFICER |
|
Professional
Experience:
• President
and Chief Executive Officer of Halliburton since 2017 and Director since 2014
• President
of Halliburton from 2014 to 2017
• Executive
Vice President and Chief Operating Officer of Halliburton from 2012 to 2014
|
Skills
and Expertise:
The Board determined that Mr. Miller should be nominated
for election as a Director because of his energy industry expertise, executive and business development experience, and
extensive knowledge of Halliburton’s global operations.
|
Other
Company Directorships:
• None
|
Former
Directorships in the Past 5 Years:
• Atwood Oceanics,
Inc. (2013-2017)
|
|
|
|
|
DEBRA L. REED
Age 61 Director
since: 2001 INDEPENDENT |
|
Professional
Experience:
• Chief Executive
Officer of Sempra Energy (an energy infrastructure and regulated holding company) since 2011 and Chairman of the Board
of Sempra Energy since 2012
Ms. Reed will retire as CEO of Sempra Energy effective May 1, 2018, and will retire as Chairman
effective December 1, 2018.
• Executive
Vice President of Sempra Energy from 2010 to 2011
• President
and Chief Executive Officer of Southern California Gas Company, and San Diego Gas & Electric Company from 2006 to
2010
|
Skills
and Expertise:
The Board determined that Ms. Reed should be nominated
for election as a Director because of her executive, operational, financial, and administrative expertise, experience
with energy infrastructure operations, public company board experience, and corporate governance expertise. The Board
also determined that Ms. Reed’s duties as Chairman and CEO of Sempra do not impede her ability to fulfill her responsibilities
as a Director.
|
Other
Company Directorships:
• Caterpillar
Inc. (since 2015)
|
Former
Directorships in the Past 5 Years:
• None
|
|
|
|
|
|
HALLIBURTON | 2018
Proxy Statement 13 |
|
Directors’
Compensation
Directors’ Fees
All non-management Directors receive an annual
retainer of $115,000, which remains unchanged from 2014. The Lead Independent Director receives an additional annual retainer
of $30,000, and the chairperson of each committee receives an additional annual retainer for serving as chair as follows: Audit
- $25,000; Compensation - $20,000; Health, Safety and Environment - $15,000; and Nominating and Corporate Governance - $15,000.
Non-management Directors are permitted to defer all or part of their fees under the Directors’ Deferred Compensation Plan.
Directors’ Equity Awards
All non-management Directors receive an annual
equity award with a value of approximately $185,000, which remains unchanged from 2014, consisting of restricted stock units (RSUs),
each of which represents the right to receive a share of common stock at a future date. The actual number of RSUs is determined
by dividing $185,000 by the average of the closing price of our common stock on the NYSE on each business day during the month
of July. These annual awards are made on or about the first day of August. The value of the award may be more or less than $185,000
based on the closing price of our common stock on the NYSE on the date of the award. Non-management Directors are permitted to
defer all of their RSUs under the Directors’ Deferred Compensation Plan.
Directors may not sell, assign, pledge, otherwise
transfer, or encumber restricted shares (which were previously granted to non-management Directors) or RSUs until the restrictions
are removed. Restrictions on RSUs lapse 25% a year over four years of service with the applicable underlying shares of common stock
distributed annually to the non-management Director unless the Director elected to defer receipt of the shares under the Directors’
Deferred Compensation Plan. If a non-management Director has a separation of service from the Board before completing four years
of service from the applicable award date, any unvested RSUs would be forfeited, unless the Board determines to accelerate vesting.
Restrictions on restricted shares and RSUs lapse following termination of Board service only under specified circumstances, which
include death or disability, retirement under the Director mandatory retirement policy, or early retirement after at least four
years of service.
During the restriction period, Directors have
the right to (i) vote restricted shares, but not shares underlying RSUs, and (ii) receive dividends or dividend equivalents
in cash on restricted shares and RSUs that have not been deferred. RSUs that have been deferred receive dividend equivalents under
the Directors’ Deferred Compensation Plan.
Directors’ Deferred Compensation Plan
The Directors’ Deferred Compensation Plan
is a nonqualified deferred compensation plan and participation is completely voluntary. Under the plan, non-management Directors
are permitted to defer all or part of their retainer fees and all of the shares of common stock underlying their RSUs when they
vest. If a non-management Director elects to defer retainer fees under the plan, then the Director may elect to have his or her
deferred fees accumulate under an interest-bearing account or translate on a quarterly basis into Halliburton common stock equivalent
units (SEUs) under a stock equivalents account. If a non-management Director elects to defer receipt of the shares of common stock
underlying his or her RSUs when they vest, then those shares are retained as deferred RSUs under the plan. The interest-bearing
account is credited quarterly with interest at the prime rate of Citibank, N.A. The SEUs and deferred RSUs are credited quarterly
with dividend equivalents based on the same dividend rate as Halliburton common stock and those amounts are translated into additional
SEUs or RSUs, respectively.
After a Director’s retirement, distributions
under the plan are made to the Director in a single distribution or in annual installments over a 5- or 10-year period as elected
by the Director. Distributions under the interest-bearing account are made in cash, while distributions of SEUs under the stock
equivalents account and deferred RSUs are made in shares of Halliburton common stock. Mses. Dicciani and Reed and Messrs. Al Khayyal,
Bennett, Boyd, and Carroll have deferred retainer fees under the plan. Mses. Dicciani and Reed and Messrs. Al Khayyal,
Albrecht, Bennett, Boyd, Carroll, and Grubisich have deferred RSUs under the plan.
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 14 |
|
Directors’ Stock Ownership Requirements
We have stock ownership requirements for all non-management Directors
to further align their interests with our stockholders. As a result, all non-management Directors are required to own Halliburton
common stock in an amount equal to or in excess of the greater of (A) the cash portion of the Director’s annual retainer
for the five-year period beginning on the date the Director is first elected to the Board or (B) $500,000. The Nominating and Corporate
Governance Committee reviews the holdings of all non-management Directors, which include restricted shares, other Halliburton common
stock, and RSUs owned by the Director, at each May meeting. Each non-management Director has five years to meet the requirements,
measured from the date he or she is first elected to the Board. Each non-management Director currently meets the stock ownership
requirements or is on track to do so within the requisite five-year period.
Director Clawback Policy
We have a clawback policy under which we will seek, in all appropriate
cases, to recoup incentive compensation paid to, awarded to, or credited for the benefit of a Director, if and to the extent that:
• |
it is determined that, in connection with the performance of that Director’s duties, he or she
breached his or her fiduciary duty by knowingly or recklessly engaging in a material violation of a U.S. federal or state
law, or recklessly disregarded his or her duty to exercise reasonable oversight; or |
• |
the Director is named as a defendant in a law enforcement proceeding for having breached his or her fiduciary duty by
knowingly or recklessly engaging in a material violation of a U.S. federal or state law, the Director disagrees with the allegations
relating to the proceeding, and either (A) we initiate a review and determine that the alleged action is not indemnifiable
or (B) the Director does not prevail at trial, enters into a plea arrangement, agrees to the entry of a final administrative
or judicial order imposing sanctions, or otherwise admits to the violation in a legal proceeding. |
The disinterested members of the Board and the disinterested members
of the Compensation Committee and the Nominating and Corporate Governance Committee may be involved in reviewing, considering,
and making determinations regarding the Director’s alleged conduct, whether recoupment is appropriate or required, and the
type and amount of incentive compensation to be recouped from the Director.
The policy also provides that, to the extent permitted by applicable
law and not previously disclosed in a filing with the SEC, we will disclose in our proxy statement the circumstances of any recoupment
arising under the policy or that there has not been any recoupment pursuant to the policy for the prior calendar year. There was
no recoupment under the policy in 2017.
Charitable Contributions and Other Benefits
Matching Gift Programs
To further our support for charities, Directors may participate in
the Halliburton Foundation’s matching gift programs for educational institutions, not-for-profit hospitals, and medical foundations.
For each eligible contribution, the Halliburton Foundation makes a contribution of 2.25 times the amount contributed by the Director,
subject to approval by its Trustees. The maximum aggregate of all contributions each calendar year by a Director eligible for matching
is $50,000, resulting in a maximum aggregate amount contributed annually by the Halliburton Foundation in the form of matching
gifts of $112,500 for any Director who participates in the programs. Neither the Halliburton Foundation nor we have made a charitable
contribution, within the preceding three years, to any charitable organization in which a Director serves as an employee or an
immediate family member of the Director serves as an executive officer that exceeds in any single year the greater of $1 million
or 2% of such charitable organization’s consolidated gross revenues.
Accidental Death and Dismemberment
We offer an optional accidental death and dismemberment policy for
non-management Directors for individual coverage or family coverage with a benefit per Director of up to $250,000 and lesser amounts
for family members. Ms. Dicciani and Messrs. Carroll, Gerber, and Malone elected individual coverage at a cost of $184 annually.
Messrs. Al Khayyal, Albrecht, Grubisich, and Martin elected family coverage at a cost of $207 annually. These premiums are included
in the All Other Compensation column of the 2017 Director Compensation table for those who participate.
|
HALLIBURTON | 2018
Proxy Statement 15 |
|
2017 Director Compensation
Name |
Fees Earned
or Paid in Cash
($) |
Stock
Awards
($) |
Change in Pension Value
and Nonqualified Deferred
Compensation Earnings
($) |
All Other
Compensation
($) |
Total
($) |
Abdulaziz F. Al Khayyal |
115,000 |
181,219 |
0 |
12,183 |
308,402 |
William E. Albrecht |
115,000 |
181,219 |
0 |
5,049 |
301,268 |
Alan M. Bennett |
138,118 |
181,219 |
0 |
164,491 |
483,828 |
James R. Boyd |
135,000 |
181,219 |
0 |
96,845 |
413,064 |
Milton Carroll |
115,000 |
181,219 |
0 |
50,065 |
346,284 |
Nance K. Dicciani |
115,000 |
181,219 |
0 |
149,866 |
446,085 |
Murry S. Gerber |
115,000 |
181,219 |
0 |
121,324 |
417,543 |
José C. Grubisich |
115,000 |
181,219 |
0 |
14,068 |
310,287 |
Robert A. Malone |
130,000 |
181,219 |
0 |
130,571 |
441,790 |
J. Landis Martin |
143,118 |
181,219 |
0 |
267,201 |
591,538 |
Debra L. Reed |
130,000 |
181,219 |
0 |
76,477 |
387,696 |
Fees Earned or Paid In Cash. The
amounts in this column represent retainer fees earned in fiscal year 2017, but not necessarily paid in 2017. Refer to the section
Directors’ Fees for information on annual retainer fees.
Stock Awards. The amounts in the
Stock Awards column reflect the grant date fair value of RSUs awarded in 2017. We calculate the fair value of equity awards by
multiplying the number of RSUs granted by the closing stock price as of the award’s grant date.
The number of restricted shares, RSUs, and SEUs held at December 31,
2017, by non-management Directors are:
Name |
Restricted Shares |
RSUs |
SEUs |
Abdulaziz F. Al Khayyal |
0 |
15,780 |
3,932 |
William E. Albrecht |
0 |
8,933 |
0 |
Alan M. Bennett |
25,236 |
25,535 |
25,912 |
James R. Boyd |
25,236 |
25,535 |
36,928 |
Milton Carroll |
20,271 |
25,535 |
27,645 |
Nance K. Dicciani |
14,843 |
25,502 |
13,767 |
Murry S. Gerber |
2,000 |
10,280 |
0 |
José C. Grubisich |
0 |
21,580 |
0 |
Robert A. Malone |
14,843 |
10,280 |
0 |
J. Landis Martin |
35,162 |
25,502 |
0 |
Debra L. Reed |
33,562 |
25,535 |
20,169 |
Change in Pension Value and Nonqualified
Deferred Compensation Earnings. None of the Directors had a change in pension value or nonqualified deferred compensation
earnings that represented above market earnings in 2017.
All Other Compensation. This column
includes compensation related to the matching gift programs under the Halliburton Foundation, the Accidental Death and Dismemberment
program, dividends or dividend equivalents on restricted shares or RSUs, and dividend equivalents associated with the Directors’
Deferred Compensation Plan.
Directors who participated in the matching gift program and the corresponding
match provided by the Halliburton Foundation in 2017 are: Mr. Bennett - $112,500; Mr. Boyd - $35,663; Ms. Dicciani - $112,500;
Mr. Gerber - $112,500; Mr. Malone - $112,500; Mr. Martin - $225,000; and Ms. Reed - $22,500. Because of differences between
the time when the Director makes the charitable contribution and the time when the Halliburton Foundation makes the matching payment,
amounts paid by the Halliburton Foundation may apply to contributions made by the Directors in both 2016 and 2017 and the amounts
shown may exceed $112,500 in those instances.
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 16 |
|
Directors who participated in the Accidental Death and Dismemberment
program and incurred imputed income for the benefit amount of $184 for individual coverage and $207 for family coverage are: Mr.
Al Khayyal - $207; Mr. Albrecht - $207; Mr. Carroll - $184; Ms. Dicciani - $184; Mr. Gerber - $184; Mr. Grubisich - $207;
Mr. Malone - $184; and Mr. Martin - $207.
Directors who received dividends or dividend equivalents on restricted
shares or RSUs held on Halliburton record dates are: Mr. Bennett - $18,170; Mr. Boyd - $18,170; Mr. Carroll - $14,595; Ms.
Dicciani - $12,224; Mr. Gerber - $8,640; Mr. Malone - $17,887; Mr. Martin - $26,853; and Ms. Reed - $24,165.
Directors who received dividend equivalents attributable to their
stock equivalents account under the Directors’ Deferred Compensation Plan are: Mr. Al Khayyal - $2,251; Mr. Bennett - $17,141;
Mr. Boyd - $26,332; Mr. Carroll - $18,606; Ms. Dicciani - $9,817; and Ms. Reed - $13,132.
Directors who received dividend equivalents attributable to their
deferred RSUs under the Directors’ Deferred Compensation Plan are: Mr. Al Khayyal - $9,725; Mr. Albrecht - $4,842;
Mr. Bennett - $16,680; Mr. Boyd - $16,680; Mr. Carroll - $16,680; Ms. Dicciani - $15,141; Mr. Grubisich - $13,861; Mr.
Martin - $15,141; and Ms. Reed - $16,680.
|
HALLIBURTON | 2018
Proxy Statement 17 |
|
Stock Ownership Information
Section 16(a) Beneficial Ownership
Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires
our Directors and executive officers to file reports of holdings and transactions in Halliburton stock with the SEC and the NYSE.
Based on our records and other information, we believe that in 2017 our Directors and our officers who are subject to Section 16
met all applicable filing requirements, except Ms. Myrtle Jones, Senior Vice President – Tax, who in 2018 filed a late Form
4 to report the gifting of shares to a charity.
Stock Ownership of Certain Beneficial
Owners and Management
The following table sets forth beneficial ownership information
about persons or groups that own or have the right to acquire more than 5% of our common stock, based on information contained
in Schedules 13G filed with the SEC.
Name and Address of Beneficial Owner | |
Amount and Nature of Beneficial Ownership | | |
Percent of Class |
BlackRock, Inc. | |
| 63,837,070 | (1) | |
| 7.3 | % |
55 East 52nd Street, New York, NY 10055 | |
| | | |
| | |
Capital Research Global Investors | |
| 46,260,129 | (2) | |
| 5.3 | % |
333 South Hope Street, Los Angeles, CA 90071 | |
| | | |
| | |
The Vanguard Group | |
| 62,254,104 | (3) | |
| 7.1 | % |
100 Vanguard Blvd, Malvern, PA 19355 | |
| | | |
| | |
(1) |
BlackRock, Inc. is a parent holding company and is deemed to be the beneficial owner of 63,837,070 shares. BlackRock
has sole power to vote or to direct the vote of 55,083,912 shares and has sole power to dispose or to direct the disposition
of 63,837,070 shares. BlackRock has sole power to vote or to direct the vote, and sole power to dispose or to direct the disposition
of, 63,837,070 shares. |
(2) |
Capital Research Global Investors is a financial services company and is deemed to be the beneficial owner of 46,260,129
shares. Capital Research Global Investors has sole power to vote or to direct the vote, and sole power to dispose or to direct
the disposition of, 46,260,129 shares. |
(3) |
The Vanguard Group is an investment adviser and is deemed to be the beneficial owner of 62,254,104 shares. The Vanguard
Group has sole power to vote or to direct the vote of 1,243,327 shares and has sole power to dispose or to direct the disposition
of 60,800,424 shares. The Vanguard Group has shared power to vote or to direct the vote of 241,318 shares and has shared power
to dispose or to direct the disposition of 1,453,680 shares. |
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 18 |
|
The following table sets forth information, as of March 7, 2018,
regarding the beneficial ownership of our common stock by each Director, each Named Executive Officer, and by all Directors and
executive officers as a group.
| |
Amount and Nature of
Beneficial Ownership | |
Name of Beneficial Owner or Number of Persons
in Group | |
Sole Voting
and Investment Power (1) (2) (3) | | |
Shared Voting or
Investment Power | | |
Percent of Class | |
Abdulaziz F. Al Khayyal | |
| 0 | | |
| | | |
| * | |
William E. Albrecht | |
| 8,000 | | |
| | | |
| * | |
Alan M. Bennett | |
| 27,236 | | |
| | | |
| * | |
James R. Boyd | |
| 47,236 | | |
| | | |
| * | |
James S. Brown | |
| 407,170 | | |
| | | |
| * | |
Milton Carroll | |
| 20,271 | | |
| | | |
| * | |
Nance K. Dicciani | |
| 19,843 | | |
| | | |
| * | |
Murry S. Gerber | |
| 55,161 | | |
| | | |
| * | |
José C. Grubisich | |
| 0 | | |
| | | |
| * | |
David J. Lesar | |
| 1,455,623 | | |
| 115,847 | (4) | |
| * | |
Robert A. Malone | |
| 28,941 | | |
| | | |
| * | |
J. Landis Martin | |
| 96,764 | (5) | |
| | | |
| * | |
Jeffrey A. Miller | |
| 716,696 | | |
| | | |
| * | |
Lawrence J. Pope | |
| 415,262 | | |
| | | |
| * | |
Joe D. Rainey | |
| 420,983 | | |
| | | |
| * | |
Debra L. Reed | |
| 33,562 | | |
| | | |
| * | |
Robb L. Voyles | |
| 354,699 | | |
| | | |
| * | |
Christopher T. Weber | |
| 64,628 | | |
| | | |
| * | |
Shares owned by all current Directors and executive
officers as a group (23 persons) |
|
|
4,617,648 |
|
|
|
|
|
|
|
* |
|
* |
Less than 1% of shares outstanding. |
(1) |
The table includes shares of common stock eligible for purchase pursuant
to outstanding stock options within 60 days of March 7, 2018, for the following: Mr. Brown – 284,201; Mr. Lesar –
931,035; Mr. Miller – 260,101; Mr. Pope – 232,934; Mr. Rainey – 210,000; Mr. Voyles – 145,667; and
five unnamed executive officers – 209,867. Until the options are exercised, these individuals will not have voting or
investment power over the underlying shares of common stock, but will only have the right to acquire beneficial ownership
of the shares through exercise of their respective options. The table also includes restricted shares of common stock over
which the individuals have voting power but no investment power. |
(2) |
The table does not include restricted stock units (RSUs) held by non-management
Directors or stock equivalent units (SEUs) held by non-management Directors under the Directors’ Deferred Compensation
Plan for the following (RSUs/SEUs): Mr. Al Khayyal – 15,780 / 3,932; Mr. Albrecht – 8,933 / 0; Mr. Bennett
– 25,535 / 25,912; Mr. Boyd – 25,535 / 36,928; Mr. Carroll – 25,535 / 27,645; Ms. Dicciani – 25,502
/ 13,767; Mr. Gerber – 10,280 / 0; Mr. Grubisich – 21,580 / 0; Mr. Malone – 10,280 / 0; Mr. Martin
– 25,502 / 0; and Ms. Reed – 25,535 / 20,169. Until the underlying shares of common stock are distributed with
respect to the RSUs or SEUs, non-management Directors will not have voting or investment power over such shares. No shares
of common stock with respect to RSUs will be distributed within 60 days of March 7, 2018, unless the Board in its discretion
vests the RSUs upon a non-management Director’s separation of service from the Board. No shares of common stock with
respect to SEUs will be distributed within 60 days of March 7, 2018, because such shares are distributed in January of the
year following the year the non-management Director has a separation of service from the Board. |
(3) |
The table does not include the following restricted stock units (RSUs)
held by Mr. Brown and Mr. Lesar: Mr. Brown – 108,743, and Mr. Lesar – 326,229. Until the underlying shares of
common stock, where applicable, are distributed with respect to the RSUs, they do not have voting or investment power over
such shares. |
(4) |
Shares held by Mr. Lesar’s spouse. Mr. Lesar disclaims the beneficial
ownership of these shares. |
(5) |
Includes 61,602 shares held by Martin Enterprises LLC. Mr. Martin is the
sole manager, and Mr. Martin and trusts (of which Mr. Martin is the sole trustee) formed solely for the benefit of his children,
are the sole members of Martin Enterprises LLC. |
|
HALLIBURTON | 2018
Proxy Statement 19 |
|
Proposal No. 2
| Ratification of Selection of Principal Independent Public Accountants |
The Audit Committee is responsible for the appointment, compensation,
retention, oversight of the work, and evaluation of the principal independent public accountants retained to audit our financial
statements. The Audit Committee and Board have approved the selection of KPMG LLP as our principal independent public accountants
to examine our financial statements and books and records for the year ended December 31, 2018, and a resolution will be presented
at the Annual Meeting to ratify this selection. Representatives of KPMG are expected to be present at the Annual Meeting and be
available to respond to appropriate questions from stockholders.
KPMG began serving as our principal independent public accountants
for the year ended December 31, 2002. The Audit Committee routinely reviews the performance and retention of our independent public
accountants, including an evaluation of service quality, the nature and extent of non-audit services, and other factors required
to be considered when assessing independence from Halliburton and its management. The Audit Committee also periodically considers
whether there should be a rotation of the principal independent public accountants. The Audit Committee and Board believe that
the continued retention of KPMG to serve as our principal independent public accountants for the year ended December 31, 2018,
is in the best interests of Halliburton and our stockholders.
As a matter of good corporate governance, however, the Audit
Committee has decided to submit a request for proposal to several public accounting firms, including KPMG, to serve as our principal
independent public accountants for the year ending December 31, 2019. At the conclusion of the process, the Audit Committee may
engage KPMG or select another firm as our principal independent public accountants for the year ending December 31, 2019. Any decision
to select new principal independent public accountants will be submitted for ratification at next year’s Annual Meeting of
Stockholders.
The affirmative vote of the holders of a majority of the shares
of our common stock represented at the Annual Meeting and entitled to vote on the matter is needed to approve the proposal.
If the stockholders do not ratify the selection of KPMG, the
Board will reconsider the selection of independent public accountants.
|
|
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS PRINCIPAL
INDEPENDENT PUBLIC ACCOUNTANTS TO EXAMINE OUR FINANCIAL STATEMENTS AND BOOKS AND RECORDS FOR THE YEAR ENDING DECEMBER
31, 2018. |
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 20 |
|
Audit Committee Report
We operate under a written charter, a copy
of which is available on Halliburton’s website at www.halliburton.com.
As required by the charter, we review and reassess the charter annually and recommend any changes to the Board for approval.
Halliburton’s management is responsible for preparing Halliburton’s
financial statements and the principal independent public accountants are responsible for auditing those financial statements.
The Audit Committee’s role is to provide oversight of management in carrying out management’s responsibility and to
appoint, compensate, retain, oversee the work of, and evaluate the principal independent public accountants. The Audit Committee
is not providing any expert or special assurance as to Halliburton’s financial statements or any professional certification
as to the principal independent public accountants’ work.
In fulfilling our oversight role for the year ended December
31, 2017, we:
• |
reviewed and discussed Halliburton’s audited financial statements with management; |
• |
discussed with KPMG LLP, Halliburton’s principal independent public accountants, the matters required by Auditing
Standard 1301 relating to the conduct of the audit; |
• |
received from KPMG the written disclosures and the letter required by the Public Company Accounting Oversight Board regarding
KPMG’s independence; |
• |
evaluated KPMG’s service quality; and |
• |
discussed with KPMG its independence and reviewed other matters required to be considered under Securities and Exchange
Commission rules regarding KPMG’s independence. |
Based on the foregoing, we recommended to the Board that the
audited financial statements be included in Halliburton’s Annual Report on Form 10-K for the fiscal year ended December 31,
2017, for filing with the Securities and Exchange Commission.
THE AUDIT COMMITTEE
Alan M. Bennett
James R. Boyd
Nance K. Dicciani
Murry S. Gerber
José C. Grubisich
|
HALLIBURTON | 2018
Proxy Statement 21 |
|
Fees Paid to KPMG
LLP
During 2016 and 2017, we incurred the following fees for services
performed by KPMG LLP.
| |
2016 | | |
2017 | |
| |
(In millions) | | |
(In millions) | |
Audit fees | |
$ | 10.5 | | |
$ | 10.7 | |
Audit-related fees | |
| 0.2 | | |
| 0.2 | |
Tax fees | |
| 3.5 | | |
| 0.9 | |
TOTAL | |
$ | 14.2 | | |
$ | 11.8 | |
Audit Fees
Audit fees represent the aggregate fees for professional services
rendered by KPMG for the integrated audit of our annual financial statements for the fiscal years ended December 31, 2016, and
December 31, 2017. Audit fees also include the audits of many of our subsidiaries in regards to compliance with statutory requirements
in foreign countries and reviews of our financial statements included in the Forms 10-Q we filed during fiscal years 2016 and 2017.
Audit-Related Fees
Audit-related fees were incurred for assurance and related services
that are traditionally performed by the independent public accountant. These services primarily include attestation engagements
required by contractual or regulatory provisions and employee benefit plan audits.
Tax Fees
The aggregate fees for tax services primarily consisted of international
tax compliance and tax return services related to our expatriate employees. In 2016, tax compliance and preparation fees total
$2.3 million and tax advisory fees total $1.2 million and in 2017, tax compliance and preparation fees total $0.4 million and tax
advisory fees total $0.5 million.
Fee Approval Policies and Procedures
The Audit Committee has established a written policy that requires
the approval by the Audit Committee of all services provided by KPMG as the principal independent public accountants that examine
our financial statements and books and records and of all audit services provided by other independent public accountants. Prior
to engaging KPMG for the annual audit, the Audit Committee reviews a Principal Independent Public Accountants Auditor Services
Plan. KPMG then performs services throughout the year as approved by the Committee. KPMG reviews with the Committee, at least quarterly, a projection of KPMG’s fees
for the year. Periodically, the Audit Committee approves revisions to the plan if the Committee determines changes are warranted.
Our Audit Committee also considered whether KPMG’s provision of tax services as reported above are compatible with maintaining
KPMG’s independence as our principal independent public accountants. All of the fees described above for services provided
by KPMG were approved in accordance with the policy.
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 22 |
|
Proposal No. 3
| Advisory
Approval of Executive Compensation |
Pursuant to Section 14A of the Securities Exchange
Act of 1934, our stockholders are being presented with the opportunity to vote to approve, on an advisory (non-binding) basis,
the compensation of our named executive officers as disclosed in this proxy statement. As reaffirmed by our stockholders at the
2017 Annual Meeting of Stockholders, consistent with our Board’s recommendation, we are submitting this proposal for a non-binding
vote on an annual basis.
As described in detail under Compensation Discussion
and Analysis, our executive compensation program is designed to attract, motivate, and retain our named executive officers, who
are critical to our success. Under the program, our named executive officers are rewarded for the achievement of specific annual,
long-term and strategic goals, corporate goals, and the realization of increased stockholder returns. Please read Compensation
Discussion and Analysis for additional details about our executive compensation program, including information about the fiscal
year 2017 compensation of our named executive officers.
The Compensation Committee continually reviews
the compensation program for our named executive officers to ensure the program achieves the desired goals of aligning our executive
compensation structure with our stockholders’ interests and current market practices. We believe our executive compensation
program achieves the following objectives identified in Compensation Discussion and Analysis:
|
• |
Provide a clear and direct relationship between executive pay and our performance
on both a short-term and long-term basis; |
|
• |
Emphasize operating performance drivers; |
|
• |
Link executive pay to measures that drive stockholder returns; |
|
• |
Support our business strategies; and |
|
• |
Maximize the return on our human resource investment. |
We are asking our stockholders to indicate their
support for our named executive officers’ compensation as described in this proxy statement and ask that our stockholders
vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the compensation paid to Halliburton’s
named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including the Compensation
Discussion and Analysis, compensation tables, and narrative discussion, is hereby approved.”
The say-on-pay vote is advisory
and, therefore, not binding on us, our Board, or our Compensation Committee. Our Board and our Compensation Committee value the
opinions of our stockholders. To the extent there is any significant vote against the named executive officers’ compensation
as disclosed in this proxy statement, the Compensation Committee will evaluate whether any actions are necessary to address those
concerns.
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS. |
|
HALLIBURTON | 2018
Proxy Statement 23 |
|
Compensation Discussion and
Analysis
2017 CD&A At-A-Glance
This year’s CD&A reviews the objectives and elements of
Halliburton’s executive compensation program and discusses the 2017 compensation earned by our Named Executive Officers (NEOs).
It also explains the actions the Compensation Committee took based on its ongoing commitment to consider stockholder feedback and
to ensure our senior leadership team continues to deliver the reliable execution and industry-leading growth, margins, and returns
that our stockholders expect. During 2017, we:
|
Continued
robust stockholder engagement, with a key focus on
executive compensation matters |
|
Contacted our largest stockholders, representing more than 40% of our outstanding common stock |
|
Successfully
executed on the Chief Executive Officer (CEO) succession
and leadership transition plan |
|
Seamlessly transitioned Mr. Miller into the role of President and CEO |
|
Revamped
the provisions of Mr. Lesar’s executive agreement |
|
Eliminated
the severance benefit of five times salary upon termination
and added a four-year non-compete and non-solicitation provision |
|
Implemented
robust restrictive covenants in executive agreements
for all of our NEOs |
|
Added substantial
non-compete/non-solicitation provisions |
2017 was an exceptional year for Halliburton and our stockholders,
with the Company outperforming our direct peers, the Oilfield Services Index (OSX), and our performance peer group both in terms
of Total Stockholder Return (TSR) and Return on Capital Employed (ROCE). As a result, the CEO and other NEOs achieved challenge
level payouts under both our Annual Performance Play Plan and our Performance Unit Plan. More information about all of these actions,
our 2017 business achievements, and the resulting compensation actions taken by the Compensation Committee are summarized in the
following narrative. TSR is a measure of stock price performance which is calculated based on the growth in stock price over a
set period and adjusted for stock splits, dividends, rights offerings, and spin-offs. The components of ROCE are described under
Pay for Performance Analysis.
2017 Named Executive Officers
Name |
Age |
Occupation |
Jeffrey A. Miller |
54 |
President and Chief Executive Officer |
Christopher T. Weber |
45 |
Executive Vice President and Chief Financial Officer |
James S. Brown |
63 |
President - Western Hemisphere |
Lawrence J. Pope |
50 |
Executive Vice President, Administration and Chief Human Resources Officer |
Joe D. Rainey |
61 |
President - Eastern Hemisphere |
Robb L. Voyles |
60 |
Executive Vice President, Secretary and General Counsel |
David J. Lesar |
64 |
Executive Chairman of the Board |
Mark
A. McCollum(1) |
59 |
Former Executive Vice President and Chief Financial Officer |
(1) |
Effective as of March 6, 2017, Mr. McCollum resigned his position as our Chief Financial Officer and as an employee. |
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 24 |
|
Key Activities and Changes in 2017
Stockholder Outreach Efforts
Seeking feedback from our stockholders on a regular basis is a critical
part of our approach to managing our executive compensation program. Halliburton maintains open communication with the investment
community. During 2017, members of our senior management team participated in over 50 investor meetings and 18 conferences. This
cadence of stockholder engagement is in addition to the input we receive through our annual advisory vote on executive compensation
(say-on-pay) and targeted outreach efforts.
In response to input from our stockholders over the last few years,
we’ve made several adjustments to our executive compensation program — including placing heavier weight on performance-based
incentives and being more transparent about our target setting process, metric selection rationale, and the associated payout calculations
under our short- and long-term incentive plans.
In May 2016, we announced the termination of the merger with Baker
Hughes Incorporated. We understand that the 2017 say-on-pay vote reflected some investor dissatisfaction with this decision. The
vote sparked a targeted stockholder outreach campaign led by senior management that solicited feedback on topics including company
strategy and performance, HS&E, governance, succession planning, and executive compensation. We contacted our largest stockholders,
representing more than 40% of our outstanding common stock. We also took into account the feedback of the proxy advisory firms.
We continue to maintain an open dialogue with our stockholders to help ensure that the Board and management have a regular pulse
of investor perspectives.
Discussing our compensation program during a time of leadership transition and business volatility was extremely valuable: |
|
|
|
|
|
|
• |
We validated the philosophy, objectives, and design
of our program. While some stockholders expressed concern about the termination of the merger with Baker Hughes, they
are highly supportive of our overall program design and its significant emphasis on performance-based pay. We received positive
feedback about the mix of equity in our long-term incentives and the use of ROCE as the primary performance measure in our
long-term incentive plan. |
|
|
• |
We gained a better understanding
of where we can be more transparent. Stockholders sought clarity around the Board’s steps to protect the stability
of the senior leadership team on a go-forward basis – specifically the details of Mr. Lesar’s transition package
and the safeguards put in place to retain the other NEOs. |
|
|
HALLIBURTON | 2018
Proxy Statement 25 |
|
CEO Succession and Leadership Transition Plan
Jeffrey A. Miller
|
|
President and CEO as of June
1, 2017
On June 1, 2017, Jeffrey A. Miller was named President and CEO of
Halliburton. Mr. Miller’s promotion was part of a vigorous management succession strategy of the Board. Mr. Miller succeeded
David J. Lesar, who will continue to serve as Executive Chairman.
As President and CEO, Mr. Miller has fully assumed the day-to-day
leadership and management of the Company. He is also responsible for the planning and execution of Halliburton’s strategic
direction, financial objectives, and technology development along with Halliburton’s management team who reports directly
to him. Mr. Miller has worked closely with Mr. Lesar for over 20 years, which greatly facilitated the smooth transition of
roles. Mr. Miller joined Halliburton in 1997 and has since served in several leadership roles, including Chief Operating Officer
until 2014 when he was named President and appointed to our Board. In connection with his promotion to President and CEO:
• Mr. Miller’s annual base salary was increased
from $1 million to $1.3 million;
• He received an award of 150,000 shares of restricted
stock, which vest 100% five years from the date of grant; and
• Mr. Miller entered into a new employment agreement
with the Company, which contains a four-year non-compete and non-solicitation provision post separation.
|
David J. Lesar
|
|
Executive Chairman
As Executive Chairman, Mr. Lesar will focus on leadership of the Board
and the strategic direction of the Company, actively engage with stockholders, and advise the Halliburton management team. In connection
with his new role:
• Mr. Lesar’s
annual base salary was decreased from $1.75 million to $1 million;
• Based in part
on input from our stockholders, Mr. Lesar entered into a new employment agreement containing a four-year non-compete and non-solicitation
provision post separation, which was not included in his prior agreement; and
• Under the terms
of his new agreement, Mr. Lesar relinquished his right to receive five times his annual base salary upon termination as provided
in his prior employment agreement.
As consideration for the agreement, Mr. Lesar is entitled to receive
a $2 million cash payment and one-half of the value of a $15 million equity grant in the form of Halliburton common stock,
provided that he remains employed by us through December 31, 2018, or his employment is earlier terminated, other than for early
retirement, cause, or breach of his fiduciary duty by knowingly or recklessly engaging in a material violation of a U.S. federal
or state law, or failing to supervise an employee who substantially participated in such a violation (a fiduciary violation). The
remaining one-half of the equity grant will be valued on the termination date and paid in four equal annual installments beginning
on the first anniversary of his termination, provided that he remains in compliance with the agreement. |
As Messrs. Miller and Lesar transitioned into
their responsibilities, the Board recognized the need to keep our management team focused and stable, especially given that other
oilfield services companies have aggressively recruited our NEOs and other executives in the past. In fact, over twenty-five of
our former executives have departed to become CEOs and/or senior executives of other oilfield services companies. To this end,
we entered into new employment agreements with our NEOs that contain more-restrictive non-compete and non-solicitation provisions
and provide restricted stock grants to ensure the NEOs continued service to the company.
Mr. Brown’s new employment agreement contains
a three year non-compete and non-solicitation provision post separation. As consideration for the agreement, Mr. Brown is entitled
to receive one-half of the value of a $5 million equity
grant in the form of Halliburton common stock, provided that he remains employed by us through his normal retirement date of December 31,
2019, or his employment is earlier terminated, other than for early retirement, cause, or a fiduciary violation. The remaining
one-half of the equity grant will be valued on the termination date and paid in three equal annual installments beginning on the
first anniversary of his termination, provided that he remains in compliance with the agreement.
Messrs. Pope, Rainey, and Voyles each entered
into new employment agreements that contain two year non-compete and non-solicitation provisions post separation and were granted
restricted stock with a grant date value of $2.5 million, which vests 100% five years from the date of grant.
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 26 |
|
Robust Restrictive Covenants
To ensure continuity and to protect stockholders’ interests,
the Board negotiated new, stricter employment agreements with all of our NEOs that include substantial non-compete and non-solicitation
provisions post separation. All of the new agreements:
|
State the length of the non-compete / non-solicitation
period |
|
Periods range from two years to four years following separation, as summarized below: |
|
Name |
Non-Compete/Non-Solicitation Period |
|
|
|
Prior |
New |
|
|
Jeffrey A. Miller |
2 years |
4 years |
|
|
Christopher T. Weber |
N/A |
2 years |
|
|
James S. Brown |
Not included |
3 years |
|
|
Lawrence J. Pope |
2 years |
2 years |
|
|
Joe D. Rainey |
2 years |
2 years |
|
|
Robb L. Voyles |
2 years |
2 years |
|
|
David J. Lesar |
Not included |
4 years |
|
|
Name
companies for whom NEOs may not work during the non-compete / non-solicitation period |
|
The NEOs cannot work anywhere in the world for the following companies (or any companies owned or controlled by them): Baker Hughes, a GE company, BJ Services, Black Mountain Oil and Gas, C&J Energy Services, Calfrac Well Services Ltd., Expro International Group, Plc., Exterran Holding Inc, FTS International, General Electric, Keane Group, Liberty, Nabors Industries Ltd, National Oilwell Varco, Inc., Noble Corporation, Patterson-UTI Energy, Inc., ProPetro Services, Inc., RockPile Energy Services, RPC, Inc. (Cudd Energy Services), Schlumberger Ltd, Superior Energy Services, Inc., Tidewater Inc., Trican, Transocean Ltd., U.S. Well Services, and Weatherford International Ltd. |
|
Include a geographic
market restriction |
|
During the non-compete/non-solicitation period, Messrs. Lesar and Brown cannot work in any business operating in North America or in Halliburton’s top ten revenue producing countries outside of North America that offers, sells, or provides equipment, products, or services sold by us in our major product service lines — completion, production enhancement, cementing, and drilling. The other NEOs’ geographic restriction was expanded to include all equipment, products, or services sold by us. |
|
Prohibit NEOs from
soliciting current and former Halliburton employees |
|
The NEOs may not solicit individuals currently employed by us to leave our company at any time during the non-compete/non-solicitation period. Additionally, the NEOs cannot solicit anyone formerly employed by us during the six-month period before or after separation to affiliate with another employer. |
|
HALLIBURTON | 2018
Proxy Statement 27 |
|
2017 Overview
Our business strengthened during 2017. We grew our global market
share and moved quickly to reactivate equipment in North America to meet customer demand and enhance overall margins. We continued
to focus on cost efficiencies and aligning our business with customers in the fastest growing market segments to collaborate and
engineer solutions to maximize their asset value.
The diligence of the senior leadership team and remarkable execution
by our employees worldwide, combined with the rigorous goals set by the Board of Directors to keep management focused on creating
long-term value for our stockholders, drove exceptional results for the 2017 performance year:
• |
We generated
$20.6 billion of total company revenue, a 30% increase from 2016, with our Completion and Production segment improving 47%
and our Drilling and Evaluation segment improving 8%. These results were primarily driven by increased activity, utilization,
and pricing in the U.S. land market associated with stimulation, well completion, and drilling services. |
• |
We improved our North America and Completion and Production operating margins
by over 1,000 basis points from 2016 levels, continuing to execute on our strategy of achieving normalized margins. |
• |
We acquired three businesses, Summit ESP, Ingrain Inc., and Optimization
Petroleum Technology. The additions of these three businesses strengthen our artificial lift, wireline, and Landmark portfolios
for our global customers. |
• |
We continued to focus on cash flow execution, generating approximately $2.5
billion in operating cash flow, retiring $1.4 billion in debt, and maintaining our dividend rate with a total payment of approximately
$626 million in dividends to our stockholders. |
• |
We delivered superior TSR over the one-, three-, and five-year period ending
December 31, 2017, relative to our direct peers, the OSX, and our performance peer group. The details are depicted in the
chart below: |
Total Stockholder Return
(TSR)
(In percentages)
The graph below depicts the outperformance of our global and North
America revenue in 2017 relative to the global and North America rig count, in addition to the West Texas Intermediate (WTI) price
of crude oil.
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 28 |
|
Results of 2017 Advisory Vote on Executive
Compensation
Consistent with our stockholders’ preference, we submit our
executive compensation program to an advisory vote annually. In 2017, our compensation program received the support of 66% of the
total votes cast at our Annual Meeting, lower than we would prefer and below the support we have received in the past. In response,
we solicited feedback from our stockholders on topics including company strategy and performance, HS&E, governance, succession planning, and executive compensation. The
feedback from this stockholder engagement effort indicated that our overall compensation program design is supported by our stockholders.
For this and other reasons, the Compensation Committee determined that the overall structure of the compensation program is sound
and closely aligns the interests of both company management and our stockholders.
Our Executive Compensation Program Objectives
Our executive compensation program is designed to achieve the following
objectives:
• |
Provide a clear and direct relationship between executive pay and our performance
on both a short-term and long-term basis; |
• |
Emphasize operating performance drivers; |
• |
Link executive pay to measures that drive stockholder returns; |
• |
Support our business strategies; and |
• |
Maximize the return on our human resource investment. |
Good Compensation Governance Practices At-A-Glance
Compensation Practice |
Pursued at
Halliburton? |
More information |
Pay for performance |
YES. |
The majority of our NEO compensation is performance based. |
p33 |
Alignment between long-term objectives and the creation of stockholder value |
YES. |
Long-term incentives are at-risk and reward the achievement of value creation and performance goals while aligning management with stockholders’ interests. |
p36 |
Benchmarking against a relevant peer group |
YES. |
The Compensation Committee reviews market data for peer group companies as well as general industry surveys. |
p32 |
Independent, External Compensation Consultant |
YES. |
Pearl Meyer provides executive compensation consulting services to the Committee. |
p31 |
Stock Ownership Requirements |
YES. |
Robust executive and director stock ownership requirements. |
p15 and 40 |
Hedging and Pledging Policy |
YES. |
Executives and directors are prohibited from hedging and pledging company stock, except for pre-approved charitable donation purposes. |
p40 |
Clawback Policy |
YES. |
Our policy provides for the forfeiture, recovery, or reimbursement of incentive plan awards. We also report to stockholders if any clawback occurred. |
p15 and 40 |
Annual “Say-on-Pay” vote |
YES. |
|
p29 |
Repricing of underwater stock options |
NO. |
We prohibit repricing. |
|
Exchange underwater options |
NO. |
We prohibit the buyout or exchange of underwater options. |
|
Liberal stock or option recycling |
NO. |
We prohibit liberal stock and option recycling. |
|
Excise tax gross-ups |
NO. |
We do not provide for excise tax gross-ups. |
p52 |
Guaranteed bonuses or uncapped incentives |
NO. |
We do not provide guaranteed bonuses or uncapped incentives. |
|
|
HALLIBURTON | 2018
Proxy Statement 29 |
|
Elements of our Executive Compensation Program for Fiscal
2017
Halliburton’s executive compensation program is composed
of base salary, a short-term incentive, and long-term incentives, each of which is described below:
|
|
Reward
Element |
|
Objective |
|
Key Features |
|
How Award Value
is Calculated |
|
2017 Decisions |
FIXED |
|
Base Salary |
|
Compensates executives based on their responsibilities, experience, and skillset. |
|
Fixed element of compensation paid in cash. |
|
Reviewed against individual’s level of skill, experience, and responsibilities. Benchmarked against a group of comparably sized corporations and industry peers. |
|
Four NEOs’ base salaries were reinstated to pre-reduction levels. Two NEOs’ base salaries were increased and one NEO had his base salary reduced.
(Page 34) |
AT
RISK |
|
Short-Term Incentive |
|
To motivate and incentivize performance over a one-year period. |
|
Award value and measures are reviewed annually. Targets are set at the beginning of the year. |
|
Performance is measured against Cash Value Added (CVA) performance measures. |
|
Award values were targeted at the market median for 2017.
(Page 35) |
|
Long-Term Incentives |
|
To motivate and incentivize sustained performance over the long-term. Aligns interests of our NEOs with long-term stockholders. |
|
Value is delivered 50% performance units; 35% restricted stock; and 15% stock options. Performance units are measured over three years against targets set at the beginning of the performance period. |
|
Restricted stock and stock options have time-based vesting and value is driven by our share price. The 2017 performance units are measured against ROCE performance relative to Performance Peers. |
|
Awards were targeted at the market median for 2017.
(Page 36) |
As illustrated below, the majority of our CEO’s and NEOs’
total direct compensation opportunity is performance-based, at-risk, and long-term. The graphs depict the mix of total target direct
compensation set for our NEOs during 2017 excluding the one-time restricted stock grants for promotion and retention.
(1) |
Reflects the compensation mix of NEOs other than Mr. McCollum who resigned his position as Chief Financial Officer and as an employee on March 6, 2017. |
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 30 |
|
Setting Executive Compensation
Role of the Compensation Committee
The Compensation Committee oversees the executive compensation
program and has overall responsibility for making final decisions about total compensation for all of the NEOs. As part of its
annual process, the Committee works closely with senior management (as appropriate) and its independent compensation consultant.
This process ensures consistency from year to year and adherence to the responsibilities listed in the Committee’s Charter,
which is available on our website.
Role of the CEO
The CEO does not provide recommendations concerning his own compensation,
nor is he present when his compensation is discussed by the Committee. The Committee, with input from its independent compensation
consultant, discusses the elements of his compensation in executive session and makes a recommendation to all of the non-management
members of the Board for discussion and final approval. At the Committee’s request, a member of our management team may attend
the executive session to answer questions from the Committee.
The CEO, with input from the Committee’s independent compensation
consultant, assists the Committee in setting compensation for the other NEOs.
The following recommendations are made to the Committee for each
NEO:
• |
Base salary
adjustments, taking into account comparator peer group data, and the NEO’s individual performance and role within
the Company. |
• |
Performance
measures, target goals, and award schedules for incentive opportunities under our Annual Performance Pay Plan and Performance
Unit Plan, with performance targets being set relative to the projected business cycle and business plan. |
• |
Restricted
stock and stock option awards made under the Stock and Incentive Plan, including developing and providing specific recommendations
to the Committee on the aggregate number and types of shares to be awarded annually, reviewing the rationale and guidelines
for annual stock awards, and recommending changes to the grant types, when appropriate. |
• |
Retirement
awards, which are calculated by an external actuary, under the Halliburton Company Supplemental Executive Retirement Plan,
or SERP. |
Use of Independent Consultants and Advisors
The Committee engaged Pearl Meyer as its independent compensation
consultant during 2017. Pearl Meyer does not provide any other services to us. The primary responsibilities of the independent
compensation consultant were to:
• |
Provide independent and objective market data; |
• |
Conduct compensation analysis; |
• |
Recommend potential changes to the comparator peer group and performance peer group; |
• |
Recommend plan design changes; |
• |
Advise on risks associated with compensation plans; and |
• |
Review and advise on pay programs and pay levels. |
These services are provided as requested by the Committee throughout
the year. Based on their review of our executive compensation program, Pearl Meyer concluded that our compensation plans do not
appear to present any material risks to the Company or its stockholders in the design, metrics, interaction between incentive plans,
or administration of the Company’s incentive plans.
|
HALLIBURTON | 2018
Proxy Statement 31 |
|
Role of Benchmarking, Peer Companies, and Market Data
The Committee regularly assesses the market competitiveness of
the Company’s executive compensation program based on data from a comparator peer group. The companies comprising the comparator
peer group are selected based on the following considerations:
• |
Market capitalization; |
• |
Revenue and number of employees; |
• |
Global impact and reach; and |
• |
Industry affiliation. |
Industry affiliation includes companies that are involved in the
oil and natural gas and energy services industries. The comparator peer group is reviewed annually by the Committee to ensure relevance,
with data provided to the Committee by the independent compensation consultant.
The 2017 comparator peer group was composed of the following peer
companies within the energy industry, as well as selected companies representing general industry. This peer group was utilized
to determine market levels of total compensation for the 2017 calendar year and is unchanged from 2016:
3M Company |
Hess Corporation |
Anadarko Petroleum Corporation |
Honeywell International Inc. |
Apache Corporation |
Johnson Controls International plc |
Baker Hughes, a GE Company |
National Oilwell Varco, Inc. |
Caterpillar Inc. |
Occidental Petroleum Corporation |
ConocoPhillips |
Raytheon Company |
Deere and Company |
Schlumberger Limited |
Emerson Electric Co. |
Transocean Ltd. |
Fluor Corporation |
Weatherford International plc |
Because of variances in market capitalization and revenue size
among the companies comprising our comparator peer group, the market data is size adjusted by revenue as necessary so that it is
comparable with our trailing 12 months revenue. These adjusted values are used as the basis of comparison of compensation between
our executives and those of the comparator peer group.
Total compensation for each NEO is structured to target market
competitive pay levels in base salary and short- and long-term incentive opportunities. We also place an emphasis on variable pay
at risk, which enables this compensation structure to position actual pay above or below the 50th percentile of our
comparator peer group depending on performance.
A consistent pre-tax, present value methodology is used in assessing
stock-based and other long-term incentive awards, including the Black-Scholes model used to value stock option grants.
The independent compensation consultant gathers and performs an
analysis of market data for each NEO, comparing each of their individual components of compensation, as well as total compensation
to that of the comparator peer group. This competitive analysis consists of comparing the market data of each of the pay elements
and total compensation at the 25th, 50th, and 75th percentiles of the comparator peer group to
current compensation for each of the NEOs.
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 32 |
|
Pay for Performance Analysis
As part of its analysis, the Committee reviews one-, three-, and
five-year pay for performance against our performance peer group. The review examines the degree of alignment between our ROCE
performance compared to the ROCE performance of our performance peer group and our CEO’s realizable compensation relative
to the realizable compensation of the CEOs in our comparator peer group. We used compensation data as of December 31, 2016, for
the total realizable compensation calculation which is the most current information available at the time of the Committee’s
review.
ROCE = |
Net
income + After-tax interest expense |
|
Stockholders’ equity (average of beginning and end of period) |
+ |
Debt (average of beginning and end of period) |
|
|
|
|
|
|
Total realizable compensation consisted of the following:
• |
base salary paid; |
• |
cash incentive payouts; |
• |
in-the-money value of stock options grants during the one-, three-, or five-year period valued as of December 31, 2016; |
• |
face value of restricted stock grants during the one-, three-, or five-year period valued as of December 31, 2016; and |
• |
for performance-based awards, (i) target value for awards still outstanding as of December 31, 2016, and (ii) realized value for performance periods beginning and ending within the one-, three-, or five-year period. |
This analysis demonstrated the following:
HAL
ROCE Performance for One-Year Period ending December 31, 2017 |
HAL
CEO Total Realizable Compensation for One-Year Period ending December 31, 2016 |
71st percentile |
63rd percentile |
|
|
HAL
ROCE Performance for Three-Year Period ending December 31, 2017 |
HAL
CEO Total Realizable Compensation for Three-Year Period ending December 31, 2016 |
79th percentile |
79th percentile |
|
|
HAL
ROCE Performance for Five-Year Period ending December 31, 2017 |
HAL
CEO Total Realizable Compensation for Five-Year Period ending December 31, 2016 |
93rd percentile |
79th percentile |
|
The
Committee selected ROCE rather than TSR for this analysis because it: |
|
|
|
|
• |
Is the best indicator of long-term performance; |
|
• |
Reinforces the Company’s objective for sustained long-term performance and value creation; |
|
• |
Measures our profitability, as well as the efficiency by which we deploy capital; |
|
• |
Is tracked and understood by our stockholders; |
|
• |
Ties a part of a NEO’s long-term incentive opportunity to the achievement of challenging relative ROCE targets, which will help to increase revenue, improve margins, and maintain focus on cost control; and |
|
• |
Provides our management team with clear line of sight to financial results. |
Based on the foregoing analysis, the Committee determined that
our pay and performance are appropriately aligned.
|
HALLIBURTON | 2018
Proxy Statement 33 |
|
Determination of CEO and NEO Target Total Compensation
When determining target total compensation for the CEO, the Committee
takes into consideration competitive market pay levels for the CEOs in the comparator peer group. The Committee also considers
the CEO’s performance and accomplishments in the areas of business development and expansion, management succession, development
and retention of management, ethical leadership, and the achievement of financial and operational objectives.
Each year, our CEO and the members of the Board agree upon a set
of objectives addressing the following areas specified in our Corporate Governance Guidelines:
• |
Leadership and vision; |
• |
Integrity; |
• |
Keeping the Board informed on matters affecting Halliburton; |
• |
Performance of the business; |
• |
Development and implementation of initiatives that provide long-term economic benefits; |
• |
Accomplishment of strategic objectives; and |
• |
Development of management. |
The Board determined that Mr. Miller met these objectives in 2017
through the following achievements:
• |
Managed through a seamless CEO transition (leadership and vision); |
• |
Led the organization through the business cycle through effective stakeholder communication and maintained high visibility with employees, investors, and customers (leadership and vision); |
• |
Maintained unwavering commitment to our Code of Business Conduct. Our overall Code of Business Conduct process is ranked as best in class across all industries by the Dow Jones Sustainability Index (integrity); |
• |
Communicated regularly with the members of the Board providing status reports and notification of issues of concern, and provided unfettered access to management and subject matter experts (keeping the Board informed); |
• |
Delivered superior relative performance against major competitors in terms of market share gains, relative margins, and return on capital employed for the year ended December 31, 2017. Also, maintained highest TSR over the one-, three-, and five-year period ending December 31, 2017, relative to our direct peers, the OSX, and our performance peer group (performance of the business); |
• |
Maintained unwavering commitment to our Health, Safety and Environment program (performance of the business); |
• |
Continued to lower the Company’s effective tax rate (develop and implement initiatives that provide long-term economic benefits); |
• |
Continued our international diversification by strengthening our international business and capitalizing on strategic merger and acquisition opportunities (accomplishment of strategic objectives); and |
• |
Exposed the next generation of management to the Board, further enhanced the management/employee succession process, and focused senior management on talent development and diversity initiatives (development of management). |
Other NEO compensation is determined similar to that of the CEO
by evaluating each NEO’s performance and considering the market competitive pay levels of the comparator peer group for the
NEO’s position.
2017 Executive Compensation Outcomes
Base Salary
The Committee generally targets base salaries at the median of
the comparator peer group; however, the Committee also considers the following factors when setting base salary:
• |
Level of responsibility; |
• |
Experience in current role and equitable compensation relationships among internal peers; |
• |
Performance and leadership; and |
• |
External factors involving competitive positioning, general economic conditions, and marketplace compensation trends. |
No specific formula is applied to determine the weight of each
factor.
Salary reviews are conducted annually
to evaluate each executive; however, individual salaries are not necessarily adjusted each year. In order to manage fixed
costs during the downturn, all of our NEOs’ base salaries were reduced on April 1, 2015. These reductions continued
through 2016 until they were restored to their pre-reduction levels on January 1, 2017. Additionally, the Committee approved
the following base salary adjustments during 2017:
• |
Mr. Miller received a 30% increase in annual base salary ($1,000,000 to $1,300,000) on June 1, 2017, to reflect his promotion to President and CEO; |
• |
Mr. Voyles received a 14.3% increase in annual base salary ($721,800 to $825,000) on March 1, 2017, to reflect his additional responsibilities as the Interim Chief Financial Officer; and |
• |
Mr. Lesar’s annual base salary was reduced by approximately 43% ($1,750,000 to $1,000,000) on June 1, 2017, to reflect his transition into the Executive Chairman role. |
Base pay amounts for 2017 for all NEOs are listed in the Summary
Compensation Table. Mr. Weber’s starting base salary was $650,000. The Summary Compensation Table reflects the salary earned
after he began working for us on June 22, 2017.
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 34 |
|
Short-term (Annual) Incentive
The Annual Performance Pay Plan is designed to reward executives
and other key members of management for improving financial results that drive the creation of economic value for our stockholders
and provide a means to connect individual cash compensation directly to our performance. It is administered in accordance with
the terms of the Stock and Incentive Plan.
The Annual Performance Pay Plan provides an incentive to
our NEOs to generate more earnings than normally expected by the investors who have provided us with capital to grow our
business. We measure achievement of this objective using Cash Value Added, or CVA. CVA is a financial measurement that
demonstrates the amount of economic value added to our business.
The Committee selected CVA as the sole financial measure upon
which to base our Annual Performance Pay Plan because it is a key measure on which we set our performance expectations for the
year and we believe it is a proven driver of value creation for stockholders of the Company. However, the Committee also considers
other business performance factors that are important to our investors, including health, safety, environment, and service quality,
in determining the final payout amounts under the Annual Performance Pay Plan.
CVA
= Net Operating Profit After
Taxes –
Capital Charge |
|
|
|
|
|
|
OPERATING INCOME |
|
|
|
+ |
Interest Income |
|
|
|
+ |
Foreign Currency Gains (Losses) |
|
|
|
+ |
Other Nonoperating Income (Expense), Net |
|
|
= |
|
NET OPERATING PROFIT |
|
|
|
- |
Income Taxes |
|
|
= |
|
NET OPERATING PROFIT AFTER TAXES |
|
|
|
|
|
|
|
NET INVESTED CAPITAL |
|
|
|
x |
Weighted Average Cost of Capital |
|
|
= |
|
CAPITAL
CHARGE |
|
|
|
|
|
|
CVA is computed monthly and aggregated throughout the calendar
year. Adjustments in the calculation of the CVA payout may, at times, be approved by the Committee and can include the treatment
of unusual items that may have impacted our actual results.
At the beginning of each plan year, the Committee approves an
incentive award schedule that equates levels of CVA performance with reward opportunities paid in cash. The performance goals range
from “Threshold” to “Target” to “Maximum”. Threshold reflects the minimum CVA performance level
which must be achieved in order for awards to be earned and Maximum reflects the maximum level that can be earned.
These goals are based on our annual operating plan, as reviewed
and approved by our Board, and are set at levels to meet or exceed stockholder expectations of our performance, as well as expectations
of the relative performance to our competitors. Given the cyclical nature of our business, our performance goals vary from year
to year, which can similarly impact the difficulty in achieving these goals.
The Committee set the 2017 performance goals for our NEOs based
on company-wide consolidated CVA results. Threshold CVA was based on 90% of planned Operating Income, Target CVA on 100% of planned
Operating Income, and Maximum CVA on 110% of planned Operating Income. Net Operating Profit After Taxes was calculated excluding
charges related to U.S. tax reform and a Venezuelan promissory note and accounts receivable, as the impact of these items was unknown
when the targets were set in February 2017.
The Committee set the 2017 performance levels, targeted to the
market median, for our NEOs based on the company-wide consolidated CVA results:
Metric |
Threshold |
Target |
Maximum |
Actual |
CVA |
-$721 M |
-$597 M |
-$474 M |
-$193 M |
Individual incentive award opportunities are established as a
percentage of base salary at the beginning of the plan year based on market competitive targets. The maximum amount a NEO can receive
is limited to two times the target opportunity level. The level of achievement of annual CVA performance determines the dollar
amount of incentive compensation payable to participants following completion of the plan year.
|
HALLIBURTON | 2018
Proxy Statement 35 |
|
The Committee set incentive award opportunities under the plan
as follows:
NEO |
|
Threshold |
|
Target |
|
Maximum |
Mr. Miller |
|
50% |
|
125% |
|
250% |
Mr. Weber |
|
40% |
|
100% |
|
200% |
Mr. Brown |
|
44% |
|
110% |
|
220% |
Mr. Pope |
|
40% |
|
100% |
|
200% |
Mr. Rainey |
|
44% |
|
110% |
|
220% |
Mr. Voyles |
|
40% |
|
100% |
|
200% |
Mr. Lesar |
|
60% |
|
150% |
|
300% |
Mr. McCollum |
|
40% |
|
100% |
|
200% |
Threshold, Target, and Maximum opportunity
dollar amounts can be found in the Grants of Plan-Based Awards in Fiscal 2017 table.
Over the past ten years, the Annual Performance
Pay Plan achieved Maximum performance levels six times, achieved Target performance level one time, and fell short of the Threshold
performance level three times, resulting in no payout.
Long-Term Incentives
The Stock and Incentive Plan is designed
to reward consistent achievement of value creation and operating performance goals, align management with stockholder interests,
and encourage long-term perspective and commitment. Long-term incentives represent the largest component of total executive compensation
opportunity.
Our Stock and Incentive Plan provides for
a variety of cash and stock-based awards, including restricted stock and units, nonqualified and incentive stock options, performance
shares and units, stock appreciation rights, and stock value equivalents. Under the Stock and Incentive Plan, the Committee may,
at its discretion, select from among these types of awards to establish individual long-term incentive awards.
Using a mix of incentive vehicles allows
us to provide a diversified yet balanced long-term incentive program that effectively addresses volatility in our industry and
in the stock market, in addition to maintaining an incentive to meet performance goals. For 2017, we used the following combination
of incentive vehicles:
Vehicle |
|
Weighting |
|
Purpose |
Performance Units |
|
50% of Award |
|
Rewards achievement of specific financial goals measured over a three-year performance period |
Restricted Stock |
|
35% of Award |
|
Supports leadership retention/stability objectives |
Stock Options |
|
15% of Award |
|
Rewards for stock price appreciation |
In determining the size of long-term incentive
awards, the Committee first considers market data for comparable positions and then may adjust the awards upwards or downwards
based on the Committee’s review of internal equity. This can result in positions of similar magnitude and pay receiving awards
of varying size. The December 6, 2017, restricted stock and stock option awards for each NEO were based primarily on market data
and were targeted to the market median.
Our internal stock nomination process under
the Stock and Incentive Plan ensures that all award grant dates are prospective and not retroactive. For NEOs, the grant date is
the day the Committee determines annual compensation actions, generally in December of each year. However, awards may be approved
by the Committee throughout the year as they determine, such as for retention or performance purposes. Exercise prices for stock
options are set at the closing stock price on the date of the approved grant.
2015 Cycle Performance
Unit Program
The 2015 cycle Performance Unit Program provides
NEOs and other selected executives with incentive opportunities based on our consolidated ROCE during a three-year performance
period. This program reinforces our objectives for sustained long-term performance and value creation. It also reinforces strategic
planning processes and balances short- and long-term decision making.
Based on feedback from our stockholders and
to more closely align with our strategy of delivering industry-leading returns across the business cycle, we modified the metrics
in our Performance Unit Program to 100% relative ROCE. The program measures ROCE on a relative basis to the results of our performance
peer group used for the Performance Unit Program. The three-year performance period aligns this measurement with our and our performance
peer group’s business cycles.
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 36 |
|
The performance peer group used for the Performance
Unit Program is comprised of oilfield equipment and services companies and domestic and international exploration and production
companies. This performance peer group is used for the Performance Unit Program because these companies represent the timing, cyclicality,
and volatility of the oil and natural gas industry and provide an appropriate industry group to measure our relative performance
against. The peer group, disclosed in our 2016 proxy statement, was used for the 2015 cycle of the Performance Unit Program.
The table below shows the incentive opportunity
based on Halliburton’s ROCE performance relative to that of our performance peer group. The 2015 cycle of the Performance
Unit Program ended on December 31, 2017, and we achieved average ROCE of -2.86%, which was above the 75th percentile
of our performance peer group’s average ROCE of -6.09% and yielded an award paid at 200% of the target opportunity level.
2015 Cycle - Performance Matrix
Halliburton Ranking vs. Performance Peer Group |
|
Threshold
25th Percentile |
|
Target
50th Percentile |
|
Maximum
75th Percentile |
Incentive Opportunity as a % of Target |
|
25% |
|
100% |
|
200% |
The NEOs received payments in 2018 as set
forth in the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table. The program allows for rewards to
be paid in cash, stock, or a combination of cash and stock. Over the past ten years, the program has achieved Maximum performance
levels five times, Target levels four times, and Threshold levels one time.
2017 Cycle Performance
Unit Program
The Committee set the performance measures
on a 100% relative ROCE basis for the 2017 cycle of the Performance Unit Program, with performance measured for the three-year
period ending December 31, 2019.
Cameron International Corporation was removed
from the performance peer group for the 2017 cycle due to its acquisition. To ensure stability in the performance peer group going
forward, the Committee added two additional oilfield equipment and service companies for the 2017 cycle, Superior Energy Services,
Inc. and TechnipFMC.
The performance peer group used for the 2017
Performance Unit Program consists of the following companies:
Anadarko Petroleum Corporation |
|
Nabors Industries Ltd. |
Apache Corporation |
|
National Oilwell Varco, Inc. |
Baker Hughes, a GE Company |
|
Schlumberger Limited |
Chesapeake Energy Corporation |
|
Superior Energy Services, Inc |
Devon Energy Corporation |
|
TechnipFMC |
Hess Corporation |
|
Transocean Ltd. |
Marathon Oil Corporation |
|
Weatherford International plc |
Murphy Oil Corporation |
|
The Williams Companies, Inc. |
At the end of the three-year performance
period, the average ROCE of the Company and the performance peer group will be calculated and percentiles will be determined. The
table below details the incentive opportunity based on Halliburton’s performance relative to the performance peer group.
If Halliburton’s relative performance ranking is below the 25th percentile, there will be no payment. If Halliburton’s
relative performance ranking is between the 25th, 50th, and 75th percentiles, the payout will
be interpolated accordingly.
2017 Cycle - Performance Matrix
Halliburton Ranking vs. Performance Peer Group |
|
Threshold
25th Percentile |
|
Target
50th Percentile |
|
Maximum
75th Percentile |
Incentive Opportunity as a % of Target |
|
25% |
|
100% |
|
200% |
Individual incentive opportunities are established
based on market references and the NEO’s role within the organization. The Threshold, Target, and Maximum columns under the
heading Estimated Future Payouts Under Non-Equity Incentive Plan Awards in the Grants of Plan-Based Awards in Fiscal 2017 table
indicate the potential payout for each NEO under the Performance Unit Program for the 2017 cycle. The potential payouts are performance
driven and completely at risk. Actual payout amounts, if any, will not be determined until the three-year cycle closes on December
31, 2019.
|
HALLIBURTON | 2018
Proxy Statement 37 |
|
Restricted Stock and Stock Options
Our restricted stock and stock option awards
are granted under the Stock and Incentive Plan and are listed in the Grants of Plan-Based Awards in Fiscal 2017 table.
Restricted stock grants are generally subject
to a graded vesting schedule of 20% per year over five years. However, different vesting schedules may be utilized at the discretion
of the Committee. Shares of restricted stock receive dividend or dividend equivalent payments.
Stock option awards vest over a three-year
graded vesting period with 33⅓% of the grant vesting each year. All options are priced at the closing
stock price on the date the grant is approved by the Committee.
The stock and option award columns in the
Summary Compensation Table reflect the aggregate grant date fair value of the restricted stock and option awards for each NEO granted
during 2017.
Supplemental Executive Retirement Plan
The objective of the Supplemental Executive
Retirement Plan, or SERP, is to provide a competitive level of pay replacement upon retirement. The current pay replacement target
is 75% of base salary at age 65 with 25 years of service, using the highest annual salary during the last three years of employment.
The material factors and guidelines considered
in making an allocation include (i) retirement benefits provided, both qualified and nonqualified; (ii) current compensation; (iii)
length of service; and (iv) years of service to normal retirement.
The calculation takes into account the following
variables: (i) base salary; (ii) years of service; (iii) age; (iv) employer portion of qualified plan savings; (v) age 65
value of any defined benefit plan; and (vi) existing nonqualified plan balances and any other retirement plans.
Several assumptions are made annually and
include a base salary increase percentage, qualified and nonqualified plan contributions and investment earnings, and an annuity
rate. These factors are reviewed and approved annually by the Committee in advance of calculating any awards.
To determine the annual benefit, external
actuaries calculate the total lump sum retirement benefit needed at age 65 from all company retirement sources to produce an annual
retirement benefit of 75% of highest annual salary during the last three years of employment. Company retirement sources include
any Company contributions to qualified benefit plans and contributions to nonqualified benefit plans. If the combination of these
two sources does not yield a total retirement balance that will meet the 75% objective, then contributions may be made annually
through the SERP to bring the total benefit up to the targeted level.
To illustrate, assume $10 million is needed
at age 65 to produce an annual retirement benefit equal to 75% of base salary. The participant is projected to have $3 million
in his qualified benefit plans resulting from Company contributions at retirement and $4 million in his nonqualified retirement
plans at retirement. Since the total of these two sources is $7 million, a shortfall of $3 million results. This is the amount
needed to achieve the 75% pay replacement objective. This shortfall may be offset through annual contributions to the SERP.
Participation in the SERP is limited to the
direct reports of the CEO and other selected executives as recommended by the CEO and approved at the discretion of the Committee.
However, participation one year does not guarantee future participation. In 2017, the Committee authorized retirement allocations
under the SERP to all NEOs as listed in the Supplemental Table: All Other Compensation and the 2017 Nonqualified Deferred Compensation.
The average annual amounts allocated over the history of participation are as follows: $589,500 for Mr. Miller; $378,000 for Mr.
Weber; $611,100 for Mr. Brown; $172,800 for Mr. Pope; $507,625 for Mr. Rainey; $266,000 for Mr. Voyles; $430,875 for Mr. Lesar;
and $200,643 for Mr. McCollum.
All of the NEOs, except Messrs. Voyles and
Weber, are fully vested in their respective account balances. Balances for active and terminated participants earn interest at
an annual rate of 5% and 10%, respectively.
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 38 |
|
Other Executive Benefits and Policies
Retirement and Savings Plan
All NEOs participate in the Halliburton Retirement
and Savings Plan, which is the defined contribution benefit plan available to all eligible U.S. employees. The matching contribution
amounts we contributed on behalf of each NEO are included in the Supplemental Table: All Other Compensation.
Elective Deferral Plan
All NEOs may participate in the Halliburton
Elective Deferral Plan, which was established to provide highly compensated employees with an opportunity to defer earned base
salary and incentive compensation in order to help meet retirement and other future income needs.
Participants may elect to defer up to 75%
of their annual base salary and up to 75% of their incentive compensation into the plan. Deferral elections must be made on an
annual basis, including the type and timing of distribution. Plan earnings are based on the NEO’s choice of up to 12 investment
options with varying degrees of risk, including the risk of loss. Investment options may be changed by the NEO daily.
In 2017, none of our NEOs participated in
this plan. Messrs. Brown, Rainey, and Lesar have account balances from participation in prior years. Messrs. Miller, Weber, Pope,
Voyles, and McCollum are not participants in the plan. Further details can be found in the 2017 Nonqualified Deferred Compensation
table.
Benefit Restoration Plan
The Halliburton Company Benefit Restoration
Plan provides a vehicle to restore qualified plan benefits which are reduced as a result of limitations on contributions imposed
under the Internal Revenue Code or due to participation in other plans we sponsor and to defer compensation that would otherwise
be treated as excessive remuneration within the meaning of Section 162(m) of the Internal Revenue Code. Awards are made annually
to those who meet these criteria and earned interest at an annual rate as defined by the plan document. Awards and corresponding
interest balances are 100% vested and distributed upon separation.
In accordance with the plan document, participants
earn monthly interest at the 120% AFR rate, provided the interest rate shall be no less than 6% per annum or greater than 10% per
annum. Because the 120% AFR rate was below the 6% minimum interest threshold, plan participants earn interest at an annual rate
of 6% in 2017.
In 2017, all NEOs except Mr. McCollum received
awards under this plan in the amounts included in the Supplemental Table: All Other Compensation and the 2017 Nonqualified Deferred
Compensation table.
Perquisites
Country club memberships are limited and
provided on an as-needed basis for business purposes only. Mr. Brown had a club membership in 2017.
We do not provide cars to our NEOs. However,
a car and part-time driver were used by Messrs. Miller and Lesar for security purposes and so that they can work while in transit
to meet customer and our needs.
A taxable benefit for executive financial
planning is provided with the amount dependent on the NEO’s level within the company. This benefit does not include tax return
preparation. It is paid, only if used, on a reimbursable basis.
We also provided security at the personal
residences of Messrs. Miller, Pope, and Lesar during 2017.
As a result of the recommendations provided
by an independent, third-party security consultant, the Board has determined that Messrs. Miller and Lesar must use company aircraft
for all travel.
The security study also recommends that their
spouses and children use company-provided aircraft. The only personal use of the company aircraft in 2017 for other NEOs is for
spousal and dependent travel on select business trips.
Mr. Rainey is an expatriate under our long-term
expatriate business practice. A differential is commonly paid to expatriates in assignment locations where the cost of goods and
services is greater than the cost for the same goods and services in the expatriate’s home country. Differentials are determined
by Mercer/ORC, a third-party consultant. Mr. Rainey receives certain assignment allowances, including a goods and services differential
and host country housing and utilities. He also participates in our tax equalization program, which neutralizes the tax effect
of the international assignment and approximates the tax obligation the expatriate would pay in his home country.
Specific amounts for the above-mentioned
perquisites are detailed for each NEO in the Supplemental Table: All Other Compensation.
|
HALLIBURTON | 2018
Proxy Statement 39 |
|
Clawback Policy
We have a clawback policy under which we
will seek to recoup incentive compensation in all appropriate cases paid to, awarded, or credited for the benefit of any of our
executive officers, which include all NEOs, if and to the extent that:
• |
The amount of incentive compensation was calculated based on the achievement of financial results that were subsequently reduced due to a restatement of our financial results; |
• |
The officer engaged in fraudulent conduct that caused the need for the restatement; and |
• |
The amount of incentive compensation that would have been paid to, awarded, or credited for the benefit of the officer, had our financial results been properly reported, would have been lower than the amount actually paid, awarded, or credited. |
|
|
The policy also provides that we will seek to recoup incentive compensation in all appropriate cases paid to, awarded to, or credited for the benefit of any of our executive officers, which include all NEOs, and certain other senior officers, if and to the extent that: |
|
|
• |
It is determined that, in connection with the performance of that officer’s duties, he or she breached his or her fiduciary duty by knowingly or recklessly engaging in a material violation of a U.S. federal or state law, or failed to supervise an employee who substantially participated in such a violation; or |
• |
The officer is named as a defendant in a law enforcement proceeding for having breached his or her fiduciary duty by knowingly or recklessly engaging in a material violation of a U.S. federal or state law, the officer disagrees with the allegations relating to the proceeding, and either (A) we initiate a review and determine that the alleged action is not indemnifiable or (B) the officer does not prevail at trial, enters into a plea arrangement, agrees to the entry of a final administrative or judicial order imposing sanctions, or otherwise admits to the violation in a legal proceeding. |
The disinterested members of the Board and
the disinterested members of the Compensation Committee and the Nominating and Corporate Governance Committee may be involved in
reviewing, considering, and making determinations regarding the officer’s alleged conduct, whether recoupment is appropriate
or required, and the type and amount of incentive compensation to be recouped from the officer.
The policy also provides that, to the extent
permitted by applicable law and not previously disclosed in a filing with the SEC, we will disclose in our proxy statement the
circumstances of any recoupment arising under the policy or that there has not been any recoupment pursuant to the policy for the
prior calendar year. There was no recoupment under the policy in 2017.
Stock Ownership Requirements
We have stock ownership requirements for
our executive officers, which include all the NEOs, to further align their interests with our stockholders.
Our CEO and our Chairman are required to
own Halliburton common stock in an amount equal to or in excess of six times their annual base salary. Executive officers that
report directly to the CEO are required to own an amount of Halliburton common stock equal to or in excess of three times their
annual base salary, and all other executive officers are required to own an amount of Halliburton common stock equal to or in excess
of two times their annual base salary. The Committee reviews their holdings, which include restricted shares and all other Halliburton
common stock owned by the officer, at each December meeting. Each executive officer has five years to meet the requirements, measured
from the later of September 12, 2011, or the date the officer first becomes subject to the ownership level for the applicable office.
After the five-year stock ownership period,
as described above, executive officers who have not met their minimum ownership requirement must retain 100% of the net shares
acquired upon restricted stock vesting until they achieve their required ownership level. During this time period, any stock option
exercise must be an exercise and hold.
As of December 31, 2017, all NEOs met the
requirements.
Hedging and Pledging
Our executive officers are prohibited from
hedging activities related to Halliburton securities and the pledging of Halliburton securities, except that hedging activities
in connection with or related to a bona fide charitable donation may be approved in advance at the sole discretion of the General
Counsel.
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 40 |
|
Elements of Post-Termination Compensation and Benefits
Termination events that trigger payments
and benefits include normal or early retirement, cause, death, disability, and voluntary termination. Post-termination or change-in-control
payments may include severance, accelerated vesting of restricted stock and stock options, payments under cash-based short- and
long-term incentive plans, payout of nonqualified account balances, and health benefits, among others. The Post-Termination or
Change-In-Control Payment table in this proxy statement indicates the impact of various events on each element of compensation
for the NEOs.
Impact of Regulatory Requirements on Compensation
Section 162(m) of the Internal Revenue Code
generally disallows a tax deduction to public companies for compensation paid to the CEO, CFO, or any of the three other most highly
compensated officers to the extent the compensation exceeds $1 million in any year. Effective for tax years beginning after
December 31, 2017, Section 162(m) has been revised to eliminate the performance-based compensation exception. At this time, it
is not certain that our performance-based compensation for periods prior to 2018 will qualify for an exemption from the deduction
limit under transition relief applicable to arrangements in place as of November 2, 2017.
Prior to the new tax law, our Stock and Incentive
Plan enabled qualification of stock options, stock appreciation rights, and performance share awards, as well as short- and long-term
cash performance plans under Section 162(m). Our policy is to utilize available tax deductions whenever appropriate and consistent
with our compensation philosophy. When designing and implementing our executive compensation program, the Committee considers all
relevant factors, including tax deductibility of compensation, and will consider the new tax law and the federal tax deductibility
of compensation in excess of $1 million a year to the extent doing so is consistent with our executive compensation objectives.
|
HALLIBURTON | 2018
Proxy Statement 41 |
|
Compensation Committee
Report
We have reviewed and discussed the Compensation
Discussion and Analysis with Company management and, based on such review and discussion, we recommended to the Board that the
Compensation Discussion and Analysis be included in this proxy statement.
THE COMPENSATION COMMITTEE
William E. Albrecht
James R. Boyd
Milton Carroll
Murry S. Gerber
Robert A. Malone
Debra L. Reed
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 42 |
|
Executive Compensation
Tables
Summary Compensation Table
The following tables set forth information regarding our CEO,
CFO, interim CFO, Chairman and former CEO, our three other most highly compensated executive officers, and a retired executive
for the fiscal year ended December 31, 2017.
Name and
Principal Position |
|
Year |
|
Salary
($) |
|
Bonus
($) |
|
Stock
Awards
($) |
|
Option
Awards
($) |
|
Non-Equity
Incentive Plan
Compensation
($) |
|
Change In
Pension Value
and NQDC
Earnings
($) |
|
All Other
Compensation
($) |
|
Total
($) |
Jeffrey A. Miller |
|
2017 |
|
1,175,000 |
|
0 |
|
10,168,098 |
|
1,506,020 |
|
8,692,468 |
|
59,532 |
|
1,477,246 |
|
23,078,364 |
President and Chief Executive Officer |
|
2016 |
|
970,000 |
|
0 |
|
2,237,972 |
|
1,169,685 |
|
3,480,500 |
|
53,541 |
|
1,085,876 |
|
8,997,574 |
|
2015 |
|
977,500 |
|
0 |
|
2,169,515 |
|
1,179,488 |
|
2,218,718 |
|
30,615 |
|
1,084,536 |
|
7,660,372 |
Christopher T. Weber(1) |
|
2017 |
|
342,234 |
|
0 |
|
2,738,401 |
|
601,910 |
|
650,000 |
|
0 |
|
417,458 |
|
4,750,003 |
Executive Vice President and Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James S. Brown |
|
2017 |
|
900,000 |
|
0 |
|
6,244,649 |
|
563,380 |
|
5,183,420 |
|
150,178 |
|
1,107,341 |
|
14,148,968 |
President – Western Hemisphere |
|
2016 |
|
873,000 |
|
0 |
|
1,295,668 |
|
674,883 |
|
2,746,217 |
|
152,725 |
|
1,316,154 |
|
7,058,647 |
|
2015 |
|
879,750 |
|
0 |
|
1,281,455 |
|
697,943 |
|
1,634,785 |
|
101,969 |
|
1,360,886 |
|
5,956,788 |
Lawrence J. Pope |
|
2017 |
|
675,000 |
|
0 |
|
3,400,112 |
|
401,996 |
|
3,901,040 |
|
40,850 |
|
424,352 |
|
8,843,350 |
Executive Vice President, Administration and Chief Human Resources Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joe D. Rainey |
|
2017 |
|
835,000 |
|
0 |
|
3,703,772 |
|
537,948 |
|
5,040,420 |
|
241,270 |
|
3,636,965 |
|
13,995,375 |
President – Eastern Hemisphere |
|
2016 |
|
809,950 |
|
0 |
|
1,295,668 |
|
674,883 |
|
2,639,032 |
|
206,351 |
|
2,821,571 |
|
8,447,455 |
|
2015 |
|
816,212 |
|
0 |
|
1,281,455 |
|
697,943 |
|
1,634,785 |
|
75,712 |
|
2,720,300 |
|
7,226,407 |
Robb L. Voyles(2) |
|
2017 |
|
807,800 |
|
0 |
|
3,400,112 |
|
401,996 |
|
3,665,980 |
|
22,009 |
|
547,777 |
|
8,845,674 |
Executive Vice President, Secretary and General Counsel |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David J. Lesar |
|
2017 |
|
1,312,500 |
|
0 |
|
18,882,089 |
|
912,976 |
|
14,832,828 |
|
372,493 |
|
2,311,073 |
|
38,623,959 |
Executive Chairman
of the Board |
|
2016 |
|
1,630,000 |
|
0 |
|
3,704,968 |
|
1,933,767 |
|
7,892,090 |
|
405,647 |
|
2,280,441 |
|
17,846,913 |
|
2015 |
|
1,660,000 |
|
0 |
|
3,867,735 |
|
2,103,341 |
|
5,999,513 |
|
299,127 |
|
1,941,613 |
|
15,871,329 |
Mark A. McCollum(3) |
|
2017 |
|
150,000 |
|
0 |
|
0 |
|
0 |
|
0 |
|
183,278 |
|
124,867 |
|
458,145 |
Former Executive
Vice President and
Chief Financial Officer |
|
2016 |
|
800,250 |
|
0 |
|
985,136 |
|
513,315 |
|
2,182,439 |
|
81,686 |
|
619,222 |
|
5,182,048 |
|
2015 |
|
806,438 |
|
0 |
|
1,102,285 |
|
599,256 |
|
1,268,190 |
|
67,574 |
|
625,526 |
|
4,469,269 |
(1) |
Effective as of June 22, 2017, Mr. Weber was hired as our Chief Financial Officer. |
(2) |
Mr. Voyles served as interim Chief Financial Officer from March 6, 2017, until June 22, 2017. |
(3) |
Effective as of March 6, 2017, Mr. McCollum resigned his position as our Chief Financial Officer and as an employee. |
|
HALLIBURTON | 2018
Proxy Statement 43 |
|
Salary. The amounts represented
in the Salary column are attributable to salary earned by each NEO.
Stock Awards. The amounts in
the Stock Awards column reflect the grant date fair value of the restricted stock awarded in 2017. Except where there is a distinction
to make between the two types of awards, this proxy statement refers to both restricted stock and restricted stock units as “restricted
stock”. We calculate the fair value of restricted stock awards by multiplying the number of restricted shares or units granted
by the closing stock price on the grant date. Additional information on amounts included in the Stock Awards column can be found
in the CEO Succession and Leadership Transition Plan section of Compensation Discussion and Analysis.
Option Awards. The amounts
in the Option Awards column reflect the grant date fair value of the stock options awarded in 2017. The fair value of stock options
is estimated using the Black-Scholes option pricing model. For a discussion of the assumptions made in these valuations, refer
to Note 10 to the Consolidated Financial Statements, Stock-based Compensation, in the Halliburton Company Form 10-K for the fiscal
year ended December 31, 2017.
Non-Equity Incentive Plan Compensation.
The amounts represented in the Non-Equity Incentive Plan Compensation column are for amounts earned in 2017 and paid in 2018 for
the Halliburton Annual Performance Pay Plan and the 2015 cycle Performance Unit Program.
The 2017 Halliburton Annual Performance Pay
Plan amounts paid to each NEO are: $2,500,000 for Mr. Miller; $650,000 for Mr. Weber; $1,980,000 for Mr. Brown; $1,350,000 for
Mr. Pope; $1,837,000 for Mr. Rainey; $1,443,600 for Mr. Voyles; and $5,250,000 for Mr. Lesar.
The 2015 cycle Performance Unit Program amounts
paid to each NEO are: $6,192,468 for Mr. Miller; $3,203,420 for Mr. Brown; $2,551,040 for Mr. Pope; $3,203,420 for Mr. Rainey;
$2,222,380 for Mr. Voyles; and $9,582,828 for Mr. Lesar. The amounts paid to the NEOs for the 2015 cycle Performance Unit
Program differ from what is shown in the Grants of Plan-Based Awards in Fiscal Year 2017 table under Estimated Future Payments
Under Non-Equity Incentive Plan Awards. That table indicates the potential award amounts for Threshold, Target, and Maximum under
the 2017 cycle Performance Unit Program, which will close on December 31, 2019.
Change in Pension Value and NQDC Earnings.
The amounts in the Change in Pension Value and NQDC Earnings column are attributable to the above-market earnings for various nonqualified
plans. The methodology for determining what constitutes above-market earnings is the difference between the interest rate as stated
in the applicable nonqualified plan document and the Internal Revenue Service Long-Term 120% AFR rate as of December 31, 2017.
The 120% AFR rate used for determining above-market earnings in 2017 was 3.16%.
Halliburton Company Supplemental Executive
Retirement Plan Above-Market Earnings. The current interest rate for active and terminated participant accounts in the Halliburton
Company Supplemental Executive Retirement Plan is 5% and 10% respectively, as defined by the plan document. The above-market earnings
for active participants equaled 1.84% (5% (plan interest) minus 3.16%) and the above-market earnings for terminated participants
equaled 6.84% (10% (plan interest) minus 3.16%) for 2017.
NEOs earned above-market earnings for their
balances associated with the plan as follows: $51,192 for Mr. Miller; $111,585 for Mr. Brown; $31,717 for Mr. Pope; $69,364
for Mr. Rainey; $19,171 for Mr. Voyles; $245,240 for Mr. Lesar; and $177,736 for Mr. McCollum.
Halliburton Company Benefit Restoration
Plan Above-Market Earnings. In accordance with the plan document, participants earn monthly interest at the 120% AFR rate,
provided the interest rate shall be no less than 6% per annum or greater than 10% per annum. Because the 120% AFR rate was below
the 6% minimum interest threshold, the above-market earnings associated with this plan were 2.84% (6% (plan interest) minus 3.16%)
for 2017.
NEOs earned above-market earnings for their
balances associated with the plan as follows: $8,340 for Mr. Miller; $13,688 for Mr. Brown; $9,133 for Mr. Pope; $9,668 for
Mr. Rainey; $2,838 for Mr. Voyles; $105,382 for Mr. Lesar; and $5,542 for Mr. McCollum.
Halliburton Company Elective Deferral
Plan Above-Market Earnings. The average earnings for the balances associated with the Halliburton Company Elective Deferral
Plan were 7.9% for 2017. The above-market earnings associated with this plan equaled 4.74% (7.9% minus 3.16%) for 2017.
NEOs earned above-market earnings for balances
associated with the plan as follows: $24,905 for Mr. Brown; $162,238 for Mr. Rainey; and $21,871 for Mr. Lesar. Messrs. Miller,
Weber, Pope, Voyles, and McCollum are not participants in and do not have any prior balances in the Halliburton Company Elective
Deferral Plan.
The amounts shown in this column differ from
the amounts shown for the Supplemental Executive Retirement Plan, the Benefit Restoration Plan, and the Elective Deferral Plan
in the 2017 Nonqualified Deferred Compensation table under the Aggregate Earnings in Last Fiscal Year column because that table
includes all earnings and losses and the Summary Compensation Table shows above-market earnings only.
All Other Compensation. Detailed
information for amounts included in the All Other Compensation column can be found in the Supplemental Table: All Other Compensation.
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 44 |
|
Supplemental Table: All Other Compensation
The following table details the components of the All Other Compensation
column of the Summary Compensation Table for 2017.
Name |
|
Financial
Planning
($) |
|
Halliburton
Foundation
($) |
|
Halliburton
Giving
Choices
($) |
|
HALPAC
($) |
|
Restricted
Stock
Dividends
($) |
|
HRSP
Employer
Match
($) |
|
HRSP
Basic
($) |
|
Benefit
Restoration
Plan
($) |
|
SERP
($) |
|
All
Other
($) |
|
Total
($) |
Jeffrey A.
Miller |
|
4,050 |
|
112,500 |
|
970 |
|
5,000 |
|
254,873 |
|
13,000 |
|
5,400 |
|
63,350 |
|
954,000 |
|
64,103 |
|
1,477,246 |
Christopher
T. Weber |
|
0 |
|
0 |
|
417 |
|
0 |
|
19,558 |
|
9,027 |
|
5,400 |
|
5,056 |
|
378,000 |
|
0 |
|
417,458 |
James S.
Brown |
|
10,000 |
|
0 |
|
780 |
|
4,935 |
|
148,784 |
|
13,125 |
|
5,400 |
|
44,100 |
|
853,000 |
|
27,217 |
|
1,107,341 |
Lawrence
J. Pope |
|
0 |
|
17,308 |
|
660 |
|
5,000 |
|
77,894 |
|
9,563 |
|
5,400 |
|
28,350 |
|
244,000 |
|
36,177 |
|
424,352 |
Joe D. Rainey |
|
21,420 |
|
0 |
|
0 |
|
0 |
|
0 |
|
10,438 |
|
5,400 |
|
39,550 |
|
671,000 |
|
2,889,157 |
|
3,636,965 |
Robb L. Voyles |
|
10,000 |
|
45,000 |
|
600 |
|
5,000 |
|
81,343 |
|
11,697 |
|
5,400 |
|
37,646 |
|
350,000 |
|
1,091 |
|
547,777 |
David J.
Lesar |
|
15,000 |
|
112,500 |
|
0 |
|
5,000 |
|
374,559 |
|
13,500 |
|
5,400 |
|
72,975 |
|
1,225,000 |
|
487,139 |
|
2,311,073 |
Mark A. McCollum |
|
0 |
|
0 |
|
188 |
|
0 |
|
21,985 |
|
11,783 |
|
4,713 |
|
0 |
|
0 |
|
86,198 |
|
124,867 |
Financial Planning. This program allows NEOs to receive
financial planning services by accredited financial planners. Tax planning is not covered under this program. The amount is based
on the services the NEO received in 2017.
Halliburton Foundation. The Halliburton Foundation allows
NEOs and other employees to donate to approved universities, medical hospitals, and primary schools of their choice. In 2017, the
Halliburton Foundation matched donations up to $20,000 on a 2.25 for 1 basis. Messrs. Miller and Lesar participate in the Halliburton
Foundation’s matching program for Directors, which allowed their 2017 contributions up to $50,000 to qualified organizations
to be matched on a 2.25 for 1 basis.
Halliburton Giving Choices. The Halliburton Giving Choices
Program allows NEOs and other employees to donate to approved not-for-profit charities of their choice. We match donations by contributing
ten cents for every dollar contributed by employees. The amounts shown represent the match amounts the program donated to charities
on behalf of the NEOs in 2017.
Halliburton Political Action Committee. The Halliburton
Political Action Committee, or HALPAC, allows NEOs and other eligible employees to donate to political candidates and participate
in the political process. We match the NEOs’ and other employees’ donations to HALPAC dollar-for-dollar to a 501(c)(3)
status nonprofit organization of the contributor’s choice. The amounts shown represent the match amounts the program donated
to charities on behalf of the NEOs in 2017.
Restricted Stock Dividends. This is the amount of dividends
paid on restricted stock held by NEOs in 2017. Restricted stock units granted to employees do not receive dividend payments.
Halliburton Retirement and Savings Plan Employer Match. This
is the contribution we made on behalf of each NEO to the Halliburton Company Retirement and Savings Plan, our defined contribution
plan. We match employee contributions up to 5% of each employee’s eligible base salary up to the 401(a)(17) compensation
limit of $270,000 in 2017.
Halliburton Retirement and Savings Plan Basic Contribution.
This is the contribution we made on behalf of each NEO to the Halliburton Company Retirement and Savings Plan. If actively
employed on December 31, 2017, or if they meet retirement eligibility requirements of the plan as of their seperation date, each
employee receives a contribution equal to 2% of their eligible base pay up to the 401(a)(17) compensation limit of $270,000 in
2017.
Halliburton Company Benefit Restoration
Plan. This is the award earned under the Halliburton Company Benefit Restoration Plan in 2017 as discussed in the Benefit Restoration
Plan section of Compensation Discussion and Analysis. Associated interest, awards, and beginning and ending balances for the Halliburton
Company Benefit Restoration Plan are included in the 2017 Nonqualified Deferred Compensation table.
Halliburton Company Supplemental Executive
Retirement Plan. This is the award approved under the Halliburton Company Supplemental Executive Retirement Plan in 2017 as
discussed in the Supplemental Executive Retirement Plan section of Compensation Discussion and Analysis. Associated interest, awards,
and beginning and ending balances for the Halliburton Company Supplemental Executive Retirement Plan are included in the 2017 Nonqualified
Deferred Compensation table.
All Other.
• |
Country Club Membership Dues. Club memberships are approved for business purposes only. During 2017, we paid club membership dues for Mr. Brown. The amount incurred was $18,000. |
• |
Aircraft Usage. As a result of the recommendations provided by an independent, third-party security consultant, the Board has determined that Messrs. Miller and Lesar must use company aircraft for all travel. The security study also recommends that their spouses and children use company-provided aircraft. The only personal use of company aircraft in 2017 for other NEOs was for spousal and dependent travel on select business trips. For 2017, the incremental cost to us for this personal use of our aircraft was as follows: $10,991 for Mr. Miller; $8,113 for Mr. Pope; and $333,929 for Mr. Lesar. For total compensation purposes in 2017, we valued the incremental cost of the personal use of aircraft using a method that takes into account: landing, parking, hanger, flight planning services, and dead-head costs; crew travel expenses; supplies and catering; aircraft fuel and oil expenses per hour of flight; any customs, foreign permit, and similar fees; and |
|
HALLIBURTON | 2018
Proxy Statement 45 |
|
|
passenger ground transportation. For tax purposes, we impute income to the NEO for the value of the spousal and dependent travel on select business trips and reimburse the NEO for the tax impact of the imputed income. For 2017, tax reimbursements for imputed income associated with this spousal and dependent travel were as follows: $15,351 for Mr. Miller; $9,217 for Mr. Brown; $3,143 for Mr. Pope; $504 for Mr. Rainey; $1,091 for Mr. Voyles; $83,080 for Mr. Lesar; and $538 for Mr. McCollum. |
• |
Home Security. We provide security for residences based on risk assessments which consider the NEO’s position. In 2017, home security costs were as follows: $33,729 for Mr. Miller; $24,921 for Mr. Pope; and $42,917 for Mr. Lesar. |
• |
Car/Driver. A car and part-time driver were used by Messrs. Miller and Lesar for security purposes and so that they can work while in transit to meet customer and our needs. In 2017, the cost to us was $4,032 and $23,047, respectively. |
• |
Other Compensation for Mr. Lesar. In 2017, Mr. Lesar received $2,449 in imputed income for relocation and $1,717 for tax equalization. |
• |
Other Compensation for Mr. Rainey. In 2017, Mr. Rainey received $66,537 for cost of living adjustment; $83,500 mobility premium; $2,612,012 for tax equalization; $500 for tax preparation fees; $113,701 for imputed housing allowance; and $12,907 for auto imputed allowance. All compensation amounts are associated with his expatriate assignment and other expatriates on comparable assignments receive similar types of adjustments. |
• |
Other Compensation for Mr. McCollum. In 2017, Mr. McCollum’s other compensation consisted of an $85,660 unused vacation payment. |
Grants of Plan-Based Awards in Fiscal
2017
The following table represents amounts associated with the 2017
cycle Performance Unit Program, the 2017 Annual Performance Pay Plan, and restricted stock and stock option awards granted in 2017
to our NEOs.
|
|
|
|
Estimated Future Payouts Under Non-Equity Incentive
Plan Awards |
|
All Other Stock Awards: Number of
Shares of |
|
All Other Option Awards: Number of
Securities Underlying |
|
Exercise or Base Price of Option |
|
Grant Date Fair Value of Stock and Option |
Name |
|
Grant Date |
|
Threshold ($) |
|
Target ($) |
|
Maximum
($) |
|
Stock or Units (#) |
|
Options (#) |
|
Awards ($/Share) |
|
Awards ($) |
Jeffrey A. Miller |
|
|
|
716,298 |
|
2,865,190 |
|
5,730,380 |
(1) |
|
|
|
|
|
|
|
|
|
|
|
500,000 |
|
1,250,000 |
|
2,500,000 |
(2) |
|
|
|
|
|
|
|
|
|
6/01/2017 |
|
|
|
|
|
|
|
150,000 |
|
|
|
|
|
6,823,500 |
|
|
12/06/2017 |
|
|
|
|
|
|
|
77,100 |
|
|
|
|
|
3,344,598 |
|
|
12/06/2017 |
|
|
|
|
|
|
|
|
|
128,500 |
|
$43.38 |
|
1,506,020 |
Christopher T. Weber |
|
|
|
290,585 |
|
1,162,342 |
|
2,324,683 |
(1)(3) |
|
|
|
|
|
|
|
|
|
|
|
260,000 |
|
650,000 |
|
1,300,000 |
(2) |
|
|
|
|
|
|
|
|
|
6/22/2017 |
|
|
|
|
|
|
|
10,724 |
|
|
|
|
|
449,336 |
|
|
6/22/2017 |
|
|
|
|
|
|
|
33,304 |
|
|
|
|
|
1,395,438 |
|
|
6/22/2017 |
|
|
|
|
|
|
|
|
|
18,174 |
|
$41.90 |
|
199,914 |
|
|
12/06/2017 |
|
|
|
|
|
|
|
20,600 |
|
|
|
|
|
893,628 |
|
|
12/06/2017 |
|
|
|
|
|
|
|
|
|
34,300 |
|
$43.38 |
|
401,996 |
James S. Brown |
|
|
|
413,491 |
|
1,653,962 |
|
3,307,924 |
(1) |
|
|
|
|
|
|
|
|
|
|
|
396,000 |
|
990,000 |
|
1,980,000 |
(2) |
|
|
|
|
|
|
|
|
|
6/01/2017 |
|
|
|
|
|
|
|
108,743 |
|
|
|
|
|
4,946,719 |
|
|
12/06/2017 |
|
|
|
|
|
|
|
29,920 |
|
|
|
|
|
1,297,930 |
|
|
12/06/2017 |
|
|
|
|
|
|
|
|
|
48,070 |
|
$43.38 |
|
563,380 |
Lawrence J. Pope |
|
|
|
314,303 |
|
1,257,210 |
|
2,514,420 |
(1) |
|
|
|
|
|
|
|
|
|
|
|
270,000 |
|
675,000 |
|
1,350,000 |
(2) |
|
|
|
|
|
|
|
|
|
5/17/2017 |
|
|
|
|
|
|
|
54,089 |
|
|
|
|
|
2,506,484 |
|
|
12/06/2017 |
|
|
|
|
|
|
|
20,600 |
|
|
|
|
|
893,628 |
|
|
12/06/2017 |
|
|
|
|
|
|
|
|
|
34,300 |
|
$43.38 |
|
401,996 |
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 46 |
|
|
|
|
|
Estimated Future Payouts
Under
Non-Equity Incentive Plan Awards |
|
All Other
Stock
Awards:
Number of
Shares of |
|
All Other
Option
Awards:
Number of
Securities
Underlying |
|
Exercise or
Base Price
of Option |
|
Grant Date
Fair Value
of Stock
and Option |
Name |
|
Grant Date |
|
Threshold
($) |
|
Target
($) |
|
Maximum
($) |
|
Stock or
Units (#) |
|
Options
(#) |
|
Awards
($/Share) |
|
Awards
($) |
Joe D. Rainey |
|
|
|
413,491 |
|
1,653,962 |
|
3,307,924 |
(1) |
|
|
|
|
|
|
|
|
|
|
|
367,400 |
|
918,500 |
|
1,837,000 |
(2) |
|
|
|
|
|
|
|
|
|
5/17/2017 |
|
|
|
|
|
|
|
54,089 |
|
|
|
|
|
2,506,484 |
|
|
12/06/2017 |
|
|
|
|
|
|
|
27,600 |
|
|
|
|
|
1,197,288 |
|
|
12/06/2017 |
|
|
|
|
|
|
|
|
|
45,900 |
|
$43.38 |
|
537,948 |
Robb L. Voyles |
|
|
|
314,303 |
|
1,257,210 |
|
2,514,420 |
(1) |
|
|
|
|
|
|
|
|
|
|
|
288,720 |
|
721,800 |
|
1,443,600 |
(2) |
|
|
|
|
|
|
|
|
|
5/17/2017 |
|
|
|
|
|
|
|
54,089 |
|
|
|
|
|
2,506,484 |
|
|
12/06/2017 |
|
|
|
|
|
|
|
20,600 |
|
|
|
|
|
893,628 |
|
|
12/06/2017 |
|
|
|
|
|
|
|
|
|
34,300 |
|
$43.38 |
|
401,996 |
David J. Lesar |
|
|
|
1,185,235 |
|
4,740,938 |
|
9,481,876 |
(1) |
|
|
|
|
|
|
|
|
|
|
|
1,050,000 |
|
2,625,000 |
|
5,250,000 |
(2) |
|
|
|
|
|
|
|
|
|
6/01/2017 |
|
|
|
|
|
|
|
326,229 |
|
|
|
|
|
14,840,157 |
|
|
12/06/2017 |
|
|
|
|
|
|
|
93,175 |
|
|
|
|
|
4,041,932 |
|
|
12/06/2017 |
|
|
|
|
|
|
|
|
|
77,899 |
|
$43.38 |
|
912,976 |
Mark A. McCollum(4) |
|
|
|
314,303 |
|
1,257,210 |
|
2,514,420 |
(1) |
|
|
|
|
|
|
|
|
|
|
|
330,000 |
|
825,000 |
|
1,650,000 |
(2) |
|
|
|
|
|
|
|
(1) |
Opportunity levels under the 2017 cycle of the Performance Unit Program. |
(2) |
Opportunity levels under the 2017 Halliburton Annual Performance Pay Plan. |
(3) |
The amounts reflected were the initial opportunity levels under the 2017 cycle of the Performance Unit Program for Mr. Weber. Any amounts earned under the program will be prorated based on his 6/22/2017 start date. |
(4) |
The amounts reflected were the initial opportunity levels under the 2017 cycle of the Performance Unit Program and the 2017 Annual Performance Pay Plan for Mr. McCollum. Because of his resignation, no payment will be made to him under either Plan. |
As indicated by footnote (1), the opportunities
for each NEO under the 2017 cycle Performance Unit Program if the Threshold, Target, or Maximum levels are achieved are reflected
under Estimated Future Payouts Under Non-Equity Incentive Plan Awards. The potential payouts are performance driven and completely
at risk. For more information on the 2017 cycle Performance Unit Program, refer to Long-term Incentives in Compensation Discussion
and Analysis.
As indicated by footnote (2), the opportunities
for each NEO under the 2017 Halliburton Annual Performance Pay Plan are also reflected under Estimated Future Payouts Under Non-Equity
Incentive Plan Awards. This plan measures company Cash Value Added as compared to our pre-established goals during a one-year period.
The potential payouts are performance driven and completely at risk. For more information on the 2017 Halliburton Annual Performance
Pay Program, refer to Short-term (Annual) Incentive in Compensation Discussion and Analysis. All restricted stock and nonqualified
stock option awards are granted under the Stock and Incentive Plan. The awards listed under All Other Stock Awards: Number of Shares
of Stock or Units and under All Other Option Awards: Number of Securities Underlying Options were awarded to each NEO on the date
indicated by the Compensation Committee.
The annual restricted stock grants awarded
to the NEOs on December 6, 2017, are subject to a graded vesting schedule of 20% per year over five years. The restricted stock
granted to the NEOs in May and June have varying vesting schedules which are described in the footnotes to the Outstanding Equity
Awards at Fiscal Year End 2017 table. All restricted shares are priced at fair market value on the date of grant. Quarterly dividends
are paid on the restricted shares at the same time and rate payable on our common stock, which was $0.18 per share during 2017.
The shares may not be sold or transferred until fully vested. The shares remain subject to forfeiture during the restricted period
in the event of the NEO’s termination of employment or an unapproved early retirement.
Nonqualified stock options granted in 2017
vest over a three-year graded vesting period with 33⅓% of the options vesting each year. All options are priced at the fair
market value on the date of grant using the Black-Scholes options pricing model. There are no voting or dividend rights unless
the NEO exercises the options and acquires the shares.
|
HALLIBURTON | 2018
Proxy Statement 47 |
|
Outstanding Equity Awards at Fiscal Year
End 2017
The following table represents outstanding
stock option and restricted stock awards for our NEOs as of December 31, 2017. The market value of shares or units of stock not
vested was determined by multiplying the number of unvested restricted shares at year end by the closing price of our common stock
on the NYSE of $48.87 on December 31, 2017.
|
|
Option Awards |
|
Stock Awards |
|
|
Number
of |
Number
of |
|
|
|
|
|
|
|
Securities |
Securities |
|
|
|
Number of |
Market Value |
|
|
Underlying |
Underlying |
|
|
|
Shares |
of Shares |
|
|
Unexercised |
Unexercised |
Option |
|
|
or Units |
or Units of |
|
|
Options |
Options |
Exercise |
Option |
|
of Stock |
Stock |
|
|
(#) |
(#) |
Price |
Expiration |
|
Not Vested |
Not Vested |
Name |
Grant
Date |
Exercisable |
Unexercisable |
($) |
Date |
|
(#) |
($) |
Jeffrey A. Miller(1) |
12/4/2013 |
55,700 |
– |
50.62 |
12/4/2023 |
|
7,640 |
373,367 |
|
8/1/2014 |
– |
– |
|
|
|
45,300 |
2,213,811 |
|
12/3/2014 |
115,100 |
– |
40.75 |
12/3/2024 |
|
24,800 |
1,211,976 |
|
12/2/2015 |
66,134 |
33,066 |
38.95 |
12/2/2025 |
|
33,420 |
1,633,235 |
|
12/7/2016 |
23,167 |
46,333 |
53.54 |
12/7/2026 |
|
33,440 |
1,634,213 |
|
6/1/2017 |
– |
– |
|
|
|
150,000 |
7,330,500 |
|
12/6/2017 |
– |
128,500 |
43.38 |
12/6/2027 |
|
77,100 |
3,767,877 |
TOTAL |
|
260,101 |
207,899 |
|
|
|
371,700 |
18,164,979 |
Christopher T. Weber(2) |
6/22/17 |
– |
18,174 |
41.90 |
6/22/2027 |
|
10,724 |
524,082 |
|
6/22/17 |
– |
– |
|
|
|
33,304 |
1,627,566 |
|
12/6/2017 |
– |
34,300 |
43.38 |
12/6/2027 |
|
20,600 |
1,006,722 |
TOTAL |
|
0 |
52,474 |
|
|
|
64,628 |
3,158,370 |
James S. Brown(3) |
12/2/2008 |
– |
– |
|
|
|
19,455 |
950,776 |
|
12/1/2010 |
26,100 |
– |
39.19 |
12/1/2020 |
|
– |
– |
|
12/6/2011 |
43,700 |
– |
35.57 |
12/6/2021 |
|
– |
– |
|
12/5/2012 |
56,900 |
– |
33.50 |
12/5/2022 |
|
– |
– |
|
12/4/2013 |
45,500 |
– |
50.62 |
12/4/2023 |
|
6,240 |
304,949 |
|
12/3/2014 |
59,500 |
– |
40.75 |
12/3/2024 |
|
12,800 |
625,536 |
|
12/2/2015 |
39,134 |
19,566 |
38.95 |
12/2/2025 |
|
19,740 |
964,694 |
|
12/7/2016 |
13,367 |
26,733 |
53.54 |
12/7/2026 |
|
19,360 |
946,123 |
|
6/1/2017 |
– |
– |
|
|
|
108,743 |
5,314,270 |
|
12/6/2017 |
– |
48,070 |
43.38 |
12/6/2027 |
|
29,920 |
1,462,190 |
TOTAL |
|
284,201 |
94,369 |
|
|
|
216,258 |
10,568,538 |
Lawrence J. Pope(4) |
12/1/2009 |
26,500 |
– |
29.35 |
12/1/2019 |
|
– |
– |
|
12/1/2010 |
23,000 |
– |
39.19 |
12/1/2020 |
|
– |
– |
|
12/6/2011 |
28,300 |
– |
35.57 |
12/6/2021 |
|
– |
– |
|
12/5/2012 |
38,500 |
– |
33.50 |
12/5/2022 |
|
– |
– |
|
12/4/2013 |
29,400 |
– |
50.62 |
12/4/2023 |
|
4,040 |
197,435 |
|
12/3/2014 |
47,400 |
– |
40.75 |
12/3/2024 |
|
10,240 |
500,429 |
|
12/2/2015 |
29,667 |
14,833 |
38.95 |
12/2/2025 |
|
15,000 |
733,050 |
|
12/7/2016 |
10,167 |
20,333 |
53.54 |
12/7/2026 |
|
14,720 |
719,366 |
|
5/17/2017 |
– |
– |
|
|
|
54,089 |
2,643,329 |
|
12/6/2017 |
– |
34,300 |
43.38 |
12/6/2027 |
|
20,600 |
1,006,722 |
TOTAL |
|
232,934 |
69,466 |
|
|
|
118,689 |
5,800,331 |
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 48 |
|
|
|
Option Awards |
|
Stock Awards |
|
|
Number
of |
Number
of |
|
|
|
|
|
|
|
Securities |
Securities |
|
|
|
Number of |
Market Value |
|
|
Underlying |
Underlying |
|
|
|
Shares |
of Shares |
|
|
Unexercised |
Unexercised |
Option |
|
|
or Units |
or Units of |
|
|
Options |
Options |
Exercise |
Option |
|
of Stock |
Stock |
|
|
(#) |
(#) |
Price |
Expiration |
|
Not Vested |
Not Vested |
Name |
Grant
Date |
Exercisable |
Unexercisable |
($) |
Date |
|
(#) |
($) |
Joe D. Rainey(5) |
12/6/2011 |
14,566 |
– |
35.57 |
12/6/2021 |
|
– |
– |
|
12/5/2012 |
37,933 |
– |
33.50 |
12/5/2022 |
|
– |
– |
|
12/4/2013 |
45,500 |
– |
50.62 |
12/4/2023 |
|
6,240 |
304,949 |
|
12/3/2014 |
59,500 |
– |
40.75 |
12/3/2024 |
|
12,800 |
625,536 |
|
12/2/2015 |
39,134 |
19,566 |
38.95 |
12/2/2025 |
|
19,740 |
964,694 |
|
12/7/2016 |
13,367 |
26,733 |
53.54 |
12/7/2026 |
|
19,360 |
946,123 |
|
5/17/2017 |
– |
– |
|
|
|
54,089 |
2,643,329 |
|
12/6/2017 |
– |
45,900 |
43.38 |
12/6/2027 |
|
27,600 |
1,348,812 |
TOTAL |
|
210,000 |
92,199 |
|
|
|
139,829 |
6,833,443 |
Robb L. Voyles(6) |
9/16/2013 |
100,000 |
– |
49.82 |
9/16/2023 |
|
11,000 |
537,570 |
|
12/3/2014 |
41,300 |
– |
40.75 |
12/3/2024 |
|
8,880 |
433,966 |
|
12/2/2015 |
27,534 |
13,766 |
38.95 |
12/2/2025 |
|
13,920 |
680,270 |
|
12/7/2016 |
10,167 |
20,333 |
53.54 |
12/7/2026 |
|
14,720 |
719,366 |
|
5/17/2017 |
– |
– |
|
|
|
54,089 |
2,643,329 |
|
12/6/2017 |
– |
34,300 |
43.38 |
12/6/2027 |
|
20,600 |
1,006,722 |
TOTAL |
|
179,001 |
68,399 |
|
|
|
123,209 |
6,021,223 |
David J. Lesar(7) |
12/1/2010 |
108,000 |
– |
39.19 |
12/1/2020 |
|
– |
– |
|
12/6/2011 |
141,900 |
– |
35.57 |
12/6/2021 |
|
– |
– |
|
12/5/2012 |
208,900 |
– |
33.50 |
12/5/2022 |
|
– |
– |
|
12/4/2013 |
137,900 |
– |
50.62 |
12/4/2023 |
|
18,940 |
925,598 |
|
12/3/2014 |
178,100 |
– |
40.75 |
12/3/2024 |
|
38,400 |
1,876,608 |
|
12/2/2015 |
117,934 |
58,966 |
38.95 |
12/2/2025 |
|
59,580 |
2,911,675 |
|
12/7/2016 |
38,301 |
76,599 |
53.54 |
12/7/2026 |
|
55,360 |
2,705,443 |
|
6/1/2017 |
– |
– |
|
|
|
326,229 |
15,942,811 |
|
12/6/2017 |
– |
77,899 |
43.38 |
12/6/2027 |
|
93,175 |
4,553,462 |
TOTAL |
|
931,035 |
213,464 |
|
|
|
591,684 |
28,915,597 |
(1) |
Mr. Miller’s
stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in
equal amounts over each grant’s five-year vesting schedule, except for the August 1, 2014, and June 1, 2017, awards,
which each vest 100% five years from the date of grant. |
(2) |
Mr. Weber’s
stock option awards vest annually in equal amounts over three-year vesting schedules. Mr. Weber was granted two restricted
stock awards when he began employment with us on June 22, 2017. The awards consisted of 10,724 and 33,304 grants of restricted
stock which vest in equal amounts over the grant’s five-year vesting schedule and 100% three years from the date of
grant, respectively. |
(3) |
Mr. Brown’s
stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in
equal amounts over each grant’s five-year vesting schedule, except the December 2, 2008, restricted stock award, which
began vesting on the sixth anniversary of the award and vests 20% annually through year ten and the June 1, 2017, grant which
vests 50% provided that he remains employed by us through December 31, 2019, or his employment is earlier terminated, other
than for early retirement, cause, or a fiduciary violation. The remaining one-half of the equity grant will be valued on the
termination date and paid in three equal annual installments beginning on the first anniversary of his termination. |
(4) |
Mr. Pope’s
stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in
equal amounts over each grant’s five-year vesting schedule, except for the May 17, 2017, grant which vests 100% five
years from the date of grant. |
(5) |
Mr. Rainey’s
stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in
equal amounts over each grant’s five-year vesting schedule, except for the May 17, 2017, grant which vests 100% five
years from the date of grant. |
(6) |
Mr. Voyles’
stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in
equal amounts over each grant’s five-year vesting schedule, except for the May 17, 2017, grant which vests 100% five
years from the date of grant. |
(7) |
Mr. Lesar’s
stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in
equal amounts over each grant’s five-year vesting schedule, except for the June 1, 2017, grant which vests 50% provided
that he remains employed by us through December 31, 2018, or his employment is earlier terminated, other than for early retirement,
cause, or a fiduciary violation. The remaining one-half of the equity grant will be valued on the termination date and paid
in four equal annual installments beginning on the first anniversary of his termination. |
|
HALLIBURTON | 2018
Proxy Statement 49 |
|
2017 Option Exercises and Stock Vested
The following table represents stock options
exercised and restricted shares that vested during fiscal year 2017 for our NEOs.
|
Option
Awards |
|
Stock
Awards |
|
Number
of Shares |
Value
Realized |
|
Number
of Shares |
Value
Realized |
|
Acquired on Exercise |
on Exercise |
|
Acquired on Vesting |
on Vesting |
Name |
(#) |
($) |
|
(#) |
($) |
Jeffrey
A. Miller |
– |
– |
|
102,800 |
4,456,616 |
Christopher T. Weber |
– |
– |
|
– |
– |
James S. Brown |
– |
– |
|
53,035 |
2,311,902 |
Lawrence J. Pope |
9,100 |
40,495 |
|
23,400 |
1,015,598 |
Joe D. Rainey |
– |
– |
|
32,580 |
1,418,481 |
Robb L. Voyles |
– |
– |
|
23,760 |
1,016,328 |
David J. Lesar |
– |
– |
|
102,020 |
4,324,009 |
Mark A. McCollum |
176,635 |
2,537,588 |
|
– |
– |
The value realized for vested restricted
stock awards was determined by multiplying the fair market value of the shares (closing price of our common stock on the NYSE on
the vesting date) by the number of shares that vested. Shares vested on various dates throughout the year. The value listed represents
the aggregate value of all shares that vested for each NEO in 2017.
2017 Nonqualified Deferred Compensation
The 2017 Nonqualified Deferred Compensation
table reflects balances in our nonqualified plans as of January 1, 2017, contributions made by the NEO and us during 2017, earnings
(the net of the gains and losses on funds, as applicable), distributions, and the ending balance as of December 31, 2017. The plans
are described in Compensation Discussion and Analysis.
|
|
|
Executive |
Registrant |
Aggregate |
|
Aggregate |
|
|
|
Contributions |
Contributions |
Earnings |
|
Balance At |
|
|
01/01/17 |
In Last |
In Last |
In Last |
Aggregate |
Last Fiscal |
|
|
Balance |
Fiscal Year |
Fiscal Year |
Fiscal Year |
Distributions |
Year End |
Name |
Plan |
($) |
($) |
($) |
($) |
($) |
($) |
Jeffrey A. Miller |
SERP |
2,793,156 |
0 |
954,000 |
139,455 |
0 |
3,886,611 |
|
Benefit Restoration |
295,668 |
0 |
63,350 |
17,683 |
0 |
376,701 |
|
TOTAL |
3,088,824 |
0 |
1,017,350 |
157,138 |
0 |
4,263,312 |
Christopher T. Weber |
SERP |
0 |
0 |
378,000 |
0 |
0 |
378,000 |
|
Benefit Restoration |
0 |
0 |
5,056 |
0 |
0 |
5,056 |
|
TOTAL |
0 |
0 |
383,056 |
0 |
0 |
383,056 |
James S. Brown |
SERP |
6,082,133 |
0 |
853,000 |
303,780 |
0 |
7,238,913 |
|
Benefit Restoration |
485,106 |
0 |
44,100 |
29,017 |
0 |
558,223 |
|
Elective Deferral |
1,039,880 |
0 |
0 |
57,742 |
0 |
1,097,622 |
|
TOTAL |
7,607,119 |
0 |
897,100 |
390,539 |
0 |
8,894,758 |
Lawrence J. Pope |
SERP |
1,728,203 |
0 |
244,000 |
86,329 |
0 |
2,058,532 |
|
Benefit Restoration |
323,684 |
0 |
28,350 |
19,362 |
0 |
371,396 |
|
TOTAL |
2,051,887 |
0 |
272,350 |
105,691 |
0 |
2,429,928 |
Joe D. Rainey |
SERP |
3,782,288 |
0 |
671,000 |
188,884 |
0 |
4,642,172 |
|
Benefit Restoration |
342,660 |
0 |
39,550 |
20,496 |
0 |
402,706 |
|
Elective Deferral |
3,476,449 |
0 |
0 |
272,017 |
0 |
3,748,466 |
|
TOTAL |
7,601,397 |
0 |
710,550 |
481,397 |
0 |
8,793,344 |
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 50 |
|
|
|
|
Executive |
Registrant |
Aggregate |
|
Aggregate |
|
|
|
Contributions |
Contributions |
Earnings |
|
Balance At |
|
|
01/01/17 |
In Last |
In Last |
In Last |
Aggregate |
Last Fiscal |
|
|
Balance |
Fiscal Year |
Fiscal Year |
Fiscal Year |
Distributions |
Year End |
Name |
Plan |
($) |
($) |
($) |
($) |
($) |
($) |
Robb L. Voyles |
SERP |
1,046,675 |
0 |
350,000 |
52,246 |
0 |
1,448,921 |
|
Benefit Restoration |
100,675 |
0 |
37,646 |
6,020 |
0 |
144,341 |
|
TOTAL |
1,147,350 |
0 |
387,646 |
58,266 |
0 |
1,593,262 |
David J. Lesar |
SERP |
13,351,400 |
0 |
1,225,000 |
667,144 |
0 |
15,243,544 |
|
Benefit Restoration |
3,733,892 |
0 |
72,975 |
223,373 |
0 |
4,030,240 |
|
Elective Deferral |
1,339,953 |
0 |
0 |
84,073 |
19,889 |
1,404,137 |
|
TOTAL |
18,425,245 |
0 |
1,297,975 |
974,590 |
19,889 |
20,677,921 |
Mark A. McCollum |
SERP |
3,511,469 |
0 |
0 |
288,698 |
328,947 |
3,471,220 |
|
Benefit Restoration |
511,969 |
0 |
0 |
21,720 |
533,689 |
0 |
|
TOTAL |
4,023,438 |
0 |
0 |
310,418 |
862,636 |
3,471,220 |
Employment Contracts and Change-in-Control
Arrangements
Employment Contracts
All of our NEOs have employment agreements
with us, except Mr. McCollum, who is no longer employed by us.
Each of the NEO agreements contain substantial
non-compete and non-solicitation provisions post separation that are summarized in Compensation Discussion and Analysis.
The employment agreements for Messrs. Miller,
Weber, Pope, Rainey, and Voyles provide that if the agreement is terminated by the employee for good reason or by death, disability,
or retirement or his employment is terminated by the company for any reason other than cause or a fiduciary violation, all restrictions
on restricted stock and units will lapse. In addition, in the case of a termination by the employee for good reason or termination
by the company for any reason other than cause or a fiduciary violation, the employee will receive a lump sum cash payment equal
to two years of his base salary then in effect.
Mr. Brown’s employment agreement provides
that if the agreement is terminated by Mr. Brown for good reason or by death, disability, retirement, or early retirement or his
employment is terminated by us for any reason other than cause or a fiduciary violation, all restrictions on restricted stock and
units, other than a restricted stock unit grant valued at $5 million (the Brown equity grant), will lapse. In addition, provided
that Mr. Brown remains employed by us through December 31, 2019, or his employment is earlier terminated for any of the above reasons
other than early retirement, he will receive one-half of the value of the Brown equity grant in the form of Halliburton common
stock. The remaining one-half of that equity grant will be valued on the termination date and paid in three equal annual installments
beginning on the first anniversary of his termination, provided that he remains in compliance with his continuing obligations under
the employment agreement. In addition, in the case of a termination by Mr. Brown for good reason or termination by the company
for any reason other than cause or a fiduciary violation, Mr. Brown will receive a lump sum cash payment equal to two years of
his base salary then in effect.
Mr. Lesar’s employment agreement provides
that if the agreement is terminated by Mr. Lesar for good reason or by death, disability, retirement, or early retirement or his
employment is terminated by us for any reason other than cause or a fiduciary violation, all restrictions on restricted stock and
units, other than a restricted stock unit grant valued at $15 million (the Lesar equity grant), will lapse. In addition, provided
that Mr. Lesar remains employed by us through December 31, 2018, or his employment is earlier terminated for any of the above reasons
other than early retirement, he will also receive (a) a lump sum cash payment of $2 million, and (b) one-half of the value of the
Lesar equity grant in the form of Halliburton common stock. The remaining one-half of that equity grant will be valued on the termination
date and paid in four equal annual installments beginning on the first anniversary of his termination, provided that he remains
in compliance with his continuing obligations under the employment agreement.
|
HALLIBURTON | 2018
Proxy Statement 51 |
|
Change-In-Control Arrangements
We do not maintain individual change-in-control agreements or
provide for excise tax gross-ups on any payments associated with a change-in-control. Some of our compensation plans, however,
contain change-in-control provisions, which could result in payment of specific benefits.
Under the Stock and Incentive Plan, in the event of a change-in-control,
the following will occur automatically:
• |
any outstanding options and stock appreciation
rights shall become immediately vested and fully exercisable; |
• |
any restrictions on restricted stock awards shall
immediately lapse; |
• |
all performance measures upon which an outstanding
performance award is contingent are deemed achieved and the holder receives a payment equal to the maximum amount of the award
he or she would have been entitled to receive, prorated to the effective date; and |
• |
any outstanding cash awards, including stock value
equivalent awards, immediately vest and are paid based on the vested value of the award. |
|
|
Under the Annual Performance Pay Plan:
|
|
|
• |
in the event of a change-in-control during a plan
year, a participant will be entitled to an immediate cash payment equal to the maximum dollar amount he or she would have
been entitled to for the year, prorated through the date of the change-in-control; and |
• |
in the event of a change-in-control after the
end of a plan year but before the payment date, a participant will be entitled to an immediate cash payment equal to the incentive
earned for the plan year. |
|
|
Under the Performance Unit Program:
|
|
|
• |
in the event of a change-in-control during a performance
cycle, a participant will be entitled to an immediate cash payment equal to the maximum amount he or she would have been entitled
to receive for the performance cycle, prorated to the date of the change-in-control; and |
• |
in the event of a change-in-control after the
end of a performance cycle but before the payment date, a participant will be entitled to an immediate cash payment equal
to the incentive earned for that performance cycle. |
|
|
Under the Employee Stock Purchase
Plan, in the event of a change-in-control, unless the successor corporation assumes or substitutes new stock purchase rights: |
|
|
• |
the purchase date for the outstanding stock purchase
rights will be accelerated to a date fixed by the Compensation Committee prior to the effective date of the change-in-control;
and |
• |
upon such effective date, any unexercised stock
purchase rights will expire and we will refund to each participant the amount of his or her payroll deductions made for purposes
of the Employee Stock Purchase Plan that have not yet been used to purchase stock. |
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 52 |
|
Post-Termination or Change-in-Control Payments
The following tables and narratives represent
the impact of certain termination events or a change-in-control on each element of compensation for NEOs as of December 31, 2017.
|
|
Termination
Event |
|
|
|
|
Early |
|
|
|
|
|
|
|
|
Retirement |
Early |
|
|
Term |
|
|
|
|
w/o |
Retirement |
Normal |
Term |
w/o |
Change in |
|
|
Resignation |
Approval |
w/Approval |
Retirement |
for Cause |
Cause |
Control |
Name |
Payments |
($) |
($) |
($) |
($) |
($) |
($) |
($) |
Jeffrey A. |
Severance |
0 |
0 |
0 |
0 |
0 |
2,800,000 |
0 |
Miller |
Annual
Perf. Pay Plan |
0 |
0 |
2,500,000 |
2,500,000 |
0 |
2,500,000 |
2,500,000 |
|
Restricted
Stock |
0 |
0 |
18,164,979 |
18,164,979 |
0 |
18,164,979 |
18,164,979 |
|
Stock
Options |
1,590,661 |
1,590,661 |
2,624,141 |
2,624,141 |
1,590,661 |
2,624,141 |
2,624,141 |
|
Performance
Units |
0 |
0 |
6,032,612 |
6,032,612 |
0 |
0 |
6,032,612 |
|
Nonqualified
Plans |
4,263,312 |
4,263,312 |
4,263,312 |
4,263,312 |
4,263,312 |
4,263,312 |
0 |
|
Health
Benefits |
0 |
12,000 |
12,000 |
0 |
0 |
0 |
0 |
|
TOTAL |
5,853,973 |
5,865,973 |
33,597,044 |
33,585,044 |
5,853,973 |
30,352,432 |
29,321,732 |
Christopher T.
|
Severance |
0 |
0 |
0 |
0 |
0 |
1,300,000 |
0 |
Weber |
Annual
Perf. Pay Plan |
0 |
0 |
1,300,000 |
1,300,000 |
0 |
1,300,000 |
1,300,000 |
|
Restricted
Stock |
0 |
0 |
6,021,224 |
6,021,224 |
0 |
6,021,224 |
6,021,224 |
|
Stock
Options |
0 |
0 |
314,980 |
314,980 |
0 |
314,980 |
314,980 |
|
Performance
Units |
0 |
0 |
774,894 |
774,894 |
0 |
0 |
774,894 |
|
Nonqualified
Plans |
5,056 |
5,056 |
5,056 |
5,056 |
5,056 |
5,056 |
0 |
|
Health
Benefits |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
TOTAL |
5,056 |
5,056 |
8,416,154 |
8,416,154 |
5,056 |
8,941,260 |
8,411,098 |
James S. |
Severance |
0 |
0 |
0 |
0 |
0 |
1,800,000 |
0 |
Brown |
Annual
Perf. Pay Plan |
0 |
0 |
1,980,000 |
1,980,000 |
0 |
1,980,000 |
1,980,000 |
|
Restricted
Stock |
0 |
0 |
5,254,268 |
10,568,538 |
0 |
10,568,538 |
10,568,538 |
|
Stock
Options |
2,579,760 |
2,579,760 |
3,037,759 |
3,037,759 |
2,579,760 |
3,037,759 |
3,037,759 |
|
Performance
Units |
0 |
0 |
3,543,978 |
3,543,978 |
0 |
0 |
3,543,978 |
|
Nonqualified
Plans |
8,894,758 |
8,894,758 |
8,894,758 |
8,894,758 |
8,894,758 |
8,894,758 |
0 |
|
Health
Benefits |
0 |
12,000 |
12,000 |
0 |
0 |
0 |
0 |
|
TOTAL |
11,474,518 |
11,486,518 |
22,722,763 |
28,025,033 |
11,474,518 |
26,281,055 |
19,130,275 |
Lawrence |
Severance |
0 |
0 |
0 |
0 |
0 |
1,350,000 |
0 |
J. Pope |
Annual
Perf. Pay Plan |
0 |
0 |
1,350,000 |
1,350,000 |
0 |
1,350,000 |
1,350,000 |
|
Restricted
Stock |
0 |
0 |
5,800,331 |
5,800,331 |
0 |
5,800,331 |
5,800,331 |
|
Stock
Options |
2,387,240 |
2,387,240 |
2,722,690 |
2,722,690 |
2,387,240 |
2,722,690 |
2,722,690 |
|
Performance
Units |
0 |
0 |
2,688,707 |
2,688,707 |
0 |
0 |
2,688,707 |
|
Nonqualified
Plans |
2,429,928 |
2,429,928 |
2,429,928 |
2,429,928 |
2,429,928 |
2,429,928 |
0 |
|
Health
Benefits |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
TOTAL |
4,817,168 |
4,817,168 |
14,991,656 |
14,991,656 |
4,817,168 |
13,652,949 |
12,561,728 |
|
HALLIBURTON | 2018
Proxy Statement 53 |
|
|
|
Termination Event |
|
|
|
|
Early |
|
|
|
|
|
|
|
|
Retirement |
Early |
|
|
Term |
|
|
|
|
w/o |
Retirement |
Normal |
Term |
w/o |
Change in |
|
|
Resignation |
Approval |
w/Approval |
Retirement |
for Cause |
Cause |
Control |
Name |
Payments |
($) |
($) |
($) |
($) |
($) |
($) |
($) |
Joe D. |
Severance |
0 |
0 |
0 |
0 |
0 |
1,670,000 |
0 |
Rainey |
Annual Perf. Pay Plan |
0 |
0 |
1,837,000 |
1,837,000 |
0 |
1,837,000 |
1,837,000 |
|
Restricted Stock |
0 |
0 |
6,833,443 |
6,833,443 |
0 |
6,833,443 |
6,833,443 |
|
Stock Options |
2,366,053 |
2,366,053 |
3,866,589 |
3,866,589 |
2,366,053 |
3,866,589 |
3,866,589 |
|
Performance Units |
0 |
0 |
3,543,978 |
3,543,978 |
0 |
0 |
3,543,978 |
|
Nonqualified Plans |
8,793,344 |
8,793,344 |
8,793,344 |
8,793,344 |
8,793,344 |
8,793,344 |
0 |
|
Health Benefits |
0 |
12,000 |
12,000 |
0 |
0 |
0 |
0 |
|
TOTAL |
11,159,397 |
11,171,397 |
24,886,354 |
24,874,354 |
11,159,397 |
23,000,376 |
16,081,010 |
Robb L. |
Severance |
0 |
0 |
0 |
0 |
0 |
1,650,000 |
0 |
Voyles |
Annual Perf. Pay Plan |
0 |
0 |
1,443,600 |
1,443,600 |
0 |
1,443,600 |
1,443,600 |
|
Restricted Stock |
0 |
0 |
6,021,224 |
6,021,224 |
0 |
6,021,224 |
6,021,224 |
|
Stock Options |
608,493 |
608,493 |
933,359 |
933,359 |
608,493 |
933,359 |
933,359 |
|
Performance Units |
0 |
0 |
2,552,579 |
2,552,579 |
0 |
0 |
2,552,579 |
|
Nonqualified Plans |
144,341 |
144,341 |
144,341 |
144,341 |
144,341 |
144,341 |
0 |
|
Health Benefits |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
TOTAL |
752,834 |
752,834 |
11,095,103 |
11,095,103 |
752,834 |
10,192,524 |
10,950,762 |
David J. |
Severance |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
Lesar |
Cash Retention |
0 |
0 |
0 |
2,000,000 |
0 |
2,000,000 |
0 |
|
Annual Perf. Pay Plan |
0 |
0 |
5,250,000 |
5,250,000 |
0 |
5,250,000 |
5,250,000 |
|
Restricted Stock |
0 |
0 |
12,972,786 |
28,915,597 |
0 |
28,915,597 |
28,915,597 |
|
Stock Options |
8,759,580 |
8,759,580 |
9,772,189 |
9,772,189 |
8,759,580 |
9,772,189 |
9,772,189 |
|
Performance Units |
0 |
0 |
10,508,893 |
10,508,893 |
0 |
0 |
10,508,893 |
|
Nonqualified Plans |
20,677,921 |
20,677,921 |
20,677,921 |
20,677,921 |
20,677,921 |
20,677,921 |
0 |
|
Health Benefits |
0 |
12,000 |
12,000 |
0 |
0 |
0 |
0 |
|
TOTAL |
29,437,501 |
29,449,501 |
59,193,789 |
77,124,600 |
29,437,501 |
66,615,707 |
54,446,679 |
|
|
|
|
|
|
|
|
|
|
Resignation. Resignation is
defined as leaving employment with us voluntarily, without having attained early or normal retirement status (see the applicable
sections below for information on what constitutes these statuses). Upon resignation, the following actions will occur for the
NEO’s various elements of compensation:
• |
Severance Pay.
No severance would be paid to the NEO. |
• |
Annual Performance
Pay Plan. No payment would be made to the NEO under the Performance Pay Plan. |
• |
Restricted Stock.
Any restricted stock holdings would be forfeited upon the date of resignation. Restricted stock holdings information can
be found in the Outstanding Equity Awards at Fiscal Year End 2017 table. |
• |
Stock Options.
The NEO must exercise outstanding, vested options within 30-90 days after the NEO’s resignation or the options will
be forfeited as per the terms of the stock option agreements. Any unvested stock options would be forfeited. Stock option
information can be found in the Outstanding Equity Awards at Fiscal Year End 2017 table. |
• |
Performance Units.
The NEO would not be eligible to receive payments under the Performance Unit Program. |
• |
Nonqualified Plans.
The NEO is entitled to any vested benefits under the applicable nonqualified plans as shown in the 2017 Nonqualified Deferred
Compensation table. Payments from the Halliburton Company Supplemental Executive Retirement Plan and Halliburton Company Benefit
Restoration Plan are paid out of an irrevocable grantor trust. The principal and income of the trust are treated as our assets
and income for federal income tax purposes and are subject to the claims of our general creditors to the extent provided in
the plan. The Halliburton Elective Deferral Plan is unfunded and we make payments from our general assets. Payments from these
plans may be paid in a lump sum or in annual installments for a maximum ten-year period. |
• |
Health Benefits.
The NEO is not eligible for the $12,000 credit to assist in paying for retiree medical costs. |
Early Retirement. A NEO becomes
eligible for early retirement when the NEO has attained age 55 with ten years of service or when the NEO’s age and years
of service equals 70 points. Eligibility for early retirement does not guarantee retention of stock awards (lapse of forfeiture
restrictions on restricted stock and ability to exercise outstanding options for the remainder of the stated term). Early retirement
eligibility is a condition that must be met before the Compensation Committee will consider retention of stock awards upon separation
from employment. For example, if a NEO is eligible for early retirement but is leaving us to go to work for a competitor, then
the NEO’s stock awards would not be considered for retention.
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 54 |
|
Early Retirement (Without Approval). The impact on the NEO’s
various elements of compensation is the same as described under Resignation except as follows: |
|
|
• |
Health Benefits. A NEO that was age 40 or older as of December 31, 2004, and qualifies
for early retirement under our health and welfare plans, which require that the NEO has attained age 55 with ten years of
service or that the NEO’s age and years of service equals 70 points with a minimum of ten years of service, is eligible
for a $12,000 credit toward retiree medical costs incurred prior to age 65. The credit is only applicable if the NEO chooses
Halliburton retiree medical coverage. This benefit is amortized as a monthly credit applied to the cost of retiree medical
coverage based on the number of months from the time of early retirement to age 65. For example, if a NEO is 10 years or 120
months away from age 65 at the time of the NEO’s early retirement, the NEO will receive a monthly credit in the amount
of $100 ($12,000/120 months). Should the NEO choose not to elect coverage with Halliburton after the NEO’s separation,
the NEO would not receive any cash in lieu of the credit. |
|
|
Early Retirement (With Approval). The following actions will occur
for the NEO’s various elements of compensation: |
|
|
• |
Severance Pay. No severance would be paid to the NEO. |
• |
Annual Performance Pay Plan. If the NEO retires prior to the end of the plan year for
any reason other than death or disability, he would forfeit any payment due under the plan, unless the Compensation Committee
determines that the payment should be prorated for the partial plan year. These payments usually occur no later than the end
of February in the year following the plan year. |
• |
Restricted Stock. Any stock holdings restrictions would lapse upon the date of retirement.
Restricted stock holdings information can be found in the Outstanding Equity Awards at Fiscal Year End 2017 table. |
• |
Stock Options. The NEO will be granted retention of the NEO’s option awards.
The unvested awards will continue to vest per the vesting schedule outlined in the NEO stock option agreements and any vested
options will not expire until 10 years from the grant award date. Stock option information can be found in the Outstanding
Equity Awards at Fiscal Year End 2017 table. |
• |
Performance Units. The NEO will participate on a prorated basis for any Performance
Unit Program cycles that have not been completed at the time of the NEO’s retirement. These payments, if earned, are
paid out and the NEO would receive payments at the same time as other participants, which is usually no later than March of
the year following the close of the cycle. |
• |
Nonqualified Plans. The NEO is entitled to any vested benefits under the applicable
nonqualified plans as shown in the 2017 Nonqualified Deferred Compensation table. Refer above to Resignation for more information
on Nonqualified Plans. |
• |
Health Benefits. Same as described under Early Retirement (Without Approval). |
|
|
Normal Retirement. A NEO would be eligible for normal retirement
should the NEO cease employment at age 65 or later. The impact on the NEO’s various elements of compensation is the
same as described under Early Retirement (With Approval) except as follows: |
|
|
• |
Cash Retention. Mr. Lesar will receive a payment of $2 million. |
• |
Performance Units. Mr. Lesar’s participation in the 2017 Performance Unit Program
will not be prorated. |
• |
Health Benefits. The NEO is not eligible for the $12,000 credit to assist in paying
for retiree medical costs. |
|
|
Termination (For Cause). Should we terminate a NEO for cause, such
as violating our Code of Business Conduct, the impact on the NEO’s various elements of compensation is the same as described
under Resignation. |
|
|
Termination (Without Cause). Should we terminate a NEO without cause,
such as termination at our convenience, then the provisions of the NEO’s employment agreement related to severance payments
and lapsing of stock restrictions would apply. Payments for these items are conditioned on a release agreement being executed
by the NEO. The impact on the NEO’s various elements of compensation is the same as described under Normal Retirement
except as follows: |
|
|
• |
Severance Pay. Severance is paid according to terms of the applicable employment agreement.
Messrs. Miller, Weber, Brown, Pope, Rainey, and Voyles would receive severance in the amount of two times base salary at the
time of termination. Mr. Lesar’s employment agreement does not provide for a severance payment. |
• |
Cash Retention. Mr. Lesar will receive a payment of $2 million. |
• |
Performance Units. No payment would be paid to the NEO under the Performance Unit Program. |
|
|
Change-in-Control. Should a change-in-control take place, the following
actions will occur for the NEO’s various elements of compensation: |
|
• |
Annual Performance Pay Plan. In the event of a change-in-control during a plan year,
the NEO is entitled to an immediate cash payment equal to the maximum dollar amount he or she would have been entitled to
for the year, prorated through the date of the change-in-control. In the event of a change-in-control after the end of a plan
year but before the payment date, the NEO is entitled to an immediate cash payment equal to the incentive earned for the plan
year. |
• |
Restricted Stock. Restricted shares under the Stock and Incentive Plan are automatically
vested. Restricted stock holdings information can be found in the Outstanding Equity Awards at Fiscal Year End 2017 table. |
• |
Stock Options. Any outstanding options shall become immediately vested and fully exercisable
by the NEO. Stock option information can be found in the Outstanding Equity Awards at Fiscal Year End 2017 table. |
• |
Performance Units. In the event of a change-in-control during a performance cycle,
the NEO will be entitled to an immediate cash payment equal to the maximum amount he or she would have been entitled to receive
for the performance cycle, prorated to the date of the change-in-control. In the event of a change-in-control after the end
of a performance cycle but before the payment date, the NEO will be entitled to an immediate cash payment equal to the incentive
earned for that performance cycle. |
|
HALLIBURTON | 2018
Proxy Statement 55 |
|
Equity Compensation Plan Information
The following table provides certain information, as of December 31,
2017, with respect to our equity compensation plans.
Plan Category | |
Number of Securities to be Issued Upon Exercise of Outstanding Options,
Warrants and Rights (a) | | |
Weighted-Average Exercise Price of Outstanding Options, Warrants
and Rights (b) | | |
Number of Securities Remaining Available for Future Issuance Under Equity
Compensation Plans (Excluding Securities Reflected in Column (a)) (c) | |
Equity compensation plans approved by security holders | |
| 20,984,065 | | |
$ | 44.92 | | |
| 47,566,921 | |
Equity compensation plans not approved by security holders | |
| — | | |
| — | | |
| — | |
TOTAL | |
| 20,984,065 | | |
$ | 44.92 | | |
| 47,566,921 | |
CEO Pay Ratio
For 2017, the annual total compensation of our CEO was 290 times
the median of the annual total compensation of all employees, based on annual total compensation of $23,091,346 for the CEO and
$79,636 for the median employee. This disclosure is based on an October 1, 2017, employee population of 52,833, of which 21,862
were U.S. employees and 30,971 were non-U.S.
employees. We excluded from this employee population 2,637 non-U.S.
employees from 47 countries as the total number of employees from these non-U.S. jurisdictions was less than 5% of our total employee
population. After applying the exclusion, the total employee population was 50,196.
Non-U.S. Employee Country Exclusions |
Country |
|
Headcount |
|
Country |
|
Headcount |
|
Country |
|
Headcount |
|
Country |
|
Headcount |
Ecuador |
|
442 |
|
Cameroon |
|
55 |
|
Chile |
|
17 |
|
Ukraine |
|
4 |
Azerbaijan |
|
417 |
|
Panama |
|
51 |
|
Spain |
|
14 |
|
Hungary |
|
3 |
Kazakhstan |
|
378 |
|
Poland |
|
48 |
|
Belgium |
|
11 |
|
Kenya |
|
3 |
Congo |
|
158 |
|
Romania |
|
46 |
|
Philippines |
|
11 |
|
Uganda |
|
3 |
Germany |
|
113 |
|
France |
|
35 |
|
Mozambique |
|
10 |
|
Switzerland |
|
2 |
Italy |
|
113 |
|
Papua New Guinea |
31 |
|
Turkmenistan |
|
7 |
|
Equatorial Guinea |
2 |
Netherlands |
|
110 |
|
Bangladesh |
|
28 |
|
Tanzania |
|
7 |
|
Turkey |
|
2 |
Bolivia |
|
109 |
|
Denmark |
|
27 |
|
Austria |
|
6 |
|
South Africa |
|
2 |
Trinidad & Tobago |
|
84 |
|
Peru |
|
23 |
|
Cyprus |
|
6 |
|
Albania |
|
1 |
Ghana |
|
64 |
|
Suriname |
|
23 |
|
Israel |
|
5 |
|
Bulgaria |
|
1 |
New Zealand |
|
59 |
|
Cote d’Ivoire |
|
21 |
|
South Korea |
|
4 |
|
Gabon |
|
1 |
Vietnam |
|
57 |
|
Japan |
|
19 |
|
Myanmar |
|
4 |
|
|
|
|
The median employee was identified using base pay, overtime pay, bonuses,
allowances, and premiums. We used the total gross wages of all employees as of our determination date of October 1, 2017,
as a reasonable estimate of the median total gross wages for the employee population and identified all employees within 1% of
the median total gross wages. From this group we selected an employee as a reasonable representative of our median employee. Annual
total compensation for both the CEO and the median employee was calculated in accordance with Item 402(c)(2)(x) of Regulation S-K.
The annual total compensation for our CEO includes both the amount reported in the “Total” column of our 2017 Summary
Compensation Table, $23,078,364, and the estimated value of our CEO’s health and welfare benefits, $12,982. Due to the flexibility
afforded in calculating the CEO pay ratio, the ratio may not be comparable to CEO pay ratios presented by other companies.
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 56 |
|
Additional Information
Involvement in Certain Legal Proceedings
There are no legal proceedings to which any of our Directors, executive
officers, or any associate of any of our Directors or executive officers is a party adverse to us or has a material interest adverse
to us.
Advance Notice Procedures
Under our By-laws, no business, including nominations of a person
for election as a director, may be brought before an Annual Meeting unless it is specified in the notice of the Annual Meeting
or is otherwise brought before the Annual Meeting by or at the direction of the Board or by a stockholder who meets the requirements
specified in our By-laws and has delivered notice to us (containing the information specified in the By-laws). To be timely, a
stockholder’s notice for matters to be brought before the Annual Meeting of Stockholders in 2019 must be delivered to or
mailed and received at our principal executive office, 3000 N.
Sam Houston Parkway East, Administration Building, Houston, TX 77032,
not less than 90 days nor more than 120 days prior to the anniversary date of the 2018 Annual Meeting of Stockholders, or no later
than February 15, 2019, and no earlier than January 16, 2019. These requirements are separate from and in addition to the
SEC’s requirements that a stockholder must meet in order to have a stockholder proposal included in our proxy statement.
This advance notice requirement does not preclude discussion by any stockholder of any business properly brought before the Annual
Meeting in accordance with these procedures.
Proxy Solicitation Costs
We are soliciting the proxies accompanying this proxy statement and
we will bear the cost of soliciting those proxies. We have retained Innisfree M&A Incorporated to aid in the solicitation of
proxies. For these services, we will pay Innisfree a fee of $17,500 and reimburse it for out-of-pocket disbursements and expenses.
Our officers and employees may solicit proxies personally and by telephone or other electronic communications with some stockholders
if proxies are not received promptly. We will, upon request, reimburse banks, brokers, and others for their reasonable expenses
in forwarding proxies and proxy materials to beneficial owners of our stock.
Stockholder Proposals for the 2019 Annual
Meeting
Stockholders interested in submitting a proposal for inclusion in
the proxy materials for the Annual Meeting of Stockholders in 2019 may do so by following the procedures prescribed in SEC Rule
14a-8. To be eligible for inclusion, stockholder proposals must be received by our Corporate Secretary at 3000 N. Sam Houston Parkway
East, Administration Building, Houston, TX 77032, no later than December 4, 2018. The 2019 Annual Meeting will be held on May 15,
2019.
|
HALLIBURTON | 2018
Proxy Statement 57 |
|
Other Matters
As of the date of this proxy statement, we know of no business that
will be presented for consideration at the Annual Meeting other than the matters described in this proxy statement. If any other
matters should properly come before the Annual Meeting for action by stockholders, it is intended that proxies will be voted on
those matters in accordance with the judgment of the person or persons voting the proxies.
By Authority of the Board of Directors,
Robb L. Voyles
Executive Vice President, Secretary and General
Counsel
April 3, 2018
www.halliburton.com |
|
HALLIBURTON | 2018 Proxy Statement 58 |
|
Directions to the Halliburton
Annual Meeting of Stockholders
The Halliburton North Belt Facility is located on the North Sam Houston
Parkway (Beltway 8 Tollway) south feeder between Aldine Westfield and JFK Boulevard.
3000 N. Sam Houston Parkway East
Houston, Texas 77032
281-871-4000
From I-45 |
From I-69 / US 59 and IAH |
• Take the Sam Houston Parkway East |
• Take the Sam Houston Parkway West |
• Exit JFK Blvd |
• Exit Aldine Westfield |
|
• “U-Turn” at Aldine Westfield and proceed east on the Sam Houston
Parkway feeder |
The main entrance to the North Belt facility will be on your right,
about halfway between Aldine Westfield and JFK Blvd.
This regulatory filing also includes additional resources:
lhal2018_def14a.pdf
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