Table of Contents
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
 
 
Filed by the Registrant ☒    Filed by a party other than the Registrant ☐
Check the appropriate box:
 
  Preliminary Proxy Statement
 
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to
§240.14a-11(c)
or
§240.14a-12
Cheniere Energy, Inc.
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
  No fee required.
  Fee computed on table below per Exchange Act Rules
14a-6(i)(4)
and
0-11.
  Fee paid previously with preliminary materials.
 
 
 


Table of Contents

PRELIMINARY PROXY STATEMENT – SUBJECT TO COMPLETION

 

LOGO

 

CHENIERE ENERGY, INC. 2024 PROXY STATEMENT


Table of Contents

LOGO

April  , 2024

Fellow Shareholders:

On behalf of Cheniere’s Board of Directors, we are pleased to invite you to attend the Cheniere Energy, Inc. 2024 Annual Meeting of Shareholders (the “Meeting”). The Meeting will be held at 9:00 a.m. Central Time, on May 23, 2024 at our corporate headquarters located at 845 Texas Avenue, Suite 1250, Houston, Texas 77002. The following Notice of Annual Meeting describes the business to be conducted at the Meeting. We encourage you to review the materials and vote your shares. You may vote via the Internet, by telephone, or by submitting your completed proxy card by mail. If you attend the Meeting, you may vote your shares in person if you are a shareholder of record.

 

In 2023, the Cheniere team reinforced its track record of reliability and operational excellence, producing approximately 2,300 TBtu of LNG – 73% of which was delivered to Europe. Our relentless focus on ensuring safe and reliable operations across our $40 billion infrastructure platform resulted in a top decile safety record for the year, as well as record annual net income of $9.9 billion, Consolidated Adjusted EBITDA1 at the high end of our guidance range, and Distributable Cash Flow1 above our guidance range.

 

These outstanding operational and financial results enabled us to deploy approximately $5 billion towards our long-term capital allocation plan – our ‘20/20 Vision’ – delivering meaningful value to our shareholders by achieving investment grade ratings throughout our corporate structure, executing on share repurchases and dividend growth, and advancing accretive growth projects at both Sabine Pass and Corpus Christi.

  

2023 was another exceptional year for Cheniere, as we achieved outstanding results across the key strategic priorities of the Company, while reinforcing our track record on safety, execution and operational reliability, and solidifying Cheniere as best-in-class across our platform.

Throughout 2023, we further built upon our project execution track record by making significant progress on our 10+ million tonnes per annum (“mtpa”) growth project at Corpus Christi. The Stage 3 project has reached over 50% completion with over 10% of total project construction complete as of December 31, 2023, and Bechtel is progressing on an accelerated timeline. We also advanced the development and engineering for our growth project at Sabine Pass, and signed approximately 6.5 mtpa of long-term contracts that are expected to support the project. It is clear that global energy markets are calling for reliable, affordable and cleaner-burning energy supply, and Cheniere is well-positioned to answer that call with our Gulf Coast LNG given our brownfield economic advantage, track record of project execution and operational reliability, and history of environmental stewardship.

We take great pride in the progress made throughout 2023 on our efforts to ensure the long-term sustainability of our business while supporting the communities where we live and work. Throughout the year, the Cheniere team continued to lead in accordance with our T.R.A.I.N.S. (Teamwork, Respect, Accountability, Integrity, Nimble, and Safety) values, encouraging development and promoting inclusivity, both inside and outside of the workplace. We adhered to our fundamental approach to climate and sustainability – to remain actionable, not aspirational – leading on data-driven transparency in our climate & sustainability efforts, guided by our foundational principles of science, transparency, operational excellence and supply chain. We plan to continue to advance these initiatives in order to maximize the climate benefits of our LNG to our global customer base.

We are incredibly proud of what our team accomplished in 2023 and the role Cheniere played in support of our customers, employees and stakeholders. We are excited to embark on the next chapter of the Cheniere story as we continue to execute on our long-term growth and capital allocation strategies to further enhance the value of the Cheniere platform in 2024.

We thank you for your continued support as investors in Cheniere and look forward to your attendance on May 23rd.

 

LOGO

 

G. Andrea Botta

 

Chairman of the Board

 

LOGO

 

Jack A. Fusco

 

President and Chief Executive Officer

 

1

For a definition of Consolidated Adjusted EBITDA and Distributable Cash Flow and a reconciliation of non-GAAP measures to net income (loss), the most directly comparable GAAP financial measure, please see Appendix D.


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    CHENIERE ENERGY, INC.

      845 Texas Avenue, Suite 1250

      Houston, Texas 77002

      (713) 375-5000

 

 

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

 

 
  TIME AND DATE:     

9:00 a.m. Central Time on May 23, 2024

 
  PLACE:     

Cheniere Energy, Inc.

845 Texas Avenue, Suite 1250

Houston, TX 77002

 
 

 

ITEMS OF BUSINESS:

    

 

  To elect nine members of the Board of Directors named in this proxy statement to hold office for a one-year term expiring at the 2025 Annual Meeting of Shareholders.

 

  To approve, on an advisory and non-binding basis, the compensation of the Company’s named executive officers for 2023 (say-on-pay vote).

 

  To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for 2024.

 

  To approve the Cheniere Energy, Inc. Amended and Restated 2020 Incentive Plan.

 

  To approve an amendment to the Company’s Certificate of Incorporation to limit the personal liability of officers as permitted by law.

 

  To transact such other business as may properly come before the Meeting and any adjournment or postponement thereof.

 

 
  RECORD DATE:     

You can vote if you were a shareholder of record as of the close of business on April 8, 2024.

 

 
  PROXY VOTING:     

It is important that your shares be represented and voted at the Meeting. You can vote your shares by completing and mailing the enclosed proxy card or by voting on the Internet or by telephone. See details under the heading “Frequently Asked QuestionsHow do I vote?”

 

 
  ELECTRONIC AVAILABILITY OF PROXY MATERIALS:     

We are making this Proxy Statement, including the Notice of Annual Meeting and 2023 Annual Report on Form 10-K for the year ended December 31, 2023, available on our website at: www.cheniere.com/2024AnnualMeeting.

 

 

      By order of the Board of Directors

      Sean N. Markowitz

      Corporate Secretary

      April   , 2024


Table of Contents

TABLE OF CONTENTS

 

PROXY SUMMARY

 

    

 

1

 

 

 

PROPOSAL 1 – ELECTION OF DIRECTORS

 

    

 

11

 

 

 

DIRECTORS AND NOMINEES

     11  

DIRECTOR NOMINATIONS AND QUALIFICATIONS

     14  

DIRECTOR BIOGRAPHIES

     16  

GOVERNANCE INFORMATION

 

    

 

21

 

 

 

BOARD COMMITTEE MEMBERSHIP AND MEETING ATTENDANCE

     21  

DIRECTOR INDEPENDENCE

     21  

BOARD LEADERSHIP STRUCTURE AND ROLE IN RISK OVERSIGHT

     22  

SHAREHOLDER OUTREACH—GOVERNANCE

     23  

CORPORATE RESPONSIBILITY

     24  

MEETINGS AND COMMITTEES OF THE BOARD

     28  

REVIEW OF COMPENSATION RISK

     31  

CODE OF BUSINESS CONDUCT AND ETHICS AND CORPORATE GOVERNANCE GUIDELINES

     32  

DIRECTOR ORIENTATION AND CONTINUING EDUCATION

     32  

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     32  

DIRECTOR COMPENSATION

     33  

MANAGEMENT

 

    

 

35

 

 

 

EQUITY COMPENSATION PLAN INFORMATION

 

    

 

37

 

 

 

SECURITY OWNERSHIP

 

    

 

38

 

 

 

COMPENSATION DISCUSSION AND ANALYSIS

 

    

 

40

 

 

 

EXECUTIVE SUMMARY

     40  

SHAREHOLDER ENGAGEMENT AND SAY-ON-PAY

     45  

EXECUTIVE COMPENSATION PHILOSOPHY & OBJECTIVES

     45  

COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

     46  

EXECUTIVE COMPENSATION PROCESS

     56  

COMPENSATION COMMITTEE REPORT

     60  

COMPENSATION TABLES

     61  

CEO PAY RATIO

 

    

 

71

 

 

 

PAY VERSUS PERFORMANCE

 

    

 

72

 

 

 

PROPOSAL 2 – ADVISORY AND NON-BINDING VOTE TO APPROVE THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS FOR 2023

 

  

 

 

77

 

 

 

AUDIT COMMITTEE MATTERS

 

    

 

78

 

 

 

PROPOSAL 3 – RATIFICATION OF KPMG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2024

 

  

 

 

80

 

 

 

PROPOSAL 4 – APPROVAL OF THE CHENIERE ENERGY, INC. AMENDED AND RESTATED 2020 INCENTIVE PLAN

 

    

 

81

 

 

 

PROPOSAL 5 – APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION TO LIMIT THE PERSONAL LIABILITY OF OFFICERS AS PERMITTED BY LAW

 

    

 

91

 

 

 

FREQUENTLY ASKED QUESTIONS

 

    

 

93

 

 

 

OTHER MATTERS

 

    

 

98

 

 

 

SHAREHOLDER PROPOSALS

     98  

DIRECTOR NOMINEES

     98  

COMMUNICATIONS WITH THE BOARD

     99  

HOUSEHOLDING OF PROXY MATERIALS

     99  

AVAILABILITY OF DOCUMENTS

     99  

APPENDIX A: CHENIERE ENERGY, INC. AMENDED AND RESTATED 2020 INCENTIVE PLAN

 

    

 

A-1

 

 

 

APPENDIX B: DEFINITION OF CUMULATIVE DISTRIBUTABLE CASH FLOW PER SHARE AND ABSOLUTE TOTAL SHAREHOLDER RETURN FOR 2023 LTI AWARDS

 

    

 

B-1

 

 

 

APPENDIX C: DEFINITION OF CUMULATIVE DISTRIBUTABLE CASH FLOW PER SHARE AND ABSOLUTE TOTAL SHAREHOLDER RETURN FOR 2024 LTI AWARDS

 

    

 

C-1

 

 

 

APPENDIX D: DEFINITION AND RECONCILIATION OF NON-GAAP MEASURES

 

    

 

D-1

 

 

 

APPENDIX E: PROPOSED AMENDMENT TO THE RESTATED CERTIFICATION OF INCORPORATION OF CHENIERE ENERGY, INC.

 

    

 

 

E-1

 

 

 

 

 

 

Note Regarding Forward-Looking Statements

This Proxy Statement contains forward-looking statements relating to, among other things, business strategy, performance and expectations for project development, as well as our goals, commitments and strategies in relation to environmental and social matters. The reader is cautioned not to place undue reliance on these statements and should review the sections captioned “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” in our Annual Report on Form 10-K for important information about these statements, including the risks, uncertainties and other factors that could cause actual results to vary materially from the assumptions, expectations and projections expressed in any forward-looking statements. These forward-looking statements speak only as of the date made, and, other than as required by law, we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or developments or otherwise.

Website References

This Proxy Statement includes several website addresses and references to additional materials found on those websites. These websites and materials are not incorporated by reference herein.


Table of Contents

 

PROXY SUMMARY

The following is an overview of information that you will find throughout this Proxy Statement in connection with the 2024 Annual Meeting of Shareholders (the “Meeting”) of Cheniere Energy, Inc. (“Cheniere” or the “Company”). This summary does not contain all of the information that you should consider. For more complete information about these topics, please review the complete Proxy Statement prior to voting. For more complete information about our 2023 performance, please review our Annual Report on Form 10-K for the year ended December 31, 2023, available on our website at www.cheniere.com/2024AnnualMeeting. The Notice of Annual Meeting (“Notice”), Proxy Statement, proxy card and 2023 Annual Report on Form 10-K for the year ended December 31, 2023, are being mailed to shareholders on or about April  , 2024.

 

 

ANNUAL MEETING OF SHAREHOLDERS

 

 

LOGO

  

TIME AND DATE:

 

  

9:00 a.m. Central Time on May 23, 2024

 

LOGO    PLACE:   

Cheniere Energy, Inc.

845 Texas Avenue, Suite 1250

Houston, TX 77002

LOGO   

RECORD DATE:

 

  

The close of business on April 8, 2024 (the “Record Date”)

 

LOGO    VOTING:   

Shareholders as of the close of business on the Record Date are entitled to vote.

Each share of common stock is entitled to one vote for each matter to be voted upon.

LOGO    ADMISSION:   

No admission card is required to enter the Meeting, but you will need proof of your stock ownership and valid government-issued picture identification. Please see “Frequently Asked Questions” on page 93 of this Proxy Statement for more information.

 

VOTING MATTERS AND BOARD RECOMMENDATIONS

 

 

PROPOSAL

 

 

DESCRIPTION

 

  

BOARD VOTE RECOMMENDATION

 

  

PAGE REFERENCE

(FOR MORE DETAILS)

 

1

  Election of directors    FOR EACH NOMINEE    11

2

  Advisory and non-binding vote on the compensation of the Company’s named executive officers for 2023 (say-on-pay vote)    FOR    77

3

  Ratification of appointment of KPMG LLP as the Company’s independent registered public accounting firm for 2024    FOR    80

4

  Approval of Cheniere Energy, Inc. Amended and Restated 2020 Incentive Plan    FOR    81

5

  Approval of amendment to the Company’s Certificate of Incorporation to limit the personal liability of officers as permitted by law    FOR    91

 

     
 

2024 PROXY STATEMENT

  1

 


Table of Contents

PROXY SUMMARY

 

2023 PERFORMANCE AND

STRATEGIC ACCOMPLISHMENTS

 

The following items highlight our 2023 and recent accomplishments. For more information about these accomplishments and their relationship to our executive compensation program, please see “Compensation Discussion and Analysis” on page 40 of this Proxy Statement.

 

EXCEPTIONAL FINANCIAL RESULTS

 

Record Net Income of $9.9 billion

 

Exceeded midpoints of original Full Year 2023 Consolidated Adjusted EBITDA & Distributable Cash Flow guidance ranges by >$500 million each

 

Out-earned our 9-train run-rate Consolidated Adjusted EBITDA & Distributable Cash Flow guidance for the 2nd year in a row

   

EXECUTION OF LONG-TERM CAPITAL ALLOCATION PLAN

 

~$5 billion deployed under “20/20 Vision” capital allocation plan

 

Investment grade credit ratings achieved across the Cheniere complex

 

Repaid ~$1.2 billion of long-term indebtedness & issued inaugural investment grade bond at Cheniere Partners

 

Funded ~$1.5 billion of capex towards financially disciplined growth at CCL Stage 3 Project

 

Repurchased ~9.5 million shares for ~$1.5 billion

 

10% increase to quarterly dividend in Q3 consistent with annual target, with $1.66/share of dividends declared for 2023

   

BEST IN CLASS SAFETY & SEAMLESS LNG OPERATIONS

 

Top decile safety record with Total Reportable Incident Rate (TRIR) of 0.10

 

Exported 637 cargoes & produced ~2,300 tbtu, representing ~11% of global LNG produced in 2023

 

>94% utilization rate in 2023 vs. ~89% global average1

 

Continued to support global call for reliable, flexible LNG supply with ~73% of our volume delivered to Europe

 

Signed long-term contracts representing >119 million tonnes of aggregate volumes between 2026-2050 in support of the SPL Expansion Project

   

PREMIER LNG DEVELOPMENT

 

CCL Stage 3 Project ahead of schedule and 51.4%2 complete at year-end, with first LNG from the first train expected in 2024

 

Submitted applications to FERC & DOE for the CCL Midscale Trains 8 & 9 Project

 

Initiated permitting process for the SPL Expansion Project, inclusive of Carbon Capture & Storage (“CCS”) at SPL

 

*

For a definition of Consolidated Adjusted EBITDA and Distributable Cash Flow and a reconciliation of these non-GAAP measures to net income (loss), the most directly comparable GAAP financial measure, please see Appendix D.

 

1

Global utilization average in 2022 per International Gas Union. Cheniere utilization reflects 2023 feed gas processed / production capacity.

 

2

CCL Stage 3 Project completion percentage as of December 31, 2023 and reflects: engineering 83.7% complete, procurement 72.2% complete, subcontract work 66.9% complete and construction 11.1% complete.

Strategic Accomplishments: Adding to our Foundation for Growth and Cash Flow Stability

 

 

Achieved key milestones for SPL Expansion Project: In May 2023, certain of our subsidiaries entered the pre-filing review process with the Federal Energy Regulatory Commission (“FERC”) under the National Energy Policy Act (“NEPA”) for an expansion adjacent to the natural gas liquefaction and export facilities at the Sabine Pass LNG terminal in Louisiana (the “SPL Project”) with a total production capacity of up to approximately 20 million tonnes per annum (“mtpa”) of LNG (the “SPL Expansion Project”), inclusive of estimated debottlenecking opportunities, and in April 2023, one of our subsidiaries executed a contract with Bechtel Energy, Inc. (“Bechtel”) to provide the front end engineering and design work on the project.

 

     
2  

CHENIERE

 

 


Table of Contents

2023 PERFORMANCE AND STRATEGIC ACCOMPLISHMENTS

 

 

Received additional export authorizations for FTA countries: In April 2023, certain of our subsidiaries filed an application with the Department of Energy (“DOE”) with respect to two midscale Trains with an expected total production capacity of approximately 3 mtpa of LNG (the “CCL Midscale Trains 8 & 9 Project”) adjacent to the expansion consisting of seven midscale Trains with an expected total production capacity of over 10 mtpa of LNG (the “CCL Stage 3 Project”), both adjacent to the natural gas liquefaction and export facilities at the Corpus Christi LNG terminal, (the “CCL Project”), requesting authorization to export LNG to free trade agreement (“FTA”) countries and non-FTA countries. In July 2023, we received authorization from the DOE to export LNG to FTA countries.

 

 

FERC application submitted: In March 2023, certain of our subsidiaries submitted an application with the FERC under the Natural Gas Act (“NGA”) for the CCL Midscale Trains 8 & 9 Project.

 

 

Signed significant new long-term contracts: During 2023, we signed approximately 6.5 mtpa of long-term contracts, which included:

 

   

long-term LNG sale and purchase agreements (“SPAs”) with Foran Energy Group Co. Ltd., BASF, ENN LNG (Singapore) Pte. Ltd., Equinor ASA and Korea Southern Power Co. Ltd. with estimated volumes totaling approximately 106 million tonnes of LNG and expected deliveries between 2026 and 2050. Approximately 65 million tonnes is subject to Cheniere Energy Partners, L.P. (“Cheniere Partners”) (NYSE: CQP) making a positive final investment decision (“FID”) on the first or second trains of the SPL Expansion Project, as applicable, or Cheniere unilaterally waiving that requirement.

 

   

an integrated production marketing (“IPM”) agreement with ARC Resources U.S. Corp., a subsidiary of ARC Resources Ltd., to purchase 140,000 MMBtu per day of natural gas at a price based on the Dutch Title Transfer Facility (“TTF”), less a fixed regasification fee, fixed LNG shipping costs and a fixed liquefaction fee, for a term of approximately 15 years commencing with commercial operations of the first train of the SPL Expansion Project. This agreement is subject to Cheniere Partners making a positive FID on the first train of the SPL Expansion Project or Cheniere Partners unilaterally waiving that requirement.

Operational Highlights: Industry Leading Safety, Growing Production, and Operational Excellence

 

 

Reliable and growing production: As of February 16, 2024, approximately 3,280 cumulative LNG cargoes totaling over 225 million tonnes of LNG have been produced, loaded and exported from the CCL Project and the SPL Project.

 

 

Operational excellence enabled industry leading safety results: For full year 2023, over 10 million hours of labor were completed with a Total Recordable Incident Rate (employees and contractors combined) of 0.10, which places us within the top decile of our industry.

Financial Highlights: Financial Results and Consistent Outperformance Relative to Guidance

 

 

For full year 2023, we generated:

 

   

Revenue of approximately $20.4 billion and Net Income of approximately $9.9 billion.

 

   

Consolidated Adjusted EBITDA of approximately $8.8 billion, reaching the high end of the latest guidance range.

 

   

Distributable Cash Flow of approximately $6.5 billion, exceeding the high end of the latest guidance range.

 

 

During 2023, we accomplished the following pursuant to our long-term capital allocation priorities:

 

   

We prepaid approximately $1.2 billion of consolidated long-term indebtedness.

 

   

We repurchased approximately 9.5 million shares of our common stock for approximately $1.5 billion.

 

   

We declared dividends of $1.66 per share of common stock in the aggregate for the year ended December 31, 2023.

 

   

We continued to invest in accretive organic growth, funding approximately $1.5 billion of capital expenditures related to the CCL Stage 3 Project.

 

 

Ratings upgrades: Throughout 2023, the Cheniere complex received 7 distinct upgrades to the credit ratings of its entities by the ratings agencies, with the entire Cheniere complex reaching investment grade status. The achievement of investment grade ratings was a priority of our “20/20 Vision” capital allocation plan announced in September 2022.

 

     
 

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PROXY SUMMARY

 

CORPORATE RESPONSIBILITY

 

Climate Strategy

As the leading U.S. LNG exporter, we aim to supply customers with affordable, reliable, and cleaner-burning natural gas. A central part of our climate strategy is to measure and mitigate emissions—to support Cheniere’s LNG supplies remaining economically and climate-competitive in a lower carbon future. This strategy is reflected in a cadence of actions that focus on science, operational excellence, collaboration along our supply chain, and transparency. We are working to better understand the emissions profile of the LNG we deliver to our customers, and to identify strategic and cost-effective opportunities to improve greenhouse gas (“GHG”) emissions performance.

2023 Environmental, Social and Governance Highlights

Our 2023 environmental, social and governance (“ESG”) highlights include:

 

 

In December 2023, we completed our previously announced collaboration with multiple natural gas midstream companies, methane detection technology providers and leading academic institutions to implement quantification, monitoring, reporting and verification (“QMRV”) of GHG emissions at natural gas gathering, processing, transmission, and storage systems specific to Cheniere’s supply chain, in order to improve the overall understanding of GHG emissions and further deployment of advanced monitoring technologies and protocols. As a result of the study, we published a paper, Informing Methane Emissions Inventories Using Facility Aerial Measurements at Midstream Natural Gas Facilities, which discusses the analysis and findings of the midstream QMRV study, highlighting the variability across estimated and measured GHG emissions data.

 

 

In October 2023, the field measurement campaign for our liquefaction QMRV research was completed. This concluded our overall QMRV research and development project series across our supply chain, the learnings of which will inform our emission measurement strategy going forward.

 

 

In August 2023, we published The Power of Connection, our fourth Corporate Responsibility (CR) report, which details our approach and progress on ESG issues, including our collaboration with natural gas midstream companies, technology providers and leading academic institutions on life-cycle assessment models, QMRV of greenhouse gas emissions and other research and development projects.

 

 

In July 2023, we launched our lifecycle analysis (“LCA”) supplier portal web application, which is designed to streamline our supply chain data collection and support more robust and frequent LCA modeling.

 

 

In May 2023, certain subsidiaries of Cheniere Partners entered the pre-filing review process with the FERC under the NEPA for a proposed carbon capture and sequestration project as part of the SPL Expansion Project, and initiated the front end engineering and design work with Bechtel, building upon the significant research and development performed over the last few years to determine the viability of such technology at our facilities.

 

 

In January 2023, we co-founded and sponsored the Energy Emissions Modeling and Data Lab (“EEMDL”), a multidisciplinary research and education initiative led by the University of Texas at Austin in collaboration with Colorado State University and the Colorado School of Mines. EEMDL’s goal is to address the growing need for accurate, timely and clear accounting of greenhouse gas emissions across the global oil and natural gas supply chains, which will help public and private institutions develop climate strategies and actions informed by accurate, verified data, identifying opportunities for emissions reductions.

 

 

In 2023, we continued to make meaningful progress on our Diversity, Equity and Inclusion efforts, aligning internally and connecting with our communities through initiatives such as our supplier diversity roadshows at the CCL Project and the SPL Project, the Love Our Parks collaboration with Houston Parks and Recreation, and our work with Historically Black Colleges and Universities (“HBCUs”).

 

 

During 2023, the Cheniere team supported our communities with over 13,000 hours of volunteering and $5.6 million of direct giving, including employee-matching gifts.

Recognition

In 2023, Cheniere received the following scores and recognition:

 

 

MSCI: AA (on a scale of AAA-CCC) in the MSCI ESG Ratings assessment

 

 

Sustainalytics: ESG Risk Rating of 22.7, considered a medium-risk assessment

 

 

Institutional Investor: Voted by the investment community first place overall across all categories, including Best ESG Program and Best Company Board, for the Natural Gas & Master Limited Partnerships sector

 

     
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CORPORATE GOVERNANCE

 

CORPORATE GOVERNANCE

 

We are committed to the values of effective corporate governance and high ethical standards. Our Board believes that these values are conducive to strong performance and creating long-term shareholder value. Our governance framework gives our highly experienced directors the structure necessary to provide oversight, advice and counsel to Cheniere.

Since our 2021 Annual Meeting, we have taken the following governance actions:

 

 

engaged annually with shareholders holding in excess of 50% of our common stock each year regarding governance matters;

 

 

added details regarding the experience of our directors and the diversity of our Board to our proxy statements, including an individualized skills matrix;

 

 

expanded the oversight responsibilities of the Governance and Nominating Committee to include oversight of our strategies, activities and initiatives related to Diversity, Equity and Inclusion (“DEI”);

 

 

added express oversight responsibility for the security of the Company’s information technology systems and controls, including programs and defenses against cybersecurity threats, to the Audit Committee charter;

 

 

issued corporate responsibility reports on an annual basis, with our fourth report in 2023 titled The Power of Connection;

 

 

undertook meaningful Board refreshment as 5 of our 9 director nominees will have joined the Board since 2021; and

 

 

enhanced our proxy statement disclosure surrounding our climate strategy, human capital management and human rights and labor standards.

The “Governance Information” section of this Proxy Statement, beginning on page 21, describes our corporate governance structure and policies, which include the following:

 

   
 Board Independence  

  7 out of 9 of our current directors and director nominees are independent.

  Independent directors meet regularly without management present.

  Our President and CEO is the only management director.

 

 Board Composition  

  Our director nominees have an average age of 62.4 and average tenure of 5.5 years (as of May 23, 2024).

  The Board values diversity, experience and relevant skillsets in assessing its composition.

 

 Board Performance  

  The Board regularly assesses its performance through Board and committee self-evaluations.

 

 Board Committees  

  We have three standing Board committees—Audit, Governance and Nominating, and Compensation.

  All of our Board committees are comprised of and chaired solely by independent directors.

 

 Leadership Structure  

  Our Chairman of the Board and CEO roles were split in December 2015.

  Our independent Non-Executive Chairman of the Board provides leadership to the Board and promotes the Board’s independent oversight of management.

 

 Risk Oversight  

  The Board has oversight responsibility for key risks (including liquidity, credit, operations, ESG and regulatory compliance) facing the Company, including assessing the relative magnitude of these risks and management’s plan for mitigating these risks. In addition to the Board’s oversight responsibility, the committees of the Board review the risks that are within their areas of responsibility.

 

 Open Communication  

  We encourage open communication and strong working relationships among our directors.

  Our directors have access to management and employees.

 

 Director and

 Executive Stock

 Ownership

 

  We have had rigorous stock ownership guidelines for our directors and executive officers since 2008, including amendments to our guidelines for our directors in February 2017, and for our executive officers in February 2021, to make them more rigorous.

 

 Director Compensation

 Limit

 

  We have capped the aggregate compensation that may be granted to a non-employee director with respect to service for a single calendar year at $750,000, subject to the discretion of the Compensation Committee. Please see “Director Compensation” on page 33 of this Proxy Statement.

 

 

     
 

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PROXY SUMMARY

 

 Accountability to

 Shareholders

 

  Directors are elected annually by a majority of the votes cast (in uncontested elections) with respect to such director. If a director does not receive the necessary vote at the annual meeting, he/she is required to tender their resignation for consideration by the Board.

  The Board maintains a process for shareholders to communicate with the Board.

  We conduct an annual advisory say-on-pay vote.

  As set forth in our Bylaws, a shareholder, or a group of up to 20 shareholders, continuously owning at least 3% of our common stock for at least the prior 3 consecutive years (and meeting certain other requirements) has the ability to nominate up to 20% of the number of directors serving on our Board via our proxy statement (proxy access).

  Special meetings may be called upon the written request of at least 50.1% of the outstanding shares of common stock of the Company, as set forth in our Bylaws.

 

 Succession Planning  

  The Governance and Nominating Committee has oversight of succession planning, both planned and emergency, for the Chief Executive Officer.

 

 Governance Policies  

  Non-employee directors are required to retire upon the earlier of reaching 75 years of age or 15 years of service, in order to encourage board refreshment. Upon the recommendation of the Governance and Nominating Committee, the Board may waive these requirements as to any non-employee director if it deems such waiver to be in the best interests of the Company.

  We maintain codes of conduct for directors, officers and employees.

  We do not allow pledging of Company stock as collateral for a loan or holding Company stock in margin accounts.

  We do not allow hedging or short sales of Company stock.

  We do not have a shareholder rights plan, or “poison pill.”

 

 

     
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OUR DIRECTOR NOMINEES

 

OUR DIRECTOR NOMINEES

 

You are being asked to vote on the election of the 9 director nominees listed below. Each director is elected annually by a majority of the votes cast. Detailed information about each nominee, including background, skills and expertise, can be found in “Proposal 1 – Election of Directors” beginning on page 11.

 

                       

 

COMMITTEE MEMBERSHIPS

   NAME
   PRINCIPAL OCCUPATION

 

  

AGE

(AS OF MAY 23,
2024)

 

  

DIRECTOR

SINCE

 

  

INDEPENDENT

 

  

 AC 

 

  

 G&N 

 

  

 CC 

 

 G. Andrea Botta

Chairman of the Board, Cheniere Energy, Inc.;
President, Glenco LLC

   71    2010    Yes       Chair   

 Jack A. Fusco

President and Chief Executive Officer,
Cheniere Energy, Inc.

   61    2016    No         

 Patricia K. Collawn

Chairman and Chief Executive Officer,
PNM Resources, Inc.

   65    2021    Yes    F      

 Brian E. Edwards

Senior Vice President, Caterpillar Inc.

   58    2022    Yes         

 Denise Gray

Chief Executive Officer, DKTN Consulting LLC and
Former Director External Affairs and Government
Relations, North America, LG Energy Solution Michigan Inc.

   61    2023    Yes         

 Lorraine Mitchelmore

Director, Suncor Energy Inc. and Bank of
Montreal, Former President and Chief Executive
Officer, Enlighten Innovations Inc.

   61    2021    Yes         

 Scott Peak

Managing Partner, Co-President, and Head of North America,

Brookfield Infrastructure

   43    2024    No         

 Donald F. Robillard, Jr.

President of Robillard Consulting, LLC, Former

Executive Vice President, Chief Financial Officer

and Chief Risk Officer of Hunt Consolidated, Inc.

and Former Chief Executive Officer and

Chairman, ES Xplore, LLC

   72    2014    Yes    Chair;

F

     

 Neal A. Shear

Senior Advisor and Chair of the Advisory

Committee of Onyxpoint Global Management LP

   69    2014    Yes            Chair

 

AC: Audit Committee

   F: Audit Committee Financial Expert

G&N: Governance and Nominating Committee

  

CC: Compensation Committee

  

All director nominees have been determined to be independent, except Jack A. Fusco and Scott Peak. Each director nominee attended or participated in at least 75% of the aggregate number of all meetings of the Board and of each committee on which he or she sits for which the director was eligible to attend in 2023.

 

     
 

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PROXY SUMMARY

 

Summary of Director Core Competencies

Our Board believes that having a diverse mix of directors with complementary qualifications, expertise and attributes is essential to meeting its oversight responsibility.

 

 

LOGO

EXECUTIVE COMPENSATION HIGHLIGHTS

 

Compensation Governance Practices

 

 

Clear, direct link between pay and performance

 

 

Majority of incentive awards earned based on performance

 

 

No hedging or “short sales” of Company stock

 

 

No pledging of Company stock as collateral for a loan or holding Company stock in margin accounts

 

 

Robust stock ownership guidelines

 

 

No defined benefit retirement plan or supplemental executive retirement plan

 

 

Strong compensation risk management program

 

 

Clawback policy that requires the Board to recoup erroneously paid performance-based incentive compensation from the Company’s current and former Section 16 officers in the event of a financial restatement

 

 

Non-employee director equity compensation limits

 

 

Minimum vesting schedule for long-term incentive awards of at least 12 months, subject to limited exceptions

 

 

No material perquisites

 

 

Solicit annual advisory vote on executive compensation

 

 

Annually review the independence of the compensation consultant retained by the Compensation Committee

 

     
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CHENIERE ENERGY, INC. AMENDED AND RESTATED 2020 INCENTIVE PLAN

 

Philosophy and Objectives

We are committed to a pay-for-performance executive compensation program that aligns the interests of our Named Executive Officers (“NEOs”) with the key drivers of long-term growth and creation of shareholder value. Changes to the executive compensation program are influenced by market practices, feedback from shareholders, and to support the program’s primary objectives.

The Board and the Compensation Committee believe the design of our executive compensation program, and the Compensation Committee’s decisions and outcomes in 2023, support our compensation philosophy and objectives, including:

 

 

Annual and long-term incentive awards are primarily performance-based

 

 

Annual incentive awards earned are based on achievement of specific financial, operating, ESG and strategic goals

 

 

Performance-based long-term incentive awards are tied to specific and formulaic financial performance and stock price growth objectives

2023 Compensation Highlights

During 2023, the Compensation Committee and Board continued to monitor market conditions and address feedback from stakeholders and our compensation consultant. Key outcomes and developments included:

 

 

The annual incentive plan generated an above-target payout for our NEOs based upon the Company’s 2023 performance across multiple financial, operating, safety and strategic metrics.

 

 

Performance share units awarded in 2021 generated an above-target payout for our NEOs based upon the Company’s performance across the performance metrics of cumulative Distributable Cash Flow per share and Absolute Total Shareholder Return over the 2021-2023 period.

 

 

In 2023, our annual performance scorecard included ESG metrics, inclusive of safety, that represented 30% of the annual performance scorecard.

During 2023, members of our Board and senior management engaged with shareholders holding more than 50% of our outstanding common stock, with the Company’s executive compensation program being a component of these engagements. We are committed to maintaining an open dialogue with our shareholders to ensure the successful evolution of our executive compensation program going forward.

CHENIERE ENERGY, INC. AMENDED AND RESTATED 2020 INCENTIVE PLAN

 

On April 2, 2024, the Board unanimously approved the Cheniere Energy, Inc. Amended and Restated 2020 Incentive Plan (the “A&R 2020 Plan”), subject to shareholder approval. The A&R 2020 Plan will be effective on May 23, 2024 (the “Effective Date”) if it is approved by our shareholders at the Meeting. The A&R 2020 Plan will apply only to awards granted on or after the Effective Date. The terms and conditions of awards granted under the Cheniere Energy, Inc. 2020 Incentive Plan (the “2020 Plan”) prior to the Effective Date will not be affected by the adoption or approval of the A&R 2020 Plan. If the A&R 2020 Plan is not approved by our shareholders at the Meeting, then the 2020 Plan will remain in effect on the terms in force prior to the Meeting with the A&R 2020 Plan not taking effect.

The A&R 2020 Plan incorporates several features designed to protect shareholder interests and promote current best practices, including:

 

 

Minimum Vesting Requirements: Awards under the A&R 2020 Plan will be subject to a minimum vesting schedule of at least 12 months following the date of grant of the award; provided, however, that up to 5% of the shares underlying awards granted after the Effective Date may be subject to vesting schedules of less than 12 months. For purposes of this minimum vesting requirement, awards granted to non-employee directors in respect of regular annual fees will be deemed to satisfy the requirement, provided that such award vests no earlier than 50 weeks following the immediately preceding year’s annual meeting, and provided further that awards granted to non-employee directors in substitution for cash compensation otherwise due and payable to such non-employee director will not be subject to such requirement.

 

 

No Dividend Payments on Unvested Awards: The A&R 2020 Plan expressly prohibits the payment of dividends or dividend equivalents on any award before the date on which the award vests.

 

     
 

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PROXY SUMMARY

 

 

Director Grant Limit: With respect to each non-employee director, the aggregate dollar value of (a) any awards granted under the A&R 2020 Plan (based on the grant date fair value of such awards) with respect to the non-employee director’s service as a non-employee director during a single calendar year and (b) any cash or other compensation that is not equity-based and that is paid by the Company with respect to the non-employee director’s service as a non-employee director for such calendar year, shall not exceed $750,000. The Compensation Committee may make exceptions to this limit for non-employee directors, in its discretion, provided that the non-employee director receiving such additional compensation does not participate in the decision to award such compensation.

 

 

Clawbacks: Awards under the A&R 2020 Plan will be subject to the Cheniere Energy, Inc. Clawback Policy, the Cheniere Energy Partners, L.P. Clawback Policy, if applicable, any other clawback or recapture policy that the Company or an applicable affiliate may adopt from time to time, and any clawback or recapture provisions set forth in an award agreement.

 

 

No Evergreen: The A&R 2020 Plan does not contain any “evergreen” provisions.

 

 

No Discount or Repriced Options: The A&R 2020 Plan does not permit discounted stock options, or repricing options to reduce the exercise price without shareholder approval.

See Proposal 4, beginning on page 81, for more details.

 

     
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PROPOSAL 1 – ELECTION OF DIRECTORS

DIRECTORS AND NOMINEES

 

This year, there are 9 nominees standing for election as directors at the Meeting. Pursuant to an Investors’ and Registration Rights Agreement that was entered into by the Company, Cheniere Energy Partners GP, LLC, CQP Holdco LP (f/k/a Blackstone CQP Holdco LP) (“CQP Holdco”) and various other related parties in 2012, Mr. Peak was appointed to the Board to replace Mr. Runkle in April 2024. Below is a summary of our director nominees, including their committee memberships as of April    , 2024. The Board, with assistance from the Governance and Nominating Committee, will evaluate and reassign committee memberships as needed following the Meeting and election of the director nominees. Detailed information about each nominee’s background, skills and expertise is provided below.

 

                   

 

NOMINEE COMMITTEE MEMBERSHIPS

 NAME
 CURRENT POSITION
  

AGE
(AS OF MAY 23,

2024)

   DIRECTOR
SINCE
   INDEPENDENT    AUDIT    GOVERNANCE AND
NOMINATING
   COMPENSATION

G. Andrea Botta

Chairman of the Board,

Cheniere Energy, Inc.

President,

Glenco LLC

   71    2010    YES     

 

   Chair     

 

Jack A. Fusco

President and Chief Executive Officer,

Cheniere Energy, Inc.

   61    2016    NO     

 

    

 

    

 

Patricia K. Collawn

Chairman and Chief Executive Officer,

PNM Resources, Inc.

   65    2021    YES    F     

 

  

Brian E. Edwards

Senior Vice President,

Caterpillar Inc.

   58    2022    YES        

 

  

Denise Gray(1)

Chief Executive Officer, DKTN Consulting, LLC

and Former Director External Affairs and Government Relations, North America,

LG Energy Solution Michigan Inc.

   61    2023    YES        

 

  

Lorraine Mitchelmore

Director,

Suncor Energy Inc. and Bank of Montreal

   61    2021    YES           

 

Scott Peak

Managing Partner, Co-President, and Head of North America,

Brookfield Infrastructure

   43    2024    NO     

 

    

 

    

 

Donald F. Robillard, Jr.

President,

Robillard Consulting, LLC

   72    2014    YES    Chair;

F

       

 

Neal A. Shear

Senior Advisor and Chair of the Advisory Committee,

Onyxpoint Global Management LP

   69    2014    YES     

 

      Chair

F = Audit Committee Financial Expert

The Board has determined that Ms. Collawn and Mr. Robillard are each an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K promulgated by the Securities and Exchange Commission (“SEC”).

 

     
 

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PROPOSAL 1 – ELECTION OF DIRECTORS

 

Director Diversity and Core Competencies

Our director nominees represent a diverse mix of directors who complement each other to create a well-rounded boardroom, and each adds:

 

 

A deep commitment to stewardship

 

A proven record of success

 

Unique and valuable insight

Our director nominees also reflect a range of diversity characteristics, as shown below.

 

 

LOGO

The table below summarizes certain of the key qualifications, skills and attributes of our director nominees. The lack of an indicator for a particular item does not mean that the director does not possess that qualification, skill or experience as we look to each director to be knowledgeable in these areas; rather, the indicator represents that the item is a core competency that contributed to his or her nomination to the Board. Our director nominees’ biographies describe each director’s background and relevant experience in more detail.

 

                   

 DIRECTOR SKILLS, EXPERIENCE AND

 DEMOGRAPHIC MATRIX

  LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO

Key Skills and Experience

                                   

Corporate Finance: Has an understanding of finance and financial reporting processes

  LOGO   LOGO   LOGO               LOGO   LOGO   LOGO

Energy Industry Experience: Contributes valuable perspective on broader trends and issues specific to our operations in the energy industry

  LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO

Executive Leadership: Has a demonstrated record of leadership and valuable perspectives relating to the management and oversight of large and complex organizations

  LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO

Governance: Contributes to the Board’s understanding of best practices in corporate governance matters

  LOGO   LOGO   LOGO           LOGO   LOGO   LOGO   LOGO

 

     
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DIRECTORS AND NOMINEES

 

                   

 DIRECTOR SKILLS, EXPERIENCE AND

 DEMOGRAPHIC MATRIX

  LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO

Government / Regulatory: Has an understanding of the role governmental and regulatory actions and decisions may have on our business and contributes to the Board’s ability to navigate complex regulatory and governmental dynamics

  LOGO   LOGO   LOGO       LOGO   LOGO       LOGO   LOGO

HSE/Sustainability: Strengthens the Board’s oversight and understanding of the interrelationship among environmental and safety matters or sustainability, and our operational activities and strategy

  LOGO   LOGO   LOGO   LOGO   LOGO   LOGO            

Human Capital Management: Has an understanding of human resources and best practices to enhance the attraction, motivation, and retention of a talented workforce

      LOGO   LOGO       LOGO   LOGO   LOGO       LOGO

International Experience: Provides valuable insights into the international aspects of our business and operations

  LOGO   LOGO       LOGO   LOGO   LOGO   LOGO   LOGO   LOGO

Operations: Provides operational knowledge to aid in managing risks inherent in our business

      LOGO   LOGO   LOGO   LOGO   LOGO       LOGO   LOGO

Public Company Director: Serves or has served on other public company boards

  LOGO   LOGO   LOGO       LOGO   LOGO   LOGO   LOGO   LOGO

Risk Oversight / Crisis Management: Has an understanding of, and experience with, the risk oversight necessary for organizational performance and security

  LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO

Trading Financial Commodities: Has knowledge of domestic and global energy commodities markets and trading of financial commodities

      LOGO   LOGO                   LOGO   LOGO

Age (as of May 23, 2024)

  71   61   65   58   61   61   43   72   69

Gender Identity

  M   M   F   M   F   F   M   M   M

Racial / Ethnic Diversity

                               

There are 9 nominees standing for election as directors at the Meeting. Each nominee, if elected, will hold office for a one-year term expiring at the 2025 Annual Meeting of Shareholders and will serve until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal. Each of the director nominees has consented to serve as a director if elected or re-elected.

Each of the director nominees currently serves on the Board. Directors are elected annually by a majority of votes cast (in uncontested elections) with respect to such director nominee. Unless your proxy specifies otherwise, it is intended that the shares represented by your proxy will be voted for the election of these 9 nominees. If you are a beneficial owner, your bank, broker or other holder of record is not permitted to vote your shares on Proposal 1 to elect directors if the bank, broker or other holder of record does not receive specific voting instructions from you. The Board is unaware of any circumstances likely to render any nominee unavailable.

 

LOGO

 

The Board unanimously recommends a vote FOR the election of the 9 nominees as directors of the Company to hold office for a one-year term expiring at the 2025 Annual Meeting of Shareholders or until their successors are duly elected and qualified.

 

     
 

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PROPOSAL 1 – ELECTION OF DIRECTORS

 

DIRECTOR NOMINATIONS AND QUALIFICATIONS

 

Director Nomination Policy and Procedures. Our Director Nomination Policy and Procedures is attached to the Governance and Nominating Committee’s written charter as Exhibit A, which is available on our website at www.cheniere.com. The Governance and Nominating Committee may consider suggestions for potential director nominees to the Board from any source, including current members of the Board and our management, advisors and shareholders, and will review and consider any such candidates submitted by a shareholder or shareholder group in the same manner as all other candidates. The Governance and Nominating Committee evaluates potential nominees by reviewing their qualifications and any other information deemed relevant. Director nominees are recommended to the Board by the Governance and Nominating Committee.

The full Board will select and recommend candidates for nomination as directors for shareholders to consider and vote upon at the annual shareholders’ meeting.

Qualifications for consideration as a director nominee vary according to the particular areas of expertise being sought as a complement to the existing Board composition. However, minimum criteria for selection of members to serve on our Board include the following:

 

 

highest professional and personal ethical standards and integrity;

 

 

high level of education and/or business experience;

 

 

broad-based business acumen;

 

 

commitment to understand the Company’s business and industry;

 

 

sufficient time to effectively carry out their duties;

 

 

strategic thinking and willingness to share ideas;

 

 

loyalty and commitment to driving the success of the Company;

 

 

network of business and industry contacts; and

 

 

diversity of experiences, expertise, backgrounds and other demographics among members of the Board.

Practices for Considering Diversity. The minimum criteria for selection of members to serve on our Board are designed to ensure that the Governance and Nominating Committee selects director nominees taking into consideration that the Board will benefit from having directors that represent a diversity of experience and backgrounds. Director nominees are selected so that the Board represents a diversity of experience in areas needed to foster the Company’s business success, including experience in the energy industry, finance, consulting, international affairs, public service, governance, regulatory compliance and ESG. Each year the Board and each committee participates in a self-assessment or evaluation of the effectiveness of the Board and its committees. These evaluations assess the diversity of talents, expertise and occupational and personal backgrounds and attributes (such as gender, ethnicity and age) of the Board members. Over 40% of our director nominees are diverse based on gender or ethnicity.

Shareholder Nominations for Director (other than Proxy Access). A shareholder of the Company may nominate a candidate or candidates for election to the Board at an annual meeting of shareholders if such shareholder (1) was a shareholder of record at the time the notice provided for below is delivered to the Corporate Secretary, (2) is entitled to vote at the meeting of shareholders called for the election of directors and is entitled to vote upon such election and (3) complies with the notice procedures and other requirements set forth in our Bylaws, as amended (the “Bylaws”). Nominations made by a shareholder must be made by giving timely notice in writing to the Corporate Secretary of the Company at the following address: Corporate Secretary, Cheniere Energy, Inc., 845 Texas Avenue, Suite 1250, Houston, Texas 77002. To be timely, a shareholder’s notice must be delivered not later than the close of business on the 90th day, nor earlier than the close of business on the 120th day, prior to the first anniversary of the preceding year’s annual meeting. A shareholder’s notice must include information about the shareholder and the nominee, as required by our Bylaws, which are available on our website at www.cheniere.com.

Director Nominations for Inclusion in Proxy Statement (Proxy Access). As set forth in our Bylaws, a shareholder, or group of up to 20 shareholders, continuously owning at least 3% of the Company’s common stock for at least the prior three consecutive years (and meeting the other requirements set forth in our Bylaws) may nominate for election to our Board and inclusion in our proxy statement for our annual meeting of shareholders up to 20% of the number of directors then serving on our Board.

The notice must include all information required by our Bylaws. In addition to complying with the other requirements set forth in our Bylaws, an eligible shareholder must provide timely notice in writing to the Corporate Secretary of the Company at the following

 

     
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DIRECTOR NOMINATIONS AND QUALIFICATIONS

 

address: Corporate Secretary, Cheniere Energy, Inc., 845 Texas Avenue, Suite 1250, Houston, Texas 77002. To be timely for purposes of proxy access, a shareholder’s notice must be delivered not later than the close of business on the 120th day, nor earlier than the 150th day, prior to the first anniversary of the date that the Company first mailed its proxy statement to shareholders for the prior year’s annual meeting of shareholders. However, if (and only if) the annual meeting is not scheduled to be held within a period that commences 30 days before such anniversary date and ends 30 days after such anniversary date (an annual meeting date outside such period being referred to herein as an “Other Meeting Date”), notice must be given in the manner provided in our Bylaws by the later of the close of business on the date that is 180 days prior to such Other Meeting Date and the 10th day following the date on which public announcement of such Other Meeting Date is first made.

Director Qualifications. The Board has concluded that, in light of our business and structure, each of our director nominees possesses relevant experience, qualifications, attributes and skills and, as of the date of this Proxy Statement, is qualified to and should serve on our Board. The primary qualifications of our directors are further discussed under “Director Biographies” below.

Director Retirement Policy. The Board maintains a mandatory director retirement policy that requires each director who has attained the age of 75 to retire from the Board at the annual meeting of shareholders of the Company held in the year in which his or her current term expires, unless the Board determines such mandate for a particular director is not at the time in the best interests of the Company. Additionally, in order to encourage Board refreshment, the Board revised the director retirement policy in 2020 to provide that directors who have reached 15 years of service on the Board will also not be eligible for re-nomination to the Board at the annual meeting of shareholders of the Company in the year at which such director’s current term expires, subject to Board discretion. The Board believes this policy helps to ensure a healthy rotation of directors, which promotes the continued influx of new ideas and perspectives to the Board.

Recent Board Refreshment. As a result of our focus on Board refreshment and pursuant to our director retirement policy, in 2022 one of our long-serving directors, Mr. David B. Kilpatrick, retired, and Mr. Edwards joined the Board. In addition, Ms. Gray was nominated to join the Board in 2023 as a result of another long-serving director, Ms. Vicky Bailey, not standing for re-election at the 2023 Annual Meeting of Shareholders (the “2023 Annual Meeting”). Pursuant to an Investors’ and Registration Rights Agreement that was entered into by the Company, Cheniere Energy Partners GP, LLC, CQP Holdco and various other related parties in 2012, Mr. Peak was appointed to the Board to replace Mr. Runkle in April 2024. In addition to the minimum criteria described above, the Governance and Nominating Committee evaluated the skill sets needed to maximize Board effectiveness and support the strategic direction of the Company. Of our nine director nominees, three have served on the Board for approximately ten years or more and five have been on our Board for less than five years. We believe this achieves the right balance between new directors who bring new ideas and insights and longer-serving directors with deep institutional knowledge of our Board and our Company.

 

     
 

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PROPOSAL 1 – ELECTION OF DIRECTORS

 

DIRECTOR BIOGRAPHIES

 

 

     
 

JACK A. FUSCO

 

PRESIDENT & CEO

 

AGE: 61

 

DIRECTOR SINCE:

2016

 

  LOGO

 

Jack A. Fusco is a director and the President and Chief Executive Officer of Cheniere. Mr. Fusco has served as President and Chief Executive Officer since May 2016 and as a director since June 2016. In addition, Mr. Fusco serves as Chairman, President and Chief Executive Officer of Cheniere Energy Partners GP, LLC (“Cheniere Partners GP”), a wholly-owned subsidiary of Cheniere and the general partner of Cheniere Partners. Mr. Fusco served as Chairman, President and Chief Executive Officer of Cheniere Energy Partners LP Holdings, LLC (“Cheniere Holdings”) from June 2016 to September 2018. Mr. Fusco is also President and Chief Executive Officer of the general partner of Sabine Pass LNG, L.P. and Chief Executive Officer of Sabine Pass Liquefaction, LLC. Mr. Fusco received recognition as Best CEO in the electric industry by Institutional Investor in 2012 as ranked by all industry analysts and for Best Investor Relations by a CEO or Chairman among all mid-cap companies by IR Magazine in 2013. Institutional Investor again recognized Mr. Fusco for the 2020 and 2023 All-American Executive Team Best CEO in the natural gas industry.

Mr. Fusco served as Chief Executive Officer of Calpine Corporation (“Calpine”) from August 2008 to May 2014 and as Executive Chairman of Calpine from May 2014 through May 11, 2016. Mr. Fusco served as a member of the board of directors of Calpine from August 2008 until March 2018, when the sale of Calpine to an affiliate of Energy Capital Partners and a consortium of other investors was completed. Mr. Fusco was recruited by Calpine’s key shareholders in 2008, just as that company was emerging from bankruptcy. Calpine grew to become America’s largest generator of electricity from natural gas, safely and reliably meeting the needs of an economy that demands cleaner, more fuel-efficient and dependable sources of electricity. As Chief Executive Officer of Calpine, Mr. Fusco

managed a team of approximately 2,300 employees and led one of the largest purchasers of natural gas in America, a successful developer of new gas-fired power generation facilities and a company that prudently managed the inherent commodity trading and balance sheet risks associated with being a merchant power producer.

Mr. Fusco’s career of over 40 years in the energy industry began with his employment at Pacific Gas & Electric Company upon graduation from California State University, Sacramento with a Bachelor of Science in Mechanical Engineering in 1984. He joined Goldman Sachs 13 years later as a Vice President with responsibility for commodity trading and marketing of wholesale electricity, a role that led to the creation of Orion Power Holdings, an independent power producer that Mr. Fusco helped found with backing from Goldman Sachs, where he served as President and Chief Executive Officer from 1998-2002. In 2004, he was asked to serve as Chairman and Chief Executive Officer of Texas Genco LLC by a group of private institutional investors, and successfully managed the transition of that business from a subsidiary of a regulated utility to a strong and profitable independent company, generating a more than 5-fold return for shareholders upon its merger with NRG in 2006. Mr. Fusco is currently on the board of directors of the American-Italian Cancer Foundation, a non-profit organization supporting cancer research and education.

Skills and Qualifications:

Mr. Fusco brings his prior experience leading successful energy industry companies and his perspective as President and Chief Executive Officer of Cheniere.

 

 

     
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DIRECTOR BIOGRAPHIES

 

     
 

G. ANDREA BOTTA

 

CHAIRMAN OF THE BOARD AND CHAIRMAN OF
GOVERNANCE AND NOMINATING COMMITTEE

 

AGE: 71

 

DIRECTOR SINCE:

2010

 

  LOGO

 

G. Andrea Botta is the Chairman of the Board and Chairman of our Governance and Nominating Committee. Mr. Botta has served as President of Glenco LLC (“Glenco”), a private investment company since February 2006. Prior to joining Glenco, Mr. Botta served as Managing Director of Morgan Stanley from 1999 to February 2006. Before joining Morgan Stanley, he was President of EXOR America, Inc. (formerly IFINT-USA, Inc.) from 1993 until September 1999 and for more than five years prior thereto, Vice President of Acquisitions of IFINT-USA, Inc. From March 2008 until February 2018, Mr. Botta

served on the board of directors of Graphic Packaging Holding Company. Mr. Botta earned a degree in Economics and Business Administration from the University of Torino in 1976.

Skills and Qualifications:

Mr. Botta brings a unique international perspective to our Board and significant investing expertise. He has over 30 years of investing experience primarily in private equity investing.

 

 

     
 

PATRICIA K. COLLAWN

 

MEMBER OF AUDIT COMMITTEE AND
COMPENSATION COMMITTEE

 

AGE: 65

 

DIRECTOR SINCE:

2021

 

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Ms. Collawn is a member of our Audit Committee and Compensation Committee. Ms. Collawn is the Chairman and Chief Executive Officer of PNM Resources, Inc., a publicly-traded energy holding company based in New Mexico, becoming Chairman in 2012 and CEO in 2010. From 2010 to May 2022, Ms. Collawn also served as President of PNM Resources. Ms. Collawn joined PNM Resources in 2007 as President, Utilities, prior to her promotion to President and Chief Operating Officer in 2008. From 2005 to 2007, Ms. Collawn served as President and Chief Executive Officer of Public Service Company of Colorado, an operating utility that is a subsidiary of Xcel Energy, Inc. Ms. Collawn previously served on the board of directors of Equitrans Midstream Corporation, a publicly traded natural gas midstream company, from April 2020 to April 2023, EVgo Services, LLC, a publicly traded builder, owner and operator of DC fast charging for electric vehicles in the U.S., from July 2021 to March 2022, and CTS Corporation, a publicly traded designer and manufacturer of sensors, actuators and electronic components for various industries, from 2003 to May 2021. Ms. Collawn also previously

served as Chairman of the Electric Power Research Institute, an independent, non-profit center for public interest energy and environmental research, including sustainability and carbon reduction matters, and Chairman of the Edison Electric Institute, a national association of investor-owned electric companies. Ms. Collawn received a B.A. from Drake University and an M.B.A. from Harvard Business School.

Skills and Qualifications:

As a senior executive in the power utilities sector for more than 25 years, Ms. Collawn has an in-depth understanding of the complex regulatory structure of the utility industry, as well as substantial operations experience. Along with her executive leadership experience and commercial and operational expertise, Ms. Collawn brings a focus on corporate governance, cybersecurity and environmental and sustainability matters to our Board.

 

 

     
 

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PROPOSAL 1 – ELECTION OF DIRECTORS

 

     
 

BRIAN E. EDWARDS

 

MEMBER OF AUDIT COMMITTEE AND COMPENSATION COMMITTEE

 

AGE: 58

 

DIRECTOR SINCE:

2022

 

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Mr. Edwards is a member of our Audit Committee and Compensation Committee. Mr. Edwards has served as a Senior Vice President of Caterpillar Inc., a construction equipment manufacturer, since January 2021, with responsibility for the Caterpillar Remanufacturing Division, which offers high-quality, lower-cost replacement parts remanufactured from genuine Caterpillar components. Mr. Edwards joined Caterpillar in 2010 as Vice President of Sales and Marketing at the company’s wholly owned subsidiary, Progress Rail. He continued rising in the leadership ranks at Progress Rail, serving in many roles, including Executive Vice President of rolling stock. Prior to joining Caterpillar, Mr. Edwards spent more than 20 years gaining expertise in manufacturing, engineering and supply chain roles at GE and General Motors. Mr. Edwards holds a bachelor’s degree in Chemical

Engineering from Youngstown State University and a master’s degree in Manufacturing Management from GMI Engineering & Management Institute (now Kettering University). Mr. Edwards completed the Caterpillar “Digging Deep” executive development program through Stanford University. Mr. Edwards is affiliated with United Way, March of Dimes and Big Brothers Big Sisters of America.

Skills and Qualifications:

Mr. Edwards provides a differentiated and meaningful perspective to the Board through his deep knowledge of industrial manufacturing, engineering and supply chain, as well as his decades of leadership within large organizations.

 

 

     
 

DENISE GRAY

 

MEMBER OF AUDIT COMMITTEE AND COMPENSATION COMMITTEE

 

AGE: 61

 

DIRECTOR SINCE:

2023

 

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Ms. Gray has served as the Chief Executive Officer of DKTN Consulting LLC, a global automotive systems and energy storage advisory firm, since May 2023, and previously served as Director External Affairs and Government Relations, North America for LG Energy Solution Michigan Inc., the North American subsidiary of LG Energy Solution Ltd, a manufacturer of large lithium-ion battery cells and packs for electric vehicles and other energy storage applications, from March 2022 until her retirement in May 2023. Ms. Gray previously served as CEO/President and Board Member of LG Chem Power Inc./LG Chem Michigan Inc./LG Energy Solution Michigan Inc. from September 2015 to March 2022. In that position, her team provided battery solutions for automotive and non-automotive applications. Ms. Gray served on the board of directors for Tenneco from March 2019 to November 2022; has served on the board of directors of Canadian National Railway since April 2021 and the Board on Energy and Environmental Systems since January 2020, and on the Advisory Boards of the Joint Office of Energy and Transportation Electric Vehicle Working Group since August 2023 and the United States

Secretary of Energy since October 2021; and as Member of The National Academy of Engineering since February 2022. Ms. Gray previously held automotive leadership positions with AVL List GmbH in Graz, Austria from 2013 to 2015 and Atieva, Inc. in Redwood City, California from 2010 to 2013. The vast majority of Ms. Gray’s 35+ year professional career was with General Motors from 1986 to 2010, where she spearheaded efforts in vehicle electrical, powertrain system controls, and software, including battery systems. Ms. Gray holds a B.S. in Electrical Engineering from Kettering University and a M.S. in Engineering Management of Technology from Rensselaer Polytechnic Institute.

Skills and Qualifications:

Ms. Gray has extensive experience in the automotive industry, including leadership roles of companies at the forefront of battery technology, bringing insights into energy transition issues and engineering expertise to our Board.

 

 

     
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DIRECTOR BIOGRAPHIES

 

     
 

 

LORRAINE MITCHELMORE

 

MEMBER OF AUDIT COMMITTEE AND GOVERNANCE AND NOMINATING COMMITTEE

 

 

AGE: 61

 

DIRECTOR SINCE:

2021

 

  LOGO

Ms. Mitchelmore is a member of our Audit Committee and Governance and Nominating Committee. Ms. Mitchelmore was recently the President and Chief Executive Officer of Enlighten Innovations Inc., a Calgary based clean technology company, from May 2017 to September 2018. Prior to that, she was President and Canada Country Chair of Shell Canada Limited and Executive Vice President, Americas Heavy Oil for Royal Dutch Shell. She has more than 30 years of international oil and gas industry experience. Throughout her career, she has served with increasing responsibility in operational, strategy, and commercial roles. Prior to joining Shell in 2002, she worked with BHP Petroleum, Chevron, and Petro-Canada.

Ms. Mitchelmore has served as a director of the Bank of Montreal, a diversified financial services provider, since May 2015, where she currently serves as Chair of the Human Resources Committee, and Suncor Energy Inc., a premier integrated energy company, since November 2019, where she currently serves as Chair of the Environment, Health, Safety and Sustainable Development Committee. She has also served on the Board of Directors of the Alberta Investment Management Corporation (AIMCo) since January 2022. Ms. Mitchelmore previously served on the Board of Advisers of Catalyst Canada from 2018 to 2023 and the board of directors of TransMountain Corporation from November 2018 to December 2019.

Ms. Mitchelmore was an associate of the Creative Destruction Lab from 2018 to 2023 where she was a mentor to many early-stage energy transition companies. She is co-founder and

co-chair of the Smart Prosperity Initiative, an organization focused on harnessing new thinking to accelerate Canada’s transition to a stronger, cleaner economy. From 2017 to 2018, she chaired the Resources of the Future Economic Strategy table for the Canadian federal government. She has been named a fellow of the Canadian Academy of Engineering, awarded the Catalyst Canada Champion Honors Award in 2014, recognizing commitment to Diversity and Inclusion, and was a recipient of Canada’s 2016 Clean16 award for leadership in advancing sustainable development in Canada.

Ms. Mitchelmore holds a BSc in Geophysics from Memorial University of Newfoundland, an MSc in Geophysics from the University of Melbourne, Australia and an MBA from Kingston Business School in London, England.

Skills and Qualifications:

Ms. Mitchelmore has over 30 years of international oil and gas industry experience, as well as significant executive, operational, strategy and commercial experience. Ms. Mitchelmore also brings meaningful experience with energy transition issues and sustainable development to our Board.

 
     
 

 

SCOTT PEAK

 

DIRECTOR

 

 

AGE: 43

 

DIRECTOR SINCE:

2024

 

  LOGO

 

Mr. Peak is a Managing Partner, Co-President, and Head of North America for Brookfield’s Infrastructure Group. In this role, he is responsible for regional oversight and investment strategy leadership and is involved in the screening and evaluation of global investment initiatives. Mr. Peak previously served as Chief Investment Officer for North America for Brookfield’s Infrastructure Group. Prior to joining Brookfield in January 2016, Mr. Peak spent a decade at Macquarie Group Ltd., where he focused on the infrastructure sector. Previously, Mr. Peak worked in the mergers and acquisitions group at Dresdner Kleinwort Wasserstein. Mr. Peak previously served as a director of the Company from April 2022 to April 2023 and the general partner of Cheniere Partners from September 2020 to April 2022 and April 2023 to April 2024. Mr. Peak holds a Master of Finance with distinction from INSEAD and a B.A. in Economics from Bates College.

 

Skills and Qualifications:

Mr. Peak brings energy infrastructure industry expertise and a unique financial perspective to our Board based on his extensive investment experience with Brookfield Infrastructure. Mr. Peak’s appointment to the Board of Cheniere was made pursuant to an Investors’ and Registration Rights Agreement that was entered into by the Company, Cheniere Energy Partners GP, LLC, CQP Holdco and various other related parties in connection with CQP Holdco’s purchase of Class B units in Cheniere Partners.

 

 

     
 

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PROPOSAL 1 – ELECTION OF DIRECTORS

 

     
 

DONALD F. ROBILLARD, JR.

 

CHAIRMAN OF AUDIT COMMITTEE AND MEMBER OF GOVERNANCE AND NOMINATING COMMITTEE

 

AGE: 72

 

DIRECTOR SINCE:

2014

 

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Donald F. Robillard, Jr. is the Chairman of our Audit Committee and a member of our Governance and Nominating Committee. Mr. Robillard served as a director and the Executive Vice President, Chief Financial Officer and Chief Risk Officer of Hunt Consolidated, Inc. (“Hunt”), a private holding company with interests in oil and gas exploration and production, refining, real estate development, private equity investments and ranching, from July 2015 until his retirement on January 31, 2017. Mr. Robillard began his association with Hunt in 1983 as Manager of International Accounting for Hunt Oil Company, Inc., a wholly-owned subsidiary of Hunt. Serving nine of his 34 years of service to the Hunt organization in Yemen in various accounting, finance and management positions, Mr. Robillard returned to the United States to join Hunt’s executive team in 1992. Mr. Robillard was named Senior Vice President and Chief Financial Officer of Hunt in April 2007. Mr. Robillard also served, from February 2016 through August of 2017, as Chief Executive Officer and Chairman of ES Xplore, LLC, a direct hydrocarbon indicator technology company which in 2016 was spun out of Hunt. He is currently President of Robillard

Consulting, LLC, an oil and gas advisory firm. Mr. Robillard is currently on the board of directors of Helmerich & Payne, Inc., a publicly-traded oil and gas drilling company. He is a Certified Public Accountant, a member of the American Institute of Certified Public Accountants, the Texas Society of Certified Public Accountants, the National Association of Corporate Directors (NACD Directorship Certified), Financial Executives International and an advisory board member of the Institute for Excellence in Corporate Governance at the Naveen Jindal School of Management at the University of Texas at Dallas. Mr. Robillard received a B.B.A. from the University of Texas, Austin.

Skills and Qualifications:

Mr. Robillard has over 40 years of experience in the oil and gas industry and over 25 years of senior management experience. Mr. Robillard brings significant executive-level experience in the oil and gas industry, including experience with project financing for LNG facilities.

 

 

     
 

NEAL A. SHEAR

 

CHAIRMAN OF COMPENSATION COMMITTEE AND MEMBER OF GOVERNANCE AND NOMINATING COMMITTEE

 

AGE: 69

 

DIRECTOR SINCE:

2014

 

 

LOGO

 

Neal A. Shear is the Chairman of our Compensation Committee and a member of our Governance and Nominating Committee. Since June 2017, Mr. Shear has served as Senior Advisor and Chair of the Advisory Committee of Onyxpoint Global Management LP, an alternative asset management firm. Mr. Shear served as Interim Special Advisor to the Chief Executive Officer of Cheniere from May 2016 to November 2016 and as Interim Chief Executive Officer and President of Cheniere from December 2015 to May 2016. Mr. Shear was the Chief Executive Officer of Higgs Capital Management, a commodity focused hedge fund from January 2012 until September 2014. Prior to Higgs Capital Management, Mr. Shear served as Global Head of Securities at UBS Investment Bank from January 2010 to March of 2011. Previously, Mr. Shear was a Partner at Apollo Global Management, LLC, where he served as the Head of the Commodities Division. Prior to Apollo Global Management, Mr. Shear spent 26 years at Morgan Stanley serving in various roles including Head of the Commodities Division, Global Head of Fixed Income, Co-Head of Institutional Sales and Trading, and Chair of the Commodities Business. Mr. Shear has served as a director and

limited partner of ESG Energy Holdings LLC, a company formed to buy refining and other assets for the purpose of improving their environmental footprint in the production of energy-related products, since February 2022; as an Advisor to WasteFuel, a waste to fuels company that converts municipal waste into biofuel, since March 2022; as a director of Galileo Technologies S.A., a global provider of modular technologies for compressed natural gas and LNG production and transportation, since February 2017; and as a director of Narl Refining Inc., the refining arm of North Atlantic Holdings St John’s Newfoundland, since November 2014. Mr. Shear received a B.S. from the University of Maryland, Robert H. Smith School of Business Management in 1976 and an M.B.A. from Cornell University, Johnson School of Business in 1978.

Skills and Qualifications:

Mr. Shear brings a unique financial and trading perspective to our Board based on his more than 30 years of experience managing commodity activity and investments

 

 

 

     
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GOVERNANCE INFORMATION

BOARD COMMITTEE MEMBERSHIP AND MEETING ATTENDANCE

 

The following table shows our current directors and director nominees’ fiscal year 2023 membership and chairpersons of our Board committees, Board and committee meetings held and attendance as a percentage of meetings eligible to attend. The current Chair of the Board and each committee is indicated in the table.

 

    NUMBER
OF
MEETINGS
HELD
  BOTTA   FUSCO   COLLAWN   EDWARDS   GRAY   MITCHELMORE   PEAK   ROBILLARD   SHEAR

Board

  11   100%
Chair
  100%   91%   100%   100%   100%   100%   100%   91%

Audit Committee

  8       87.5%   100%   100%   100%     100%
Chair
 

Governance and Nominating Committee

  6   100%
Chair
          100%     100%   100%

Compensation Committee

  5       100%   100%   100%         100%

Chair

DIRECTOR INDEPENDENCE

 

The Board determines the independence of each director and nominee for election as a director in accordance with the rules and regulations of the SEC and the New York Stock Exchange (“NYSE”) independence standards, which are listed below. The Board also considers relationships that a director may have:

 

 

as a partner, shareholder or officer of organizations that do business with or provide services to Cheniere;

 

 

as an executive officer of charitable organizations to which we have made or make contributions; and

 

 

that may interfere with the exercise of a director’s independent judgment.

The NYSE independence standards state that the following list of persons will not be considered independent:

 

 

a director who is, or during the past three years was, employed by the Company or by any parent or subsidiary of the Company other than prior employment as an interim executive officer;

 

 

a director who accepts, or has an immediate family member who accepts, any compensation from the Company or any parent or subsidiary of the Company in excess of $120,000 during any period of 12 consecutive months within the past three years, other than compensation for Board or committee services and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service), and not including compensation paid to an immediate family member who is a non-executive employee of the Company or compensation received for former service as an interim executive officer;

 

 

a director who is an immediate family member of an individual who is, or has been in any of the past three years, employed by the Company or any parent or subsidiary of the Company as an executive officer;

 

 

a director who is a current employee, or has an immediate family member who is a current executive officer, of a company that has made payments to, or received payments from, the Company or any parent or subsidiary of the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues;

 

 

a director who is, or has an immediate family member who is, employed as an executive officer of another entity where at any time during the most recent three fiscal years any of the Company’s or any parent’s or subsidiary’s executive officers serve on the compensation committee of such other entity; or

 

     
 

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GOVERNANCE INFORMATION

 

 

a director who is a current partner or employee of the Company’s or any parent’s or subsidiary’s internal or external auditor, who has an immediate family member who is a current partner of such internal or external auditor, who has an immediate family member who is a current employee of such outside auditor and works on the Company’s or any parent’s or subsidiary’s audit, or who was a partner or employee, or has an immediate family member who was a partner or employee, of such internal or external auditor and worked on the Company’s or any parent’s or subsidiary’s audit at any time during any of the past three years.

As of January 2024, the Board determined that director nominees Messrs. Botta, Edwards, Robillard, and Shear and Mses. Collawn, Gray and Mitchelmore are independent, and that none of them has a relationship that may interfere with the exercise of his or her independent judgment. In addition, the Board previously determined that Ms. Vicky Bailey, who served as a director for a portion of 2023, was independent.

BOARD LEADERSHIP STRUCTURE AND ROLE IN RISK OVERSIGHT

 

Board Leadership Structure. Mr. Botta serves as the Non-Executive Chairman of the Board. Mr. Fusco serves as President and CEO of the Company.

The Company has in place strong governance mechanisms to ensure the continued accountability of the CEO to the Board and to provide strong independent leadership, including the following:

 

 

the Non-Executive Chairman of the Board provides independent leadership to the Board and ensures that the Board operates independently of management and that directors have an independent leadership contact;

 

 

each of the Board’s standing committees, consisting of the Audit, Compensation and Governance and Nominating Committees, are chaired by and comprised solely of non-employee directors who meet the independence requirements under the NYSE listing standards and the SEC;

 

 

the independent directors of the Board, along with the Compensation Committee, evaluate the CEO’s performance and determine his compensation;

 

 

the independent directors of the Board meet in executive sessions without management present and have the opportunity to discuss the effectiveness of the Company’s management, including the CEO, the quality of Board meetings and any other issues and concerns; and

 

 

the Governance and Nominating Committee has oversight of succession planning, both planned and emergency, and the Board has approved an emergency CEO succession process.

The Board believes that its leadership structure assists the Board’s role in risk oversight. See the discussion on the “Board’s Role in Risk Oversight” below.

Non-Executive Chairman of the Board. The Non-Executive Chairman of the Board position is held by Mr. Botta, an independent director. The Board has appointed an independent Non-Executive Chairman of the Board to provide independent leadership to the Board. The Non-Executive Chairman of the Board role allows the Board to operate independently of management with the Non-Executive Chairman of the Board providing an independent leadership contact to the other directors. The responsibilities of the Non-Executive Chairman of the Board are set out in a Non-Executive Chairman of the Board Charter. These responsibilities include the following:

 

 

preside at all meetings of the Board, including executive sessions of the independent directors;

 

 

call meetings of the Board and meetings of the independent directors, as may be determined in the discretion of the Non-Executive Chairman of the Board;

 

 

work with the CEO and the Corporate Secretary to prepare the schedule of Board meetings to assure that the directors have sufficient time to discuss all agenda items;

 

 

prepare the Board agendas in coordination with the CEO and the Corporate Secretary;

 

 

advise the CEO of any matters that the Non-Executive Chairman of the Board determines should be included in any Board meeting agenda;

 

     
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advise the CEO as to the quality, quantity, appropriateness and timeliness of the flow of information from the Company’s management to the Board;

 

 

recommend to the Board the retention of consultants who report directly to the Board;

 

 

act as principal liaison between the directors and the CEO;

 

 

at the discretion of the Non-Executive Chairman of the Board, participate in meetings of the committees of the Board;

 

 

in the absence of the CEO or as requested by the Board, act as the spokesperson for the Company; and

 

 

be available, if requested, for consultation and direct communication with major shareholders of the Company.

Board’s Role in Risk Oversight. Risks that could affect the Company are an integral part of Board and committee deliberations throughout the year. The Board has oversight responsibility for assessing the primary risks (including liquidity, credit, operations, ESG and regulatory compliance) facing the Company, the relative magnitude of these risks and management’s plan for mitigating these risks. In addition to the Board’s oversight responsibility, the committees of the Board consider the risks within their areas of responsibility. The Board and its committees receive regular reports directly from members of management who are responsible for managing particular risks within the Company. The Audit Committee discusses with management the Company’s major financial and risk exposures and the steps management has taken to mitigate such exposures, including the Company’s risk assessment and risk management policies. The Audit Committee also monitors the effectiveness of the Company’s internal control over financial reporting, legal and regulatory compliance and cybersecurity risk management and confers with our independent registered public accounting firm on the results of its processes to assess risk in the context of its audit engagement. The Governance and Nominating Committee reviews with management the current and emerging environmental, sustainability and social responsibility issues impacting the Company. The Compensation Committee oversees the management of risks relating to our compensation plans and arrangements, including assessments of the relationship among the Company’s risk management policies and practices, corporate strategy and compensation policies and practices. For a discussion of the Compensation Committee’s risk oversight, please see “Review of Compensation Risk” on page 31 of this Proxy Statement. The Board and its committees regularly discuss the risks related to the Company’s business strategy at their meetings. For more information on cybersecurity risk oversight, please see Item 1C. “Cybersecurity” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

SHAREHOLDER OUTREACH—GOVERNANCE

 

The Company proactively engages with shareholders on governance topics as a matter of strategic priority, and the continuous evolution of our governance framework is a product of the Board’s responsiveness to shareholder input.

Ahead of our 2023 Annual Meeting, members of our Board and senior management led engagements with shareholders representing more than 50% of our outstanding common stock through in-person, video and telephonic meetings, with governance topics being a priority in these engagements.

Following our 2023 Annual Meeting, members of our Board and senior management engaged with shareholders holding more than 50% of our outstanding common stock. We intend to continue our proactive and constructive shareholder engagement efforts going forward and to consider any and all shareholder input with respect to our governance framework. Key outcomes and developments since the 2023 Annual Meeting include:

 

 

In response to shareholder feedback and as part of our ongoing efforts to enhance our external reporting for shareholders, we are committed to further enhancing our disclosures around our climate and sustainability initiatives.

 

 

As part of our ongoing commitment to the refreshment of our Board, Denise Gray was elected to the Board, following the departure of Vicky Bailey who had served as a member of the Board since 2006.

The Board believes that its current system of corporate governance oversight enables the directors to prioritize the long-term interests of the Company and our shareholders and be prudent stewards of shareholder capital. In addition, the Board is responsive to evolution in the general corporate governance environment.

 

     
 

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GOVERNANCE INFORMATION

 

Key Themes from Our Shareholder Outreach

Our shareholders have varying methodologies and analytical processes for evaluating governance programs. However, a number of common themes emerged during our engagements with shareholders in 2023, which included:

 

 

Further enhancement of disclosure regarding the Company’s achievements in and prioritization of initiatives related to Environmental, Social, and Governance issues. Since our 2023 Annual Meeting, we have announced several significant milestones and achievements related to ESG, specifically with respect to our initiatives on climate, sustainability and social issues within our communities, as well as governance. Shareholders have provided positive feedback on these efforts, particularly Cheniere’s leadership on data-driven environmental transparency, integrating sustainability throughout the business, and the comprehensive scope and level of disclosure detail in The Power of Connection, our fourth corporate responsibility report. Addressing ESG-related issues and opportunities in a transparent, data-driven manner with our shareholders is a key focus of the Company’s executive management, with oversight from the Governance and Nominating Committee of the Board, and we have made significant progress with respect to understanding these issues and opportunities. In addition to our standalone corporate responsibility report, we have enhanced disclosure regarding ESG and the Company’s progress across key related areas below in “Corporate Responsibility.” We will continue to prioritize these important issues and evolve our related disclosure in the future.

 

 

Continued monitoring and implementation of best governance practices. Our shareholders have expressed a desire that our Board continue to actively monitor changes in the general corporate governance environment and consider any appropriate changes to our governance practices. Our Board recognizes the importance of evolving governance best practices, is responsive to changes in the general corporate governance environment and strives to implement best governance practices in a timely manner.

Please see page 45 of this Proxy Statement for a discussion regarding actions taken by our Board with respect to compensation matters as a result of shareholder outreach.

CORPORATE RESPONSIBILITY

 

Cheniere’s vision is to provide clean, secure, and affordable energy to the world. This vision underpins our commitment to respond to the world’s shared energy challenges—expanding the global supply of reliable and affordable energy, improving air quality, reducing emissions, and supporting the transition to a lower-carbon future. Cheniere’s approach to corporate responsibility is guided by our Climate & Sustainability Principles: Transparency, Science, Supply Chain, and Operational Excellence.

In 2023, we published The Power of Connection, our fourth Corporate Responsibility report, which outlines Cheniere’s commitment to sustainability and our performance on key ESG metrics. The report sets forth our progress towards aligning with multiple relevant reporting frameworks, including the Task Force on Climate-Related Financial Disclosures (“TCFD”), Sustainability Accounting Standards Board (“SASB”), the Global Reporting Initiative (“GRI”), as well as IPIECA, an ESG-focused oil and gas industry association.

ESG Governance

The Governance and Nominating Committee of the Board of Directors is responsible for reviewing our climate and sustainability policies, strategies, and actions. Executive-level managers oversee our major ESG focus areas, including climate, environment, human capital, safety, community and governance. Executive management provides regular updates on these topics to the Board.

In 2023, the Board received quarterly updates from management on climate and sustainability, including a session focused on climate risks, opportunities, and strategies. Further demonstrating our commitment to integrating ESG into our overall corporate strategy, our 2023 annual performance scorecard included an ESG metric of 30% of the total 2023 scorecard value for all Cheniere employees.

Climate Strategy

As the leading U.S. LNG exporter, we aim to supply customers with affordable, reliable, and cleaner-burning natural gas. A central part of our climate strategy is to measure and mitigate emissions—to support Cheniere’s LNG supplies remaining economically and climate-competitive in a lower carbon future. This strategy is reflected in a cadence of actions that focus on science, operational excellence, collaboration along our supply chain, and transparency. We are working to better understand the emissions profile of the LNG we deliver to our customers, and to identify strategic and cost-effective opportunities to improve GHG emissions performance.

 

     
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Industry Leadership: Science and Transparency

Cheniere is taking action to better understand climate risk, working with experts from world-renowned institutions to help shape our climate programs and strategies to maximize the climate benefits of our LNG for our global customers, and to further reinforce the resilience and competitiveness of our business over the long-term. Examples include:

 

   

Life Cycle Assessment (“LCA”): We developed a life cycle assessment model as the foundational analytical tool for our climate strategy and continue to update the LCA to better understand our GHG emissions profile across the entire value chain. We sponsored the publication of a first-of-its-kind supplier-specific life cycle assessment in a peer-reviewed scientific journal (co-authored by scholars from the University of Texas at Austin, Queen Mary University of London, and Duke University). In 2023, we launched our LCA supplier portal web application, which is designed to streamline our supply chain data collection and support more robust and frequent LCA modeling.

 

   

Quantification, Monitoring, Reporting & Verification (QMRV) Research and Development (R&D): In October 2023, the field measurement campaign for our liquefaction QMRV R&D project was completed. In December 2023, we completed our previously announced collaboration with multiple natural gas midstream companies, methane detection technology providers and leading academic institutions to implement QMRV of GHG emissions at natural gas gathering, processing, transmission, and storage systems specific to Cheniere’s supply chain, in order to improve the overall understanding of GHG emissions and further deployment of advanced monitoring technologies and protocols. As a result of the study, we published a paper, Informing Methane Emissions Inventories Using Facility Aerial Measurements at Midstream Natural Gas Facilities, which discusses the analysis and findings of the midstream QMRV study, highlighting the variability across estimated and measured greenhouse gas emissions data. The completion of these projects concluded our multi-year, multi-sector QMRV R&D project series across our supply chain, the learnings of which will inform our emission measurement strategy going forward.

 

   

The Energy Emissions Modeling and Data Lab (“EEMDL”): In January 2023, we co-founded and sponsored the EEMDL, a multidisciplinary research and education initiative led by the University of Texas at Austin in collaboration with Colorado State University and the Colorado School of Mines. EEMDL’s goal is to address the growing need for accurate, timely and clear accounting of greenhouse gas emissions across the global oil and natural gas supply chains, which will help public and private institutions develop climate strategies and actions informed by accurate, verified data, identifying opportunities for emissions reductions.

 

   

Cargo Emission Tags (“CE Tags”): In 2023, we continued providing customers with CE Tags showing the estimated GHG emissions profile associated with each cargo we deliver. These tags are generated from our LCA and provide customers with transparent data about GHG emissions across the LNG value chain.

 

   

Oil and Gas Methane Partnership (“OGMP 2.0”): In 2023, we reported our methane emissions to the OGMP 2.0, the United Nations Environment Programme’s flagship oil and gas methane emissions reporting and mitigation initiative. OGMP 2.0 is intended to be the global framework for transparent reporting of methane emissions from the oil and gas sector.

These efforts are helping us build a data-driven approach that leverages our unique position within the LNG supply chain to collaborate with our suppliers, scientific experts, and customers to improve the climate competitiveness of our LNG and strengthen the resilience of our business over the long-term. We believe it is critical to develop future climate goals and strategies—including the setting of any emissions reduction targets—based on an accurate and holistic assessment of the emissions profile of our LNG business, accounting for all steps in the supply chain.

Addressing Climate Risk

We have built our strategy to respond to climate-related risks and opportunities, support the long-term resilience of our business and address the world’s shared energy challenges. We integrate climate-related risks and opportunities into our business strategy and financial planning.

In April 2021, we published a Climate Scenario Analysis: Transitional Risk report, which analyzed the long-term resilience of Cheniere’s business under multiple long-term climate scenarios, including a trajectory consistent with the goals of the Paris Agreement to limit global warming to well below 2°C compared to pre-industrial levels. The report was informed by the recommendations of the TCFD. Under all scenarios evaluated and subject to the assumptions contained therein, the report concluded that Cheniere is positioned to help meet growing demand for LNG through 2040. The analysis validates our belief in the long-term resiliency of our business, even under a well-below-2°C pathway and a major transformation of the global energy system.

We also consider physical risks such as hurricanes, flood and other extreme weather events. We design our facilities to withstand a variety of extreme weather conditions, and we implement appropriate risk mitigation and management measures.

 

     
 

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GOVERNANCE INFORMATION

 

Human Capital Management

Our people are one of our greatest assets and a driving force of our business. We strive to provide a best-in-class workplace that fosters productivity and inclusivity, and empowers all employees to do their best work. We invest in core human capital priorities—attracting, engaging and developing diverse talent, and building an inclusive and equitable workplace—because our employees enable our current and future success and ability to generate long-term value. Our strength comes in part from the collective expertise of our diverse workforce and through our core values of teamwork, respect, accountability, integrity, nimble and safety (“TRAINS”).

Our employees help drive our success, build our reputation, establish our legacy and deliver on our commitments to our customers. We aim to retain the best talent and keep our employees engaged through fulfilling career opportunities, training and development resources, and a competitive compensation program. Highlights include:

 

   

Competitive compensation and benefits package and offerings to support wellness and mental health

 

   

Development and training opportunities for all employees, including access to over 130 online learning courses and funding for employees’ external professional certifications and continuing education

 

   

Annual performance reviews and regular talent reviews to target development strategies and manage succession plans

Our Chief Human Resources Officer oversees human capital management, which includes our approach to talent attraction and retention, rewards and remuneration, employee relations, employee engagement and training and development, and communicates progress on the program to our Board quarterly.

Diversity, Equity and Inclusion

We are committed to supporting a diverse and inclusive culture where all employees can thrive and feel welcomed and valued. To create this environment, we are committed to equal employment opportunity and to compliance with all federal, state and local laws that prohibit workplace discrimination, harassment and unlawful retaliation. Our Code of Business Conduct and Ethics, our TRAINS values and both our discrimination and harassment and equal employment opportunity policies demonstrate our commitment to building an inclusive workplace, regardless of race, beliefs, nationality, gender and sexual orientation or any other status protected by law or our policies. We are committed to providing fair and equitable employee programs including compensation and benefits. We provide executives and senior management with DEI training and Unconscious Bias training to all employees. In addition, we continue to promote our “Values in Action” philosophy, which supports employees in identifying and implementing actions and behaviors that align with our TRAINS values.

Our recent progress and highlights include:

 

   

Maintained female representation on the Board at 33%, electing Denise Gray as a Board member in 2023 following the departure of Vicky Bailey, who had served as a member of the Board since 2006

 

   

Employed 39 students through our 2023 summer internship program: approximately 51% of interns identified as female and approximately 67% identified as racially/ethnically diverse

 

   

Met our target to invest $1 million in DEI-focused community programs that serve traditionally underrepresented populations

 

   

Through our HBCU scholarship program, Cheniere has provided nearly 50 scholarships to students of Howard University, Prairie View A&M University, Southern University and A&M College – Baton Rouge, and Texas Southern University

 

   

Hired a dedicated external DEI consultant to advise and advance our DEI strategy

 

   

Introduced a supplier diversity program with objectives and focus areas

Through our strategic recruitment efforts, we attract a variety of candidates with a diversity of backgrounds, skills, experience, and expertise. Since 2019, we have had a 28.4% increase in racially or ethnically diverse employees and a 42% increase in racially or ethnically diverse management, and the percentage of female employees has remained steady at 26%. In 2023, we contributed over $1 million to DEI community efforts, of which approximately $250,000 was used to fund scholarship programs for students attending HBCUs in our communities. In addition, scholarship recipients are provided the opportunity to network with employees and apply for summer internships. We also committed to other scholarships and community efforts furthering our commitment to DEI.

We encourage our employees to leverage their unique backgrounds through involvement in various employee resource groups and employee networks. Groups such as Women Inspiring Leadership Success (WILS), Emerging Professional Network (EPN), Cultural Champions Teams, and Military and Veterans Network (MNV), our newest employee resource group focused on military and veterans, help build a culture of inclusion.

 

     
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Our Chief Compliance and Ethics Officer oversees the DEI program and communicates progress on the program to our Board quarterly.

Health and Safety

Safety is a core value at Cheniere, and we are committed to a safety-first culture in all aspects of our business. Our Cheniere Integrated Management System (CIMS) coordinates the management of all our core operational functions to enable excellence in safety, health, and environmental performance, as well as operational reliability. We also facilitate this commitment through the following:

 

   

Commitment to a robust safety culture, including asset location and office Safety Committees chaired by employees

 

   

Safety compliance requirements to pre-qualify, monitor and evaluate suppliers

 

   

Robust training program to ensure compliance with Cheniere-specific and regulatory safety requirements

 

   

Governance and assurance programs to assess effectiveness of health and safety programs and drive continuous improvement

 

   

Processes to document incidents and share lessons learned across the Company

 

   

Safety target included in the compensation scorecard which is tied to the annual incentive program for all employees

Community Engagement and Development

We believe building strong relationships and supporting the communities in which we live and work contributes to our success. We focus on driving community development through local skills training opportunities, job creation and targeted community investment. This helps support the long-term growth of our local communities and builds critical relationships that help to facilitate our business success. We implement a comprehensive approach to community engagement to build respectful, collaborative relationships and respond proactively to our communities’ needs and concerns. Our vice president of state and local government and community affairs provides executive oversight and leadership on our stakeholder engagement, community investments, corporate giving and volunteer efforts. This team provides regular updates to the CEO and members of senior management, as well as to the Board at least annually.

We partner with our communities throughout a project’s lifecycle, beginning at the early stages of planning. In addition to supporting a local workforce and supplier base, Cheniere supports economic development in our communities through strategic community investments, corporate giving and volunteering. During a project’s planning phase, we assess community-focused environmental and social impacts of our operations, including impacts to minority and economically disadvantaged populations and other relevant environmental considerations. Along with implementing a targeted stakeholder engagement plan, we log and track community feedback to help ensure we address concerns in a timely and transparent manner.

Oversight and initiatives include:

 

   

Updated formal stakeholder engagement plans for LNG terminals and connected pipelines to include additional environmental justice considerations and expanded outreach methods for continued meaningful engagement with our communities

 

   

The Cheniere Foundation, Employee Giving Fund and direct company contributions, including $100,000 to restore an oyster reef and a protect coastal salt marsh on Rabbit Island in southwest Louisiana, and nearly $200,000 in contributions to support the needs of local first responders in multiple communities near our Corpus Christi facility

 

   

Robust stakeholder engagement plans whereby our site leadership engages with their community stakeholders on a regular basis

 

   

Annual social investments that support environmental stewardship, including projects dedicated to marine habitats, coastal restoration, and air quality

 

   

Expanded our portfolio of mentorship, apprenticeship, and educational programs to help create jobs and provide local residents with skills to enter the workforce

 

Global community direct giving

 

$5.6 million

   

Provided over

 

13,000 volunteer hours

 

   

Invested in organizations promoting diversity, equity and inclusion in our local communities

 

$1 million

 

 

     
 

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GOVERNANCE INFORMATION

 

Political Engagement

We are committed to high ethical standards, as codified in Cheniere’s Code of Business Conduct and Ethics. We expect employees to uphold the highest standards of ethical behavior and conduct all political advocacy activities in compliance with applicable state and federal laws as well as our policies. We comply with regulatory standards associated with registration and reporting of our lobbying activities, which are limited to the U.S. only.

 

   

Our lobbying activity is publicly available in the Federal Lobbying Database, as well as in the Texas and Louisiana state databases

 

   

Cheniere’s memberships in 501(c)(4) and 501(c)(6) organizations can be found at www.cheniere.com/about/resources/memberships-trade-associations

Human Rights and Labor Standards

We respect the human rights of all people, including our personnel and individuals based in the communities in which we operate. In addition, we strive to work with suppliers and contractors who embrace and commit to similar values:

 

   

Our Supplier Code of Conduct affirms that we respect human rights worldwide and that we strive to work with suppliers who engage in efforts to promote similar human rights-related standards, including those related to fair wages, anti-discrimination, and other ethical labor practices.

 

   

We expect our suppliers to review, understand and agree to abide by our Supplier Code of Conduct to ensure compliance with our standards.

MEETINGS AND COMMITTEES OF THE BOARD

 

Our operations are managed under the broad supervision and direction of the Board, which has the ultimate responsibility for the oversight of the Company’s general operating philosophy, objectives, goals and policies. Pursuant to authority delegated by the Board, certain Board functions are discharged by the Board’s standing Audit, Governance and Nominating, and Compensation Committees. Members of the Audit, Governance and Nominating, and Compensation Committees for a given year are selected by the Board following the annual shareholders’ meeting. During the fiscal year ended December 31, 2023, our Board held eleven meetings. Each incumbent member of the Board attended or participated in at least 75% of the aggregate number of: (i) Board meetings; and (ii) committee meetings held by each committee of the Board on which the director served, during the period for which each director served. Although directors are not required to attend annual shareholders’ meetings, they are encouraged to attend such meetings. At the 2023 Annual Meeting, all of the 9 members of the Board then serving were present.

Committee Membership as of April  , 2024:

 

 AUDIT COMMITTEE   GOVERNANCE AND NOMINATING COMMITTEE    COMPENSATION COMMITTEE
 Donald F. Robillard, Jr.*   G. Andrea Botta*    Neal A. Shear*
 Patricia K. Collawn   Lorraine Mitchelmore    Patricia K. Collawn
 Brian E. Edwards   Donald F. Robillard, Jr.    Brian E. Edwards
 Denise Gray   Neal A. Shear    Denise Gray
 Lorraine Mitchelmore         

 

*

Chair of Committee

AUDIT COMMITTEE

 

Each member of the Audit Committee has been determined by the Board to be “independent” as defined by the NYSE listing standards and by the SEC, and the Board determined that each of Ms. Collawn and Mr. Robillard is an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K promulgated by the SEC. The Audit Committee held eight meetings during the fiscal year ended December 31, 2023.

 

     
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GOVERNANCE AND NOMINATING COMMITTEE

 

The Audit Committee has a written charter, which is available on our website at www.cheniere.com. The Audit Committee is appointed by the Board to oversee the accounting and financial reporting processes of the Company and the audits of the Company’s financial statements. The Audit Committee assists the Board in overseeing:

 

 

the integrity of the Company’s financial statements;

 

 

the qualifications, independence and performance of our independent auditor;

 

 

our internal audit function and systems of internal controls over financial reporting and disclosure controls and procedures; and

 

 

compliance by the Company with legal and regulatory requirements.

The Audit Committee maintains a channel of communication among the independent auditor, principal financial and accounting officers, VP-internal audit, compliance officer and the Board concerning our financial and compliance position and affairs. The Audit Committee has and may exercise all powers and authority of the Board in connection with carrying out its functions and responsibilities and has sole authority to select and retain the independent auditor and authority to engage and determine funding for independent legal, accounting or other advisers. The Audit Committee’s responsibility is oversight, and it recognizes that the Company’s management is responsible for preparing the Company’s financial statements and complying with applicable laws and regulations.

GOVERNANCE AND NOMINATING COMMITTEE

 

Each member of the Governance and Nominating Committee has been determined by the Board to be “independent” as defined by the NYSE listing standards and by the SEC. The Governance and Nominating Committee held six meetings during the fiscal year ended December 31, 2023.

The Governance and Nominating Committee has a written charter, which is available on our website at www.cheniere.com. The Governance and Nominating Committee is appointed by the Board to develop and maintain the Company’s corporate governance policies. The Governance and Nominating Committee also oversees our Director Nomination Policy and Procedures. The Governance and Nominating Committee has the following duties and responsibilities, among others:

 

 

review at least annually the Company’s policies and practices relating to corporate governance, including, without limitation, the Corporate Governance Guidelines and the Director Nomination Policy and Procedures and, when necessary or appropriate, recommend any proposed changes to the Board for approval;

 

 

provide oversight of a process by each committee of the Board to review, at least annually, the applicable charter of such committee and, when necessary or appropriate, recommend changes in such charters to the Board for approval;

 

 

develop a process, subject to approval by the Board, for an annual evaluation of the Board and its committees and oversee this evaluation;

 

 

assist the Board in evaluating and determining director independence under applicable laws, rules and regulations, including the rules and regulations of the NYSE;

 

 

along with the independent directors of the Board, oversee the search for and evaluation of potential successors to the CEO (both planned and emergency);

 

 

in consultation with the Non-Executive Chairman of the Board, review periodically the size of the Board and the structure, composition and responsibilities of the committees of the Board to enhance continued effectiveness;

 

 

identify, recruit and evaluate individuals qualified to serve on the Board in accordance with the Company’s Director Nomination Policy and Procedures;

 

 

in consultation with the Non-Executive Chairman of the Board, recommend that the Board select and approve such director nominees to be considered for election at the Company’s annual meeting of shareholders or to be appointed by the Board to fill an existing or newly created vacancy on the Board;

 

 

recommend to the Board action to be taken with respect to (i) any offer of resignation from a director who did not receive a majority of votes cast at his or her election, or (ii) any waiver from the director retirement policy;

 

 

in consultation with the Non-Executive Chairman of the Board, identify, at least annually, qualified members of the Board to serve on each Board committee and as chairman of each Board committee and recommend each such member and chairman to the Board for approval;

 

     
 

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review, at least annually, non-employee director compensation for service on the Board and Board committees, including Non-Executive Chairman compensation and committee chairmen compensation, and recommend any changes to the Board;

 

 

review stock ownership guidelines for the directors and executive officers and monitor compliance with such guidelines;

 

 

oversee orientation and continuing education programs for directors;

 

 

review emerging corporate governance issues and practices;

 

 

review with management and provide oversight of the current and emerging environmental, sustainability and social responsibility issues impacting the Company;

 

 

review, at least annually, the Company’s climate change and sustainability policies and strategies; and

 

 

review with management and provide oversight of the Company’s strategies, activities and initiatives related to diversity, equity and inclusion.

COMPENSATION COMMITTEE

 

Each member of the Compensation Committee has been determined by the Board to be “independent” as defined by the NYSE listing standards and by the SEC. The Compensation Committee held five meetings during the fiscal year ended December 31, 2023.

The Compensation Committee has a written charter, which is available on our website at www.cheniere.com. The Compensation Committee is appointed by the Board to review and approve the compensation policies, practices and plans of the Company. The Chairman of the Compensation Committee, in consultation with other Compensation Committee members, members of management and the independent compensation consultant, determines the agenda and dates of Compensation Committee meetings.

The Compensation Committee’s charter is reviewed annually. Changes to the charter must be approved by the Board on the recommendation of the Compensation Committee. The charter provides that the Compensation Committee has the sole authority to retain, oversee and terminate any compensation consultant, independent legal counsel or other adviser engaged to assist in the evaluation of compensation of directors and executive officers of the Company, including the sole authority to approve such adviser’s fees and other retention terms. Pursuant to the charter, the Compensation Committee has the following duties and responsibilities, among others:

 

 

review and approve annually corporate goals and objectives relevant to CEO compensation, evaluate at least annually the CEO’s performance in light of those goals and objectives and, either as a committee or together with the other directors who meet the independence requirements of the NYSE (as directed by the Board), determine and approve the CEO’s compensation, including salary, bonus and equity compensation, based on this evaluation;

 

 

review and recommend to the Board for approval on an annual basis the compensation of the other executive officers of the Company, including salary, bonus and equity compensation, based on the Compensation Committee’s evaluations;

 

 

review and approve corporate goals and objectives, after consultation with the Board and management, for the other executive officers for the defined performance period;

 

 

review and determine whether established goals and objectives of any performance-based compensation for the other executive officers have been met for the completed performance period;

 

 

report to the Board on the performance of the other executive officers in light of the established corporate goals and objectives for the performance period;

 

 

in determining the long-term incentive component of the CEO’s compensation, the Compensation Committee shall consider such criteria as the Compensation Committee deems appropriate, including the Company’s performance and relative shareholder return, the value of similar incentive awards granted to CEOs at peer group companies, and the long-term incentive awards granted to the CEO in past years;

 

 

assess the ongoing competitiveness of the total executive compensation packages of the CEO and other executive officers from time to time, at the Compensation Committee’s discretion;

 

 

review and approve budgets and guidelines for performance-based compensation;

 

     
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REVIEW OF COMPENSATION RISK

 

 

review existing cash-based plans applicable to executive officers and equity-based compensation plans;

 

 

review and recommend to the Board for approval all new cash-based compensation plans applicable to executive officers and equity-based compensation plans and all material modifications to such existing compensation plans, provided that any other modifications to existing compensation plans and any equity-based inducement plans shall be approved by the Compensation Committee;

 

 

review and discuss the Company’s Compensation Discussion and Analysis (“CD&A”) and the related executive compensation information and recommend to the Board that the CD&A and related executive compensation information be included in the Company’s proxy statement and annual report on Form 10-K, as required by the rules and regulations of the SEC;

 

 

approve the Compensation Committee Report on executive officer compensation included in the Company’s proxy statement or annual report on Form 10-K, as required by the rules and regulations of the SEC;

 

 

review and recommend to the Board for approval proposals regarding the say-on-pay vote and the frequency of the say-on-pay vote to be included in the Company’s proxy statement;

 

 

review the results of the most recent say-on-pay vote and consider whether to recommend adjustments to the executive compensation policies as a result;

 

 

review and recommend to the Board for approval any employment agreements, severance arrangements, change-in-control arrangements or special or supplemental employee benefits, and any material amendments to the foregoing, applicable to executive officers, provided that any awards granted under an equity-based inducement plan shall be approved by the Compensation Committee;

 

 

review and recommend to the Board for approval new hire and promotion compensation arrangements for executive officers, provided that any awards granted under an equity-based inducement plan shall be approved by the Compensation Committee;

 

 

administer the Company’s stock plans;

 

 

grant awards under the stock plans or delegate that responsibility to the Equity Grant Committee, a committee of the Board or, subject to Delaware General Corporation Law, officers of the Company, provided that any awards granted under an equity-based inducement plan shall be approved by the Compensation Committee;

 

 

conduct and review an annual Committee performance evaluation;

 

 

review and assess the adequacy of the Compensation Committee charter annually and recommend any proposed changes to the Board for approval;

 

 

review the Company’s executive compensation arrangements to determine whether they encourage excessive risk-taking, review and discuss, at least annually, the relationship between risk management policies and practices and executive compensation, evaluate executive compensation policies and practices that may mitigate any such risk, and determine whether any risks arising from such policies and practices are reasonably likely to have a material adverse effect on the Company; and

 

 

implement the policy with respect to the recovery or clawback of excess incentive-based compensation pursuant to Rule 10D-1 under the Securities Exchange Act of 1934, as amended.

REVIEW OF COMPENSATION RISK

 

The Compensation Committee considered the risks associated with our compensation policies and practices in 2023. The Compensation Committee concluded that our compensation policies and practices were not reasonably likely to have a material adverse effect on the Company and did not encourage our employees, including our executive officers, to take excessive risks in order to receive larger awards. As part of this analysis, the Compensation Committee considered the individual components of our executive officers’ compensation, the performance measures required to be achieved to earn cash bonus and equity awards and the vesting schedule of the equity awards. In concluding that our incentive plans do not promote excessive risk, the Compensation Committee considered the following factors, among others:

 

 

A significant portion of our executive officers’ compensation is tied to developmental, operating and corporate performance goals, and the achievement of the performance goals is conducted in accordance with the Company’s risk framework approved by the Board.

 

 

A significant portion of our executive officers’ compensation is provided in equity and is tied to the stock value of the Company, and our executive officer stock ownership guidelines subject our executive officers to minimum share ownership and retention requirements, further aligning their interests with those of our shareholders.

 

     
 

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GOVERNANCE INFORMATION

 

 

Our compensation program design provides a mix of annual and longer-term incentives and performance measures.

 

 

Our compensation mix is not overly weighted toward annual incentives.

 

 

We do not maintain excessively leveraged payout curves for incentive compensation opportunities, nor do we maintain steep payout cliffs at certain performance levels that may encourage short-term business decisions to meet payout thresholds.

 

 

We currently do not grant stock options.

 

 

The Compensation Committee has discretion over incentive award payouts, and compliance and ethical behavior are integral factors considered in all performance assessments.

 

 

The Company’s Policy on Insider Trading and Compliance prohibits executive officers, directors and employees from hedging and effecting short sales of the Company’s stock and prohibits pledging of the Company’s stock.

CODE OF BUSINESS CONDUCT AND ETHICS AND CORPORATE GOVERNANCE GUIDELINES

 

Our Code of Business Conduct and Ethics, which is applicable to all directors, officers and employees of the Company, is available on the Company’s website at www.cheniere.com.

Our Corporate Governance Guidelines set out the material corporate practices that the Board has implemented which serve the best interests of the Company and its shareholders. Our Corporate Governance Guidelines are available on the Company’s website at www.cheniere.com.

DIRECTOR ORIENTATION AND CONTINUING EDUCATION

 

Upon joining the Board, as part of our onboarding process, new directors participate in a director orientation program that introduces them to the Company, which includes a review of background materials and meetings with management. This orientation enables new directors to become familiar with our business and strategic plans, significant financial matters, core values, including our Code of Business Conduct and Ethics, compliance programs and corporate governance practices, and other key policies and practices, including workplace safety, risk management, investor relations and sustainability efforts.

Continuing education opportunities are provided to keep directors updated with information about our industry, corporate governance developments and critical strategic issues facing the Company, and other matters relevant to Board service. To enhance the Board’s understanding of some of the unique issues facing our business, directors are invited to visit our operating locations, tour our facilities and directly interact with the personnel responsible for our day-to-day operations. Directors also participate in the National Association of Corporate Directors (NACD), of which the Company is a member.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

 

The Compensation Committee consisted of Ms. Collawn and Messrs. Edwards and Shear from January 1, 2023 through May 11, 2023; and from May 11, 2023 through the end of 2023, consisted of Mmes. Collawn and Gray and Messrs. Edwards and Shear. No member of the Compensation Committee was an employee or officer of the Company in 2023. During 2023, none of our executive officers served as a member of the compensation committee of any other company that had an executive officer who served as a member of our Board. During 2023, none of our executive officers served as a member of the board of directors of any other company that had an executive officer who served as a member of our Compensation Committee. Mr. Shear served as the Interim Chief Executive Officer and President of Cheniere from December 2015 to May 2016.

 

     
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DIRECTOR COMPENSATION

 

DIRECTOR COMPENSATION

 

Our Corporate Governance Guidelines provide for compensation for our directors’ services, in recognition of their time and skills. Directors who are also our officers or employees do not receive additional compensation for serving on the Board.

Maintaining a market-based compensation program for our directors enables the Company to attract qualified members to serve on the Board. The Governance and Nominating Committee, with the assistance of our independent compensation consultant, periodically reviews our director compensation levels and practices and compares them to that of comparable companies to ensure they are aligned with market practices. Specifically, comparisons are made to the companies included in our peer group used for benchmarking the compensation of our executive officers, which is discussed under “Peer Group” below. Based on the results of such competitive reviews, the Governance and Nominating Committee may recommend changes to our director compensation program to the Board for approval.

The Board did not increase annual director compensation in 2023. Mr. Fusco did not receive any compensation for his service as a director. Directors may elect to receive the annual compensation either (i) 100% in restricted stock or (ii) $100,000 in cash and $195,000 in restricted stock. Additional compensation is paid for Board leadership positions, to recognize the additional time required to perform the responsibilities associated with these positions. These additional fees are as follows, which may be received either (i) 100% in restricted stock or (ii) 50% in cash and 50% in restricted stock: $30,000 for the Chair of the Audit Committee; $20,000 for the Chair of the Compensation Committee; $10,000 for the Chair of the Governance and Nominating Committee; and $185,000 for the Non-Executive Chairman. Cash payments are made quarterly. The directors’ restricted stock equity retainer of $195,000 and 50% of all Chair fees awarded in 2023 vest on the earlier of: (i) the day immediately prior to the date of the Company’s regular annual meeting of shareholders in the calendar year following the calendar year in which the date of the grant occurs; and (ii) the first anniversary of the date of grant. If a director elects to receive their $100,000 non-equity retainer and 50% cash portion of their committee chair fees (collectively, the “remaining compensation”) in restricted stock in lieu of cash, such restricted stock vests quarterly. Should a director resign, their remaining pro-rated compensation is paid in cash upon such resignation as if a 100% cash election had been made for their remaining compensation. Notwithstanding the foregoing, if a director resigns (i) upon the request of the Board, including as a result of Board refreshment or retirement initiatives, or (ii) in the case of a director designated to serve on the Board on behalf of a Company shareholder, upon the removal or replacement by, or upon the request of, such shareholder, and in each case where the director has not engaged in action that would result in removal for Cause (as defined in the director’s grant agreement), such director would receive a pro-rata amount of the restricted stock portion of their annual compensation based on the number of days of service relative to the applicable vesting period. Additionally, pursuant to a Director Deferred Compensation Plan approved in February 2022, non-employee directors may elect to defer receipt of 100% of their annual equity-based director compensation in a given director year (from annual meeting to annual meeting) into the form of deferred stock units (“DSUs”), which follow the same vesting schedule as the restricted stock the director would have otherwise received.

The Governance and Nominating Committee continues to evaluate our total director compensation package to ensure competitiveness with market practices, as well as fairness and appropriateness in light of the responsibilities and obligations of our non-employee directors.

 

     
 

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GOVERNANCE INFORMATION

 

The compensation earned by or paid to our non-employee directors for the year ended December 31, 2023 is set forth in the following table:

 

NON-EMPLOYEE DIRECTOR COMPENSATION TABLE FOR FISCAL YEAR 2023

 

NAME

 

FEES EARNED

OR PAID IN

CASH ($)

   

STOCK

AWARDS

($)(1)

   

OPTION

AWARDS

($)

   

NON-EQUITY

INCENTIVE PLAN

COMPENSATION

   

CHANGE

IN PENSION

VALUE AND

NONQUALIFIED

DEFERRED

COMPENSATION

EARNINGS ($)

   

ALL OTHER

COMPENSATION

($)

   

TOTAL

($)

 

Vicky A. Bailey(2)

 

$

50,000

 

 

$

 

 

 

   —

 

 

 

      —

 

 

 

      —

 

 

 

      —

 

 

$

50,000

 

G. Andrea Botta(3)

 

$

197,500

 

 

$

292,530

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

490,030

 

Patricia K. Collawn(4)

 

$

 

 

$

295,176

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

295,176

 

Brian E. Edwards(5)

 

$

100,000

 

 

$

195,069

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

295,069

 

Denise Gray(6)

 

$

 

 

$

295,176

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

295,176

 

Lorraine Mitchelmore(7)

 

$

 

 

$

295,176

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

295,176

 

Scott Peak(8)

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

Donald A. Robillard, Jr.(9)

 

$

 

 

$

325,164

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

325,164

 

Matthew Runkle(10)

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

Neal A. Shear(11)

 

$

 

 

$

315,168

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

315,168

 

 

(1)

For Mses. Collawn, Gray and Mitchelmore and Messrs. Botta, Edwards, Robillard and Shear, the amounts in this column reflect the grant date fair values (at $147.00 per share on May 11, 2023) of awards granted on May 11, 2023.

 

(2)

Ms. Bailey did not stand for re-election at the 2023 Annual Meeting. As of December 31, 2023, she had no shares of restricted stock or deferred stock units outstanding.

 

(3)

Mr. Botta was granted 1,990 shares of restricted stock or deferred stock units on May 11, 2023, with a grant date fair value of $292,530. Mr. Botta receives $185,000 for his service as Non-Executive Chairman of the Board of Directors and $10,000 for his service as Chairman of the Governance and Nominating Committee. As of December 31, 2023, he had outstanding 0 shares of restricted stock and 1,990 deferred stock units.

 

(4)

Ms. Collawn was granted 2,008 shares of restricted stock or deferred stock units on May 11, 2023, with a grant date fair value of $295,176. As of December 31, 2023, she had outstanding 0 shares of restricted stock and 1,667 deferred stock units.

 

(5)

Mr. Edwards was granted 1,327 shares of restricted stock or deferred stock units on May 11, 2023, with a grant date fair value of $195,069. As of December 31, 2023, he had outstanding 1,327 shares of restricted stock and 0 deferred stock units.

 

(6)

Ms. Gray was granted 2,008 shares of restricted stock or deferred stock units on May 11, 2023, with a grant date fair value of $295,176. As of December 31, 2023, she had outstanding 0 shares of restricted stock and 1,667 deferred stock units.

 

(7)

Ms. Mitchelmore was granted 2,008 shares of restricted stock or deferred stock units on May 11, 2023, with a grant date fair value of $295,176. As of December 31, 2023, she had outstanding 1,667 shares of restricted stock and 0 deferred stock units.

 

(8)

Pursuant to arrangements between Mr. Peak and Brookfield, Mr. Peak did not receive compensation for his service on the Board. As of December 31, 2023, he had no shares of restricted stock or deferred stock units outstanding.

 

(9)

Mr. Robillard was granted 2,212 shares of restricted stock or deferred stock units on May 11, 2023, with a grant date fair value of $325,164. Mr. Robillard receives $30,000 for his service as Chairman of the Audit Committee, paid in the form of restricted stock. As of December 31, 2023, he had outstanding 1,821 shares of restricted stock and 0 deferred stock units.

 

(10)

On April 2, 2024, Mr. Runkle resigned from the Board. Pursuant to arrangements between Mr. Runkle and Blackstone, Mr. Runkle did not receive compensation for his service on the Board. As of December 31, 2023, he had no shares of restricted stock or deferred stock units outstanding.

 

(11)

Mr. Shear was granted 2,144 shares of restricted stock or deferred stock units on May 11, 2023, with a grant date fair value of $315,168. Mr. Shear receives $20,000 for his service as Chairman of the Compensation Committee, paid in the form of restricted stock. As of December 31, 2022, he had outstanding 1,769 shares of restricted stock and 0 deferred stock units.

Directors are also reimbursed for their expenses incurred by attending Board, committee and shareholder meetings, including those for travel, meals and lodging. Occasionally, a spouse or other guest may accompany directors on charter flights when the aircraft is already scheduled for business purposes and can accommodate additional passengers. In those cases, there is no aggregate incremental cost to the Company and, as a result, no amount is reflected in the 2023 Director Compensation table.

 

     
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MANAGEMENT

EXECUTIVE OFFICERS

 

The following table sets forth the names, ages and positions of each of our executive officers (for purposes of Rule 3b-7 under the Securities Exchange Act of 1934 and this Proxy Statement), as of the Record Date, all of whom serve at the request of the Board:

 

 NAME    AGE    POSITION

Jack A. Fusco

   61    Director, President and Chief Executive Officer

Zach Davis

   39    Executive Vice President and Chief Financial Officer

Anatol Feygin

   55    Executive Vice President and Chief Commercial Officer

Corey Grindal

   53    Executive Vice President and Chief Operating Officer

Sean N. Markowitz

   50    Executive Vice President, Chief Legal Officer and Corporate Secretary

Jack A. Fusco

President and Chief Executive Officer

Mr. Fusco has served as President and Chief Executive Officer since May 2016. Further information regarding Mr. Fusco is provided above under “Director Biographies.”

Zach Davis

Executive Vice President and Chief Financial Officer

Mr. Davis has served as Executive Vice President and Chief Financial Officer since February 2022, and previously served as Senior Vice President and Chief Financial Officer from August 2020 to February 2022. Mr. Davis also serves as a director and Executive Vice President and Chief Financial Officer of Cheniere Partners GP, and as a director of the Cheniere Foundation. Institutional Investor recognized Mr. Davis as the All-America Executive Team Best CFO in Energy – Natural Gas & Master Limited Partnership Sector for 2023 and 2024 by the buy-side and sell-side investor community. Mr. Davis joined Cheniere in November 2013. He previously served as Senior Vice President, Finance from February 2020 to August 2020 and as Vice President, Finance and Planning from October 2016 to February 2020. Mr. Davis has over 17 years of finance experience, primarily in the LNG, power, renewable energy, midstream and infrastructure sectors. Prior to joining Cheniere, Mr. Davis held energy investment banking and project finance roles at Credit Suisse, Marathon Capital and HSH Nordbank. Mr. Davis received a B.S. in Economics from Duke University.

Anatol Feygin

Executive Vice President and Chief Commercial Officer

Mr. Feygin has served as Executive Vice President and Chief Commercial Officer since September 2016. Mr. Feygin joined Cheniere in March 2014 as Senior Vice President, Strategy and Corporate Development. Mr. Feygin also currently serves as Executive Vice President and Chief Commercial Officer of Cheniere Partners GP, and previously served as a director and Executive Vice President and Chief Commercial Officer of Cheniere Holdings from September 2016 and August 2017, respectively, to September 2018. Prior to joining Cheniere, Mr. Feygin worked with Loews Corporation from November 2007 to March 2014, most recently as its Vice President, Energy Strategist and Senior Portfolio Manager. Prior to joining Loews, Mr. Feygin spent three years at Bank of America, most recently as Head of Global Commodity Strategy. Mr. Feygin began his banking career at J.P. Morgan Securities Inc. as Senior Analyst, Natural Gas Pipelines and Distributors. Mr. Feygin previously served on the board of directors of Diamond Offshore Drilling, Inc., an offshore drilling provider, from May 2019 to April 2021. Mr. Feygin earned a B.S. in Electrical Engineering from Rutgers University and an M.B.A. in Finance from the Leonard N. Stern School of Business at New York University.

Corey Grindal

Executive Vice President and Chief Operating Officer

Mr. Grindal has served as Executive Vice President and Chief Operating Officer since January 2023, and previously served as Executive Vice President, Worldwide Trading from September 2020 to January 2023. Mr. Grindal has also served as a director and Executive Vice President and Chief Operating Officer of Cheniere Partners GP since September 2022 and January 2023, respectively. Mr. Grindal previously served as Senior Vice President, Gas Supply from September 2016 to September 2020, after joining Cheniere in June of 2013 as Vice President of Supply. Mr. Grindal was brought in to develop the required infrastructure needed for firm and reliable deliveries to Cheniere’s LNG terminals, establish the required relationships with the United States’ producer community, and

 

     
 

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MANAGEMENT

 

set up the needed systems, processes, and personnel for Cheniere to be the premiere United States LNG exporter. Mr. Grindal has over 30 years of experience in pipeline construction and operations, project management, and natural gas and power trading. Prior to joining Cheniere, Mr. Grindal was with Deutsche Bank and was responsible for physical and financial trading. Prior to Deutsche Bank, Mr. Grindal held positions with Louis Dreyfus and the Tenneco/ El Paso companies. Mr. Grindal holds a B.S. degree in Mechanical Engineering with Honors from the University of Texas at Austin.

Sean N. Markowitz

Executive Vice President, Chief Legal Officer and Corporate Secretary

Mr. Markowitz has served as Executive Vice President, Chief Legal Officer and Corporate Secretary since February 2020, and previously served as General Counsel and Corporate Secretary from September 2016 to February 2020. Mr. Markowitz joined Cheniere in October 2015 as Assistant General Counsel and Corporate Secretary. Mr. Markowitz served as Interim General Counsel and Corporate Secretary from June 2016 to September 2016. Mr. Markowitz has served as Executive Vice President, Chief Legal Officer and Assistant Secretary of Cheniere Partners GP since February 2023, previously serving as Executive Vice President, Chief Legal Officer and Corporate Secretary from May 2020 to February 2023 and as General Counsel and Corporate Secretary from December 2016 and December 2015, respectively, to May 2020. Mr. Markowitz also previously served as General Counsel and Corporate Secretary of Cheniere Holdings from November 2016 and December 2015, respectively, to September 2018. Mr. Markowitz was named as a Top 20 In-House Legal Leader by the Financial Times in 2023. Prior to joining Cheniere, Mr. Markowitz served as General Counsel and Corporate Secretary for Sizmek, Inc. (and its predecessor company, Digital Generation, Inc.) from August 2012 to May 2015. Prior to joining Digital Generation, Inc., Mr. Markowitz served as Chief Legal Counsel—Commercial for Alon USA Energy, Inc. from August 2010 to August 2012 (and as Assistant General Counsel from December 2008 to July 2010). From January 2006 to December 2008, Mr. Markowitz served as Counsel—Corporate Acquisitions and Finance for Electronic Data Systems Corporation which was acquired by Hewlett-Packard Company in August 2008. Mr. Markowitz’s earlier career experience includes service with the law firms of Fulbright & Jaworski L.L.P. (now a part of Norton Rose Fulbright), Hughes & Luce L.L.P. (now a part of K&L Gates LLP) and Andrews Kurth LLP (now a part of Hunton Andrews Kurth LLP). Mr. Markowitz earned his J.D., with honors, from The University of Texas School of Law and graduated magna cum laude with a B.S. in Economics from the Wharton School of the University of Pennsylvania.

INDEMNIFICATION OF OFFICERS AND DIRECTORS

 

Our Restated Certificate of Incorporation, as amended, and Bylaws provide that the Company will indemnify its directors and officers to the fullest extent permissible under Delaware law. These indemnification provisions require the Company to indemnify such persons against certain liabilities and expenses to which they may become subject by reason of their service as a director or officer of the Company or any of its affiliated enterprises. The provisions also set forth certain procedures, including the advancement of expenses, that apply in the event of a claim for indemnification. Our Restated Certificate of Incorporation, as amended, also provides for the exculpation of directors and officers to the fullest extent permissible under Delaware law.

We have also entered into an Indemnification Agreement with members of our Board and certain officers of the Company. The Indemnification Agreement provides for indemnification for all expenses and claims that a director or officer incurs as a result of actions taken, or not taken, on behalf of the Company while serving as a director, officer, employee, controlling person, selling shareholder, agent or fiduciary (the “Indemnitee”) of the Company, or any subsidiary of the Company, with such indemnification to be paid within 25 days after written demand. The Indemnification Agreement provides that no indemnification will generally be provided: (1) for claims brought by the Indemnitee, except for a claim of indemnity under the Indemnification Agreement, if the Company approves the bringing of such claim, or as otherwise required under Section 145 of the General Corporation Law of the State of Delaware (the “DGCL”), regardless of whether the Indemnitee ultimately is determined to be entitled to indemnification; (2) for claims under Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); (3) if the Indemnitee did not act in good faith or in a manner reasonably believed by the Indemnitee to be in or not opposed to the best interests of the Company; (4) if the Indemnitee had reasonable cause to believe that his or her conduct was unlawful in a criminal proceeding; or (5) if the Indemnitee is adjudged liable to the Company, unless the court in which such action is brought permits indemnification in accordance with the DGCL. Indemnification will be provided to the extent permitted by law, the Company’s Restated Certificate of Incorporation, as amended, and Bylaws, and to a greater extent if, by law, the scope of coverage is expanded after the date of the Indemnification Agreement. In all events, the scope of coverage will not be less than what is in existence on the date of the Indemnification Agreement.

 

     
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EQUITY COMPENSATION

PLAN INFORMATION

The following table provides information about our compensation plans as of December 31, 2023. The equity compensation plans approved by our shareholders consist of the Cheniere Energy, Inc. 2020 Incentive Plan (the “Plan”).

 

PLAN CATEGORY   

(a)

NUMBER OF SECURITIES

TO BE ISSUED UPON

EXERCISE OF

OUTSTANDING OPTIONS,
WARRANTS AND RIGHTS

 

(b)
WEIGHTED-

AVERAGE EXERCISE

PRICE OF

OUTSTANDING

OPTIONS, WARRANTS

AND RIGHTS

  

(c)

NUMBER OF SECURITIES

REMAINING AVAILABLE FOR

FUTURE ISSUANCE UNDER

EQUITY COMPENSATION

PLANS (EXCLUDING

SECURITIES REFLECTED IN

THE FIRST COLUMN (a))

Equity compensation plans approved by security holders

    

 

3,506,751

(1) 

   

 

      —

    

 

3,630,119

(2) 

Equity compensation plans not approved by security holders

    

 

   

 

    

 

Total

    

 

3,506,751

   

 

    

 

3,630,119

 

(1)

The number in this column represents the number of shares issuable under outstanding Restricted Stock Unit awards (“RSUs”) and Performance Stock Unit awards (“PSUs”) based on the maximum award level. For more information regarding these awards, please see “LTI Program” on page 50 of this Proxy Statement. The following awards have been granted under the Plan and remain outstanding as of December 31, 2023: 1,846,244 shares underlying RSUs, 1,643,463 shares underlying PSUs based on the maximum award level, and 17,044 shares of restricted stock and deferred stock units.

 

(2)

In May 2020, the Company established the Plan. The Plan is a broad-based incentive plan which allows for the issuance of stock options, stock appreciation rights and awards of bonus stock, phantom stock, restricted stock, restricted stock units and performance awards and other stock-based awards to employees, consultants and non-employee directors. The term of any award under the Plan may not exceed a period of ten years.

 

Vesting of restricted stock under the Plan depends on whether the restricted stock was granted as a retention award or annual director equity award. Vesting of retention awards typically occurs in equal annual installments over a two-year period or three-year period on each anniversary of the grant date. The outstanding annual director equity retainer awards and 50% of all Chair fees vest on the earlier of: (i) the day immediately prior to the date of the Company’s next annual meeting of shareholders after the date of grant and (ii) the first anniversary of the date of grant. If a director elects to receive their remaining compensation in restricted stock in lieu of cash, such stock vests quarterly.

 

RSUs under the Plan generally vest in equal annual installments over a three-year period on each anniversary of the grant date or cliff vest upon the third anniversary of the grant date.

 

PSUs under the Plan cliff vest upon the third anniversary of the grant date, subject to the satisfaction of performance conditions.

 

     
 

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SECURITY OWNERSHIP

As of April 1, 2024, there were 230,654,868 shares of common stock outstanding. The information provided below summarizes the beneficial ownership of directors, nominees for director, named executive officers set forth in the “Summary Compensation Table,” and all of our current directors and executive officers as a group, as well as owners of more than 5% of our outstanding common stock. “Beneficial Ownership” generally includes those shares of Company common stock that a person has the power to vote, sell or acquire within 60 days. It includes shares of Company common stock that are held directly and also shares held indirectly through a relationship, a position as a trustee or under a contract or understanding.

DIRECTORS AND EXECUTIVE OFFICERS

 

The following table sets forth information with respect to shares of common stock of the Company owned of record and beneficially as of April 1, 2024 by each director, nominee for director and named executive officer set forth in the “Summary Compensation Table” and by all current directors and executive officers of the Company as a group. As of April 1, 2024, the current directors and executive officers of the Company beneficially owned an aggregate of 1,430,782 shares of common stock (less than 1% of the outstanding shares entitled to vote at the time).

The table also presents the ownership of common units of Cheniere Partners owned of record or beneficially as of April 1, 2024 by each director, nominee for director and named executive officer set forth in the Summary Compensation Table and by all current directors and executive officers of the Company as a group. The Company owns 100% of the general partner interest and 48.6% of the limited partner interest in Cheniere Partners. As of April 1, 2024, there were 484,040,623 common units and 9,878,047 general partner units of Cheniere Partners outstanding.

 

     CHENIERE ENERGY, INC.    CHENIERE ENERGY PARTNERS, L.P.

NAME OF BENEFICIAL OWNER

  

AMOUNT AND

NATURE OF

BENEFICIAL

OWNERSHIP

   

PERCENT

OF CLASS

  

AMOUNT AND

NATURE OF

BENEFICIAL

OWNERSHIP

  

PERCENT

OF CLASS

Jack A. Fusco

  

 

724,062

(1) 

 

*

  

  

G. Andrea Botta

  

 

41,072

(2) 

 

*

  

  

Patricia K. Collawn

  

 

7,181

(2) 

 

*

  

  

Brian E. Edwards

  

 

2,034

 

 

*

  

  

Denise Gray

  

 

2,008

(2) 

 

*

  

  

Lorraine Mitchelmore

  

 

5,398

 

 

*

  

  

Scott Peak

  

 

0

(3) 

 

*

  

  

Donald F. Robillard, Jr.

  

 

46,524

 

 

*

  

  

Neal A. Shear

  

 

30,689

 

 

*

  

  

Zach Davis

  

 

102,596

(4) 

 

*

  

  

Anatol Feygin

  

 

212,481

(5) 

 

*

  

  

Corey Grindal

  

 

143,666

(6) 

 

*

  

  

Sean N. Markowitz

  

 

79,209

(7) 

 

*

  

  

All current directors and executive officers as a group (13 persons)

  

 

1,430,782

 

 

*

  

  

 

*

Less than 1%

 

(1)

Does not include 106,371 unvested RSUs awarded to Mr. Fusco.

 

(2)

Includes deferred stock units which are distributable within 60 days following such director’s retirement or resignation based upon his or her payout elections under the Director Deferred Compensation Plan. For additional information regarding such holdings, refer to the “Director Compensation” table on page 34.

 

(3)

Mr. Peak is an employee of Brookfield Infrastructure and does not receive compensation or grants of restricted stock for his service on the Board.

 

(4)

Does not include 34,847 unvested RSUs awarded to Mr. Davis.

 

(5)

Does not include 23,907 unvested RSUs awarded to Mr. Feygin.

 

(6)

Does not include 35,570 unvested RSUs awarded to Mr. Grindal.

 

(7)

Does not include 24,023 unvested RSUs awarded to Mr. Markowitz.

 

     
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OWNERS OF MORE THAN FIVE PERCENT OF OUTSTANDING STOCK

 

OWNERS OF MORE THAN FIVE PERCENT OF OUTSTANDING STOCK

 

The following table shows the beneficial owners known by us to own more than five percent of shares of common stock of the Company as of April 1, 2024.

 

     COMMON STOCK  

NAME AND ADDRESS OF BENEFICIAL OWNER

  

AMOUNT AND

NATURE OF

BENEFICIAL

OWNERSHIP

   

PERCENT OF 

CLASS 

 

The Vanguard Group

100 Vanguard Blvd.

Malvern, PA 19355

     22,529,128 (1)      9.77 % 

BlackRock, Inc.

55 East 52nd Street

New York, NY 10055

     21,603,683 (2)      9.37 % 

 

(1)

Information is based solely on a Schedule 13G/A filed with the SEC on February 13, 2024 by The Vanguard Group. The Vanguard Group has shared voting power over 302,904 shares of common stock, sole dispositive power over 21,879,535 shares of common stock and shared dispositive power over 649,593 shares of common stock.

 

(2)

Information is based solely on a Schedule 13G/A filed with the SEC on January 24, 2024 by BlackRock, Inc. BlackRock, Inc. has sole voting power over 19,845,741 shares of common stock and sole dispositive power over 21,603,683 shares of common stock.

All information provided in the “Owners of More than Five Percent of Outstanding Stock” table with respect to the above entities is based solely on information set forth in their respective Schedule 13D/A, Schedule 13G/A and Schedule 13G filings with the SEC, as applicable. This information may not be accurate or complete, and Cheniere takes no responsibility therefor and makes no representation as to its accuracy or completeness.

 

     
 

2024 PROXY STATEMENT

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COMPENSATION

DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”) describes the material elements of the compensation of our Named Executive Officers (“NEOs”), including factors considered in making compensation decisions. Our NEOs for fiscal year 2023 were the following individuals:

 

  JACK A. FUSCO

   DIRECTOR, PRESIDENT

   AND CHIEF EXECUTIVE

   OFFICER

ZACH DAVIS

EXECUTIVE VICE

PRESIDENT AND

CHIEF FINANCIAL

OFFICER

ANATOL
FEYGIN

EXECUTIVE VICE

PRESIDENT AND

CHIEF COMMERCIAL

OFFICER

COREY GRINDAL

EXECUTIVE VICE

PRESIDENT AND CHIEF

OPERATING OFFICER

SEAN N.

MARKOWITZ

EXECUTIVE VICE

PRESIDENT, CHIEF

LEGAL OFFICER

AND CORPORATE

SECRETARY

This CD&A is organized as follows:

TABLE OF CONTENTS

 

1  

Executive Summary

 

  

PAGE 40

 

 

 

 

2  

Executive Compensation
Philosophy & Objectives

 

  

PAGE 45

 

 

 

 

3  

Components of Our Executive Compensation Program

 

  

PAGE 46

 

 

 

 

4  

Executive
Compensation Process

 

  

PAGE 56

 

 

 

5  

Other Considerations

 

  

PAGE 59

 

 

 

 

6  

Compensation Committee Report

 

  

PAGE 60

 

 

 

 

7  

Compensation Tables

 

  

PAGE 61

 

 

 

 

 

EXECUTIVE SUMMARY

ABOUT OUR BUSINESS

 

Cheniere is a Houston-based energy infrastructure company primarily engaged in LNG-related businesses, and the leading producer and exporter of LNG in the United States. We provide clean, secure and affordable LNG to integrated energy companies, utilities and energy trading companies around the world. Our primary business strategy is to be a full-service LNG provider to worldwide end-use customers, with capabilities that include gas procurement and transportation, liquefaction, vessel chartering, and LNG delivery.

 

     
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EXECUTIVE SUMMARY

 

We own and operate the Sabine Pass LNG terminal in Cameron Parish, Louisiana at Sabine Pass, one of the largest LNG production facilities in the world, which has natural gas liquefaction facilities consisting of six operational Trains for a total production capacity of approximately 30 mtpa of LNG (the “SPL Project”). We also own and operate the Corpus Christi LNG terminal near Corpus Christi, Texas, which has natural gas liquefaction facilities consisting of three operational Trains for a total production capacity of approximately 15 mtpa of LNG (the “CCL Project”).

Additionally, we are constructing an expansion of the Corpus Christi LNG terminal (the “CCL Stage 3 Project” and together with the SPL Project and CCL Project, the “Liquefaction Projects”) consisting of seven midscale Trains with an expected total production capacity of over 10 mtpa of LNG. First LNG production from the first train of the CCL Stage 3 Project is currently forecasted to be achieved at the end of 2024. We are developing two midscale Trains with an expected total production capacity of approximately 3 mtpa of LNG (the “CCL Midscale Trains 8 and 9 Project”) adjacent to the CCL Stage 3 Project, filing an application with the FERC in March 2023 for authorization to site, construct and operate the CCL Midscale Trains 8 & 9 Project and with the DOE in April 2023 requesting authorization to export LNG to FTA and non-FTA countries. In July 2023, we received authorization from the DOE to export LNG to FTA countries. Through Cheniere Partners, we are also developing an expansion adjacent to the SPL Project with a total production capacity of up to approximately 20 mtpa of LNG (the “SPL Expansion Project”), inclusive of estimated debottlenecking opportunities. In May 2023, certain subsidiaries of Cheniere Partners entered the pre-filing review process with respect to the SPL Expansion Project with the FERC under the NEPA, and in April 2023, a subsidiary of Cheniere Partners executed a contract with Bechtel to provide the Front-End Engineering and Design for the SPL Expansion Project. In February 2024, we filed an application with the FERC for authorization to site, construct and operate the SPL Expansion Project. The development of the CCL Midscale Trains 8 and 9 Project and the SPL Expansion Project or other projects, including infrastructure projects in support of natural gas supply and LNG demand, will require, among other things, acceptable commercial and financing arrangements before we make a positive FID. We are also pursuing liquefaction expansion opportunities and other projects along the LNG value chain.

Liquefaction Projects Underpinned by Long-Term Contracts

Our long-term customer agreements form the foundation of our business and provide us with significant, stable, long-term cash flows. We have contracted substantially all of our anticipated production capacity under SPAs, in which our customers are generally required to pay a fixed fee with respect to the contracted volumes irrespective of their election to cancel or suspend deliveries of LNG cargoes, and under IPM agreements, in which the gas producer sells natural gas to us on a global LNG or natural gas index price, less a fixed liquefaction fee, shipping and other costs. Through our SPAs and IPM agreements, we have contracted approximately 95% of the total anticipated production from the Liquefaction Projects through the mid-2030s with approximately 16 years of weighted average remaining life as of December 31, 2023, excluding volumes from contracts with terms less than 10 years and volumes that are contractually subject to additional liquefaction capacity beyond what is currently in construction or operation.

For the volumes not contracted by our project level subsidiaries, we have an integrated marketing function that has access to the excess LNG available from the Liquefaction Projects, and has, and continues to develop, a portfolio of long-, medium- and short-term SPAs. Our management team creates value for our shareholders through diligent development (including commercialization), construction and operation of these facilities, the achievement of ambitious key milestones and disciplined capital allocation. The Compensation Committee considers progress against these goals when it designs Cheniere’s executive compensation program for our NEOs.

 

     
 

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COMPENSATION DISCUSSION AND ANALYSIS

 

2023 PERFORMANCE AND STRATEGIC ACCOMPLISHMENTS

 

2023 was another exceptional year for our company, further reinforcing the power of the Cheniere platform. Throughout the year, we continued to achieve significant milestones across the organization, including financially, operationally and commercially:

 

 

 

EXCEPTIONAL FINANCIAL

RESULTS

 

Record Net Income of $9.9 billion

 

Exceeded midpoints of original Full Year 2023 Consolidated Adjusted EBITDA & Distributable Cash Flow guidance ranges by >$500 million each

 

Out-earned our 9-train run-rate Consolidated Adjusted EBITDA & Distributable Cash Flow guidance for the 2nd year in a row

   

 

 

EXECUTION OF

LONG-TERM

CAPITAL

ALLOCATION

PLAN

 

~$5 billion deployed under “20/20 Vision” capital allocation plan

 

Investment grade credit ratings achieved across the Cheniere complex

 

Repaid ~$1.2 billion of long-term indebtedness & issued inaugural investment grade bond at Cheniere Partners

 

Funded ~$1.5 billion of capex towards financially disciplined growth at CCL Stage 3 Project

 

Repurchased ~9.5 million shares for ~$1.5 billion

 

10% increase to quarterly dividend in Q3 consistent with annual target, with $1.66/share of dividends declared for 2023

   

 

 

BEST IN CLASS SAFETY &

SEAMLESS LNG OPERATIONS

 

Top decile safety record with Total Reportable Incident Rate (TRIR) of 0.10

 

Exported 637 cargoes & produced ~2,300 tbtu, representing ~11% of global LNG produced in 2023

 

>94% utilization rate in 2023 vs. ~89% global average1

 

Continued to support global call for reliable, flexible LNG supply with ~73% of our volume delivered to Europe

 

Signed long-term contracts representing >119 million tonnes of aggregate volumes between 2026-2050 in support of the SPL Expansion Project

 

 

 

   

 

PREMIER LNG DEVELOPMENT

 

CCL Stage 3 Project ahead of schedule and 51.4%2 complete at year-end, with first LNG from the first train expected in 2024

 

Submitted applications to FERC & DOE for the CCL Midscale Trains 8 & 9 Project

 

Initiated permitting process for the SPL Expansion Project, inclusive of CCS at SPL

 

*

For a definition of Consolidated Adjusted EBITDA and Distributable Cash Flow and a reconciliation of these non-GAAP measures to net income (loss), the most directly comparable GAAP financial measure, please see Appendix D.

 

1

Global utilization average in 2022 per International Gas Union. Cheniere utilization reflects 2023 feed gas processed / production capacity.

 

2

CCL Stage 3 Project completion percentage as of December 31, 2023 and reflects: engineering 83.7% complete, procurement 72.2% complete, subcontract work 66.9% complete and construction 11.1% complete.

Strategic Accomplishments: Adding to our Foundation for Growth and Cash Flow Stability

 

 

 

Achieved key milestones for SPL Expansion Project: In May 2023, certain of our subsidiaries entered the pre-filing review process with the FERC under the NEPA for the SPL Expansion Project, and in April 2023, one of our subsidiaries executed a contract with Bechtel to provide the front end engineering and design work on the project.

 

 

Received additional export authorizations for FTA countries: In April 2023, certain of our subsidiaries filed an application with the DOE with respect to the CCL Midscale Trains 8 & 9 Project, requesting authorization to export LNG to FTA countries and non-FTA countries. In July 2023, we received authorization from the DOE to export LNG to FTA countries.

 

     
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EXECUTIVE SUMMARY

 

 

FERC application submitted: In March 2023, certain of our subsidiaries submitted an application with the FERC under the NGA for the CCL Midscale Trains 8 & 9 Project.

 

 

Signed significant new long-term contracts: During 2023, we signed approximately 6.5 mtpa of long-term contracts, which included:

 

   

long-term LNG SPAs with Foran Energy Group Co. Ltd., BASF, ENN LNG (Singapore) Pte. Ltd., Equinor ASA and Korea Southern Power Co. Ltd. with estimated volumes totaling approximately 106 million tonnes of LNG and expected deliveries between 2026 and 2050. Approximately 65 million tonnes is subject to Cheniere Partners making a positive FID on the first or second trains of the SPL Expansion Project, as applicable, or Cheniere unilaterally waiving that requirement.

 

   

an IPM agreement with ARC Resources U.S. Corp., a subsidiary of ARC Resources Ltd., to purchase 140,000 MMBtu per day of natural gas at a price based on TTF, less a fixed regasification fee, fixed LNG shipping costs and a fixed liquefaction fee, for a term of approximately 15 years commencing with commercial operations of the first train of the SPL Expansion Project. This agreement is subject to Cheniere Partners making a positive FID on the first train of the SPL Expansion Project or Cheniere Partners unilaterally waiving that requirement.

Operational Highlights: Industry Leading Safety, Growing Production, and Operational Excellence

 

 

 

Reliable and growing production: As of February 16, 2024, approximately 3,280 cumulative LNG cargoes totaling over 225 million tonnes of LNG have been produced, loaded and exported from the CCL Project and the SPL Project.

 

 

Operational excellence enabled industry leading safety results: For full year 2023, over 10 million hours of labor were completed with a Total Recordable Incident Rate (employees and contractors combined) of 0.10, which places us within the top decile of our industry.

Financial

 

 

 

For full year 2023, we generated:

 

   

Revenue of approximately $20.4 billion and Net Income of approximately $9.9 billion.

 

   

Consolidated Adjusted EBITDA of approximately $8.8 billion, reaching the high end of the latest guidance range.

 

   

Distributable Cash Flow of approximately $6.5 billion, exceeding the high end of the latest guidance range.

 

 

During 2023, we accomplished the following pursuant to our long-term capital allocation priorities:

 

   

We prepaid approximately $1.2 billion of consolidated long-term indebtedness.

 

   

We repurchased approximately 9.5 million shares of our common stock for approximately $1.5 billion.

 

   

We declared dividends of $1.66 per share of common stock in the aggregate for the year ended December 31, 2023.

 

   

We continued to invest in accretive organic growth, funding approximately $1.5 billion of capital expenditures related to the CCL Stage 3 Project.

 

 

Ratings upgrades: Throughout 2023, the Cheniere complex received 7 distinct upgrades to the credit ratings of its entities by the ratings agencies, with the entire Cheniere complex reaching investment grade status. The achievement of investment grade ratings was a priority of our “20/20 Vision” capital allocation plan announced in September 2022.

CORPORATE RESPONSIBILITY

 

Climate Strategy

As the leading U.S. LNG exporter, we aim to supply customers with affordable, reliable, and cleaner-burning natural gas. A central part of our climate strategy is to measure and mitigate emissions—to support Cheniere’s LNG supplies remaining economically and climate-competitive in a lower carbon future. This strategy is reflected in a cadence of actions that focus on science, operational excellence, collaboration along our supply chain, and transparency. We are working to better understand the emissions profile of the LNG we deliver to our customers, and to identify strategic and cost-effective opportunities to improve GHG emissions performance.

 

     
 

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COMPENSATION DISCUSSION AND ANALYSIS

 

2023 Environmental, Social and Governance Highlights

Our 2023 ESG highlights include:

 

 

In December 2023, we completed our previously announced collaboration with multiple natural gas midstream companies, methane detection technology providers and leading academic institutions to implement QMRV of GHG emissions at natural gas gathering, processing, transmission, and storage systems specific to Cheniere’s supply chain, in order to improve the overall understanding of GHG emissions and further deployment of advanced monitoring technologies and protocols. As a result of the study, we published a paper, Informing Methane Emissions Inventories Using Facility Aerial Measurements at Midstream Natural Gas Facilities, which discusses the analysis and findings of the midstream QMRV study, highlighting the variability across estimated and measured greenhouse gas emissions data.

 

 

In October 2023, the field measurement campaign for our liquefaction QMRV research was completed. This concluded our overall QMRV research and development project series across our supply chain, the learnings of which will inform our emission measurement strategy going forward.

 

 

In August 2023, we published The Power of Connection, our fourth Corporate Responsibility (CR) report, which details our approach and progress on ESG issues, including our collaboration with natural gas midstream companies, technology providers and leading academic institutions on life-cycle assessment models, QMRV of greenhouse gas emissions and other research and development projects.

 

 

In July 2023, we launched our LCA supplier portal web application, which is designed to streamline our supply chain data collection and support more robust and frequent LCA modeling.

 

 

In May 2023, certain subsidiaries of Cheniere Partners entered the pre-filing review process with the FERC under the NEPA for a proposed carbon capture and sequestration project as part of the SPL Expansion Project, and initiated the front end engineering and design work with Bechtel, building upon the significant research and development performed over the last few years to determine the viability of such technology at our facilities.

 

 

In January 2023, we co-founded and sponsored the EEMDL, a multidisciplinary research and education initiative led by the University of Texas at Austin in collaboration with Colorado State University and the Colorado School of Mines. EEMDL’s goal is to address the growing need for accurate, timely and clear accounting of greenhouse gas emissions across the global oil and natural gas supply chains, which will help public and private institutions develop climate strategies and actions informed by accurate, verified data, identifying opportunities for emissions reductions.

 

 

In 2023, we continued to make meaningful progress on our Diversity, Equity and Inclusion efforts, aligning internally and connecting with our communities through initiatives such as our supplier diversity roadshows at the CCL Project and the SPL Project, the Love Our Parks collaboration with Houston Parks and Recreation, and our work with HBCUs.

 

 

During 2023, the Cheniere team supported our communities with over 13,000 hours of volunteering and $5.6 million of direct giving, including employee-matching gifts.

Recognition

In 2023, Cheniere received the following scores and recognition:

 

 

MSCI: AA (on a scale of AAA-CCC) in the MSCI ESG Ratings assessment

 

 

Sustainalytics: ESG Risk Rating of 22.7, considered a medium-risk assessment

 

 

Institutional Investor: Voted by the investment community first place overall across all categories, including Best ESG Program and Best Company Board, for the Natural Gas & Master Limited Partnerships sector

COMPENSATION GOVERNANCE PRACTICES

 

The Board and the Compensation Committee are committed to implementing compensation governance best practices that further strengthen the alignment of our compensation program with our business strategy and shareholders’ interests, which include the following:

 

 

Clear, direct link between pay and performance

 

 

Majority of incentive awards earned based on performance

 

     
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EXECUTIVE SUMMARY

 

 

No hedging or “short sales” of Company stock

 

 

No pledging of Company stock as collateral for a loan or holding Company stock in margin accounts

 

 

Robust stock ownership guidelines

 

 

No defined benefit retirement plan or supplemental executive retirement plan

 

 

Robust compensation risk management program

 

 

Clawback policy that requires the Board to recoup erroneously paid performance-based incentive compensation from the Company’s current and former Section 16 officers in the event of a financial restatement, which mitigates compensation-related risk and complies with applicable SEC rules and NYSE listing standards

 

 

Non-employee director equity compensation limits

 

 

Minimum vesting schedule for long-term incentive awards of at least 12 months, subject to limited exceptions

 

 

No material perquisites

 

 

Solicit annual advisory vote on executive compensation

 

 

Annually review the independence of the compensation consultant retained by the Compensation Committee

SHAREHOLDER ENGAGEMENT AND SAY-ON-PAY

The Board and management are committed to a compensation program that is aligned with shareholder interests, and the Company proactively engages with shareholders regarding compensation as a matter of strategic priority. Over the years, shareholder input has significantly contributed to the evolution of our compensation program.

Ahead of our 2023 Annual Meeting, members of our Board and senior management proactively led engagements with shareholders representing more than 50% of our outstanding common stock through in-person, video and telephonic meetings.

 

 

SHAREHOLDER ENGAGEMENT

 

>50% of outstanding shares represented

   

 

2023 SAY-ON-PAY

 

Over 90% Support

 

At our 2023 Annual Meeting, our say-on-pay proposal received support from shareholders owning over 90% of the shares represented at the meeting and entitled to vote on the matter, evidence of the broad-based support of the Compensation Committee and our compensation program from our shareholders.

We intend to continue our broad-based, proactive and constructive shareholder engagement efforts going forward and to consider shareholder input or recommendations with respect to our compensation program design and practices. We will continue to evaluate our compensation programs and incorporate shareholder outreach as a standard business practice in the future. We are committed to maintaining an open dialogue with our shareholders to ensure the successful evolution of our executive compensation program.

EXECUTIVE COMPENSATION PHILOSOPHY & OBJECTIVES

We are committed to maintaining a compensation philosophy that is consistent, competitive and conventional when reviewed against our peers. The Board and the Compensation Committee remain committed to a pay-for-performance compensation structure that aligns our executive compensation with the key drivers of long-term growth and creation of shareholder value. Our executive compensation programs and objectives are designed to ensure that we attract, retain and motivate executives with the talent and experience necessary for us to achieve our strategic business plan, while still remaining commensurate with our peers.

As the first mover in our industry, we face fierce competition for our executive officers and key employees throughout the organization due to the limited pool of talent with the set of skills needed to run an LNG company with a global scope. Trains 1 through 4 of the SPL Project were the first large-scale liquefaction facilities to have been constructed and placed in service in the U.S. lower 48 states, and Trains 1 and 2 of the CCL Project were the first liquefaction trains constructed and placed in service at a greenfield liquefaction facility in the lower 48. As of the end of 2023, there were five LNG projects in the U.S. that have reached the operations phase, other than Cheniere’s SPL Project and CCL Project. Additionally, there are five projects under construction in the U.S., including Cheniere’s Corpus Christi Stage 3 Project. There are over 50 additional projects outside of North America under various stages of development.

 

     
 

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COMPENSATION DISCUSSION AND ANALYSIS

 

In connection with our status as a market leader, our annual compensation structure is based on the following principles:

 

 

NEO compensation is primarily performance-based. We believe such an incentive structure creates appropriate motivation for our executive officers and aligns their compensation with the performance of our Company and value created for shareholders. We will continue to balance our LTI program to address performance accountability, long-term stock ownership and talent retention issues in the current environment.

 

 

Annual cash bonus incentive metrics are tied to specific financial, operating, safety, ESG and strategic goals. We believe close alignment between our compensation goals and our business strategy is critical to driving performance to be measured against our key milestones and metrics.

 

 

Significant long-term compensation is linked to financial performance and growth metrics. We believe our executive officers’ compensation should be closely linked to the creation of value for our shareholders over the long run. As such, the majority of their compensation is and should be at risk and directly tied to corporate outperformance over longer time horizons. In addition to the long-term performance risk, our executive officers are also subject to continued employment requirements for the vesting of their long-term compensation.

2023 COMPENSATION HIGHLIGHTS

 

During 2023, the Compensation Committee and Board continued to monitor market conditions and address feedback from stakeholders and our compensation consultant. Key outcomes and developments included:

 

 

The annual incentive plan generated an above-target payout for our NEOs based upon the Company’s 2023 performance across multiple financial, operating, safety, ESG and strategic metrics.

 

 

Performance share units awarded in 2021 also generated an above-target payout for our NEOs based upon the Company’s performance across the performance metrics of cumulative Distributable Cash Flow per share and Absolute Total Shareholder Return over the 2021-2023 period.

 

 

In February 2023, the Board approved our 2023 annual performance scorecard which continued to emphasize safety and ESG metrics and milestones, illustrating our Company-wide commitment to these important issues, as well as financial and operational discipline.

During 2023, members of our Board and senior management engaged with shareholders holding more than 50% of our outstanding common stock, with dialogue on the Company’s executive compensation program being an important part of these engagements. We are committed to maintaining an open dialogue with our shareholders to ensure the successful evolution of our executive compensation program going forward.

COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

The primary components of our executive compensation program, as applied to our 2023 Named Executive Officers, are as follows:

 

TYPE

  

PURPOSE

Base Salary

  

Provide a minimum, fixed level of cash compensation to compensate executives for services rendered during the fiscal year.

Annual Incentive

Program

  

Drive achievement of annual corporate goals including key financial, operating, safety and strategic goals that create value for shareholders.

LTI Program

  

Align executive officers’ interests with the interests of shareholders by rewarding sustained financial performance and growth through a multi-year performance period.

 

     
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COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

 

The following pie charts illustrate the pay mix of our CEO and the average pay mix of our other NEOs for 2023, assuming target performance.

 

LOGO

  

LOGO

BASE SALARY

 

Base salaries provide the fixed compensation necessary to attract and retain key executives. The base salaries of our NEOs are designed to be comparable to positions in the marketplace from which we recruit executive talent. The Compensation Committee referenced competitive ranges of base salary across the oil and gas industry and companies of comparable enterprise value in determining 2023 base salaries for our NEOs. See “Peer Group” on page 58 of this Proxy Statement for details regarding the external market data referenced by the Compensation Committee in making decisions regarding base salaries and other compensation elements.

In February 2024, the Compensation Committee reviewed the base salaries of our NEOs and recommended and the Board approved changes in the annual base salaries of our NEOs, effective February 26, 2024. The following table provides the base salaries as in effect at the end of 2023 and for 2024 of our NEOs.

 

2023 and 2024 Base Salaries

 

 
          2023 ANNUAL
BASE SALARY
     2024 ANNUAL
BASE SALARY
 

Jack A. Fusco

  

Director, President and Chief Executive Officer

  

$

1,600,000

 

  

$

1,700,000

 

Zach Davis

  

Executive Vice President and Chief Financial Officer

  

$

725,000

 

  

$

800,000

 

Anatol Feygin

  

Executive Vice President and Chief Commercial Officer

  

$

700,000

 

  

$

750,000

 

Corey Grindal

  

Executive Vice President and Chief Operating Officer

  

$

900,000

 

  

$

950,000

 

Sean N. Markowitz

  

Executive Vice President, Chief Legal Officer and Corporate Secretary

  

$

700,000

 

  

$

750,000

 

ANNUAL INCENTIVE PROGRAM

 

The Board and the Compensation Committee are committed to a pay-for-performance compensation structure that aligns our executive compensation with the key drivers of long-term growth and creation of shareholder value. We believe that close alignment between our compensation goals and our business strategy is critical to driving performance to be measured against our key metrics and objectives. Consistent with our compensation philosophy and in response to feedback from our shareholders, the Compensation Committee utilizes a scorecard approach to determining annual cash bonuses.

The following key features are included in the scorecard:

 

 

Individual bonus targets based on competitive benchmarks;

 

 

Quantitative performance goals in the following areas of performance: financial, budget management, safety and operational effectiveness;

 

     
 

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COMPENSATION DISCUSSION AND ANALYSIS

 

 

Qualitative component based on identified strategic goals and ESG accomplishments; and

 

 

Available adjustments for exceptional individual performance.

Target Incentive Opportunities. The Compensation Committee reviews the target annual incentive opportunities for each of our NEOs annually, and may adjust the targets based on competitive positioning, internal parity, or other relevant factors. For 2023, the Compensation Committee approved individual annual incentive targets which are reflected in the table below titled “NEOs Annual Incentive Award for 2023.”

Performance Goals. The 2023 scorecard provided that 45% of the bonus opportunity was determined based on performance measures using multiple financial, budget management and operational effectiveness measures, and 55% was determined based upon achievement of strategic goals and ESG accomplishments, including safety, because the Compensation Committee believes that each of those areas is a key driver of the Company’s annual performance and, ultimately, long-term success.

For 2023, the Compensation Committee set the target performance goals in November 2022, with the exception of the Adjusted EBITDA target and other revisions which were approved in February 2023. As a result of anticipated international gas price curves and proactive selling of open capacity, the Consolidated Adjusted EBITDA target was increased by approximately 35% as compared to 2022. As 2023 marked the first full year of operations for all nine large-scale Trains, the target for asset production was increased by approximately 4% from 2022, after accounting for major turnarounds at the SPL Project, with an associated approximately 3% increase in Adjusted O&M expense despite national inflation trends. After reaching FID in 2022 for the CCL Stage 3 Project, for 2023 our goal focused on execution of project development. We also continued to emphasize our commitment to a culture of compliance with laws and regulations as well as a top-tier safety achievement with respective dedicated scorecard metrics.

Process for Measuring Performance. Performance below the “threshold” level results in no payout earned for the applicable performance goal. If performance falls between the “threshold” and “target” or “target” and “stretch” levels, then the achievement level under the scorecard is determined using straight line interpolation. Once the achievement level under the scorecard is calculated based on actual performance as compared to the goals set forth above, the Compensation Committee has the discretion to reduce or increase the payouts to the extent it determined appropriate to reflect each NEO’s performance during the year.

 

Actual
payout

  =   Base
salary
  x   Target bonus
(%)
  x   Performance score
(%)
  +/-   Individual performance adjustment
(if any)

 

     
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COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

 

2023 Performance Results. The scorecard table below shows the level of achievement in 2023 for each of the performance goals and the resulting weighted percentage of target that was earned as a result of 2023 performance. The scorecard reflects the Company’s noteworthy performance in 2023, achieving above the target level in almost all of the performance measures. We increased our financial guidance throughout 2023, and Adjusted EBITDA results were at the high end of the final guidance range while we exceeded the high end of the final guidance for 2023 for Distributable Cash Flow, mainly attributed to higher margins on open capacity and optimization upstream and downstream of the SPL Project and CCL Project. Operationally, we successfully executed our first major maintenance turnaround at the SPL Project within the scheduled timeline and with zero recordables and zero lost time injuries, enabling us to achieve a total recordable incident rate of only 0.10. Strategically, we advanced the Stage 3 total project progress ahead of schedule to reach 51% complete as of December 31, 2023, filed with the FERC and the DOE for the CCL Midscale Trains 8 & 9 Project and initiated the pre-filing review progress with the FERC for the SPL Expansion Project. We also signed approximately 6.5 mtpa of long term contracts that are expected to support the SPL Expansion Project. From an ESG perspective, we continued to progress our Life Cycle Assessment emission strategy and our DEI initiatives, as well as our regulatory and compliance goals. Overall, the Company’s achievements in 2023 resulted in a total weighted average under the scorecard of 167% of target, as shown below:

 

METRIC

   THRESHOLD
(50% OF
TARGET)
  TARGET   STRETCH
(200% OF
TARGET)
  WEIGHT   2023 ACTUAL   %
ACHIEVEMENT

Scorecard EBITDA ($ millions):

  

$7,500

 

$8,250

 

$9,000

   

$8,910

 

  Scorecard EBITDA, excl. commodity margin ($ millions)2

  

$3,700

 

$3,950

 

$4,100

 

25%

 

$4,202

 

200%

  Commodity margin ($ millions)

  

$3,800

 

$4,300

 

$4,900

 

5%

 

$4,708

 

168%

Budget Management:

            

  Adjusted SG&A Expense1 ($ millions)

   $250   $228   $216   5%   $217   198%

Operational Effectiveness
(excluding commissioning):

            

  Asset Production (TBtu)

  

2,248

 

2,314

 

2,332

 

10%

 

2,299

 

89%

  Adjusted O&M Expense1 ($ millions)

  

$1,624

 

$1,488

 

$1,413

 

10%

 

$1,517

 

89%

Strategic:

 

  Stage 3 total project progress

  

35%

 

40%

 

44%

 

5%

 

51%

 

200%

  Expansion and Growth

  

Provide to Board
expansion
implementation
strategy

 

File with FERC for a
growth project

 

Progress
development of
10+ Mtpa of growth
projects

 

5%

   

200%

  Advance commercialization for further expansions

  

Subject to Compensation Committee Discretion

 

5%

   

200%

ESG:

 

Environmental

 

  Climate Business Development (CCUS, Renewables, etc.)

  

Provide climate
Business
Development
strategy to Board

 

Identify to Board and
pursue
partnership, project
development
and/or transaction

 

Enter into
partnership,
transaction and/or
commencement of
permitting
for project

 

5%

   

100%

  Emissions Strategy (Life Cycle Assessment)

  

Update LCA model
and supplier portals

 

Provide to Board
potential emissions
target implementation
strategy

 

Provide to Board
potential emissions
target

 

5%

   

200%

Social

 

  Safety (TRIR)3

  

50th percentile
(Second quartile of
peer group)

0.58

 

Top quartile


0.28

 

Lower of 15th
percentile
and 3-year
Cheniere average

0.16

 

10%

 

0.10

 

200%

  Progress DEI Initiatives

  

Subject to Compensation Committee Discretion

 

5%

   

125%

Governance

 

  Regulatory / Compliance

  

Subject to Compensation Committee Discretion

 

5%

   

200%

Weighted Average

 

167%

 

(1)

For definitions of Adjusted SG&A Expense and Adjusted O&M Expense, please see Appendix D.

 

(2)

In approving the scorecard results, the Committee determined to use Scorecard EBITDA which excludes from Consolidated Adjusted EBITDA $138 million of incremental cash settlement expenses related to certain long term incentive awards granted to officers of the Company who are required to file reports with the SEC pursuant to Section 16 of the Exchange Act. For a definition of Consolidated Adjusted EBITDA and a reconciliation to net income, the most directly comparable GAAP financial measure, please see Appendix D.

 

(3)

“TRIR” is the “Total Recordable Incident Rate,” which is calculated as the number of recordable injuries multiplied by 200,000 and then divided by the number of hours worked.

 

     
 

2024 PROXY STATEMENT

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Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

Based in part on the recommendations of Mr. Fusco, the Compensation Committee approved and recommended to the Board for approval the final annual incentive award payouts for each of the NEOs other than Mr. Fusco. The Compensation Committee approved and recommended to the Board for approval the final annual incentive award payout to Mr. Fusco. In evaluating our NEOs’ performance during 2023, the Compensation Committee considered each NEO’s specific contribution to our Company’s key achievements, including those discussed under “Compensation Discussion and Analysis—2023 Performance and Developments” and towards achieving the quantitative and strategic measures in the scorecard.

Based on 2023 Company and individual performance results, the Compensation Committee recommended and the Board approved annual incentive awards to the NEOs for 2023 as follows:

 

NEOs Annual Incentive Award for 2023

 

 
NAMED EXECUTIVE    TITLE    TARGET
ANNUAL
INCENTIVE
(% OF
BASE
SALARY)
    TARGET ANNUAL
INCENTIVE
     SCORECARD
DETERMINED
ANNUAL
INCENTIVE
(167% OF
TARGET)
    

EARNED 

ANNUAL 

INCENTIVE 

 

Jack A. Fusco

  

Director, President and Chief Executive Officer

  

 

150

 

$

2,400,000

 

  

$

4,008,000

 

  

$

4,008,000 

Zach Davis

  

Executive Vice President and Chief Financial Officer

  

 

100

 

$

725,000

 

  

$

1,210,750

 

  

$

1,452,900 

Anatol Feygin

  

Executive Vice President and Chief Commercial Officer

  

 

100

 

$

700,000

 

  

$

1,169,000

 

  

$

1,169,000 

Corey Grindal

   Executive Vice President and Chief Operating Officer      100   $ 900,000      $ 1,503,000      $ 1,503,000 

Sean N. Markowitz

  

Executive Vice President, Chief Legal Officer and Corporate Secretary

  

 

100

 

$

700,000

 

  

$

1,169,000

 

  

$

1,169,000 

Under the terms of the Annual Incentive Program, determination of an individual’s annual incentive award is based on scorecard results and individual performance. Individual performance is not a weighted factor in our plan but evaluation of individual performance may result in an adjustment to payout for an individual executive. For 2023, Mr. Davis received an increased earned annual incentive equal to 120% of his scorecard-determined bonus, in connection with the Company’s outstanding financial achievements in 2023, including the advancement of multiple key strategic goals under the Company’s capital allocation program announced in 2022.

LONG-TERM INCENTIVE AWARDS

 

LTI program awards accomplish several important objectives: (i) they motivate sustained performance against our long-term objectives; (ii) they align executives with shareholder interests by rewarding long-term value creation; and (iii) they help retain employees who are in high demand elsewhere.

LTI Program

The Compensation Committee believes that the LTI program delivers a consistent, competitive and conventional approach to delivering long-term incentives. Equity grants align our NEOs’ interests with the interests of shareholders by rewarding sustained long-term value creation and enable us to attract and retain highly qualified individuals for important positions throughout the Company. We have incorporated Absolute Total Shareholder Return (“ATSR”) as an additional metric under the LTI program for PSU grants since 2019, believing that this feature further aligns our LTI program with that of our peers. The ATSR metric and the cumulative distributable cash flow (“DCF”) metric require important absolute performance achievements, despite favorable or unfavorable market conditions, to earn the awarded long-term incentives.

 

     
50  

CHENIERE

 


Table of Contents

COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

 

The key attributes in the Company’s NEO LTI program are described below:

 

 

  Grants will be made on an annual basis with a minimum of a 1-year vesting period

 

  Grants will consist of a mix of at least 50% PSUs for executive officers with the remainder consisting of RSUs

¡   PSUs: 3-year cliff vesting (performance and service-based)

¡   RSUs: 3-year ratable vesting (service-based)

  The 2023 and 2024 LTI Awards to executive officers were a mix of 50% PSUs and 50% RSUs

 

  PSUs will include one or more performance metrics, with the actual number of shares earned to be between 0% and 300%, providing for a cap on payouts

¡   PSUs will vest upon certification by the Compensation Committee of the level of achievement of the performance conditions during the performance period

  The outstanding LTI Awards to executive officers included two performance metrics (cumulative DCF per share and ATSR)

 

  Equity award grants to executives will include clawback provisions

2023 LTI Awards

In February 2023, the Compensation Committee recommended and the Board approved long-term incentive awards as part of the Company’s LTI program for each of the named executive officers of the Company.

 

2023 LTI Awards

 

 

NAME

  

TITLE

  

TARGET
VALUE (% OF
BASE SALARY)

   

TARGET
DOLLAR
VALUE

    

RSUs

    

TARGET PSUs

 

Jack A. Fusco

  

Director, President and Chief Executive Officer

  

 

977

 

$

15,630,000

 

  

 

51,012

 

  

 

51,012

 

Zach Davis

  

Executive Vice President and Chief Financial Officer

  

 

500

 

$

3,625,000

 

  

 

11,831

 

  

 

11,831

 

Anatol Feygin

  

Executive Vice President and Chief Commercial Officer

  

 

500

 

$

3,500,000

 

  

 

11,423

 

  

 

11,423

 

Corey Grindal

  

Executive Vice President and Chief Operating Officer