EXECUTIVE COMPENSATION (contd)
Executive Summary
Compensation Philosophy and Objectives
Devon was formed in 1971 and has been publicly held since 1988. Since 2010, the Company has successfully transitioned to a liquids-rich (oil and natural
gas liquids), higher-margin, onshore North American production base and continues to transform its organizational structures and processes to allocate capital investments to the Companys most promising assets. Devon is committed to delivering
strong returns on its investments through a dynamic culture focused on innovation, safety, operational excellence, environmental stewardship, and social responsibility. The Company focuses its business on generating operating returns by managing a
premier asset portfolio, delivering superior execution, and exercising discipline in Devons capital allocation. Devon also maintains a strong commitment to financial strength and flexibility through all commodity price cycles, as reflected in
the Companys investment grade credit ratings.
The success of Devons strategy is founded on a pay-for-performance compensation philosophy intended to motivate near-term operational and financial success as well as long-term stockholder value creation. The Committee utilizes a range of quantitative and
strategic measures to evaluate performance, increasing the rigor of the associated goals and evolving the measures as appropriate. Overall, an executive officers total compensation is weighted in favor of long-term incentives to emphasize
value creation and shareholder alignment.
The objectives of Devons compensation program are to:
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motivate and reward executives to drive and achieve the Companys goal of increasing stockholder value;
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allocate incentives for the achievement of near-term and long-term objectives, in a manner that motivates executives to
take measured and appropriate risk; and
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attract and retain highly trained, experienced, and committed executives who have the skills, education, business
acumen, and background to create value in a large and diversified oil and gas business.
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The primary components of Devons
executive compensation program are base salary, a performance bonus, and LTI. The Committee generally targets each component, as well as the aggregate of the components, at approximately the 50th
percentile of the Companys peer group.
Individual compensation levels may vary from these targets based on performance, expertise,
experience, responsibilities, or other factors unique to the individuals role within the Company. The Committee also provides retirement and other benefits typical for Devons peer group.
Impact of the COVID-19 Pandemic on Company Operations and Compensation
Decisions
The worldwide COVID-19 pandemic has presented unprecedented challenges for
communities and individual health as well as economies, businesses, and the stockholders who invest in them. Devon dedicated extensive resources throughout 2020 to promote employee health, community health, and business continuity. Included in the
measures taken was the creation of a COVID-19 Incident Management team in February, regular meetings of the Board on the progress of the Companys COVID-19
response, the expansion of flexible work-from-home arrangements, the deployment of enhanced virtual meeting tools, the distribution of masks, gloves, and hand sanitizer to employees, enhancement of its workplace sanitation protocols, reconfiguration
of workspaces to allow for social distancing, contact tracing, and early adoption of cost-free COVID-19 testing for employees.