Integrity, accountability and disclosure
Devon recognizes that strong corporate governance is required to maintain our social license to operate. We strive for effective decision-making and risk management as we conduct our business in keeping with our corporate values and ESG responsibilities, serving the interests of our stakeholders.
Our Corporate Governance Guidelines support the long-term interests of the company and our stakeholders by focusing on certain core principles for effective governance of the company. The guidelines cover board composition, policies, procedures and committees. They also provide direction for the recruitment, selection, responsibilities, compensation and evaluation of individual directors. The guidelines are updated from time-to-time to reflect the evolving needs of our company.
Among other responsibilities, our non-management chair seeks to optimize board performance through regular feedback to help ensure the diverse viewpoints of all directors are heard, and that a climate of constructive candor is created in which frank and thoughtful discussion occurs.
The GEPP Committee maintains the former Governance Committee’s oversight role for corporate governance and for nominating qualified candidates for director positions. Following the merger, its scope incorporated expanded environmental duties and responsibilities, as well as oversight of management’s efforts to integrate sustainability into Devon’s business and activities. GEPP Committee members regularly hear from Devon leaders and subject matter experts on emissions and other environmental matters, ESG-related stakeholder engagements, public policy developments and our social responsibility programs. The GEPP Committee’s endorsement of ESG matters helps inform the company’s strategy, plans and priorities, and secure internal alignment.
In 2021, the GEPP Committee’s activities included:
- Evaluating the ESG profile of our go-forward company
- Discussing and endorsing the company’s environmental targets announced in June 2021 and tactics for meeting the targets
- Discussing the contents of Devon’s 2021 Sustainability Report and Climate Change Assessment Report with management before their publication
- Reviewing and discussing Devon’s DEI metrics, and actions and strategy for improving our workforce DEI, with the Compensation Committee and management, reflecting the board’s increased emphasis on diversity, equity and inclusion (DEI)
The GEPP Committee nominates qualified candidates to be Devon directors, seeking factors such as the nominees’ integrity and accountability, ability to provide informed judgment, respect from peers and high performance standards.
截至2023年3月，我们的董事会包括四名妇女（33％）和一名种族多元化（8％）董事，包括德文郡审计委员会主席。当前的董事会任期约1 - 13年，可以平衡新的观点和连续性。我们的董事年龄从45岁到73岁。非管理董事的董事会退休年龄为74岁。
Shareholders elect Devon directors at our annual meeting for one-year terms. Our bylaws require a director who does not receive a plurality of votes in an uncontested election to offer to resign, which has not happened in Devon’s 51-year history. At our 2022 annual meeting, our directors received an average approval rating of 96%.
Board and executive compensation
Under our Corporate Governance Guidelines, non-management directors are expected to have a significant ownership stake in Devon to help align the board’s and stockholders’ interests with our long-term performance. The board determines non-management director compensation annually based on the Compensation Committee’s recommendations. Compensation for our non-management directors, which is based on market norms and includes cash retainers and equity awards, has remained relatively consistent in recent years. In 2022, the Compensation Committee approved non-management directors’ participation in Devon’s matching gift program for qualifying charitable contributions up to $10,000 annually. Devon employees receive no additional compensation for serving on the board.
Devon focuses on generating positive operating returns by managing a premier asset portfolio, delivering superior execution and exercising disciplined capital allocation. Our executive compensation program seeks to create a strong tie between company performance and executive pay and is closely aligned with shareholders’ interests. This pay-for-performance philosophy is intended to motivate near-term operational and financial success as well as to create long-term stockholder value. Total compensation is weighted in favor of long-term incentives to emphasize value creation and stockholder alignment.
德文郡的薪酬理念也是设计to attract and retain highly trained, experienced executives who have the skills, education, business acumen and background to create value in a large and diversified oil and gas business. The primary components of the company’s executive compensation program are base salary, a performance bonus and long-term incentives.
Executive compensation is determined annually by the Compensation Committee, which evaluates the performance of the company and of individual executives and the business unit or organization they manage. The leadership team updates the board regularly on our economic and operational risks and opportunities and on our ESG performance.
In determining executive compensation in 2021, the Compensation Committee considered the company’s operational and financial achievements and performance relative to our corporate goals. Devon set ambitious goals for financial results, expenditures, oil and gas production, ESG/EHS performance, merger integration and strategic initiatives.
该公司在我们公司绩效记分卡上几乎所有2021个进球的目标都优于我们的目标。In addition, Devon’s share price earned the highest Total Shareholder Return (TSR) of any stock in the S&P 500 Index during 2021, and we achieved the highest TSR in our performance peer group in 2021 (196%) and from 2019-2021 (122%). Based on these results, the Compensation Committee assigned a company performance score of 177%, which led to above target bonuses for our employees (including executives).
To help ensure that management and our board understand the compensation issues that matter to our stockholders, Devon conducts investor outreach throughout the year. During 2021, the company contacted the majority of our top 100 stockholders, interacted with many other stockholders and met with representatives of approximately 50 investors. The Compensation Committee reviews the feedback resulting from this outreach, as well as the most recent advisory vote by stockholders on executive compensation. In 2022, approximately 95% of voting stockholders voted “for” Devon’s executive compensation.
Additional information about our executive compensation program is available in the Compensation Discussion and Analysis (CD&A) section of our 2022 proxy statement.