National Fuel Gas Company
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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-12

NATIONAL FUEL GAS COMPANY

(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 paid previously with preliminary materials.
   Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1)0-11.

 

 

 


 

 

LOGO

 

2023

Proxy

Statement

 

 
 

 

and Notice of Annual Meeting of Stockholders

to be held on March 9, 2023

 

 

 

 

 

 
 

                                                 

 

 

 

 

 


National Fuel Gas Company

6363 MAIN STREET

WILLIAMSVILLE, NEW YORK 14221

January 20, 2023

Dear Stockholders of National Fuel Gas Company:

Each year, our proxy statement provides you with a brief summary of the Company’s recent operations and detailed information relating to the items on the agenda for you to vote on at the Annual Meeting of Stockholders. As we did last year, our Board of Directors has determined to hold the 2023 Annual Meeting virtually, via a live webcast. The electronic webcast meeting will afford stockholders the same rights and access as if the meeting were held in person, including the ability to vote shares electronically during the meeting.

The meeting will be held at 10:00 a.m. Eastern Time on March 9, 2023, conducted via live webcast at www.virtualshareholdermeeting.com/NFG2023. The matters on the agenda for the meeting are outlined in the enclosed Notice of Annual Meeting and Proxy Statement.

At the meeting, you will be asked to consider and vote on four proposals, all as explained in more detail in the proxy statement: (1) the election of seven directors, (2) advisory approval of named executive officer compensation, (3) advisory vote on the frequency of future “say-on-pay” votes; and (4) ratification of the appointment of the Company’s independent public accounting firm. Your Board of Directors unanimously recommends that you vote FOR each of the director nominees, FOR proposals 2 and 4, and FOR the EVERY YEAR option on proposal 3.

So that you may elect Company directors and secure the representation of your interests at the Annual Meeting, we urge you to vote your shares. The preferred methods of voting are by telephone, by Quick Response Code (“QR Code”) or by Internet as described on the proxy card. These methods are both convenient for you and reduce the expense of soliciting proxies for the Company. If you prefer not to vote by telephone, QR Code or the Internet, please complete, sign and date your proxy card and return it by mail. The Proxies are committed by law to vote your shares as you instruct on the proxy card, by telephone, by QR Code or by Internet.

Your vote is always important. Stockholder voting is the primary means by which stockholders can influence a company’s operations and its corporate governance. In fact, stockholders who do vote can influence the outcome of proposals in greater proportion than their percentage share ownership.

Please make your voice heard by voting your shares.

Even if you plan to attend the Annual Meeting virtually, we encourage you to promptly vote your shares in advance of the meeting, by telephone, by QR Code or by Internet, or to complete, sign, date and return your proxy card. If you later wish to vote at the Annual Meeting, you can revoke your proxy by giving written notice to the Secretary of the Annual Meeting and/or the Trustee (as described in the proxy statement), and/or by casting your ballot at the Annual Meeting.

Please review the proxy statement and take advantage of your right to vote.

Sincerely yours,

David P. Bauer

President and Chief Executive Officer


Notice of Annual Meeting of Stockholders

to be held on March 9, 2023

To the Stockholders of National Fuel Gas Company:

Notice is hereby given that the Annual Meeting of Stockholders of National Fuel Gas Company (the “Company”) will be held at 10:00 a.m. Eastern Time on March 9, 2023, conducted via live webcast at www.virtualshareholdermeeting.com/NFG2023. At the meeting, action will be taken with respect to:

 

  (1)

The election of seven directors to hold office for one-year terms, as provided in the attached proxy statement and until their respective successors have been elected and qualified;

 

  (2)

Advisory approval of named executive officer compensation;

 

  (3)

An advisory vote on the frequency of future “say-on-pay” votes;

 

  (4)

Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal 2023;

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

Stockholders of record at the close of business on January 9, 2023, will be entitled to vote at the meeting.

BY ORDER OF THE BOARD OF DIRECTORS

Sarah J. Mugel

General Counsel, Secretary and Corporate Responsibility Officer

January 20, 2023

Attending the Annual Meeting

 

 

National Fuel Gas Company is holding the Annual Meeting in a virtual meeting format only, conducted via live webcast. Stockholders will not be able to attend the meeting in person.

 

Please visit www.virtualshareholdermeeting.com/NFG2023 in order to attend and to participate in the virtual meeting, where you will be prompted to enter the 16-digit control number found on your proxy card or your voting instruction form provided by your broker, bank, or other nominee.

If you receive your Annual Meeting materials electronically and wish to attend the virtual meeting, please follow the instructions provided online for attendance. Once you have joined the virtual meeting, you may vote your shares electronically during the meeting by following the instructions available on the meeting website, although we encourage you to vote in advance of the meeting. Only stockholders or their valid proxy holders may participate in the meeting. If you plan on attending the virtual meeting, we encourage you to allow ample time to log in online and recommend that you do so fifteen minutes before the meeting start time to ensure that you are logged in when the meeting begins.


 

 

Your Vote is Important

Please vote by telephone, by QR Code or by Internet.

Whether or not you plan to attend the meeting, and whatever the number of shares you own, please vote your shares by telephone, by QR Code or by Internet as described in the proxy/voting instruction card and reduce National Fuel Gas Company’s expense in soliciting proxies. Alternatively, you may complete, sign, date and promptly return the proxy/voting instruction card by mail.

Why Your Vote is Important

 

 

Q: Who is asking for my vote and why am I receiving this document?

A: The Board of Directors asks that you vote on the matters listed in the Notice of Annual Meeting, which are more fully described in this proxy statement. This proxy statement is a document that Securities and Exchange Commission regulations require we give you when we ask you to sign a proxy designating individuals to vote on your behalf. A proxy, if duly executed and not revoked, will be voted and, if it contains any specific instructions, will be voted in accordance with those instructions.

Q: How many shares are not voted at the Annual Meeting on non-routine matters (proposals other than the ratification of accountant)?

A: At recent Annual Meetings, approximately 11% to 19% of our shares have not been voted on non-routine matters. IF YOU HOLD YOUR SHARES AT A BROKERAGE FIRM, YOU MUST TELL YOUR BROKER HOW TO VOTE YOUR SHARES. Since 2010, brokers have not been able to vote customer shares on non-routine matters. Stockholder voting is the primary means by which stockholders can influence a company’s operations and its corporate governance, so your vote is important.

Q: How can I vote?

A: To reduce costs and conserve resources, we send some of our stockholders a notice advising them that our materials for this meeting are available on the Internet. The notice contains instructions to (i) electronically access the materials; (ii) vote via the Internet; and (iii) request a paper copy of the materials by mail, if desired. Other stockholders have received our proxy materials by U.S. mail. In either case, there are four ways to vote by proxy:

 

   

Vote by Phone by calling 1-800-690-6903: You will need information from your proxy card to vote; have it available and follow the instructions provided.

 

   

Vote by scanning the Quick Response Code  LOGO (“QR Code”) on the proxy card: By accessing the QR site through the proxy card you can vote your shares.

 

   

Vote by Internet by going to www.proxyvote.com: You will need information from your proxy card to vote; have it available and follow the instructions provided.

 

   

Vote by Mail: Complete and return the proxy card in the prepaid and addressed envelope.

You may also vote at the Annual Meeting. However, if you are the beneficial owner of the shares, you must obtain a legal proxy from the stockholder of record, usually your bank or broker. A legal proxy identifies you, states the number of shares you own, and gives you the right to vote those shares. Without a legal proxy we cannot identify you as the owner and will not know how many shares you have to vote.

 

To attend and vote at the Annual Meeting, you will need the 16-digit control number found on your proxy card or your voting instruction form provided by your broker, bank, or other nominee.

Please visit www.virtualshareholdermeeting.com/NFG2023 on the date and at the time specified in the Notice of Annual Meeting of Stockholders. You will be prompted to enter your 16-digit control number to attend the meeting.

 

 


Table of Contents

 

Proxy Statement Overview &
Fiscal 2022 Summary
    1  
General Information     11  
PROPOSAL 1. Election of Directors     14  

Nominees for Election as Directors at the

2023 Annual Meeting of Stockholders

    15  

Continuing Directors Whose Terms Expire in 2024

    23  
Corporate Governance     27  

Diversity

    27  

Director Independence

    27  

Board Leadership Structure

    27  

Annual Meeting Attendance

    28  

Meetings of the Board of Directors

and Standing Committees

    28  

Method of Evaluating Board and Committee Effectiveness

    30  

Process for Nominating Directors

    30  

Charitable Contributions by Company

    30  

Compensation Committee Interlocks

and Insider Participation

    30  

Risk Oversight

    30  

Related Person Transactions

    31  

Code of Ethics

    31  
Director Compensation     32  

Director Compensation Table — 

Fiscal 2022

    33  
Audit Fees     34  
Audit Committee Report     35  

Security Ownership of Certain

Beneficial Owners and Management

    37  

Delinquent Section 16(a) Reports

    38  

Equity Compensation Plan

Information

    39  
Executive Compensation     40  

Compensation Committee Report

    40  

Compensation Discussion and Analysis

    40  

Fiscal 2022 Summary Compensation Table

    57  

Grants of Plan-Based Awards in Fiscal 2022

    59  

Outstanding Equity Awards at Fiscal 2022 Year-End

    60  

Option Exercises and Stock Vested in Fiscal 2022

    62  

Fiscal 2022 Pension Benefits

    62  

Fiscal 2022 Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans

    64  

Fiscal 2022 Potential Payments Upon Termination or Change in Control

    65  

CEO Pay Ratio

    70  

Executive Officer and Director Hedging

    70  

PROPOSAL 2. Advisory Approval of

Named Executive Officer Compensation

    71  
PROPOSAL 3. Advisory Vote on Frequency of Future “Say-on-Pay” Votes     72  

PROPOSAL 4. Ratification of

Appointment of Independent

Registered Public Accounting Firm

    73  

Important Notice Regarding

Delivery of Stockholder Documents

    74  

Proposals of Security Holders

for the 2024 Annual Meeting

    75  
Other Business     76  
Where You Can Find Additional Information     77  

 

 

 

Your Vote is Important!

 

Please vote by phone, by QR Code or by

Internet, or complete, sign, date and

return your proxy card.

 

 

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   i


 

Proxy Summary

    LOGO  

 

This proxy statement contains certain “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements should be read with the cautionary statements and important factors included under the heading “Safe Harbor for Forward-Looking Statements” in National Fuel Gas Company’s (“National Fuel” or the “Company”) Form 10-K at Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and with the information included in the Company’s Form 10-K at Item 1A “Risk Factors”. Forward-looking statements are all statements other than statements of historical fact, including, without limitation, statements regarding future prospects, plans, objectives, goals, projections, estimates of oil and gas quantities, emissions reduction targets, strategies, future events or performance and underlying assumptions, capital structure, anticipated capital expenditures, completion of construction projects, projections for pension and other post-retirement benefit obligations, impacts of the adoption of new authoritative accounting and reporting guidance, and possible outcomes of litigation or regulatory proceedings, as well as statements that are identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may” and similar expressions.

Proxy Statement Overview & Fiscal 2022 Summary

This overview and summary highlights information contained elsewhere in this proxy statement and also includes certain additional information regarding business performance and corporate responsibility, including environmental, social and governance (“ESG”) matters. This overview and summary does not contain all of the information that you should consider, and you should read the Company’s 2022 Annual Report and this entire proxy statement carefully before voting.

Annual Meeting Voting Matters

 

 

The table below summarizes the matters that will be subject to the vote of stockholders at the 2023 Annual Meeting of Stockholders of National Fuel Gas Company:

 

PROPOSALS

  

BOARD VOTE

RECOMMENDATION

  

PAGE NUMBER

(for additional details)

1. Election of Directors

   FOR ALL NOMINEES    Page 14

2. Advisory Approval of Named Executive Officer Compensation

   FOR    Page 71

3. Advisory Vote on the Frequency of Future “Say-on-Pay” Votes

   FOR EVERY YEAR    Page 72

4. Ratification of Appointment of Independent Registered Public Accounting Firm

   FOR    Page 73

 

 

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     National Fuel Gas Company  |  2023 PROXY STATEMENT   1


Proxy Summary

 

Annual Meeting of Stockholders

 

 

 

 

LOGO

DATE AND TIME

March 9, 2023 at

10:00 a.m. Eastern Time

 

   

 

LOGO

WEBSITE

www.virtualshareholdermeeting.com/NFG2023

   

 

LOGO

RECORD DATE

January 9, 2023

Voting Details

Stockholders as of the record date are entitled to one vote for each share of common stock for each director nominee and each other proposal to be voted.

Voting Deadline

Votes must be received by March 8, 2023 (unless attending virtually). For stock that is held in employee benefit plans votes must be received by March 7, 2023.

Attending the Virtual Meeting

National Fuel stockholders as of the record date are entitled to attend the annual meeting virtually. To participate in the meeting, please visit www.virtualshareholdermeeting.com/NFG2023, where you will be prompted to enter the 16-digit control number found on your proxy card or your voting instruction form provided by your broker, bank, or other nominee. Please see “Attending the Meeting” on page 12.

National Fuel Gas Company Fiscal 2022 Summary

 

 

Fiscal 2022 was another strong year financially and operationally for National Fuel, with the Company continuing to execute on its growth plans. In December 2021, the Company’s Pipeline & Storage business completed construction of our FM100 modernization and expansion project – the largest pipeline project in the Company’s history. The FM100 project drove meaningful year-over-year revenue growth in this business, while also providing, in conjunction with a companion third-party pipeline expansion, significant high-value firm transportation capacity for our Exploration & Production business, Seneca Resources Company, LLC (“Seneca”). Over the course of the fiscal year, against the backdrop of stronger commodity prices, Seneca continued to grow its natural gas production, utilizing this incremental pipeline capacity to reach premium markets outside of the Appalachian basin, while also strategically focusing our position exclusively on natural gas in the Appalachian basin after divesting Seneca’s California operations. In addition, we continued to realize the benefits of our integrated Appalachian development model, as Seneca’s record annual production drove a significant increase in Gathering segment revenues. At our Utility, we maintained our focus on safely and reliably providing natural gas service to more than two million residents in western New York and northwestern Pennsylvania, with further investments in system modernization and emissions reductions, and completed the replacement of more than 150 miles of delivery system main distribution lines.

Throughout the fiscal year, the Company remained steadfast in its commitment to our guiding principles of safety, environmental stewardship, community, innovation, satisfaction, and transparency. In line with our focus on continuous improvement, the Company further enhanced our ESG initiatives and disclosures with the publication of our inaugural Climate Report in March, as well as our third annual Corporate Responsibility Report in September. These two reports included additional climate-focused information under the Task Force on Climate-Related Financial Disclosures (“TCFD”) framework, reported on the resilience of our operations to potential transitional and physical risks associated with climate change, including a less than 2-degree Celsius scenario, and disclosed our ongoing progress towards our methane intensity and greenhouse gas (“GHG”) emissions reduction targets.

Looking to fiscal 2023, the Company believes that it is well-positioned to execute on long-term development plans and continue to deliver year-over-year growth. Given the favorable natural gas price outlook and our unique integrated approach to developing our expansive high-quality acreage position, we expect to continue to grow our natural gas production base, with our gathering business growing in lockstep. Combining this with our ongoing investment in modernizing our resilient and reliable transmission, storage, and distribution infrastructure, we believe that National Fuel is poised to generate strong returns in the years to come.

 

 

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2    National Fuel Gas Company  |  2023 PROXY STATEMENT    


                    Proxy Summary

 

2022 Financial and Operating Highlights

 

 

Increased Dividend for 52nd Consecutive Year

In June, the Board of Directors increased the Company’s annual dividend rate by 4.4 percent to $1.90 per share, continuing its long history of consecutive dividend increases and our 120th year of uninterrupted dividend payments.

Meaningfully Growing Appalachian Natural Gas Production and Gathering Throughput

Seneca’s net production increased to 353 billion cubic feet equivalent (“Bcfe”), up 8% from the prior year despite the divestiture of our California operations, driving a corresponding 11% increase in Gathering segment revenue, driven by the strong performance of the Company’s assets within Appalachia.

Increased Proved Reserves

Seneca’s total proved natural gas and crude oil reserves at September 30, 2022 increased to approximately 4.2 trillion cubic feet equivalent, an increase of 8% versus fiscal 2021.

Continued Growth of Interstate Pipeline Business

Our Pipeline & Storage business generated revenue of $377 million, an increase of $33 million, or 10%, from the prior year, driven largely by the Company’s FM100 expansion and modernization project, which was placed into service in December 2021.

Continued Focus on Utility System Modernization

Our Utility segment invested approximately $83 million in modernization and reliability, bringing our 5-year modernization total to over $377 million.

 

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Our Commitment to Corporate Responsibility and Sustainability

 

 

The Company has made significant efforts to ensure our operations have minimal environmental impacts on the communities in which we operate.

Publication of Inaugural Climate Report

In March, National Fuel issued its first Climate Report, which further aligns our disclosures with the TCFD framework, includes significant additional disclosure related to climate-related transitional and physical risks, and describes both our strategy for addressing climate-related risks and opportunities, as well as the resiliency of that strategy under a carbon constrained scenario.

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   3


Proxy Summary

 

Publication of Third Annual Corporate Responsibility Report

In September, National Fuel issued its third Corporate Responsibility Report, which provides an enhanced comprehensive review of ESG performance metrics and highlights the Company’s ongoing initiatives to ensure the long-term sustainability of its integrated energy business.

Methane Emissions Intensity Reduction Targets:

In 2020, National Fuel established significant methane intensity reduction targets at each of its businesses, as well as an absolute GHG emissions reduction target for the consolidated Company, each using a 2020 baseline. The targets are as follows:

 

EXPLORATION & PRODUCTION

 

PIPELINE & STORAGE

 

LOGO

 

40%

reduction in methane

intensity by 2030

 

 

LOGO

 

50%

reduction in methane

intensity by 2030

     

GATHERING

 

UTILITY

 

LOGO

 

30%

reduction in methane

intensity by 2030

 

 

LOGO

 

30%

reduction in methane

intensity by 2030

 
     

CONSOLIDATED COMPANY

   

 

LOGO

 

25%

reduction in total GHG emissions by 2030

   

Received Responsible Natural Gas Certifications for 100% of our Appalachian Production

In August, the Company announced that 100% of our natural gas production achieved an “A” certification grade under the MiQ Standard for Methane Emissions Performance, the highest available certification level. This accreditation is in addition to the certification of 100% of the Company’s production as responsibly sourced under Equitable Origin’s EO100TM Standard for Responsible Energy Development, announced in January 2022.

Entered Agreement for Electric Powered Hydraulic Fracturing Equipment

In September, our E&P segment announced the upcoming deployment of a fully integrated electric fracturing fleet in fiscal 2023, which is expected to decrease emissions, lower fuel costs and reduce our equipment footprint.

Maintained Focus on Water Handling and Water Management

In fiscal 2022, National Fuel recycled 93% of the volume of its total produced fluids in Appalachia. We manage the movement of approximately 2.5 million barrels of fluid every month, more than 75% of which is transported by Company-owned water pipelines directly to Seneca’s Marcellus and Utica development pads. As a result, Seneca was able to avoid an estimated 205,000 truck trips in fiscal 2022, eliminating the associated air emissions and reducing the impact on local roads and public infrastructure.

Participation in the Energy Transition

Over the course of the fiscal year, the Company joined industry-led consortiums to advance hydrogen development, continued efforts to develop, procure, and transport renewable natural gas in our region, and identified pilot geothermal projects to facilitate thermal energy delivery to our utility customers.

 

 

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4    National Fuel Gas Company  |  2023 PROXY STATEMENT    


Proxy Summary

 

Continued Participation in ONE Future Coalition

Each of our principal subsidiaries is a member of the ONE Future coalition, a group of approximately 50 natural gas companies working together to voluntarily reduce methane emissions intensity across the natural gas value chain to 1% (or less) by 2025.

Continued Participation in the EPA’s Methane Challenge

Each of the Company’s major operating segments is a participant in the U.S. Environmental Protection Agency’s Natural Gas STAR Methane Challenge Program, a voluntary program designed to provide a platform to make, track, and communicate commitments to reduce methane emissions.

Environmental and Social Performance Goals

Short-term incentive compensation goals include goals focused on safety and environmental stewardship, as well as goals promoting diversity, equity, and inclusion among the Company’s workforce. In addition, the Compensation Committee established a long-term performance goal focused on reducing GHG emissions and methane emissions intensity in a manner aligned with the Company’s publicly disclosed 2030 targets.

Our Commitment to our Employees

 

 

Our 2,100-plus employees continue to be the most important part of our Company and have made us who we are today.

Focused on Workforce Safety

National Fuel has maintained our long-standing focus on safety, with a 20% reduction in our Occupational Safety and Health Administration (“OSHA”) recordable injury rate over the past 3 years, excluding cases of workplace COVID transmission.

Maintaining our Commitment to Inclusivity and Enhancing Workforce Diversity

National Fuel is committed to hiring and developing qualified individuals who can enhance the diversity of our workforce and reflect the diverse communities we serve. National Fuel continues to actively pursue a number of diversity-focused groups in our communities for employment opportunities across the organization. To further our inclusion initiatives, in January 2022, the Company created four employee resource groups to engage and connect with underrepresented employees. The groups are voluntary, employee led, and are comprised of individuals who join based on common interests, backgrounds, and/or demographic factors, as well as group allies.

 

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Our Commitment to our Communities

 

 

Today, National Fuel’s investments and operations continue to contribute significantly to the economic health and vitality of our local communities.

Investing in critical energy infrastructure

Over the last 10 years, we have invested more than $7 billion in energy development within our operating region.

Large local employer

We employ over 2,100 people, paying over $241 million in annual compensation and $65 million in annual retiree pension benefits.

Provider of local tax revenues

Over the past five years, we have paid $301 million in state and local property taxes, providing revenues that support our communities. Additionally, over the past five years Seneca has paid $58 million in Pennsylvania impact fees which support the maintenance and repair of local infrastructure and investment in new community facilities.

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   5


Proxy Summary

 

Supporter of local vendors and contractors

We support the employment of thousands more in our local communities by using the products and services of local vendors, contractors and labor. Over the last five years, we have paid $572 million and $263 million to local vendors and contractors in New York and Pennsylvania, respectively.

Fair landowner compensation

We provide fair and reasonable compensation to local landowners for acreage leases, mineral rights and pipeline rights of way and easements. Over the last five years, Seneca has paid local Pennsylvania landowners more than $349 million in royalties on natural gas production.

Charitable giving

Each year, hundreds of National Fuel employees donate financially to local and national charitable organizations. The National Fuel Gas Company Foundation matches these financial donations dollar for dollar, up to $750 per employee, doubling the impact of each employee’s contribution. Since 2005, our employees and the foundation have given more than $23 million to charitable organizations. National Fuel employees also donate their time to charitable organizations, volunteering nearly 2,800 hours over the past three years.

 

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Our Diverse, Experienced, and Independent Board of Directors

 

 

National Fuel’s commitment to diversity also extends to our Board of Directors, and our Board has continued its commitment to having qualified, diverse directors whose expertise and personal characteristics align with the Company’s long-term business strategy.

Focused on Board Diversity

Our Nominating/Corporate Governance Committee, chaired by Rebecca Ranich, makes recommendations to the full Board on nominees for director positions, and has invited qualified gender and racially diverse candidates to stand for election to the Board, with successful results. Three of the Company’s last six directors to join the Board have increased Board diversity. While currently at a full complement of directors, when vacancies arise in the future, the Company will continue to focus on diversity.

Inclusion of the “Rooney Rule”

The Company’s Corporate Governance Guidelines incorporate the “Rooney Rule.” As a result, in identifying independent director candidates for nomination to the Board, the Nominating/Corporate Governance Committee is committed to including in any initial candidate pool qualified racially, ethnically and/or gender diverse candidates.

 

 

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6    National Fuel Gas Company  |  2023 PROXY STATEMENT    


Proxy Summary

 

Diverse and Extensive Experience

The Company’s Board of Directors consists of individuals with extensive and diverse leadership experience within the energy industry, as well as complementary industries, including manufacturing and consulting. Our eleven Board members have experience in the areas depicted below, among others:

 

 

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Strong Corporate Governance Practices

Our Board has implemented strong governance practices, including maintaining a significant complement of independent directors (currently ten out of eleven directors), designating a Lead Independent Director, holding regular meetings of the non-management and/or independent directors, separating the roles of Chairman of the Board and Chief Executive Officer, and providing a process for stockholders meeting certain requirements to have nominees included in the Company’s proxy materials.

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   7


Proxy Summary

 

Proposal 1 — Election of Directors

 

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES FOR THE BOARD OF DIRECTORS.

Nominees for one-year term:

David C. Carroll — age 66

Principal Occupation: Former President and Chief Executive Officer of GTI Energy

Expertise: Leadership, Industry, Energy Transition/Technology

Steven C. Finch — age 64

Principal Occupation: President of Manufacturing and Community Engagement, Viridi Parente, Inc.

Expertise: Leadership, Manufacturing, Capital and Labor Management, Energy Transition/Sustainability, Regional

Joseph N. Jaggers — age 69

Principal Occupation: Former President, Chief Executive Officer and Chairman of Jagged Peak Energy Inc.

Expertise: Leadership, Exploration and Production

Jeffrey W. Shaw — age 64

Principal Occupation: Former President and Chief Executive Officer, Southwest Gas Corporation

Expertise: Leadership, Industry, SEC Financial Expert

Thomas E. Skains — age 66

Principal Occupation: Former President and Chief Executive Officer, Piedmont Natural Gas Company

Expertise: Leadership, Industry, Regulatory

David F. Smith — age 69

Principal Occupation: Chairman of the Board and Former Chief Executive Officer of National Fuel Gas Company

Expertise: Leadership, Industry

Ronald J. Tanski — age 70

Principal Occupation: Former President and Chief Executive Officer, National Fuel Gas Company

Expertise: Leadership, Industry, Financial

For complete information on this proposal, please refer to page 14 and following.

Proposal 2 — Advisory Approval of Named Executive Officer Compensation

 

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE COMPANY’S NAMED EXECUTIVE OFFICER COMPENSATION.

This proposal allows stockholders to take part in a non-binding, advisory vote to approve the compensation of the Company’s named executive officers (the “say-on-pay” vote). The summary below and the discussion in the Compensation Discussion and Analysis provide information about the Company’s compensation programs. Unless otherwise indicated, we intend capitalized and abbreviated terms to have the same meaning in this section as in the Compensation Discussion and Analysis.

Objectives of the Compensation Committee

When setting compensation for the Company’s executives, the Compensation Committee’s primary goal is to provide balanced incentives for creating value for stockholders in both the near-term and long-term. In order for this to occur, the Compensation Committee awards a combination of cash and equity components that are designed to:

 

  Ø

Focus management efforts on both near-term and long-term drivers of stockholder value, including financial, safety, environmental, diversity, and customer service metrics;

 

  Ø

Tie executive compensation to long-term total shareholder return (“TSR”), long-term total return on capital (“ROC”), and long-term sustainability, by linking a significant portion of named executive officers’ potential compensation to

 

 

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8    National Fuel Gas Company  |  2023 PROXY STATEMENT    


Proxy Summary

 

  the future price of the Company’s common stock (and the payment of dividends) and the future returns on capital achieved by the Company, both relative to peers, and to future reductions in GHG emissions and methane intensity levels; and

 

  Ø

Attract, motivate, reward and retain management talent in the highly competitive energy industry in order to achieve the objectives that contribute to the overall success of the Company.

Elements of Compensation

The Compensation Committee has developed the Company’s compensation policies and procedures to align the interests of executives with those of the Company’s stockholders and, where appropriate, other stakeholders, including customers. The main elements of the executive compensation program are as follows:

 

BASE SALARY (CASH)

Provides a predictable base compensation for day-to-day

job performance;

   

SHORT-TERM

PERFORMANCE

INCENTIVES (CASH)

Utilizes metrics specific to each executive in order to motivate

them to deliver near-term

financial, operational, and

ESG results, generally over a period

that is no longer than two years; and

   

LONG-TERM PERFORMANCE

INCENTIVES (EQUITY)

Focuses the attention of

executives on delivering long-

term stockholder value and on maintaining a significant personal investment in the Company

through stock ownership.

Executive Compensation Aligned with Stockholders’ Interests

The Company recognizes and rewards executives through compensation arrangements that directly link executive pay to the Company’s performance, and we seek to ensure a strong alignment of interests with our stockholders by including a significant amount of equity in the overall mix of pay. As shown in the chart below, which includes the fiscal 2022 target compensation mix for the CEO and an average for the other four named executive officers, 83% of the target compensation of David Bauer, the Company’s CEO, was at-risk compensation, with 63% tied to equity (in the form of performance shares and restricted stock units), and 20% tied to cash-based incentive awards subject to short-term performance goals.

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   9


Proxy Summary

 

2022 Say-on-Pay Vote and Stockholder Engagement

The 2022 say-on-pay advisory vote yielded a result of over 97% of votes cast in support of the compensation of the Company’s named executive officers. The Board generally considered this outcome another indicator of stockholder support for the overall philosophy and structure of the Company’s executive compensation policies and decisions. Given the high approval percentage of the vote, the Compensation Committee did not make any significant changes to the executive compensation program that were based specifically on the results of the 2022 say-on-pay advisory vote.

From time to time members of Company management have held meetings with some of the Company’s largest stockholders to obtain feedback on matters of interest to them. The Board has directed management to continue to engage as appropriate with interested stockholders, and to inform it of any requests for meetings with members of the Board. The Board and management believe that engagement with stockholders facilitates important dialogue from which we gather various important viewpoints.

The Board of Directors believes that the Company’s compensation policies and practices, as developed following engagement with stockholders, including with respect to ESG factors, encourage a culture of pay for performance and are strongly aligned with the interests of the Company’s stockholders. Accordingly, the Board recommends a vote FOR the advisory approval of named executive officer compensation.

For complete information on this proposal, please refer to the Compensation Discussion and Analysis, accompanying compensation tables and related narrative discussion, starting at page 40, and to the proposal at page 71.

Proposal 3 — Advisory Vote on the Frequency of Future “Say-on-Pay” Votes

 

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EVERY YEAR.

This proposal allows stockholders to take part in a non-binding, advisory vote on the frequency of future advisory votes to approve named executive officer compensation. Stockholders may choose whether such a “say-on-pay” vote should be on the agenda for the Annual Meeting of Stockholders every year, every two years, or every three years, or they may abstain from voting. We recommend that stockholders choose to be presented with the say-on-pay vote every year.

For complete information on this proposal, please refer to page 72.

Proposal 4 — Ratification of Appointment of Independent Registered Public Accounting Firm

 

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THIS APPOINTMENT.

As a matter of good governance, it is important that stockholders vote to ratify the selection of the Company’s independent auditor. The Company has selected PricewaterhouseCoopers LLP as the Company’s independent auditor for fiscal 2023.

For complete information on this proposal, please refer to page 73.

 

 

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10    National Fuel Gas Company  |  2023 PROXY STATEMENT    


  General Information     LOGO  

 

NATIONAL FUEL GAS COMPANY

6363 MAIN STREET

WILLIAMSVILLE, NEW YORK 14221

PROXY STATEMENT

Introduction

 

 

This proxy statement is furnished to the holders of National Fuel Gas Company (“National Fuel” or the “Company”) common stock (the “Common Stock”) in connection with the solicitation of proxies on behalf of the Board of Directors of the Company (the “Board of Directors” or the “Board”) for use at the Annual Meeting of Stockholders (the “Annual Meeting”) to be held on March 9, 2023, or any adjournment or postponement thereof. This proxy statement and the accompanying proxy/voting instruction card are first being mailed to stockholders or made available on the Internet on or about January 20, 2023.

Solicitation of Proxies

 

 

All costs of soliciting proxies will be borne by the Company. MacKenzie Partners, Inc., 1407 Broadway, 27th Floor, New York, NY 10018, has been retained to assist in the solicitation of proxies by mail, telephone, and electronic communication and will be compensated in the estimated amount of $18,500 plus reasonable out-of-pocket expenses. A number of regular employees of the Company and its subsidiaries, and one or more retirees of the Company and its subsidiaries, may solicit proxies in person, by telephone or by other methods. Costs, if any, associated with solicitation by retirees are expected to be de minimis.

Record Date, Outstanding Voting Securities and Voting Rights

 

 

Only stockholders of record at the close of business on January 9, 2023, will be eligible to vote at the Annual Meeting or any adjournment or postponement thereof. As of that date, 91,793,906 shares of Common Stock were issued and outstanding. The holders of 45,896,954 shares will constitute a quorum at the meeting.

Each share of Common Stock entitles the holder thereof to one vote with respect to each matter that is subject to a vote at the Annual Meeting. Shares may not be voted unless the owner is present or represented by proxy. In order to grant a proxy, a stockholder can use the telephone, QR Code or Internet voting procedures or return a signed proxy card. All shares that are represented by effective proxies received by the Company in time to be voted shall be voted by the authorized Proxy at the Annual Meeting or any adjournment or postponement thereof.

If you hold your shares through a broker, bank or other nominee (in “street name”), you will receive instructions from them on how to vote your shares. If you do not give the broker specific instructions on how you would like your shares to be voted, your broker may only vote your shares on “routine” matters, such as Proposal 4 — Ratification of Appointment of Independent Registered Public Accounting Firm. However, your broker is prohibited from voting uninstructed shares on “non-routine” matters such as: Proposal 1 — Election of Directors; Proposal 2 — Advisory Approval of Named Executive Officer Compensation; and Proposal 3 — Advisory Vote on Frequency of Future “Say-on-Pay” Votes. The absence of voting instruction results in what is called a “broker non-vote” on those proposals and will not be counted. Your vote is important. PLEASE MAKE YOUR VOICE HEARD BY VOTING YOUR SHARES ON THESE IMPORTANT MATTERS.

Where stockholders direct how their votes shall be cast, shares will be voted in accordance with such directions. Proxies submitted with abstentions and broker non-votes will be included in determining whether or not a quorum is present. Abstentions and broker non-votes will not be counted in tabulating the number of votes cast on proposals submitted to stockholders and therefore will not have the effect of a vote cast for or against any proposal.

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   11


General Information

 

The proxy also confers discretionary authority to vote on all matters that may properly come before the Annual Meeting, or any adjournment or postponement thereof, respecting: (i) matters of which the Company did not have timely notice but that may be presented at the meeting; (ii) approval of the minutes of the prior annual meeting of stockholders; (iii) the election of any person as a director if a nominee is unable to serve or for good cause will not serve; (iv) any stockholder proposal omitted from this proxy statement pursuant to Rule 14a-8 or 14a-9 of the Securities and Exchange Commission’s (the “SEC”) proxy rules; and (v) all matters incident to the conduct of the meeting.

With respect to Proposal 1, the affirmative vote of a plurality of the votes cast by the holders of shares of Common Stock entitled to vote is required to elect each of the nominees for director. Approval of each of Proposals 2 and 4 requires a majority of the votes cast by the holders of shares of Common Stock entitled to vote on the proposal. With respect to

Proposal 3, we will consider the frequency of the advisory vote (every year, every two years, or every three years) receiving the greatest number of votes cast as the frequency recommended by our stockholders.

Attending the Meeting

 

 

The Company is holding the Annual Meeting in a virtual meeting format only on March 9, 2023 at 10:00 a.m. Eastern Time. Stockholders as of the close of business on January 9, 2023, the record date, are entitled to participate in the Annual Meeting, including to vote their shares and ask questions.

To participate in the virtual Annual Meeting, please visit www.virtualshareholdermeeting.com/NFG2023, where you will be prompted to enter the 16-digit control number found on your proxy card or your voting instruction form provided by your broker, bank, or other nominee. If you receive your Annual Meeting materials electronically and wish to participate in the virtual meeting, please follow the instructions provided online for attendance. Once you have joined the virtual meeting, you may vote your shares electronically during the meeting by following the instructions available on the meeting website.

Questions for the Meeting

 

 

Stockholders as of the record date who participate in the virtual Annual Meeting using their control number (as described above) will have an opportunity to submit questions during the meeting. The Company will try to answer as many stockholder-submitted questions that comply with the posted rules of conduct as time permits. If the Company receives substantially similar questions, the Company will group such questions together and provide a single response to avoid repetition.

Additional Information about the Meeting

 

 

Additional information regarding the rules of conduct and procedures for participating in the virtual Annual Meeting will be posted prior to and during the meeting at www.virtualshareholdermeeting.com/NFG2023.

Revoking a Proxy

 

 

Any stockholder giving a proxy may revoke it at any time prior to the voting thereof by mailing a revocation or a subsequent proxy to National Fuel Gas Company, Attn: Sarah J. Mugel, Secretary of the Company, 6363 Main Street, Williamsville, NY 14221, by voting a subsequent proxy by phone, QR Code or by Internet, or by filing written revocation at the meeting with Ms. Mugel, Secretary of the meeting, or by casting a ballot at the meeting. If you are an employee stockholder or retired employee stockholder, you may revoke voting instructions given to the Trustee by following the instructions under “Employee and Retiree Stockholders” in this proxy statement.

Employee and Retiree Stockholders

 

 

If you are a participant in the Company’s Employee Stock Ownership Plan or any of the Company’s Tax-Deferred Savings Plans (the “Plans”), the proxy card will also serve as a voting instruction form to instruct Vanguard Fiduciary Trust Company (the “Trustee”) for the Plans, as to how to vote your shares. All shares of Common Stock for which the Trustee has not received timely directions shall be voted by the Trustee in the same proportion as the shares of Common Stock for which the Trustee received timely directions, except in the case where to do so would be inconsistent with the provisions of Title I of

 

 

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12    National Fuel Gas Company  |  2023 PROXY  STATEMENT    


General Information

 

the Employee Retirement Income Security Act (“ERISA”). If the voting instruction form is returned signed but without directions marked for one or more items, regarding the unmarked items you are instructing the Trustee and the Proxies to vote FOR all of the director nominees named in this proxy statement, FOR Proposal 2, FOR EVERY YEAR on Proposal 3, and FOR Proposal 4. Participants in the Plan(s) may also provide those voting instructions by telephone, QR Code or the Internet. Those instructions may be revoked by re-voting or by written notice to the Trustee on or before March 7, 2023 in care of the following address:

To: Vanguard Fiduciary Trust Co.

c/o National Fuel Gas Company

Attn: Legal Department

6363 Main Street

Williamsville, NY 14221

Multiple Copies of Proxy Statement

 

 

The Company has adopted a procedure approved by the SEC called “householding.” Under this procedure, some stockholders of record who have the same address and last name may receive only one copy of the proxy statement and the Company’s annual report. However, if any stockholder wishes to revoke consent for householding and receive a separate annual report or proxy statement for the upcoming Annual Meeting or in the future, he or she may telephone, toll-free, 1-866-540-7095. The stockholder will need their 16-digit control number and should simply follow the prompts. Stockholders may also write Broadridge Householding Department, 51 Mercedes Way, Edgewood, NY 11717. Stockholders sharing an address who wish to receive a single set of reports may do so by contacting their banks or brokers if they are the beneficial holders, or by contacting Broadridge at the address provided above if they are the record holders. This procedure will reduce our printing costs and postage fees and reduce the quantity of paper arriving at your address.

Stockholders who participate in householding will continue to receive separate proxy cards. Householding will not affect your dividend check mailings.

For additional information on householding, please see “IMPORTANT NOTICE REGARDING DELIVERY OF STOCKHOLDER DOCUMENTS” in this proxy statement.

Other Matters

 

 

The Board of Directors does not know of any other matter that will be presented for consideration at the Annual Meeting. If any other matter does properly come before the Annual Meeting, the Proxies will vote in their discretion on such matter.

Annual Report

 

 

Mailed herewith or made available on the Internet is a copy of the Company’s Annual Report for the fiscal year ended September 30, 2022 (“fiscal 2022”). The Company will furnish any exhibit to its Form 10-K upon request to the Secretary at the Company’s principal office, and upon payment of $5 per exhibit.

 

 

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     National Fuel Gas Company  |  2023 PROXY STATEMENT   13


 

Proposal 1.

Election of Directors

    LOGO  

 

Your Company’s Board of Directors is a multi-disciplined cohesive and engaged group whose experiences reflect the integrated nature of the Company’s business. The following matrix summarizes the key skills, attributes and experiences of each of our directors that are most relevant to their board service. The matrix is not intended to list each and every skill, experience, knowledge or other attribute of our directors. The diversity and breadth of knowledge, skill, experience, and attributes of our directors, collectively, lends itself to a highly collaborative and effective Board. To that end, we believe that each of the Company’s directors makes unique, valuable and substantial contributions to the Board and the leadership of our Company.

A biography for each director, including detailed qualifications, is included beginning on page 16.

 

                       
          LOGO             LOGO             LOGO             LOGO             LOGO             LOGO             LOGO             LOGO             LOGO             LOGO             LOGO     

Independent

 

🌑

     

🌑

 

🌑

 

🌑

 

🌑

 

🌑

 

🌑

 

🌑

 

🌑

 

🌑

Senior Leadership

 

🌑

 

🌑

 

🌑

 

🌑

 

🌑

 

🌑

 

🌑

 

🌑

 

🌑

 

🌑

 

🌑

Energy Industry

 

🌑

 

🌑

 

🌑

 

🌑

     

🌑

 

🌑

 

🌑

 

🌑

 

🌑

 

🌑

Other Public Company Board

 

🌑

     

🌑

     

🌑

 

🌑

 

🌑

 

🌑

 

🌑

     

🌑

Operational/Safety

 

🌑

     

🌑

 

🌑

 

🌑

 

🌑

 

🌑

 

🌑

 

🌑

 

🌑

 

🌑

Legal/Regulatory/Government Relations

 

🌑

 

🌑

     

🌑

             

🌑

 

🌑

 

🌑

 

🌑

Risk Management

 

🌑

 

🌑

 

🌑

         

🌑

 

🌑

 

🌑

 

🌑

 

🌑

 

🌑

Consumer/Customer Relations

 

🌑

 

🌑

         

🌑

         

🌑

 

🌑

 

🌑

 

🌑

Financial/Accounting

 

🌑

 

🌑

 

🌑

                 

🌑

         

🌑

Environmental/Sustainability/Energy Transition

 

🌑

         

🌑

 

🌑

     

🌑

               

Age(1)

 

61

 

53

 

67

 

66

 

64

 

69

 

64

 

64

 

66

 

69

 

70

Tenure(1)

 

4

 

3

 

3

 

11

 

5

 

8

 

7

 

9

 

6

 

16

 

9

Gender Diversity

         

🌑

             

🌑

               

Racial/Ethnic Diversity

                 

🌑

                       

 

(1)

As of March 9, 2023 (Annual Meeting).

Your Board of Directors has continued its efforts to attract qualified, diverse candidates whose expertise and personal characteristics align with the Company’s long-term business strategy. Our Nominating/Corporate Governance Committee, which makes recommendations to the full Board on nominees for director positions, has invited qualified gender and racially diverse candidates to stand for election to the Board, with successful results. Three of the Company’s last six directors to join the Board have increased Board diversity.

 

 

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14    National Fuel Gas Company  |  2023 PROXY STATEMENT    


Proposal 1. Election of Directors

 

Nominees for Election as Directors at the 2023 Annual Meeting of Stockholders

 

 

At the Annual Meeting, seven individuals will be elected to serve as directors for one-year terms expiring in 2024. The nominees for the seven directorships are: David C. Carroll, Steven C. Finch, Joseph N. Jaggers, Jeffrey W. Shaw, Thomas E. Skains, David F. Smith and Ronald J. Tanski. The nomination process is discussed under “Process for Nominating Directors” below.

The Company’s Restated Certificate of Incorporation (the “Certificate”) was amended after the 2021 Annual Meeting of Stockholders to provide for the declassification of the Board of Directors. Under the Certificate as amended, the Company is phasing out the three-year staggered terms of our directors and transitioning to the annual election of directors, a process that began with last year’s annual meeting. By the 2024 Annual Meeting, all directors will stand for election annually. Directors of a particular class hold office until the annual meeting of the year in which the term of the class expires or, in the case of directors elected by the Board to fill vacancies or newly created directorships, until the next annual meeting following their election. In addition, all directors hold office until their respective successors are elected and qualify, subject to prior death, resignation, retirement, disqualification or removal from office. The Company’s Certificate also provides that if the number of directors is changed by resolution of the Board, any increase or decrease shall be apportioned by the Board among the classes, if applicable, so as to maintain the number of directors in each class as nearly equal as possible, provided that a decrease in the number of directors may not shorten the term of any incumbent director.

It is intended that the Proxies will vote for the election of Messrs. Carroll, Finch, Jaggers, Shaw, Skains, Smith and Tanski as directors, unless they are otherwise directed by the stockholders. Although the Board has no reason to believe that any of the nominees will be unavailable for election or service, stockholders’ proxies confer discretionary authority upon the Proxies to vote for the election of another nominee for director in the event any nominee is unable to serve, or for good cause will not serve. Each of the nominees has consented to being named in this proxy statement and to serve if elected.

The affirmative vote of a plurality of the votes cast by the holders of shares of Common Stock entitled to vote is required to elect each of the nominees for director.

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   15


Proposal 1. Election of Directors

 

LOGO   

 

The Board of Directors recommends that you vote FOR
the election of each of the seven nominees named below.

David C. Carroll

 

 

LOGO

AGE:* 66

 

DIRECTOR SINCE:

2012

 

BOARD COMMITTEES:

•  Executive

•  Nominating/ Corporate Governance

 

FORMER COMPANY

DIRECTORSHIPS

Versa Power Systems, Inc.

(wholly owned subsidiary of

FuelCell Energy, Inc.)

 

EDUCATION:

•  University of Pittsburgh,
B.S. in Chemical
Engineering

•  Lehigh University, MBA

•  Stanford University
Graduate School of
Business, Stanford
Executive Program

 

* All ages are as of the Annual Meeting date.

 

   

Professional Experience:

Mr. Carroll is the former President and CEO of GTI Energy (“GTI”), a leading research and training organization focused on developing, scaling and deploying energy transition solutions. He led GTI from 2006 until 2022, spearheading a significant expansion of its business, and previously served as Vice President of Business Development. Prior to joining GTI, he held various technical and management positions of increasing responsibility with Praxair, Inc., Chicago Bridge & Iron, and Air Products and Chemicals, Inc. All of these companies are industrial gas producers and manufacturers. He is a trustee of the American Gas Foundation, a member of the Society of Gas Lighting, and a former member of the Governing Board of Stanford University’s Natural Gas Initiative. Mr. Carroll serves on the Board of Strategic Advisors of Energy Capital Ventures, an early-stage technology venture fund focusing on the ESG imperatives and the digital transformation of the natural gas industry. Mr. Carroll also serves as a technical advisor to Mountain View Clean Energy, a start-up company whose principal purpose is to advance low carbon hydrogen and ammonia production worldwide. He chaired the steering committee for the 17th International Conference and Exhibition on Liquefied Natural Gas in Houston (2013). In 2015, Mr. Carroll was named President of the International Gas Union, a term that concluded in 2018 as the United States held the 2018 World Gas Conference in Washington, D.C.

 

Qualifications:

Mr. Carroll is a highly respected leader in the global energy sector, having directed the development of strategies, technologies, and innovations necessary to drive transformation of the global energy system. His multi-faceted knowledge of the natural gas industry brings economic, technological and leadership experience to the Board. Mr. Carroll has expertise on unconventional gas production, transmission and distribution pipeline integrity and end use technologies, as well as insight into market and industry developments and conditions, including developments related to the energy transition toward low-carbon fuels. This unique combination of skills contributes to the Board’s oversight of our integrated natural gas operations, including the deployment of technology to enhance safety, reliability, and emissions reductions, and provides valuable insight into risks and opportunities for the continued growth of the Company’s various business segments, as well as insight into global energy trends and emerging industries. Mr. Carroll is involved in both the domestic and international natural gas business communities, providing the Board with a broad perspective on emerging technical, regulatory and economic issues, including climate initiatives and the positioning of natural gas among future global energy supplies.

 

 

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16    National Fuel Gas Company  |  2023 PROXY STATEMENT    


Proposal 1. Election of Directors

 

Steven C. Finch

 

 

LOGO

AGE: 64

 

DIRECTOR SINCE:

2018

 

BOARD COMMITTEES:

•  Audit

•  Nominating/ Corporate Governance

 

PUBLIC COMPANY DIRECTORSHIPS

•  Allied Motion Technologies, Inc.

 

EDUCATION:

Kettering University
(formerly General
Motors Institute), B.S. in
Electrical Engineering

 

   

Professional Experience:

Mr. Finch is President, Manufacturing and Director of Community Engagement at Viridi Parente, Inc., a developer and manufacturer of environmentally conscious energy usage and storage products, including battery powered energy delivery systems for heavy equipment, and energy storage and power management systems. He is the former Plant Manager of the General Motors (“GM”) Tonawanda Engine Plant, one of Western New York’s largest manufacturers with approximately 1,600 employees. Mr. Finch, a Western New York native, began his 41-year career with GM in 1976 as a General Motors Institute co-op student at the Chevrolet Gear and Axle Plant in Buffalo, N.Y. Over the course of 30 years, he held several assignments with increasing responsibility at various GM facilities outside Buffalo before becoming Tonawanda Engine Plant Manager in 2007. Mr. Finch is a member of the Board of Directors of Allied Motion Technologies Inc., a designer and manufacturer of precision and specialty controlled motion components and systems. He is a member of the Board of Directors of the Community Foundation for Greater Buffalo, serving on its Racial Equity Roundtable initiative, and past Chairman of the Board of Directors of the Buffalo Urban League. He previously served as Chairman of the Board of the United Way of Buffalo and Erie County, and as a board member and Senior Vice President of the Automobile Association of America Western and Central New York.

 

Qualifications:

With a career spanning more than four decades, Mr. Finch has a proven track record of leadership during a period of significant evolution for the automotive industry. Mr. Finch helped navigate the GM workforce through economic downturn and bankruptcy. After a reorganization, he successfully secured the addition of three new engine product lines, ultimately overseeing investments at the plant totaling more than $3 billion during his 10-year tenure. Through his extensive career, including his current focus at Viridi Parente on the future of mobile and in-place energy usage, Mr. Finch has developed expansive and diverse experience in manufacturing and customer relations, as well as in capital and labor management. Mr. Finch’s success in managing highly technical operations and delivering quality products in a safe, environmentally responsible and cost-effective manner has direct application to National Fuel’s work in the energy industry, including the Company’s focus on environmental stewardship and emissions reductions, employee safety and commitment to the provision of outstanding service to residential customers. Mr. Finch’s experience in senior level oversight during periods of significant industry challenge and disruption provides an important perspective on organizational transformation and the management of regulatory and economic change. Mr. Finch’s extensive management roles provide experience on attracting and retaining talent within the Company’s region and provide guidance to the Board on improving our diverse and inclusive culture. Furthermore, Mr. Finch’s strong community presence positions him to provide guidance and insight to the Board on local and regional matters, and provides an important connection between the Company and the communities it serves.

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   17


Proposal 1. Election of Directors

 

Joseph N. Jaggers

 

 

LOGO

AGE: 69

 

DIRECTOR SINCE:

2015

 

BOARD COMMITTEES:

•  Audit

•  Compensation, Chair
Executive

 

FORMER PUBLIC

COMPANY

DIRECTORSHIPS

•  QEP Resources, Inc.

•  Jagged Peak Energy Inc.

•  Bill Barrett Corporation

•  Mission Resources
Corporation

 

EDUCATION:

United States Military
Academy at
West Point, B.S.

 

   

Professional Experience:

Mr. Jaggers is the founder and former President, Chief Executive Officer and Chairman of Jagged Peak Energy Inc., formerly an independent oil and natural gas exploration and production company. Before forming Jagged Peak Energy in 2013, Mr. Jaggers served as President and Chief Executive Officer and as director of Ute Energy, LLC, from 2010 until its sale in 2012. From 2006 to 2010, he served as director, President and Chief Operating Officer of Bill Barrett Corporation. From 2001 to 2006, he was Vice President, Exploration & Production, for Williams Companies. Previously, he served as President and Chief Operating Officer of Barrett Resources, from 2000 until its sale to Williams in 2001. From 1981 through 2000, he worked for BP Amoco in various domestic and international assignments of increasing responsibility culminating in executive oversight for the Northern North Sea, one of BP’s largest producing assets at the time. Mr. Jaggers is past President of the Colorado Oil and Gas Association, past Executive Director of the Independent Producers Association of the Mountain State and an inductee into the Rocky Mountain Oil and Gas Hall of Fame.

 

Qualifications:

With more than 40 years of experience in the oil and gas industry, including a long record of creating value through efficiently achieving production and reserve growth, Mr. Jaggers has familiarity with energy market cycles and dynamics and contributes significantly to the Board’s oversight of our exploration and production business. Mr. Jaggers’ extensive operational experience in diverse producing basins provides the Board with substantial insight in assessing various risks that may affect oil and gas operations at the Company. With experience as a senior leader in a number of large, publicly traded exploration and production companies, Mr. Jaggers adds significant operational depth to the Board as well as an understanding of effective and efficient resource development. These attributes assist the Board in its oversight of the ongoing development of the Company’s various natural gas assets and evaluation of the continued advancement of the Company’s Appalachian drilling program.

 

 

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18    National Fuel Gas Company  |  2023 PROXY STATEMENT    


Proposal 1. Election of Directors

 

Jeffrey W. Shaw

 

 

LOGO

AGE: 64

 

DIRECTOR SINCE:

2014

 

BOARD COMMITTEES:

•  Audit, Chair

•  Nominating/ Corporate Governance

 

FORMER PUBLIC

COMPANY

DIRECTORSHIPS

Southwest Gas Corporation

 

EDUCATION:

•  University of Utah, B.S.
in Accounting

•  Certified Public
Accountant

 

   

Professional Experience:

Mr. Shaw retired as Chief Executive Officer of Southwest Gas Corporation (“Southwest”) in 2015. He was named Chief Executive Officer and a director of Southwest in 2004 and also served as President of Southwest at various times from 2003 to 2014. Previously Mr. Shaw, a CPA, held various positions at Southwest, including Director of Internal Audit, Controller and Chief Accounting Officer, Vice President/Controller and Chief Accounting Officer, Vice President and Treasurer, Senior Vice President/Finance and Treasurer, and Senior Vice President/Gas Resources and Pricing. During his time at Southwest, Mr. Shaw was involved in the design of the company’s enterprise risk management process, as well as the implementation of various safety policies and programs. He worked for Arthur Anderson & Co. in its Dallas and Las Vegas offices in the audit division prior to joining Southwest in 1988. He is a member of the American Institute of Certified Public Accountants, the Nevada Society of CPAs and the Leadership Las Vegas Alumni Association. Mr. Shaw is a member of the Advisory Board of the University of Utah David Eccles School of Business and is a member and past Chairman of the Broadcast Leadership Council at Brigham Young University. He is a past director of the American Gas Association, past Chairman and director of the Western Energy Institute and past President and trustee of the Las Vegas Area Council of the Boy Scouts of America.

 

Qualifications:

Mr. Shaw’s extensive executive management and financial experience at an energy company with regulated natural gas businesses similar to those of the Company provides the Board with valuable perspective and understanding of state regulatory activities. In particular, Mr. Shaw’s accounting and finance background, and the significant roles he has held in these areas over his career, qualify him as an “Audit Committee Financial Expert” under the Securities and Exchange Commission’s rules and enable him to play a key role in performing the Board’s audit and risk oversight functions. In addition, Mr. Shaw’s background and financial expertise contribute to the Board’s understanding and guidance on financial matters. Mr. Shaw is the Company’s Lead Independent Director.

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   19


Proposal 1. Election of Directors

 

Thomas E. Skains

 

 

LOGO

AGE: 66

 

DIRECTOR SINCE:

2016

 

BOARD COMMITTEES:

•  Compensation

•  Nominating/ Corporate Governance

 

PUBLIC COMPANY

DIRECTORSHIPS

•  Duke Energy Corporation

•  Truist Financial
Corporation

 

FORMER PUBLIC

COMPANY

DIRECTORSHIPS

Piedmont Natural Gas
Company, Inc.

 

EDUCATION:

•  Sam Houston State
University, B.B.A

•  University of Houston
Law School, J.D.

 

   

Professional Experience:

Mr. Skains is the former Chairman of the Board, Chief Executive Officer and President of Piedmont Natural Gas Company, Inc. (“Piedmont”), serving from 2002 as President and from 2003 as Chairman and CEO, until his retirement in 2016. Previously, Mr. Skains held various positions at Piedmont, including Chief Operating Officer and Senior Vice President — Marketing and Supply Services. Mr. Skains held positions of increasing responsibility with Transcontinental Gas Pipe Line Corporation (“Transco”), which he joined in 1981 as an attorney and served as corporate and senior attorney before being named Vice President in 1986 and Senior Vice President — Transportation and Customer Services in 1989. In 2016, Mr. Skains became a director at Duke Energy Corporation, where he has chaired its Regulatory Policy Committee and served on its Finance and Risk Management and Nuclear Oversight Committees, and where he currently serves on its Compensation and People Development and Corporate Governance Committees. Mr. Skains has served as a director of Truist Financial Corporation (formerly BB&T Corporation) since 2009, where he serves as Lead Independent Director and as a member of each of the Executive, Risk, and Nominating and Governance Committees, and where he previously chaired each of those committees. Mr. Skains has also served as a director at Truist Financial Corporation’s subsidiary, Truist Bank (formerly Branch Banking and Trust Company), since 2013, where he serves as a member of the Executive Committee and as a member and former chair of the Risk Committee. Mr. Skains previously served on the Charlotte Chamber of Commerce Board of Directors and was Chairman in 2015. He also served on the boards of several industry and community organizations, including GTI Energy, the American Gas Association (as Chairman in 2009), the Southern Gas Association (as Chairman in 2006), and the American Gas Foundation, a not-for-profit energy research group.

 

Qualifications:

Mr. Skains’ strong leadership and strategic management skills provide the Board with a valuable perspective on the complexities, challenges and opportunities facing the natural gas industry. Through his experiences at Piedmont and Transco, as well as his ongoing directorship at Duke Energy, Mr. Skains contributes significant knowledge of the legal and regulatory issues encountered by project sponsors in developing energy infrastructure, including natural gas pipeline projects. Mr. Skains brings to the Board extensive knowledge of the natural gas industry, and he is able to use his legal training and experience as a corporate energy attorney to provide valuable insight on legal and regulatory compliance matters, as well as risk management and corporate governance matters.

 

 

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20    National Fuel Gas Company  |  2023 PROXY STATEMENT    


Proposal 1. Election of Directors

 

David F. Smith

 

 

LOGO

AGE: 69

 

DIRECTOR SINCE:

2007

 

BOARD COMMITTEES:

•  Executive, Chair

•  Financing, Chair

 

COMPANY DIRECTORSHIPS

•  GTI Energy

 

EDUCATION:

•  State University of
New York at Fredonia,
B.A. in Political Science

•  State University of
New York at Buffalo
School of Law, J.D.

 

   

Professional Experience:

Mr. Smith has been Chairman of the Board of the Company since 2010 (from 2013 to 2014 he served as Executive Chairman of the Board). He also served as Chief Executive Officer of the Company from 2008 to 2013; as President of the Company from 2006 to 2010; and as Chief Operating Officer of the Company from 2006 to 2008. Mr. Smith was also President and/or Chairman of each of the Company’s major subsidiaries over the course of his career. He is a Board member of GTI Energy (Executive Committee and Audit Committee), a former director of the American Gas Association, former Chairman of the Board of Directors of the Business Council of New York State, and Emeritus Board member of the State University of New York at Buffalo Law School Dean’s Advisory Council. He is also past Chairman of the Northeast Gas Association and Buffalo Niagara Enterprise.

 

Qualifications:

Mr. Smith brings to the Board significant industry and Company expertise and leadership experience. His 36-year tenure with the Company, which included key leadership positions within all of the Company’s business segments has resulted in significant knowledge of the Company’s history and strategies during its substantial growth from a regional utility to a much larger diversified energy company. He also brings a long and active participation in industry groups that identify and address important issues facing the Company and has well-established relationships of trust with other industry leaders. In addition, Mr. Smith has deep ties to businesses and civic organizations in Western New York (the location of the Company’s corporate headquarters and most of its business units). His experience as an active participant during decades of regulatory evolution at the state and federal levels provides valuable perspective and insight into the political and regulatory trends impacting the Company’s regulated interstate pipeline and storage, and utility businesses.

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   21


Proposal 1. Election of Directors

 

Ronald J. Tanski

 

 

LOGO

AGE: 70

 

DIRECTOR SINCE:

2014

 

BOARD COMMITTEES:

•  Executive

•  Financing

 

PUBLIC COMPANY

DIRECTORSHIPS

•  CMS Energy Corporation

•  Consumers Energy
Company

 

EDUCATION:

•  State University of
New York at Buffalo,
B.A. in Biology

•  State University of
New York at Buffalo,
MBA

•  State University of
New York at Buffalo
School of Law, J.D.

 

   

Professional Experience:

Mr. Tanski was President and Chief Executive Officer of the Company from 2013 until his retirement in 2019. He previously served as President and Chief Operating Officer of the Company from 2010 to 2013 and as Treasurer and Principal Financial Officer from 2004 to 2010. Mr. Tanski was President of National Fuel Gas Supply Corporation from 2008 to 2010 and President of National Fuel Gas Distribution Corporation from 2006 to 2008. He was previously Treasurer of those and other subsidiaries of the Company, and he also served in management roles at Seneca Resources Corporation (now Seneca Resources Company, LLC) and Horizon Energy Development, Inc. (sold in 2010). He is a member of the Board of Directors of CMS Energy Corporation and the Board of Directors of its wholly owned subsidiary, Consumers Energy Company. He previously served as a director of the Interstate Natural Gas Association of America (“INGAA”) and was INGAA Chairman in 2015. Mr. Tanski was a director of the American Gas Association and a member of the Council on Accountancy at Canisius College.

 

Qualifications:

Mr. Tanski has over four decades of industry experience, beginning his career as an attorney for the Company, and thereafter serving in various management capacities across the Company’s diversified energy business. Through his broad range of experience, including numerous senior leadership positions in both the Company’s regulated utility, and interstate natural gas transmission and storage businesses, as well as within the Company’s exploration and production subsidiary, he gained hands-on, practical knowledge about the natural gas industry, and virtually every aspect of the Company’s operations. Mr. Tanski’s role as CEO and substantial management experience with the Company’s subsidiaries, his detailed understanding of the Company’s integrated operations, and in particular, his financial and legal background with the Company, assist the Board with oversight of the Company’s operations. Mr. Tanski’s leadership roles at the Company during periods of regulatory change and through several commodity price cycles, as well as his participation with industry trade associations, including the prior chairmanship of a national pipeline trade association, also provide important insight into the business climates and regulatory environments in which the Company’s subsidiaries operate.

 

 

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Proposal 1. Election of Directors

 

Continuing Directors Whose Terms Expire in 2024

 

 

David H. Anderson

 

 

LOGO

AGE: 61

 

DIRECTOR SINCE:

2019

 

BOARD COMMITTEES:

•  Audit

•  Compensation

•  Financing

 

PUBLIC COMPANY

DIRECTORSHIPS

Northwest Natural Holding Company

 

EDUCATION:

•  Texas Tech University, B.B.A. in Accounting

•  Certified Public
Accountant (retired)

•  Chartered Global Management Accountant

 

   

Professional Experience:

Mr. Anderson is President and Chief Executive Officer of Northwest Natural Holding Company (“Northwest Holdings”) and Northwest Natural Gas Company, a local distribution company that provides natural gas service to approximately 2.5 million people in Oregon and Southwest Washington through over 790,000 connections with one of the most modern pipeline systems in the nation. In addition, Northwest Holdings’ subsidiaries provide water distribution and wastewater services to communities throughout the Pacific Northwest and Texas, serving approximately 150,000 people through 60,000 connections across five states. In addition, NW Natural Renewables, LLC, a newly formed subsidiary of Northwest Holdings, is focused on providing cost-effective solutions to decarbonize a variety of sectors, utilizing existing waste streams and renewable energy resources. Mr. Anderson has held a series of positions with increasing responsibility at Northwest Holdings since joining the company in 2004, including Chief Operating Officer and Chief Financial Officer. During his time as CFO, Mr. Anderson established and managed the company’s corporate enterprise risk management process. Previously, he was Senior Vice President and Chief Financial Officer at TXU Gas Company and Chief Accounting Officer at TXU Corporation, an energy services company that included electricity generation and the transmission and distribution of electricity and natural gas. Mr. Anderson serves as a director of Northwest Holdings. He was Chair of the Board of Directors of the American Gas Association (AGA) and Compensation Committee Chair in 2021, and previously served as First Vice Chair. He is past chairman of the AGA’s Audit Committee, past co-chairperson of the AGA’s Carbon Policy Task Force, chair of the AGA’s Finance Committee, a member of the AGA’s Safety, Resilience/Reliability and Security Task Force, and a board trustee of the American Gas Foundation. Additionally, he serves as a director of the Oregon Business Council. Mr. Anderson also serves on Oregon Governor Kate Brown’s Global Warming Commission and is a member of the Founders’ Circle of SOLVE, an Oregon non-profit dedicated to environmental stewardship.

 

Qualifications:

Mr. Anderson’s extensive financial and operational experience in the electric and natural gas industries and leadership roles on environmental matters provide the Board with important perspectives with respect to the Company’s business operations, sustainability, risk management and financial positioning. The combined professional skills and energy industry insights Mr. Anderson brings to the Board strengthen the Board’s collective knowledge, capabilities, and experience. Mr. Anderson’s experience in highly regulated industries impacted by emerging climate initiatives enables him to provide valuable perspective and management oversight on subjects including public policy, government relations, and regulatory compliance. In addition, the significant roles he has held in accounting and finance qualify Mr. Anderson as an “Audit Committee Financial Expert” under the Securities and Exchange Commission’s rules.

 

 

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Proposal 1. Election of Directors

 

David P. Bauer

 

 

LOGO

AGE: 53

 

DIRECTOR SINCE:

2020

 

BOARD COMMITTEES:

•  Executive

•  Financing

 

EDUCATION:

Boston College, B.S. in Accounting

 

   

Professional Experience:

Mr. Bauer has been President and Chief Executive Officer of the Company since 2019. He previously served as President of National Fuel Gas Supply Corporation, the Company’s principal pipeline and storage subsidiary, from 2016 to 2019, and as Treasurer and Principal Financial Officer of the Company from 2010 to 2019. Mr. Bauer joined the Company in 2001, after more than 10 years in public accounting at PricewaterhouseCoopers LLP, and served as Assistant Treasurer or Treasurer of the Company’s various operating subsidiaries from 2004 to 2019. He is a director of the American Gas Association, Invest Buffalo Niagara, Catholic Health System, and YMCA Buffalo Niagara, where he chairs the finance committee. He also serves as chairman of the audit committee of D’Youville University and as a member of the Canisius College Business Advisory Council and the Diocese of Buffalo Investment Committee.

 

Qualifications:

As a member of the Company’s executive team since 2004, Mr. Bauer brings to the Board substantial management experience and in-depth knowledge of the Company’s operations and strategic direction. His oversight of key infrastructure modernization and expansion projects and the continued growth of the Company’s Appalachian development program together with his leadership role in maintaining the Company’s fiscal strength, assists the Board with investment strategy, capital allocation and risk management. In addition, Mr. Bauer’s deep ties to Western New York, the location of the Company’s corporate headquarters, enhances the Board’s understanding of local and regional issues. Mr. Bauer has also been instrumental in furthering the Company’s community outreach initiatives, including the Company’s inaugural Days of Doing volunteer service program in October 2022.

 

 

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24    National Fuel Gas Company  |  2023 PROXY STATEMENT    


Proposal 1. Election of Directors

 

Barbara M. Baumann

 

 

LOGO

AGE: 67

 

DIRECTOR SINCE:

2020

 

BOARD COMMITTEES:

•  Audit

•  Financing

 

PUBLIC COMPANY

DIRECTORSHIPS /

PRIVATE COMPANY TRUSTEESHIPS

Devon Energy Corporation Putnam Mutual Funds

 

FORMER PUBLIC COMPANY DIRECTORSHIPS

•  Buckeye Partners, L.P.

•  SM Energy Company

•  CVR Energy, Inc.

•  UNS Energy Corporation

 

EDUCATION:

•  Mount Holyoke College, B.A.

•  Wharton School of the University of Pennsylvania, MBA

 

   

Professional Experience:

Ms. Baumann is a former BP Amoco executive who currently serves as President and Owner of Cross Creek Energy Corporation, an energy advisory firm with investments in the domestic oil and gas industry. Prior to founding her own firm in 2003, Ms. Baumann was Executive Vice President of Associated Energy Managers, a private equity firm investing in energy companies. Ms. Baumann began her 18-year career with Amoco (later BP Amoco) in 1981. She served in various areas of finance and operations, including Chief Financial Officer of Ecova Corporation, Amoco’s wholly owned environmental remediation business, and Vice President of Amoco’s San Juan Basin business unit. She is Chair of the Board of Directors of Devon Energy Corporation, and Vice Chair of the independent Board of Trustees of Putnam Mutual Funds. In addition, she is a senior advisor for First Reserve Corporation, a private equity firm focused on energy, and formerly served as a director of privately held companies Ascent Resources, Texas American Resources II (TARC II) and IOG Resources. Ms. Baumann also previously served on the boards of Buckeye Partners, L.P., SM Energy Company, CVR Energy, Inc., UNS Energy Corporation, and privately held Hat Creek Energy Corporation. She is a former board member and treasurer of The Denver Foundation, current member of its investment committee, and a member of the finance committee of Children’s Hospital Colorado. She is also a past member and past chair of the Board of Trustees of Mount Holyoke College.

 

Qualifications:

Ms. Baumann brings to the Board extensive knowledge of the energy industry, including particular expertise in the oil and gas exploration and production sector. Over the course of her distinguished career, she has gained broad strategic planning, economic evaluation, operational, natural gas marketing, and human resources management skills and experience, which are important to the oversight of financial, operational, and compensation management functions. She also has significant financial, accounting and risk management experience, qualifying her as an “Audit Committee Financial Expert” under the Securities and Exchange Commission’s rules. Ms. Baumann’s service on other public and private company boards enhances her strong corporate governance background, and her position as an independent trustee of a large family of mutual funds provides insight into the perspective of institutional stockholders.

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   25


Proposal 1. Election of Directors

 

Rebecca Ranich

 

 

LOGO

AGE: 64

 

DIRECTOR SINCE:

2016

 

BOARD COMMITTEES:

•  Audit

•  Nominating/Corporate Governance, Chair

 

COMPANY DIRECTORSHIPS

•  GTI Energy

 

FORMER PUBLIC

COMPANY

DIRECTORSHIPS

•  Questar Corporation

•  Cardno Limited

•  Uniper SE

 

EDUCATION:

•  Northwestern University, B.A. in Soviet Studies

•  University of Detroit Mercy, MBA

 

   

Professional Experience:

Ms. Ranich is a former director at Deloitte Consulting, LLP, where she led the firm’s Energy and Sustainability Investment Advisory Services for public sector clients, providing counsel on more than $1 billion of investments. Her practice focused on strategic energy investments designed to mitigate and manage risks related to energy supply, demand and climate change issues. Preceding her position at Deloitte, Ms. Ranich worked at PSG International, where she was a member of the management team leading negotiations to implement the Trans-Caspian Gas Pipeline, a multi-billion dollar, 1,700-kilometer pipeline project transporting natural gas from Turkmenistan to Turkey. She was previously a Vice President at Michael Baker Corporation, an international engineering, energy and environmental services firm. While at Baker, she held executive responsibility for delivering energy and environmental engineering services in Europe, Russia and the Caspian region, overseeing projects with a construction value in excess of $40 billion. She managed offices in London, Naples, Wiesbaden and Moscow. Ms. Ranich served as a member of the Board of Directors of Questar Corporation from 2013 to 2016, when Questar was acquired by Dominion Resources, Inc. At Questar she was Chair of the Board’s Governance and Nominating Committee. She is a former member of the Board of Directors of Cardno Limited, an Australian infrastructure and environmental services company, and a former member of the Supervisory Board at Uniper SE, a German power generation and energy supply chain corporation. She serves as Chair of the Board of the GTI Energy and Chair of its Investment Committee, and she is an advisory board member of Yet Analytics, an xAPI data analytics platform. In addition to being an investor in and advisor to emerging technology companies, Ms. Ranich is a member of the Technology Commercialization Panel for the Johns Hopkins University Applied Physics Laboratory.

 

Qualifications:

Ms. Ranich’s wealth of experience and formidable skills in strategic energy investments, project development, risk management and corporate governance contribute significantly to the Board. With her work on sustainable environmental practices and extensive global industry experience, including first-hand involvement in high-risk environments and large-scale projects designed to effect significant advancements in the delivery of energy, Ms. Ranich complements the diverse backgrounds on the Board, adds a keen understanding of risk, particularly related to the ongoing energy transition, and provides a unique global perspective. Ms. Ranich also brings to the Board her prior experience as chair of a public company corporate governance committee, and a successful track record of establishing, building and leading energy-focused businesses.

 

 

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26    National Fuel Gas Company  |  2023 PROXY STATEMENT    


  Corporate Governance     LOGO  

 

The Board of Directors is committed to effective corporate governance. The Board has adopted Corporate Governance Guidelines that provide a framework for the governance of the Company, and it regularly reviews corporate governance developments. The Board has implemented many strong governance practices, including maintaining a significant complement of independent directors (ten out of eleven), designating a Lead Independent Director, holding regular meetings of the non-management and/or independent directors, separating, at the Board’s discretion, the roles of Chairman of the Board and Chief Executive Officer, and providing a process for stockholders meeting certain requirements to have nominees included in the Company’s proxy materials. In addition, the Company’s Code of Business Conduct and Ethics, which applies to all directors, officers and employees, sets forth standards for conducting business in an honest and ethical manner.

Diversity

 

 

National Fuel’s commitment to diversity extends both to its workforce and your Board of Directors. Under the Company’s Corporate Governance Guidelines, the Board of Directors is required, when selecting candidates for re-election and candidates for Board membership, to consider factors that include diversity of perspectives, including all aspects of diversity (race, ethnicity, national origin, gender and other protected classes), to be brought to the Board by the individual members. In recent years, National Fuel’s Nominating/Corporate Governance Committee, which makes recommendations to the full Board on nominees for director positions, has invited qualified gender and racially diverse candidates to stand for election to the Board, with successful results. While currently at a full complement of directors, when vacancies arise in the future, the Board will continue its efforts to attract qualified diverse Board candidates whose expertise and personal characteristics align with the Company’s long term business strategy. This commitment to diversity is reflected in the “Rooney Rule” incorporated into the Company’s Process for Identifying and Evaluating Nominees for Director (Exhibit B to the Corporate Governance Guidelines), which provides that, in identifying independent director candidates for nomination to the Board, the Nominating/Corporate Governance Committee, and any search firm it engages, is committed to including in any initial candidate pool qualified racially, ethnically and/or gender diverse candidates. Board member Rebecca Ranich serves as Chair of the Nominating/Corporate Governance Committee, and women have long occupied National Fuel’s top corporate levels. Today, four of the Company’s eight designated executive officers are women who hold the following important policy-making positions: President of the Company’s Utility segment; General Counsel, Secretary and Corporate Responsibility Officer, who also serves as the Company’s Compliance Officer; Treasurer and Principal Financial Officer; and Controller and Principal Accounting Officer.

Director Independence

 

 

The Board of Directors has determined that directors Anderson, Baumann, Carroll, Finch, Jaggers, Ranich, Shaw, Skains, Smith and Tanski are independent, and that Mr. Bauer is not independent due to his current employment relationship with the Company. The Board’s determinations of director independence were made in accordance with the listing standards of the New York Stock Exchange (the “NYSE”) and SEC regulations.

Board Leadership Structure

 

 

Non-management directors meet at regularly scheduled executive sessions without management. In addition, the independent directors met during fiscal 2022, in accordance with NYSE listing standards. The sessions were chaired by Jeffrey W. Shaw, as Lead Independent Director.

In March 2022, the Board of Directors re-elected Mr. Smith as Chairman of the Board and re-elected Mr. Bauer as President and Chief Executive Officer. The Board believes that Mr. Smith’s role as Chairman and Mr. Bauer’s position as Chief Executive Officer constitute an effective leadership model, given Mr. Smith’s past experience in the role of CEO and experience as Chairman of the Board and Mr. Bauer’s appointment as CEO in 2019. The Board believes this is the optimal leadership structure at this time and reviews and considers this structure at least annually. As in the past, it is the Board’s opinion that the stockholders’ interests are best served by allowing the Board to retain flexibility to determine the optimal organizational structure for the Company at a given time, including whether the roles of Chairman and CEO should be filled by the same person. At times in the past the roles have been separate and at other times they have been combined. The members of the Board possess considerable experience and unique knowledge of the challenges and opportunities the

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   27


Corporate Governance

 

Company faces, have significant industry experience and are in the best position to evaluate its needs and how best to organize the capabilities of the directors and management to meet those needs.

The Board of Directors provides a process for stockholders and other interested parties to send communications to the Board or to certain directors. Communications to the Lead Independent Director, to the non-management directors as a group, or to the entire Board should be addressed as follows: Lead Independent Director, c/o 6363 Main Street, Williamsville, NY 14221. For the present, all stockholder and interested parties’ communications addressed in such manner will go directly to the indicated directors. If the volume of communication becomes such that the Board determines to adopt a process for determining which communications will be relayed to Board members, that process will appear on the Company’s website at www.nationalfuel.com.

Annual Meeting Attendance

 

 

Last year, all directors attended the 2022 Annual Meeting, and all directors are expected to attend this year’s meeting.

Meetings of the Board of Directors and Standing Committees

 

 

In fiscal 2022, there were four meetings of the Board of Directors. In addition, directors attended meetings of standing committees. The Audit Committee held nine meetings, the Compensation Committee held five meetings, the Executive Committee held one meeting, and the Nominating/Corporate Governance Committee held four meetings. During fiscal 2022, all directors attended at least 75% of the aggregate of meetings of the Board and of the committees of the Board on which they served. In addition, Board members are encouraged to and regularly attend meetings of committees on which they do not serve, although committee decision-making is reserved to committee members.

The table below shows the number of committee meetings conducted in fiscal 2022 and the directors who served on these committees as of September 30, 2022.

 

      BOARD COMMITTEES

DIRECTOR

   AUDIT    COMPENSATION    EXECUTIVE    FINANCING    NOMINATING/
CORPORATE
GOVERNANCE

David H. Anderson

   X    X         X     

David P. Bauer

             X    X     

Barbara M. Baumann

   X              X     

David C. Carroll

             X         X

Steven C. Finch

   X                   X

Joseph N. Jaggers

   X    Chair    X          

Rebecca Ranich

   X                   Chair

Jeffrey W. Shaw

   Chair                   X

Thomas E. Skains

        X              X

David F. Smith

             Chair    Chair     

Ronald J. Tanski

             X    X     

Number of Meetings in Fiscal 2022

   9    5    1    0    4

Audit Committee

The Audit Committee is a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Audit Committee held nine meetings during fiscal 2022 in order to review the scope and results of the annual audit, to receive reports of the Company’s independent registered public accounting firm and chief internal auditor, to monitor compliance with the Company’s Reporting Procedures for Accounting and Auditing Matters (included in this proxy statement as Appendix A), to review the Company’s enterprise risk management program and to prepare a report of the Audit Committee’s findings and recommendations to the Board of Directors. A current copy of the charter of the Audit Committee is available on the Company’s website at www.nationalfuel.com, under the Governance section of our Investor Relations page. The members of the Audit Committee are independent as independence for audit committee members is defined in NYSE listing standards and in SEC regulations. No Audit Committee member simultaneously serves on the audit committees of more than three

 

 

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Corporate Governance

 

public companies. The Board limits the number of audit committees on which an Audit Committee member can serve to three, unless the Board has determined that such simultaneous service would not impair the ability of such members to serve effectively. The Company’s Board of Directors has determined that the Company has three audit committee financial experts (as defined by SEC regulations) serving on its Audit Committee, namely Mr. Shaw, Mr. Anderson and Ms. Baumann. The Board has also determined, in its business judgment in accordance with NYSE listing standards, that all members of the Audit Committee are financially literate.

In connection with its review of the Company’s internal audit function, the Audit Committee in 2021 had an external quality assessment performed by IIA Quality Services, LLC under the Institute of Internal Auditors’ (the “IIA”) International Standards for the Professional Practice of Internal Auditing (the “Standards”). The assessment concluded that the Company’s Audit Services Department generally conforms to the Standards, the IIA Code of Ethics, and the Definition of Internal Auditing. “Generally conforms” is the IIA’s highest rating. The Standards state that an external quality assessment should be conducted at least once every five years.

Further information relating to the Audit Committee appears in this proxy statement under the headings “Audit Fees” and “Audit Committee Report.”

Compensation Committee

As described in the Compensation Discussion and Analysis in this proxy statement, the Compensation Committee held five meetings during fiscal 2022 in order to review and determine the compensation of Company executive officers and to review reports and/or grant awards under the National Fuel Gas Company 2010 Equity Compensation Plan, as amended and restated (the “2010 Equity Compensation Plan”), the 2012 Annual At Risk Compensation Incentive Plan (“AARCIP” or the “At Risk Plan”), and the Executive Annual Cash Incentive Program (“EACIP”). The members of the Compensation Committee are independent under NYSE listing standards and “non-employee directors” as defined in SEC regulations. A current copy of the charter of the Compensation Committee is available on the Company’s website at www.nationalfuel.com, under the Governance section of our Investor Relations page.

The Compensation Committee is responsible for various aspects of executive compensation, including approval of the base salaries and incentive compensation of the Company’s executive officers. The Compensation Committee is authorized to evaluate director compensation and make recommendations to the full Board regarding director compensation. The Compensation Committee may form subcommittees and delegate to those subcommittees such authority as the Compensation Committee deems appropriate, other than authority required to be exercised by the Compensation Committee as a whole. The Compensation Committee also administers the Company’s 2010 Equity Compensation Plan and the At Risk Plan and approves performance conditions and target incentives for executive officers who are participants in the EACIP. As described more fully in the Compensation Discussion and Analysis, the Compensation Committee retained two independent compensation consulting firms to assist in determining executive compensation. In addition, as set forth in the Compensation Committee’s charter, the Chief Executive Officer may and does make, and the Compensation Committee may and does consider, recommendations regarding the Company’s compensation and employee benefit plans and practices, including the compensation of executive officers other than himself. The Compensation Committee then approves executive compensation as it deems appropriate. The Compensation Committee has assessed the independence of the compensation consultants under NYSE listing standards and has determined their work presents no conflicts of interest under SEC regulations. For more information regarding the role of the compensation consultants and the Chief Executive Officer in determining or recommending the amount or form of executive compensation, see the Compensation Discussion and Analysis.

Executive Committee

The Executive Committee met once during fiscal 2022. The Executive Committee has, and may exercise, the authority of the full Board, except as may be prohibited by New Jersey corporate law (N.J.S.A. § 14A:6-9).

Financing Committee

The Financing Committee did not meet during fiscal 2022. The Financing Committee may exercise Board authority with respect to specific financing matters for which the Board has delegated responsibility to it.

Nominating/Corporate Governance Committee

All the members of the Nominating/Corporate Governance Committee are independent, as independence is defined in NYSE listing standards. The Nominating/Corporate Governance Committee makes recommendations to the full Board on nominees for the position of director. The Nominating/Corporate Governance Committee also has duties regarding corporate governance matters as required by law, regulation or NYSE rules. Additionally, the Nominating/Corporate Governance Committee oversees the Company’s strategy and reporting with respect to corporate responsibility matters, including ESG

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   29


Corporate Governance

 

factors that are of significance to the Company and its stakeholders. The Nominating/Corporate Governance Committee provides guidance to management on corporate responsibility issues and makes recommendations to the Board regarding corporate responsibility initiatives and strategies. A current copy of the charter of the Nominating/Corporate Governance Committee is available on the Company’s website at www.nationalfuel.com, under the Governance section of our Investor Relations page. The Nominating/Corporate Governance Committee held four meetings during fiscal 2022.

Method of Evaluating Board and Committee Effectiveness

 

 

Annually, the Board and each of the Audit Committee, Compensation Committee and Nominating/Corporate Governance Committee take part in a self-evaluation process to determine their effectiveness and opportunities for improvement. Questionnaires are provided to each director soliciting comments with respect to dynamics of the full Board and each of the above committees, on which the director serves, as well as director performance and adequacy of Board materials. The confidential responses are summarized for Board and Nominating/Corporate Governance committee review. Board members are requested to report dissatisfaction with individual performance to the Chairman of the Board and the Chairman of the Nominating/Corporate Governance Committee. At a Board and Nominating/Corporate Governance Committee meeting, time is allocated to discuss the summary and review any comments or inadequacies.

Process for Nominating Directors

 

 

Stockholders may recommend individuals to the Nominating/Corporate Governance Committee to consider as potential nominees. Procedures by which stockholders may make such recommendations are set forth in Exhibit B to the Company’s Corporate Governance Guidelines, described in the following paragraph. In addition, the Company’s By-Laws provide a process for stockholders meeting certain requirements to have nominees included in the Company’s proxy materials.

In general, the Nominating/Corporate Governance Committee’s charter provides for the Nominating/Corporate Governance Committee to develop and recommend to the Board criteria for selecting new director nominees and evaluating unsolicited nominations, which criteria are included in this proxy statement as part of the Company’s Corporate Governance Guidelines. A current copy of the Corporate Governance Guidelines is included in this proxy statement as Appendix B, and is available on the Company’s website at www.nationalfuel.com, under the Governance section of our Investor Relations page. Appendix B also addresses the qualifications and skills the Nominating/Corporate Governance Committee believes are necessary in a director, and the Nominating/Corporate Governance Committee’s consideration of stockholder recommendations for director. Pursuant to the Corporate Governance Guidelines, in order to be considered in connection with the 2024 Annual Meeting of Stockholders, stockholder recommendations identifying a proposed nominee and setting out his or her qualifications should be delivered to the Company’s Secretary at its principal office no later than September 22, 2023.

Under the process for selecting new Board candidates, the Chairman, the Chief Executive Officer and the Nominating/Corporate Governance Committee discuss the need to add a new Board member or to fill a vacancy on the Board. The Nominating/Corporate Governance Committee will initiate a search, working with staff support and seeking input from Board members and senior management, hiring a search firm if necessary, and considering candidates recommended by stockholders in accordance with Exhibit B to the Corporate Governance Guidelines.

Charitable Contributions by Company

 

 

Within the preceding three years, the Company did not make any charitable contributions to any charitable organization in which a director served as an executive officer which exceeded the greater of $1 million or 2% of the charitable organization’s consolidated gross revenues in a single fiscal year.

Compensation Committee Interlocks and Insider Participation

 

 

There are no “Compensation Committee interlocks” or “insider participation” which SEC regulations or NYSE listing standards require to be disclosed in this proxy statement.

Risk Oversight

 

 

The Board retains oversight of safety, environmental, social, operational and corporate governance risks, among other areas central to corporate responsibility, including strategic, financial and regulatory risks and opportunities. An important aspect of

 

 

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30    National Fuel Gas Company  |  2023 PROXY STATEMENT    


Corporate Governance

 

the Board’s oversight role is the enterprise risk management process, under which enterprise-wide risks have been identified, including climate-related risk, along with mitigative measures to address and manage such risks. Through its enterprise risk management process, the Company has identified specific foundational risks, critical risks and potentially-emerging risks and reviews the assessment of these risks, along with any newly identified risks, on a quarterly basis with the Board. Management also reports quarterly to the Board on significant matters within these risk categories. In addition, management provides a detailed presentation on a topic related to one or more risk categories at each Board meeting. Additional review or reporting on enterprise risks is conducted as needed or as requested by the Board. The Board and management consider enterprise risks and opportunities in their strategic and capital spending decision process, and the Board directs management to integrate corporate responsibility concerns into decision-making throughout the organization.

The Nominating/Corporate Governance Committee specifically has oversight responsibility for corporate responsibility matters that are significant to the Company and its stakeholders. The Company conducts business consistent with our six guiding principles of safety, environmental stewardship, community, innovation, satisfaction, and transparency. To that end, corporate responsibility and ESG matters are a standing agenda item at Nominating/Corporate Governance Committee meetings. In fiscal 2022, the Company published its inaugural Climate Report, which aligns our climate-risk disclosures with the Task Force on Climate-Related Financial Disclosures framework. The Company also published its third annual Corporate Responsibility Report, highlighting our ESG-related initiatives, programs, and actions.

The Audit Committee discusses guidelines and policies governing management’s process for assessing and managing the Company’s exposure to risk, and on a quarterly basis, at meetings which are attended by the entire Board, reviews the enterprise risk management process described above. The Audit Committee also oversees the scope of work of the Audit Services Department, which includes review of the internal audit function’s annual risk-based audit plan. The Audit Services Department considers significant risk categories identified through the enterprise risk management process when creating its internal audit plan. Additionally, in conjunction with its review of the integrity of the Company’s financial statements, the Audit Committee discusses with management major financial risk exposures and the steps taken to monitor and control those exposures.

Related Person Transactions

 

 

The Company had no related person transactions in fiscal 2022. The Company’s Code of Business Conduct and Ethics (the “Code of Conduct”) (which is in writing and available to stockholders as described at the end of this proxy statement) identifies the avoidance of any actual or perceived conflicts between personal interests and Company interests as an essential part of the responsibility of the Company’s directors, officers and employees. The Code of Conduct provides that a conflict of interest may arise when a director, officer or employee receives improper personal benefits as a result of his or her position in the Company, or when personal situations tend to influence or compromise a director’s, officer’s or employee’s ability to render impartial business decisions in the best interest of the Company. Potential conflicts of interest under the Code of Conduct would include but not be limited to related person transactions. The Audit Committee administers the Code of Conduct as it relates to the Company’s directors and executive officers.

The Company’s policies and procedures for the review, approval or ratification of related person transactions are set forth in writing in the charter of the Audit Committee. The charter provides that the Audit Committee will review and, if appropriate, approve or ratify any transaction between the Company and a related person which is required to be disclosed under SEC rules. In the course of its review of a transaction, the Audit Committee will consider the nature of the related person’s interest in the transaction, the material terms of the transaction, the significance of the transaction to the related person and to the Company, whether the transaction would affect the independence of a director, and any other matters the Audit Committee deems appropriate. The Audit Committee will approve or ratify only those transactions that it considers to be in, or not inconsistent with, the best interests of the Company and its stockholders, as the Audit Committee determines in good faith. Any member of the Audit Committee who is a related person with respect to a transaction under review may not participate in the deliberations or vote respecting approval or ratification of the transaction.

Code of Ethics

 

 

The Company has adopted a Code of Business Conduct and Ethics that applies to the Company’s directors, principal executive officer, principal financial officer, controller, other officers and employees that is designed to deter wrongdoing and to promote honest and ethical conduct. The code deals with a variety of corporate matters, including compliance with laws, conflicts of interest, corporate opportunities, use of company resources, fair dealing and confidentiality of company information. The text of the code is available on the Company’s website at www.nationalfuel.com, under the Governance section of our Investor Relations page.

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   31


  Director Compensation     LOGO  

 

The 2009 Non-Employee Director Equity Compensation Plan was approved at the 2009 Annual Meeting of Stockholders and reapproved at the 2016 and 2019 Annual Meetings of Stockholders (“Director Equity Compensation Plan”). This plan provides for the issuance of shares on a quarterly basis to non-employee directors in such amounts as the Board may determine from time to time. In addition, non-employee directors receive a portion of their compensation in cash, as determined by the Board from time to time. Directors who are not Company employees or retired employees do not participate in any of the Company’s employee benefit or compensation plans. Directors who are current employees receive no compensation for serving as directors.

In fiscal 2022, non-employee directors were paid a cash retainer of $110,000, plus shares of Common Stock equal in value to approximately $175,000. Common Stock issued to non-employee directors under the Director Equity Compensation Plan is nontransferable until the later of two years from issuance or six months after the recipient’s cessation of service as a director of the Company, except that transferability restrictions lapse upon the death of the recipient.

The Lead Independent Director (Mr. Shaw) was paid an additional annual retainer of $20,000, the Chairman of the Audit Committee (Mr. Shaw) was paid an additional annual retainer of $20,000, and the Chairpersons of the Compensation and Nominating/Corporate Governance Committees (Mr. Jaggers and Ms. Ranich, respectively) were each paid an additional annual retainer of $15,000. These payments were made in July 2022. For his service as Chairman of the Board, Mr. Smith was paid an additional retainer of $20,000 per quarter for the first two quarters of the fiscal year, and $25,000 per quarter for the last two quarters.

The Company requires that each director, in order to receive compensation for service as a director, must beneficially own at least 2,500 shares of Common Stock at the end of the first year of service as a director, at least 5,000 shares at the end of the second year of service and at least 7,500 shares at the end of the third year of service. All directors are in compliance with this requirement.

Non-employee members of the Board are eligible to participate in the Company’s Deferred Compensation Plan for Directors and Officers (the “DCP”). In general, the DCP is an unfunded, nonqualified deferred compensation plan open to the directors of the Company and the officers of the Company and its subsidiaries. Under the DCP, and subject to administration by the Compensation Committee of the Board, each eligible officer may defer receipt of his or her base salary and discretionary cash bonuses, and each eligible director may defer receipt of his or her annual cash retainer and quarterly Company common stock awards. Eligible officers may also defer receipt of their performance-based cash bonuses and Company common stock received in settlement of restricted stock units, performance shares or performance units awards under terms and conditions as described in the DCP. Compensation deferred under the DCP is recorded as deferred compensation in cash or stock accounts, as applicable, and certain transfers among accounts are permitted as described in the DCP. Cash accounts accrue interest and will be settled in cash. Interest is credited as of the last day of each calendar quarter. The rate of interest applied at the end of each quarter is the quarterly equivalent of the annual yield on Moody’s Average Corporate Bond Yield as of the last day of the immediately preceding quarter, as published by Moody’s Investors Service, Inc. Stock accounts accrue dividend equivalents and generally will be settled in Company common stock. Payouts will generally be made in accordance with the participants’ deferral elections. The deferred compensation obligations are unsecured general obligations of the Company, and the participants have no right, interest or claim in the assets of the Company, except as unsecured general creditors.

 

 

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32    National Fuel Gas Company  |  2023 PROXY STATEMENT    


  Director Compensation Table —Fiscal 2022     LOGO  

 

The following table sets forth the compensation paid to each non-employee director for service during fiscal 2022:

 

NAME

   FEES
EARNED OR
PAID IN
CASH
($)
(1)
     Stock
AWARDS
($)
(2)
     All Other
COMPENSATION
($)
(3)
     TOTAL
($)
 

David H. Anderson

     110,000        175,152        8        285,160  

Barbara M. Baumann

     110,000        175,152        8        285,160  

David C. Carroll

     110,000        175,152        8        285,160  

Steven C. Finch

     110,000        175,152        8        285,160  

Joseph N. Jaggers

     125,000        175,152        8        300,160  

Rebecca Ranich

     125,000        175,152        8        300,160  

Jeffrey W. Shaw

     150,000        175,152        8        325,160  

Thomas E. Skains

     110,000        175,152        8        285,160  

David F. Smith

     200,000        175,152        8        375,160  

Ronald J. Tanski

     110,000        175,152        8        285,160  

 

(1)

Represents the portion of the annual retainer paid in cash, plus additional retainers, as applicable, for service as a committee Chairperson, Lead Independent Director, or Chairman of the Board, including any amounts deferred at the director’s election pursuant to the terms of the DCP.

 

(2)

Represents the aggregate grant date fair value of the Common Stock issued as compensation under the Director Equity Compensation Plan, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, including any amounts deferred at the director’s election pursuant to the terms of the DCP. The average of the high and low stock price on each date of issuance was used to compute the fair value. The average prices (and resultant values of the Stock Awards) were as follows: $53.315 for October 1, 2021 (stock in total valued at $43,772); $63.655 for January 3, 2022 (stock in total valued at $43,795); $69.975 for April 1, 2022 (stock in total valued at $43,804); and $66.74 for July 1, 2022 (stock in total valued at $43,781). As of September 30, 2022, the aggregate shares paid as compensation under director plans for all years of service were as follows: Anderson, 11,827; Baumann, 9,211; Carroll, 29,439; Finch, 14,733; Jaggers, 23,102; Ranich, 20,616; Shaw, 25,886; Skains, 19,527; Smith, 21,308; and Tanski, 11,661.

 

(3)

Represents premiums paid on a blanket travel insurance policy, which covers each director up to a maximum benefit of $500,000. This insurance provides coverage in case of death or injury while on a trip for Company business.

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   33


  Audit Fees     LOGO  

 

In addition to retaining PricewaterhouseCoopers LLP to report on the annual consolidated financial statements of the Company for fiscal 2022, the Company retained PricewaterhouseCoopers LLP to provide various non-audit services in fiscal 2022. The aggregate fees billed for professional services by PricewaterhouseCoopers LLP for each of the last two fiscal years were as follows:

 

      2022      2021  

Audit Fees(1)

   $ 1,842,500      $ 1,933,000  

Audit-Related Fees(2)

   $ 0      $ 0  

Tax Fees

                 

Tax advice and planning(3)

   $ 57,357      $ 223,070  

Tax compliance(4)

   $ 0      $ 13,585  

All Other Fees(5)

   $ 10,338      $ 3,154  

TOTAL

   $ 1,910,195      $ 2,172,809  

 

(1)

Audit Fees include audits of consolidated financial statements and internal control over financial reporting, reviews of financial statements included in quarterly Forms 10-Q, comfort letters and consents, and audits of certain of the Company’s wholly owned subsidiaries to meet statutory or regulatory requirements.

 

(2)

Audit-Related Fees include audits of certain of the Company’s wholly owned subsidiaries not required by statute or regulation, and consultations concerning technical financial accounting and reporting standards.

 

(3)

Tax advice and planning includes consultations on various federal and state tax matters.

 

(4)

Tax compliance includes tax return preparation and tax audit assistance.

 

(5)

All Other Fees relate to permissible fees other than those described above and include consulting fees and the software-licensing fee for an accounting and financial reporting research tool.

The Audit Committee’s charter references its pre-approval policies and procedures. The Audit Committee has pre-approved the use of PricewaterhouseCoopers LLP for specific types of services, including various audit and audit-related services and certain tax services, among others. The chair of the Audit Committee and, in his absence, another specified member of the committee are authorized to pre-approve any audit or non-audit service on behalf of the committee. Each pre-approval is to be reported to the full committee at the first regularly scheduled committee meeting following such pre-approval.

For fiscal 2022, none of the services provided by PricewaterhouseCoopers LLP were approved by the Audit Committee in reliance upon the “de minimis exception” contained in Section 202 of Sarbanes-Oxley and codified in Section 10A(i)(1)(B) of the Exchange Act and in 17 CFR 210.2-01(c)(7)(i)(C).

 

 

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  Audit Committee Report     LOGO  

 

The Audit Committee is composed solely of six directors who meet the independence and financial literacy requirements of the New York Stock Exchange and the Securities and Exchange Commission (SEC). The Audit Committee Chairman, Jeffrey W. Shaw, and members David H. Anderson and Barbara M. Baumann, each qualify as an “audit committee financial expert” as defined by the SEC. The responsibilities of the Audit Committee are set forth in the Audit Committee Charter, a copy of which is available on the Company’s website.

The Audit Committee reviews the integrity of the Company’s financial statements and discusses with management major financial risk exposures and the steps taken to monitor and control those exposures. The Audit Committee also oversees the scope of work of the Audit Services Department. That scope includes reviewing the accuracy, reliability and integrity of financial and operational information and the means used to identify, measure, classify and report such information. To that end, management reports quarterly to the Board of Directors on significant risk categories identified through the enterprise risk management process, which the Audit Services Department considers when creating its internal audit plan. The Audit Committee also directly appoints, retains, compensates, evaluates, terminates and oversees the work of the independent auditor for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company, and such firm must report directly to the Audit Committee. In addition to those responsibilities, with respect to the independent auditor, the Audit Committee:

 

   

reviews and evaluates the annual engagement letter, including the independent auditor’s proposed fees;

 

   

reviews, evaluates and monitors the annual audit plan and its progression, including the timing and scope of audit activities;

 

   

annually reviews and evaluates the qualifications, performance and independence of the independent auditor, including the lead partner, and ensures that the lead partner and any other audit partners are rotated at appropriate intervals in compliance with applicable laws, rules and regulations;

 

   

reviews and evaluates the independent auditor report describing internal quality-control procedures and any material issues raised by the most recent internal quality-control review of the independent auditors or outside inquiry or investigation; and

 

   

reviews the independent auditor report describing all relationships between the independent auditor and the Company, including a list of the fees billed for each category, in order to assess the independent auditor’s independence.

Management is responsible for the Company’s consolidated financial statements and for establishing, maintaining, and assessing internal control over financial reporting. PricewaterhouseCoopers LLP, the Company’s independent auditor, is responsible for expressing opinions on the conformity of the Company’s audited financial statements with generally accepted accounting principles and on the Company’s internal control over financial reporting.

As part of its auditor engagement process, the Audit Committee considers whether to rotate the independent auditor. PricewaterhouseCoopers LLP has been the Company’s independent auditor since 1941. PricewaterhouseCoopers LLP rotates its lead audit engagement partner every five years; the Audit Committee interviews proposed candidates and selects the lead audit engagement partner. The Audit Committee believes that there are significant benefits to having an independent auditor with an extensive history with the Company. These include:

 

   

Higher quality audit work and accounting advice, due to the independent auditor’s institutional knowledge of our business and operations, accounting policies and financial systems, and internal control framework; and

 

   

Operational efficiencies because of the independent auditor’s history and familiarity with our business.

In fulfilling its responsibilities, the Audit Committee has reviewed and discussed the Company’s audited financial statements for fiscal 2022 with management. The Audit Committee has also reviewed with management its evaluation of the structure and effectiveness of the Company’s internal control over financial reporting. The Audit Committee has discussed with PricewaterhouseCoopers LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC. The Audit Committee has received the written disclosures and the letter from

 

 

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Audit Committee Report

 

PricewaterhouseCoopers LLP required by the applicable requirements of the PCAOB regarding PricewaterhouseCoopers LLP’s communications with the audit committee concerning independence, and has discussed with PricewaterhouseCoopers LLP that firm’s independence. The Audit Committee also has considered whether PricewaterhouseCoopers LLP’s level of fees and provision of non-audit services to the Company and its affiliates are compatible with PricewaterhouseCoopers LLP’s independence and has concluded that PricewaterhouseCoopers LLP is independent from the Company and its management.

Based on the review, discussions and considerations referred to in the preceding paragraph, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for fiscal 2022 for filing with the SEC.

 

     

AUDIT COMMITTEE

 

Jeffrey W. Shaw, Chairman

David H. Anderson

Barbara M. Baumann

Steven C. Finch

Joseph N. Jaggers

Rebecca Ranich

 

 

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36    National Fuel Gas Company  |  2023 PROXY STATEMENT    


  Security Ownership of Certain Beneficial Owners and Management     LOGO  

 

The following table sets forth for each current director, each nominee for director, each of the executive officers named in the Fiscal 2022 Summary Compensation Table, and for all directors, nominees and executive officers as a group, information concerning beneficial ownership of Common Stock. The Common Stock is the only class of Company equity securities outstanding. Unless otherwise noted, to the best of the Company’s knowledge, each person has sole voting and investment power with respect to the shares listed. Security holdings are as of December 30, 2022. As of that date, 91,786,806 shares of Common Stock were issued and outstanding.

 

NAME OF BENEFICIAL

OWNER

   SHARES HELD
IN ESOP
(1)
     SHARES HELD IN
401(K)
PLAN
(2)
     SHARES OTHERWISE
BENEFICIALLY OWNED
(3)
    PERCENT  OF
CLASS
(4)
 

David H. Anderson

     0        0        6,890 (5)      *  

David P. Bauer

     0        12,935        136,399 (6)      *  

Barbara M. Baumann

     0        0        12,103       *  

Karen M. Camiolo

     0        16,607        52,910       *  

David C. Carroll

     0        0        29,118 (7)      *  

Donna L. DeCarolis

     273        22,634        79,234       *  

Steven C. Finch

     0        0        15,704 (8)      *  

Joseph N. Jaggers

     0        0        23,794       *  

Ronald C. Kraemer

     4,136        17,443        47,911 (9)      *  

Justin I. Loweth

     0        9,252        43,922 (10)      *  

Rebecca Ranich

     0        0        16,549 (11)      *  

Jeffrey W. Shaw

     0        0        26,678 (12)      *  

Thomas E. Skains

     0        0        20,573 (8)      *  

David F. Smith

     2,112        21,573        308,499 (13)      *  

Ronald J. Tanski

     2,993        29,310        319,066 (14)      *  

Directors, Nominees and Executive Officers as a Group (18 Total)

     9,514        137,135        1,177,080       1.44

 

*

Represents beneficial ownership of less than 1% of issued and outstanding Common Stock.

 

(1)

This column lists shares held in the National Fuel Gas Company Employee Stock Ownership Plan (“ESOP”). The beneficial owners of these shares have sole voting power with respect to shares held in the ESOP, but do not have investment power respecting those shares until they are distributed.

 

(2)

This column lists shares held in the Company Tax-Deferred Savings Plan for Non-Union Employees (“TDSP”), a 401(k) plan. The beneficial owners of these shares have sole voting and investment power with respect to shares held in the TDSP.

 

(3)

This column includes shares held of record and any shares beneficially owned through a bank, broker or other nominee, plus shares deferred under the DCP to the extent such shares would have been distributed within 60 days following a separation from service had one occurred on December 30, 2022.

 

(4)

This column lists the sum of the individual’s (or individuals’) holdings shown on this table, expressed as a percentage of the Company’s outstanding shares.

 

(5)

Includes 197 shares held through a family trust, as to which Mr. Anderson shares voting and investment power, and 1,520 shares beneficially owned under the DCP, as to which Mr. Anderson does not have voting or investment power.

 

(6)

Includes 1,497 shares held by Mr. Bauer’s children, as to which Mr. Bauer does not have voting or investment power, and 61,352 shares beneficially owned under the DCP, as to which Mr. Bauer does not have voting or investment power.

 

(7)

Includes 1,520 shares beneficially owned under the DCP, as to which Mr. Carroll does not have voting or investment power.

 

(8)

Includes 7,600 shares beneficially owned under the DCP, as to which the director does not have voting or investment power.

 

(9)

Includes 1,903 shares beneficially owned under the DCP, as to which Mr. Kraemer does not have voting or investment power.

 

(10)

Includes 225 shares held by Mr. Loweth’s wife in an individual retirement account, as to which Mr. Loweth does not have voting or investment power, and 500 shares held in custodial accounts for Mr. Loweth’s children, as to which Mr. Loweth holds voting and investment power.

 

(11)

Includes 506 shares beneficially owned under the DCP, as to which Ms. Ranich does not have voting or investment power.

 

(12)

Includes 100 shares held through a family trust, as to which Mr. Shaw shares voting and investment power.

 

(13)

Includes 210,772 shares held through a family partnership, as to which Mr. Smith shares voting and investment power, and 7,600 shares beneficially owned under the DCP, as to which Mr. Smith does not have voting or investment power.

 

(14)

Includes 429 shares owned jointly with Mr. Tanski’s wife, as to which Mr. Tanski shares voting and investment power.

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   37


Security Ownership of Certain Beneficial Owners and Management

 

As of December 30, 2022, each of the following persons is known to the Company to be the beneficial owner of more than five percent of the Common Stock, as set forth in a Schedule 13G filed with the SEC. The Common Stock is the only class of Company stock outstanding.

 

NAME AND ADDRESS OF

BENEFICIAL OWNER

   SHARES HELD AS
TRUSTEE FOR COMPANY
EMPLOYEE  BENEFIT
PLANS
    SHARES
OTHERWISE
BENEFICIALLY HELD
    PERCENT
OF
CLASS
(1)
 

The Vanguard Group

100 Vanguard Boulevard

Malvern, PA 19355

     1,992,611 (2)      9,386,368 (3)      12.40

BlackRock, Inc.

55 East 52nd Street

New York, NY 10055

     N/A       8,050,417 (4)      8.77

State Street Corporation

One Lincoln Street

Boston, MA 02111

     N/A       6,045,884 (5)      6.59

 

(1)

This column lists the sum of the shares shown on this table, expressed as a percentage of the Company’s outstanding shares at December 30, 2022.

 

(2)

This amount represents the shares held by Vanguard Fiduciary Trust Company, a wholly owned subsidiary of The Vanguard Group, in its capacity as trustee for certain employee benefit plans. These shares have been allocated to plan participants. The plan trustee votes the shares allocated to participant accounts as directed by those participants. Shares held by the trustee on behalf of the plans as to which participants have made no timely voting directions are voted by the trustee in the same proportion as the shares of Common Stock for which the trustee received timely directions, except in the case where to do so would be inconsistent with provisions of Title I of ERISA. Vanguard Fiduciary Trust Company disclaims beneficial ownership of all shares held in trust by the trustee that have been allocated to the individual accounts of participants in the plans for which directions have been received, pursuant to Rule 13d-4 under the Exchange Act.

 

(3)

The number of shares is derived from Amendment No. 10 to Schedule 13G filed on February 9, 2022 by The Vanguard Group. The filing states that The Vanguard Group has sole voting power with respect to zero shares of Common Stock, shared voting power with respect to 42,707 shares of Common Stock, sole dispositive power with respect to 9,270,856 shares of Common Stock, and shared dispositive power with respect to 115,512 shares of Common Stock.

 

(4)

The number of shares is derived from the Amendment to Schedule 13G filed on February 1, 2022 by BlackRock, Inc. The filing states that BlackRock, Inc. has sole voting power with respect to 7,604,083 shares of Common Stock, shared voting power with respect to zero shares of Common Stock, sole dispositive power with respect to 8,050,417 shares of Common Stock, and shared dispositive power with respect to zero shares of Common Stock.

 

(5)

The number of shares is derived from the Amendment to Schedule 13G filed on February 11, 2022 by State Street Corporation. The filing states that State Street Corporation has sole voting power with respect to zero shares of Common Stock, shared voting power with respect to 5,951,196 shares of Common Stock, sole dispositive power with respect to zero shares of Common Stock, and shared dispositive power with respect to 6,045,884 shares of Common Stock.

Delinquent Section 16(a) Reports

 

 

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires that our directors, executive officers, and persons who own more than 10% of a registered class of our equity securities file with the SEC reports of ownership and changes in beneficial ownership of our common stock. The Company files certain Section 16(a) reports on behalf of the directors and executive officers, and directors, executive officers, and greater than 10% owners are required to furnish us with copies of all Section 16(a) forms that are filed on their behalf. Based solely on a review of copies of these reports furnished to us or written representations that no other reports were required, we believe that during fiscal 2022, all required reports were filed on behalf of our directors and executive officers on a timely basis, other than the filing of one Form 4 reporting one transaction for Sarah J. Mugel, General Counsel, Secretary and Corporate Responsibility Officer, relating to a reallocation of her 401(k) plan account investments on February 28, 2022 that should have been promptly reported under Section 16(a). A late Form 4 was filed on December 16, 2022, reporting this one transaction.

 

 

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38    National Fuel Gas Company  |  2023 PROXY STATEMENT    


  Equity Compensation Plan Information     LOGO  

 

As of September 30, 2022

 

 

 

PLAN CATEGORY

   NUMBER OF SECURITIES TO BE
ISSUED UPON  EXERCISE OF
OUTSTANDING OPTIONS,
WARRANTS AND RIGHTS
(A)
    WEIGHTED-
AVERAGE EXERCISE
PRICE OF  OUTSTANDING
OPTIONS, WARRANTS AND
RIGHTS
(B)
    NUMBER OF SECURITIES
REMAINING AVAILABLE  FOR
FUTURE ISSUANCE UNDER
EQUITY COMPENSATION PLANS
(EXCLUDING SECURITIES
REFLECTED IN COLUMN (A))
(C)
 

Equity compensation plans approved by security holders

     1,026,614 (1)    $ 53.05 (2)      2,314,436 (3) 

Equity compensation plans not approved by security holders

     0       0       0  

Total

     1,026,614     $ 53.05       2,314,436  

 

(1)

The securities listed in column (a) include 607,179 shares of Common Stock which would be issued under performance-based awards outstanding at September 30, 2022 if the target level of performance is achieved under those awards. If actual performance rises above the target level of performance for these awards, additional shares would generally be issued. For example, if maximum performance were achieved, 1,214,358 shares of Common Stock would be issued under performance-based awards outstanding at September 30, 2022. In that event, the number of shares to be issued noted in column (a) would be 1,633,793.

 

(2)

The weighted-average exercise price in column (b) takes into account outstanding stock appreciation rights. It does not take into account outstanding restricted stock units (RSUs) or performance shares.

 

(3)

Of the securities listed in column (c), 165,233 were available at September 30, 2022 for future issuance pursuant to the Director Equity Compensation Plan and 2,149,203 were available for future issuance under the 2010 Equity Compensation Plan. All securities included in column (c) are available for issuance for awards other than options, warrants or rights.

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   39


  Executive Compensation     LOGO  

 

Compensation Committee Report

 

 

The Compensation Committee of the Board of Directors has reviewed and discussed with management the Compensation Discussion and Analysis contained in this proxy statement. Based upon this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2022.

 

     

COMPENSATION COMMITTEE

 

J. N. Jaggers, Chairman

D. H. Anderson

T. E. Skains

Compensation Discussion and Analysis

 

 

This Compensation Discussion and Analysis (“CD&A”) provides a detailed review of the Company’s compensation of named executive officers, including the goals of the compensation program, the process for determining compensation levels, and analysis of the specific components of compensation, among other things. The Board of Directors believes that the Company’s compensation policies and practices, as developed following engagement with stockholders, including discussions with respect to ESG factors, encourage a culture of pay for performance and are strongly aligned with the long-term interests of the Company’s stockholders.

The Company’s named executive officers for fiscal 2022 are David P. Bauer, President and Chief Executive Officer; Karen M. Camiolo, Treasurer and Principal Financial Officer; Ronald C. Kraemer, Chief Operating Officer; Donna L. DeCarolis, President of the Company’s Utility segment; and Justin I. Loweth, President of the Company’s E&P segment and Midstream segment.

Stockholder Engagement and Alignment

 

 

2022 Say-on-Pay Vote and Stockholder Engagement

The 2022 say-on-pay advisory vote yielded a result of over 97% of votes cast in support of the compensation of the Company’s named executive officers. The Board (including the Compensation Committee) generally considered this outcome an indicator of stockholder support for the overall philosophy and structure of the Company’s executive compensation policies and decisions. Given the high approval percentage of the vote, the Compensation Committee did not make any significant changes to the executive compensation program that were based specifically on the results of the 2022 say-on-pay advisory vote.

From time to time members of Company management have held meetings with some of the Company’s largest stockholders to obtain feedback on matters of interest to them. The Board has directed management to continue to engage as appropriate with interested stockholders, and to inform it of any requests for meetings with members of the Board. The Board and management believe that engagement with stockholders facilitates important dialogue from which we gather various viewpoints.

Executive Compensation Aligned with Stockholders’ Interests

The Compensation Committee has developed the Company’s compensation policies and procedures to align the interests of executives with those of the Company’s stockholders. The Company recognizes and rewards executives through compensation arrangements that directly link executive pay to the Company’s performance, and we ensure a strong alignment of interests with our stockholders by including a significant percentage of equity, which is at-risk compensation, in the overall mix of pay. As shown in the chart below, which includes the fiscal 2022 target compensation mix for the CEO and an average for the other four named executive officers, 83% of the target compensation of David Bauer, the Company’s CEO, was at-risk compensation, with 62% tied to equity (in the form of performance shares and restricted stock units), and 21% tied to cash-based short-term performance goals.

 

 

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40    National Fuel Gas Company  |  2023 PROXY STATEMENT    


Executive Compensation

 

LOGO

Key features of the Company’s executive compensation program include the following:

 

  Ø

Annual performance incentives of the named executive officers are based on objective performance goals;

 

  Ø

Long-term performance incentives are composed entirely of equity;

 

  Ø

Long-term performance goals beginning with fiscal 2022 consist of three-year TSR and three-year total ROC, each relative to a peer group, and three-year reductions in GHG emissions and methane intensity levels;

 

  Ø

Named executive officers and other officers are required to meet stock ownership guidelines that range from one to six times base salary (six times for the CEO and three times for other named executive officers);

 

  Ø

Executive officers may not hedge or pledge Company stock;

 

  Ø

Equity incentive plans prohibit the repricing of equity awards;

 

  Ø

The Compensation Committee engages two independent compensation consultants to assist in setting compensation;

 

  Ø

All change-in-control agreements are double triggered;

 

  Ø

The Company does not provide tax “gross-ups” on any compensation or with respect to any change-in-control payments; and

 

  Ø

The Board has adopted a clawback policy (see “Recovery of Funds” in the Company’s Corporate Governance Guidelines, included as Appendix B to this proxy statement).

TSR Performance and CEO Pay Relative to Peers

 

 

Relative Total Shareholder Return

For the one-year period ended September 30, 2022, the Company’s TSR was at approximately the 63rd percentile of the Corporate Peer Group (as defined below) selected by the Compensation Committee in September 2021 (and listed in the table below). Under the calculation method used for this relative TSR analysis, starting stock prices are calculated as the average closing stock prices for the month of September 2021, ending stock prices are calculated as the average closing stock prices for the month of September 2022, and dividends are deemed reinvested at each ex-dividend date. The use of average closing stock prices mirrors the calculation method specified for the Company’s TSR performance shares. For the three-year period ended September 30, 2022, using the same calculation method, the Company’s TSR was at approximately the 54th percentile of the primary peer group selected by the Compensation Committee in September 2019 (which peer group is listed below under the heading “Long-Term Incentive Compensation” and subheading “Performance on Past Awards”).

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   41


Executive Compensation

 

CEO Compensation Versus Peers

Reflected in the table below is a comparison of fiscal 2021 total direct compensation for Mr. Bauer against that of CEOs in the Corporate Peer Group selected by our Compensation Committee in September 2021. Fiscal 2021 is the most recent fiscal year for which proxy statement data is available for our peers. Mr. Bauer’s target total direct compensation, as shown in the table, was just below the average of our peers, and above the median of our peers (65th percentile).

CEO & President

Compared to CEO proxy data for fiscal year 2021

 

COMPANY   TITLE   FYE
REVENUE
(MILLIONS)
   

MARKET CAP
AS OF 9/30/21

(MILLIONS)

   

FYE # OF

EMPLOYEES

    TOTAL DIRECT COMPENSATION  
      ACTUAL             TARGET      

ANTERO MIDSTREAM CORPORATION

  Chairman, CEO & President   $ 898     $ 4,975       519     $ 5,385,526     $ 5,131,615  

ATMOS ENERGY CORPORATION

  President, CEO & Director   $ 4,202     $ 11,536       4,684     $ 4,777,821     $ 4,797,744  

CNX RESOURCES CORPORATION

  President, CEO & Director   $ 751     $ 2,750       441     $ 7,652,012     $ 6,260,012  

COTERRA ENERGY INC.

  CEO, President & Director   $ 3,449     $ 8,697       936     $ 4,458,333     $ 5,920,833  

EQT CORPORATION

  President, CEO & Director   $ 3,065     $ 7,734       693     $ 16,919,763     $ 16,119,763  

EQUITRANS MIDSTREAM CORPORATION

  CEO & Chairman   $ 1,317     $ 4,386       766     $ 8,476,330     $ 7,764,190  

GULFPORT ENERGY CORPORATION

  CEO & Chairman   $ 809     $ 1,692       212     $ 4,123,277     $ 4,288,998  

MDU RESOURCES GROUP, INC.

  President, CEO & Director   $ 5,681     $ 6,006       16,000     $ 4,923,889     $ 5,472,639  

NEW JERSEY RESOURCES CORPORATION

  President, CEO & Director   $ 2,157     $ 3,357       1,251     $ 3,960,093     $ 3,555,348  

ONE GAS, INC.

  President, CEO & Director   $ 1,809     $ 3,390       3,600     $ 1,955,699     $ 2,102,830  

RANGE RESOURCES CORPORATION

  CEO, President & Director   $ 2,930     $ 5,404       527     $ 7,389,996     $ 6,834,996  

SM ENERGY COMPANY

  President, CEO & Director   $ 2,623     $ 3,198       506     $ 6,466,936     $ 5,650,013  

SOUTHWEST GAS HOLDINGS, INC.

  President, CEO & Director   $ 3,680     $ 3,952       12,720     $ 8,167,539     $ 7,642,539  

SOUTHWESTERN ENERGY COMPANY

  CEO, President & Director   $ 6,667     $ 5,629       938     $ 5,090,759     $ 4,697,634  

SPIRE INC.

  President, CEO & Director   $ 2,236     $ 3,162       3,710     $ 5,093,952     $ 5,083,935  

UGI CORPORATION

  President, CEO & Director   $ 7,447     $ 8,912       11,300     $ 3,331,005     $ 3,253,852  

Summary Statistics

                                           

75th Percentile

      $ 3,811     $ 6,438       3,954     $ 7,455,500     $ 6,403,758  

Average

      $ 3,107     $ 5,299       3,675     $ 6,135,808     $ 5,911,059  

Median

      $ 2,777     $ 4,680       937     $ 5,092,356     $ 5,302,127  

25th Percentile

      $ 1,686     $ 3,317       525     $ 4,374,569     $ 4,595,475  

NATIONAL FUEL GAS CO

  CEO & President   $ 2,141     $ 4,789       2,188     $ 6,062,968     $ 5,853,218  

Percentile Rank

        33%       51%       63%       64%       65%  

 

LOGO

 

NOTES:

   ©2022 Korn Ferry. All rights reserved
      - Total Direct Compensation = base salary + bonus + long-term incentives

Objectives of the Named Executive Officer Compensation Program

 

 

The Company’s named executive officer compensation program is designed to attract, motivate, reward and retain executive talent in order to achieve the objectives that contribute to the overall success of the Company. When setting compensation for the Company’s named executive officers, the Compensation Committee’s primary goal is to provide balanced incentives for creating stockholder value in both the near-term and long-term. The Compensation Committee awards a combination of cash and equity components that are designed to focus management efforts on drivers of stockholder value, including financial, safety, environmental, diversity, and customer service metrics. The Compensation Committee establishes the compensation program based on its business judgment after consultation with its compensation consultants. Total

 

 

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42    National Fuel Gas Company  |  2023 PROXY STATEMENT    


Executive Compensation

 

compensation for named executive officers includes the following key components, each of which is addressed in greater detail below:

 

COMPENSATION COMPONENT

  OBJECTIVES   KEY FEATURES IN  2022
Base Salary  

• Provide a fixed level of pay in recognition of day-to-day job performance.

 

• Attract, retain and motivate leadership with compensation reflecting specific responsibilities, experience and effectiveness.

 

• Generally references the 50th percentile of energy industry median provided by independent compensation consultants; may pay greater base salary to attract, retain and motivate executives.

 

• Adjustments are made based on Compensation Committee members’ business judgment.

 

• Overall corporate performance and individual performance are factors for subjective consideration.

Annual Cash Incentive
Compensation
 

• Motivate performance toward, and reward achievement of, near-term financial, operating, and ESG goals.

 

• Target awards are set as a percentage of base salary.

Long-Term Equity Incentive
Compensation
 

• Focus attention on managing the Company from a long-term investor’s perspective to create long-term stockholder value.

 

• Encourage executives and other managers to have a significant, personal investment in the Company through stock ownership.

 

• Reward executives for longer-term financial performance of the Company relative to an industry peer group and achievement of emissions goals.

 

• Long-term incentive compensation denominated in equity.

 

• Long-term incentive compensation allocated two-thirds to performance shares and one-third to time-based RSUs as an additional retention tool, or, for long-tenured named executive officers (Ms. Camiolo, Mr. Kraemer and Ms. DeCarolis), entirely to performance shares, to enhance emphasis on achievement of performance targets.

 

• Beginning in fiscal 2022, performance shares allocated among three distinct performance conditions — three-year reductions in GHG emissions and methane intensity levels; three-year TSR; and three-year ROC.

 

• Performance conditions are objective and, with respect to TSR and ROC goals, measured relative to a recognized peer group.

Executive Health, Welfare, and Retirement Benefits  

• Provide executives with reasonable and competitive benefits commensurate with those in the regulated and unregulated energy industry.

 

• Help the Company attract and retain high-caliber employees in high-level management positions.

 

• Retirement benefits consisting of:

 

• qualified defined contribution plan (401(k));

 

• qualified non-contributory defined contribution plan (retirement savings account or “RSA”) or qualified defined benefit plan (depending on year of hire); and

 

• non-qualified executive retirement plan and/or non-qualified tophat plan, depending on year of hire.

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   43


Executive Compensation

 

COMPENSATION COMPONENT

   OBJECTIVES    KEY FEATURES IN  2022
Change in Control Agreements   

• Help assure that executives direct their attention to their duties, acting in the best interests of stockholders, notwithstanding potential for loss of employment in connection with a change in control.

  

• Double-trigger provision to avoid providing benefits to officers who continue to enjoy employment with the Company after a change in control event.

 

• No tax gross-up on payment.

 

• Lump sum severance payment is reduced on a pro-rata basis if termination occurs between age 62 and 65.

Process for Determining Compensation

 

 

Risk Assessment

The Board conducted a risk assessment of the Company’s compensation programs during fiscal 2022. Based on the assessment, the Board concluded that the Company’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.

Role of the Compensation Committee

The Compensation Committee comprises three directors, all of whom have been determined by the Board to be independent. The Compensation Committee administers the Company’s compensation program for named executive officers, setting base salaries and available incentive compensation ranges. The Compensation Committee exercises the authority delegated to it by the stockholders or the Board under the Company’s cash and equity incentive compensation plans, which include:

Cash Compensation Plans/Short-Term Incentive

 

   

AARCIP, generally for named executive officers

 

   

EACIP, generally for other executive officers

Equity Compensation Plans/Long-Term Incentive

 

   

2010 Equity Compensation Plan

In addition, the Compensation Committee makes recommendations to the Board with respect to the development of incentive compensation plans and equity-based plans and changes in compensation for non-employee directors.

As described below, the Compensation Committee retained the services of independent compensation consultants to assist it in administering the Company’s compensation program. Further, as described earlier in this proxy statement, the members of the Compensation Committee have significant experience in the energy industry and as leaders of major corporations. In these roles, as well as through their experiences with the Company, the Compensation Committee has garnered extensive knowledge regarding the establishment of a competitive and properly focused compensation program for the Company’s named executive officers. In making the decisions discussed below, the Compensation Committee uses its subjective business judgment developed through its years of experience.

Role of the Chief Executive Officer

In making its subjective determinations with respect to named executive officers other than the Chief Executive Officer, the Compensation Committee discusses the information it receives from its independent compensation consultants with the CEO and seeks his recommendation as to the appropriate base salaries and target short-term and long-term incentive awards for each of these officers, based on his assessment of the officers’ performance, contributions and abilities, and taking into account the compensation consultants’ recommendations. The CEO also provides input to the Compensation Committee’s compensation consultants with regard to the responsibilities of the Company’s named executive officers, to facilitate the consultants’ recommendations and comparisons of such officers and their positions to other positions in the marketplace. The CEO made no recommendations with regard to his own compensation.

Independent Compensation Consultants

The Compensation Committee retains independent compensation consultants to inform its business judgment as to compensation matters, including the selection of peer companies for compensation comparison purposes. The

 

 

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44    National Fuel Gas Company  |  2023 PROXY STATEMENT    


Executive Compensation

 

Compensation Committee retained the services of Korn Ferry (a unit of Korn/Ferry International) (“Korn Ferry”) to provide a competitive assessment of compensation at the Company’s businesses other than its exploration and production business, and Meridian Compensation Partners, LLC (“Meridian”) to assess compensation at its exploration and production business.

Determining Our Peers

The Compensation Committee understands the importance of using comparative data that reflects information from companies with business segments comparable to those of the Company. Because of the Company’s diverse asset mix, selecting an appropriate peer group of companies requires a customized approach that calls for more critical thought than simple selection of a standard industry group, which may include utility companies without a presence in the broader natural gas industry. The Company’s assets span the entire natural gas value chain and include exploration and production (“E&P”), interstate natural gas transmission and storage, natural gas gathering, and natural gas utility operations. For compensation and performance comparisons, the Compensation Committee utilizes two separate peer groups. The Korn Ferry corporate peer group (the “Corporate Peer Group”) is the primary peer group against which the Compensation Committee generally compares named executive officer compensation and is intended to include a group of companies that, as a whole, represents our asset mix. Meridian assists in the formulation of a peer group that is targeted to evaluate our E&P business and the compensation of executives who oversee it (the “E&P Peer Group”). Both peer groups may change over time due to corporate transactions or as the Compensation Committee believes is warranted based on its business judgment. The Compensation Committee believes that the peer groups include an appropriate mix of companies that reflect businesses in which the Company participates, or with which it competes, as reflected in the tables below.

For the purpose of establishing 2022 compensation, the Compensation Committee selected the peer groups listed below. In addition, the Compensation Committee utilized the Corporate Peer Group for purposes of setting relative performance conditions on long-term incentive awards of performance shares.

Corporate Peer Group

Korn Ferry provides information to the Compensation Committee to consider in evaluating and setting compensation for Company officers and officers of affiliate companies other than Seneca, the Company’s E&P business. For those officers, the Compensation Committee reviewed an analysis of the following forms of compensation for comparable positions in general industry and the energy industry:

 

  1)

base salary;

 

  2)

total cash compensation (base salary plus short-term cash incentive); and

 

  3)

total direct compensation (base salary plus short-term cash incentive plus long-term equity incentive).

The Compensation Committee also reviewed recommendations on incentive compensation target amounts with respect to:

 

  1)

short-term cash incentive; and

 

  2)

long-term equity incentive.

 

 

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     National Fuel Gas Company  |  2023  PROXY STATEMENT   45


Executive Compensation

 

Additionally, the Compensation Committee reviewed a proxy analysis of base salary, incentive targets, total cash compensation, long-term incentive and total direct compensation for the offices of President and CEO of the Company, Chief Operating Officer of the Company, Treasurer and Principal Financial Officer of the Company, and President of National Fuel Gas Distribution Corporation, based on proxy data for the Company and the 16 energy companies in the Corporate Peer Group listed below. The Compensation Committee selected these 16 companies for purposes of establishing compensation for 2022 because each participated in one or more businesses that are similar to those of the Company:

 

     CORPORATE PEER COMPANIES FOR FISCAL 2022   

    EXPLORATION    

    &    

    PRODUCTION    

  

    PIPELINE    

    & STORAGE    

    AND/OR    

    GATHERING    

  

    NATURAL    

    GAS UTILITY    

1

 

Antero Midstream Corporation

        X     

2

 

Atmos Energy Corporation

        X    X

3

 

CNX Resources Corporation

   X    X     

4

 

Coterra Energy Inc.

   X          

5

 

EQT Corporation

   X    X     

6

 

Equitrans Midstream Corporation

        X     

7

 

Gulfport Energy Corporation

   X          

8

 

MDU Resources Group, Inc.

        X    X

9

 

New Jersey Resources Corporation

        X    X

10

 

ONE Gas, Inc.

             X

11

 

Range Resources Corporation

   X          

12

 

SM Energy Company

   X          

13

 

Southwest Gas Holdings, Inc.

        X    X

14

 

Southwestern Energy Company

   X          

15

 

Spire Inc.

        X    X

16

 

UGI Corporation

        X    X
   

TOTAL

   7    10    7

The Compensation Committee reviews the members of the Corporate Peer Group each year and makes such adjustments as it believes are warranted. The Compensation Committee revised the Corporate Peer Group used for purposes of establishing compensation for 2022. In particular, to gain the benefit of additional reference points, the Compensation Committee added Antero Midstream Corporation, a natural gas gathering company, Gulfport Energy Corporation, a natural gas-weighted exploration and production company, and ONE Gas, Inc., a natural gas distribution utility.

E&P Peer Group

Meridian provides information to the Compensation Committee to consider in evaluating and setting compensation for employees at Seneca. Meridian also assessed the compensation of Mr. Bauer, Mr. Kraemer and Ms. Camiolo against the E&P Peer Group. The Compensation Committee requested these additional analyses due to the importance of the Company’s E&P segment and the contributions of Mr. Bauer, Mr. Kraemer and Ms. Camiolo in the management of that segment. The Compensation Committee selected Meridian due to its expertise in E&P industry compensation matters.

The Compensation Committee reviewed an analysis for officers of Seneca and select officers of the Company of compensation practices with respect to the following forms of compensation for comparable positions in the E&P industry:

 

  1.

base salary;

 

  2.

target short-term incentive;

 

  3.

target cash compensation (base salary plus short-term incentive);

 

  4.

long-term incentive; and

 

  5.

total target compensation (base salary plus short-term and long-term incentive).

 

 

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Executive Compensation

 

The Compensation Committee reviewed an analysis based on data from Meridian’s proprietary North America Oil & Gas Exploration & Production compensation database, supplemented by publicly available sources. The Compensation Committee selected 16 E&P peer companies based on criteria such as revenues, assets, and nature of operations that made them relatively comparable to Seneca, in terms of operations, and similar in size to Seneca or the Company. The companies in the 16-member E&P Peer Group ranged in size from approximately $1.8 billion to $12.8 billion in assets (with a median of $4.2 billion). By comparison, at the time the E&P Peer Group was selected, Seneca’s assets and the Company’s consolidated assets totaled approximately $2.3 and $7.5 billion, respectively. The E&P Peer Group is:

 

     E&P PEER COMPANIES FOR FISCAL 2022

1

   Antero Resources Corporation    9    Matador Resources Company

2

   Bonanza Creek Energy, Inc.    10    Oasis Petroleum Inc.

3

   Callon Petroleum Company    11    PDC Energy, Inc.

4

   Centennial Resource Development, Inc.    12    Range Resources Corporation

5

   Cimarex Energy Co.    13    SM Energy Company

6

   Comstock Resources Inc.    14    Southwestern Energy Company

7

   Gulfport Energy Corporation    15    Talos Energy Inc.

8

   Laredo Petroleum, Inc.    16    Whiting Petroleum Corporation

The Compensation Committee reviews the companies in the E&P Peer Group from time to time and makes adjustments as it believes are warranted. For purposes of establishing compensation for 2022, the Compensation Committee removed HighPoint Resources Corporation, Montage Resources Corporation and Parsley Energy, Inc., which were acquired by other entities. The Compensation Committee added Antero Resources Corporation, Centennial Resource Development, Inc., Talos Energy Inc. and Whiting Petroleum Corporation, based on the criteria noted above.

Fiscal 2022 Total Compensation

 

 

Base Salary

Base salaries provide a predictable base compensation for day-to-day job performance. The Compensation Committee reviews named executive officer base salaries at calendar year-end and adjusts them, if it deems appropriate in its subjective business judgment, following review of its compensation consultants’ competitive analyses and, with respect to named executive officers other than the CEO, upon consideration of the recommendations of the CEO. In addition, base salary may be adjusted during the calendar year when changes in responsibility occur or when circumstances otherwise warrant. Base salary is not adjusted based on specific objective financial results, although overall corporate performance is reviewed by the Compensation Committee in its decision-making process. The Compensation Committee does not use formulas; rather, it exercises its business judgment.

In establishing base salaries for named executive officers other than those employed by Seneca, the Compensation Committee generally references the 50th percentile of the Korn Ferry Energy Industry survey data. For the President of Seneca, the Compensation Committee generally references Meridian survey data for the chief operating officer at independent exploration and production company peers. Because that position is not a direct match, however, the Compensation Committee also references, as a supplement, the position of chief executive officer at those peers. In its subjective business judgment, the Compensation Committee may pay a greater salary if it is necessary to attract, retain and motivate the individuals responsible for the success of the business enterprise. The Compensation Committee considers overall corporate performance and an individual’s specific responsibilities, experience (including time in position) and effectiveness and makes adjustments based on business judgment and, for named executive officers other than the CEO, the CEO’s recommendations.

In setting Mr. Bauer’s base salary for calendar year 2022, the Compensation Committee referenced the independent compensation consultant’s report indicating Mr. Bauer’s then-current base salary was below the 50th percentile of the consultant’s Energy Industry market data. The Compensation Committee increased Mr. Bauer’s salary from $950,000 to $980,000, a level still below the 50th percentile level.

In determining Ms. Camiolo’s base salary for calendar year 2022, the Compensation Committee referenced the independent compensation consultant’s report and increased Ms. Camiolo’s salary from $437,000 to $446,000, a level between the

 

 

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Executive Compensation

 

Energy Industry 50th and 75th percentiles for principal financial officers. The increase followed discussion with Mr. Bauer regarding Ms. Camiolo’s responsibilities, effectiveness and experience.

For calendar year 2022, upon review of the independent compensation consultant’s report and consultation with Mr. Bauer, the Compensation Committee increased Mr. Kraemer’s base salary from $698,000 to $780,000, a level below the Energy Industry 50th percentile for positions comparable to his position as Chief Operating Officer.

For calendar year 2021, following discussion with Mr. Bauer regarding Ms. DeCarolis’ responsibilities, experience and effectiveness, the Compensation Committee increased her base salary from $630,000 to $650,000, an amount in line with the Energy Industry 50th percentile for positions comparable to her position as President of the Company’s Utility segment.

For calendar year 2022, the Compensation Committee increased Mr. Loweth’s base salary as President of Seneca and President of Midstream Company from $575,000 to $645,000, a level above the 75th percentile of the independent compensation consultant’s survey data for chief operating officers of independent exploration and production company peers, but below the 25th percentile of the consultant’s survey data for chief executive officers of such peers. The Compensation Committee’s action on Mr. Loweth’s salary followed discussion with Mr. Bauer of Mr. Loweth’s responsibilities, experience and effectiveness.

The fiscal 2022 base salaries paid to the named executive officers are shown in the Fiscal 2022 Summary Compensation Table under the “Salary” column within this proxy statement.

Annual Cash Incentive

The Company provides an annual cash incentive to its executives to motivate their performance over a short term (which is generally considered to be no longer than two years). Early in the fiscal year, the Compensation Committee establishes for each named executive officer a target amount for the annual cash incentive, stated as a percentage of base salary. Subject to the limitations described in this paragraph, executives generally can earn up to two times the target percentage, based on performance on written goals. The maximum payment may not exceed the lesser of (i) two times the executive’s base salary, or (ii) two million dollars. In addition, because earnings-related goals take into account performance over two fiscal years, as described below, performance below the maximum level on an earnings-related goal in the first year will negate the possibility of achieving maximum performance on the averaged two-year goal. For participants in the EACIP, the CEO has broad discretion to reduce the amount otherwise payable as annual cash incentive based on such factors as the CEO may determine.

Target Award Levels

In considering target award levels for the annual cash incentive for fiscal 2022, the Compensation Committee took into account the recommendations of the independent compensation consultants based on reviews of competitive market practices, and the recommendations of Mr. Bauer with respect to named executive officers other than himself. The Committee noted that target total cash compensation (base salary and annual bonus) was below the median of the survey data for Mr. Bauer, Mr. Kraemer and Ms. DeCarolis, and aligned with the median for Ms. Camiolo. For Mr. Loweth, target total cash compensation was slightly above the 50th percentile of the survey data for chief operating officers of independent E&P companies, but below the 25th percentile for chief executive officers of such peers. The Compensation Committee exercised its business judgment and set target awards for fiscal 2022 as follows:

 

NAMED EXECUTIVE OFFICER

   TARGET
(AS A PERCENTAGE OF BASE  SALARY)
 

Mr. Bauer

     125

Ms. Camiolo

     50

Mr. Kraemer

     100

Mr. Loweth

     95

Ms. DeCarolis

     80

These target levels represented increases from the prior year for Mr. Bauer (from 120%), Mr. Kraemer (from 90%), and Ms. DeCarolis (from 75%), bringing target total cash compensation for fiscal 2022 to levels at or below the 50th percentile of survey data. For Mr. Loweth, the increase from 70% in the prior year brought target total cash compensation to a level above the 50th percentile of the survey data for chief operating officers of independent E&P companies, but below the 25th percentile for chief executive officers of such peers. The Compensation Committee made no change to Ms. Camiolo’s target award, maintaining target total cash compensation at approximately the 50th percentile of survey data.

 

 

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Executive Compensation

 

Fiscal Year 2022 Performance Goals

Based upon discussions with Mr. Bauer and upon review of forecasted financial and operational data, the Compensation Committee approved for each named executive officer a set of particular performance goals for the 2022 fiscal year. The Compensation Committee aligned these goals with the Company’s strategic business plans, as well as its ongoing corporate responsibility efforts, including ESG matters. Certain goals overlapped among named executive officers; for example, each named executive officer had goals tied to safety, diversity and consolidated EBITDA. Incentive payments are based upon performance against the stated goals. Each of the named executive officers participated in the AARCIP, under which 100% of the target incentive is made dependent on objective performance criteria. All performance criteria applicable to a particular executive are communicated to that executive in writing at the time the criteria are established.

Two-Year Averaging of Earnings-Related Goals

The earnings-related goals established by the Compensation Committee are structured so as to average current-year and prior-year performance. As a result, earnings performance in any given year will impact compensation over two years, mitigating against a potential incentive to pursue short-term results at the expense of longer-term value. In the Company’s E&P segment, for example, a low commodity price environment can militate in favor of scaling back drilling plans, a change that can negatively affect near-term earnings but enhance longer-term value. The Compensation Committee endeavors to incentivize strong short-term results without encouraging activity that is not economic under prevailing market conditions. Averaging earnings-related goals over two years helps to balance those two objectives. The Compensation Committee also sets targets based on the current fiscal year’s financial forecast. Thus, the current year’s targets may be lower (or higher) than the prior year’s actual results (to which the averaging applies). In this way, the impact of lower (or higher) natural gas commodity prices on the Company’s earnings affects the target levels from one year to the next. The use of a two-year averaging technique for earnings-related goals will impact the performance percentage points earned on those goals in a given year, but over time and all other things being equal, it will not change the cumulative performance percentage points earned for actual performance.

The types of objective goals approved for fiscal 2022 and the purpose of the goals are set forth in the following table:

 

GOALS

  PURPOSE
Financial performance goals related to earnings (EBITDA*)   To focus executives’ attention on the Company’s overall profitability, as well as the profitability of certain segments, as appropriate. Performance is averaged with the prior year’s performance to mitigate against short-term action to impact one year’s earnings.
Operations performance goals related to expenses in the exploration and production business, compression reliability in the pipeline and storage and gathering businesses, and customer service in the utility business   To focus executives’ attention on controlling expense, ensuring operational reliability, and continued excellence in customer service.
ESG performance goals related to emissions reductions, safety, and diversity, equity and inclusion   To focus executives’ attention on environmental stewardship, employee, customer and public safety, workplace inclusiveness, and diversity among the workforce

 

*

In general, for purposes of the goals, EBITDA is defined, subject to certain exclusions, as operating income plus depreciation, depletion and amortization, plus any period-end impairment charges.

To determine the annual cash incentive award payout based on stated performance objectives, the weight assigned to each goal is multiplied by the percentage of the goal achieved to calculate a weighted percentage for each goal. Once the weighted percentage for each goal is determined, the percentages are totaled. That total weighted percentage is multiplied by the target award to arrive at the total incentive payment amount.

The fiscal 2022 annual cash incentives earned by the named executive officers are shown in the Fiscal 2022 Summary Compensation Table in the “Non-Equity Incentive Plan Compensation” column. For each named executive officer, the amount earned was based on performance against objective goals. The Compensation Committee established the goals in the first quarter of the fiscal year and, in accordance with the terms and conditions of the goals as initially adopted, updated certain goals to reflect Seneca’s divestiture of its California operations – in particular, the consolidated EBITDA and Seneca/Midstream EBITDA goals, and Seneca’s lease operating expense and general and administrative expense goals. These updates resulted, in general, in lower fiscal 2022 EBITDA goal targets and more stringent fiscal 2022 Seneca expense targets. As described above, each of the EBITDA goals averaged fiscal 2022 performance with the prior year’s performance. The Compensation Committee approved the incentive payments made to the named executive officers.

 

 

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Executive Compensation

 

The following chart identifies the goals assigned to each of the named executive officers for the 2022 fiscal year, the percentage of each goal achieved, the weight assigned to each goal, and the weighted percentage achieved for each goal. Also noted is each named executive officer’s target percentage of base salary, total weighted percentage achieved, target amount, and actual incentive payout. Following the chart, numbered sequentially to match the appearance of the performance objective in the chart, is a summary of what the objective was at the threshold level, target level and maximum level of performance, and a summary of actual performance. Where a target level of performance is stated as a range, achievement at any point within the range will result in the same contribution to the total payout. With regard to EBITDA goals, performance is averaged with the prior year’s performance as a mechanism to mitigate against short-term action to impact one year’s earnings.

 

              

ANNUAL CASH INCENTIVE

 

EXECUTIVE

    BAUER     CAMIOLO     KRAEMER     LOWETH     DECAROLIS  

Target Percentage of Base Salary

      125%       50%       100%       95%       80%  

FISCAL 2022
PERFORMANCE GOALS

  PERFORMANCE
(%)
    WGHTD    

WGHTD %

ACHVD

    WGHTD    

WGHTD %

ACHVD

    WGHTD    

WGHTD %

ACHVD

    WGHTD    

WGHTD %

ACHVD

    WGHTD    

WGHTD %

ACHVD

 

Financial Goals

                                                                 
1.    Consolidated EBITDA*     141       0.25       35.25       0.25       35.25       0.25       35.25       0.25       35.25      
0.30
 
   
42.30
 
2.    Regulated EBITDA*     97       0.20       19.40       0.20       19.40       0.25       24.25           0.35       33.95  
3.    Seneca/Midstream EBITDA*     157       0.20       31.40       0.20       31.40       0.15       23.55       0.25       39.25                  

Operations Goals

                                                                 
1.    Seneca Lease Operating Expense     100                                                       0.10       10.00                  
2.    Seneca Finding and Development Cost     100       0.10       10.00       0.10       10.00           0.10       10.00      
3.    Seneca General and Administrative Expense     67                   0.10       6.70      
4.    Compression Reliability     83               0.05       4.15          
5.    Customer Service     123                                       0.05     6.15                       0.10       12.30  

Environmental, Social and

Governance Goals

                                                                 
1.    Seneca Emission Reduction     50                                                       0.05       2.50                  
2.    Pipeline Emission Reduction     100               0.05       5.00          
3.    Operational Safety and Methane Emission Reduction     100       0.05       5.00       0.05       5.00               0.05       5.00  
4.    Safety     155       0.15       23.25       0.15       23.25       0.15       23.25       0.10       15.50      
0.15
 
   
23.25
 
5.    Diversity, Equity and Inclusion     164       0.05       8.20       0.05       8.20       0.05       8.20       0.05       8.20       0.05       8.20  

Total Weighted Percentage Achieved

      132.50%       132.50%       129.80%       127.40%      
125.00%
 
Target            $1,215,625       $221,875       $759,500       $596,125      
$516,000
 

Annual Cash Incentive

      $1,610,703       $293,984       $985,831       $759,463      
$645,000
 

 

*

Reflects an average of 2022 performance and 2021 performance. Regulated EBITDA refers to the Company’s regulated Utility and Pipeline and Storage segments; Seneca/Midstream EBITDA refers to the Company’s Exploration and Production and Gathering segments.

 

 

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Executive Compensation

 

PERFORMANCE GOAL   THRESHOLD   TARGET   MAXIMUM   ACTUAL PERFORMANCE
Financial Goals
1.   Consolidated EBITDA – In determining final performance level, the results of this goal are averaged with the prior year results on the consolidated EBITDA goal.   $993 Million   $1,130-1,159 Million   $1,295 Million   2022 Consolidated EBITDA = $1,227 Million; performance level of 150%; 2-year average of performance levels = (150%+132%)/2 = 141%
2.   Regulated EBITDA – In determining final performance level, the results of this goal are averaged with the prior year results on the regulated companies EBITDA goal.   $391 Million   $406-411 Million   $432 Million   2022 Regulated EBITDA = $404 Million; performance level of 93%; 2-year average of performance levels = (93%+100%)/2 = 97%
3.   Seneca/Midstream EBITDA – In determining final performance level, the results of this goal are averaged with the prior year results on the Seneca/Midstream EBITDA goal.   $612 Million   $734-758 Million   $873 Million   2022 Seneca/Midstream EBITDA = $834 Million; performance level of 166%; 2-year average of performance levels = (166%+147%)/2 = 157%
Operations Goals
1.   Seneca Lease Operating Expense (per thousand cubic feet equivalent (Mcfe))   $0.84/Mcfe   $0.81/Mcfe   $0.78/Mcfe   $0.81/Mcfe
2.   Seneca Finding and Development Cost (per Mcfe)   $0.81/Mcfe   $0.64-0.67/Mcfe   $0.54/Mcfe   $0.64/Mcfe
3.   Seneca General and Administrative Expense   $69.4 Million   $65.6-67.6 Million   $61.7 Million   $68.8 Million
4.   Compression Reliability – Measured by compressor fleet availability average.   Greater than 95%   96.2%   96.8%   96.0%
5.   Customer Service – Measured by average of performance levels on residential satisfaction rates and non-emergency appointments kept.   Residential Satisfaction Rates are at least 85%in NY and PA, or Non-Emergency Appointments Kept are at least 98% in NY and PA   Residential Satisfaction Rates are at least 94.2% in NY and 93.6% in PA, and Non-Emergency Appointments Kept are at least 98% in NY and PA   Residential Satisfaction Rates are at least 97.3% in NY and 97.8% in PA, and Non-Emergency Appointments Kept are at least 99.8% in NY and 99.9% in PA   Residential Satisfaction Rates of 92.3% in NY and 90.1% in PA, constituting performance at 50% level; ; Non-Emergency Appointments Kept = 99.7% in NY and 99.8% in PA, constituting performance at 195% level; average of performance levels = 123%
Environmental, Social and Governance Goals
1.   Seneca Emission Reduction – Measured by Seneca’s performance on maintenance and construction projects designed to reduce emissions.   Complete 2 of 3 emission reduction projects   Complete 3 emission reduction projects   Capped at Target   Completed 2 emission reduction projects
2.   Pipeline Emission Reduction – Measured by the Pipeline & Storage and Gathering segments’ performance on maintenance and construction projects designed to reduce emissions.   Complete 2 of 3 emission reduction projects   Complete 3 emission reduction projects   Capped at Target   Completed all 3 emission reduction projects
3.   Operational Safety and Methane Emission Reduction – Measured by the Utility segment’s operational safety performance in New York and outstanding leaks reduction.   Complete all 3 safety performance standards OR any 2 safety performance standards and meet outstanding leaks reduction targets   Complete all 3 safety performance standards and meet outstanding leaks reduction targets   Capped at Target   Completed all 3 safety performance standards and met outstanding leaks reduction targets
4.   Safety – To promote continued importance of safety; measured by OSHA “Days Away, Restricted or Transferred” rate.   Safety performance at or better than goal in any two divisions   Safety performance at or better than goal in any three divisions   Safety performance at combined level of 1.28 or less   Safety performance at or better than goal in three divisions, and at combined level of 1.67
5.   Diversity, Equity and Inclusion – Measured by outreach programs and percent of job applicants in protected classes.   Engage in at least 7 outreach programs   Engage in at least 7 outreach programs, and percentage of protected-class applicants is more than the three-year average   Engage in at least 7 outreach programs, and percentage of protected-class applicants is no less than 50%   Engaged in at least 7 outreach programs, and percentage of protected-class applicants was 45%

 

 

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Executive Compensation

 

Discretionary Bonus

On December 1, 2022, the Compensation Committee authorized a discretionary bonus to Mr. Loweth in the amount of $14,903. The bonus offset an impact on Mr. Loweth’s annual incentive compensation resulting from Seneca’s sale of its California operations. In light of the sale process, Seneca elected not to make expenditures necessary to begin construction of a planned solar facility at one of its California operating sites. While the purchaser of the California operations subsequently commenced construction of the solar facility, Mr. Loweth’s performance on an emissions reduction goal was impacted. Notwithstanding that impact, the sale of the California operations significantly benefited the Company. Under Mr. Loweth’s leadership, Seneca accomplished the sale in a strong commodity price environment, resulting in cash consideration at closing of $240.9 million. The sale helped the Company to accelerate its deleveraging efforts, increasing near-term financial flexibility, and tightened the Company’s strategic focus in the Appalachian basin, where it has experienced substantial growth.

Long-Term Incentive Compensation

The Compensation Committee uses its business judgment to establish target long-term incentive awards, taking into account the recommendations of its compensation consultants based on reviews of competitive market practices, and the recommendations of the CEO with respect to named executive officers other than himself. Such awards are intended to focus attention on managing the Company from a long-term investor’s perspective. In addition, the Compensation Committee wishes to encourage officers and other managers to have a significant, personal investment in the Company through stock ownership. The Compensation Committee typically makes equity awards on an annual basis in December but has not established a policy to make grants at a specific meeting, to allow flexibility to review and evaluate appropriate equity grant practices.

Fiscal Year 2022 Awards

For the named executive officers, the Compensation Committee established fiscal 2022 target long-term incentive awards at or below the 50th percentile of market data for comparable positions. Awards ranged from 82% to 100% of the 50th percentile mark.

For Mr. Bauer and Mr. Loweth, the Compensation Committee granted two-thirds of the fiscal 2022 long-term incentive award in the form of performance shares, and one-third in the form of time-vested RSUs, which serve as an additional retention tool. For Ms. Camiolo, Mr. Kraemer and Ms. DeCarolis, the Compensation Committee granted a long-term incentive award entirely in the form of performance shares. The Compensation Committee made that determination to focus greater attention on the achievement of performance targets, and in recognition of the fact that retention incentives such as time-vested RSUs can have a lesser impact with respect to long-tenured executives.

Beginning with fiscal year 2022, the long-term incentive awards included a new set of performance shares with a performance goal focused on emissions reductions. The emissions goal sets methane intensity reduction metrics for each of the Company’s operating segments, and an overall greenhouse gas emissions metric for the consolidated Company. The performance period for the goal runs from calendar year 2022 through calendar year 2024, consistent with the Company’s calendar-year reporting of GHG emissions. The goal is designed to incentivize and reward performance to the extent management achieves methane intensity and GHG reduction targets making progress towards the Company’s 2030 goals. The emissions goal accounts for 4% of the total long-term incentive award.

The number of performance shares that will vest and be paid will depend on the number of methane intensity segment targets achieved, and whether the Company meets the overall greenhouse gas emissions target, as reflected in the following table:

 

   

EMISSIONS REDUCTION

PERFORMANCE LEVEL

   PERCENTAGE OF
TARGET OPPORTUNITY  PAID

2 of 4 segment targets achieved

     50%

3 of 4 segment targets achieved

   100%

4 of 4 segment targets achieved

   150%

4 of 4 segment targets achieved and overall greenhouse gas emissions goal achieved

   200%

The performance shares awarded in fiscal 2022 and not allocated to the emissions goal are split evenly between relative TSR and relative ROC performance conditions, as described below. The performance conditions are to be achieved over a three-year performance cycle that started October 1, 2021 and concludes September 30, 2024.

 

 

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Executive Compensation

 

The Compensation Committee established the performance condition for the second set of performance shares awarded in fiscal 2022 as the Company’s three-year TSR over the performance cycle as compared to the same metric for companies in the Corporate Peer Group selected by the Compensation Committee, as calculated based on the data reported for each company in the Bloomberg online database. Starting stock prices are calculated as the average closing stock prices for the calendar month immediately preceding the start of the performance cycle; ending stock prices are calculated as the average closing stock prices for the calendar month concluding the performance cycle; and dividends are deemed reinvested in each company’s securities at each ex-dividend date. The Compensation Committee linked the awards to relative levels of performance, which results in the vesting and payment of a percentage of the target number of performance shares depending on the Company’s percentile rank in the Corporate Peer Group, as follows:

 

   

RELATIVE TSR GOAL

COMPANY’S PERCENTILE RANKING

   PERCENTAGE OF
TARGET OPPORTUNITY  PAID

30th or below

       0%

40th

     50%

50th

   100%

70th

   150%

90th or above

   200%

If the Company’s three-year TSR is negative (less than 0.0), the percentage of target opportunity paid is capped at 100%, regardless of the Company’s percentile ranking. For performance between two established performance levels, the percentage of target opportunity paid is determined by straight line mathematical interpolation.

The Compensation Committee established the performance condition for the third set of performance shares awarded in fiscal 2022 as the Company’s three-year ROC over the performance cycle as compared to the same metric for companies in the Corporate Peer Group. ROC for the Company or any member of the Corporate Peer Group means the average of the returns on capital for each twelve-month period corresponding to each of the Company’s fiscal years during the performance cycle, calculated based on the data reported for that company in the Bloomberg database. The Compensation Committee linked the awards to relative levels of performance, which results in the vesting and payment of a percentage of the target number of performance shares depending on the Company’s percentile rank in the Corporate Peer Group, as follows:

 

   

RELATIVE ROC GOAL

COMPANY’S PERCENTILE RANKING

   PERCENTAGE OF
TARGET OPPORTUNITY  PAID

<45th

       0%

45th

     50%

60th

   100%

75th

   150%

100th

   200%

If the Company’s three-year ROC is negative (less than 0.0), the percentage of target opportunity paid is capped at 100%, regardless of the Company’s percentile ranking. For performance between two established performance levels, the percentage of target opportunity paid is determined by mathematical interpolation.

No dividend equivalents are provided in respect of any performance shares.

Each of the time-based RSU awards granted to named executive officers in fiscal 2022 generally vests in three equal annual installments beginning on the first anniversary of the date of grant, assuming continued employment at the Company. No dividend equivalents are provided in respect of any RSUs.

The performance shares and time-based RSUs granted to the named executive officers in fiscal 2022 are set out in the Grants of Plan-Based Awards in Fiscal 2022 Table within this proxy statement.

 

 

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Executive Compensation

 

Performance on Past Awards

With respect to the performance shares granted in fiscal 2020, which had a performance cycle covering fiscal years 2020 through 2022, the Compensation Committee had established the following 13-member peer group:

Atmos Energy Corporation

Cabot Oil & Gas Corporation

CNX Resources Corporation

EQT Corporation

MDU Resources Group Inc.

New Jersey Resources Corporation

Range Resources Corporation

SM Energy Company

Southwest Gas Corporation

Southwestern Energy Company

Spire, Inc.

UGI Corporation

Whiting Petroleum Corporation

One company in that peer group (Whiting Petroleum) declared bankruptcy during the course of the performance cycle. Pursuant to the award terms for the performance shares, that company was deemed to have performed at a level ranking it at the bottom of the peer group. The Company’s performance was ranked against the performance of the companies in the peer group at September 30, 2022. With respect to TSR, the Company outperformed seven of the 13 companies, with a three-year TSR of 57.75%, placing it at approximately the 54th percentile. Pursuant to the TSR performance share payout scale (the same scale shown above for the fiscal 2022-2024 Relative TSR Goal), performance at that percentile resulted in a payout of approximately 110% of the target opportunity. Regarding ROC, the Company outperformed 11 of the 13 companies, with an average ROC of 7.97%, placing it at approximately the 85th percentile. Pursuant to the ROC performance share payout scale (the same scale shown above for the fiscal 2022-2024 Relative ROC Goal), performance at that percentile resulted in a payout of approximately 169% of the target opportunity.

The Company’s performance on the last five completed TSR and ROC performance share grants is summarized in the table below.

 

GRANT DATE
(FISCAL YEAR)

 

PERFORMANCE

CYCLE

(FISCAL YEARS)

 

TSR

 

ROC

  RELATIVE
PERFORMANCE
  PERCENTILE   PAYOUT
PERCENTAGE
  RELATIVE
PERFORMANCE
  PERCENTILE   PAYOUT
PERCENTAGE

2020

  2020 – 2022   outperformed
7 of 13
  53.85   109.62   outperformed
11 of 13
  84.62   169.24

2019

  2019 – 2021   outperformed
10 of 13
  76.92   167.30   outperformed
10 of 13
  76.92   153.84

2018

  2018 – 2020   outperformed
9 of 12
  75.00   100.00
(capped)
  outperformed
7 of 12
  58.33   94.43

2017

  2017 – 2019   outperformed
6 of 12
  50.00   100.00   outperformed
10 of 12
  83.33   166.66

2016

  2016 – 2018   outperformed
6 of 12
  50.00   100.00   outperformed
8 of 12
  66.67   122.23
 

 

 

   

 

 

  Average   61.15   115.38   Average   73.97   141.28

Clawback Policy

 

 

The Company’s Corporate Governance Guidelines include a clawback provision. Under the clawback provision, if the Company is required to restate its financial results due to material noncompliance with any financial reporting requirement under the securities laws as a result of misconduct by a current or former executive officer, the Board would exercise its business judgment to determine what action it believes is appropriate to address the conduct, prevent its recurrence, and impose such discipline as would be appropriate. In addition to other potential action, the Board may, in its discretion after considering the costs and benefits of doing so, seek to recover that portion of any incentive-based compensation received by such officer (including compensation received upon exercise or payment of stock options and other equity awards) during the three-year period preceding the date on which the Company was required to prepare the accounting restatement, which exceeds the amount or value that the Board determines would have been payable or received in respect of such incentive

 

 

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Executive Compensation

 

awards had the revised financial statement(s) reflected in the restatement been applied to determine the incentive compensation or been available to the market at the time of exercise or payment of any incentive award. Subject to any limits imposed by applicable law, the Board may seek to recover such excess compensation by requiring the officer to pay such amount to the Company, by set-off, by reducing future compensation, or by such other means or combination of means as the Board determines to be appropriate.

Employee Benefits

 

 

Retirement Benefits

The Company maintains four plans that provide retirement benefits: (i) a qualified defined contribution retirement plan (“401(k) Plan”) that includes a traditional 401(k) benefit and, for certain eligible employees hired at various points in 2003 and thereafter, a retirement savings account (“RSA”) benefit; (ii) a qualified defined benefit retirement plan for those hired prior to various points in 2003 (“Retirement Plan”); (iii) a non-qualified defined benefit executive retirement plan available only to select officers promoted prior to 2002 (“Executive Retirement Plan”); and (iv) a non-qualified tophat plan (“Tophat Plan”). These plans help the Company attract and retain high caliber employees in high-level management positions and, in the case of the non-qualified plans, restore retirement benefits lost to employees under the qualified retirement plans as a result of the effect of the Internal Revenue Code limits and the qualified plans’ limits on compensation considered and benefits provided under such qualified plans. The employee benefits for named executive officers employed prior to 2003 differ from those made available to those employed during or after that year. The Company made changes to its programs that reflected a shift in competitive practices away from certain types of retirement benefits, but generally grandfathered existing employees (including named executive officers) who were then in service in the benefits programs that are commensurate with those in the regulated energy industry.

The named executive officers participated in the following plans in fiscal 2022:

 

      401(k) PLAN    RETIREMENT PLAN    TOPHAT PLAN    EXECUTIVE
RETIREMENT  PLAN
   TRADITIONAL
BENEFIT
   RSA
BENEFIT
         401(k)
BENEFIT
   RSA
BENEFIT
   RETIREMENT
BENEFIT
     

Bauer

   X         X    X         X     

Camiolo

   X         X    X         X     

Kraemer

   X         X    X              X

Loweth

   X    X         X    X          

DeCarolis

   X         X    X              X

Benefits are described in more detail in the sections entitled “Fiscal 2022 Pension Benefits” and “Fiscal 2022 Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans” within this proxy statement.

Executive Life Insurance

The Company maintains an insurance program known as the “ExecutiveLife Insurance Plan.” Executive officers who have reached age 50 are eligible to participate in this plan, under which the Company will pay the premium, generally in an amount up to $15,000 per year, of a life insurance policy or policies to be owned by the executive officer. The payment is taxable income to the executive officer and ceases when the executive officer’s employment ceases. In fiscal 2022 each of the named executive officers other than Mr. Loweth participated in the ExecutiveLife Insurance Plan.

Executive Perquisites

The Company offers a limited number of perquisites to our named executive officers. The basis for offering these perquisites is to assist the officers in conducting business on behalf of the Company and to enhance the Company’s ability to attract and retain highly qualified executives. For certain items, the perquisite is incidental to other business-related use. For example, the Company shares an arena suite for the local professional hockey team. The Company also has additional season tickets for seats for both the local professional hockey and football teams. The Company made these investments as a result of specific drives by the Buffalo, New York business community to support the retention of these professional athletic teams in the Buffalo area. These suites are primarily used for Company business. On the occasions when the suites are not used for Company business, the named executive officers as well as other employees are permitted personal use.

The Company offers named executive officers tax preparation advice, in part to assure the Company that its officers are properly reporting compensation. The Company makes contributions for the named executive officers’ long-term disability plans. The Company also pays the costs of spouses accompanying named executive officers to certain of the Board of Directors and industry meetings and functions, as well as blanket travel insurance for the named executive officer and spouse.

 

 

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Executive Compensation

 

Change in Control Arrangements

 

 

The Company’s named executive officers serve at the pleasure of the Board of Directors and are not employed pursuant to employment agreements. Each of the named executive officers is a party to an Employment Continuation and Noncompetition Agreement with the Company, which would become effective upon a change in control of the Company.

The Company and the Compensation Committee believe that these agreements are required for the attraction and retention of the executive talent needed to achieve corporate objectives and to assure that named executive officers direct their attention to their duties, acting in the best interests of the stockholders, notwithstanding the potential for loss of employment in connection with a change in control.

The agreement contains a “double-trigger” provision that provides payment only if employment terminates within three years following a change in control, as defined in the agreement, either by the Company other than for cause or by the named executive officer for good reason. The Compensation Committee believes this structure strikes a balance between the incentive and the executive attraction and retention efforts described above, without providing change in control benefits to named executive officers who continue to enjoy employment with the Company in the event of a change in control transaction.

The payment is generally calculated by multiplying 1.99 by the sum of the named executive officer’s current base salary plus the average of the annual short-term incentive compensation payment for the previous two fiscal years. The 1.99 multiplier is reduced on a pro-rata basis if termination occurs between age 62 and age 65, at which point no amount is payable. If payment is triggered, certain health benefits are continued for the earlier of 18 months following termination or the date other similar coverage becomes available.

The agreement contains a restrictive covenant whereby the named executive officer may, upon termination following a C change in control, choose to refrain from being employed by or otherwise serving as an agent, consultant, partner or major stockholder of a business engaged in activity that is competitive with that of the Company or its subsidiaries. If the named executive officer so chooses to be bound by this restrictive covenant, an additional payment is made in the amount of the sum of current base salary plus the average of the annual short-term incentive compensation payment for the previous two fiscal years. The Compensation Committee and the Company believe this is an appropriate payment in exchange for the named executive officer’s agreement to the non-compete covenant. There is no gross-up for taxes on either payment.

If a named executive officer experiences a qualifying termination of employment within a specific time following a change in control of the Company, many of the components of total compensation described above become immediately vested or paid out in a lump sum. More detail about these items and calculations as of September 30, 2022, are set forth in the section entitled “Potential Payments Upon Termination or Change in Control” within this proxy statement.

Stock Ownership Guidelines

 

 

In an effort to emphasize the importance of stock ownership and in consultation with the Compensation Committee, the Company maintains Common Stock ownership guidelines for officers, ranging from one time base salary for junior officers to six times base salary at the CEO level. Generally, officers are expected to meet the guidelines within five years following promotion. Mr. Bauer holds approximately 9.7 times his base salary as of December 30, 2022. All other named executive officers, for whom the requirement is three times base salary, exceed their ownership requirements. The Board and management believe that employees who are stockholders perform their jobs in a manner that considers the long-term interests of the stockholders. Company directors are also subject to ownership requirements, as noted previously in this proxy statement.

Tax and Accounting Considerations

 

 

In designing the Company’s compensation program, general consideration is given to the accounting treatment of the awards made to our named executive officers and pertinent tax law provisions. Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), generally prohibits the Company from deducting compensation paid in excess of $1 million per year to certain covered officers, including certain former named executive officers. Due to the importance and benefit to the Company and its stockholders of awarding compensation that is structured to properly incentivize our named executive officers, the Compensation Committee believes that it is in the Company’s best interests to retain flexibility in awarding compensation, even if some awards may be non-deductible compensation expenses to the Company. The Company has also designed its compensation program with the intent that any awards granted thereunder will either be exempt from, or comply with the applicable requirements under, Section 409A of the Code.

 

 

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Executive Compensation

 

Fiscal 2022 Summary Compensation Table

 

 

The following table sets forth a summary of the fiscal 2022 compensation of the Company’s CEO, Principal Financial Officer, and each of the three most highly compensated executive officers other than the CEO and Principal Financial Officer. The compensation reflected for each officer was for the officer’s services provided in all capacities to the Company and its subsidiaries.

 

NAME AND

PRINCIPAL

POSITION

  FISCAL
YEAR
    SALARY
($)
    BONUS
($)
    STOCK
AWARDS
($)
(1)
    NON-EQUITY
INCENTIVE
PLAN
COMPENSATION
($)
(2)
    CHANGE  IN
PENSION
VALUE
AND
NONQUALIFIED
DEFERRED
COMPENSATION
EARNINGS
($)
(3)
    ALL OTHER
COMPENSATION
($)
(4)
    TOTAL
($)
 

David P. Bauer

President and Chief

Executive Officer

    2022       972,500       0       3,657,593       1,610,703       53,382       184,248       6,478,426  
    2021       937,500       0       3,476,073       1,425,375       955,805       156,886       6,951,639  
    2020       875,000       0       1,945,917       1,056,125       937,392       145,481       4,959,915  

Karen M. Camiolo

Treasurer and

Principal Financial

Officer

    2022       443,750       0       428,487       293,984       0       59,335       1,225,556  
    2021       434,750       0       379,748       282,370       176,812       58,098       1,331,778  
    2020       424,749       0       370,176       247,417       338,162       55,336       1,435,840  

Ronald C. Kraemer

Chief Operating

Officer

    2022       759,500         2,161,947       985,831       946,819       135,323       4,989,420  
    2021       662,167       0       855,268       799,467       1,094,770       104,014       3,515,686  
                                                               

Justin I. Loweth

President of

Seneca Resources

Company, LLC

    2022       627,500       14,903       1,756,773       759,463       N/A       94,487       3,253,126  
    2021       463,333       129,857       635,436       295,143       N/A       63,056       1,586,825  
                                                               

Donna L. DeCarolis

President of National

Fuel Gas Distribution

Corporation

    2022       645,000       0       1,014,917       645,000       759,086       92,499       3,156,502  
    2021       622,500       0       855,454       622,578       1,513,037       89,804       3,703,373  
    2020       586,250       0       810,762       675,800       1,326,938       90,547       3,490,297  
                                                               

 

(1)

The stock award values for fiscal 2022 show the aggregate grant date fair value of performance shares and, where applicable, time-based RSUs, computed in accordance with FASB ASC Topic 718. For information on the valuation assumptions and performance conditions with respect to these awards, refer to Note A under the heading “Stock-Based Compensation” and Note H under the heading “Stock Award Plans” in the Company’s financial statements in its Form 10-K for the fiscal year ended September 30, 2022 (“2022 Form 10-K”). The grant date fair value of performance shares reflects an estimate that 100% of the performance shares awarded will vest at the end of the three-year performance period. The actual percentage to vest will be determined following fiscal 2024. The grant date fair value of stock awards granted in fiscal 2022, assuming the highest level of performance for performance shares (200%), is as follows: Mr. Bauer, $6,245,770; Ms. Camiolo, $856,974; Mr. Kraemer, $4,323,894; Mr. Loweth, $3,000,434; and Ms. DeCarolis, $2,029,834.

 

(2)

For fiscal 2022, this column reflects annual incentive compensation. Please refer to the Compensation Discussion and Analysis for additional information about annual incentive compensation, including information regarding the performance conditions applicable to the awards.

 

(3)

The amounts included in this column as the aggregate change in the actuarial present value of the named executive officers’ accumulated benefits under all defined benefit and actuarial pension plans (including supplemental plans) include the following for fiscal 2022: for Mr. Bauer, an increase of $53,382; for Mr. Kraemer, an increase of $945,531; and for Ms. DeCarolis, an increase of $758,434. For Ms. Camiolo, the aggregate change in the actuarial present value of her accumulated benefits under all defined benefit and actuarial pension plans (including supplemental plans) for fiscal 2022 was a decrease of $275,008. These amounts were determined using interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements in its 2022 Form 10-K, as described in Note K, “Retirement Plan and Other Post-Retirement Benefits.” The amounts included in this column as above-market earnings on compensation that is deferred on a basis that is not tax-qualified are as follows for fiscal 2022: for Mr. Kraemer, $1,288; and for Ms. DeCarolis, $652. See the narrative, tables and notes to the sections entitled “Fiscal 2022 Pension Benefits” and “Fiscal 2022 Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans” within this proxy statement for more information.

 

(4)

See the All Other Compensation table below for more information.

 

 

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Executive Compensation

 

The following table describes each component of the All Other Compensation column in the Fiscal 2022 Summary Compensation Table:

 

DESCRIPTION

  DAVID P.
BAUER
($)
    KAREN M.
CAMIOLO
($)
    RONALD C.
KRAEMER
($)
    JUSTIN I.
LOWETH
($)
    DONNA L.
DECAROLIS
($)
 

Defined Contributions(a)

    18,075       18,075       18,075       30,108       18,075  

401(k) Tophat(b)

    136,917       26,189       86,645       19,575       59,325  

RSA Tophat(c)

    0       0       0       44,025       0  

Employee Stock Ownership Plan (“ESOP”) Supplemental Payment(d)

    0       0       1,217       0       0  

Life Insurance(e)

    15,000       15,000       15,000       680       15,000  

Travel Accident Insurance(f)

    113       71       99       99       99  

Perquisites(g)

    14,143       N/A       14,287       N/A       N/A  

Total

    184,248       59,335       135,323       94,487       92,499  

 

a)

Represents the Company contributions to the 401(k) plan accounts of the named executive officers. Each named executive officer receives a Company match of up to 6% within the 401(k) plan on the lesser of base salary or the IRS annual compensation limit. In addition, Mr. Loweth is a participant in the Company’s RSA benefit within the 401(k) plan, pursuant to which he receives a Company contribution of 4% on the portion of his base salary plus annual bonus that does not exceed the IRS annual compensation limit.

 

b)

Each named executive officer is prohibited from receiving the full 401(k) Company match due to the IRS annual compensation limit. The 401(k) tophat benefit gives each named executive officer a Company match on the following forms of compensation: (1) base salary that exceeds the IRS annual compensation limit, and (2) annual cash incentive compensation.

 

c)

Represents the Company contributions on Mr. Loweth’s base salary plus annual cash incentive payment that exceeded the IRS annual compensation limit.

 

d)

All management participants who were hired prior to December 31, 1986 participate in the ESOP, which pays dividends to the participants on the Common Stock held in the plan. Participants who were hired prior to 1983 did not have the option to reinvest dividends on shares acquired prior to 1983. The formula for the supplemental payment was designed to result in aggregate supplemental payments to pre-1983 participants approximating the amount the Company saved in corporate income taxes by prohibiting the reinvestment of dividends. The ESOP is a qualified benefit plan that was frozen in 1987 and closed to future participants.

 

e)

Represents Company-paid life insurance premiums under the ExecutiveLife Insurance Plan or, for Mr. Loweth, group life insurance.

 

f)

Represents the premiums paid for the blanket travel insurance policy, which provides a death benefit to beneficiaries of an officer if the officer dies while traveling on business.

 

g)

Perquisites for Mr. Bauer and Mr. Kraemer consist of tax preparation and advice, attendance at Company and industry events for a family member, blanket travel insurance for personal travel, tickets to sporting and entertainment events, and medical and long-term disability contributions paid by the Company. Perquisites for each other named executive officer were less than $10,000 in the aggregate.

 

 

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Executive Compensation

 

Grants of Plan-Based Awards in Fiscal 2022

 

 

The following table sets forth information with respect to awards granted to the named executive officers during fiscal 2022 under the At Risk Plan and the 2010 Equity Compensation Plan. Please refer to the CD&A within this proxy statement for additional information regarding these plans.

 

                   ESTIMATED POSSIBLE
PAYOUTS  UNDER
NON-EQUITY INCENTIVE PLAN
AWARDS
    ESTIMATED FUTURE
PAYOUTS  UNDER
EQUITY INCENTIVE PLAN
AWARDS
   

ALL OTHER
STOCK

AWARDS:

NUMBER OF
SHARES OF
STOCK OR