Halliburton Company
Shareholder Annual Meeting in a DEF 14A on 04/06/2021   Download
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DEF 14A 1 lhal2021_def14a.htm HALLIBURTON CO - DEF 14A HALLIBURTON COMPANY - DEF 14A

UNITED STATES

 

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

SCHEDULE 14A

 

(RULE 14a-101)

 

INFORMATION REQUIRED IN PROXY STATEMENT

 

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No. )

         
 

Filed by the Registrant Filed by a Party other than the Registrant
   
Check the appropriate box:
Preliminary Proxy Statement
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Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material under §240.14a-12

 

 

HALLIBURTON COMPANY

 

(Name of Registrant as Specified in its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

   
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To Our Valued Shareholders:

 

April 6, 2021

 

 

Jeffrey A. Miller

Chairman of the Board,

President and Chief Executive Officer

At Halliburton, we look to the future with optimism and focused on innovation.

 

On behalf of our Board of Directors, we are pleased to invite you to the Halliburton Company Annual Meeting of Shareholders. The meeting will take place at the Life Center on Wednesday, May 19, 2021, at 9:00 a.m. Central Daylight Time.

 

At Halliburton, we look to the future with optimism and focused on innovation. Our execution culture and core values guided us through the most difficult environment we have experienced in our more than 100-year history. We applaud our employees who delivered historic bests in all key safety and service quality metrics despite the global pandemic and market downturn. Because of their dedication, we never stopped serving our customers around the world while keeping each other's well-being a primary focus.

 

By executing on our key strategic priorities, we turned what were once-in-a-lifetime challenges into extraordinary opportunities that reset Halliburton’s earnings power. We are a global integrated oilfield services company with a strong international portfolio and a leading position in the North American market. Building on this successful foundation, we will help our customers satisfy the world’s need for affordable and reliable energy provided by oil and gas, in a more effective, efficient, safe, and ethical manner, while minimizing environmental impact. We stand firm in our commitment to collaborate and engineer solutions to maximize our customers’ asset value and to deliver industry-leading returns and strong free cash flows for our shareholders.

 

Your vote and the representation of your shares are important. Please review the proxy materials for detailed information on the proposals presented this year. We hope you will vote as soon as possible. If you attend the meeting, you may vote in person even if you have previously voted.

 

Thank you for your ongoing support of and continued interest in Halliburton. We look forward to seeing you at our Annual Meeting.

 

Sincerely,

 

Jeffrey A. Miller

Chairman of the Board,

President and Chief Executive Officer

 
Table of Contents    
 

 

Letter from the Chairman, President and Chief Executive Officer  
   
Proxy Statement Summary iii
   
Notice of Annual Meeting of Shareholders ix
   
Corporate Governance 1
   
The Board of Directors and Standing Committees of Directors 2
   
Communication to the Board 8
     
Proposal No. 1 Election of Directors 9
   
Information about Nominees for Director 11
   
Directors’ Compensation 15
   
Stock Ownership Information 18
     
Proposal No. 2 Ratification of Selection of Principal Independent Public Accountants 20
   
Audit Committee Report 21
   
Fees Paid to KPMG LLP 22
     
Proposal No. 3 Advisory Approval of Executive Compensation 23
   
Compensation Committee Report 23
   
Compensation Discussion and Analysis 24
   
Executive Compensation Tables 44
   
Summary Compensation Table 44
   
Supplemental Summary Compensation Table Information for CEO 44
   
Supplemental Table: All Other Compensation 46
   
Grants of Plan-Based Awards in Fiscal 2020 47
   
Outstanding Equity Awards at Fiscal Year End 2020 48
   
2020 Option Exercises and Stock Vested 50
   
2020 Nonqualified Deferred Compensation 50
   
Employment Contracts and Change-in-Control Arrangements 51
   
Post-Termination or Change-in-Control Payments 52
   
Equity Compensation Plan Information 55
     
CEO Pay Ratio   55
     
Proposal No. 4 Proposal to Amend and Restate the Halliburton Company Stock and Incentive Plan 56
     
Proposal No. 5 Proposal to Amend and Restate the Halliburton Company Employee Stock Purchase Plan 62
   
General Information 65
   
Additional Information 66
     
Other Matters   67
     
Appendix A   A-1
     
Appendix B   B-1

 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      ii
 

Proxy Statement Summary

 

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting. Page references are supplied to help you find further information in this proxy statement.

 

Eligibility to Vote (page 65)

 

You can vote if you were a shareholder of record at the close of business on March 22, 2021.

 

How to Cast Your Vote (page 65)

 

     
  You can vote by any of the following methods:  
                 
                 
 

INTERNET

www.proxyvote.com

until 11:59 p.m.

Eastern Daylight Time on May 18, 2021

 

BY TELEPHONE

until 11:59 p.m.

Eastern Daylight Time on May 18, 2021

 

BY MAIL

Completing, signing, and returning your proxy or voting instruction card
before May 19, 2021

 

IN PERSON

at the annual meeting: If you are a shareholder of record, we have a record of your ownership. If your shares are held in the name of a broker, nominee, or other intermediary, you must bring a proxy issued in your name from the record holder to the meeting. Attendees will be asked to present valid picture identification, such as a driver’s license or passport.

 

 

Selection of Principal Independent Public Accountants (page 20)

 

During the year ended December 31, 2020, KPMG LLP served as our principal independent public accountants and provided certain tax and other services to us. Representatives of KPMG are expected to be present at the Annual Meeting and be available to respond to appropriate questions from shareholders.

 

As a matter of good corporate governance, we are requesting our shareholders to ratify the selection of KPMG LLP as our principal independent public accountants for the year ending December 31, 2021.


 

 

 

  HALLIBURTON  |  2021 Proxy Statement      iii
 

Voting Matters (pages 9, 20, 23, 56, and 62)

 

   

Board Vote

Recommendation

 

Page Reference

(for more detail)

Election of Directors   FOR Each Nominee   9
Ratification of Selection of Principal Independent Public Accountants   FOR   20
Advisory Approval of Executive Compensation   FOR   23
Proposal to Amend and Restate the Halliburton Company Stock and Incentive Plan   FOR   56
Proposal to Amend and Restate the Halliburton Company Employee Stock Purchase Plan   FOR   62

 

Governance Highlights

 

Our Board has long maintained a formal statement of its responsibilities, our Corporate Governance Guidelines, to ensure effective governance in all areas of its responsibilities. Our current board structure and governance practices, as specified in those Guidelines and our By-laws, Code of Business Conduct, and policies and business practices, include the following:

 

Size of Board to be Elected 10   Supermajority Voting Threshold for Mergers No
Number of Independent Director Nominees 9   Proxy Access Yes
Average Age of Director Nominees 65   Shareholder Action by Written Consent Yes
Average Director Nominee Tenure 6.8   Shareholder Called Special Meetings Yes
Annual Election of Directors Yes   Poison Pill No
Mandatory Retirement Age 72   Code of Conduct for Directors, Officers, and Employees Yes
Women and Minority Director Nominees 50%   Stock Ownership Guidelines for Directors/Officers Yes
Majority Voting in Director Elections Yes   Anti-Hedging and Pledging Policy Yes
Lead Independent Director Yes   Compensation Recoupment Policy Yes
Related Persons Transactions Policy Yes   Corporate Political Contributions No

 

Success for Halliburton and our shareholders and customers results from adherence to our core values.

 


 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      iv
 

 

Board Nominees (pages 11-14)

 

     

Abdulaziz F. Al Khayyal

Retired Senior
Vice President,
Industrial Relations,

Saudi Aramco

Age: 67

Director since 2014

INDEPENDENT

Committees:

 

William E. Albrecht

Retired Non-Executive
Chairman
of the Board of California
Resources Corporation

Age: 69

Director since 2016

INDEPENDENT

Committees:

 

M. Katherine Banks

Vice Chancellor of
Engineering and National
Laboratories, The Texas
A&M University System

Age: 61

Director since 2019

INDEPENDENT

Committees:

 

Alan M. Bennett

Retired President
and Chief Executive
Officer of H&R
Block, Inc.

Age: 70

Director since 2006

INDEPENDENT

Committees:

             
       

Milton Carroll

Executive Chairman of
the Board of CenterPoint
Energy, Inc.

Age: 70

Director since 2006 INDEPENDENT

Committees:

 

Murry S. Gerber

Retired Executive
Chairman of the Board
of EQT Corporation

Age: 68

Director since 2012

INDEPENDENT

Committees:

 

Patricia Hemingway Hall

Retired President and
Chief Executive Officer
of Health Care Services
Corporation

Age: 68

Director since 2019

INDEPENDENT

Committees:

   
             
       

Robert A. Malone

Executive Chairman,
President and Chief
Executive Officer of First
Sonora Bancshares, Inc.

Age: 69

Director since 2009

INDEPENDENT

Committees:

 

Jeffrey A. Miller

Chairman of the Board,
President and Chief
Executive Officer
of Halliburton

Age: 57

Director since 2014

NOT INDEPENDENT

Committees:

None

 

 

Bhavesh V. Patel

Chief Executive Officer,
LyondellBasell Industries
Age: 54

Director since 2021 INDEPENDENT

Committees:

TBD

   

 

  Chair    Audit    Compensation   Health, Safety and Environment    Nominating and Corporate Governance TBD – Mr. Patel will be appointed to Committees in May 2021.



 

 

  HALLIBURTON  |  2021 Proxy Statement      v
 

2020 Performance Highlights

 

As we shared in our Annual & Sustainability Report 2020, available on our website at www.halliburton.com, and as you will read in this proxy statement, Halliburton has embraced change throughout our history, and our core values have guided our actions in response to a century of change. In 2020, those core values – Integrity, Safety, Collaboration, Competition, Creativity, Reliability and Respect –strengthened our response to a global pandemic and commodity supply-demand imbalance. Those Halliburton core values empowered change as we navigated each of 2020’s many and varied challenges. We reset our earnings power. We deployed digital solutions that set records for autonomous, efficient operations. We focused on safety and service quality and delivered Company-best results. We renewed our core value of “respect” to further embrace our commitment to diversity and inclusion, and to strengthen our culture and workplace, so everyone can be their authentic self and do their best work. We delivered on our customer commitment to collaborate and engineer solutions to maximize their asset value. And we remained committed to delivering industry-leading returns and strong free cash flows for our shareholders.

 

Geographic Diversity  
   

In 2020, we earned the majority of our revenue internationally. We reset our earnings power and improved margins in several key end markets, despite the activity slowdowns.

 

   
Cash Flow Execution  
   

During 2020, we generated $1.9 billion of operating cash flow and had $728 million of capital expenditures, resulting in over $1.1 billion of free cash flow. This demonstrates our ability to generate strong free cash flow in different business environments. We additionally returned over $350 million to shareholders through dividends and share repurchases and repaid $500 million of debt. *Management believes free cash flow, defined as “operating cash flow” less “capital expenditures”, is an important liquidity measure and useful to investors and management for assessing the business’s ability to generate cash.

 

   
Capital Discipline  
   
Market conditions changed and we quickly acted by reducing our capital expenditures by 52% to $728 million in 2020. These capital expenditures were predominantly made in our Sperry Drilling, Production Enhancement, Baroid, Artificial Lift, Wireline and Perforating, and Production Solutions product service lines.


 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      vi
 
Safety and Service Quality  
   
We achieved exceptional safety and service quality performance during 2020. Our total recordable incident rate and non-productive time each improved over 20%, both historical bests across our business. This is a result of our employees’ continued commitment to safety and process execution, despite the year’s distractions.
   

 

Named Executive Officers (page 25)

 

For 2020, our NEOs were:

 

Name Age   Occupation
Jeffrey A. Miller 57   Chairman, President and Chief Executive Officer
Lance Loeffler 44   Executive Vice President and Chief Financial Officer
Eric J. Carre 55   Executive Vice President – Global Business Lines
Joe D. Rainey 64   President – Eastern Hemisphere
Mark J. Richard 59   President – Western Hemisphere

 

Executive Compensation (pages 23-55)

 

Objectives (page 30)

 

Our executive compensation program is composed of base salary, a short-term incentive, and long-term incentives and is designed to achieve the following objectives:

 

Provide a clear and direct relationship between executive pay and our performance on both a short-term and long-term basis;
Target market competitive pay levels with a comparator peer group;
Emphasize operating performance drivers;
Link executive pay to measures that drive shareholder returns;
Support our business strategies; and
Maximize the return on our human resource investment.

 

Board Responsiveness to Shareholder Feedback

 

Halliburton has always maintained open communications with the shareholder community. Seeking feedback from our shareholders on a regular basis is a critical part of our approach to managing our executive compensation program. Our ongoing, open dialogue with our shareholders helps ensure that the Board and management have a regular pulse on the views of our shareholders. These communications validate that our shareholders continue to be broadly supportive of the overall philosophy, objectives, and design of our program. They also provide us important perspectives on how to improve and better explain our program.

 

During 2020, members of our senior management team participated in 20 sell-side investor conferences, three roadshows, and held over 380 investor meetings. As is our practice, during proxy season engagement, management engaged in targeted outreach with numerous shareholders. Our Compensation Committee Chair also participated in this outreach effort. During this shareholder outreach, we contacted shareholders who collectively hold almost 50% of our outstanding common stock. We also met with many of those shareholders who collectively represented 28% of our outstanding shares. We reviewed the changes to our compensation program implemented by our Compensation Committee during 2020 and solicited their feedback on our compensation program, as well as our company strategy and performance, corporate governance, sustainability, and other topics.


 

 

  HALLIBURTON  |  2021 Proxy Statement      vii
 

The feedback from this effort indicated that our overall compensation program design is supported by our shareholders. For this and other reasons, the Compensation Committee determined that the overall structure of the compensation program is sound and closely aligns the interests of both company management and our shareholders. Based on shareholder feedback received in 2019, effective January 1, 2020, we:

 

Modified financial metrics for determining short-term incentives to increase our emphasis on free cash flow and capital discipline

Replaced CVA with two distinct metrics, weighted as follows, for the 2020 plan year:

•   75% Net Operating Profit After-Taxes (NOPAT)

•   25% Asset Turns

Increased emphasis on performance-based long-term incentives Modified our long-term incentive mix (as illustrated in the graphic below):

•   Increased weight of performance units to 70% (up from 50%)

  Reduced weight of restricted stock to 30%

•   Eliminated stock options for NEOs

Added a second financial metric for determining long-term performance-based awards under the PUP Added a relative Total Shareholder Return (TSR) modifier for the 2020 PUP performance cycle; compares performance to the Oilfield Services Index (OSX); penalizes bottom quartile performance or rewards top-quartile performance
Increased equity component of long-term incentives Changed PUP to issue new awards (contingent on three-year performance period) 50% in stock (previously delivered entirely in cash) so that 65% of long-term incentives is delivered in equity

 

Increased Emphasis on Long-Term Performance-Based Equity

 


 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      viii
 
  HALLIBURTON
 

 

Notice of Annual Meeting of Shareholders to be held May 19, 2021

 

April 6, 2021

 

Halliburton Company, a Delaware corporation, will hold its Annual Meeting of Shareholders on Wednesday, May 19, 2021, at 9:00 a.m. Central Daylight Time at its corporate office at 3000 N. Sam Houston Parkway East, Life Center - Auditorium, Houston, Texas 77032.

 

At the meeting, the shareholders will be asked to consider and act upon the matters discussed in the attached proxy statement as follows:

 

1. To elect the ten nominees named in the attached proxy statement as Directors to serve for the ensuing year and until their successors shall be elected and shall qualify.
2. To consider and act upon a proposal to ratify the appointment of KPMG LLP as principal independent public accountants to examine the financial statements and books and records of Halliburton for the year ending December 31, 2021.
3. To consider and act upon advisory approval of our executive compensation.
4. To consider and act upon a proposal to amend and restate the Halliburton Company Stock and Incentive Plan.
5. To consider and act upon a proposal to amend and restate the Halliburton Company Employee Stock Purchase Plan.
6. To transact any other business that properly comes before the meeting or any adjournment or adjournments of the meeting.

 

These items are fully described in the following pages, which are made a part of this Notice. The Board of Directors has set the close of business on March 22, 2021, as the record date for the determination of shareholders entitled to notice of and to vote at the meeting and at any adjournment of the meeting.

 

Internet Availability of Proxy Materials

 

On or about April 6, 2021, we mailed our shareholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our 2021 proxy statement and 2020 Annual Report on Form 10-K and how to vote online. The notice also provides instruction on how you can request a paper copy of these documents if you desire. If you received your Annual Meeting materials via e-mail, the e-mail contains voting instructions and links to the proxy statement and Form 10-K on the Internet.

 

If You Plan to Attend

 

Attendance at the meeting is limited to shareholders and one guest each. Admission will be on a first-come, first-served basis. Registration will begin at 8:00 a.m., and the meeting will begin at 9:00 a.m. Each shareholder holding stock in a brokerage account will need to bring a copy of a brokerage statement reflecting stock ownership as of the record date. Please note that you will be asked to present valid picture identification, such as a driver’s license or passport.

 

Potential Impact of Coronavirus (COVID-19) Pandemic on Meeting

 

We intend to hold our Annual Meeting in person this year. However, continuing public health concerns of our shareholders regarding the coronavirus (COVID-19) pandemic and the protocols that federal, state, and local governments may recommend or impose may necessitate conducting the meeting by means of remote communication. In the event it is not possible or advisable to hold our Annual Meeting in person, we will announce alternative arrangements for the meeting at least one week before our meeting, which may include holding the meeting solely by means of remote communication. We may also need to change the date or the time of the meeting. Please monitor our website at www.halliburton.com for updated information. If you are planning to attend our meeting, please check the website one week prior to the meeting date. As always, we encourage you to vote your shares prior to the Annual Meeting.

 

It is important that you retain a copy of the control number found on the proxy card, voting instruction form, or Notice of Internet Availability of Proxy Materials, as such number will be required in order for shareholders to gain access to any meeting held solely by means of remote communication.

 

By order of the Board of Directors

 

D:\Santosh\March\31\HAL015-PXY\DEF 14A\V1_03-31-2021_04-54 IST\2.Conversion

 

Van H. Beckwith

Executive Vice President, Secretary and Chief Legal Officer

 

Corporate Governance

 

Corporate Governance Guidelines and Committee Charters

 

Our Board has long maintained a formal statement of its responsibilities and guidelines to ensure effective governance in all areas of its responsibilities. Our Corporate Governance Guidelines are available on our website at www.halliburton.com by clicking on the tabs “Investors”, “Company Information”, and then the “Corporate Governance” link. The guidelines are reviewed periodically and revised as appropriate to reflect the dynamic and evolving processes relating to corporate governance, including the operation of the Board.

 

In order for our shareholders to understand how the Board conducts its affairs in all areas of its responsibility, the full text of the charters of our Audit; Compensation; Health, Safety and Environment; and Nominating and Corporate Governance Committees are also available on our website.

 

Except to the extent expressly stated otherwise, information contained on or accessible from our website or any other website is not incorporated by reference into and should not be considered part of this proxy statement.

 

Code of Business Conduct

 

Our Code of Business Conduct, which applies to all of our employees and Directors and serves as the code of ethics for our principal executive officer, principal financial officer, principal accounting officer or controller, and other persons performing similar functions, is available on our website. Any waivers to our Code of Business Conduct for our Directors or executive officers can only be made by our Audit Committee. There were no waivers of the Code of Business Conduct in 2020.

 

Related Persons Transactions Policy

 

Our Board has adopted a written policy governing related persons transactions as part of the Board’s commitment to good governance and independent oversight. The policy covers transactions involving any of our Directors, executive officers, nominees for Director, greater than 5% shareholders, or any of their immediate family members, among others.

 

The types of transactions covered by this policy are transactions, arrangements, or relationships, or any series of similar transactions, arrangements, or relationships, including any indebtedness or guarantee of indebtedness, in which (i) we or any of our subsidiaries were or will be a participant, (ii) the aggregate amount involved exceeds $120,000 in any calendar year, and (iii) any related person had, has, or will have a direct or indirect material interest.

 

Under the policy, we generally only enter into or ratify related persons transactions when the Board determines such transactions are in our best interests and the best interests of our shareholders. In determining whether to approve or ratify a related persons transaction, the Board will consider the following factors and other factors it deems appropriate:

 

whether the related persons transaction is on terms comparable to terms generally available with an unaffiliated third party under the same or similar circumstances;
the benefits of the transaction to us;
the extent of the related person’s interest in the transaction; and
whether there are alternative sources for the subject matter of the transaction.

 

 

  HALLIBURTON  |  2021 Proxy Statement      1
 

The Board of Directors and Standing Committees of Directors

 

The Board has standing Audit; Compensation; Health, Safety and Environment; and Nominating and Corporate Governance Committees. Each standing Committee is comprised of Directors who, in the business judgment of the Board, are independent, after considering all relevant facts and circumstances, including the independence standards set forth in our Corporate Governance Guidelines.

 

Our independence standards meet New York Stock Exchange, or NYSE, independence requirements. Our independence standards and compliance with those standards are periodically reviewed by the Nominating and Corporate Governance Committee. There were no relevant transactions, arrangements, or relationships not disclosed in this proxy statement that were considered by the Board in making its determination as to the independence of the Directors.

 

Board Leadership

 

Our Board believes that it is important to maintain flexibility to determine the appropriate leadership of the Board and whether the roles of Chairman and Chief Executive Officer should be combined or separate. Our Corporate Governance Guidelines provide that the Board consider annually whether it is appropriate for the same individual to fill both of those roles. When making that determination, the Board considers issues such as industry and financial expertise, in-depth knowledge of Halliburton and its business, and succession planning. In 2020, the Board decided that a combined leadership role would currently best serve the needs of the Company and its shareholders. The Board believes that Jeffrey A. Miller, our Chairman, President and Chief Executive Officer, with his industry expertise, financial expertise, and in-depth knowledge of Halliburton and its business, is the correct person to fill both roles. The Board also believes that Mr. Miller is best suited to lead the Board’s discussion and evaluation of the Company’s business, financial, and health, safety, environment, and sustainability strategy and performance. With the exception of Mr. Miller, the Board is composed of independent Directors.

 

Robert A. Malone is our Lead Independent Director. The Lead Independent Director’s role and responsibilities are set forth in the Lead Independent Director Charter adopted by the Board. These include the following:

 

 

Robert A.
Malone

LEAD INDEPENDENT
DIRECTOR

  liaises between the independent Directors and the Chairman advises management on and approves information sent to the Board
  approves agendas for Board meetings approves schedules for meetings of the Board
  presides over meetings and executive sessions of the independent Directors authorizes the retention of outside advisors and consultants who report directly to the Board
  leads the Board’s annual evaluation of the Chief Executive Officer schedules meetings of the independent Directors as appropriate

 

Our Lead Independent Director Charter is available on our website at www.halliburton.com.

 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      2
 

Board and Committee Risk Oversight

 

We have implemented an Enterprise Risk Management (ERM) program to identify and analyze enterprise-level risks and their potential impact on our business. The objectives of our ERM program are to:

 

increase the probability of achieving higher returns on capital and reducing cash flow volatility by identifying:

 

  current and developing risks; and
  significant controls and potential gaps related to identified risks;

 

ensure that our key risks are being effectively managed; and
assess whether our compensation policies are reasonably likely to have a materially adverse effect on us.

 

Our internal processes to identify and manage risks include our Code of Business Conduct, extensive policies and business practices, our financial controls, Internal Assurance Services audits of our internal controls and health, safety, environment, and sustainability, the activities of the Ethics & Compliance group of the Law Department, and our ERM program.

 

The Board provides oversight of the ERM program. The Audit Committee receives an annual ERM report on risk assessment and risk management in which risks are identified and assigned a significance rating based on potential consequences of the risk and the likelihood of occurrence.

 

Our Chief Executive Officer, who is primarily responsible for managing our day-to-day business, is ultimately responsible to the Board for all risk categories. Our executive officers are assigned responsibility for the various risk categories. The Board has delegated to its Committees the responsibility to monitor certain risks and receive regular updates on those risks. Certain risks monitored by each Committee are shown below.

 

 

Independent Committees

 

The Board believes that it has a strong governance structure in place to ensure independent oversight on behalf of all shareholders. All standing Committees of the Board are comprised solely of independent Directors. We have established processes for the effective oversight of critical issues entrusted to independent Directors, such as:

 

the integrity of our financial statements;
CEO and senior management compensation;
CEO and senior management succession planning;
the election of our Lead Independent Director;
membership of our independent Committees;
Board, Committee, and Director evaluations; and
nominations of Directors.

 

 

  HALLIBURTON  |  2021 Proxy Statement      3
 

Members of the Committees of Our Board of Directors

 

  Audit Compensation Health, Safety and Nominating and Corporate
Name Committee Committee Environment Committee Governance Committee
Abdulaziz F. Al Khayyal    
William E. Albrecht    
M. Katherine Banks    
Alan M. Bennett    
Milton Carroll    
Nance K. Dicciani*    
Murry S. Gerber    
Patricia Hemingway Hall    
Robert A. Malone    
Jeffrey A. Miller        
Bhavesh V. Patel#        

 

Chair Member

 

* Ms. Dicciani is retiring from the Board on May 19, 2021. The Board will appoint a new Chair for the Health, Safety and Environment Committee in May 2021.
# Mr. Patel joined the Board in February 2021 and will be appointed to Committees of the Board in May 2021.

 

Audit Committee

 

2020 Meetings Committee Members Responsibilities
7 M. Katherine Banks
Alan M. Bennett (Chair)
Nance K. Dicciani
Murry S. Gerber

  Recommending to the Board the appointment of the independent public accountants to audit our financial statements (the principal independent public accountants);

  Together with the Board, being responsible for the appointment, compensation, retention, oversight of the work, and evaluation of the principal independent public accountants;

  Reviewing the scope of the principal independent public accountants’ examination;

  Reviewing the scope of activities of Internal Assurance Services and the Ethics & Compliance group;

  Reviewing our financial statements and our significant financial policies and accounting systems and controls; and

  Approving the services to be performed by the principal independent public accountants.

 

The Board has determined that all members of the Audit Committee are independent under our Corporate Governance Guidelines. The Board has determined that Alan M. Bennett, Nance K. Dicciani, and Murry S. Gerber are “audit committee financial experts” as defined by the Securities and Exchange Commission, or SEC. A copy of the Audit Committee Charter is available on our website at www.halliburton.com.

 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      4
 

Compensation Committee

 

2020 Meetings Committee Members Responsibilities
4 William E. Albrecht
Milton Carroll
Murry S. Gerber (Chair)
Patricia Hemingway Hall
Robert A. Malone

  Developing an overall executive compensation philosophy and strategy;

  Overseeing the effectiveness of our compensation program in attracting, retaining, and motivating key employees;

  Utilizing our compensation program to reinforce business strategies and objectives to enhance shareholder value;

  Administering our compensation program, including our incentive plans, in a fair and equitable manner consistent with established policies and guidelines while monitoring risks associated with compensation plans; and

  Performing additional roles and activities with respect to executive compensation as described under Compensation Discussion and Analysis.

 

A copy of the Compensation Committee Charter is available on our website at www.halliburton.com.

 

Health, Safety and Environment Committee

 

2020 Meetings Committee Members Responsibilities
4 Abdulaziz F. Al Khayyal
William E. Albrecht
M. Katherine Banks
Nance K. Dicciani (Chair)

  Reviewing and assessing our health, safety, environmental, and sustainable development policies and practices;

•  Overseeing the communication, implementation, and compliance with these policies, as well as applicable goals and legal requirements; and

•  Assisting the Board with oversight of our risk-management processes relating to health, safety, the environment, and sustainability.

 

A copy of our Health, Safety and Environment Committee Charter is available on our website at www.halliburton.com.

 

Nominating and Corporate Governance Committee

 

2020 Meetings Committee Members Responsibilities
4 Abdulaziz F. Al Khayyal
Alan M. Bennett
Milton Carroll (Chair)
Patricia Hemingway Hall
Robert A. Malone

•  Reviewing and recommending revisions to our Corporate Governance Guidelines;

•  Overseeing our Director self-evaluation process and performance reviews;

•  Identifying and screening candidates for Board and Committee membership;

•  Reviewing the overall composition profile of the Board for the appropriate mix of skills, characteristics, experience, and expertise;

•  Reviewing and making recommendations on Director compensation; and

•  Reviewing the management succession planning process.

 

A copy of our Nominating and Corporate Governance Committee Charter is available on our website at www.halliburton.com.

 

Board Attendance

 

During 2020, the Board held 4 meetings and met in Executive Session, without management present, on 4 occasions.

Committee meetings were held as follows:

 

Audit Committee 7
Compensation Committee 4
Health, Safety and Environment Committee 4
Nominating and Corporate Governance Committee 4

 

All members of the Board attended 100% of the total number of meetings of the Board and the Committees on which he or she served during the last fiscal year.

 

All of our Directors attended the 2020 Annual Meeting, as required by our Corporate Governance Guidelines.

 

 

  HALLIBURTON  |  2021 Proxy Statement      5
 

Evaluation of Board and Director Performance

 

The Board believes that a rigorous evaluation process is an essential component of strong corporate governance practices. The Nominating and Corporate Governance Committee annually conducts a three-part evaluation process to evaluate Board effectiveness and aid in succession planning. This process consists of a full Board evaluation, Committee evaluations, and individual Director evaluations. The evaluations, which are distributed and obtained through a third party platform, seek feedback on Board and Committee performance, processes, effectiveness, and opportunities for improvement. The results of the evaluations are reviewed and discussed with the Board, its Committees, and each individual Director.

 

As part of the annual process, each Director also completes a skill set survey. The Board uses the survey responses to evaluate the experience and expertise of existing Directors and to identify the skills and characteristics of future Director candidates to achieve and maintain an optimum mix of skills and characteristics.

 

 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      6
 

Shareholder Nominations of Directors

 

Our By-laws provide that shareholders may nominate persons for election to the Board at a meeting of shareholders.

 

Shareholder nominations require written notice to the Corporate Secretary at the address of our principal executive offices set forth on page 65 of this proxy statement, and for the Annual Meeting of Shareholders in 2022, must be received not less than 90 days nor more than 120 days prior to the anniversary date of the 2021 Annual Meeting of Shareholders, or no later than February 18, 2022, and no earlier than January 19, 2022. The shareholder notice must contain, among other things, certain information relating to the shareholder and the proposed nominee as described in our By-laws. In addition, the proposed nominee may be required to furnish other information as we may reasonably require to determine the eligibility of the proposed nominee to serve as a Director.

 

Our By-laws also provide for proxy access for shareholder nominations of directors. The provision permits up to 20 shareholders owning 3% or more of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials for a meeting of shareholders up to two directors or 20% of the Board, whichever is greater, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in the By-laws.

 

Our By-laws further provide that if a shareholder owning at least 1% of our issued and outstanding common stock continuously for at least one year as of the date the written notice of the nomination is submitted to us proposes a nominee not submitted under the proxy access provision, our Corporate Secretary will (i) obtain from such nominee any additional relevant information the nominee wishes to provide in consideration of his or her nomination, (ii) report on each such nominee to the Nominating and Corporate Governance Committee, and (iii) facilitate having each such nominee meet with the Nominating and Corporate Governance Committee as the Committee deems appropriate.

 

Qualifications of Directors

 

Candidates nominated for election or reelection to the Board should possess the following qualifications:

 

Personal characteristics:
  high personal and professional ethics, integrity, and values;
  an inquiring and independent mind; and
  practical wisdom and mature judgment;
Broad training and experience at the policy-making level in business, government, education, or technology;
Expertise that is useful to us and complementary to the background and experience of other Board members, so that an optimum balance of experience and expertise of members of the Board can be achieved and maintained;
Willingness to devote the required amount of time to carry out the duties and responsibilities of Board membership;
Commitment to serve on the Board for several years to develop knowledge about our business;
Willingness to represent the best interests of all of our shareholders and objectively evaluate management performance; and
Involvement only in activities or interests that do not create a conflict with the Director’s responsibilities to us and our shareholders.

 

The Nominating and Corporate Governance Committee is responsible for assessing the appropriate mix of skills and characteristics required of Board members and periodically reviews and updates the criteria. In selecting Director nominees, the Board considers the personal characteristics, experience, and other criteria as set forth in our Corporate Governance Guidelines, as well as our specific needs and the needs of our Board at the time.

 

We value all types of diversity, including diversity of our Board. In evaluating the overall qualifications of a potential nominee, the Committee and Board take into account overall Board diversity in personal background, race, gender, age, and nationality. This process resulted in enhancement of our Board over the last several years with the addition of two women Directors and an ethnically diverse Director. In 2019, Dr. Banks and Ms. Hemingway Hall joined the Board. Dr. Banks contributes extensive experience in engineering and technology to the Board while Ms. Hemingway Hall contributes substantial public company and corporate governance experience. Mr. Patel joined the Board in 2021. His chemical industry experience will benefit us greatly as we expand our chemicals business.

 

Process for the Selection of New Directors

 

The Board is responsible for filling vacancies on the Board and ensuring regular refreshment of the Board. Our Corporate Governance Guidelines provide that each non-management Director shall retire from the Board immediately prior to the annual meeting of shareholders following his or her seventy-second (72nd) birthday. The Board has delegated to the Nominating and Corporate Governance Committee the duty of selecting and recommending candidates to the Board for approval. The Nominating and Corporate Governance Committee will consider candidates for Board membership recommended by Board

 

 

  HALLIBURTON  |  2021 Proxy Statement      7
 

members, our management, and shareholders. The Committee may also retain an independent executive search firm to identify candidates for consideration and to gather additional information about the candidate’s background, experience, and reputation. Mr. Patel was identified as a potential Director candidate by a non-management Director. A shareholder who wishes to recommend a candidate should notify our Corporate Secretary.

 

The Nominating and Corporate Governance Committee, in consultation with the Board, will determine the specific criteria for a new Director candidate. After the Nominating and Corporate Governance Committee identifies a candidate, the Committee will determine the appropriate method to evaluate the candidate. The preliminary determination regarding a candidate is based on the likelihood that the candidate will meet the Board membership criteria listed in our Corporate Governance Guidelines. The Committee will determine, after discussion with the Chairman of the Board and other Board members, whether a candidate should continue to be considered. If a candidate warrants additional consideration, the Committee and others, as appropriate, will interview the candidate. Once the evaluation and interviews are completed, the Committee will recommend to the Board whether the candidate should be appointed to the Board or proposed for election by shareholders and the Board will act on such recommendation.

 

 

Communication to the Board

 

To foster better communication from our shareholders and other interested persons, we maintain a process for shareholders and others to communicate with the Audit Committee and the Board. The process has been approved by both the Audit Committee and the Board and meets the requirements of the NYSE and the SEC. The methods of communication with the Board include telephone, mail, and e-mail.

 

888.312.2692
or
770.613.6348
Board of Directors
c/o Code of Business Conduct
Halliburton Company
P.O. Box 2625
Houston, TX 77252-2625
USA
BoardofDirectors@halliburton.com

 

Our Director of Business Conduct, an employee, reviews all communications directed to the Audit Committee and the Board. The Audit Committee is promptly notified of any substantive communication involving accounting, internal accounting controls, or auditing matters. The Lead Independent Director is promptly notified of any other significant communication, and any Board-related matters which are addressed to a named Director are promptly sent to that Director. Copies of all communications are available for review by any Director. Communications may be made anonymously or confidentially. Confidentiality shall be maintained unless disclosure is:

 

required or advisable in connection with any governmental investigation or report;
in the interests of Halliburton, consistent with the goals of our Code of Business Conduct; or
required or advisable in our legal defense of a matter.

 

Information regarding these methods of communication is also on our website at www.halliburton.com.

 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      8
 
Proposal No. 1 Election of Directors

 

In considering whether a current Director should be nominated for election as a Director, the Nominating and Corporate Governance Committee and the Board considered, among other matters, the expertise and experience of the Director, the annual performance evaluation of the Director, the Director’s attendance at, preparation for, and engagement in Board and Committee meetings, the diversity of the Board, the tenure of the Director, and the overall distribution of tenure among Directors to ensure sufficient experience with the Company’s operations, performance, and technology, and the cycles of the industry. A summary of the qualifications and experience of our non-management Directors is provided under Information about Nominees for Director.

 

  AFTER CONSULTATION WITH THE NOMINATING AND CORPORATE GOVERNANCE COMMITTEE, THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE DIRECTOR NOMINEES LISTED UNDER INFORMATION ABOUT NOMINEES FOR DIRECTOR.

 

The ten nominees are all current Directors. If any nominee is unwilling or unable to serve, favorable and uninstructed proxies will be voted for a substitute nominee designated by the Board. If a suitable substitute is not available, the Board will reduce the number of Directors to be elected. Each nominee has indicated approval of his or her nomination and his or her willingness to serve if elected. The Directors elected will serve for the ensuing year and until their successors are elected and qualify.

 

 

  HALLIBURTON  |  2021 Proxy Statement      9
 

NON-MANAGEMENT DIRECTOR QUALIFICATIONS AND EXPERIENCE

 

 

                  
TENURE                           
Year Elected  2014  2016  2019  2006  2006  2012  2019  2009  2021
                            
INDEPENDENCE AND EXPERIENCE                           
Independence                 
Board or Board Committee Leadership                 
Public Company Experience                 
Private Company Experience                   
Not-for-Profit Experience                 
Government Experience                      
Academia                        
Community Leadership/Philanthropic                  
                            
DECISION-MAKING OR OTHER SUBSTANTIAL EXPERIENCE                           
Energy Industry  A  A  B  A  A  A     A  A
Accounting/Finance  A  A  A  A     A  A  A  A
Technology/Engineering  A  A  A  A  A  A     A  A
Legal/Compliance  A  A  A  A     A  A  A  A
Mergers & Acquisitions  A  A     A  B  A  A  A  A
Human Resources/Compensation  A  A  B  A  A  A  A  A  A
Strategic Planning  A  A  A  A  A  A  A  A  A
International Business  A  A  A  A  A  A  A  A  A
Health, Safety & Environment and Sustainability  A  A  B  A     A     A  A
Public Policy  A  A  A  A  B  A  A  A  A
Corporate Governance  A  A  B  A  A  A  A  A  A
                            
LEGEND                           
A    Decision-making experience at Executive or Board level                  
B    Other Substantial Experience                    
                            
DEMOGRAPHICS                           
Race/Ethnicity                           
Black/African American                          
Indian/South Asian                         
White/Caucasian                     
Middle Eastern                          
Gender                           
Male                   
Female                         

 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      10
 

Information about Nominees for Director

 

ABDULAZIZ F. AL KHAYYAL  

 

Age 67

 

Director

since: 2014

INDEPENDENT

  Professional Experience:  
 

•   Retired Senior Vice President of Industrial Relations of Saudi Arabian Oil Company (the world’s largest producer of crude oil)

•   Senior Vice President of Industrial Relations of Saudi Aramco from 2007 to 2014 and served as a director of Saudi Aramco from 2004 to 2014

  Skills and Expertise:  
  The Board determined that Mr. Al Khayyal should be nominated for election as a Director because of his exceptional knowledge of the energy industry, including significant international industry experience and executive experience with the world’s largest producer of crude oil.
  Other Company Directorships: Former Directorships in the Past 5 Years:
  •   Marathon Petroleum Corporation (since 2016) •   None




 

WILLIAM E. ALBRECHT  

 

Age 69

Director

since: 2016

INDEPENDENT

  Professional Experience:  
 

•   Retired Non-Executive Chairman of the Board of California Resources Corporation (a publicly traded oil and natural gas exploration and production company)

•   Non-Executive Chairman of the Board of California Resources Corporation from 2016 to 2020

•   Executive Chairman of the Board of California Resources Corporation from 2014 to 2016

•   Vice President of Occidental Petroleum Corporation from 2008 to 2014

•   President of Oxy Oil & Gas, Americas from 2012 to 2014

  Skills and Expertise:  
  The Board determined that Mr. Albrecht should be nominated for election as a Director because of his extensive experience in the domestic oil and natural gas industry and executive experience with a public oil and gas exploration and production company and an international offshore drilling company.
  Other Company Directorships: Former Directorships in the Past 5 Years:
 

•   Lead Independent Director of Valaris plc (since 2019)

•   Chairman of the Board and director of Laredo Petroleum, Inc. (since 2020)

•   Chairman of the Board and director of Rowan Companies plc (2015-2019)

 

M. KATHERINE BANKS  

 

Age 61

Director

since: 2019

INDEPENDENT

  Professional Experience:  
  •  Vice Chancellor of Engineering and National Laboratories for The Texas A&M University System and Dean of the College of Engineering at Texas A&M University (a public research university) since 2012
  Skills and Expertise:  
  The Board determined that Dr. Banks should be nominated for election as a Director because of her extensive experience in engineering and technology and executive experience in leading one of the largest engineering schools in the country and overseeing the engineering, academic, and research programs at seven universities.
  Other Company Directorships: Former Directorships in the Past 5 Years:
  •   None •   None


 

 

  HALLIBURTON  |  2021 Proxy Statement      11
 

 

ALAN M. BENNETT  

 

Age 70

Director

since: 2006

INDEPENDENT

  Professional Experience:  
 

•   Retired President and Chief Executive Officer of H&R Block, Inc. (a tax and financial services provider)

•   President and Chief Executive Officer of H&R Block, Inc. from 2010 to 2011

•   Interim Chief Executive Officer of H&R Block, Inc. from 2007 to 2008

•   Senior Vice President and Chief Financial Officer of Aetna, Inc. from 2001 to 2007

  Skills and Expertise:  
  The Board determined that Mr. Bennett should be nominated for election as a Director because of his business and financial expertise, ranging from internal audit to corporate controller to chief financial officer of a large, public company. He is a certified public accountant and also has chief executive officer experience.
  Other Company Directorships: Former Directorships in the Past 5 Years:
 

•   Fluor Corporation (since 2011)

•   TJX Companies, Inc. (since 2007)

•   None

 

MILTON CARROLL  

 

Age 70

Director

since: 2006

INDEPENDENT

  Professional Experience:  
 

•   Executive Chairman of the Board of CenterPoint Energy, Inc. (a public utility holding company) since 2013. In that role, Mr. Carroll’s primary function is to provide leadership for the CenterPoint Board and to coordinate its activities.

•   Non-Executive Chairman of the Board of CenterPoint Energy, Inc. from 2002 to 2013

  Skills and Expertise:  
  The Board determined that Mr. Carroll should be nominated for election as a Director because of his public company board experience, corporate governance expertise, and knowledge of the oil and gas services industry. The Board also determined that Mr. Carroll’s duties as Chairman of CenterPoint do not impede his ability to fulfill his responsibilities as a Director.
  Other Company Directorships: Former Directorships in the Past 5 Years:
  •   Chairman of the Board of Health Care Service Corporation (since 2002)

•   LyondellBasell Industries (2010-2016)

•   Western Gas Holdings, LLC, the general partner of Western Gas Partners, L.P. (2008-2019)

•   Western Midstream Partners, LP (February 2019-August 2019)

 

MURRY S. GERBER  

 

Age 68

Director

since: 2012

INDEPENDENT

  Professional Experience:  
 

•   Retired Executive Chairman of the Board of EQT Corporation (a leading producer of unconventional natural gas)

•   Executive Chairman of the Board of EQT Corporation from 2010 to 2011

•   Chairman and Chief Executive Officer of EQT Corporation from 2000 to 2010

•   Chief Executive Officer and President of EQT Corporation from 1998 to 2007

  Skills and Expertise:  
  The Board determined that Mr. Gerber should be nominated for election as a Director because of his executive leadership skills and extensive business experience in the energy industry and domestic unconventional oil and natural gas basins.
  Other Company Directorships: Former Directorships in the Past 5 Years:
 

•   BlackRock, Inc. (since 2000)

•   United States Steel Corporation (since 2012)

•   None

 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      12
 

PATRICIA HEMINGWAY HALL  

 

Age 68

Director

since: 2019

INDEPENDENT

  Professional Experience:  
 

•   Retired President and Chief Executive Officer of Health Care Service Corporation (mutual health insurance company which operates five Blue Cross and Blue Shield Plans)

•   Chief Executive Officer of Health Care Service Corporation from 2008 to 2015

•   President of Health Care Services Corporation from 2007 to 2015

 
 
  Skills and Expertise:  
  The Board determined that Ms. Hemingway Hall should be nominated for election as a Director because of her executive leadership skills, business experience, public company board experience, and substantial corporate governance experience.
  Other Company Directorships: Former Directorships in the Past 5 Years:
 

•   ManpowerGroup Inc. (since 2011)

•   Cardinal Health, Inc. (since 2013)



•   Celgene Corporation (2018-2019)

 

ROBERT A. MALONE  

 

Age 69

Director

since: 2009

INDEPENDENT

  Professional Experience:  
 

•   Executive Chairman, President and Chief Executive Officer of First Sonora Bancshares, Inc. (a bank holding company) since 2014

•   Chairman, President and Chief Executive Officer of The First National Bank of Sonora, Texas (a community bank owned by First Sonora Bancshares, Inc.) since 2014

•   Executive Vice President of BP plc, and Chairman of the Board and President, BP America Inc. (one of the nation’s largest producers of oil and natural gas) from 2006 to 2009

  Skills and Expertise:  
  The Board determined that Mr. Malone should be nominated for election as a Director because of his energy industry expertise and executive leadership experience, including crisis management and safety performance.
  Other Company Directorships: Former Directorships in the Past 5 Years:
 

•   Non-Executive Chairman of the Board of Peabody Energy Corporation (since 2016) following the Company’s emergence from bankruptcy and Director (since 2009)

•   Teledyne Technologies Incorporated (since 2015)

•   BP Midstream Partners GP LLC, the general partner of BP Midstream (since 2017)

•   None

 

 

JEFFREY A. MILLER  

 

Age 57

Director

since: 2014

CHAIRMAN

PRESIDENT,

AND CHIEF

EXECUTIVE

OFFICER

  Professional Experience:  
 

•   Chairman of the Board, President and Chief Executive Officer of Halliburton since 2019

•   Member of the Board of Directors, President and Chief Executive Officer of Halliburton from 2017 to 2018

•   Member of the Board of Directors and President of Halliburton from 2014 to 2017

  Skills and Expertise:  
  The Board determined that Mr. Miller should be nominated for election as a Director because of his energy industry expertise, executive and business development experience, and in-depth knowledge of Halliburton’s global operations.
  Other Company Directorships: Former Directorships in the Past 5 Years:
  •   None •   Atwood Oceanics, Inc. (2013-2017)






 

 

  HALLIBURTON  |  2021 Proxy Statement      13
 

 

BHAVESH V. (BOB) PATEL  

 

Age 54

Director

since: 2021

INDEPENDENT

  Professional Experience:  
 

•   Chief Executive Officer of LyondellBasell Industries (an international plastics, chemicals, and refining company) since 2015

•   Director of LyondellBasell Industries since 2018

•   Senior Vice President, Olefins and Polyolefins-Americas and Executive Vice President Olefins and Polyolefins Europe, Asia, International & Technology of LyondellBasell from 2010 to 2015

  Skills and Expertise:  
  The Board determined that Mr. Patel should be nominated for election as a Director because of his chemical industry experience, executive leadership skills, public company board experience, and safety expertise.
  Other Company Directorships: Former Directorships in the Past 5 Years:
  •   Union Pacific Corporation (since 2017) •   None

 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      14
 

Directors’ Compensation

 

Directors’ Fees

 

All non-management Directors receive an annual retainer of $115,000, which remains unchanged since 2014. Consistent with the reduction of Mr. Miller’s salary in response to the COVID-19 pandemic and its impact on our business, the non-management Directors reduced their retainer by 20% on May 19, 2020, for the remainder of 2020. The Lead Independent Director receives an additional annual retainer of $30,000, and the chair of each Committee receives an additional annual retainer for serving as chair as follows: Audit - $25,000; Compensation - $20,000; Health, Safety and Environment - $15,000; and Nominating and Corporate Governance - $15,000. Non-management Directors are permitted to defer all or part of their fees under the Directors’ Deferred Compensation Plan.

 

Directors’ Equity Awards

 

All non-management Directors receive an annual equity award with a value of approximately $185,000, which remains unchanged since 2014, consisting of restricted stock units (RSUs), each of which represents the right to receive a share of common stock at a future date. These annual awards are made in December. The actual number of RSUs is determined by dividing $185,000 by the average of the closing price of our common stock on the NYSE on each business day during the month of November. The value of the award may be more or less than $185,000 based on the methodology described above for determining the number of RSUs to be awarded and the closing price of our common stock on the NYSE on the date of the award. Non-management Directors are permitted to defer all of their RSUs under the Directors’ Deferred Compensation Plan.

 

Additionally, when a non-management Director first joins the Board, he or she receives an equity award shortly thereafter of RSUs equal to a prorated value of the annual equity award of $185,000. The factor used to determine the prorated award is the number of whole months of service from the beginning of the month in which Board service begins to the following first of December divided by 12. The number of RSUs awarded is determined by dividing the prorated award amount by the average of the closing price of our common stock on the NYSE on each business day during the month immediately preceding the Director joining the Board.

 

Directors may not sell, assign, otherwise transfer, or encumber restricted shares (which were previously granted to non-management Directors) or RSUs until the restrictions are removed. Beginning in 2020 and to align our practices with peer companies, restrictions on RSUs lapse entirely on the first anniversary of the grant date with the applicable underlying shares of common stock distributed to the non-management Director unless the Director elected to defer receipt of the shares under the Directors’ Deferred Compensation Plan. Restrictions on RSUs granted prior to 2020 lapse 25% a year over four years. If a non-management Director has a separation of service from the Board before completing the specified number of service years from the applicable award date, any unvested RSUs would be forfeited, unless the Board determines to accelerate vesting. Restrictions on restricted shares and RSUs lapse following termination of Board service only under specified circumstances, which include death or disability, retirement under the Director mandatory retirement policy, or early retirement after at least four years of service.

 

During the restriction period, Directors have the right to (i) vote restricted shares, but not shares underlying RSUs, and (ii) receive dividends or dividend equivalents in cash on restricted shares and RSUs that have not been deferred. RSUs that have been deferred receive dividend equivalents under the Directors’ Deferred Compensation Plan.

 

Directors’ Deferred Compensation Plan

 

The Directors’ Deferred Compensation Plan is a nonqualified deferred compensation plan and participation is completely voluntary. Under the plan, non-management Directors are permitted to defer all or part of their retainer fees and all of the shares of common stock underlying their RSUs when they vest. If a non-management Director elects to defer retainer fees under the plan, then the Director may elect to have his or her deferred fees accumulate under an interest-bearing account or translate on a quarterly basis into Halliburton common stock equivalent units (SEUs) under a stock equivalents account. If a non-management Director elects to defer receipt of the shares of common stock underlying his or her RSUs when they vest, then those shares are retained as deferred RSUs under the plan. The interest-bearing account is credited daily with interest at the

 

 

  HALLIBURTON  |  2021 Proxy Statement      15
 

prime rate of Citibank, N.A. The SEUs and deferred RSUs are credited quarterly with dividend equivalents based on the same dividend rate as Halliburton common stock and those amounts are translated into additional SEUs or RSUs, respectively.

 

After a Director’s retirement, distributions under the plan are made to the Director in a single distribution or in annual installments over a 5- or 10-year period as elected by the Director. Distributions under the interest-bearing account are made in cash, while distributions of SEUs under the stock equivalents account and deferred RSUs are made in shares of Halliburton common stock. Ms. Dicciani and Messrs. Al Khayyal, Bennett, and Carroll have deferred retainer fees under the plan. Mses. Dicciani and Hemingway Hall, and Messrs. Al Khayyal, Albrecht, Bennett, and Carroll have deferred RSUs under the plan.

 

Directors’ Stock Ownership Requirements

 

We have stock ownership requirements for all non-management Directors to further align their interests with our shareholders. As a result, all non-management Directors are required to own Halliburton common stock in an amount equal to or in excess of the greater of (i) the annual base retainer in effect on the date the non-management Director is first elected to the Board multiplied by five or (ii) $500,000. The Nominating and Corporate Governance Committee reviews the holdings of all non-management Directors, which include restricted shares, other Halliburton common stock, and RSUs owned by the Director, at each May meeting. Each non-management Director has five years to meet the requirements, measured from the date he or she is first elected to the Board. Each non-management Director currently meets the stock ownership requirements or is on track to do so within the requisite five-year period.

 

Director Clawback Policy

 

We have a clawback policy under which we will seek, in all appropriate cases, to recoup incentive compensation paid to, awarded to, or credited for the benefit of a Director, if and to the extent that:

 

it is determined that, in connection with the performance of that Director’s duties, he or she breached his or her fiduciary duty by knowingly or recklessly engaging in a material violation of a U.S. federal or state law, or recklessly disregarded his or her duty to exercise reasonable oversight; or

 

the Director is named as a defendant in a law enforcement proceeding for having breached his or her fiduciary duty by knowingly or recklessly engaging in a material violation of a U.S. federal or state law, the Director disagrees with the allegations relating to the proceeding, and either (i) we initiate a review and determine that the alleged action is not indemnifiable or (ii) the Director does not prevail at trial, enters into a plea arrangement, agrees to the entry of a final administrative or judicial order imposing sanctions, or otherwise admits to the violation in a legal proceeding.

 

The disinterested members of the Board and the disinterested members of the Compensation Committee and the Nominating and Corporate Governance Committee may be involved in reviewing, considering, and making determinations regarding the Director’s alleged conduct, whether recoupment is appropriate or required, and the type and amount of incentive compensation to be recouped from the Director.

 

The policy also provides that, to the extent permitted by applicable law and not previously disclosed in a filing with the SEC, we will disclose in our proxy statement the circumstances of any recoupment arising under the policy or that there has not been any recoupment pursuant to the policy for the prior calendar year. There was no recoupment under the policy in 2020.

 

Matching Gift Programs

 

To further our support for charities, Directors may participate in the Halliburton Foundation’s matching gift programs for educational institutions, not-for-profit hospitals, and medical foundations. For each eligible contribution, the Halliburton Foundation makes a contribution of 2.25 times the amount contributed by the Director, subject to approval by its Trustees. The maximum aggregate of all contributions each calendar year by a Director eligible for matching is $50,000, resulting in a maximum aggregate amount contributed annually by the Halliburton Foundation in the form of matching gifts of $112,500 for any Director who participates in the programs. Neither the Halliburton Foundation nor we have made a charitable contribution, within the preceding three years, to any charitable organization in which a Director serves as an executive officer that exceeds in any single year the greater of $1 million or 2% of such charitable organization’s consolidated gross revenues.

 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      16
 

2020 Director Compensation

 

Name  Fees Earned
or Paid in Cash
($)
  Stock
Awards
($)
  Change in Pension Value
and Nonqualified Deferred
Compensation Earnings
($)
  All Other
Compensation
($)
  Total
($)
Abdulaziz F. Al Khayyal  97,750  216,938  0  13,062  327,750
William E. Albrecht  97,750  216,938  0  7,713  322,401
M. Katherine Banks  97,750  216,938  0  28,528  343,216
Alan M. Bennett  122,750  216,938  0  123,090  462,778
Milton Carroll  112,750  216,938  0  32,787  362,475
Nance K. Dicciani  112,750  216,938  0  133,448  463,136
Murry S. Gerber  117,750  216,938  0  5,401  340,089
Patricia Hemingway Hall  97,750  216,938  0  116,277  430,965
Robert A. Malone  127,750  216,938  0  121,947  466,635

 

Fees Earned or Paid In Cash. The amounts in this column represent retainer fees earned in fiscal year 2020, but not necessarily paid in 2020. Refer to the section Directors’ Fees for information on annual retainer fees.

 

Stock Awards. The amounts in the Stock Awards column reflect the grant date fair value of RSUs awarded in 2020. We calculate the fair value of equity awards by multiplying the number of RSUs granted by the closing stock price as of the award’s grant date.

 

The number of restricted shares, RSUs, and SEUs held at December 31, 2020, by non-management Directors are:

 

Name  Restricted Shares   RSUs   SEUs 
Abdulaziz F. Al Khayyal   0    42,555    13,281 
William E. Albrecht   0    35,098    0 
M. Katherine Banks   0    20,626    0 
Alan M. Bennett   25,236    53,180    38,527 
Milton Carroll   20,271    53,180    50,360 
Nance K. Dicciani   14,843    44,646    14,995 
Murry S. Gerber   2,000    21,519    0 
Patricia Hemingway Hall   0    20,654    0 
Robert A. Malone   14,843    21,519    0 

 

Change in Pension Value and Nonqualified Deferred Compensation Earnings. None of the Directors had a change in pension value or nonqualified deferred compensation earnings that represented above market earnings in 2020.

 

All Other Compensation. This column includes compensation related to the matching gift programs under the Halliburton Foundation, the Accidental Death and Dismemberment program, dividends or dividend equivalents on restricted shares or RSUs, and dividend equivalents associated with the Directors’ Deferred Compensation Plan.

 

Directors who participated in the matching gift program and the corresponding match provided by the Halliburton Foundation in 2020 are: Dr. Banks - $24,750; Mr. Bennett - $90,000; Ms. Dicciani - $112,500; Ms. Hemingway Hall - $112,500; and Mr. Malone - $112,500.

 

Non-management Directors are provided an Accidental Death and Dismemberment benefit, the annual premium for which is $155.

 

Directors who received dividends or dividend equivalents on restricted shares or RSUs held on Halliburton record dates are: Dr. Banks - $3,623; Mr. Bennett - $7,949; Mr. Carroll - $6,385; Ms. Dicciani - $9,057; Mr. Gerber - $5,246; Ms. Hemingway Hall - $3,068; and Mr. Malone - $9,292.

 

Directors who received dividend equivalents attributable to their stock equivalents account under the Directors’ Deferred Compensation Plan are: Mr. Al Khayyal - $3,053; Mr. Bennett - $11,861; Mr. Carroll - $13,122; and Ms. Dicciani - $4,616.

 

Directors who received dividend equivalents attributable to their deferred RSUs under the Directors’ Deferred Compensation Plan are: Mr. Al Khayyal - $9,854; Mr. Albrecht - $7,558; Mr. Bennett - $13,125; Mr. Carroll - $13,125; Ms. Dicciani - $7,120; and Ms. Hemingway Hall - $554.

 

 

  HALLIBURTON  |  2021 Proxy Statement      17
 

Stock Ownership Information

 

Delinquent Section 16(a) Reports

 

The Company believes, based on our records and review of filings with the SEC, that during the fiscal year ended December 31, 2020, our Directors and executive officers complied with the filing requirements of Section 16(a) of the Securities Exchange Act of 1934.

 

Stock Ownership of Certain Beneficial Owners and Management

 

The following table sets forth beneficial ownership information about persons or groups that own or have the right to acquire more than 5% of our common stock, based on information contained in Schedules 13G filed with the SEC.

 

Name and Address
of Beneficial Owner
  Amount and Nature of
Beneficial Ownership
   Percent
of Class
 
BlackRock, Inc.   61,559,691(1)    7.00% 
55 East 52nd Street, New York, NY 10055          
Capital World Investors   64,412,667(2)    7.30% 
333 South Hope Street, 55th Fl, Los Angeles, CA 90071          
The Vanguard Group   101,229,649(3)    11.45% 
100 Vanguard Blvd, Malvern, PA 19355          
(1)BlackRock, Inc. is deemed to be the beneficial owner of 61,559,691 shares. BlackRock has sole power to vote or to direct the vote of 52,417,183 shares and has sole power to dispose or to direct the disposition of 61,559,691 shares.
(2)Capital World Investors is deemed to be the beneficial owner of 64,412,667 shares. Capital World Investors has sole power to vote or to direct the vote of 64,412,667 shares and has sole power to dispose or to direct the disposition of 64,412,667 shares.
(3)The Vanguard Group is deemed to be the beneficial owner of 101,229,649 shares. The Vanguard Group has sole power to dispose or to direct the disposition of 97,453,618 shares. The Vanguard Group has shared power to vote or to direct the vote of 1,381,498 shares and has shared power to dispose or to direct the disposition of 3,776,031 shares.

 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      18
 

The following table sets forth information, as of March 12, 2021, regarding the beneficial ownership of our common stock by each Director, each Named Executive Officer, and by all Directors and executive officers as a group.

 

   Amount and Nature of Beneficial Ownership
Name of Beneficial Owner or
Number of Persons in Group
  Sole Voting
and
Investment
Power(1)
  Shared
Voting or
Investment
Power
  Percent of
Class
Abdulaziz F. Al Khayyal  0     *
William E. Albrecht  16,000     *
M. Katherine Banks  2,768     *
Alan M. Bennett  27,236     *
Eric J. Carre  313,830     *
Milton Carroll  20,271     *
Nance K. Dicciani  27,172     *
Murry S. Gerber  580,052     *
Patricia Hemingway Hall  2,768     *
Lance Loeffler  265,794     *
Robert A. Malone  42,269     *
Jeffrey A. Miller  1,473,629     *
Bhavesh V. Patel  10,000     *
Joe D. Rainey  703,851     *
Mark J. Richard  391,570     *
Shares owned by all current Directors and executive officers as a group (21 persons)  5,457,206     *
*Less than 1% of shares outstanding.
(1)The table includes shares of common stock eligible for purchase pursuant to outstanding stock options within 60 days of March 12, 2021, for the following: Mr. Carre – 140,510; Mr. Loeffler – 114,667; Mr. Miller – 582,134; Mr. Rainey – 346,733; Mr. Richard – 142,032; and six unnamed executive officers – 771,766. Until the options are exercised, these individuals will not have voting or investment power over the underlying shares of common stock, but will only have the right to acquire beneficial ownership of the shares through exercise of their respective options. The table also includes restricted shares of common stock over which the individuals have voting power but no investment power.

 

 

  HALLIBURTON  |  2021 Proxy Statement      19
 

Proposal No. 2   Ratification of Selection of Principal Independent Public Accountants

 

The Audit Committee is responsible for the appointment, compensation, retention, oversight of the work, and evaluation of the principal independent public accountants retained to audit our financial statements. The Audit Committee and Board have approved the selection of KPMG LLP as our principal independent public accountants to examine our financial statements and books and records for the year ended December 31, 2021, and a resolution will be presented at the Annual Meeting to ratify this selection. The Audit Committee and Board believe that the continued retention of KPMG to serve as our principal independent public accountants for the year ended December 31, 2021, is in the best interests of Halliburton and our shareholders. Representatives of KPMG are expected to be present at the Annual Meeting and be available to respond to appropriate questions from shareholders.

 

KPMG began serving as our principal independent public accountants for the year ended December 31, 2002. The Audit Committee routinely reviews the performance and retention of our independent public accountants, including an evaluation of service quality, the nature and extent of non-audit services, and other factors required to be considered when assessing independence from Halliburton and its management. The Audit Committee also periodically considers whether there should be a rotation of the principal independent public accountants.

 

The affirmative vote of the holders of a majority of the shares of our common stock represented at the Annual Meeting and entitled to vote on the matter is needed to approve the proposal.

 

If the shareholders do not ratify the selection of KPMG, the Board will reconsider the selection of independent public accountants.

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS PRINCIPAL INDEPENDENT PUBLIC ACCOUNTANTS TO EXAMINE OUR FINANCIAL STATEMENTS AND BOOKS AND RECORDS FOR THE YEAR ENDING DECEMBER 31, 2021.

 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      20
 

Audit Committee Report

 

We operate under a written charter, a copy of which is available on Halliburton’s website at www.halliburton.com. As required by the charter, we review and reassess the charter annually and recommend any changes to the Board for approval. We are also mindful of the observations provided in the Securities and Exchange Commission’s Statement on Role of Audit Committees in Financial Reporting and Key Reminders Regarding Oversight Responsibilities.

 

Halliburton’s management is responsible for preparing Halliburton’s financial statements and the principal independent public accountants are responsible for auditing those financial statements. The Audit Committee’s role is to provide oversight of management in carrying out management’s responsibility and to appoint, compensate, retain, oversee the work of, and evaluate the principal independent public accountants. The Audit Committee is not providing any expert or special assurance as to Halliburton’s financial statements or any professional certification as to the principal independent public accountants’ work.

 

In fulfilling our oversight role for the year ended December 31, 2020, we:

 

reviewed and discussed Halliburton’s audited financial statements with management;

 

discussed with KPMG LLP, Halliburton’s principal independent public accountants, the matters required by Auditing Standard 1301 relating to the conduct of the audit;

 

received from KPMG the written disclosures and the letter required by the Public Company Accounting Oversight Board regarding KPMG’s independence;

 

evaluated KPMG’s service quality; and

 

discussed with KPMG its independence and reviewed other matters required to be considered under Securities and Exchange Commission rules regarding KPMG’s independence.

 

Based on the foregoing, we recommended to the Board that the audited financial statements be included in Halliburton’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, for filing with the Securities and Exchange Commission.

 

THE AUDIT COMMITTEE

 

M. Katherine Banks
Alan M. Bennett
Nance K. Dicciani
Murry S. Gerber

 

 

  HALLIBURTON  |  2021 Proxy Statement      21
 

Fees Paid to KPMG LLP

 

During 2019 and 2020, we incurred the following fees for services performed by KPMG LLP.

 

   2019   2020 
   (In millions)   (In millions) 
Audit fees  $10.7   $10.7 
Audit-related fees   0.1    0.2 
Tax fees   0.5    0.6 
TOTAL  $11.3   $11.5 

 

Audit Fees

 

Audit fees represent the aggregate fees for professional services rendered by KPMG for the integrated audit of our annual financial statements for the fiscal years ended December 31, 2019, and December 31, 2020. Audit fees also include the audits of many of our subsidiaries in regards to compliance with statutory requirements in foreign countries and reviews of our financial statements included in the Forms 10-Q we filed during fiscal years 2019 and 2020.

 

Audit-Related Fees

 

Audit-related fees were incurred for assurance and related services that are traditionally performed by the independent public accountants. These services primarily include attestation engagements required by contractual or regulatory provisions.

 

Tax Fees

 

The aggregate fees for tax services primarily consisted of international tax compliance and tax return services related to our expatriate employees. In 2019, tax compliance and preparation fees total $0.1 million and tax advisory fees total $0.4 million, and in 2020, tax compliance and preparation fees total $0.2 million and tax advisory fees total $0.4 million.

 

Fee Approval Policies and Procedures

 

The Audit Committee has established a written policy that requires the approval by the Audit Committee of all services provided by KPMG as the principal independent public accountants that examine our financial statements and books and records and of all audit services provided by other independent public accountants. Prior to engaging KPMG for the annual audit, the Audit Committee reviews a Principal Independent Public Accountants Auditor Services Plan. KPMG then performs services throughout the year as approved by the Committee. KPMG reviews with the Committee, at least quarterly, a projection of KPMG’s fees for the year. Periodically, the Audit Committee approves revisions to the plan if the Committee determines changes are warranted. Our Audit Committee also considered whether KPMG’s provision of tax services as reported above are compatible with maintaining KPMG’s independence as our principal independent public accountants. All of the fees described above for services provided by KPMG were approved in accordance with the policy.

 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      22
 

Proposal No. 3   Advisory Approval of Executive Compensation

 

Pursuant to Section 14A of the Securities Exchange Act of 1934, our shareholders are being presented with the opportunity to vote to approve, on an advisory basis, the compensation of our Named Executive Officers (NEOs) as disclosed in this proxy statement. As reaffirmed by our shareholders at the 2017 Annual Meeting of Shareholders, consistent with our Board’s recommendation, we are submitting this proposal for a non-binding vote on an annual basis.

 

As described in detail under Compensation Discussion and Analysis, our executive compensation program is designed to attract, motivate, and retain our NEOs, who are critical to our success. Under the program, our NEOs are rewarded for the achievement of specific annual, long-term, and strategic goals, corporate goals, and the realization of increased shareholder returns. Please read Compensation Discussion and Analysis for additional details about our executive compensation program, including information about the fiscal year 2020 compensation of our NEOs and our Board’s ongoing commitment to ensure that our program aligns with our long-term strategy and shareholder value creation.

 

The Compensation Committee continually reviews the compensation program for our NEOs to ensure the program achieves the desired goals of aligning our executive compensation structure with our shareholders’ interests and current market practices. We believe our executive compensation program achieves the following objectives identified under Compensation Discussion and Analysis:

 

Provide a clear and direct relationship between executive pay and our performance on both a short-term and long-term basis;
Target market competitive pay levels with a comparator peer group;
Emphasize operating performance drivers;
Link executive pay to measures that drive shareholder returns;
Support our business strategies; and
Maximize the return on our human resource investment.

 

We are asking our shareholders to indicate their support for our NEOs’ compensation as described in this proxy statement and vote “FOR” the following resolution at the Annual Meeting:

 

“RESOLVED, that the compensation paid to Halliburton’s Named Executive Officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion, is hereby approved.”

 

Our Board and our Compensation Committee value the opinions of our shareholders. The say-on-pay vote is advisory and, therefore, not binding on us, our Board, or our Compensation Committee. However, the Compensation Committee considers shareholder feedback in its ongoing review of our executive compensation program.

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

 

Compensation Committee Report

 

We have reviewed and discussed the Compensation Discussion and Analysis with Company management and, based on such review and discussion, we recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.

 

THE COMPENSATION COMMITTEE

 

William E. Albrecht
Milton Carroll
Murry S. Gerber
Patricia Hemingway Hall
Robert A. Malone

 

 

  HALLIBURTON  |  2021 Proxy Statement      23
 

Compensation Discussion and Analysis

 

             
  2020 CD&A At-A-Glance  
     
  This year’s Compensation Discussion and Analysis (CD&A) reviews the objectives and elements of Halliburton’s executive compensation program and discusses the 2020 compensation earned by our NEOs. It also explains the significant actions the Compensation Committee took based on its ongoing commitment to consider shareholder feedback and to ensure our senior leadership team continues to deliver the reliable execution, strong cash flow, and industry-leading returns that our shareholders expect.  
  Business Overview   Responsiveness   CEO Compensation  
 

2020 was a year of constant challenge and change. In the first quarter of 2020, OPEC+ was initially unable to reach an agreement on production limits of crude oil, exacerbating the demand decline from the COVID-19 pandemic, severely impacting our industry.

 

Our swift and decisive cost actions and service delivery improvements reset our earnings power, delivering strong margins and cash flow. We also achieved historic bests in safety and service quality and continued to outperform on relative ROCE and TSR, demonstrating our resilience – even in a low-price environment.

 

Through this, sustainability remains central to our strategy, as we seek to deliver long-term financial value while minimizing our environmental footprint and having a positive impact on society. Halliburton is committed to continued evolution of sustainable, reliable energy solutions that align with our sustainability objectives.

 

More information about our 2020 business achievements are described in 2020 Performance and Compensation Overview on page 27.

 

 

Our compensation program received the support of 91% of the total votes cast at our 2020 Annual Meeting. These results indicated solid support of our shareholder outreach efforts during 2019, which resulted in significant changes to our program.

 

Effective January 1, 2020, we modified the financial metrics for determining short-term incentives and restructured our long-term incentives (starting with the 2020 PUP cycle award grant) to put increased emphasis on performance-based long-term incentives and equity under the PUP award, which is now 50% of the PUP award.

 

The Compensation Committee believes that our program closely aligns the interests of management with our shareholders’ interests. Nevertheless, we continued our extensive outreach efforts as part of our commitment to ensure continued shareholder support for our compensation program.

 

More information about our approach to shareholder engagement is described in Board Responsiveness to Shareholder Feedback on page 25.

 

 

The end of 2020 marked Mr. Miller’s third full year as our CEO since his promotion from COO. This milestone, plus the PUP changes effective January 1, 2020, makes understanding the year-over-year increase in the Summary Compensation Table (SCT) complicated in two ways:

 

At the time of Mr. Miller’s promotion from COO to CEO, the Compensation Committee approved a market-based adjustment to his target award opportunity, which was appropriately aligned with his expanded role and responsibilities. This resulted in an increase of $3.7M to his 2018 PUP cycle award payout.

 

We are required to report performance share awards from two different plan years in this proxy statement for 2020. This means that we are reporting both the cash earned for the 2018 PUP cycle and target equity granted for the 2020 cycle, resulting in an additional $5M to be reported in the Stock Awards column of the Summary Compensation Table.

 

More information about these actions and the impact on the SCT is described in CEO Compensation: Understanding the Summary Compensation Table on page 26.

 

 
             
  2020 Pay Outcomes:          
  Effective May 1, 2020, Mr. Miller and the other NEOs voluntarily reduced their base salaries by 20% and 10%, respectively. Those salaries were reinstated by the Compensation Committee effective January 1, 2021. There were also no short-term incentives paid to any of our NEOs for the 2020 plan year. Although 2020 was challenging, our Return on Capital Employed (ROCE) for the three-year period ending December 31, 2020, was above the 75th percentile relative to our performance peer group, demonstrating our ability to be an outperformer under volatile market conditions. As a result, the 2018 cycle of PUP that ended December 31, 2020, yielded an award paid at 200% of target.  
             

 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      24
 

2020 Named Executive Officers

 

Name  Age  Occupation
Jeffrey A. Miller  57  Chairman, President and Chief Executive Officer
Lance Loeffler  44  Executive Vice President and Chief Financial Officer
Eric J. Carre  55  Executive Vice President – Global Business Lines
Joe D. Rainey  64  President – Eastern Hemisphere
Mark J. Richard  59  President – Western Hemisphere

 

Board Responsiveness to Shareholder Feedback

 

Halliburton has always maintained open communications with the shareholder community. Seeking feedback from our shareholders on a regular basis is a critical part of our approach to managing our executive compensation program. Our ongoing, open dialogue with our shareholders helps ensure that the Board and management have a regular pulse on the views of our shareholders. These communications validate that our shareholders continue to be broadly supportive of the overall philosophy, objectives, and design of our program. They also provide us important perspectives on how to improve and better explain our program.

 

During 2020, members of our senior management team participated in 20 sell-side investor conferences, three roadshows, and held over 380 investor meetings. As is our practice, during proxy season engagement, management engaged in targeted outreach with numerous shareholders. Our Compensation Committee Chair also participated in this outreach effort. During this shareholder outreach, we contacted shareholders who collectively hold almost 50% of our outstanding common stock. We also met with many of those shareholders who collectively represented 28% of our outstanding shares. We reviewed the changes to our compensation program implemented by our Compensation Committee during 2020 and solicited their feedback on our compensation program, as well as our company strategy and performance, corporate governance, sustainability, and other topics.

 

The feedback from this effort indicated that our overall compensation program design is supported by our shareholders. For this and other reasons, the Compensation Committee determined that the overall structure of the compensation program is sound and closely aligns the interests of both company management and our shareholders. Based on shareholder feedback received in 2019, effective January 1, 2020, we:

 

  Modified financial metrics for determining short-term incentives to increase our emphasis on free cash flow and capital discipline  

Replaced CVA with two distinct metrics, weighted as follows, for the 2020 plan year:

•  75% Net Operating Profit After-Taxes (NOPAT)

•  25% Asset Turns

  Increased emphasis on performance-based long-term incentives  

Modified our long-term incentive mix (as illustrated in the graphic below):

   

•  Increased weight of performance units to 70% (up from 50%)

•  Reduced weight of restricted stock to 30%

•  Eliminated stock options for NEOs

  Added a second financial metric for determining long-term performance-based awards under the PUP   Added a relative Total Shareholder Return (TSR) modifier for the 2020 PUP performance cycle; compares performance to the Oilfield Services Index (OSX); penalizes bottom quartile performance or rewards top-quartile performance
  Increased equity component of long-term incentives   Changed PUP to issue new awards (contingent on three-year performance period) 50% in stock (previously delivered entirely in cash) so that 65% of long-term incentives is delivered in equity

 

 

  HALLIBURTON  |  2021 Proxy Statement      25
 

Increased Emphasis on Long-Term Performance-Based Equity

 

 

CEO Compensation: Understanding the Summary Compensation Table

 

There are two key factors to consider when analyzing our CEO’s reported compensation in this year’s Summary Compensation Table (SCT):

 

Mr. Miller’s promotion to CEO, which increased his target market competitive pay levels, primarily impacting the amount earned under the Performance Unit Program in 2020 as compared to 2019; and
Based on shareholder feedback, we fundamentally changed the structure of our long-term incentives. As a result, we are required to report performance awards for 2020 from two different plan years in this proxy statement. This means that we are reporting both the cash earned for the 2018 PUP cycle and target level equity granted for the 2020 cycle, resulting in an additional $5M to be reported in the Stock Awards column of the SCT.

 

The graph below is intended to present a picture of Mr. Miller’s compensation for 2020, considering the above key issues. The $17.3M presented below for 2020 compensation is aligned with the intended target total compensation for Mr. Miller as determined by the Compensation Committee when setting executive compensation levels for 2020.

 

 

2019 Compensation: Amount reflects the total compensation earned in 2019 as reported in the SCT.

 

Other Compensation: Amount reflects the sum of the change in salary paid, restricted stock awarded, and NQDC earnings and all other compensation for 2020 as compared to 2019. Mr. Miller voluntarily reduced his salary by 20% effective May 1, 2020. His salary was reinstated by the Compensation Committee effective January 1, 2021.

 

Non-Equity Incentive Plan Compensation: Amount reflects the change in the 2018 cycle PUP award payout as compared to the 2017 cycle of the PUP. This increase in target compensation for the 2018 PUP was commensurate with Mr. Miller’s promotion from COO to CEO.

 

Performance Shares: Required Reporting: Represents the value of the target level award opportunity for the performance units awarded in equity for the 2020 cycle of the PUP that began January 1, 2020, and ends December 31, 2022. The amount reported is based on the grant date fair value of the award and will have actual value to Mr. Miller only if performance is achieved at the end of the performance cycle.

 

2020 Compensation: Amount reflects the total compensation earned by Mr. Miller in 2020 as reported in the SCT, as well as what the amount would have been if we had not restructured our long-term incentives beginning with the 2020 plan year and granted the performance shares.

 

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  HALLIBURTON  |  2021 Proxy Statement      26
 

2020 Performance and Compensation Overview

 

Business Highlights

 

Despite 2020’s global pandemic and an unprecedented energy market downturn, our execution culture and core values turned what were once-in-a-lifetime challenges into extraordinary opportunities that reset Halliburton’s earnings power. During 2020:

 

Our dedicated employees embraced change as we fulfilled our value proposition to collaborate and engineer solutions to maximize asset value for our customers.
We demonstrated the strength of our international business that is deeper technically, geographically, and organizationally than ever before.
We redesigned our service delivery platform and reset our earnings power in the North American market, where we remain the leading integrated services provider.
Halliburton 4.0, our digital framework, permeates everything we do. We increased the breadth and depth of our digital offerings and delivered best-in-class performance across a spectrum of digital technologies.
We announced our commitment to the Science Based Targets initiative (SBTi), which will help us reduce our carbon footprint and environmental impact.
To advance sustainable energy solutions, we successfully launched Halliburton Labs – an accelerator, where entrepreneurs, academics, investors, and industrial labs come together to develop solutions that enable cleaner, affordable energy.
We focused on safety and service quality and delivered Company-best results.

 

Even though the market dynamics of 2020 were challenging, our results were relatively strong, especially when compared to our peers, as highlighted below.

 

Geographic Diversity

   

 

 

 

 

In 2020, we earned the majority of our revenue internationally.

We reset our earnings power and improved margins in several key end markets, despite the activity slowdowns.

 

     

Cash Flow Execution

   
     

 

 

During 2020, we generated $1.9 billion of operating cash flow and had $728 million of capital expenditures, resulting in over $1.1 billion of free cash flow. This demonstrates our ability to generate strong free cash flow in different business environments. We additionally returned over $350 million to shareholders through dividends and share repurchases and repaid $500 million of debt.

 

*Management believes free cash flow, defined as “operating cash flow” less “capital expenditures”, is an important liquidity measure and useful to investors and management for assessing the business’s ability to generate cash.

     

 

 

  HALLIBURTON  |  2021 Proxy Statement      27
 
Capital Discipline    
 

 

Market conditions changed and we quickly acted by reducing our capital expenditures by 52% to $728 million in 2020. These capital expenditures were predominantly made in our Sperry Drilling, Production Enhancement, Baroid, Artificial Lift, Wireline and Perforating, and Production Solutions product service lines.

     
Safety and Service Quality    
     
 

 

We achieved exceptional safety and service quality performance during 2020. Our total recordable incident rate and non-productive time each improved over 20%, both historical bests across our business. This is a result of our employees’ continued commitment to safety and process execution, despite the year’s distractions.:

 

We delivered superior ROCE performance over the one-, three-, and five-year periods ending December 31, 2020, relative to the Oilfield Services Index (OSX), our two largest competitors, and our performance peer group. The details are depicted in the chart below:

 

Return on Capital Employed (ROCE)

(in percentage)

 

 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      28
 

We also delivered TSR over the one-, three-, five-, and ten-year periods ending December 31, 2020, that exceeded the TSR of the OSX and our performance peer group. We also outperformed the average TSR of our two largest competitors for the one-, five-, and ten-year periods ending December 31, 2020. The details are depicted in the chart below:

 

Total Shareholder Return (TSR)

(in percentage)

 

 

In the first quarter of 2020, OPEC+ was initially unable to reach an agreement to continue to impose limits on the production of crude oil, exacerbating the demand decline from the COVID-19 pandemic, resulting in the worst economic downturn our industry has ever experienced. Despite these challenges, we strongly rebounded, outperforming the OSX, our two largest competitors, and our performance peer group in terms of TSR between April 1 and December 31, 2020, as shown in the chart on the left below. Further, consistent with our strategy to deliver industry leading returns, we outperformed on TSR relative to the OSX in terms of percentage points over the one-, three-, five-, and ten-year periods ending December 31, 2020, as shown in the chart on the right below:

 

Total Shareholder Return (TSR)   HAL TSR greater than OSX
(in percentage)   (in percentage points)
     
 

 

 

  HALLIBURTON  |  2021 Proxy Statement      29
 

Our Executive Compensation Program Objectives

 

Our executive compensation program is designed to achieve the following objectives:

 

Provide a clear and direct relationship between executive pay and our performance on both a short-term and long-term basis;
Target market competitive pay levels with a comparator peer group;
Emphasize operating performance drivers;
Link executive pay to measures that drive shareholder returns;
Support our business strategies; and
Maximize the return on our human resource investment.

 

Good Compensation Governance Practices At-A-Glance

 

What We Do   What We Don’t Do
Use mix of relative and absolute financial metrics   No repricing of underwater stock options
The majority of total direct compensation opportunity is performance-based, at-risk, and long-term (65% of long-term incentives is equity-based effective 2020)   No excessive perquisites
Deliver rewards that are based on the achievement of long-term objectives and the creation of shareholder value   No guaranteed bonuses or uncapped incentives
Maintain a clawback policy in the event of a material financial restatement or fraud   No single trigger vesting upon a change of control (applicable to awards to NEOs for 2019 forward)
Maintain robust executive and Director stock ownership requirements   No excise tax gross-ups
Use an independent, external compensation consultant   No hedging or pledging of company securities by executives and Directors
Benchmark against a relevant group of peer companies   No buyout or exchange of underwater options
Rigorous oversight of incentive metrics, goals, and pay-for-performance relationship   No special or one-time stock grants for internal promotions
Hold an annual say-on-pay vote   No liberal share counting or recycling

 

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  HALLIBURTON  |  2021 Proxy Statement      30
 

Elements of our Executive Compensation Program for 2020

 

Halliburton’s executive compensation program for the 2020 plan year was composed of base salary, a short-term incentive, and long-term incentives as described below:

 

    Reward           How Award Value    
    Element   Objective   Key Features   is Determined   2020 Decisions
FIXED   Base Salary   Compensates executives based on their responsibilities, experience, and skillset.   Fixed element of compensation paid in cash.   Benchmarked against a group of comparably sized corporations and industry peers.  

Messrs. Loeffler and Richard received the second half of their two-year promotion-related increases. The other NEOs did not receive salary increases.

 

Additionally, Mr. Miller and the other NEOs voluntarily reduced their 2020 base salaries by 20% and 10%, respectively, effective May 1, 2020. Those salaries were reinstated by the Compensation Committee effective January 1, 2021. (Page 36)

    Short-Term Incentive   To motivate and incentivize performance over a one-year period.   Award value and measures are reviewed annually. Targets are set at the beginning of the year.  

Performance measured against:

 

  75% NOPAT

  25% Asset Turns

 

  Award values were targeted at the market median for 2020. There were no short-term incentives paid to any of our NEOs for the 2020 plan year. (Page 36)
AT RISK   Long-Term Incentives   To motivate and incentivize sustained performance over the long-term. Aligns interests of our NEOs with long-term shareholders.  

Value is delivered:

 

  70% performance units measured over three years (1/2 in stock; 1/2 in cash) with relative TSR modifier

  30% restricted stock

 

 

The 2020 performance units measured against ROCE performance relative to performance peers and includes a relative TSR modifier.

 

Restricted stock grants have time-based vesting and value is driven by our share price.

  Awards were targeted at the market median for 2020. (Page 38)

 

 

  HALLIBURTON  |  2021 Proxy Statement      31
 

As illustrated below, the majority of our CEO’s and NEOs’ total direct compensation opportunity is performance-based, at-risk, and long-term. The graphs depict the mix of total target direct compensation set for our CEO and NEOs for the 2020 plan year. As part of its process, the Compensation Committee makes decisions about target long-term incentive award opportunities for the following year during its regular December meeting. For the 2020 plan year, the Compensation Committee approved restricted stock grants in December 2019.

 

 

Setting Executive Compensation

 

Role of the Compensation Committee

 

The Compensation Committee oversees the executive compensation program and has overall responsibility for making final decisions about total compensation for all of the NEOs, except for the CEO, which is set by the entire Board of Directors. As part of its annual process, the Compensation Committee works closely with senior management (as appropriate) and the Compensation Committee’s independent compensation consultant. This process ensures consistency from year to year and adherence to the responsibilities listed in the Committee’s Charter, which is available on our website.

 

The CEO does not provide recommendations concerning his own compensation, nor is he present when his compensation is discussed by the Compensation Committee. The Compensation Committee, with input from its independent compensation consultant, discusses the elements of his compensation in executive session and makes a recommendation to all of the non-management Directors for discussion and final approval. At the Compensation Committee’s request, a member of our management team may attend the executive session to answer questions from the Compensation Committee.

 

The CEO, with input from the Compensation Committee’s independent compensation consultant, assists the Compensation Committee in setting compensation for the other NEOs.

 

Use of Independent Consultants and Advisors

 

The Compensation Committee engaged Pearl Meyer as its independent compensation consultant during 2020. Pearl Meyer does not provide any other services to us. The primary responsibilities of the independent compensation consultant were to:

 

Provide independent and objective market data;
Conduct compensation analysis;
Recommend potential changes to the comparator peer group and performance peer group;
Recommend plan design changes;
Advise on risks associated with compensation plans; and
Review and advise on pay programs and pay levels.

 

These services are provided as requested by the Compensation Committee throughout the year. Based on their review of our executive compensation program, Pearl Meyer concluded that our compensation plans do not appear to present any material risks to the Company or its shareholders in the design, metrics, interaction between, or administration of the incentive plans.

 

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  HALLIBURTON  |  2021 Proxy Statement      32
 

Role of Benchmarking, Peer Companies, and Market Data

 

The Compensation Committee regularly assesses the market competitiveness of the Company’s executive compensation program based on data from a comparator peer group. The companies comprising the comparator peer group are selected based on the following considerations:

 

Market capitalization;
Revenue and number of employees;
Global impact and reach; and
Industry affiliation.

 

Industry affiliation includes companies that are involved in the oil and natural gas and energy services industries. With data provided by the independent compensation consultant, the Compensation Committee reviews the comparator peer group annually to ensure relevance.

 

The 2020 comparator peer group was composed of the following peer companies within the energy industry, as well as selected companies representing general industry. This peer group was utilized to determine market levels of total compensation for the 2020 plan year and was unchanged from 2019:

 

3M Company Hess Corporation
Anadarko Petroleum Corporation Honeywell International Inc.
Apache Corporation Johnson Controls International plc
Baker Hughes National Oilwell Varco, Inc.
Caterpillar Inc. Occidental Petroleum Corporation
ConocoPhillips Raytheon Company
Deere and Company Schlumberger Limited
Emerson Electric Co. Transocean Ltd.
Fluor Corporation Weatherford International plc

 

Because of variances in market capitalization and revenue size among the companies comprising our comparator peer group, the market data is size adjusted by revenue as necessary so that it is comparable with our trailing 12 months revenue. These adjusted values are used to compare our executives’ compensation to those of the comparator peer group.

 

Total compensation for each NEO is structured to target market competitive pay levels in base salary and short- and long-term incentive opportunities. We also place an emphasis on variable pay at risk, which enables this compensation structure to position actual pay above or below the 50th percentile of our comparator peer group depending on performance.

 

A consistent pre-tax, present value methodology is used in assessing stock-based and other long-term incentive awards.

 

The independent compensation consultant gathers and performs an analysis of market data for each NEO, comparing each of their individual components of compensation and total compensation to that of the comparator peer group. This competitive analysis consists of comparing the market data of each of the pay elements and total compensation at the 25th, 50th, and 75th percentiles of the comparator peer group to current compensation for each NEO.

 

 

  HALLIBURTON  |  2021 Proxy Statement      33
 

Pay for Performance Analysis

 

As part of its analysis, the Compensation Committee reviews one-, three-, and five-year pay for performance against our performance peer group as identified in the section entitled “Long-term Incentives”. The review examines the degree of alignment between our ROCE performance compared to the ROCE performance of our performance peer group and our CEO’s realizable compensation relative to the realizable compensation of the CEOs in our comparator peer group.

 

Total realizable compensation consisted of the following:

 

base salary paid;
cash incentive payouts;
in-the-money value of stock options grants during the one-, three-, and five-year periods valued as of December 31, 2019;
face value of restricted stock grants during the one-, three-, and five-year periods valued as of December 31, 2019; and
for performance-based awards, (i) target value for awards still outstanding as of December 31, 2019, and (ii) realized value for performance periods beginning and ending within the one-, three-, and five-year periods.

 

This analysis supported the Compensation Committee’s determination that our pay and performance are appropriately aligned.

 

 

Determination of CEO and NEO Target Total Compensation

 

When determining target total compensation for the CEO, the Compensation Committee takes into consideration competitive market pay levels for the CEOs in the comparator peer group. The Compensation Committee also considers the CEO’s performance and accomplishments in the areas of business development and expansion, management succession, development and retention of management, ethical leadership, and the achievement of financial and operational objectives. Each year, our CEO and the members of the Board agree upon a set of objectives addressing the following areas:

 

Leadership and vision;
Integrity;
Keeping the Board informed on matters affecting Halliburton;
Performance of the business;
Development and implementation of initiatives that provide long-term economic benefits;
Accomplishment of strategic objectives; and
Development of management.
www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      34
 

The Board determined that Mr. Miller met these objectives in 2020 through the following achievements:

 

  LEADERSHIP AND VISION

 

Led the organization through an unprecedented decline in demand for oil and subsequent decline in oil prices caused by the global pandemic
Prioritized stakeholder communication and maintained high visibility with employees, shareholders, and customers
Facilitated a seamless Chief Legal Officer leadership transition

 

  INTEGRITY

 

Maintained unwavering commitment to our Code of Business Conduct (COBC)
Advocated for the Local Ethics Officer program which continues to be at the cutting edge of compliance initiatives
Expanded the Company’s core values to align more closely with racial equality expectations, a core element of our COBC

 

  KEEPING THE BOARD INFORMED

 

Communicated regularly with the members of the Board providing status reports and notifications on business issues and providing unfettered access to management and subject matter experts

 

  PERFORMANCE OF THE BUSINESS

 

Reset earnings power and eliminated $1 billion of structural cost
Reduced debt by $500 million
Generated $1.1 billion of free cash-flow
Outperformed the OSX, our two largest competitors, and our performance peer group in terms of ROCE over the one-, three-, and five-year periods ending December 31, 2020; delivered superior TSR performance relative to the OSX and our performance peer group over the one-, three-, five-, and ten-year periods ending December 31, 2020, and outperformed the average TSR of our two largest competitors for the one-, five-, and ten-year periods ending December 31, 2020
Maintained unwavering commitment to our Health, Safety and Environment program

 

  DEVELOP AND IMPLEMENT INITIATIVES THAT PROVIDE LONG-TERM ECONOMIC BENEFITS

 

Continued Company focus on evolving market trends, first of its kind technology development, and automation
Continued to institutionalize Continuous Improvement which drives profitability, capacity, and greater flexibility
Executed key steps to increase environmental, social, and governance focus

 

  ACCOMPLISHMENT OF STRATEGIC OBJECTIVES

 

Deployed key future technologies demonstrating focus on capital efficiency
Executed key integration initiatives across multiple segments of the business
Advanced cleaner, affordable energy by committing to Science Based Targets and successfully launching Halliburton Labs clean energy accelerator

 

  DEVELOPMENT OF MANAGEMENT

 

Continued to expose management to the Board via spotlight presentations, focused on our robust succession management process with a closer look at our sustainable leadership pipeline, and focused on talent development with an emphasis on diversity, equality, and respect initiatives

 

 

Other NEO compensation is determined similar to that of the CEO by evaluating each NEO’s performance and considering the market competitive pay levels of the comparator peer group for the NEO’s position. The Compensation Committee also considers the importance of keeping our management team focused and stable, especially given that other oilfield services companies have aggressively recruited our NEOs and other executives in the past. In fact, over thirty of our former executives have departed to become CEOs and/or senior executives of other oilfield services companies.

 

 

  HALLIBURTON  |  2021 Proxy Statement      35
 

2020 Executive Compensation Outcomes

 

Base Salary

 

The Compensation Committee generally targets base salaries at the median of the comparator peer group. The Compensation Committee also considers the following factors when setting base salary:

 

Level of responsibility;
Experience in current role and equitable compensation relationships among internal peers;
Performance and leadership; and
External factors involving competitive positioning, general economic conditions, and marketplace compensation trends.

 

No specific formula is applied to determine the weight of each factor.

 

Salary reviews are conducted annually to evaluate each executive. Individual salaries are not necessarily adjusted each year.

 

At its regular December 2019 meeting, the Compensation Committee determined that the January 1, 2020, base salaries for our NEOs would remain unchanged from 2019 with the exceptions of Messrs. Loeffler and Richard, both of whom received the second half of their two-year promotion-related increases of 16.9% and 11.7%, respectively.

 

In response to the substantial decline in global demand for oil caused by the COVID-19 pandemic, as well as the impact of the pandemic on the broader economic environment and our business, Mr. Miller and the other NEOs voluntarily reduced their base salaries by 20% and 10%, respectively, effective May 1, 2020. Base salary levels were restored to their pre-reduction levels on January 1, 2021.

 

Short-term (Annual) Incentive

 

The Annual Performance Pay Plan is designed to provide executives and other key members of management the opportunity to earn an annual cash bonus based on the annual performance of the Company. The Annual Performance Pay Plan places a significant percentage of each NEO’s annual cash compensation at risk and aligns the interests of executives and shareholders. It is administered in accordance with the terms of the Stock and Incentive Plan.

 

2020 Target Award Opportunities

 

Individual incentive award opportunities are established as a percentage of base salary at the beginning of the plan year based on market competitive targets. The maximum award a NEO can receive is limited to two times the target opportunity level. The level of achievement of annual performance determines the dollar amount of incentive compensation payable to participants following completion of the plan year. The Compensation Committee set incentive award opportunities under the plan for 2020 as follows:

 

NEO Threshold Target Maximum
Mr. Miller 60% 150% 300%
Mr. Loeffler 40% 100% 200%
Mr. Carre 40% 100% 200%
Mr. Rainey 44% 110% 220%
Mr. Richard 44% 110% 220%

 

Threshold, Target, and Maximum opportunity dollar amounts can be found in the Grants of Plan-Based Awards in Fiscal 2020 table.

 

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  HALLIBURTON  |  2021 Proxy Statement      36
 

2020 Financial Performance Metrics and Results

 

For 2020, as discussed above, performance under the Annual Performance Pay Plan was based on the achievement of new, pre-established performance metrics: Net Operating Profit After-Taxes (NOPAT) and Asset Turns. The Compensation Committee selected these metrics because they are key financial measures upon which we set our performance expectations for the year and place an increased emphasis on free cash flow and capital discipline.

 

 

(1) Average Net Assets excludes cash and marketable investments, and current and non-current deferred income tax assets.
(2) Average Net Liabilities excludes current and long-term debt, which includes finance lease liabilities, and non-current deferred income tax liability.

 

Adjustments in the calculation of NOPAT and Asset Turns may, at times, be approved by the Compensation Committee and can include the treatment of unusual items that may have impacted our actual results.

 

At the beginning of each plan year, the Compensation Committee approves an incentive award schedule that equates levels of performance with cash reward opportunities. The performance goals range from “Threshold” to “Target” to “Maximum”. Threshold reflects the minimum performance level which must be achieved in order for any award to be earned and Maximum reflects the maximum awards that can be earned.

 

The performance goals are based on our annual operating plan, as reviewed and approved by our Board, and are set at levels to meet or exceed shareholder expectations of our performance, as well as expectations of the relative performance to our competitors. Given the cyclical nature of our business, our performance goals vary from year to year, which can similarly impact the difficulty in achieving the goals. The Compensation Committee may also consider other business performance factors that are important to our investors, including health, safety, environment, and service quality, in determining the final payout amounts under the Annual Performance Pay Plan.

 

At the beginning of 2020, the Compensation Committee set performance goals for our NEOs based on company-wide consolidated NOPAT results. Threshold NOPAT was based on 90% of planned Operating Income, Target NOPAT on 100% of planned Operating Income, and Maximum NOPAT on 110% of planned Operating Income. Threshold Asset Turns was based on 98% of planned Revenues, Target Asset Turns on 100% of planned Revenues, and Maximum Asset Turns on 102% of planned Revenues. Net Invested Capital was based on 100% of our operating plan in all performance range scenarios.

 

 

  HALLIBURTON  |  2021 Proxy Statement      37
 

The Compensation Committee set the 2020 award levels, targeted to the market median, for our NEOs based on the company-wide consolidated NOPAT and Asset Turns results. The performance goals for the 2020 plan year are noted in the table below:

 

        Performance Range        
Metrics   Weighting   Threshold   Target   Maximum   Actual
NOPAT   75%   $1,350 M   $1,510 M   $1,671 M   -$2,293 M
Asset Turns   25%   1.40   1.43   1.46   1.18

 

Because actual 2020 Asset Turns and NOPAT results were both below Threshold, our NEOs did not receive a payout under the Annual Performance Pay Plan. As evidence of the Compensation Committee’s commitment to setting robust targets, over the past ten years, the Annual Performance Pay Plan achieved Maximum performance levels four times, Target performance levels two times, and fell short of the Threshold performance level four times, resulting in no payout.

 

Long-Term Incentives

 

The Stock and Incentive Plan is designed to reward consistent achievement of value creation and operating performance goals, align management with shareholder interests, and encourage long-term perspective and commitment. Long-term incentives represent the largest component of total executive compensation opportunity.

 

Using a mix of incentive vehicles allows us to provide a diversified yet balanced long-term incentive program that effectively addresses volatility in our industry and in the stock market, in addition to maintaining an incentive to meet performance goals. For the 2020 plan year, the Compensation Committee used the following combination of equity vehicles for long-term incentive grants:

 

Vehicle Weighting Purpose
Performance Units 70% of Award Rewards achievement of specific financial goals measured over a three-year performance period
Restricted Stock(1) 30% of Award Supports leadership retention/stability objectives; five-year vesting period
(1) Restricted stock grants are generally subject to a graded vesting schedule of 20% per year over five years. However, different vesting schedules may be utilized at the discretion of the Compensation Committee. Shares of restricted stock receive dividend or dividend equivalent payments.

 

Individual Incentive Opportunities

 

In determining the size of long-term incentive awards, the Compensation Committee first considers market data for comparable positions and then may adjust the awards upwards or downwards based on the Compensation Committee’s review of internal equity. This can result in positions of similar magnitude and pay receiving awards of varying size. Awards are targeted to the market median.

 

As part of its process, the Compensation Committee makes decisions about target long-term incentive award opportunities for the following year during its regular December meeting. For the 2020 plan year, the Compensation Committee approved restricted stock grants in December 2019.

 

Individual incentive opportunities are established based on market references and the NEO’s role within the organization. In the Grants of Plan-Based Awards in Fiscal 2020 table, the Threshold, Target, and Maximum columns under the heading Estimated Future Payouts Under Non-Equity Incentive Plan Awards indicate the potential cash payout for each NEO under the Performance Unit Program (PUP) for the 2020 cycle and the Threshold, Target, and Maximum columns under the heading Estimated Future Payouts Under Equity Incentive Plan Awards indicate the potential shares vesting for each NEO under the PUP for the 2020 cycle. The potential payouts are performance driven and completely at risk. Actual payouts and shares vesting, if any, will not be determined until the three-year cycle closes on December 31, 2022.

 

A Closer Look at the Performance Unit Program

 

The PUP provides NEOs and other selected executives with incentive opportunities based on our consolidated ROCE during a three-year performance period. This program reinforces our objectives for sustained long-term performance and value creation. It also reinforces strategic planning processes and balances short- and long-term decision making.

 

The program measures ROCE on a relative basis to the results of a pre-determined performance peer group over three years.

 

The performance peer group used for the PUP is comprised of oilfield equipment and services companies and domestic and international exploration and production companies. This peer group is used for the PUP because these companies represent the timing, cyclicality, and volatility of the oil and natural gas industry and provide an appropriate industry group for measuring our relative performance.

 

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  HALLIBURTON  |  2021 Proxy Statement      38
 

The three-year performance period aligns this measurement with our and our performance peer group’s business cycles. ROCE indicates the efficiency and profitability of our capital investments and is determined based on the ratio of earnings divided by average capital employed. The calculation is as follows:

 

 

Why ROCE?
Highly correlated to stock price performance over the long-term, applying drivers that management can directly influence   Overwhelmingly supported by our shareholders.
Aligned with our strategy of delivering industry-leading returns across the business cycle.   Eliminates the subjectivity inherent in setting long-term absolute targets in a cyclical industry.
Reinforces the Company’s objective for sustained long-term performance and value creation.   Provides our management team with clear line of sight to long-term financial results.

 

Consistent with our executive compensation objectives and strategy to deliver leading returns in our industry, over the past 10 years the performance of PUP exceeded the 75th percentile five times, has fallen between the 50th and 75th percentile four times, and been below the 50th percentile only one time. We believe that this long-term focus on generating superior returns within our industry also correlates with our industry TSR outperformance over the same period of time.

 

2020 Cycle PUP

 

For the 2020 cycle, consistent with the design from the prior year, the Compensation Committee set the performance measures on a 100% relative ROCE basis with relative performance to be measured as of the three-year period ending December 31, 2022.

 

The 2020 PUP peer group was changed from the prior year peer group. Anadarko Petroleum Corporation was removed for the 2020 cycle because it was acquired by another public company.

 

The performance peer group used for the 2020 PUP consists of the following companies:

 

Apache Corporation National Oilwell Varco, Inc.
Baker Hughes Schlumberger Limited
Chesapeake Energy Corporation Superior Energy Services, Inc.
Devon Energy Corporation TechnipFMC
Hess Corporation Transocean Ltd.
Marathon Oil Corporation Weatherford International plc
Murphy Oil Corporation The Williams Companies, Inc.
Nabors Industries Ltd.  

 

 

  HALLIBURTON  |  2021 Proxy Statement      39
 

2020 Cycle – Performance Matrix

 

At the end of the three-year award cycle, the average ROCE of Halliburton and the performance peer group will be calculated and performance percentiles will be determined. If Halliburton’s relative performance ranking is between the 25th and 75th percentiles, the payout will be interpolated accordingly. If Halliburton’s relative performance ranking is below the 25th percentile, there will not be a payout.

 

In addition, as discussed above, based on shareholder feedback, the Compensation Committee also introduced a relative TSR modifier that compares three-year performance against the OSX and can increase or decrease the incentive opportunity payout by 25%. The modifier imposes an award penalty for bottom quartile performance and an incentive for top quartile performance as follows:

 

            Relative TSR Modifier
            Lower Quartile   2nd/3rd Quartile   Upper Quartile2
            Performance   Performance   Performance
            ≤25th percentile   >25th percentile & <75th   ≥75th percentile
        Unadjusted       percentile    
        Incentive       MULTIPLIER    
        Opportunity1   75%   100%   125%
HAL ROCE
Ranking vs.
Performance
  Below
Threshold
<25th percentile
  0%   0%
(0% x 75%)
  0%
(0% x 100%)
  0%
(0% x 125%)
Peer Group   Threshold
25th percentile
  25%   18.75%
(25% x 75%)
  25%
(25% x 100%)
  31.25%
(25% x 125%)
    Plan
50th percentile
  100%   75%
(100% x 75%)
  100%
(100% x 100%)
  125%
(100% x 125%)
    Challenge
≥75th percentile
  200%   150%
(200% x 75%)
  200%
(200% x 100%)
  250%
(200% x 125%)
1 If Halliburton’s relative ROCE performance ranking is between the 25th and 75th percentiles, the payout will be interpolated accordingly.
2 If TSR is in the upper quartile but negative, the TSR Modifier will not apply.

 

Any awards earned at the end of the 2020 cycle will be issued 50% in stock and 50% in cash.

 

2018 Cycle PUP

 

The table below shows the incentive opportunity based on Halliburton’s ROCE performance relative to that of our performance peer group for the 2018 cycle of the PUP that ended on December 31, 2020. We achieved ROCE of -2.1% which was above the 75th percentile of our performance peer group’s ROCE of -3.7% and yielded an award paid at 200% of the target opportunity level.

 

2018 Cycle – Performance Matrix

 

  Threshold Target Maximum
Halliburton Ranking vs. Performance Peer Group 25th Percentile 50th Percentile 75th Percentile
Incentive Opportunity as a % of Target 25% 100% 200%

 

The NEOs received payments in 2021 as set forth in the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table. The program allows for rewards to be paid in cash, stock, or a combination of cash and stock.

 

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  HALLIBURTON  |  2021 Proxy Statement      40
 

Other Executive Benefits and Policies

 

Retirement and Savings Plan

 

All NEOs may participate in the Halliburton Retirement and Savings Plan, which is the defined contribution benefit plan available to all eligible U.S. employees. The matching contribution amounts we contributed on behalf of each NEO are included in the Supplemental Table: All Other Compensation.

 

Supplemental Executive Retirement Plan

 

The objective of the Supplemental Executive Retirement Plan, or SERP, is to provide a competitive level of pay replacement upon retirement. The current pay replacement target is 75% of base salary at age 65 with 25 years of service, using the highest annual salary during the last three years of employment.

 

The material factors and guidelines considered in making an allocation include: (i) retirement benefits provided, both qualified and nonqualified; (ii) current compensation; (iii) length of service; and (iv) years of service to normal retirement.

 

The calculation takes into account the following variables: (i) base salary; (ii) years of service; (iii) age; (iv) employer portion of qualified plan savings; (v) age 65 value of any defined benefit plan; and (vi) existing nonqualified plan balances and any other retirement plans.

 

Several assumptions are made annually and include a base salary increase percentage, qualified and nonqualified plan contributions and investment earnings, and an annuity rate. These factors are reviewed and approved annually by the Compensation Committee in advance of calculating any awards.

 

To determine the annual benefit, external actuaries calculate the total lump sum retirement benefit needed at age 65 from all company retirement sources to produce an annual retirement benefit of 75% of highest annual salary during the last three years of employment. Company retirement sources include any Company contributions to qualified benefit plans and contributions to nonqualified benefit plans. If the combination of these two sources does not yield a total retirement balance that will meet the 75% objective, then contributions may be made annually through the SERP to bring the total benefit up to the targeted level.

 

To illustrate, assume $10 million is needed at age 65 to produce an annual retirement benefit equal to 75% of base salary. The participant is projected to have $3 million in his qualified benefit plans resulting from Company contributions at retirement and $4  million in his nonqualified retirement plans resulting from Company contributions at retirement. Since the total of these two sources is $7 million, a shortfall of $3 million results. This is the amount needed to achieve the 75% pay replacement objective. This shortfall may be offset through annual contributions to the SERP.

 

Participation in the SERP is limited to the direct reports of the CEO and other selected executives as recommended by the CEO and approved at the discretion of the Compensation Committee. However, participation one year does not guarantee future participation. In 2020, the Compensation Committee authorized retirement allocations under the SERP to all NEOs as listed in the Supplemental Table: All Other Compensation and the 2020 Nonqualified Deferred Compensation table.

 

All of the NEOs, except Mr. Loeffler, are fully vested in their respective account balances. Balances for active and terminated participants earn interest at an annual rate of 5% and 10%, respectively.

 

Elective Deferral Plan

 

All NEOs may participate in the Halliburton Elective Deferral Plan, which was established to provide highly compensated employees with an opportunity to defer earned base salary and incentive compensation in order to help meet retirement and other future income needs.

 

Participants may elect to defer up to 75% of their annual base salary and up to 75% of their incentive compensation into the plan. Deferral elections must be made on an annual basis, including the type and timing of distribution. Plan earnings are based on the NEO’s choice of up to 12 investment options with varying degrees of risk, including the risk of loss. Investment options may be changed by the NEO daily.

 

In 2020, none of our NEOs participated in this plan. Messrs. Rainey and Richard have account balances from participation in the plan in prior years. Messrs. Miller, Loeffler, and Carre are not participants in the plan. Further details can be found in the 2020 Nonqualified Deferred Compensation table.

 

 

  HALLIBURTON  |  2021 Proxy Statement      41
 

Benefit Restoration Plan

 

The Halliburton Company Benefit Restoration Plan provides a vehicle to restore qualified plan benefits which are reduced as a result of limitations on contributions imposed under the Internal Revenue Code (IRC) or due to participation in other plans we sponsor and to defer compensation that would otherwise be treated as excessive remuneration within the meaning of IRC Section 162(m). Awards are made annually to those who meet these criteria and earned interest at an annual rate as defined by the plan document. Awards and corresponding interest balances are 100% vested and distributed upon separation.

 

In accordance with the plan document, participants earn monthly interest at the 120% AFR rate, provided the interest rate shall be no less than 6% per annum or greater than 10% per annum. Because the 120% AFR rate was below the 6% minimum interest threshold, plan participants earned interest at an annual rate of 6% in 2020.

 

In 2020, all NEOs received awards under this plan in the amounts included in the Supplemental Table: All Other Compensation and the 2020 Nonqualified Deferred Compensation table.

 

Perquisites

 

Effective January 1, 2019, we eliminated several perquisites including tax gross ups for personal use of corporate aircraft, executive physical examinations, and financial planning reimbursements. We also eliminated reimbursements for country club dues for all of our NEOs.

 

We do not provide cars to our NEOs. However, a car and part-time driver is available for Mr. Miller’s limited use as needed for security purposes and so that he can work while in transit to meet customers or attend business-related functions.

 

We provided security at the personal residences of Mr. Miller during 2020.

 

As a result of the recommendations provided by an independent, third-party security consultant, the Board has determined that Mr. Miller must use company aircraft for all travel. The security study also recommends that his spouse and children use company-provided aircraft.

 

Mr. Rainey is an expatriate under our long-term expatriate business practice. A differential is commonly paid to expatriates in assignment locations where the cost of goods and services is greater than the cost for the same goods and services in the expatriate’s home country. Differentials are determined by Mercer/ORC, a third-party consultant. Mr. Rainey receives certain assignment allowances, including a goods and services differential and host country housing and utilities. He also participates in our tax equalization program, which neutralizes the tax effect of the international assignment and approximates the tax obligation the expatriate would pay in his home country.

 

Specific amounts for the above-mentioned perquisites are detailed for each NEO in the Supplemental Table: All Other Compensation.

 

Clawback Policy

 

We have a clawback policy under which we will seek to recoup incentive compensation in all appropriate cases paid to, awarded, or credited for the benefit of any of our executive officers, which include all NEOs, if and to the extent that:

 

The amount of incentive compensation was calculated based on the achievement of financial results that were subsequently reduced due to a restatement of our financial results;
The officer engaged in fraudulent conduct that caused the need for the restatement; and
The amount of incentive compensation that would have been paid to, awarded, or credited for the benefit of the officer, had our financial results been properly reported, would have been lower than the amount actually paid, awarded, or credited.

 

The policy also provides that we will seek to recoup incentive compensation in all appropriate cases paid to, awarded to, or credited for the benefit of any of our executive officers, which include all NEOs, and certain other senior officers, if and to the extent that:

 

It is determined that, in connection with the performance of that officer’s duties, he or she breached his or her fiduciary duty by knowingly or recklessly engaging in a material violation of a U.S. federal or state law, or failed to supervise an employee who substantially participated in such a violation; or
The officer is named as a defendant in a law enforcement proceeding for having breached his or her fiduciary duty by knowingly or recklessly engaging in a material violation of a U.S. federal or state law, the officer disagrees with the allegations relating to the proceeding, and either (i) we initiate a review and determine that the alleged action is not indemnifiable or (ii) the officer does not prevail at trial, enters into a plea arrangement, agrees to the entry of a final administrative or judicial order imposing sanctions, or otherwise admits to the violation in a legal proceeding.

 

The disinterested members of the Board and the disinterested members of the Compensation Committee and the Nominating and Corporate Governance Committee may be involved in reviewing, considering, and making determinations regarding the officer’s alleged conduct, whether recoupment is appropriate or required, and the type and amount of incentive compensation to be recouped from the officer.

 

The policy also provides that, to the extent permitted by applicable law and not previously disclosed in a filing with the SEC, we will disclose in our proxy statement the circumstances of any recoupment arising under the policy or that there has not been any recoupment pursuant to the policy for the prior calendar year. There was no recoupment under the policy in 2020.

 

 

  HALLIBURTON  |  2021 Proxy Statement      42
 

Stock Ownership Requirements

 

We have stock ownership requirements for our executive officers, which include all NEOs, to further align their interests with our shareholders.

 

Our CEO is required to own Halliburton common stock in an amount equal to or in excess of six times his annual base salary. Executive officers that report directly to the CEO are required to own an amount of Halliburton common stock equal to or in excess of three times their annual base salary, and all other executive officers are required to own an amount of Halliburton common stock equal to or in excess of two times their annual base salary. The Compensation Committee reviews their holdings, which include restricted shares and all other Halliburton common stock owned by the officer, at each December meeting. Each executive officer has five years to meet the requirements, measured from the date the officer becomes subject to the ownership level for the applicable office.

 

After the five-year stock ownership period, as described above, executive officers who have not met their minimum ownership requirement must retain 100% of the net shares acquired upon restricted stock vesting until they achieve their required ownership level. During this time period, any stock option exercise must be an exercise and hold.

 

As of December 31, 2020, all NEOs met the requirements.

 

Hedging and Pledging Policy

 

We have a policy under which our Directors and executive officers, which include all NEOs, and certain senior officers are prohibited from:

 

hedging activities related to Halliburton securities; and
the pledging of Halliburton securities.

 

The policy defines hedging activities as the use of any financial instrument designed to hedge or offset a change in the market value of any Halliburton security, and defines pledging as the use of a Halliburton security or any related derivative security as collateral for any form of indebtedness.

 

Additionally, the policy:

 

discourages all employees and Directors from speculative activities in Halliburton securities and related derivative securities, such as puts or call options;
applies to all Halliburton securities, including restricted stock, restricted stock units, options, and debt securities, which are issued by any Halliburton entity, and any other security directly or indirectly exercisable for or convertible or exchangeable into any Halliburton security; and
applies regardless of whether or not the securities were acquired from our equity compensation plans.

 

Elements of Post-Termination Compensation and Benefits

 

Termination events that trigger payments and benefits include normal or early retirement, cause, death, disability, and voluntary termination. Post-termination or change-in-control payments may include severance, accelerated vesting of restricted stock and stock options, payments under cash-based short- and long-term incentive plans, share vesting under the long-term incentive plan, payout of nonqualified account balances, and health benefits, among others. The impact of various events on each element of compensation for the NEOs is detailed in the Post-Termination or Change-In-Control Payment table.

 

Impact of Regulatory Requirements on Compensation

 

IRC Section 162(m) generally disallows a tax deduction to public companies for compensation paid to the CEO, CFO, or any of the three other most highly compensated officers to the extent the compensation exceeds $1 million in any year. Effective for tax years beginning after December 31, 2017, Section 162(m) has been revised to eliminate the performance-based compensation exception.

 

Although the tax deductibility of compensation is a consideration evaluated by our Compensation Committee, the Committee believes that the elimination of the deduction on compensation payable in excess of the $1 million limitation for our NEOs is not material relative to the benefit of being able to attract and retain talented management. Accordingly, our Compensation Committee will continue to pay compensation that is not deductible.

 

 

  HALLIBURTON  |  2021 Proxy Statement      43
 

Executive Compensation Tables

 

Summary Compensation Table

 

The following tables set forth information regarding our CEO, CFO, and our three other most highly compensated executive officers for the fiscal year ended December 31, 2020.

 

Name and
Principal Position
Year Salary
($)
Bonus
($)
Stock
Awards
($)
Option
Awards
($)
Non-Equity
Incentive Plan
Compensation
($)
Change In
Pension Value
and NQDC
Earnings
($)
All Other
Compensation
($)
Total
($)
Jeffrey A. Miller 2020 1,300,000 0 9,687,697 0 9,456,914 252,566 1,622,208 22,319,385
Chairman, President and Chief Executive Officer 2019 1,500,000 0 3,584,073 0 5,730,380 139,300 1,799,861 12,753,614
2018 1,400,000 0 3,137,712 1,253,184 9,628,708 47,006 1,533,288 16,999,898
Lance Loeffler 2020 709,333 0 2,554,478 0 0 19,725 504,508 3,788,044
Executive Vice President and Chief Financial Officer 2019 650,000 0 888,858 0 0 4,656 465,091 2,008,605
2018 375,000 0 1,316,925 626,190 60,626 269 218,632 2,597,642
Eric J. Carre 2020 746,667 0 2,455,778 0 2,534,094 89,513 697,483 6,523,535
Executive Vice President – Global Business Lines 2019 800,000 0 848,065 0 2,485,124 45,466 737,503 4,916,158
                 
Joe D. Rainey 2020 849,333 0 3,256,812 0 3,378,792 490,397 4,868,394 12,843,728
President – Eastern Hemisphere 2019 910,000 0 1,129,322 0 3,307,924 409,467 2,368,494 8,125,207
2018 875,000 0 1,223,016 488,976 5,240,944 11,626 3,135,200 10,974,762
Mark J. Richard 2020 756,000 0 3,226,875 0 2,000,000 123,041 1,337,580 7,443,496
President – Western Hemisphere 2019 716,678 0 1,129,322 0 1,656,000 88,574 1,321,431 4,912,005

 

Supplemental Summary Compensation Table Information for CEO

 

As described in the CD&A section entitled “CEO Compensation: Understanding the Summary Compensation Table”, there are two key factors to consider when analyzing our CEO’s reported compensation in this year’s Summary Compensation Table (SCT):

 

Mr. Miller’s promotion to CEO in 2018, which increased his target market competitive pay levels, primarily impacting the amount earned under the Performance Unit Program in 2020 as compared to 2019; and
Based on shareholder feedback, we fundamentally changed the structure of our long-term incentives. As a result, we are required to report performance awards for 2020 from two different plan years in this proxy statement. This means that we are reporting both the cash earned for the 2018 PUP cycle and target equity granted for the 2020 PUP cycle, resulting in an additional $5M being reported in the Stock Awards column of the SCT.

 

The following table shows 2020 total compensation as reported in the SCT adjusted to remove the value attributed to the target level equity performance shares granted for the 2020 PUP cycle. This table is not intended to replace the SCT. The table is intended to present a picture of Mr. Miller’s compensation for 2020 as viewed by the Compensation Committee when setting target total compensation for Mr. Miller.

 

Name Year Salary
($)
Bonus
($)
Stock
Awards
($)
Option
Awards
($)
Non-Equity
Incentive Plan
Compensation
($)
Change In
Pension Value
 and NQDC
Earnings
($)
All Other
Compensation
($)
Total
($)
Jeffrey A. Miller 2020 1,300,000 0 4,691,304 0 9,456,914 252,566 1,622,208 17,322,992

 

 

  HALLIBURTON  |  2021 Proxy Statement      44
 

Salary. The amounts in the Salary column reflect the salary earned by each NEO.

 

Stock Awards. The amounts in the Stock Awards column reflect the aggregate grant date fair value of the restricted stock and performance shares awarded in 2020. As noted in the Supplemental Summary Compensation Table Information for CEO, the amount for performance shares awarded in 2020 has been removed from that table. Each amount reflects an accounting expense and does not correspond to actual value that may be realized by a NEO in the future. Except where there is a distinction to make between the two types of awards, this proxy statement refers to both restricted stock and restricted stock units as “restricted stock”. We calculate the fair value of restricted stock awards by multiplying the number of restricted shares or restricted stock units granted by the closing stock price on the grant date. For the performance shares, a Monte Carlo simulation that uses a probabilistic approach was performed by an actuary to determine grant date fair value. The NEOs may never realize any value from these performance shares and, to the extent that they do, the amounts realized may have no correlation to the amounts reported above.

 

Option Awards. As discussed in Compensation Discussion and Analysis, we discontinued granting Option Awards to NEOs in 2019.

 

Non-Equity Incentive Plan Compensation. The Non-Equity Incentive Plan Compensation column reflects amounts earned in 2020 and paid in 2021 for the 2018 cycle Performance Unit Program.

 

The 2018 cycle Performance Unit Program amounts paid to each NEO are: $9,456,914 for Mr. Miller; $2,534,094 for Mr. Carre; $3,378,792 for Mr. Rainey; and $2,000,000 for Mr. Richard. Mr. Loeffler was not a participant in the 2018 cycle Performance Unit Program. The amounts paid to the NEOs for the 2018 cycle Performance Unit Program differ from what is shown in the Grants of Plan-Based Awards in Fiscal Year 2020 table under Estimated Future Payments Under Non-Equity Incentive Plan Awards. That table indicates the potential award amounts payable in cash under the 2020 cycle Performance Unit Program, which will close on December 31, 2022.

 

As discussed in the Compensation Discussion and Analysis, no amounts were earned by our NEOs under the 2020 Halliburton Annual Performance Pay Plan because the minimum threshold performance level was not achieved.

 

Change in Pension Value and NQDC Earnings. The amounts in the Change in Pension Value and NQDC Earnings column are attributable to the above-market earnings for various nonqualified plans. The methodology for determining what constitutes above-market earnings is the difference between the interest rate as stated in the applicable nonqualified plan document and the Internal Revenue Service Long-Term 120% AFR rate as of December 31, 2020. The 120% AFR rate used for determining above-market earnings in 2020 was 1.58%.

 

Supplemental Executive Retirement Plan Above-Market Earnings. The current interest rate for active participant accounts in the Supplemental Executive Retirement Plan is 5% as defined by the plan document. The above-market earnings for active participants equaled 3.42% (5% (plan interest) minus 1.58%) for 2020.

 

NEOs earned above-market earnings for their balances associated with the plan as follows: $226,453 for Mr. Miller; $17,594 for Mr. Loeffler; $77,522 for Mr. Carre; $232,796 for Mr. Rainey; and $39,758 for Mr. Richard.

 

Benefit Restoration Plan Above-Market Earnings. In accordance with the plan document, participants earn monthly interest at the 120% AFR rate, provided the interest rate shall be no less than 6% per annum or greater than 10% per annum. Because the 120% AFR rate was below the 6% minimum interest threshold, the above-market earnings associated with this plan were 4.42% (6% (plan interest) minus 1.58%) for 2020.

 

NEOs earned above-market earnings for their balances associated with the plan as follows: $26,113 for Mr. Miller; $2,131 for Mr. Loeffler; $11,991 for Mr. Carre; $23,881 for Mr. Rainey; and $7,546 for Mr. Richard.

 

Elective Deferral Plan Above-Market Earnings. The average NEO earnings for the balances associated with the Elective Deferral Plan were 6.78% for 2020. The above-market earnings associated with this plan equaled 5.20% (6.78% minus 1.58%) for 2020.

 

NEOs earned above-market earnings for balances associated with the plan as follows: $233,720 for Mr. Rainey; and $75,737 for Mr. Richard. Messrs. Miller, Loeffler, and Carre are not participants in and do not have any prior balances in the Elective Deferral Plan.

 

The amounts shown in this column differ from the amounts shown for the Supplemental Executive Retirement Plan, the Benefit Restoration Plan, and the Elective Deferral Plan in the 2020 Nonqualified Deferred Compensation table under the Aggregate Earnings in Last Fiscal Year column because that table includes all earnings and losses and the Summary Compensation Table shows above-market earnings only.

 

All Other Compensation. Detailed information for amounts included in the All Other Compensation column can be found in the Supplemental Table: All Other Compensation.

 

 

  HALLIBURTON  |  2021 Proxy Statement      45
 

Supplemental Table: All Other Compensation

 

The following table details the components of the All Other Compensation column of the Summary Compensation Table for 2020.

 

Name  Halliburton
Foundation
($)
  Halliburton
Giving
Choices
($)
  HALPAC
($)
  Restricted
Stock
Dividends
($)
  HRSP
Employer
Match
($)
  Benefit
Restoration
Plan
($)
  SERP
($)
  Expatriate
Assignment
($)
  All
Other
($)
  Total
($)
Jeffrey A. Miller  112,500  1,000  5,000  159,818  13,313  50,750  1,266,000  0  13,827  1,622,208
Lance Loeffler  17,325  575  5,000  28,462  13,929  21,217  418,000  0  0  504,508
Eric J. Carre  0  0  0  42,900  14,000  23,083  617,000  0  500  697,483
Joe D. Rainey  0  0  0  0  13,758  28,217  1,014,000  3,812,419  0  4,868,394
Mark J. Richard  45,000  460  5,000  32,320  14,250  23,550  1,217,000  0  0  1,337,580

 

Halliburton Foundation. The Halliburton Foundation allows NEOs and other employees to donate to approved universities, medical hospitals, and primary schools of their choice. In 2020, the Halliburton Foundation matched donations up to $20,000 on a 2.25 for 1 basis. Mr. Miller participated in the Halliburton Foundation’s matching program for Directors, which allowed his 2020 contributions up to $50,000 to qualified organizations to be matched on a 2.25 for 1 basis.

 

Halliburton Giving Choices. The Halliburton Giving Choices Program allows NEOs and other employees to donate to approved not-for-profit charities of their choice. We match donations by contributing ten cents for every dollar contributed by employees. The amounts shown represent the match amounts the program donated to charities on behalf of the NEOs in 2020.

 

Halliburton Political Action Committee. The Halliburton Political Action Committee, or HALPAC, allows NEOs and other eligible employees to donate to political candidates and participate in the political process. We match the NEOs’ and other employees’ donations to HALPAC dollar-for-dollar to a 501(c)(3) status nonprofit organization of the contributor’s choice. The amounts shown represent the match amounts donated to charities on behalf of the NEOs in 2020.

 

Restricted Stock Dividends. This is the amount of dividends paid on restricted stock held by NEOs in 2020. Restricted stock units granted to employees do not receive dividend payments.

 

Retirement and Savings Plan Employer Match. This is the contribution we made on behalf of each NEO to the Halliburton Retirement and Savings Plan, our defined contribution plan. We match employee contributions up to 5% of each employee’s eligible base salary up to the 401(a)(17) compensation limit of $285,000 in 2020.

 

Benefit Restoration Plan. This is the award earned under the Benefit Restoration Plan in 2020 as discussed in the Benefit Restoration Plan section of Compensation Discussion and Analysis. Associated interest, awards, and beginning and ending balances for the Benefit Restoration Plan are included in the 2020 Nonqualified Deferred Compensation table.

 

Supplemental Executive Retirement Plan. This is the award approved under the Supplemental Executive Retirement Plan in 2020 as discussed in the Supplemental Executive Retirement Plan section of Compensation Discussion and Analysis. Associated interest, awards, and beginning and ending balances for the Supplemental Executive Retirement Plan are included in the 2020 Nonqualified Deferred Compensation table.

 

Expatriate Assignment. In 2020, Mr. Rainey received compensation associated with his expatriate assignment similar in type to that received by other expatriates on comparable assignments. He received $88,180 for cost of living adjustment; $84,933 for mobility premium; $3,501,795 for tax equalization; $107,601 for imputed housing allowance; $16,840 for tax preparation; and $13,070 for auto imputed allowance.

 

All Other.

 

Aircraft Usage. As a result of the recommendations provided by an independent, third-party security consultant, the Board has determined that Mr. Miller must use company aircraft for all travel. The security study also recommends that his spouse and children use company-provided aircraft. For 2020, the incremental cost to us for this personal use of our aircraft was $8,978 for Mr. Miller. For total compensation purposes in 2020, we valued the incremental cost of the personal use of aircraft using a method that takes into account: landing, parking, hanger, flight planning services, and dead-head costs; crew travel expenses; supplies and catering; aircraft fuel and oil expenses per hour of flight; any customs, foreign permit, and similar fees; and passenger ground transportation. NEOs are not reimbursed for the tax impact of any imputed income resulting from aircraft usage.
Home Security. We provide security for residences based on risk assessments. In 2020, home security costs were as follows: $2,100 for Mr. Miller.
Car/Driver. A car and part-time driver is available for Mr. Miller’s limited use as needed for security purposes and so that he can work while in transit to meet customers or attend business-related functions. In 2020, the cost to us for personal use was $2,749.
Other Compensation for Mr. Carre. In 2020, Mr. Carre received $500 in tax preparation fees.

 

www.halliburton.com  

 

  HALLIBURTON  |  2021 Proxy Statement      46
 

Grants of Plan-Based Awards in Fiscal 2020

 

The following table represents amounts associated with the 2020 cycle Performance Unit Program, the 2020 Annual Performance Pay Plan, and restricted stock awards granted in 2020 to our NEOs.

 

      Estimated Future Payouts Under
Non-Equity Incentive Plan Awards
   Estimated Future Payouts Under
Equity Incentive Plan Awards
   All Other
Stock Awards:
Number of
Shares of
  Grant Date
Fair Value
of Stock and
Options
Name  Grant Date  Threshold
($)
  Target
($)
  Maximum
($)
   Threshold
(#)
  Target
(#)
  Maximum
(#)
   Stock or Units
(#)
  Awards
($)(4)
Jeffrey A. Miller     998,250  3,993,000   9,982,500(1)                  
     900,000  2,250,000   4,500,000(2)                  
  1/2/2020             48,693  194,773   486,933(3)      4,996,393
   12/2/2020                        266,400  4,691,304
Lance Loeffler     247,788  991,150   2,477,875(1)                  
     304,000  760,000   1,520,000(2)                  
  1/2/2020             12,075  48,300   120,750(3)      1,239,011
   12/2/2020                        74,700  1,315,467
Eric J. Carre     235,800  943,200   2,358,000(1)                  
     320,000  800,000   1,600,000(2)                  
  1/2/2020             11,525  46,100   115,250(3)      1,182,575
   12/2/2020                        72,300  1,273,203
Joe D. Rainey     315,000  1,260,000   3,150,000(1)                  
     400,400  1,001,000   2,002,000(2)                  
  1/2/2020             15,350  61,400   153,500(3)      1,575,057
   12/2/2020                        95,500  1,681,755
Mark J. Richard     315,000  1,260,000   3,150,000(1)                  
     356,400  891,000   1,782,000(2)                  
  1/2/2020             15,350  61,400   153,500(3)      1,575,057
   12/2/2020                        93,800  1,651,818

 

(1) Cash opportunity levels under the 2020 cycle of the Performance Unit Program.
(2) Cash opportunity levels under the 2020 Halliburton Annual Performance Pay Plan.
(3) Share opportunity levels under the 2020 cycle of the Performance Unit Program.
(4) With respect to restricted stock awards, this column reflects the grant date fair value of the award. With respect to equity-based incentive awards under the PUP, this column reflects the grant date fair value at target.

 

As indicated by footnotes (1) and (3), the cash opportunities for each NEO under the 2020 cycle Performance Unit Program if the Threshold, Target, or Maximum levels are achieved are reflected under Estimated Future Payouts Under Non-Equity Incentive Plan Awards and the share opportunities are reflected under Estimated Future Payouts Under Equity Incentive Plan Awards. The potential payouts are performance driven and completely at risk. For more information on the 2020 cycle Performance Unit Program, refer to Long-term Incentives in Compensation Discussion and Analysis.

 

As indicated by footnote (2), the opportunities for each NEO under the 2020 Halliburton Annual Performance Pay Plan are also reflected under Estimated Future Payouts Under Non-Equity Incentive Plan Awards. The potential payouts are performance driven and completely at risk. For more information on the 2020 Halliburton Annual Performance Pay Program, refer to Short-term (Annual) Incentive in Compensation Discussion and Analysis. No amounts were earned by our NEOs under the 2020 Halliburton Annual Performance Pay Plan because the minimum threshold performance level was not achieved.

 

All restricted stock awards are granted under the Stock and Incentive Plan. The awards listed under All Other Stock Awards: Number of Shares of Stock or Units were awarded to each NEO on the date indicated by the Compensation Committee.

 

The restricted stock grants awarded to the NEOs during 2020 are subject to a graded vesting schedule of 20% per year over five years. All restricted shares are priced at fair market value on the date of grant. Quarterly dividends are paid on the restricted shares at the same time and rate payable on our common stock, which was $0.18 per share during the first quarter of 2020 and $0.045 per share during the last three quarters of 2020. The shares may not be sold or transferred until fully vested. The shares remain subject

 

 

  HALLIBURTON  |  2021 Proxy Statement      47
 

to forfeiture during the restricted period in the event of the NEO’s termination of employment or an unapproved early retirement.

 

The performance share grants awarded to the NEOs during 2020 are subject to a three-year performance period. All performance shares are priced at fair market value on the date of grant. Quarterly dividends will not be paid during the performance period but shall be accrued and paid in cash at the time, and to the extent, the underlying shares of Company common stock are delivered.

 

Outstanding Equity Awards at Fiscal Year End 2020

 

The following table represents outstanding stock option and restricted stock awards for our NEOs as of December 31, 2020. The market value of shares or units of stock not vested was determined by multiplying the number of unvested restricted shares at year end by the closing price of our common stock on the NYSE of $18.90 on December 31, 2020.

 

      Option Awards  Stock Awards
Name  Grant Date  Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
  Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
  Option
Exercise
Price
($)
  Option
Expiration
Date
  Number of
Shares
or Units
of Stock
Not Vested
(#)
  Market Value
of Shares
or Units of
Stock
Not Vested
($)
  Equity
Incentive
Plan
Awards:
# Unearned
Shares
Units or
Other
Rights
Not Vested
(#)
  Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares
Units or
Other Rights
Not Vested
($)
Jeffrey A. Miller(1)  12/4/2013  55,700    50.62  12/4/2023       
  12/3/2014  115,100    40.75  12/3/2024       
   12/2/2015  99,200    38.95  12/2/2025       
   12/7/2016  69,500    53.54  12/7/2026  8,360  158,004   
   6/1/2017            150,000  2,835,000   
   12/6/2017  128,500    43.38  12/6/2027  30,840  582,876   
   12/5/2018  114,134  57,066  31.44  12/5/2028  59,880  1,131,732   
   12/4/2019            133,547  2,524,038   
   1/2/2020                194,773  3,681,210
   12/2/2020            266,400  5,034,960   
TOTAL     582,134  57,066        649,027  12,266,610  194,773  3,681,210
Lance Loeffler(2)  1/2/2015  15,594    39.49  1/2/2025       
  1/4/2016  27,912    34.48  1/4/2026  2,088  39,463   
   1/3/2017  16,678    55.68  1/3/2027  2,592  48,989   
   1/2/2018  13,611  6,805  49.61  1/2/2028  4,596  86,864   
   12/5/2018  34,067  17,033  31.44  12/5/2028  17,880  337,932   
   12/4/2019            33,120  625,968   
   1/1/2020                48,300  912,870
   12/2/2020            74,700  1,411,830   
TOTAL     107,862  23,838        134,976  2,551,046  48,300  912,870

 

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  HALLIBURTON  |  2021 Proxy Statement      48
 
      Option Awards  Stock Awards
Name  Grant Date  Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
  Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
  Option
Exercise
Price
($)
  Option
Expiration
Date
  Number of
Shares
or Units
of Stock
Not Vested
(#)
  Market Value
of Shares
or Units of
Stock
Not Vested
($)
  Equity
Incentive
Plan
Awards:
# Unearned
Shares
Units or
Other
Rights
Not Vested
(#)
  Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares
Units or
Other Rights
Not Vested
($)
Eric J. Carre(3)  1/2/2014  8,300    50.01  1/2/2024       
  1/2/2015  24,750    39.49  1/2/2025       
   1/4/2016  9,534    34.48  1/4/2026  3,341  63,145   
   5/1/2016            40,000  756,000   
   12/7/2016  30,100    53.54  12/7/2026  3,620  68,418   
   12/6/2017  34,425    43.38  12/6/2027  8,280  156,492   
   12/5/2018  33,401  16,699  31.44  12/5/2028  17,520  331,128   
   12/4/2019            31,600  597,240   
   1/2/2020                46,100  871,290
   12/2/2020            72,300  1,366,470   
TOTAL     140,510  16,699        176,661  3,338,893  46,100  871,290
Joe D. Rainey(4)  12/6/2011  14,566    35.57  12/6/2021       
  12/5/2012  37,933    33.50  12/5/2022       
   12/4/2013  45,500    50.62  12/4/2023       
   12/3/2014  59,500    40.75  12/3/2024       
   12/2/2015  58,700    38.95  12/2/2025       
   12/7/2016  40,100    53.54  12/7/2026  4,840  91,476   
   5/17/2017            54,089  1,022,282   
   12/6/2017  45,900    43.38  12/6/2027  11,040  208,656   
   12/5/2018  44,534  22,266  31.44  12/5/2028  23,340  441,126   
   12/4/2019            42,080  795,312   
   12/2/2020                61,400  1,160,460
   1/1/2020            95,500  1,804,950   
TOTAL     346,733  22,266        230,889  4,363,802  61,400  1,160,460
Mark J. Richard(5)  1/1/2011  4,600    40.83  1/1/2021       
  1/3/2012  6,400    34.15  1/3/2022       
   1/3/2013  13,900    36.31  1/3/2023       
   1/2/2014  7,900    50.01  1/2/2024       
   1/2/2015  14,807    39.49  1/2/2025       
   1/4/2016  28,604    34.48  1/4/2026  3,341  63,145   
   1/3/2017  17,119    55.68  1/3/2027  4,163  78,681   
   1/2/2018  16,013  8,006  49.61  1/2/2028  8,466  160,007   
   12/20/2018  29,283  14,641  27.14  12/20/2028  15,474  292,459   
   12/4/2019            42,080  795,312   
   1/1/2020                61,400  1,160,460
   12/2/2020            93,800  1,772,820   
TOTAL     138,626  22,647        167,324  3,162,424  61,400  1,160,460

 

 

  HALLIBURTON  |  2021 Proxy Statement      49
 
(1) Mr. Miller’s stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in equal amounts over each grant’s five-year vesting schedule, except for the June 1, 2017, award, which will vest 100% five years from the date of grant.
(2) Mr. Loeffler’s stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in equal amounts over each grant’s five-year vesting schedule.
(3) Mr. Carre’s stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in equal amounts over each grant’s five-year vesting schedule, except for the May 1, 2016, award, which will vest 100% five years from the date of grant.
(4) Mr. Rainey’s stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in equal amounts over each grant’s five-year vesting schedule, except for the May 17, 2017, award, which will vest 100% five years from the date of grant.
(5) Mr. Richard’s stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in equal amounts over each grant’s five-year vesting schedule.

 

2020 Option Exercises and Stock Vested

 

The following table represents stock options exercised and restricted shares that vested during fiscal year 2020 for our NEOs.

 

    Option Awards   Stock Awards
Name   Number of Shares
Acquired on Exercise
(#)
  Value Realized
on Exercise
($)
  Number of Shares
Acquired on Vesting
(#)
  Value Realized
on Vesting
($)
Jeffrey A. Miller       88,267   1,690,907
Lance Loeffler       29,846   527,189
Eric J. Carre       28,336   585,060
Joe D. Rainey       35,240   670,511
Mark J. Richard       28,149   588,155

 

The value realized for vested restricted stock awards was determined by multiplying the fair market value of the shares (closing price of our common stock on the NYSE on the vesting date) by the number of shares that vested. Shares vested on various dates throughout the year. The value listed represents the aggregate value of all shares that vested for each NEO in 2020.

 

2020 Nonqualified Deferred Compensation

 

The 2020 Nonqualified Deferred Compensation table reflects balances in our nonqualified plans as of January 1, 2020, contributions made by the NEO and us during 2020, earnings (the net of the gains and losses on funds, as applicable), distributions, and the ending balance as of December 31, 2020. The plans are described in Compensation Discussion and Analysis.

 

Name  Plan  01/01/20
Balance
($)
  Executive
Contributions
In Last
Fiscal Year
($)
  Registrant
Contributions
In Last
Fiscal Year
($)
  Aggregate
Earnings
In Last
Fiscal Year
($)
  Aggregate
Distributions
($)
  Aggregate
Balance At
Last Fiscal
Year End
($)
Jeffrey A. Miller  SERP  6,409,491  0  1,266,000  327,723  0  8,003,214
   Benefit Restoration  591,913  0  50,750  35,465  0  678,128
   TOTAL  7,001,404  0  1,316,750  363,188  0  8,681,342
Lance Loeffler  SERP  498,927  0  418,000  25,477  0  942,404
   Benefit Restoration  48,541  0  21,217  2,898  0  72,656
   TOTAL  547,468  0  439,217  28,375  0  1,015,060
Eric J. Carre  SERP  2,194,885  0  617,000  112,201  0  2,924,086
   Benefit Restoration  271,781  0  23,083  16,286  0  311,150
   TOTAL  2,466,666  0  640,083  128,487  0  3,235,236

 

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  HALLIBURTON  |  2021 Proxy Statement      50
 
Name  Plan  01/01/20
Balance
($)
  Executive
Contributions
In Last
Fiscal Year
($)
  Registrant
Contributions
In Last
Fiscal Year
($)
  Aggregate
Earnings
In Last
Fiscal Year
($)
  Aggregate
Distributions
($)
  Aggregate
Balance At
Last Fiscal
Year End
($)
Joe D. Rainey  SERP  6,587,991  0  1,014,000  336,886  0  7,938,877
   Benefit Restoration  540,904  0  28,217  32,427  0  601,548
   Elective Deferral  4,212,075  0  0  300,271  0  4,512,346
   TOTAL  11,340,970  0  1,042,217  669,584  0  13,052,771
Mark J. Richard  SERP  1,129,000  0  1,217,000  57,596  0  2,403,596
   Benefit Restoration  171,127  0  23,550  10,250  0  204,927
   Elective Deferral  1,570,959  0  0  100,558  209,823  1,461,694
   TOTAL  2,871,086  0  1,240,550  168,404  209,823  4,070,217

 

Employment Contracts and Change-in-Control Arrangements

 

Employment Contracts

 

All of our NEOs have employment agreements with us that contain substantial non-compete and non-solicitation provisions post separation.

 

The employment agreements provide that if the agreement is terminated by the employee for good reason or by death, disability, or retirement or his employment is terminated by the Company for any reason other than cause or a fiduciary violation, all restrictions on restricted stock and units will lapse. In addition, in the case of a termination by the employee for good reason or termination by the Company for any reason other than cause or a fiduciary violation, the employee will receive a lump sum cash payment equal to two years of his base salary then in effect.

 

Change-In-Control Arrangements

 

We do not maintain individual change-in-control agreements or provide for excise tax gross-ups on any payments associated with a change-in-control. Some of our compensation plans, however, contain change-in-control provisions, which could result in payment of specific benefits.

 

Under the Stock and Incentive Plan, in the event of a change-in-control, awards granted after February 13, 2019, are subject to double-trigger vesting, such that, if a participant is terminated due to involuntary termination without cause, death, disability, good reason (as defined in an employment agreement, or a similar constructive termination event, in each case, only if a severance benefit is payable upon termination of employment due to such event pursuant to an employment agreement), or other event as specified in the participant’s award document within the period beginning on the date of the public announcement of a transaction that, if consummated, would constitute a corporate change and ending on the date that is the earlier of the announcement of the termination of the proposed transaction or two years after the consummation of the transaction (a Qualifying Termination), the following will occur automatically:

 

any outstanding options and stock appreciation rights shall become immediately vested and fully exercisable for the full term thereof;
any restrictions on restricted stock awards shall immediately lapse;
all performance measures upon which an outstanding performance award is contingent are deemed achieved and the holder shall receive a payment equal to the target amount of the award he or she would have been entitled to receive; and
any outstanding cash awards, including stock value equivalent awards, immediately vest and are paid based on the vested value of the award.
Under the Annual Performance Pay Plan:
in the event of a change-in-control during a plan year, a participant experiencing a Qualifying Termination will be entitled to payment equal to the target amount of the award he or she would have been entitled to receive, without proration; and
in the event of a change-in-control after the end of a plan year but before the payment date, a participant will be entitled to an immediate cash payment equal to the incentive earned for the plan year.
Under the Performance Unit Program:
in the event of a change-in-control during a performance cycle, a participant experiencing a Qualifying Termination will be entitled to both a payment equal to the target amount of

 

 

  HALLIBURTON  |  2021 Proxy Statement      51
 
  the cash award he or she would have been entitled to receive and the vesting of the target amount of performance shares awarded, without proration; and
in the event of a change-in-control after the end of a performance cycle but before the payment and vesting date, a participant will be entitled to an immediate payment equal to the cash award earned and the vesting of performance shares earned for that performance cycle.
   
Under the Employee Stock Purchase Plan, in the event of a change-in-control, unless the successor corporation assumes or substitutes new stock purchase rights:
   
the purchase date for the outstanding stock purchase rights will be accelerated to a date fixed by the Compensation Committee prior to the effective date of the change-in-control; and
upon such effective date, any unexercised stock purchase rights will expire and we will refund to each participant the amount of his or her payroll deductions made for purposes of the Employee Stock Purchase Plan that have not yet been used to purchase stock.

 

Post-Termination or Change-in-Control Payments

 

The following tables and narratives represent the impact of certain termination events or a change-in-control on each element of compensation for NEOs as of December 31, 2020.

 

      Termination Event
Name  Payments  Resignation
($)
  Early
Retirement
w/o
Approval
($)
  Early
Retirement
w/Approval
($)
  Normal
Retirement
($)
  Term
for Cause
($)
  Term
w/o
Cause
($)
  Change in
Control
($)
Jeffrey A. Miller  Severance  0  0  0  0  0  3,000,000  0
   Annual Perf. Pay Plan  0  0  0  0  0  0  0
   Restricted Stock  0  0  12,266,610  12,266,610  0  12,266,610  4,707,612
   Stock Options  0  0  0  0  0  0  0
   Performance Cash  0  0  9,748,609  9,748,609  0  0  9,456,914
   Performance Shares  0  0  3,067,678  3,067,678  0  0  0
   Nonqualified Plans  8,681,342  8,681,342  8,681,342  8,681,342  8,681,342  8,681,342  0
   Health Benefits  0  12,000  12,000  0  0  0  0
   TOTAL  8,681,342  8,693,342  33,776,239  33,764,239  8,681,342  23,947,952  14,164,526
Lance Loeffler  Severance  0  0  0  0  0  1,520,000  0
   Annual Perf. Pay Plan  0  0  0  0  0  0  0
   Restricted Stock  0  0  2,551,046  2,551,046  0  2,551,046  513,248
   Stock Options  0  0  0  0  0  0  0
   Performance Cash  0  0  2,745,259  2,745,259  0  0  0
   Performance Shares  0  0  760,725  760,725  0  0  0
   Nonqualified Plans  72,656  72,656  72,656  72,656  72,656  72,656  0
   Health Benefits  0  0  0  0  0  0  0
   TOTAL  72,656  72,656  6,129,686  6,129,686  72,656  4,143,702  513,248
Eric J. Carre  Severance  0  0  0  0  0  1,600,000  0
   Annual Perf. Pay Plan  0  0  0  0  0  0  0
   Restricted Stock  0  0  3,338,893  3,338,893  0  3,338,893  819,145
   Stock Options  0  0  0  0  0  0  0
   Performance Cash  0  0  2,664,261  2,664,261  0  0  2,534,094
   Performance Shares  0  0  726,081  726,081  0  0  0
   Nonqualified Plans  3,235,236  3,235,236  3,235,236  3,235,236  3,235,236  3,235,236  0
   Health Benefits  0  0  0  0  0  0  0
   TOTAL  3,235,236  3,235,236  9,964,471  9,964,471  3,235,236  8,174,129  3,353,239

 

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  HALLIBURTON  |  2021 Proxy Statement      52
 
      Termination Event
Name  Payments  Resignation
($)
  Early
Retirement
w/o
Approval
($)
  Early
Retirement
w/Approval
($)
  Normal
Retirement
($)
  Term
for Cause
($)
  Term
w/o
Cause
($)
  Change in
Control
($)
Joe D. Rainey  Severance  0  0  0  0  0  1,820,000  0
  Annual Perf. Pay Plan  0  0  0  0  0  0  0
   Restricted Stock  0  0  4,363,802  4,363,802  0  4,363,802  1,763,540
   Stock Options  0  0  0  0  0  0  0
   Performance Cash  0  0  3,555,851  3,555,851  0  0  3,378,792
   Performance Shares  0  0  967,056  967,056  0  0  0
   Nonqualified Plans