☐ | Preliminary Proxy Statement |
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☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material under § 240.14a-12 |
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☐ | Fee paid previously with preliminary materials. |
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and0-11. |
MARCH 21, 2024
A Message From Our Board Chair
Dear Fellow Shareholders:
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Ovintiv delivered a remarkableWe are proud of another year of achievement in 2021, as our strategystrong performance and strategic execution combined to generate significant value for our shareholders. As a Board, we areCompany in 2023. We continued to provide the safe, affordable, and secure energy that fuels the world. We remain committed to the safe, efficient and responsible development of these critical products that make modern life possible.
The Ovintiv team generated net earnings of more than $2 billion and Free Cash Flow of approximately $1.2 billion. We returned more than $730 million directly to our shareholders through base dividends and share buybacks. Our business performance was driven by the consistent execution of our durable returns strategy.
During 2023, we seamlessly and simultaneously executed a sustainableset of Permian Basin acquisitions and well-governed business rootedthe divestiture of our Bakken asset. These transactions were highly accretive, reaffirmed our investment grade rating, expanded our Permian inventory life, and were completed ahead of schedule. Together with our time-tested strategic bolt-on and organic assessment and appraisal programs, we have added over 1,650 premium return net drilling locations in value creation.the past several years.
We also continued to drive strong operational execution across all our assets. Our actions reflectleading well results and efficiency gains across our portfolio drove outperformance throughout the year. In 2023, we saw multiple quarters of both production and capital guidance beats, allowing us to raise guidance twice and bring additional wells online for the same capital spend—boosting returns on invested capital. We also continued to deliver on our Scope 1 & 2 Greenhouse Gas (“GHG”) target, with 2023 emissions intensity down 42% from 2019 levels. This culture of innovation and efficiency is hard to match and is showing up in our outstanding results.
We continued our track record of strong Board oversight and management’sseeking feedback from our shareholders through our annual outreach program. Our commitment to generating superior returns by continuously improving bothbeing a responsible producer remains resolute and will continue to be a cornerstone of our business. We believe that fostering a culture of innovation, engaging with our external stakeholders and workforce, adhering to the profitabilityhighest standards of conduct, and setting measurable
near-term targets supports the sustainability of our business and we delivered that valuedrives better corporate outcomes. Our ongoing strategic board refreshment process led to our shareholders through disciplined capital allocation.
The year began with lingering effectsfour new directors in 2021-2024, two of one of the most volatile periods in energy industry history. New COVID-19 surges coupled with energy supply and demand rebalancing meant 2021 held many social and operational challenges. Guided by our strategy, the Board and management successfully navigated those challenges to make our business even stronger. We stayed rooted in our core values of One, Agile, Innovative and Driven. We kept our people safe, increased business resiliency, furthered our environmental, social and governance (“ESG”) performance and took actions to drive value for all our stakeholders.
A YEAR OF STRATEGIC ACCOMPLISHMENTS
We started 2021 by outlining a $1.5 billion stay-flat capital program that did not waver throughout the year despite inflationary pressures across the economy. This performance reinforces our track record of operational excellence, capital efficiency, innovation and unwavering environmental commitment. Our strong execution resulted in $2.3 billion of net debt reduction, which included the redemption of our 2021 and 2022 senior notes and increased our base dividend by 50%were added in the third quarter with cash on handpast two years, bringing a balance of tenure, age, background, and proceeds from divestitures.perspective.
Strategically we delivered on all our financial and operational promises and achieved our 8th safest year ever. We drove an 11% gain in capital efficiency year-over-year, which powered approximately $1.7 billion of free cash flow generation. We sold two assets ahead of schedule and above target price and are executing on our portfolio renewal program, which consists of organic appraisal and low-cost property bolt-ons. These actions further right-sized our balance sheet and focused our actions towards our carefully selected multi-basin portfolio that we operate today. In addition, we also set a new net debt target of $3.0 billion. This target representsFinally, I am proud to report the next milestone of our capital allocation framework that continues to drive value creation through increasing cash returns to shareholders. In the past year, our dividends and share buyback program returned $233 million to our shareholders.
Our Values
Core
One
Agile
Innovative
Driven
Foundational
Integrity
Safety
Sustainability
Trust
Respect
CONTINUED ENVIRONMENTAL ADVANCEMENT
In 2021,important progress the Ovintiv team made tremendous progresson safety performance. The Board was engaged throughout the year with the Company’s Safety Advisory Task Force (“Safety Task Force”). The Safety Task Force reported to the Environment, Health and Safety (“EHS”) Committee. This organization wide effort created a performance step-change in 2023. As can be seen in our sustainability focusresults, 2023 was an outstanding safety performance year across key metrics and continuedwe are constantly looking to improve safety awareness and procedures.
We are excited about the impressive results our exceptional environmental performance. Not only didCompany has generated. Looking forward, we beat our 33% methane intensity reduction target four years ahead of schedule, but we reduced Scope 1 & 2 greenhouse gas (“GHG”) intensity by over 20% from 2019 levels andare committed to a 50% Scope 1 & 2 GHG intensity reduction target by 2030, which is tied to compensationdeveloping our resource safely, efficiently, and responsibly, while also generating durable returns for all employees starting in 2022. We also announced our full alignment with the World Bank Zero Routine Flaring by 2030 initiative, nine years ahead of the initiative’s target. These achievements and ongoing initiatives are our latest actions as a responsible operator and a sustainable supplier of energy.
SOCIAL AND GOVERNANCE COMMITMENT
We continue to have an active and ongoing Board refreshment process. In 2021, we welcomed Katherine Minyard and George Pita to the Board, which marked our fourth and fifth new independent directors since 2019. Ms. Minyard’s and Mr. Pita’s addition to the Board, coupled with our Corporate Responsibility and Governance Committee’s formal adoption of a Diversity in Board Recruitment policy, furthers our commitment to Board diversity. We commit to continue our Board refreshment process, which allows us to benefit from new ideas and to adapt to evolving shareholder expectations. With a balance of tenures, a diversity of perspectives, and a range of skills – including industry expertise and relevant subject matter expertise – our Board is well-positioned to oversee Ovintiv’s management team.
PROACTIVE SHAREHOLDER ENGAGEMENT
The Board welcomes and values input from all shareholders and we continued our ongoing annual shareholder outreach process in 2021. Other Board members and I had the opportunity to engage with and solicit input from a large number of our shareholders. This process was extremely informative. We utilize the feedback from these interactions to enhance our decision-making on topics such as ESG disclosure, compensation target-setting, and Board composition.
In 2021, the Board was also excited to unanimously elect Brendan McCracken as President & CEO. His appointment was the culmination of our ongoing succession planning, and it reflects his strong leadership skills and track record for delivering strong results. We look forward to working with Brendan and his exemplary team to continue delivering on our operational, financial and ESG goals, which collectively drive value for all stakeholders.
We have a powerful purpose: producing safe, affordable, and reliable energy both profitably and sustainably with a keen focus on reducing emissions. The Board takes pride in the significant role that the full Ovintiv team plays in responsibly producing and delivering reliable products that contribute to energy security and quality of life for many plus help address energy poverty. Simply put, our products fuel the world and make modern life possible. We will generate superior returns and free cash flow by continuously improving capital efficiency and expanding margins while driving down emissions. We will deliver that value to our shareholders through disciplined capital allocation. Within this Proxy Statement you will see a number of strong actions taken by the Board to continue our best-in-class track record. We encourage you to interact with our new and dynamic sustainability website and our Annual Report to see additional details on all our recent actions and go-forward initiatives.
On behalf of the Board, thank you for your investment in our company.Company.
PETER A. DEA
CHAIR OF THE BOARD
PETER A. DEA CHAIR OF THE BOARD | ||
Ovintiv Inc. | 2024 Proxy Statement | 1 |
TABLE OF CONTENTS
Our products fuel the world—
we make modern
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Time and Date 8:00 a.m. (Mountain Time) on May | Place Online at www.virtualshareholder | Record Date March | The Notice of Internet Materials will be mailed to |
Meeting Agenda
Shareholders will be asked to vote on the following proposals at the 2022our 2024 Annual Meeting of Shareholders of Ovintiv (the “Meeting”):
Item | Board Recommendation | ||||
1 | Election of Directors | FOReach director nominee nominated herein | |||
2 | Advisory Vote to Approve Compensation of Named Executive Officers | FOR | |||
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Ratify PricewaterhouseCoopers LLP as Independent Auditors | FOR |
Record Date
Shareholders at the close of business on the Record Date are entitled to receive notice of, and vote at, the Meeting and any adjournments or postponements thereof. As of the Record Date, there were 268,953,641 shares of Ovintiv common stock issued and outstanding.
The Notice of Internet Availability of Proxy Materials is being mailed to shareholders on or about March 21, 2024.
By Order of the Board,
Meghan N. Eilers
Executive Vice-President, General Counsel & Corporate Secretary
Ovintiv Inc.
March 21, 2024
Your Vote Is Important
You can vote your shares of Ovintiv common stock in any of the following ways: | ||||
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ONLINE
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Before the Meeting you may vote your shares through the internet by following the directions on your proxy card. Internet voting is available 24-hours a day. To vote online, you will need the control number located on your proxy card or Notice of Internet Availability of Proxy Materials. | |||
| PHONE Call 1-800-690-6903 from a touch-tone phone and follow the voice instructions. To vote by phone, you will need the control number located on your proxy card or Notice of Internet Availability of Proxy Materials. | |||
| If you received a proxy card by mail, you can complete, sign and date the | |||
| AT THE MEETING Shareholders of record as of March | |||
| If you are a non-registered shareholder, please refer to the information forwarded by your bank, broker or other holder of record to see which voting methods are available to you to vote in advance of or at the Meeting.
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IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY The SEC’s “Notice and Access” rule permits Ovintiv to deliver a Notice of Internet Availability of Proxy Materials to shareholders in lieu of paper copies of the company’s Proxy Statement, Annual Report on Form 10-K and related materials (collectively, the “Proxy Materials”). The Notice of Internet Availability of Proxy Materials provides instructions as to how shareholders can access the Proxy Materials through the Internet or, alternatively, request printed copies of the Proxy Materials be sent to them by mail. |
Ovintiv Inc. | 2024 Proxy Statement | 3 |
PROXY STATEMENT SUMMARY
This summary is provided for your convenience. It does not contain all of the information you should consider when casting your vote. We encourage you to read this entire Proxy Statement before voting. For additional information, please refer to the 20212023 Annual Report on Form 10-K of Ovintiv Inc. (“Ovintiv” or the “company”“Company”) dated February 25, 202227, 2024 (the “Annual Report”). Unless noted otherwise, information in this Proxy Statement is as of February 25, 2022.27, 2024. Certain measures in this Proxy Statement do not have any standardized meaning as prescribed by U.S. GAAP (as hereinafter defined) and, therefore, are considered non-GAAP measures (as hereinafter defined and noted by the † symbol). For additional information regarding non-GAAP measures, refer to Schedule CA of this Proxy Statement.
Our Approach
Generating Superior ReturnsBusiness Overview
• Four top tier assets with substantial operating scale • Generating strong cash flows from each asset Deep Inventory of Premium Drilling Locations • 10-15 yrs of oil & condensate and >20 yrs of natural gas inventory • Proven organic assessment and appraisal program Multi-Basin Advantage • Cross basin learnings and operational best practices employed across the Multi-Product Commodity Exposure • Balanced production across oil and natural gas
Generating Durable Returns • Expertise and culture to convert resource to Free Cash Flow† • Disciplined capital |
Top Tier Operations & Performance
Ovintiv has a track record of strong execution and a focus on value creation. Our recent actions and go forward initiatives underpin our ability to sustainably generate shareholder value.Select 2023 Highlights
| Strong Financial Results
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Returned more than $730 million to
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| Seamless Acquisition Integration
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| Expanded Index Inclusion |
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Key Year-End 2021 2023 Business Metrics
Our Approach to ESGSustainability
Producing safe, affordable and reliable energy both profitably and sustainably is a powerful purpose – one that we takeOvintiv takes seriously. Our products fuel the world and make modern life possible. Oil, natural gas, and natural gas liquids are essential to every aspect of life from transportation to education and healthcare. It is easy to forget how reliant families and communities across the globe are on oil and natural gas, from the clothes we wear, the food we eat, the mobility we cherish and the electronic technologies we rely on every day. The reliability and affordability of our products combat poverty, enhance quality of life and drive our economies. As a responsible and innovative producer of oil and natural gas, we are committed to drive progress and improve lives. ESG is a pillarResponsible business and sustainability are pillars of our business strategy. Our Board of Directors (the “Board”) and executive leadership team (“ELT”) direct our ESGenvironmental, social and governance (“ESG”) strategies, monitoring progress and performance through the Board’s committee structure. High standards for ESGsustainable excellence are established through our policies and programs, and employees understand the company’sCompany’s expectations and are empowered to take ownership of their own performance. By linking employee and executive compensation to ESGenvironmental and othersocial performance-related metrics, the Board is ensuring every team member is aligned to our continuous improvement. Starting in 2021, we included our methane emissions reductions target in our compensation scorecard. ForIn our 2022 compensation program, we established a Scope 1 & 2 GHG emissions intensity target, further incentivizing our team members to be both innovative and responsible in their daily decision-making. Our Scope 1 & 2 GHG emissions intensity target was not adjusted for acquisition or divestiture activity in 2023.
History of ESG Leadership
A History of Robust and Transparent Disclosure |
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Ovintiv Inc. | 2024 Proxy Statement | 5 |
OUR KEY ESGENVIRONMENTAL, SOCIAL & GOVERNANCE INITIATIVES
| EMISSIONS
• Scope 1 & 2 GHG intensity reduction target tied to •
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| TRANSPARENCY
• • Leading industry-wide initiatives through active trade association engagement with the American Exploration & Production Council, the Canadian Association of Petroleum Producers, and the American Petroleum Institute. • Produced disclosures aligned with Task Force on Climate-related Financial Disclosures (“TCFD”) and Sustainability Accounting Standards Board (“SASB”) guidance. | ||
| HUMAN CAPITAL
Our success is a direct result of the talent of our team and our ability to work together to achieve
Creating a culture of inclusion is consistent with our long-standing foundational values, and we seek to make sure that every employee has an equal opportunity for success at Ovintiv. | ||
| GOVERNANCE Strong corporate governance is the core of our
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Note:
(1) | Ovintiv’s legacy operations are fully aligned today, full alignment of the Permian Acquisition assets is still in progress. |
To learn more about Ovintiv’s sustainability initiatives, please refer to our Sustainability Report, which is available on our website at www.ovintiv.com/sustainability/.under the “Sustainability” tab.
| Ovintiv |
COVID 19 Response
Safety Taskforce
At Ovintiv, safety is a foundational value and drives decision-making across the organization. We want every person who steps foot on our site to leave in the same condition they arrived.
In 2023, we have the advantage ofundertook an enriched safety mindset and a world class safety team that knows how to jump into immediate action. From the onset of this pandemic, we prioritized the physical and mental healthextensive, company-wide review of our employees, moving quicklysafety practices by an internal Safety Advisory Task Force and commissioned an independent review conducted by a third party, both of which reported directly to protect our team while continuingELT and Board of
Directors. Through these reviews, immediate action was taken, and four strategic initiatives emerged: Start Work Safely Authorization, Integrate Safety into Commercial Processes, Safety Leadership Competency Development and Embed One Safety Culture. We then established multi-disciplinary advisory groups to provide safe, reliablerecommendations and affordable energy.
A successful pandemic response waschart a priority at every level, starting at the top of our organization. Our executive
leadership team met regularly with our Pandemic Response Team (“PRT”) to discuss employee safety and business continuity. For the past two years, our Board has been actively engaged with our executives in providing oversight through this unprecedented situation. Our PRT continues to meet regularly, reviewing our approach to ensure we can do our work safely and in accordance with local regulations and health agency recommendations.path forward for each strategic initiative.
Shareholder Engagement
We value shareholder feedback and conduct an annual outreach program allowing investors to engage directly with members of our Board and management team to hear directly from our ELT. Weinstitutional investors, so that we understand the factors they consider to be most important when evaluating our Company. This engagement provides an opportunity for our Board and management team to answer questions our investors have about our approach to corporate governance, risk oversight, and strategy. In 2023, we continued this long-standing practice in 2021, and shareholders holding collectivelyby offering engagements to more than two-thirdstwo thirds of our outstanding Ovintiv common stock were offered the opportunity for this engagement.
In addition to shareholder engagement at the senior level, shareholders have the opportunity to engage with employees froma focus on governance and sustainability matters, as well as meetings with institutional investors during conferences and industry events. Additionally, we hosted one of our Operations, Finance, Legal, Human Resources, Government Relations, and Sustainability teams.largest institutional investors on a tour of our Permian field operations.
In 2023, we solicited holding >67% of our
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• Chair of the • Chair of the Corporate Responsibility and Governance Committee • Sustainability team leadership • Investor Relations team leadership
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Our Board Chair, Chair of the Human Resources and Compensation Committee (“HRC Committee”), Chair of the Corporate Responsibility and Governance Committee (“CRG Committee”) and members of our ELT and sustainability team were actively engaged in outreach discussions with shareholders. Overall, investors expressed strong support for Ovintiv.our strategy, risk management, disclosure practices and performance. We also gained valuable feedback during these discussions, which was shared with the rest of thefull Board and its relevant committees. Our Board is committed to constructive engagement, and these engagements have led to enhancements inwhich fuels ongoing discussions regarding how we can evolve our environmental, social, governance, executive compensation, and disclosure activities that thepractices. In this year’s engagements, we covered a wide range of topics, wherein our shareholders expressed approval of our current practices, and encouraged our Board believes are in the best interest of Ovintivto continue with our sustainability strategy, active shareholder engagement, and its shareholders.disclosure practices.
Ovintiv Inc. | 2024 Proxy Statement | 7 |
TOPIC | AREAS OF FOCUS | STATE OF PROGRESS | ||
Environmental and emission reduction initiatives | • Methane emissions intensity • Measurement, targets and progress • Climate disclosures and frameworks • Industry collaboration • Costs of abatement • Technology and innovation • Scenario planning • Site and facility design
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• Leading methane leak detection and repair program. • Disclosure in line with TCFD and SASB. •
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| • Factors in board refreshment • Director commitments • Diversity of background and thought | •36% of our Board brings gender or ethnic diversity.
• Director overboarding policy implemented in 2023. • Director change in circumstance policy added in 2023. | ||
Executive compensation | • Target-setting and commodity cyclicality • Performance metrics • Reference benchmarks • Vesting periods • Disclosure • ESG metrics |
•Relative TSR and return on invested capital (“ROIC”) drive long-term incentive (“LTI”) program. • Annual risk assessments of • Scope 1 & 2 GHG emissions intensity target is tied to all employees’ compensation. | ||
| • Safety culture • Talent pipeline |
•Outreach at multiple education levels to generate interest in energy careers. | ||
Enterprise risk management | • Cybersecurity oversight • Board education on evolving risks |
• Leverage enterprise risk management (“ERM”) system to identify emerging risks, and | ||
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Items of Business
Item 1.Election of Directors
The Board of Ovintiv has nominated the following individuals for election as directors. As Mr. Mclntire is retiring as of May 1, 2024, and no new directors are standing for election, the size of the Board will be reduced from 12 to 11 effective as of the Meeting. Please refer to page 14 in this Proxy Statement for important information about the qualifications and experience of each of the following director nominees. Each director nominee has consented to being named in this Proxy Statement and has agreed to serve if elected.
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Name | Age | Director Since | Background | Independent | Audit | CRG | EH&S | HRC | Reserves | |||||||||
PETER DEA (CHAIR) | 68 | 2010 | – Oil & Gas Exploration & Production – Former CEO | ✓ |
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MEG GENTLE | 47 | 2020 | – LNG Development – Former CEO and CFO | ✓ | M |
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HOWARD MAYSON | 69 | 2014 | – Reserves Evaluation and Commercialization – Global Lead/Country Manager | ✓ |
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BRENDAN MCCRACKEN | 46 | 2021 | – President & CEO of Ovintiv Inc. |
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LEE MCINTIRE | 73 | 2014 | – Engineering & Construction – Alternative Energy – Former CEO | ✓ |
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KATHERINE MINYARD | 46 | 2021 | – Energy Equity Research – Equity Investing | ✓ |
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STEVE NANCE | 65 | 2019 | – Oil & Gas Exploration & Production – Former CEO | ✓ |
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SUZANNE NIMOCKS | 62 | 2010 | – Strategic Consulting – Corporate Director | ✓ | M | C |
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GEORGE PITA | 60 | 2021 | – Infrastructure Construction – Current CFO | ✓ | M |
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THOMAS RICKS | 68 | 2019 | – Wealth Management – Former Chief Investment Officer | ✓ |
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BRIAN SHAW | 68 | 2013 | – Global Capital Markets – Equity Investing – Former CEO | ✓ | M |
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BRUCE WATERMAN | 71 | 2010 | – Agriculture and Oil & Gas Exploration & Production – Former CFO | ✓ | C |
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C = Chair
M = Member
Peter A. Dea Age: 70 Colorado Independent Director Since 2010 Chairman Since 2020 | Sippy Chhina Age: 57 Alberta Independent Director Since 2024 Committees: Audit and Reserves | Meg A. Gentle Age: 49 Texas Independent Director Since 2020 Committees: Audit and HRC | Ralph Izzo Age: 66 New Jersey Independent Director Since 2022 Committees: CRG and EH&S |
Howard J. Mayson Age: 71 Colorado Independent Director Since 2014 Committees: Reserves (Chair) | Brendan M. McCracken Age: 48 Colorado Non-Independent Director Since 2021 | Steven W. Nance Age: 67 Texas Independent Director Since 2019 Committees: EH&S (Chair) | Suzanne P. Nimocks Age: 64 Texas Independent Director Since 2010 Committees: CRG (Chair) and Audit |
George L. Pita Age: 62 Florida Independent Director Since 2021 Committees: Audit (Chair) and Reserves | Thomas G. Ricks Age: 70 Texas Independent Director Since 2019 Committees: HRC (Chair) and CRG | Brian G. Shaw Age: 70 Ontario Independent Director Since 2013 Committees: Audit and EH&S |
The Board recommends that you vote FOR the election of each of our eleven nominees to serve as directors of the companyCompany until the earlier of (i) Ovintiv’s 20232025 Annual Meeting of Shareholders; (ii) in each case, their successor is duly elected and qualified; or (iii) in each case, their death, resignation or removal.
Ovintiv Inc. | 2024 Proxy Statement | 9 |
Item 2. Advisory Vote to Approve Compensation of Named Executive Officers
At the company’s 2018Company’s 2023 annual meeting, shareholders voted, on a non-binding advisory basis, to hold say-on-pay votes annually. That recommendation has been adopted by Ovintiv and, accordingly, we are asking our shareholders to approve, on ana non-binding advisory basis, our named executive officer (“NEO”) compensation for fiscal year 2021.2023 as disclosed pursuant to Item 402 of Regulation S-K.
The Board recommends that you vote FOR this resolution because it believes that the policies and practices described in the “Compensation Discussion and Analysis”“Executive Compensation” section beginning on page 3743 of this Proxy Statement are effective in achieving the company’sCompany’s goals of aligning pay to performance and to NEOs’ levels of responsibility, encouraging our NEOs to remain focused on both short and long-term financial and strategic goals, and linking NEO performance to shareholder value.
Item 3. Increase Share Reserve of Omnibus Incentive Plan
Pursuant to the Omnibus Incentive Plan of Ovintiv Inc., dated February 13, 2019 (as amended January 24, 2020 and as summarized on Schedule A to this Proxy Statement and attached as Schedule D to this Proxy Statement, the “Omnibus Incentive Plan”) and as required by applicable securities laws and stock exchange rules, shareholder approval is required to increase the maximum number of shares of Ovintiv common stock that may be issued from treasury or purchased on the open market and delivered to plan participants in settlement of Awards (as defined herein) granted thereunder (the “Share Reserve”). We are asking shareholders to approve an increase to the Share Reserve of 6,000,000 shares of Ovintiv common stock, so that the maximum number of shares of Ovintiv common stock that may be issued from treasury or purchased on the open market and delivered to participants under the Omnibus Incentive Plan will be 12,000,000 shares.
The grant of Awards under the Omnibus Incentive Plan is an integral component of the compensation of Ovintiv employees and a key part of our short and long-term incentive pay. A significant portion of Ovintiv employees’ compensation in 2021 was in the form of Awards, which vest over a period of not less than one year and which may be settled in cash or shares of Ovintiv common stock either issued from treasury or purchased on the open market. This form of compensation (i) provides competitive pay opportunities to attract, motivate and retain employees through multi-year vesting periods; (ii) provides performance-based compensation that aligns the interests of management and shareholders without excessive risk; (iii) rewards employee performance in achieving Ovintiv’s long-term corporate goals and shareholder objectives; and (iv) aligns Ovintiv with corporate governance and compensation best practices. Based on historical Award issuances and settlements, as well as Ovintiv’s current share price, we anticipate that this requested Share Reserve increase, if approved, will provide for sufficient settlement of Awards in shares of Ovintiv common stock through 2027. The Board recommends that you vote FOR this amendment.
Item 4.Ratify PricewaterhouseCoopers LLP as Independent Auditors
We are asking our shareholders to ratify the appointment of PricewaterhouseCoopers LLP as our independent auditors for fiscal year 2022.2024. A summary of fees paid to PricewaterhouseCoopers LLP for services provided in fiscal years 20212023 and 20202022 is provided on page 6364 of this Proxy Statement. The Board recommends that you vote FOR this ratification.
If you have any questions or require any assistance with voting your shares, please contact our proxy solicitor:
INNISFREE M&A INCORPORATED
Shareholders may call toll-free: (877) 750-8332750-0537
Banks and brokers may call collect: (212) 750-5833
Shareholder’s Guide to Voting at the Annual Meeting
The Board is soliciting your proxy to vote your shares at the Meeting on the following matters:
Item | Board Recommendation | |||
1 | Election of Directors | FOR each director nominee nominated herein | ||
2 | Advisory Vote to Approve Compensation of Named Executive Officers | FOR | ||
3 | ||||
Ratify PricewaterhouseCoopers LLP as Independent Auditors | FOR |
10 | 2024 Proxy Statement | Ovintiv Inc. |
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
| Board Refreshment +2 |
Two new members have been added to the Board in the past two years, both of which are independent. The Board | ||||||||||||
AGE DIVERSITY
INDEPENDENCE
| How We Build an Effective Board While identifying potential Board members, the The CRG Committee continually assesses the Board and the skill sets, experiences and characteristics represented by the directors to ensure alignment with the Company’s strategic objectives and evolving needs and expectations. Our directors bring a broad range of backgrounds to the Board, with more than half of independent directors coming from industries outside of exploration and production (“E&P”). Ovintiv is fortunate to have a Board that balances institutional knowledge and fresh perspectives. The CRG Committee believes that the Board should be continually refreshed to introduce new ideas and skill sets that contribute to enhanced Board decision-making and position the Company to effectively adapt to evolving market conditions. In 2020, the CRG Committee reinforced a multi-year strategic Board refreshment process to review Board composition and diversity, assess key skill sets and future requirements aligned with the Company’s strategic plan, ensure the governance processes around renewal were robust and assist with the identification of future qualified director candidates. This led to the addition of Ralph Izzo in September 2022 and Sippy Chhina in January of 2024. Both of these recent Board additions bring a depth of experience outside of the traditional E&P space. Our Board’s thorough director orientation and continuing education process complement this refreshment process. The CRG Committee has a process to ensure qualified nominees recommended by shareholders will receive timely consideration. Please see “Shareholder Proposals and Director Nominations” on page 81 of this Proxy Statement for more details. |
How We Build an Effective Board
The CRG Committee continually assesses the Board and the skill sets, experiences and characteristics represented by the directors to ensure alignment with the company’s strategic objectives and evolving needs and expectations. Ovintiv is fortunate to have a Board that balances experienced institutional knowledge and fresh perspectives. Our directors bring a broad range of backgrounds to the Board, with more than half of independent directors coming from industries outside of exploration and production (“E&P”).
The CRG Committee believes that the Board should be continually refreshed to introduce new ideas and skill sets that contribute to enhanced Board decision-making and position the company to effectively adapt to evolving market conditions. At its meeting in April 2020, the CRG Committee reinforced a multi-year strategic Board refreshment process. The Committee evaluated third-party consultants to support this process. In June 2020, Heidrick & Struggles, a leading consulting firm, was engaged to review Board composition and diversity, assess key skill sets and future requirements aligned with the company’s strategic plan, ensure the governance processes around renewal were robust and assist with the identification of future qualified director candidates. This led to the addition of Meg Gentle to the Board in December 2020, Katherine Minyard in March 2021 and George Pita in July 2021. All three of these recent Board additions bring a depth of experience outside of traditional E&P. Board refreshment is an ongoing process. Our Board’s thorough director orientation and continuing education process complement this refreshment process.
Since 2019, the company has added five new independent directors with three of the five adding gender or racial and ethnic diversity to the boardroom. In the course of identifying potential Board members, the CRG Committee takes into consideration a variety of factors including age, gender, ethnicity, professional background, leadership, corporate governance experience, and past industry experiences. Other important considerations include leadership style, judgment and demonstrated strategic thinking. The CRG Committee balances these considerations against its ongoing assessment of the existing directors’ skills, experiences, and characteristics. The CRG Committee and our Board recognize the value of bringing a diverse range of perspectives to the work of overseeing the risks and strategic direction of our company. In 2021, the Board adopted a Diversity of Board Candidates Policy, which commits the CRG Committee to include female and racially or ethnically diverse candidates in each director search undertaken.
The CRG Committee has a process to ensure qualified nominees recommended by shareholders will receive timely consideration. Please see “Shareholder Proposals and Director Nominations” on page 65 of this Proxy Statement for more details.
12 | 2024 Proxy Statement | Ovintiv Inc. |
The skills and expertise of an effective Board need to align with the strategic priorities of Ovintiv. The below skills matrix is tested and assessed regularly and evolves with the needs of the organization. As shown below, each director nominee brings a balance of perspectives.
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| Gentle |
| Mayson |
| Nance |
| Pita |
| Shaw | ||||||||||||
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Skills and Expertise |
| Chhina |
| Izzo |
| McCracken |
| Nimocks |
| Ricks |
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| Accounting and Finance: Experience with financial services or complex financial transactions, including both debt and equity. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||
| Environment, Sustainability & Safety: Environmental/sustainability experience to identify and adapt to strategic and emerging issues necessary to support long-term value creation and ensure the business remains responsible and sustainable in the long-term. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||
| Financial Reporting: Audit committee financial expert as defined by the U.S. Securities and Exchange Commission. | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||
| Governance/Public Company Board Experience: Governance experience gained through board service or experience as a public company executive. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||
| Human Capital Management: Expertise in compensation design and oversight of social issues, including diversity and inclusion. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||
| Industry: Industry experience that provides valuable perspectives on issues specific to the energy sector as well as managing the operations of the complex E&P business. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||
| Public Policy and Government Relations: Experience in government relations, public policy or regulatory matters. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||
| Reserves: Experience reviewing externally disclosed natural gas and oil reserves and resources data. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||
| Risk Management: Experience identifying, managing and mitigating corporate risks including cybersecurity. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||
| Technology & Innovation: Experience identifying and capturing new technological advances applicable to our business. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||
| CEO/Sr. Officer Experience: Experience working as a CEO or Senior Executive of a public company. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||
Background | ||||||||||||||||||||||||
Tenure | 14 | 0 | 3 | 1 | 10 | 3 | 5 | 14 | 3 | 5 | 11 | |||||||||||||
Age | 70 | 57 | 49 | 66 | 71 | 48 | 67 | 64 | 62 | 70 | 70 | |||||||||||||
Diversity | ||||||||||||||||||||||||
Gender | M | F | F | M | M | M | M | F | M | M | M | |||||||||||||
Race/Ethnicity | ✓ | ✓ |
Ovintiv Inc. | 2024 Proxy Statement | 13 |
Director Nominees
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PETER A. DEA Age: 70 Colorado Independent Director Since 2010 Chairman Since 2020 |
BACKGROUND
Mr. Dea has a
Recognized
Through personal and professional efforts, Mr. Dea has prioritized sustainability and stewardship. He initiated the Emissions Savings Program at Western Gas Resources in 2008 and, with his family, established a foundation that supports education, science, and conservation causes. He is | |||||
CURRENT ROLES • Executive Chairman, • President and • Director, Antero Midstream Corporation (2018-present) • Director, Liberty Energy Inc. (2018-present) • Director, Crested Butte Land |
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• CEO and Chairman, Barrett Resources Corporation • Trustee, The Nature Conservancy • Trustee and Chair, Denver Museum of Nature & Science • Co-Chair, ACE Scholarships • Director, Echostar Communications Inc. • Trustee, Western Colorado University | |||||
EDUCATION AND CREDENTIALS
• MSc, Geology, University of Montana • BA, Geology, Western Colorado University
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RECOGNITION • Western Energy Alliance Wildcatter of the Year • Member of the Rocky Mountain Oil and Gas Hall of Fame, the All American Wildcatters and The Explorers Club • Colorado Oil & Gas Association Lifetime Achievement Award • Western Colorado University Award for Excellence • American Association of Petroleum Geologists “Heritage of the Petroleum Geologist” Honoree |
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Environment,
& Safety | Governance/ Public Company Board Experience | Human Capital Management | Industry | Public Policy & Government Relations | Reserves | Risk Management | Technology & Innovation | CEO/ Sr. Officer Experience |
14 | 2024 Proxy Statement | Ovintiv Inc. |
SIPPY CHHINA Age: Alberta Independent Director Committees: Audit and
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BACKGROUND
Ms. In Ms. Chhina’s professional career, she was either the lead audit partner, a quality assurance partner, or the lead advisory partner serving some of Deloitte LLP’s largest public company energy sector clients. Ms. Chhina’s experience includes companies operating in sub sectors such as oil and gas, power, renewables, and related infrastructure across North America, South America, and Africa. She was also the lead audit partner for investees of large Canadian and U.S. private equity and pension funds operating either directly or through infrastructure investments in the energy and related services sector. In her client facing role, Ms. Chhina provided services with respect to audits, securities offerings, IPOs/MBOs, M&A transaction advisory, corporate structuring, business model design, master data management, supply chain, and ESG with a focus on energy transition and decarbonization strategies. Ms. Chhina is known for growth-focused leadership, her strength as a strategic advisor, her ability to lead transformative change, to simplify complex issues which coupled with her stakeholder-centric approach, helped her successfully advise and guide organizations through ever evolving market, regulatory and stakeholder expectations. She is fluent in English, Hindi, and Punjabi. | |||
CURRENT ROLES • Board Ready Women • Board Director • Treasurer EDUCATION • Inter Commerce Degree, Sambalpur University, 1985 • Certified Management Accountant Designation 1989, Society of Management Accountants of Alberta • National Honor Roll, 1992 Uniform Final Exam for Chartered Accountant Designation, CPA Canada • Deloitte Leadership Development Program, Columbia University Graduate School of Business, December 2006 • ICD-Rotman Directors Education Program, April 2023, Institute of Corporate Directors, ICD.D, June 2023 RECOGNITION • Deloitte Board Readiness Certification, June 2023 • Calgary Influential Women in Business (CIWB) Award Recipient, 2023 | PREVIOUS ROLES • Director, Deloitte LLP • Compensation Committee • Board Chair Nomination Committee • Co-Chair Strategy, Ethics and Risk Committee • Co-Chair Audit Quality Committee • Partner, Deloitte LLP, • Various client service and leadership roles • Partner, BDO LLP • Various roles from staff accountant to senior manager • Financial Consultant, various entities, including construction, financial services, and professional service organizations • Financial Analyst to Controller, Bayford Merrifield Inc. • Mount Royal University Foundation, • Governor, 2017-2020 • Governance Committee • Calgary Petroleum Club • Board of Governors • Finance Committee • Membership Committee • Marketing Committee • Communications Committee • President (Chair) and Past President (Past Chair) |
SKILLS AND EXPERTISE | ||||||||||||||
Accounting & Finance | Environment, Sustainability & Safety | Financial Reporting | Governance/ Public Company Board Experience | Industry | Reserves | Risk Management | Technology & Innovation |
Ovintiv Inc. | 2024 Proxy Statement | 15 |
MEG A. GENTLE Age: 49 Texas Independent Director Since 2020 Committees: Audit and HRC | BACKGROUND Ms. Gentle is an energy expert with focused experience in finance, business development and gas marketing Ms. Gentle’s experience with HIF Global gives her unique insights into climate risks, mitigation and strategy, among other sustainability-related initiatives. Prior to HIF,
She now shares her international expertise in her non-profit work, serving on the Board of Directors for the Atlantic Council, a think tank devoted to shaping policy choices and
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CURRENT ROLES
• Executive Director, HIF Global • Director, The Atlantic Council • Director, Council on Foreign Relations • Executive Committee (Board of Visitors), University of Texas MD Anderson Cancer Center • Director, Casa de Esperanza de los Niños (House of Hope for Children) | PREVIOUS ROLES
• President and CEO, Tellurian Inc. • Director, Tellurian Inc. (2016-2020) • Director, Cheniere Energy Partners L.P. • Various leadership roles with Cheniere Energy, Inc., including: • EVP Marketing •
• Senior VP – Strategic Planning & Finance • Director, U.S. India Business Council • Director, White House Historical Association | |||||
EDUCATION AND CREDENTIALS
• BA, Economics and International Affairs, James Madison University | RECOGNITION • |
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Accounting & Finance | Environment, Sustainability & Safety | Financial Reporting | Governance/ Public Company Board Experience | Human Capital Management | Industry | Public Policy & Government Relations | Reserves | Risk Management | CEO/ Sr. Officer Experience |
16 | 2024 Proxy Statement | Ovintiv Inc. |
RALPH IZZO Age: 66 New Jersey Independent Director Since 2022 Committees: CRG and EH&S |
BACKGROUND
Mr. Izzo is a well-known leader in the utility industry and a national energy policy expert. He brings 30-plus years of experience in strategic planning, finance, risk management and public policy to the Board, as well as experience leading large, regulated companies. Mr. Izzo most recently served as the Executive Chair of Public Service Enterprise Group Incorporated (PSEG), having previously retired as its President and CEO. In this leadership role, he was a strategic advisor to the publicly traded, diversified energy holding company, whose largest subsidiary is a utility company providing affordable, reliable energy to major U.S. East Coast cities. He has diverse experiences across the energy industry, including roles with alternative and emerging energy technologies. This unique background provides valuable perspectives on the future global transition to lower carbon solutions. He is also a member of the U.S. Department of Energy’s Fusion Energy Sciences Advisory Committee and the former chair of the Nuclear Energy Institute. Throughout his career, Mr. Izzo has been committed to leading companies and communities toward a more sustainable path. He worked alongside PSEG’s 12,500 employees, delivering on the company’s vision for universal access to cleaner, more reliable, resilient and affordable energy. Today, he engages in energy policy matters and advises several utility and energy companies on a more energy-efficient future. | |||
CURRENT ROLES • Director, Bank of New York (BNY) Mellon (2020-present) • Director, TerraPower, LLC • Member, U.S. Department of Energy’s Fusion Energy Sciences Advisory Committee • Director, Liberty Science Center • Director, New Jersey Performing Arts Center • Dean’s Advisory Board, Columbia University School of Engineering and Applied Science • Trustee, Princeton University Andlinger Center on Energy and Environment • Trustee, Peddie School • Director, Community Food Bank of New Jersey • Director, CMS Energy (2023-present) | PREVIOUS ROLES • Executive Chair, Public Service Enterprise Group Incorporated (PSEG) (2022) • Director, The Williams Companies, Inc. • Director and Chair, Nuclear Energy Institute • Director, Edison Electric Institute • Director, Nuclear Energy Insurance LLC • Chair, New Jersey Chamber of Commerce • Chair, Board of Governors, Rutgers University • Various leadership roles with PSEG (2006-2022), including: • Chairman of the Board • President and CEO • President and COO | |||
EDUCATION AND CREDENTIALS • PhD, Applied Physics, Columbia University • MBA, Finance, Rutgers Business School • MS, Mechanical Engineering, Columbia University • BS, Mechanical Engineering, Columbia University | RECOGNITION • Elected to the New Jersey Hall of Fame • 2022 Recipient of the US Energy Award, US Energy Association • 2022 Lifetime Achievement Award, Platts Global Energy • Proclamations of Thanks and Congratulations for Career Accomplishments, Governor of New Jersey and the State Senate |
SKILLS AND EXPERTISE | ||||||||||||||||||
Accounting & Finance | Environment, Sustainability & Safety | Governance/ Public Company Board Experience | Human Capital Management | Industry | Public Policy & Government Relations | Risk Management | Technology & Innovation | CEO/ Sr. Officer Experience |
Ovintiv Inc. | 2024 Proxy Statement | 17 |
HOWARD J. MAYSON Age: 71 Colorado Independent Director Since 2014 Committees: Reserves (Chair) | BACKGROUND Mr. Mayson is a senior E&P executive with over 45 years in business management, leadership and technology underpinned by a strong technical and operational background. His career has touched most of the world’s major oil and gas producing areas. He has been
He has shown strong commitment to environmental protection in professional settings, particularly overseas, where standards can be lax. On a
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CURRENT ROLES
• • Director of private energy-related companies in the U.K. and Canada • Science Advisory Board Member, Koloma | PREVIOUS ROLES
• Various leadership roles with BP p.l.c., including: • SVP, E&P Technology • CEO, BP Russia • • •
• Chair, Industrial Advisory Board, Institute of Petroleum Engineering • International operational roles early in career with Schlumberger | |||||
EDUCATION AND CREDENTIALS
• • MSc, Mechanical Engineering, MIT | ||||||
• BEng (Hons), Engineering, University of Sheffield | RECOGNITION • Awarded an Honorary Doctor of Engineering by Scotland’s Heriot-Watt University in 2008 |
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Environment, Sustainability & Safety | Governance/ Public Company Board Experience | Human Capital Management | Industry | Public Policy & Government Relations | Reserves | Risk Management | Technology & Innovation | CEO/ Sr. Officer Experience |
18 | 2024 Proxy Statement | Ovintiv Inc. |
BRENDAN M. MCCRACKEN Age: 48 Colorado Non-Independent Director Since2021 |
BACKGROUND
Mr. McCracken
Under Mr. Mr. McCracken is a driven, disciplined and | |||
CURRENT ROLES • President & CEO, Ovintiv Inc. • Director and Executive Committee Member, American Exploration and Production Council • Governor and Executive Committee Member, Canadian Association of Petroleum
• Director, American Petroleum Institute | PREVIOUS ROLES • Various senior leadership roles with Ovintiv, including: • President • EVP, Corporate Development and External Affairs • VP, General Manager of Canadian Operations • VP, Investor Relations • Director, Calgary Philharmonic Orchestra | |||
• • BSc, Mechanical Engineering, Queen’s University • P. Eng. Member, Association of Professional Engineers and Geoscientists of Alberta |
• Oilweek magazine Rising Star •
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Reserves | Risk Management | Technology & Innovation | CEO/ Sr. Officer Experience |
| 2024 Proxy Statement | 19 |
Age: Texas Independent Director Committees: EH and Reserves |
BACKGROUND
Mr. Nance is In his more than 10-year career as a corporate director, he has
After retiring from his corporate career, Mr. Nance leveraged his significant C-level experience to build a consulting business providing coaching and leadership development to executives, including assisting with succession planning and strategic direction.
He oil and gas industry. | ||||||||||||
CURRENT ROLES
• President and Manager, Steele Creek Energy, LLC • Member, Society of Petroleum Engineers | PREVIOUS ROLES
• Director, Cloud Peak Energy, Inc. (2010-2019) • • Trustee, Independent Petroleum Association of America (IPAA) • President, Chairman and CEO, XPLOR Energy • President, Peoples Energy Production Company • • • Dean’s Council, Whitacre College of Engineering, Texas Tech • Director, The | ||||||||||||
EDUCATION AND CREDENTIALS
• BSc, Petroleum Engineering, Texas Tech University • Registered Professional Engineer (Inactive Status), Texas | RECOGNITION • Academy of Petroleum Engineering inductee, Texas Tech • Distinguished Engineer honoree, Texas Tech • Harold Winkler Lifetime Achievement Award for Petroleum Engineering, Texas Tech | ||||||||||||
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Accounting
| Environment,
& Safety | Governance/ Public Company Board Experience | Human Capital Management | Industry | Reserves | Risk Management | Technology & Innovation | CEO/ Sr. Officer Experience |
20 | 2024 Proxy Statement | Ovintiv Inc. |
SUZANNE P. NIMOCKS Age: 64 Texas Independent Director Since 2010 Committees: CRG (Chair) and Audit | BACKGROUND Ms. Nimocks has She is also a director
Previously a
Ms. Nimocks | ||||||||||||
CURRENT ROLES • Director, Brookfield Infrastructure Partners (2022-present) • Lead Independent Director (2012-present) and Chair of the |
• • Co-founder and Advisory Board Member, Advancing Women Executives • Trustee, Texas Children’s Hospital | PREVIOUS ROLES
• Director, Valaris plc • Director, ArcelorMittal (2011-2022) • Director, AXIP Energy Services • Various leadership roles with McKinsey & Company, including: • Director (Senior Partner) • Managing Partner, Houston Office • Member, Global Senior Partner Election Committee • • • Trustee, St. John’s School • Director, United Way of the Texas Gulf Coast • Trustee, Kay Bailey Hutchison Center for Energy Law and Business, University of Texas | |||||||||||
EDUCATION AND CREDENTIALS
•
• BA, Economics, Tufts University | RECOGNITION • 2023, 2018 Most Influential Directors, Women Inc. • Most Influential Women in Energy, Houston Business Journal |
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Accounting
| Environment,
& Safety | Governance/ Public Company Board Experience | Human Capital Management | Industry | Risk Management | Technology & Innovation |
Ovintiv Inc. | 2024 Proxy Statement | 21 |
GEORGE L. PITA Age: 62 Florida Independent Director Committees: Audit |
BACKGROUND
Mr.
Prior to his experience at MasTec, | ||||||
• Advisor, MasTec, Inc. • Advisory Board, Accounting School, University of |
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• Director and Chair of Audit Committee, Goodwill Industries of South Florida • Member, Latino Corporate Directors Association • Member, Digital Directors Network (group specializing in cybersecurity and other technology matters) |
• EVP and CFO, Stuart Weitzman Holdings LLC • Various leadership roles with Perry Ellis International, including: • EVP and CFO • SVP Strategic Planning • SVP Direct Retail, ASI and wholesale golf operations • Various leadership roles with Sunglass Hut International, including: • EVP and CFO • VP Finance, Chief Accounting Officer • VP International Business Development • Various roles with Arthur Andersen, including Senior Audit Manager • Director and Chair of Audit Committee, Jupiter Acquisition Corp. | |||||
EDUCATION AND CREDENTIALS
• BA, Accounting, University of Miami | |||||||
RECOGNITION • 2022 Latino Leaders, CSuite Magazine • 2021’s 100 Most Influential Latinos in Energy, Latino Leaders • Top-Rated CFO in 2022 & 2023, Institutional Investor Magazine, Mid Cap E&C (MasTec also rated Most Honored Company, IR Program in Mid Cap E&C, 2022 & 2023) • All American Executive Team (MasTec), Institutional Investor Magazine, Mid Cap E&C, 2018, 2019, 2020, 2021, 2022, 2023 • 2017 Turnaround Achievement Award (MasTec), South Florida Business Journal |
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Accounting & Finance | Environment,
| Financial Reporting | Governance/ Public Company Board Experience | Industry | Risk Management | Technology & Innovation | CEO/ Sr. Officer Experience |
22 | 2024 Proxy Statement | Ovintiv Inc. |
THOMAS G. RICKS Age: 70 Texas Independent Director Committees: and CRG |
BACKGROUND
Mr. Ricks
Mr. Ricks uses his capital management expertise to chair Ovintiv’s Human Resource and Compensation Committee, and frequently engages with shareholders, soliciting feedback on the Company’s executive compensation program which is shared around the Board table. He served as
Mr. Ricks joined the Ovintiv Board in 2019 following the acquisition of Newfield Exploration Company. He | ||||
CURRENT ROLES
| • Director, Sensei Biotherapeutics, Inc. (2015-present) EDUCATION AND CREDENTIALS • MBA, University of Chicago • BA, Economics, Trinity College |
• Director,
• • CEO, The University of Texas Investment Management Company • Various leadership roles with the University of Texas System, including: • Vice Chancellor, Asset Management • Executive Director, Finance and Private Investments • Director, Newfield Exploration Company (1992-2019) • Director, Argus Pharmaceuticals
• Director, BDM International •
• Investment Advisor, St. David’s Foundation |
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Accounting & Finance | Environment,
& Safety | Financial Reporting | Governance/ Public Company Board Experience | Human Capital Management | Reserves | Risk Management | CEO/ Sr. Officer Experience |
Ovintiv Inc. | 2024 Proxy Statement | 23 |
BRIAN G. SHAW Age: Ontario Independent Director Committees: Audit and EH&S |
BACKGROUND
Mr. Shaw brings deep experience in capital markets and investing as the former Chairman and CEO of a league-leading capital markets business at CIBC, one of Canada’s major banks. From the initial perspective of the trading desk, he ultimately Mr. Shaw shares his investment strategy expertise gained from building and executing arbitrage strategies and leading an institutional equities and research division. His role as CEO also gave him experience managing an international regulatory environment and leading a significant workforce of 2,500 full-time employees. Now a private investor, he continues to apply his experiences identifying emerging opportunities and appreciating the investor mindset, serving | |||||
CURRENT ROLES
• Director,
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• Director, NuVista Energy Ltd. (2014-2022) • Director, Patheon Inc. • Director, PrairieSky Royalty Ltd. • Director, Lakeview Mortgage Funding Inc. • Director, Toronto Symphony Orchestra • Director, Toronto CFA Society | |||||
EDUCATION AND CREDENTIALS
• MBA, University of Alberta • BComm, University of Alberta
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RECOGNITION • Serves on multiple Advisory Boards within asset management and financial advisory, including Sionna Investment Managers, Prime Quadrant, Hillmount Mortgage Fund, Fulcra Asset Management, among others • Regular speaker on the University circuit, including the Inaugural Trader in Residence, McMaster University |
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Accounting & Finance | Governance/
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Notes:
Human Capital Management |
& Government Relations | Risk Management | CEO/ Sr. Officer Experience |
24 | 2024 Proxy Statement | Ovintiv Inc. |
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The Board is responsible for overseeing Ovintiv’s overall business and for stewarding our operations and strategic objectives in a manner consistent with shareholder interests.
Overview of Board Leadership Structure
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Independent Chair of the Board | ||
| All of our directors are independent, with the exception of our CEO | |
| Active participation and engagement by all directors | |
All of the members of the Audit, CRG, EH&S, HRC and Reserves Committees are independent | ||
More than half of the members of the Audit Committee are financial experts |
The responsibilities of the Board are more fully described in the Board of Directors’ Mandate.Charter. The Board of Directors’ Mandate,Charter, as well as the mandatescharters of each Board committee, are available on Ovintiv’s website athttps://www.ovintiv.com/mandates-guidelines/.under the “Investors-Corporate Governance” tab.
Our Governance Best Practices
| Declassified | | Separation of Board Chair and CEO roles | | No interlocking directorships with other reporting issuers | |||||||||
| Chair of the Board, committee chairs and committee members are all independent | | No dual-class shares | | Prohibition on hedging or pledging for directors and executives | |||||||||
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| Evaluation of Board, committee and director performance periodically conducted by a third party |
| Executive incentive compensation clawback policy updated in 2023 to comply with new NYSE requirements | Annual advisory vote on executive compensation | ||||||||||
Executive sessions held by independent directors at regular Board and committee meetings | Business Code of Conduct and comprehensive ethics and compliance program |
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Majority voting for directors in uncontested elections | Stock ownership guidelines for executives and directors | |||||||||||||
Proxy access right | | Proactive shareholder engagement |
Independent Chair of the Board
Our bylaws mandaterequire the separation of the Chief Executive Officer (“CEO”) and the Chair of the Board (the “Board Chair”) roles. The Board Chair must be independent and is appointed by the Board based on a CRG Committee recommendation. The Board Chair is responsible for ensuring the effective functioning of the Board and serves as the primary liaison between
independent directors and
the CEO. In addition, the Board Chair serves as an Ex Officio member of the Board’s committees. In that capacity, the Board Chair may vote when necessary to achieve a quorum. General guidelines for the Board Chair, committee Chairs and CEO are available on our website athttps://www.ovintiv.com/mandates-guidelines/.under the “Investors-Corporate Governance” tab.
Ovintiv Inc. | 2024 Proxy Statement | 25 |
Director Independence
Our Corporate Governance Guidelines require that the Board consist of a majority of independent directors. Apart from our CEO, all of our director nominees are independent. To determine whether a director is “independent,” the Board applies the following criteria:
the director must not have a disqualifying relationship, as specified by applicable securities laws and stock exchange rules; and
• | the director must not have a disqualifying relationship, as specified by applicable securities laws and stock exchange rules; and |
• | the director must not have a material relationship with Ovintiv directly, or as an officer, shareholder or partner of an organization that has a relationship with Ovintiv. |
the director must not have a material relationship with Ovintiv directly, or as an officer, shareholder or partner of an organization that has a relationship with Ovintiv.
When determining director independence, the Board does not consider transactions: (i) involving less than $120,000; (ii) with entities for which a director or immediate family member served only as a director or trustee; and (iii) with entities in which a director’s or an immediate family member’s only interest is less than a 10% ownership interest.
Risk Oversight
OurAs part of its charter, the Board is responsible for oversight of Ovintiv’s enterprise risk oversight, including regular monitoringmanagement processes, which are governed by the Corporate Risk Management Policy. The policy ensures that short-term, intermediate-term and long-term risks are evaluated properly and the policy outlines the Board’s responsibilities to ensure (i) a system is in place to identify the efficacy ofprincipal risks to Ovintiv and the best practical procedures are in place to monitor and mitigate these risks and (ii) review Ovintiv’s keyquarterly corporate risk management programs, control processes,reports and cybersecurity protocols.related material that identifies the significant risks to Ovintiv and the mitigation strategies in place. Board committees help dischargefulfill this responsibility by managing issues under their purview and reporting regularly to the full Board. The committees review policies and practices relevant to their assigned risk
management areas and work closely with management to ensure key
controls and processes are in place. The Board receives regular updates from its standing committees on individual categories of risk and receives a report periodically from the Chair of the Audit Committee about oversight efforts and coordination. The Board consults with outside experts and advisors to re-assess the Company’s risk environment (see “Director Continuing Education in 2023” on page 32), and the Audit Committee regularly receives updates from the Vice-President and Deputy General Counsel, who reports directly to the General Counsel.
Our Audit Committee has direct oversight on the Company’s information security protocols, policies, and practices. The Board has also invited a privacy and data security expert to give the Board an update on cybersecurity and corporate best practices for information security.
26 | 2024 Proxy Statement | Ovintiv Inc. |
Committee Oversight of ESGRisk, Environmental, Social and Governance Matters
OversightIn addition to Board oversight of ESG matters is a key componentOvintiv’s enterprise risk processes, each committee has direct oversight of the Board’s risk oversight function. specific risks including, cybersecurity, environmental, social, governance and sustainability.
The Board also offers guidance on Ovintiv’s ESG disclosure, including ourdisclosures and its annual Sustainability Report.
Three Below is an overview of the risk oversight responsibilities of each of the Board’s standing committees provide further oversight and guidance on different aspects of Ovintiv’s key ESG issues.committees.
| CRG Committee | EH&S Committee | ||
The Audit Committee has direct oversight of the Company’s financial information and holds regular executive sessions with the Company’s external auditors. The Audit Committee’s Charter expressly includes direct oversight of cybersecurity and the Company’s compliance with it. | The CRG Committee actively assists the Board in | The EH&S Committee |
HRC Committee | Reserves Committee | |||||
The HRC Committee’s
| The Reserves Committee oversees the evaluation and disclosure of information with respect to the Company’s oil and gas reserves. It also meets regularly with the Company’s independent qualified reserves auditors. |
Ovintiv Inc. | 2024 Proxy Statement | 27 |
Continuing ESGAwareness and Education
In addition to providing risk oversight, of ESG matters, the Board is committed to listening to shareholders’ and other key stakeholders’ input on sustainability and ESGother important issues. Recent shareholder engagement led to a commitment by Ovintiv to publish additional disclosures in the Company’s Sustainability Report,
Recently,addressing the Company’s methane detection and measurement methodologies. In July of 2023, the Board traveled to our operations in the PermianUinta basin to interact first-hand with employees driving emissions advancement.reduction through efficiencies and innovation.
The Board members were hosted by the Company’s Uinta operations team and joined by the ELT and members of the senior leadership team. On their visit, the directors heard from several subject matter experts as they toured our recently completed pad locations – learning about drilling, completions, artificial lift strategies and advanced facility designs.
In addition to learning about recent innovations and achievements, the Board also heard about the mutually beneficial relationship our staff have with the neighboring Ute Tribe – engaging with the community in many capacities including, land, regulatory, government relations and social investment.
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Our Board currently has five committees, all comprised of independent directors. The Board may appoint special ad hoc committees from time to timetime-to-time for important matters.
AUDIT COMMITTEE | |||||
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(Chair) | Members: Sippy Chhina Meg A. Gentle Suzanne P. Nimocks
Brian G. Shaw | The Audit Committee is responsible for oversight of Ovintiv’s internal financial control systems and Ovintiv’s internal and external auditors and provides corresponding recommendations to the Board. In addition, the Audit Committee is responsible for overseeing the |
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Each Audit Committee member
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28 | 2024 Proxy Statement | Ovintiv Inc. |
CORPORATE RESPONSIBILITY AND GOVERNANCE COMMITTEE
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SUZANNE P. NIMOCKS (Chair) |
| Members: Ralph Izzo Thomas G. Ricks | The CRG Committee has primary stewardship over governance matters on behalf of the Board, evaluating emerging topics and ensuring continued good governance of the |
| Each CRG Committee member meets the independence requirements of the NYSE.
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ENVIRONMENT, HEALTH AND SAFETY COMMITTEE | ||||
STEVEN W. NANCE (Chair)
| Members:
Brian G. Shaw | The EH&S Committee assists the Board in fulfilling its oversight role with respect to occupational health, safety, environment and security of personnel and physical assets. The EH&S Committee has overall responsibility for reviewing and reporting to the Board on
|
HUMAN RESOURCES AND COMPENSATION COMMITTEE | ||||
THOMAS G. RICKS (Chair) | Members: Meg A. Gentle Howard J. Mayson
| The HRC Committee is responsible for providing strategic oversight of human resource matters, including executive compensation and the social aspects of the
|
|
Each of our HRC Committee members qualifies as a “Non-Employee Director” under Rule 16b-3 under the Securities Exchange Act of 1934 (the “Exchange Act”) | |||||
| No HRC Committee member is a current or former officer or employee of Ovintiv or any of its subsidiaries or has a relationship that must be described under the SEC rules relating to disclosure of related person transactions.
|
Ovintiv Inc. | 2024 Proxy Statement | 29 |
RESERVES COMMITTEE | ||||
| ||||
HOWARD J. MAYSON (Chair)
| Members:
Steven W. Nance George L. Pita
| The Reserves Committee oversees our internal qualified reserves evaluators, as well as any independent qualified reserves evaluators or auditors retained to evaluate and audit management’s reserves reporting procedures and our oil and natural gas reserves and resources data. The Reserves Committee also reviews Ovintiv’s annual reserves estimates prior to public disclosure. |
Committee Charters
The charters for Ovintiv’s audit committee, corporate responsibility and governance committee, environmental, health and safety committee, human resources and compensation committee and reserves committee can be found on our website at www.ovintiv.com under the “Investors-Corporate Governance” tab.
Evolving Committee Responsibilities
We recognize the increased expectations for more sustainable performance by our industry on the part of all stakeholders. To ensure our companyCompany remains positioned to effectively respond to these expectations, we regularly review our governance practices and structures. In addition to our ongoing Board refreshment process, we continue to be thoughtful about rotating committee membership and leadership in order to appropriately balance experience and continuity with fresh and diverse perspectives and viewpoints. Following the Annual Meeting, Mr. Pita will take over the role as Chair of the Audit Committee and Mr. Waterman will continue to serve as a member of the Audit Committee.
30 | 2024 Proxy Statement | Ovintiv Inc. |
How We Maintain an Effective Board
Board Assessment Process
The CRG Committee conducts an annual assessment to review the Board’s strengths and identify opportunities for improvement. This assessment provides feedback from each director for both the Board
as a whole and for each director individually.
whole. Periodically, a third party will be engaged to assist with the assessment process. Following the assessment conducted in 2021, theThe Board Chair identified the following actions to support for continuous improvement.
Feedback from Assessment |
| Informed Actions | ||
• | Board refreshment is an ongoing process, and the Board aims to enhance its diversity of skills, backgrounds, and perspectives, as this | |||
• Differentiate Ovintiv as an industry leader in | The Board is committed to effective
| |||
• | The Board is committed to supporting the | |||
• Support risk management and information security | The Board is committed to supporting the Company in leveraging technology | |||
• Build upon existing processes for human capital management and succession planning | At both the Board and executive levels, the Board will continue to build upon a proven track record of effective succession planning, with independent Board members working closely and intentionally with internal successors. |
Director Orientation
The CRG Committee oversees new director orientation, as well as continuing education for existing directors. New directors are partnered with experienced Board members to facilitate their orientation, build rapport, and ensure timely engagement in Board activities. New directors
participate in a series of
introductory meetings with the Board Chair, committee chairs, the CEO and ELT and are provided with an overview of Ovintiv’s business and the role and expectations of the Board and its committees.
Ovintiv Inc. | 2024 Proxy Statement | 31 |
Director Continuing Education
Shareholders are best served by a Board comprised of individuals who are knowledgeable about current and emerging industry, regulatory and governance matters. To ensure continuing director education, Ovintiv:
| Encourages and provides subscriptions to leading
| ||
|
| ||
| Provides detailed Board materials in advance of each meeting for pre-read and analysis; and
| ||
| Hosts field visits for the Board to enhance focus on
|
As part of the Board’s annual evaluation process, directors are asked to identify areas where they feel continuing education would be helpful.
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| Multi-industry trade association updates were provided on key business, trade, health, geopolitical and other risks affecting both the oil and gas sector and the broader market.
| |
| Interactive session with
| |
| Interactive sessions with Company investors. | |
Interactive session with banking experts on commodity prices and macroeconomic considerations. | ||
Interactive session with guest speaker from Sustainable Governance Partners LLC, offering governance trends among major U.S. institutional investors.
| ||
| Interactive session with safety expert from the Krause Bell Group. | |
Continuing education and seminars were conducted via the Institute of Corporate Directors (Canada), the National Association of Corporate Directors (U.S.), Financial Executives International, the Eurasia Group, the Canadian Public Accountability Board, Deloitte, Women Corporate Directors, and the Global Risk Institute.
| ||
|
| |
Regular presentation of market fundamentals, including commodity price outlooks, basis differentials, geopolitical and other macro environment considerations and risks.
| ||
| Regular analysis and presentations from the HRC Committee’s independent compensation consultant on key executive compensation matters.
| |
| Presentation
|
Director Attendance
In 2021,2023, Ovintiv held five regularly scheduled Board meetings, threefour special meetings and 22 committee meetings. In aggregate, director attendance at Board and
committee meetings in 20212023 was 98.2%.99%, and no director attended fewer than 90% of the meetings of the Board in 2023. All directors serving at the time, attended the 20212023 annual meeting of shareholders.
Directors are expected to attend each meeting of the Board and their assigned committees. Ovintiv’s directors review all materials sent to them in advance of meetings and engage in regular evaluation of the Board’s effectiveness, its committees and individual directors.
32 | 2024 Proxy Statement | Ovintiv Inc. |
Director attendance at Board and committee meetings for the year ended December 31, 20212023 is summarized below.
| Board | Audit | CRG | EH&S | HRC | Reserves | Total | |||||||||||||||||||||
Peter A. Dea | 8 of 8 | – | – | – | – | – | 8 of 8 | |||||||||||||||||||||
Fred J. Fowler(1) | 4 of 4 | – | – | 1 of 2 | 2 of 2 | – | 7 of 8 | |||||||||||||||||||||
Meg A. Gentle | 8 of 8 | 5 of 5 | – | – | 5 of 5 | – | 18 of 18 | |||||||||||||||||||||
Howard J. Mayson | 8 of 8 | – | – | – | 5 of 5 | 3 of 3 | 16 of 16 | |||||||||||||||||||||
Brendan M. McCracken(2) | 2 of 2 | – | – | – | – | – | 2 of 2 | |||||||||||||||||||||
Lee A. McIntire | 8 of 8 | – | 6 of 6 | 3 of 3 | 5 of 5 | – | 22 of 22 | |||||||||||||||||||||
Margaret A. McKenzie(1) | 4 of 4 | 2 of 2 | – | – | 2 of 2 | – | 8 of 8 | |||||||||||||||||||||
Katherine L. Minyard(3) | 5 of 5 | – | 2 of 2 | – | 2 of 2 | 9 of 9 | ||||||||||||||||||||||
Steven W. Nance | 7 of 8 | – | – | 3 of 3 | – | 2 of 3 | 12 of 14 | |||||||||||||||||||||
Suzanne P. Nimocks | 8 of 8 | 5 of 5 | 6 of 6 | – | – | – | 19 of 19 | |||||||||||||||||||||
George L. Pita(4) | 3 of 3 | 3 of 3 | – | – | – | 1 of 1 | 7 of 7 | |||||||||||||||||||||
Thomas G. Ricks | 8 of 8 | – | 6 of 6 | – | 5 of 5 | – | 19 of 19 | |||||||||||||||||||||
Brian G. Shaw | 8 of 8 | 5 of 5 | – | 3 of 3 | – | – | 16 of 16 | |||||||||||||||||||||
Douglas J. Suttles(5) | 6 of 6 | – | – | – | – | – | 6 of 6 | |||||||||||||||||||||
Bruce G. Waterman | 8 of 8 | 5 of 5 | – | – | – | 3 of 3 | 16 of 16 |
Notes:
Board | Audit | CRG | EH&S | HRC | Reserves | Total | ||||||||||||||||||||||
Peter A. Dea | 9 of 9 | 9 of 9 | ||||||||||||||||||||||||||
Meg A. Gentle | 9 of 9 | 5 of 5 | 5 of 5 | 19 of 19 | ||||||||||||||||||||||||
Ralph Izzo | 9 of 9 | 3 of 4 | 4 of 5 | 16 of 18 | ||||||||||||||||||||||||
Howard J. Mayson | 9 of 9 | 5 of 5 | 3 of 3 | 17 of 17 | ||||||||||||||||||||||||
Brendan M. McCracken | 9 of 9 | 9 of 9 | ||||||||||||||||||||||||||
Lee A. McIntire(1) | 9 of 9 | 4 of 4 | 5 of 5 | 5 of 5 | 23 of 23 | |||||||||||||||||||||||
Katherine L. Minyard(2) | 9 of 9 | 5 of 5 | 3 of 3 | 17 of 17 | ||||||||||||||||||||||||
Steven W. Nance | 9 of 9 | 5 of 5 | 3 of 3 | 17 of 17 | ||||||||||||||||||||||||
Suzanne P. Nimocks | 9 of 9 | 5 of 5 | 4 of 4 | 18 of 18 | ||||||||||||||||||||||||
George L. Pita | 9 of 9 | 5 of 5 | 3 of 3 | 17 of 17 | ||||||||||||||||||||||||
Thomas G. Ricks | 9 of 9 | 4 of 4 | 5 of 5 | 18 of 18 | ||||||||||||||||||||||||
Brian G. Shaw | 9 of 9 | 5 of 5 | 5 of 5 | 19 of 19 |
Notes:
(1) |
|
(2) |
|
|
|
|
Executive Sessions
Independent directors of the Board meet without the presence of management during executive session at regularly scheduled Board and committee meetings.
Engagement with Management
Directors interact regularly with the ELT and key personnel on an informal basis. In conjunction with Board meetings, receptions are frequently held with a cross-section of employees who have been identified for the company’sCompany’s leadership development program
or who have contributed
to significant corporate initiatives. This informal interaction allows Board members to learn more about companyCompany operations and culture and provides insightsinsight to theour leaders of tomorrow.
Succession Planning
The Board and ELT work together on a robustcomprehensive executive succession planning effort that assessesto assess the competencies, experience, leadership capabilities and development opportunities of each potential candidate. In 2021, Brendan McCracken was promoted to Chief Executive Officer, after holding several diverse senior leadership positions at Ovintiv. The Board retained Heidrick & Struggles to do a market scan of external candidates and Mr. McCracken’s promotion to Chief Executive Officer is an example of the Board and ELT’s robust succession planning. In addition,
approximately eight individuals from across the company are selected annually for in-depth leadership development utilizing the services of a third-party organizational development service, assigned an executive mentor and coached through on-the-job opportunities. The progress of participants through the program and in the years after are stewarded by the ELT and overseen by the HRC Committee. FourAll six members of our ELT including Mr. McCracken, have participatedwere promoted to their current role from within the organization.
Each individual was identified years prior to these promotions for enhanced leadership development and broad business exposure. Formal succession planning and development is overseen by the Board and includes rotations in this program.responsibility, third-party coaching, assigned internal mentors and regular exposure to the Board and ELT.
Ovintiv Inc. | 2024 Proxy Statement | 33 |
Diversity, Equity and Inclusion
We value diversity at all levels of the organization and intentionally work to increase the diversity of our team. By participating in programs that provide science, technology, engineering, mathematics and other opportunities to junior high and high school students, we believe we can foster the diversity of our future employee pool and contribute to the building blocks that will advance and strengthen our industry over time.
Our human resources team hosts a cross-functional working group to explore and address employee and talent pipeline diversity challenges, including diversity in field, technical and trade positions. This group develops recommendations for how Ovintiv can create a more diverse and inclusive workplace. In addition, the companyCompany supports an employee-led organization called LINK – Leveraging Inclusion, Networking and Knowledge, which evolved from a gender-focused diversity group to one of broader inclusion. LINK was the recipient of the 2023 ALLY Energy GRIT Award for The Best Affinity Group (employee resource group). This award represents ALLY’s highest honor for internal employee groups, companies, start-ups, and schools. LINK’s efforts bring employees together and promote diversity of thought and perspectives, supporting inclusion for all employees through connection and educational opportunities. In 2023, LINK hosted a panel discussion
featuring members of our Board of Directors, focused on identifying trends, leveraging opportunity, and reducing risk. The event provided an opportunity for the directors to interact informally with employees experiencing the Company culture firsthand.
In addition to LINK, the companyCompany facilitates professional development opportunities for women and other minority
underrepresented groups through targetedfocused succession planning, unconscious bias training and other employee development and mentoring programs. The Board actively monitors best practices and corporate governance developments relating to DE&I. In 2020, this process led to the adoption of a Diversity of Board Candidates Policy to promote the identification and consideration of diverse director candidates for nomination to the Board. Under the policy, the CRG Committee has formally committed to including gender and racially or ethnically diverse candidates in each director search undertaken by the committee.
Ovintiv also has a long history of female leadership. Three of our executive officers reporting to the CEO are women and since 2013,2010, at least two of our Board members have been women. This year, four of our director nominees are either gender or ethnically/racially diverse.
RECIPIENT OF THE 2023 ALLY ENERGY GRIT AWARD FOR THE BEST
AFFINITY GROUP
34 | 2024 Proxy Statement | Ovintiv Inc. |
Majority Voting
Ovintiv’s bylaws provide for majority voting in uncontested elections of directors. In any such election, if a director nominee receives a greater number of “against” than “for” votes, then he or she must offer to tender his or her resignation to the Board. The CRG Committee will then make a
recommendation as to such resignation to the Board, which will act on the CRG Committee’s recommendation within 90 days after certification of the election results. A director whose resignation is being considered cannot participate in Board or CRG Committee deliberations on the matter.
Business Code of Conduct
Ovintiv’s Business Code of Conduct (the “Code”) and other corporate governance policies and practices apply to its directors, officers, employees, and contractors. The Code outlines expectations regarding ethical business conduct, legal and regulatory compliance, details how to report
suspected or actual wrongdoing, and expressly
prohibits retaliation for “good-faith”“good faith” reporting. All employees must recommit to the Code and its related policies annually. Training on the Code and key compliance issues are provided at all levels of the organization.organization, and in-person training was provided to all field offices in 2023.
Our Integrity Hotline
• | Our 24-7 Integrity Hotline facilitates anonymous reporting of potential Code violations. Hotline reports are received by an external third party and directed to Ovintiv’s Ethics and Compliance Team for handling. |
• | Management reports to the |
Any waiver of the Code in respect to an officer or director must be approved by the Board and promptly disclosed as required by law. The Board has not waived any aspect of the Code to date, and Ovintiv has never been required to make a public filing regarding a departure from the Code.
Annual Commitment
| ||||||
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Each year, employees formally commit to follow the Code, acknowledging their understanding of and compliance with its key policies. 100%
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A copy of the Code is available on our website at www.ovintiv.com.under “Policies and Practices”.
Human Rights Policy
Our Human Rights Policy recognizes the fundamental importance of human rights. Our respect for human rights is embodied in the way we operate and conduct ourselves – guided by our foundational values of safety, sustainability, integrity, respect and trust. Our policy provides for anonymous reporting of concerns through a third party hosted Integrity
Hotline. Reported issues are investigated and addressed as necessary. We consider any violation of our human rights standards to be a serious offense that may result in termination, penalties, or other legal consequences.
A copy of our Human Rights Policy is available on our website by searching for “Policies and Practices”.
Ovintiv Inc. | 2024 Proxy Statement | 35 |
Ovintiv’s commitment to human rights is guided by international and national standards, including:
| UN Guiding Principles on Business and Human Rights | |
| UN Universal Declaration of Human Rights | |
| The UN’s recognition that access to water is a human right | |
| International Labor Organization’s Declaration of Fundamental Principles and Rights at Work | |
| Organization for Economic Development Guidelines for Multi-national Enterprises | |
| All applicable federal, state and provincial laws and regulations |
Securities Trading and Insider Reporting Policy
Our directors, officers, employees and contractors (“Covered Persons”) are subject to our Securities Trading and Insider Reporting Policy. This policy prohibits insider trading, establishes guidelines for regular blackout periods related to financial reporting, and outlines trading restrictions and reporting obligations applicable to directors and certain officers. The policy also expressly prohibits Covered Persons from:
purchasing financial instruments that allow a Covered Person to own Ovintiv securities without the full financial risks of ownership (i.e. hedging), including by selling a “call option” or purchasing a “put option”;
• | purchasing financial instruments that allow a Covered Person to own Ovintiv securities without the full financial risks of ownership (i.e. hedging), including by selling a “call option” or purchasing a “put option”; |
selling Ovintiv securities they do not own, have not fully paid for, or have no right to own (i.e. a “short sale”);
• | selling Ovintiv securities they do not own, have not fully paid for, or have no right to own (i.e. a “short sale”); |
holding Ovintiv securities in a margin account or otherwise pledging Ovintiv securities as collateral for a loan;
• | holding Ovintiv securities in a margin account or otherwise pledging Ovintiv securities as collateral for a loan; |
entering into equity monetization transactions involving any Ovintiv securities which (i) have not yet vested or (ii) constitute all or part of such Covered Person’s requirements (if any) under Ovintiv’s minimum share ownership guidelines; and
• | entering into brokerage arrangements that might result in a sale at a time when they are not permitted to trade, other than a safe harbor plan as described in the policy; and |
entering into brokerage arrangements that might result in a sale at a time when they are not permitted to trade.
• | entering into “short swing” transactions wherein a Covered Person buys and sells or sells and buys Ovintiv securities within a six-month period. |
Related Person Transactions
Ovintiv has written procedures in place for reviewing related person transactions as defined under Item 404 of Regulation S-K (each, a “Related Person Transaction”). In general, the companyCompany will only enter into or ratify a Related Person Transaction when the Board, acting through the CRG Committee, determines that such Related Person Transaction is reasonable and fair to the company.Company. When determining whether a Related Person Transaction is reasonable and fair to the company,Company, the CRG Committee considers, among other things, the evaluation of the transaction by employees directly involved and the recommendation of the company’s Company’s
Chief Financial Officer. In
addition, any Related Person Transaction involving an executive officer must be pre-approved by the CEO and any Related Person Transaction involving the CEO or a beneficial owner of more than five percent of the company’sCompany’s outstanding common stock must be submitted to the Audit Committee for approval. Ongoing Related Person Transactions are reviewed annually for reasonableness and fairness to the companyCompany or as changes to such arrangements are made.
There areSince January 1, 2023, there were no reportable Related Person Transactions under Item 404 of Regulation S-K.
Other Board Memberships and Interlocks
SeveralOvintiv believes that each of our director nominees are also directors should devote sufficient time and attention to Board duties and to otherwise fulfill the responsibilities required of other public companies. Thedirectors. In 2023, the Board does not impose express limitsadopted an overboarding policy that prohibits directors from serving on the number ofmore than three other public company boards on which our directors may serve. However, the Board Chair regularly discusses expectations and time commitments associated with Board membership with prospective candidates and incumbent directors.
The Board does not have a formal policy on interlocking directorships. No two director nominees sit on the same board of directors of any other reporting issuer, and no nominee sits on the board of a company that hasboards. Prior to accepting an executive serving on the Board. None of Ovintiv’s executive officers servedinvitation to serve on the board of directors of another company, whether
public or compensation committeeprivate, directors are required to notify the Chair of any entitythe CRG Committee and the General Counsel and cannot accept a new directorship until being advised by the CRG Committee that had one or more of its executive officers servingservice on the Board or HRC Committee during 2021.other board is appropriate and no conflicts of interest exist with a director’s service on Ovintiv’s board.
36 | 2024 Proxy Statement | Ovintiv Inc. |
Change of Circumstance
In 2023, Ovintiv adopted a director change of circumstance policy which requires a director to immediately tender their resignation to the Chair of the CRG Committee when a director resigns or materially changes their position with their employer
or becomes aware of circumstances that may adversely reflect upon the director or the Company. The CRG Committee will consider the circumstances, and may in certain cases, recommend that the Board accept the director’s resignation.
Our Director Compensation Program
Our director compensation program is designed to reflect current market practices and enhance alignment with shareholder interests. Independent directors do not receive performance-based compensation, benefits, or other perquisites from Ovintiv. Mr. McCracken receives no compensation from Ovintiv in his capacity as a director. Director compensation is 75%69% equity based and at the director’s election, the remaining 25%31% may be taken in Deferred Share Units (“DSU”) or cash.
In 2023, Directors received annual compensation in the amounts shown below.
Annual Retainer | $USD | |||||
Chair of the Board |
| |||||
Board Member |
| |||||
Audit Committee Chair |
| |||||
HRC Committee Chair |
| |||||
| 15,000 | |||||
Other Committee Chairs |
| 10,000 |
Elements of Director Compensation
Compensation Element | Weighting | Description | |||
Director Restricted Share Units (“Director RSUs”) under the | • Granted annually • • Equity granted prior to 2022, settle on the earlier of three years from the grant date or retirement from the Board
| ||||
Cash or | • Paid or granted in quarterly installments • Pro-rated for periods of partial service
|
Note:
(1) | At the director’s election, this remaining portion of the annual retainer can be |
Ovintiv Inc. | 2024 Proxy Statement | 37 |
In 2021,2023, directors received Director RSU grants in the amounts shown below.
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Name | FMV of Grant | 2023 Director RSU Grants(1) | ||||||
Peter A. Dea | $331,276 | 10,060 | ||||||
Meg A. Gentle | $200,017 | 6,074 | ||||||
Ralph Izzo | $200,017 | 6,074 | ||||||
Howard J. Mayson | $200,017 | 6,074 | ||||||
Lee A. McIntire(2) | $200,017 | 6,074 | ||||||
Katherine L. Minyard(3) | $200,017 | 6,074 | ||||||
Steven W. Nance | $200,017 | 6,074 | ||||||
Suzanne P. Nimocks | $200,017 | 6,074 | ||||||
George L. Pita | $200,017 | 6,074 | ||||||
Thomas G. Ricks | $200,017 | 6,074 | ||||||
Brian G. Shaw | $199,530 | 6,077 |
Notes:
(1) | The number of Director RSUs |
(2) |
|
(3) |
|
Director RSUs granted under the terms of the Omnibus Incentive Plan are currently settled in shares.
20212023 Director Compensation Table
Annual compensation of directors for the year ended December 31, 2021,2023, is summarized in the following table.
Name | Fees Earned(1) ($) | 75% Share Based Awards ($) | 25% Cash/DSU ($) | All Other Compensation(2)(3) ($) | Total ($) | Fees Earned or Paid in Cash(1)(2) ($) | Stock Awards($) | All Other Compensation(2)(3) ($) | Total ($) | |||||||||||||||||||||||||||
Peter A. Dea(4) | 400,000 | 300,000 | 100,000 | 390 | 400,390 | |||||||||||||||||||||||||||||||
Peter A. Dea(4) | ||||||||||||||||||||||||||||||||||||
Peter A. Dea(4) | ||||||||||||||||||||||||||||||||||||
Peter A. Dea(4) | 133,750 | 331,276 | 408 | 465,434 | ||||||||||||||||||||||||||||||||
Meg A. Gentle(4) | 225,000 | 168,750 | 56,250 | 390 | 225,390 | |||||||||||||||||||||||||||||||
Meg A. Gentle(4) | ||||||||||||||||||||||||||||||||||||
Meg A. Gentle(4) | ||||||||||||||||||||||||||||||||||||
Meg A. Gentle(4) | 90,000 | 200,017 | 408 | 290,425 | ||||||||||||||||||||||||||||||||
Ralph Izzo(4) | ||||||||||||||||||||||||||||||||||||
Ralph Izzo(4) | ||||||||||||||||||||||||||||||||||||
Ralph Izzo(4) | ||||||||||||||||||||||||||||||||||||
Ralph Izzo(4) | 90,000 | 200,017 | 408 | 290,425 | ||||||||||||||||||||||||||||||||
Howard J. Mayson | ||||||||||||||||||||||||||||||||||||
Howard J. Mayson | ||||||||||||||||||||||||||||||||||||
Howard J. Mayson | ||||||||||||||||||||||||||||||||||||
Howard J. Mayson | 235,000 | 176,250 | 58,750 | 390 | 235,390 | 100,000 | 200,017 | 408 | 300,425 | |||||||||||||||||||||||||||
Brendan M. McCracken(5) | – | – | – | – | – | |||||||||||||||||||||||||||||||
Brendan M. McCracken(5) | ||||||||||||||||||||||||||||||||||||
Brendan M. McCracken(5) | ||||||||||||||||||||||||||||||||||||
Brendan M. McCracken(5) | – | – | – | – | ||||||||||||||||||||||||||||||||
Lee A. McIntire | 225,000 | 168,750 | 56,250 | 285 | 225,285 | |||||||||||||||||||||||||||||||
Lee A. McIntire(4)(6)(7) | ||||||||||||||||||||||||||||||||||||
Lee A. McIntire(4)(6)(7) | ||||||||||||||||||||||||||||||||||||
Lee A. McIntire(4)(6)(7) | ||||||||||||||||||||||||||||||||||||
Lee A. McIntire(4)(6)(7) | 90,000 | 200,017 | 277 | 290,294 | ||||||||||||||||||||||||||||||||
Katherine L. Minyard | 215,313 | 168,750 | 46,563 | 292 | 215,605 | |||||||||||||||||||||||||||||||
Katherine L. Minyard(8) | ||||||||||||||||||||||||||||||||||||
Katherine L. Minyard(8) | ||||||||||||||||||||||||||||||||||||
Katherine L. Minyard(8) | ||||||||||||||||||||||||||||||||||||
Katherine L. Minyard(8) | 90,000 | 200,017 | 408 | 290,425 | ||||||||||||||||||||||||||||||||
Steven W. Nance | ||||||||||||||||||||||||||||||||||||
Steven W. Nance | ||||||||||||||||||||||||||||||||||||
Steven W. Nance | ||||||||||||||||||||||||||||||||||||
Steven W. Nance | 235,000 | 176,250 | 58,750 | 390 | 235,390 | 100,000 | 200,017 | 408 | 300,425 | |||||||||||||||||||||||||||
Suzanne P. Nimocks | 235,000 | 176,250 | 58,750 | 390 | 235,390 | |||||||||||||||||||||||||||||||
Suzanne P. Nimocks | ||||||||||||||||||||||||||||||||||||
Suzanne P. Nimocks | ||||||||||||||||||||||||||||||||||||
Suzanne P. Nimocks | 105,000 | 200,017 | 408 | 305,425 | ||||||||||||||||||||||||||||||||
George L. Pita | ||||||||||||||||||||||||||||||||||||
George L. Pita | ||||||||||||||||||||||||||||||||||||
George L. Pita | ||||||||||||||||||||||||||||||||||||
George L. Pita | 112,500 | 84,375 | 28,125 | 195 | 112,695 | 110,000 | 200,017 | 408 | 310,425 | |||||||||||||||||||||||||||
Thomas G. Ricks | 240,000 | 180,000 | 60,000 | 390 | 240,390 | |||||||||||||||||||||||||||||||
Thomas G. Ricks | ||||||||||||||||||||||||||||||||||||
Thomas G. Ricks | ||||||||||||||||||||||||||||||||||||
Thomas G. Ricks | 105,000 | 200,017 | 408 | 305,425 | ||||||||||||||||||||||||||||||||
Brian G. Shaw(4) | 225,000 | 168,750 | 56,250 | 390 | 225,390 | |||||||||||||||||||||||||||||||
Bruce G. Waterman(4) | 245,000 | 183,750 | 61,250 | 390 | 245,390 | |||||||||||||||||||||||||||||||
Fred J. Fowler(6) | 187,140 | 168,750 | 18,390 | 92 | 187,232 | |||||||||||||||||||||||||||||||
Margaret A. McKenzie(6) | 187,140 | 168,750 | 18,390 | 130 | 187,270 | |||||||||||||||||||||||||||||||
Douglas J. Suttles(7) | – | – | – | – | – | |||||||||||||||||||||||||||||||
Brian G. Shaw(2) | ||||||||||||||||||||||||||||||||||||
Brian G. Shaw(2) | ||||||||||||||||||||||||||||||||||||
Brian G. Shaw(2) | ||||||||||||||||||||||||||||||||||||
Brian G. Shaw(2) | 90,000 | 199,530 | 408 | 289,938 |
Notes:
(1) | Fees earned |
(2) |
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Amounts originally paid in Canadian dollars have been converted to U.S. dollars using exchange rate of C$1.00 = US$ |
Represents cost of Company-provided life insurance coverage. |
(4) | Elected to receive all or a portion of fees in DSUs in lieu of cash. |
(5) | Mr. McCracken receives no compensation in his capacity as a director. See “Compensation Discussion and Analysis” beginning on page |
(6) | Mr. |
(7) | Mr. |
(8) | Ms. Minyard retired |
Director DSU Plan
Although DSUs vest immediately, they cannot be redeemed until the holder retires from the Board.
Redeemed DSUs are paid in cash, less applicable withholding taxes, with value determined by
38 | 2024 Proxy Statement | Ovintiv Inc. |
multiplying the number of DSUs by the current market value of a share of Ovintiv common stock.
Retiring directors may redeem DSUs all at once or in stages, provided they do so prior to December 15 of the year
following their departure from the Board. Directors are credited with dividend-equivalent DSUs wheneverwhen a dividend is paid on shares of Ovintiv common stock.
Director Share Ownership Guidelines
To ensure alignment with shareholders, independent directors must maintain an ownership stake in Ovintiv. Each independent director is required to purchase shares of Ovintiv common stock or hold DSUs or Director RSUs with an aggregate value of at least five
times the director’s
annual cash compensation within five years of the later of (i) the director’s appointment to the Board and (ii) January 1, 2022.Board. Shares of Ovintiv common stock held directly or beneficially through a nominee, DSUs, and Director RSUs all count towards the guidelines.
Guideline compliance is evaluated annually. If a director falls into non-compliance solely due to a share price decline, we permit a grace period of one year to restore compliance. All of our directors either meet the ownership guidelines or are on track to meet the ownership guidelines within the five years from appointment as is required under our guidelines.guidelines at the recommendation of Ovintiv’s compensation consultant .
2022 Director Compensation Structure
In October 2021,2023, the Board approved changes to our director compensation structure effective January 1, 2022. 2024.
These changes were based on advice from the Board’s outside compensation consultant and external benchmarking, and were made in order to align our structure with feedback received from shareholders and maintain market competitiveness.
For 2022, the Board approved a new director compensation structure, intended to enhance shareholder alignment and reflect current market practices. Under the new structure,
Beginning in 2024, directors will receive annual compensation of $290,000$305,000 consisting of $90,000$95,000 in cash (or at the Director’sdirector’s discretion, DSUs) and $200,000$210,000 in RSUs. The Board Chairman will receive annual compensation of $465,000,$480,000, consisting of $133,750$138,750 in cash (or at the Chairman’s discretion, DSUs) and $331,250$341,250 in director RSUs.
Committee Chairs will receive an additional cash retainer (or at each Committee Chair’s discretion, DSUs):
Audit Committee Chair: | $ | 20,000 | ||
Human Resources and Compensation Committee Chair: | $ | 15,000 | ||
Corporate Responsibility and Governance Committee Chair: | $ | 15,000 | ||
Environmental, Health and Safety Committee Chair: | $ | 10,000 | ||
Reserves Committee Chair: | $ | 10,000 |
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| 2024 Proxy Statement | 39 |
To enhance shareholder alignment, Director share ownership requirements will change to five (5) times annual cash compensation. The share ownership requirement must be achieved within five (5) years of the later of (i) appointment to the Board and (ii) January 1, 2022.
Securities Ownership of Officers and Directors
The following table provides information with respect to the ownership of securities by each director, each NEO named in the Summary Compensation Table on page 50,54, and the directors and executive officers as a group, all as of February 28, 2022.March 8, 2024. Unless otherwise noted, voting power and investment power are exercisable solely by the named
person, and no shares of Ovintiv common stock were pledged as security by such person. As of February 28, 2022,March 8, 2024, all of the company’sCompany’s directors and officers meet, or are on track to meet, the ownership guidelines within the required period.
Name of Beneficial Owner | Aggregate Number of Shares and Stock Options Beneficially Owned(1) | RSUs, PSUs, and Stock Options(2) | Total Ownership | Percentage of Outstanding Shares of Common Stock | ||||||||||||
Corey D. Code | 86,568 | 179,948 | 266,516 | * | ||||||||||||
Peter A. Dea | 15,850 | 39,997 | 55,847 | * | ||||||||||||
Meg A. Gentle | – | 8,007 | 8,007 | * | ||||||||||||
Greg D. Givens | 94,224 | 148,936 | 243,160 | * | ||||||||||||
Howard J. Mayson | 26,604 | 22,911 | 49,515 | * | ||||||||||||
Brendan M. McCracken | 79,540 | 315,046 | 394,586 | * | ||||||||||||
Lee A. McIntire | 20,767 | 21,937 | 42,704 | * | ||||||||||||
Katherine L. Minyard | 11,000 | 7,098 | 18,098 | * | ||||||||||||
Steven W. Nance | 21,613 | 22,270 | 43,883 | * | ||||||||||||
Suzanne P. Nimocks | 17,522 | 23,232 | 40,754 | * | ||||||||||||
George L. Pita | – | 2,638 | 2,638 | * | ||||||||||||
Thomas G. Ricks | 212,415 | 22,438 | 234,853 | * | ||||||||||||
Brian G. Shaw | 23,736 | 21,678 | 45,414 | * | ||||||||||||
Bruce G. Waterman | 112,302 | 23,604 | 135,906 | * | ||||||||||||
Renee Zemljak | 108,651 | 141,122 | 249,773 | * | ||||||||||||
All Directors and executive officers as a group | 867,155 | (3) | 1,106,731 | (4) | 1,973,886 | 0.76% |
Name of Beneficial Owner | Aggregate Number of Shares and Stock Options Beneficially Owned(1) | RSUs, PSUs, and Stock Options(2) | Total Ownership | Percentage of Outstanding Shares of Common Stock | ||||||||||||||||
Sippy Chhina | – | – | – | * | ||||||||||||||||
Corey Code | 162,332 | 144,338 | 306,670 | * | ||||||||||||||||
Peter Dea | 74,807 | 65,022 | 139,829 | * | ||||||||||||||||
Meghan Eilers | 31,916 | 64,989 | 96,905 | * | ||||||||||||||||
Meg Gentle | 18,964 | 13,903 | 32,867 | * | ||||||||||||||||
Greg Givens | 186,776 | 167,346 | 354,122 | * | ||||||||||||||||
Ralph Izzo | 7,291 | 2,140 | 9,431 | * | ||||||||||||||||
Howard Mayson | 45,066 | 17,651 | 62,717 | * | ||||||||||||||||
Brendan McCracken | 183,737 | 508,511 | 692,248 | * | ||||||||||||||||
Lee McIntire(3) | 53,950 | 35,325 | 89,275 | * | ||||||||||||||||
Steven Nance | 53,348 | 8,226 | 61,574 | * | ||||||||||||||||
Suzanne Nimocks | 52,036 | 29,604 | 81,640 | * | ||||||||||||||||
George Pita | 10,573 | 2,766 | 13,339 | * | ||||||||||||||||
Tom Ricks | 186,886 | 8,401 | 195,287 | * | ||||||||||||||||
Brian Shaw | 38,231 | 40,679 | 78,910 | * | ||||||||||||||||
Renee Zemljak | 104,639 | 129,193 | 233,832 | * | ||||||||||||||||
All directors and executive officers as a group(4) | 1,287,618 | (5) | 1,320,083 | (6) | 2,607,701 |
Notes:
* | Less than 1% of issued and outstanding shares of Ovintiv common stock as of |
(1) | The amounts set forth in this column represent, in respect of each applicable director and officer, the sum of: (i) the number of shares of Ovintiv common stock in respect of which such director or officer had sole or shared voting or investment power as of |
(2) | The amounts set forth in this column represent, in respect of each applicable director and officer, the number of shares of Ovintiv common stock that would be received by each applicable director or officer upon the stock-settlement of the RSUs, PSUs and stock options, as applicable, held by each such director or officer pursuant to the Omnibus Incentive Plan with a vesting date after |
(3) | Lee A. McIntire notified the Board that he will retire from the Board effective May 1, 2024. |
(4) | As of March 8, 2024, these numbers include 17 persons, 11 independent directors, and 6 executive officers. |
(5) | Shares of Ovintiv common stock beneficially owned by unlisted executive officer Rachel |
The number of shares of Ovintiv common stock that would be received by unlisted executive officer Rachel |
Delinquent Section 16(a) Reports
On March 9, 2022, Form 4s were filed on behalf of certain members of our Board and ELT which included the late reporting of the acquisition of certain dividend equivalent RSUs and/or DSUs in lieu of the receipt of dividends paid, in accordance with the Omnibus Incentive Plan, on RSUs and/or DSUs previously awarded to such individuals. These acquisitions occurred quarterly between March 30, 2020 and December 31, 2021, and specifically included the following transactions, each of which should have been reported on a Form 4: 8 transactions, by Mr. Code; 8 transactions by Mr. Dea; 4 transactions by Ms. Gentle; 8 transactions by Mr. Givens; 8 transactions by Mr. Mayson; 8 transactions by Mr. McCracken; 8 transactions by Mr. McIntire, 4 transactions by Ms. Minyard; 7 transactions by Ms. Moore; 8 transactions by Mr. Nance; 8 transactions by Ms. Nimocks; 2 transactions by Mr. Pita; 8 transactions by Mr. Ricks; 8 transactions by Mr. Shaw; 8 transactions by Mr. Waterman; and 8 transactions by Ms. Zemljak. In addition, Ms. Moore’s Form 4 included the late reporting of a previously undisclosed disposition from July 1, 2021 in which certain of her RSUs vested and were cash settled.
40 | 2024 Proxy Statement | Ovintiv Inc. |
Outstanding Equity Awards Held by Directors at Fiscal Year End
The following table shows DSUs and Director RSUs directly or indirectly held, controlled, or directed by the individual directors as of December 31, 2021.2023.
Director | DSUs (#) and Market or Payout Value(1) | Director RSUs (#) and Market or Payout Value(2) | DSUs (#) and Market or Payout Value(1) | Director RSUs (#) and Market or Payout Value(2) | ||||||||||||
Peter A. Dea | 42,907 ($1,454,189) | 45,411 ($1,530,351) | ||||||||||||||
Peter A. Dea | ||||||||||||||||
Peter A. Dea | ||||||||||||||||
Peter A. Dea | 50,356 ($2,177,479) | 14,003 ($615,008) | ||||||||||||||
Meg A. Gentle | 1,884 ($63,491) | 8,007 ($269,836) | ||||||||||||||
Meg A. Gentle | ||||||||||||||||
Meg A. Gentle | ||||||||||||||||
Meg A. Gentle | 5,580 ($245,062) | 7,877 ($345,962) | ||||||||||||||
Ralph Izzo | ||||||||||||||||
Ralph Izzo | ||||||||||||||||
Ralph Izzo | ||||||||||||||||
Ralph Izzo | 1,693 ($74,366) | – | ||||||||||||||
Howard J. Mayson | ||||||||||||||||
Howard J. Mayson | ||||||||||||||||
Howard J. Mayson | ||||||||||||||||
Howard J. Mayson | 8,987 ($304,722) | 28,325 ($954,553) | 9,425 ($406,203) | 8,226 ($361,299) | ||||||||||||
Brendan M. McCracken(3) |
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Brendan M. McCracken(3) | ||||||||||||||||
Brendan M. McCracken(3) | ||||||||||||||||
Brendan M. McCracken(3) | – | – | ||||||||||||||
Lee A. McIntire | ||||||||||||||||
Lee A. McIntire | ||||||||||||||||
Lee A. McIntire | ||||||||||||||||
Lee A. McIntire | 24,132 ($818,244) | 27,121 ($913,978) | 27,002 ($1,165,089) | 7,877 ($345,962) | ||||||||||||
Katherine L. Minyard |
| 7,098 ($239,203) | ||||||||||||||
Katherine L. Minyard | ||||||||||||||||
Katherine L. Minyard | ||||||||||||||||
Katherine L. Minyard | – | 7,443 ($326,885) | ||||||||||||||
Steven W. Nance |
| 27,454 ($930,883) | ||||||||||||||
Steve W. Nance | ||||||||||||||||
Steve W. Nance | ||||||||||||||||
Steve W. Nance | ||||||||||||||||
Steve W. Nance | – | 8,226 ($361,299) | ||||||||||||||
Suzanne P. Nimocks | ||||||||||||||||
Suzanne P. Nimocks | ||||||||||||||||
Suzanne P. Nimocks | ||||||||||||||||
Suzanne P. Nimocks | 20,384 ($691,161) | 28,761 ($969,246) | 21,378 ($921,310) | 8,226 ($361,299) | ||||||||||||
George L. Pita |
| 2,638 ($88,901) | ||||||||||||||
George L. Pita | ||||||||||||||||
George L. Pita | ||||||||||||||||
George L. Pita | – | 2,766 ($121,484) | ||||||||||||||
Thomas G. Ricks | ||||||||||||||||
Thomas G. Ricks | ||||||||||||||||
Thomas G. Ricks | ||||||||||||||||
Thomas G. Ricks |
| 27,622 ($930,861) | – | 8,402 ($369,014) | ||||||||||||
Brian G. Shaw | 29,479 ($999,545) | 26,871 ($911,116) | ||||||||||||||
Bruce G. Waterman | 42,280 ($1,433,589) | 29,259 ($992,086) | ||||||||||||||
Brian G. Shaw | ||||||||||||||||
Brian G. Shaw | ||||||||||||||||
Brian G. Shaw | 32,834 ($1,415,022) | 7,845 ($338,101) |
Notes:
(1) | “Market or Payout Value” represents the value of vested DSUs not paid out or distributed and is determined by multiplying the number of DSUs held by each director as of December 31, |
(2) | “Market or Payout Value” represents the value of vested RSUs not paid out or distributed and is determined by multiplying the number of director RSUs held by each director as of December 31, |
(3) | Mr. McCracken receives no compensation in his capacity as a director. See |
Delinquent Section 16(a) Reports
Based solely on our review of copies of such reports filed with the SEC and written representations that no other reports are required, the Company believes that all of its executive officers, directors and those greater-than-10% shareholders that filed any reports for the year ended December 31, 2023 reported all transactions on a timely basis, except for a Form 4 for Peter Dea relating to the vesting and settlement of restricted stock units on August 7, 2023 which was filed late due to a Company administrative oversight.
Principal Shareholders
The table below provides the number of shares of Ovintiv common stock held by persons known by us to be the beneficial owners of more than five percent of our issued and outstanding shares of common stock, as of the date of such shareholders’ Schedule 13G filings with the SEC.
Name and Address | Amount and Nature of Beneficial Ownership | Percentage of Outstanding Shares of Common Stock | ||||||||
1 | The Vanguard Group, Inc.(1) 100 Vanguard Boulevard, Malvern, PA 19355 | 27,407,355 | 10% | |||||||
2 | BlackRock Institutional Trust Company, N.A.(2) 55 East 52nd Street, New York, NY 10055 | 23,594,232 | 9% | |||||||
3 | Dodge & Cox(3) 555 California Street, 40th Floor, San Francisco, CA 94104 | 21,828,737 | 8% |
Name | Amount and Nature of Beneficial Ownership | Percentage of Outstanding Shares of Common Stock | ||||||
1 BlackRock, Inc.(1) | 28,420,951 | 10.50 | % | |||||
2 The Vanguard Group(2) | 27,030,413 | 9.90 | % | |||||
3 FMR LLC(3) | 23,112,701 | 8.469 | % | |||||
4 Dodge & Cox(4) | 22,995,251 | 8.40 | % |
Notes:
(1) | Information based |
(2) | Information based |
Ovintiv Inc. | 2024 Proxy Statement | 41 |
(3) | Information based on a Schedule 13G/A filed with the SEC on February 9, 2024. Such filing indicates that FMR LLC, on its own behalf and on behalf of its subsidiaries and affiliates identified therein, has sole voting power with respect to 21,308,754 of the reported shares, shared voting power with respect to none of the reported shares, sole dispositive power with respect to 23,112,701 of the reported shares and shared dispositive power with respect to none of the reported shares. The address for such shareholder is 245 Summer Street, Boston, Massachusetts 02210. |
Information based |
42 | 2024 Proxy Statement | Ovintiv Inc. |
EXECUTIVE COMPENSATION
Item 2.2: Advisory Vote to Approve Compensation of Named Executive OfficersOfficers: The Board recommends you vote FOR this proposal
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At the company’s 2018 annual meeting, shareholders voted on a non-binding, advisory basis to hold say-on-pay votes annually. That recommendation has been adopted by Ovintiv and, accordingly, shareholders are being asked to vote on the following advisory resolution:
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When considering Ovintiv’s approach to executive compensation, the Board takes the advisory vote into account together with other shareholder feedback, the advice of its independent consultant, FW Cook, and best practices in compensation governance.
Through consultation with our shareholders and key advisors, the HRC Committee has worked diligently to develop an executive compensation program that attracts and retains top talent and encourages sustainable performance. The Board believes Ovintiv’s approach to executive compensation is balanced and effectively aligns the compensation of our executive officers with the long-term interests of our shareholders.
Vote Required for Approval
To be approved, the advisory resolution on the compensation of the NEOs requires the support of a majority of votes cast at the Meeting. Abstentions are counted as votes “against” and broker non-votes have no effect on the voting with respect to this Item 2.
COMPENSATION DISCUSSION AND ANALYSIS
| The Board has overseen the strategic evolution of Ovintiv and continues to drive long-term value creation for our shareholders. Consistent with that objective, the HRC Committee has developed a compensation program that delivers compensation commensurate with short- and long-term performance against key strategic |
This Compensation Discussion and Analysis (“CD&A”):
IDENTIFIES the company’s named executive officers for 2021;
• | IDENTIFIES the Company’s named executive officers for 2023; |
DESCRIBES Ovintiv’s key compensation principles and approach to compensation governance;
• | DESCRIBES Ovintiv’s key compensation principles and approach to compensation governance; |
EXPLAINS each component of Ovintiv’s executive compensation program; and
• | EXPLAINS each component of Ovintiv’s executive compensation program; and |
• | OUTLINES 2023 performance and compensation realized by the Company’s NEOs based on that performance. |
OUTLINES 2021 performance and compensation realized by the company’s NEOs based on that performance.
Named Executive Officers
This CD&A describes our compensation practices and the compensation awarded or paid to each of our NEOs during the last completed fiscal year. For the year ended December 31, 2021,2023, the company’sCompany’s NEOs consisted of the following:
Name | Title | Age | NEO Since | Business Experience (Past Five Years) | ||||
Brendan McCracken | President & Chief Executive Officer | 46 | 2020 | Mr. McCracken was appointed President of the company in 2020. Mr. McCracken joined one of Ovintiv’s predecessor companies in 1997 and assumed a variety of leadership roles, including recent appointments as Executive Vice-President, Corporate Development & External Affairs in 2019 and Vice-President & General Manager of Canadian Operations in 2017. | ||||
Corey Code | Executive Vice-President & Chief Financial Officer | 47 | 2019 | Mr. Code was appointed Executive Vice-President & Chief Financial Officer of the company in 2019. Mr. Code joined one of Ovintiv’s predecessor companies in 1999 and assumed a variety of leadership roles, including recent appointments as Vice-President, Investor Relations and Strategy in 2018 and Vice-President, Investor Relations in 2017. | ||||
Greg Givens | Executive Vice-President & Chief Operating Officer | 49 | 2020 | Mr. Givens was appointed Executive Vice-President & Chief Operating Officer of the company in 2019. Mr. Givens joined the company in 2018 as Vice-President and General Manager of Texas Operations. Prior to joining the company, Mr. Givens was Vice-President Eagle Ford of EP Energy (a public oil and gas company) from 2012 to 2017. | ||||
Renee Zemljak | Executive Vice-President, Midstream, Marketing & Fundamentals | 56 | 2014 | Ms. Zemljak was appointed Executive Vice-President, Midstream, Marketing & Fundamentals of the company in 2009. Ms. Zemljak joined one of Ovintiv’s predecessor companies in 2000 and assumed a variety of leadership roles, including her previous position as Vice-President of USA Marketing in 2002. | ||||
Joanne Cox | Executive Vice-President, General Counsel & Corporate Secretary | 55 | 2015 | Ms. Cox joined the company in 2015 as Executive Vice-President and General Counsel. Ms. Cox retired from Ovintiv effective January 1, 2022, after spending seven years as General Counsel & Corporate Secretary. She was responsible for the overall legal affairs of the company and oversaw the company’s corporate compliance program. | ||||
Doug Suttles | Former Chief Executive Officer | 60 | 2013 | Mr. Suttles retired from Ovintiv effective July 31, 2021, after spending 8 years as Chief Executive Officer. |
Business Experience | ||||||||
Brendan McCracken President & Chief Executive Officer • Age: 48 | Mr. McCracken was appointed President in 2020 and Chief Executive Officer of the Company in 2021. He joined one of Ovintiv’s predecessor companies in 1997 and assumed a variety of leadership roles, including appointments as Executive Vice-President, Corporate Development & External Affairs in 2019 and Vice-President & General Manager of Canadian Operations in 2017. | |||||||
Corey Code Executive Vice-President & Chief Financial Officer • Age: 50 | Mr. Code was appointed Executive Vice-President & Chief Financial Officer of the Company in 2019. He joined one of Ovintiv’s predecessor companies in 1999 and assumed a variety of leadership roles, including Vice-President, Investor Relations and Strategy in 2018 and Vice-President, Investor Relations in 2017. | |||||||
Greg Givens Executive Vice-President & Chief Operating Officer • Age: 51 | Mr. Givens was appointed Executive Vice-President & Chief Operating Officer of the Company in 2019. He joined the Company in 2018 as Vice-President and General Manager of Texas Operations. Prior to joining the Company, Mr. Givens was Vice-President Eagle Ford of EP Energy (a public oil and gas company) from 2012 to 2017. | |||||||
Renee Zemljak Executive Vice-President, Midstream, Marketing & Fundamentals • Age: 59 | Ms. Zemljak was appointed Executive Vice-President, Midstream, Marketing & Fundamentals of the Company in 2009. She joined one of Ovintiv’s predecessor companies in 2000 and assumed a variety of leadership roles, including her previous position as Vice-President of USA Marketing in 2002. As previously announced, the Company is eliminating the role of Executive Vice-President, Midstream, Marketing & Fundamentals effective April 1, 2024, at which point Ms. Zemljak will cease to serve as an executive officer of the Company. | |||||||
Meghan Eilers Executive Vice-President, General Counsel • Age: 42 | Ms. Eilers was appointed Executive Vice-President, General Counsel and Corporate Secretary in 2022. She joined Ovintiv in 2019 as Vice President, Legal Operations. Ms. Eilers came to Ovintiv in 2019 through the Newfield merger, where she had served as Newfield’s Associate General Counsel. Prior to joining Newfield, Ms. Eilers served in several positions at Noble Energy from 2007 to 2018. |
Ovintiv Inc. | 2024 Proxy Statement | 43 |
20212023 Compensation Program Changes
The Company did not make any substantive changes to our compensation program during 2023.
Compensation Key Principles
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Key Principle |
| Application to Executive Compensation | ||
Alignment with shareholders |
| Compensation consists largely of at risk, performance-based LTI awards tied to critical performance goals needed to achieve long-term, sustainable value for our shareholders | ||
| Metrics are rigorously set to tie to key deliverables aligned with the | |||
Ovintiv’s 2023 Say-on-Pay vote received 96.4% support, which demonstrates shareholders’ strong support for our executive compensation practices and pay for performance alignment | ||||
Pay for performance |
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| Annual bonus is determined by execution of financial and other key measures approved by the Board and contained in our Company Scorecard | |||
| The HRC Committee establishes rigorous targets for the annual bonus and strategic portion of our | |||
Market-competitive pay |
| Compensation is designed around median target performance measured against our | ||
Sound risk management |
| The HRC Committee is made up of independent directors and retains an independent compensation consultant | ||
| We conduct annual risk assessments of our executive compensation programs and reflect governance best practices |
Realized Compensation
Ovintiv’ objective is to deliver superior long-term performance for shareholders. Stock performance is one of many factors in determining compensation for our executives. The realized compensation reflects the intended design of the compensation program.
44 | 2024 Proxy Statement | Ovintiv Inc. |
Named Executive Officer Pay Mix
Components of Our Executive Compensation Program
Executive compensation at Ovintiv is market-competitive and aligns pay with performance. Base salary and target short- and long-term pay levels are determined based on comparisons to a carefully selected group of industry peers. Our compensation program is summarized below.
| Element | Form of Award | Period | Program Components | ||||
Fixed | Base Salary (page | Cash | One year | Determined by applying multiple factors including: | ||||
• Scope of responsibilities | ||||||||
• Experience | ||||||||
• Performance | ||||||||
• Market data from our | ||||||||
At risk | Annual Bonus (page | Cash, with an option to defer 25% or 50% into | One year | • Performance-based | ||||
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• Company Scorecard measures Performance relative to Board-approved metrics and goals (described on page 47 of this Proxy Statement)
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LTI (page 48) | Grants vest annually in equal thirds. | • Promotes retention | ||||||
• Realized value based on stock price performance | ||||||||
• RSUs granted under the
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PSUs | “Cliff vest” after three years, generally subject to continued employment through the vesting date. | • Performance-based | ||||||
• Realized value determined by our TSR performance relative to our | ||||||||
• Maximum payout of 200% of target, but capped at 100% for negative absolute TSR | ||||||||
• PSUs granted under the |
Ovintiv Inc. | 2024 Proxy Statement | 45 |
Base Salary
Base salaries for the CEO and the other continuing NEOs are determined using market data from our Compensation Peer Group (as defined on page 4550 of this Proxy Statement) and are reviewed every year at the HRC Committee’s February meeting. Base salary levels are set taking into account the market median, with adjustments to account for factors such as an individual’s time in role, experience level and expertise. In 2021,2023, Mr. McCracken, Mr. Code, Mr. Givens, Ms. Zemljak and Ms. Eilers received a base salary increase tied to his appointment as Chief Executive Officer. Messrs. Code and Givens also received base salary increases tied to total compensation positioning withinin the market.
The table below shows the 2021 2023 year-end base salary for each NEO.
NEO | Position | Base Salary(1) | ||||||
Brendan McCracken | President & Chief Executive Officer | |||||||
Corey Code | Executive Vice-President & Chief Financial Officer | |||||||
Greg Givens | Executive Vice-President & Chief Operating Officer | |||||||
Renee Zemljak | Executive Vice-President, Midstream, Marketing & Fundamentals | |||||||
| Executive Vice-President, General Counsel | |||||||
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Note:
(1) | Amounts paid in Canadian dollars have been converted to U.S. dollars using an exchange rate of C$1.00 = US$ |
Annual Bonus
All employees participate in our annual bonus plan, which provides an opportunity to earn a cash award based on performance against a combination of companyCompany metrics and individual objectives for the year. The annual bonus is designed to motivate employees to pursue our key business performance metrics.objectives. In setting the targets and ranges for each metric, we employ stress tests to ensure that there is appropriate alignment between performance and payouts.
The portion of the annual bonus tied to companyCompany performance versus individual performance varies by job level. For NEOs, a companyCompany score is calculated atfollowing the end of the year based on Ovintiv’s performance against the metrics set out in the Company Scorecard (the “Company Score”). The Company Score provides the baseline payout percentage for annual bonuses. The Board can then adjust this percentage up or down for EH&S performance withinbonuses and includes an automatic 10 points downward adjustment should the Company experience a predetermined range of no more than 10%. EH&S performance is measured against its own rigorous scorecard (described on page 41 of this Proxy Statement).serious safety event during the year. Additionally, the Board can exercise bothretains discretion to adjust final payouts either up or down (within a range of -25% to +25%), to reflect unforeseen circumstances that occurred in the year.
Employee Deferred Share Unit Plan
Under the Employee Deferred Share Unit Plan (“Employee DSU Plan”), executives can convert either 25% or 50% of their annual bonus award into DSUs. To defer part of an annual bonus award into DSUs, an executive must make an election prior to December 31 of the preceding calendar year. No NEOs participated in the plan in 2023. Once an election is made, the number of DSUs credited to an executive is calculated as follows:
DSUs are settled in cash and are payable only after an executive separates from service of Ovintiv.
46 | 2024 Proxy Statement | Ovintiv Inc. |
Company Scorecard Metrics and Performance
The following metrics were selected in 20212023 for our Company Scorecard. These metrics align with the key components of our strategic plan and our key ESG initiatives and serve as the building blocks of strong financial returns for shareholders.
Scorecard Metric(1) | Key Goals | ||
| |||
Free Cash Flow(2) | • Achieve | ||
Capital Efficiency(3) | • Achieve | ||
| • Achieve Achieve Recordable Injury Severity 0.17(5) • Achieve GHG Intensity of 14.3(6) • Achieve Spill Intensity of 0.023(7) | ||
Total | • Achieve | ||
| • Achieve |
Notes:
(1) | Performance metrics and targets are updated annually to reflect changes in priorities given the macro environment. |
(2) | Free Cash Flow† is defined as |
(3) | Capital Efficiency is defined as capital invested per barrel of oil equivalent per day (“BOE/d”) |
(4) | TRIF equals Recordable Injuries X 200,000 divided by Total Exposure Hours. |
(5) | Injury Severity equals simple average of the severity of all recordable injures experienced in the year; severity is determined using the US Workers Compensation Injury Classification System. |
(6) | GHG Intensity equals Scope 1 & 2 MT CO2e/Mboe. |
(7) | Spill Intensity equals Produced Liquids Spilled (bbls) divided by Total Produced Liquids (mbbls). |
(8) | Total Costs† is defined as the summation of upstream transportation and processing expense, upstream operating expense, administrative expense and capitalized indirect costs, excluding the impact of |
Our HRC Committee rigorously tested multiple scenarios to determine the appropriate threshold, target and maximum payout for each goal. Considerations included benchmark and geographical pricing sensitivities, operational efficiency, results of scenario analysis, funding and corporate financial statement implications and comparison to peer companies and industry trends.
The threshold, target and maximum ranges shown below reflect the Company Scorecard as approved in February 2021.
2021 COMPANY SCORECARD(1)by the Board for 2023.
Note:
Notes:
(1) | Scorecard targets based on |
EH&S Scorecard Metrics and Performance
EH&S SCORECARD
EH&S Metric | Formula | 2020 Results | 2021 Target | 2021 Results | Comments | |||||
Total Recordable Injury Frequency (“TRIF”)
| Recordable Injuries X 200,000 divided by Total Exposure Hours | 0.19 | 0.18 | 0.15 | TRIF down 71% since 2013, driven by Ovintiv’s core “Life Saving Rules.” | |||||
Spill Intensity | Produced Liquid Spilled (bbls) divided by Total Produced Liquid (mbbls) | 0.039 | 0.035 | 0.031 | Spills have the American Exploration and Production Council (“AXPC”) definition of gross volumes of crude oil, condensate and/or produced water spilled that are greater than or equal to 1 bbl outside of impermeable secondary containment. Ovintiv achieved a 20% reduction in spill intensity vs. 2020, and 29% vs. 2019.
| |||||
Flaring & Venting | Regulatory reported gross flared and vented volumes divided by gross gas production (mmcf/mmcf) | 0.66% | < 0.60% | 0.39% | Ovintiv achieved full alignment with the World Bank Zero Routine Flaring by 2030 initiative, nine years ahead of the World Bank’s target. Ovintiv achieved a 41% reduction in F&V % vs. 2020 and 65% reduction vs. 2019.
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Methane Intensity | Metric tons CH4 emitted divided by gross annual production (MBoe) | 0.10 | < 0.11 | 0.07 | Ovintiv achieved Methane Intensity target four years ahead of schedule. Ovintiv achieved a 30% reduction in methane intensity vs. 2020 and a 53% reduction vs. 2019.
|
(2) | For additional information regarding non-GAAP measures, refer to Schedule A of this Proxy Statement. |
(3) | 10-point deduction override in the event of a fatality, regardless of performance against safety target. |
Ovintiv Inc. | 2024 Proxy Statement | 47 |
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SAFETY: A FOUNDATIONAL VALUE Safety is
|
2021Board Discretion
The total actual bonus paid to NEOs is the product of the Company Score subject to the Board’s discretion to adjust that result within a range of -25% to +25% if there are material unforeseen events or major dislocations in the industry during the year. In addition, the Board can adjust individual NEO scores within a range of -20% to +20% to reflect individual performance.
Use of Board Discretion
The Board made no discretionary adjustments to NEO 2023 bonuses.
2023 Annual Bonus Result
TheFollowing application of the above Company Score, the annual bonus payments to our CEO and other NEOs for 20212023 are shown below.
Bonus Target (% of Base Salary)(1) | Target Bonus(2)(3) ($) | Total Actual Bonus ($) | ||||||||||||||||||||||||||||||
| Bonus Target (% of Base Salary)(1) | Target Bonus(2) ($) | Total Actual Bonus ($) | Target | Maximum | |||||||||||||||||||||||||||
| Target | Maximum | ||||||||||||||||||||||||||||||
Brendan McCracken | 125 | 250 | 807,506 | 1,469,661 | ||||||||||||||||||||||||||||
Brendan McCracken | ||||||||||||||||||||||||||||||||
Brendan McCracken | ||||||||||||||||||||||||||||||||
Brendan McCracken | 125 | 250 | $ | 1,353,125 | $2,543,875 | |||||||||||||||||||||||||||
Corey Code | 75 | 150 | 294,413 | 535,831 | ||||||||||||||||||||||||||||
Corey Code | ||||||||||||||||||||||||||||||||
Corey Code | ||||||||||||||||||||||||||||||||
Corey Code | 100 | 200 | $ | 548,340 | $1,030,879 | |||||||||||||||||||||||||||
Greg Givens | 75 | 150 | 387,688 | 705,593 | ||||||||||||||||||||||||||||
Greg Givens | ||||||||||||||||||||||||||||||||
Greg Givens | ||||||||||||||||||||||||||||||||
Greg Givens | 100 | 200 | $ | 656,250 | $1,233,750 | |||||||||||||||||||||||||||
Renee Zemljak | 70 | 140 | 343,000 | 624,260 | ||||||||||||||||||||||||||||
Joanne Cox | 60 | 120 | 191,520 | 348,566 | ||||||||||||||||||||||||||||
Doug Suttles | 135 | 270 | 922,500 | 1,549,800 | (3) | |||||||||||||||||||||||||||
Renee Zemljak | ||||||||||||||||||||||||||||||||
Renee Zemljak | ||||||||||||||||||||||||||||||||
Renee Zemljak | 80 | 160 | $ | 401,000 | $ 753,880 | |||||||||||||||||||||||||||
Meghan Eilers | ||||||||||||||||||||||||||||||||
Meghan Eilers | ||||||||||||||||||||||||||||||||
Meghan Eilers | ||||||||||||||||||||||||||||||||
Meghan Eilers | 70 | 140 | $ | 330,750 | $ 621,810 |
Notes:
(1) | Annual bonus targets as a percentage of salary were unchanged in |
(2) | Canadian dollar amounts have been converted to U.S. dollars using an exchange rate of C$1.00 = US$ |
(3) |
|
Long-Term Incentive Awards
LTI awards make up the largest portion of target compensation for our executives. These awards, which are primarily performance-based, are designed to incentivize delivery of our strategy and long-term value creation and payout of these awards correlates with Ovintiv’s stock price performance. LTI awards are granted annually, following approval by the HRC Committee. In setting the target value of LTI awards, the HRC Committee reviews individual performance, retention risk, internal equity and overall market competitiveness.
As described on page 3949 of this Proxy Statement, the company’s 2021Company’s 2023 compensation program employed two LTI vehicles: RSUs and PSUs. In 2021,2023, 50% of LTI awards granted to the company’sCompany’s NEOs were in the form of RSUs and 50% were in the form of PSUs. Compensation from RSUs is based solely on the company’sCompany’s stock price over the performance period. PSUs are performance-based, and compensation is only earned if the company’sCompany’s stock price performance is above the 25th percentile relative to the PSU Performance Peer Group and if strategic milestones are met.
48 | 2024 Proxy Statement | Ovintiv Inc. |
LTI Awards Granted in 20212023
Details of LTI awards granted to the NEOs in 20212023 are shown below. The realized value of the 20212023 LTI awards will be determined at the time of vesting based on the NEO’s continued service over the vesting period and company and stock price performance.
| RSUs | PSUs | ||||||||||||||||||||||||||||||
| RSUs | PSUs | ||||||||||||||||||||||||||||||
| # of Units | Target Value(2) ($) | # of Units | Target Value(1)(2) ($) | # of Units | Target Value(1) ($) | # of Units | Target Value(1)(2) ($) | ||||||||||||||||||||||||
Brendan McCracken | 124,788 | 3,016,146 | 124,788 | 3,016,146 | ||||||||||||||||||||||||||||
Brendan McCracken | ||||||||||||||||||||||||||||||||
Brendan McCracken | ||||||||||||||||||||||||||||||||
Brendan McCracken | 87,118 | $3,875,009 | 87,118 | $3,875,009 | ||||||||||||||||||||||||||||
Corey Code | ||||||||||||||||||||||||||||||||
Corey Code | ||||||||||||||||||||||||||||||||
Corey Code | ||||||||||||||||||||||||||||||||
Corey Code | 26,024 | 598,509 | 26,024 | 598,509 | 24,704 | $ 1,111,520 | 24,704 | $ 1,111,520 | ||||||||||||||||||||||||
Greg Givens | 32,881 | 750,016 | 32,881 | 750,016 | ||||||||||||||||||||||||||||
Greg Givens | ||||||||||||||||||||||||||||||||
Greg Givens | ||||||||||||||||||||||||||||||||
Greg Givens | 33,724 | $1,500,044 | 33,724 | $1,500,044 | ||||||||||||||||||||||||||||
Renee Zemljak | 32,881 | 750,016 | 32,881 | 750,016 | ||||||||||||||||||||||||||||
Renee Zemljak | ||||||||||||||||||||||||||||||||
Renee Zemljak | ||||||||||||||||||||||||||||||||
Renee Zemljak | 20,234 | $ 900,008 | 20,234 | $ 900,008 | ||||||||||||||||||||||||||||
Joanne Cox | 19,084 | 438,901 | 19,084 | 438,901 | ||||||||||||||||||||||||||||
Doug Suttles(3) | 208,242 | 4,750,000 | 208,242 | 4,750,000 | ||||||||||||||||||||||||||||
Meghan Eilers | ||||||||||||||||||||||||||||||||
Meghan Eilers | ||||||||||||||||||||||||||||||||
Meghan Eilers | ||||||||||||||||||||||||||||||||
Meghan Eilers | 16,862 | $ 750,022 | 16,862 | $ 750,022 |
Notes:
(1) |
|
Amounts awarded in Canadian dollars have been converted to U.S. dollars using an exchange rate of C$1.00 = US$ |
|
20212023 PSUs
The performance metrics for 20212023 PSU awards are Relative TSR and a return metric, Return on Invested Capital,ROIC, creating strong alignment between executive compensation and the shareholder experience. The performance metrics for 20212023 PSU awards, together with the weighting and rationale for each metric, are set out below.
Weighting | Measurement | Rationale for Metric | |||||
Relative TSR | 50% |
| Aligned with the interest and experience of our shareholders | ||||
Return on Invested
| |||||||
Measures the | Aligned with capital discipline and performance and removes impact of prices |
20192021 PSU Settlement
Vesting and payout of 20192021 PSU awards was assessed by the HRC Committee at its February 20222024 meeting. The following table summarizes the payout ranges, the results achieved, and payouts for the 20192021 PSU awards based on Relative TSR and Strategic Milestonesstrategic milestone performance over the three-year period beginning January 1, 20192021, and ending December 31, 2021.2023.
Notes:
|
|
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Ovintiv Inc. | 2024 Proxy Statement | 49 |
2021 Compensation2023 Peer Group
We use one peer group for purposes of benchmarking executive compensation and assessing PSU performance (our “Peer Group”). In order to remain competitive and retain top talent, we define our compensation market as a group of North American industry peers of a similar size, industry focus and geography as Ovintiv, (“Compensation Peer Group”). Theand select our
Peer Group accordingly. The HRC Committee is careful to include relevant exploration and production-focusedE&P-focused companies, as their performance is similarly linked to changes in commodity prices during similar measurement periods. All members of our Compensation Peer Group meet the following criteria:
Compensation Peer Group: Evaluation Criteria | ||||
Financial and operational comparability | • total assets • production • product mix | • enterprise value • market capitalization • revenues | ||
Nature and scope of operations | • primarily North American operations • operate in similar North American plays | • upstream | ||
Identified as competitive peer | • competitor for executive talent • competitor for investment capital | • identified internally or externally as a peer to Ovintiv |
The HRC Committee reviews and considers changes to the Compensation Peer Group annually and made a few changes compared to the Compensation Peer Group used in 2020. The companies in the Compensation Peer Group for 2021 are as follows:
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Note:
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2023 Peer Group | ||||
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| Pioneer Natural Resources Company | ||
APA Corporation | EOG Resources Inc. | Range Resources Corporation | ||
Canadian Natural Resources Ltd. | Enerplus Corporation | S&P 400 Index | ||
| Hess Corporation | XOP | ||
Coterra Energy Inc. | Marathon Oil Corporation | |||
Devon Energy Corporation | Murphy Oil Corporation |
Additions | Deletions | |||
Chesapeake Energy Corporation | Continental Resources Inc. |
The HRC Committee assesses market competitiveness of compensation for the CEO and other members of the ELT each year using data from the Compensation Peer Group. For our CEO, this assessment is conducted using only our U.S. peers. For the other NEOs, we use country-specific data from the Compensation Peer Group, based on the role and the country in which the executive is based. To remain competitive, we set annual target compensation for our executives around the median (or 50th percentile) of executives with comparable roles within our Compensation Peer Group. Target compensation may be set above or below the median based on various factors, including time in role, sustained performance over time, readiness for promotion, skill set and experience relative to external market counterparts.
2021 PSU Performance Peer Group
The HRC Committee used a different peer group to assess our Relative TSR performance for purposes of our PSU awards. The PSU Performance Peer Group includes companies with which we compete primarily for investment capital. The HRC Committee selects and approves our PSU Performance Peer Group based on the following criteria:
50 | 2024 Proxy Statement |
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Ovintiv Inc. |
The HRC Committee approved the following PSU Performance Peer Group to apply to PSU grants made in 2021:
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Note:
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As a U.S. based company, we compete for executive talent primarily in the U.S. For this reason, starting in 2022, we are moving to one executive compensation & PSU performance peer group. In selecting the Compensation Peer Group, the HRC Committee is careful to include relevant exploration and production-focused companies, as their performance is similarly linked to changes in commodity prices during similar measurement periods. In light of our move to a single peer group and the adoption of a unified U.S. pay strategy for the NEOs, we made market adjustments where necessary to 2022 NEO pay (effective April 1, 2022) ranging from 3% for Mr. McCracken and up to 37% for other NEOs.
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The following table outlines the executive compensation governance best practices that we follow and the pitfalls that we avoid.
PRACTICES WE FOLLOW | ||||||||||
PRACTICES WE PROHIBIT | ||||||||||
Maintain an independent HRC Committee whose members have the necessary skills, knowledge and experience |
| Re-pricing, option exchanges, or cancellations of LTI grants | ||||||||
Retain an independent compensation consultant that provides no services on behalf of management |
| Gross-up of executive compensation, including perquisites or incentive awards, to account for taxes | ||||||||
Grant LTIs with payouts that are tied directly to absolute stock price performance and stock price performance relative to a group of industry peers |
| Excessive severance packages or guaranteed compensation for any executive | ||||||||
Cap payouts for executive annual bonus awards and PSU grants |
| “Single trigger” vesting of LTI awards granted in 2018 and onward | ||||||||
Maintain “double trigger” vesting provisions for cash severance payable to our executives upon a change in control |
| Hedging and short-selling of Ovintiv stock by directors, officers and employees | ||||||||
Maintain “double trigger” accelerated vesting provisions for all LTI grants | ||||||||||
Impose executive compensation clawback requirements and robust stock ownership guidelines |
Ovintiv Inc. | 2024 Proxy Statement | 51 |
Independent Compensation Advisors
The HRC Committee retains FW Cook as its independent compensation consultant to provide objective expertise on executive compensation matters. FW Cook reports directly to the HRC Committee Chair. In 2021, FW Cook received $150,847 for executive compensation-related services.
Compensation Risk Management engages WTW (formerly, Willis Towers Watson) to provide pension-related services, including as actuary to our Canadian pension plans, and from time-to-time to provide competitive market data regarding our compensation program and employee benefit programs. In 2021, WTW received $13,350 for compensation-related services, and $927,379 for other services provided to management.
Compensation Risk Management
| THEBOARDANDHRCCOMMITTEEUSEASTRUCTUREDDECISION-MAKINGPROCESSTOMITIGATECOMPENSATION-RELATEDRISK
The Board and the HRC Committee mitigate compensation-related risk using a structured decision-making process and program safeguards. The HRC Committee’s structured approach to compensation risk is designed to discourage inadvertent or undue risk-taking by incorporating risk management principles directly into our program design, actively considering risk as a key element of compensation decision-making and requiring annual compensation program risk assessments.
Our annual compensation risk assessments are reviewed, and often conducted, by the HRC Committee’s independent compensation consultant. The most recent risk assessment,
Specific examples of how our program incorporates compensation risk management include:
We believe these features reduce risk by diversifying rewards and eliminating reliance on any single or limited number of performance measures to determine executive incentive compensation. Compensation-related risk is mitigated through our corporate governance practices, which include robust stock ownership guidelines, an Incentive Compensation Clawback Policy, and prohibitions regarding hedging of equity awards and stock — all of which apply to incentive-based compensation granted to our executives.
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Executive Stock Ownership Guidelines
Ovintiv’s executives and vice-presidents must achieve minimum stock ownership levels within five years of being appointed to their positions. An individual who receives a promotion resulting in an increased stock ownership target is given an additional five-year period to meet the new target. Targets are calculated as a multiple of annual base salary. Stock ownership is calculated based on the
aggregate value of: (i) owned shares of Ovintiv common stock (including beneficial ownership); (ii) RSU holdings; (iii) DSU holdings; and (iv) other Ovintiv securities as may be approved by the Board.
The following table illustrates each NEO’s stock ownership requirement and actual stock ownership as of February 28, 2022.March 8, 2024.
| Ownership Requirement (Multiple of Base Salary) | Current Ownership (Multiple of Base Salary) | Ownership Requirement (Multiple of Base Salary) | Current Ownership (Multiple of Base Salary) | ||||||||
Brendan McCracken | 5 | 6.1 | ||||||||||
Brendan McCracken | ||||||||||||
Brendan McCracken | ||||||||||||
Brendan McCracken | 5 | 14.3 | ||||||||||
Corey Code | ||||||||||||
Corey Code | ||||||||||||
Corey Code | ||||||||||||
Corey Code | 3 | 7.6 | 3 | 13.6 | ||||||||
Greg Givens | 3 | 7.2 | ||||||||||
Greg Givens | ||||||||||||
Greg Givens | ||||||||||||
Greg Givens | 3 | 16.0 | ||||||||||
Renee Zemljak | 3 | 7.9 | ||||||||||
Renee Zemljak | ||||||||||||
Renee Zemljak | ||||||||||||
Renee Zemljak | 3 | 13.0 | ||||||||||
Meghan Eilers | ||||||||||||
Meghan Eilers | ||||||||||||
Meghan Eilers | ||||||||||||
Meghan Eilers | 3 | 5.3 |
52 | 2024 Proxy Statement | Ovintiv Inc. |
Incentive Compensation Clawback Policy
Our Amended and Restated Incentive Compensation Clawback Policy (“Clawback Policy”) applies if:
Ovintiv is required to prepare an accounting restatement due to material non-compliance with any financial reporting requirement under applicable securities laws;
incentive compensation received by a current or former executive in respect of years to which the restatement pertains exceeds the amount that would have been received under the restatement; and
an executive who received the incorrect amount of incentive compensation engaged in gross negligence, intentional misconduct, or fraud that either caused or
• |
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• | incentive-based compensation received by a current or former executive in respect of years to which the restatement pertains exceeds the amount that would have been received under the restatement. |
Where such circumstances exist, the BoardCompany will recover the amount of any incentive-based compensation received by an executive during the
recovery period that exceeds the amount that otherwise would have been received had it been determined based on the restated financial statements. The Company may effect any recovery pursuant to the Clawback Policy by requiring payment of such amount(s) to the Company, by set-off, by reducing future compensation, or by such other means or combination of means as the HRC Committee determines to be appropriate. The Company does not indemnify executives against the loss of any incentive-based compensation pursuant to the Clawback Policy.
Our Clawback Policy is authorized to: (i) requireintended to be consistent with the executive to immediately reimburse Ovintiv any incentive compensation previously paid; (ii) immediately terminate any rightrequirements of Rule 10D-1 and Section 303A.14 of the executive to any unpaid incentive compensation; (iii) immediately withhold or cancel the value of any incentive compensation from any outstanding amounts owing to the executive to compensate for the value of any unrecovered incentive compensation amount; and (iv) initiate other action against the executive as the Board may deem necessary.NYSE Listed Company Manual.
Indebtedness of Directors and Executive Officers
As atof the date of this Proxy Statement, there is not, and since January 1, 2021,2023, there has not been, any indebtedness outstanding by, or any guarantees, support agreements, letters of credit or other similar arrangements or understandings provided by, Ovintiv or its subsidiaries to any of our current or former directors (including the director nominees) or executive officers or any of their respective associates.
CEO Pay Ratio
Mr. McCracken’s 2021 annual total target compensation was $8,630,387 as reflected in
The HRC Committee has reviewed, commented on and discussed with management this CD&A for the Summary Compensation Tableyear ending December 31, 2023. Based on that review and discussion, the HRC Committee recommended to the Board that it be included in this Proxy Statement. Our median employee’s annual total compensation for 2021 calculated in accordance with Item 402(c)(x) of Regulation S-K (which includes 2021 base salary, target grant date fair value of LTI awards, annual bonus, company contributions to retirement plan, annual allowance and other benefits) was $171,140. As a result, in accordance with Item 402(u) of Regulation S-K,
we estimate that Mr. McCracken’s 2021 annual total compensation was approximately 50 times that of our median employee. The median employee was determined based on actual 2021 total cash compensationStatement for the period from January 1, 2021 to December 31, 2021, for the employee population asMeeting. The HRC Committee consists of December 31, 2021. We used a foreign exchange rate of C$1.00 = US$0.798 (the average exchange rate during 2021) to convert Canadian compensation into U.S. dollars for purposes of comparison.Meg Gentle, Howard Mayson, Lee Mclntire and Thomas Ricks.
Human Resources and Compensation Committee
Ovintiv Inc. | 2024 Proxy Statement | 53 |
Summary Compensation Table
The table below shows the compensation paid or awarded to each of our NEOs in the last three years.
Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1) | Stock Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non-qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total Compensation ($)(3) | ||||||||||||||||||||||||
Brendan McCracken | 2021 | 702,756 | 6,032,292 | — | 1,469,661 | — | 425,678 | 8,630,387 | ||||||||||||||||||||||||
2020 | 362,697 | 1,353,325 | — | 268,054 | — | 82,759 | 2,066,835 | |||||||||||||||||||||||||
2019 | 297,919 | 628,381 | 271,889 | 179,278 | — | 69,577 | 1,447,044 | |||||||||||||||||||||||||
Corey Code | 2021 | 392,551 | 1,197,019 | — | 535,831 | — | 96,151 | 2,221,552 | ||||||||||||||||||||||||
2020 | 352,559 | 1,197,027 | — | 251,198 | — | 85,705 | 1,886,489 | |||||||||||||||||||||||||
2019 | 307,560 | 764,913 | 519,894 | 204,390 | — | 72,030 | 1,868,787 | |||||||||||||||||||||||||
Greg Givens | 2021 | 516,918 | 1,500,031 | — | 705,593 | — | 106,338 | 2,828,880 | ||||||||||||||||||||||||
2020 | 470,902 | 1,500,019 | — | 353,176 | — | 88,339 | 2,412,436 | |||||||||||||||||||||||||
2019 | 410,356 | 933,760 | 416,263 | 247,786 | — | 75,738 | 2,083,903 | |||||||||||||||||||||||||
Renee Zemljak | 2021 | 490,000 | 1,500,031 | — | 624,260 | — | 121,283 | 2,735,574 | ||||||||||||||||||||||||
2020 | 490,000 | 1,500,019 | — | 325,850 | — | 117,215 | 2,433,084 | |||||||||||||||||||||||||
2019 | 490,000 | 1,293,755 | 431,267 | 353,976 | — | 119,227 | 2,688,225 | |||||||||||||||||||||||||
Joanne Cox(4) | 2021 | 330,211 | 877,801 | — | 348,566 | — | 86,299 | 1,642,877 | ||||||||||||||||||||||||
Doug Suttles(5) | 2021 | 683,333 | 9,500,000 | — | 1,549,800 | — | 394,496 | 12,127,629 | ||||||||||||||||||||||||
2020 | 1,100,000 | 8,500,013 | — | 1,306,250 | — | 277,224 | 11,183,487 | |||||||||||||||||||||||||
2019 | 1,100,000 | 7,331,253 | 2,443,754 | 1,419,000 | — | 276,387 | 12,570,394 |
Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1) | Stock Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non-qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total Compensation ($)(2) | ||||||||||||||||||||||||
Brendan McCracken President & Chief Executive Officer |
| 2023 |
|
| 1,082,500 |
|
| 7,750,017 |
|
| — |
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| 2,543,875 |
|
| — |
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| 407,547 |
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| 11,783,939 |
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| 2022 |
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| 1,022,500 |
|
| 7,250,046 |
|
| — |
|
| 1,457,063 |
|
| — |
|
| 435,764 |
|
| 10,165,373 |
| |||||||||
| 2021 |
|
| 702,756 |
|
| 6,032,292 |
|
| — |
|
| 1,469,661 |
|
| — |
|
| 434,773 |
|
| 8,639,482 |
| |||||||||
Corey Code |
| 2023 |
|
| 548,340 |
|
| 2,223,040 |
|
| — |
|
| 1,030,879 |
|
| — |
|
| 129,902 |
|
| 3,932,161 |
| ||||||||
| 2022 |
|
| 474,703 |
|
| 2,037,821 |
|
| — |
|
| 514,764 |
|
| — |
|
| 111,083 |
|
| 3,138,371 |
| |||||||||
| 2021 |
|
| 364,511 |
|
| 1,111,517 |
|
| — |
|
| 497,558 |
|
| — |
|
| 89,284 |
|
| 2,062,870 |
| |||||||||
Greg Givens |
| 2023 |
|
| 656,250 |
|
| 3,000,087 |
|
| — |
|
| 1,233,750 |
|
| — |
|
| 150,528 |
|
| 5,040,615 |
| ||||||||
| 2022 |
|
| 603,750 |
|
| 2,500,013 |
|
| — |
|
| 650,869 |
|
| — |
|
| 138,319 |
|
| 3,892,951 |
| |||||||||
| 2021 |
|
| 516,918 |
|
| 1,500,031 |
|
| — |
|
| 705,593 |
|
| — |
|
| 106,338 |
|
| 2,828,880 |
| |||||||||
Renee Zemljak |
| 2023 |
|
| 501,250 |
|
| 1,800,017 |
|
| — |
|
| 753,880 |
|
| — |
|
| 126,812 |
|
| 3,181,959 |
| ||||||||
| 2022 |
|
| 490,000 |
|
| 1,550,025 |
|
| — |
|
| 432,915 |
|
| — |
|
| 124,344 |
|
| 2,597,284 |
| |||||||||
| 2021 |
|
| 490,000 |
|
| 1,500,031 |
|
| — |
|
| 624,260 |
|
| — |
|
| 121,283 |
|
| 2,735,574 |
| |||||||||
Meghan Eilers Executive Vice-President, General Counsel and Corporate Secretary |
| 2023
|
|
| 472,500
|
|
| 1,500,044
|
|
| — |
|
| 621,810
|
|
| — |
|
| 117,599
|
|
| 2,711,953
|
|
Notes:
(1) | For |
(2) |
|
| 2019 | |||||||
Assumption | Stock Option Grants | SAR Grants | ||||||
Expected Term | Seven years | Seven years | ||||||
Volatility | 46.68% | 51.28% | ||||||
Dividend Yield | 1.04% | 1.04% | ||||||
Risk Free Rate | 1.85% | 1.85% | ||||||
Black-Scholes Value | 46.0% | 48.0% |
All amounts are presented in U.S. dollars. Amounts paid or awarded in Canadian dollars have been converted to U.S. dollars using an exchange rate (for each year above) of C$1.00 = US$ |
|
|
54 | 2024 Proxy Statement | Ovintiv Inc. |
All Other Compensation Table
The table below provides a breakdown of all other benefits and perquisites received by each of our NEOs in the last three years:2023:
Name | Year | Company Contributions to Retirement Plans ($)(1) | Annual Allowance ($) | Company Aircraft ($)(2) | Relocation Benefits ($)(3) | Severance and Other Separation- Related Benefits ($)(4) | Other Perquisites and Benefits ($)(5) | Total ($) | Year | Company Contributions to Retirement Plans ($)(1) | Life Spending Allowance ($)(2) | Company Aircraft ($)(3) | Other Perquisites and Benefits ($)(4) | Total ($) | ||||||||||||||||||||||||||||||||||||||||||
Brendan McCracken | 2021 | 78,288 | 33,716 | 21,815 | 279,937 | – | 11,923 | 425,679 | ||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 23,503 | 31,601 | – | – | – | 27,656 | 82,760 | |||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 18,010 | 22,990 | – | – | – | 28,577 | 69,577 | |||||||||||||||||||||||||||||||||||||||||||||||||
Brendan McCracken | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brendan McCracken | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brendan McCracken | 2023 | 188,183 | 39,600 | 178,054 | 1,710 | 407,547 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Corey Code | 2021 | 42,879 | 31,601 | – | – | – | 21,671 | 96,151 | ||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 35,006 | 31,601 | – | – | – | 19,098 | 85,705 | |||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 24,600 | 24,259 | – | – | – | 23,171 | 72,030 | |||||||||||||||||||||||||||||||||||||||||||||||||
Corey Code | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corey Code | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corey Code | 2023 | 60,169 | 29,344 | — | 40,389 | (5) | 129,902 | |||||||||||||||||||||||||||||||||||||||||||||||||
Greg Givens | 2021 | 63,420 | 38,000 | – | – | – | 4,918 | 106,338 | ||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 47,329 | 38,000 | – | – | – | 3,010 | 88,339 | |||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 43,917 | 26,657 | – | – | – | 5,164 | 75,738 | |||||||||||||||||||||||||||||||||||||||||||||||||
Greg Givens | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greg Givens | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greg Givens | 2023 | 104,182 | 39,600 | — | 6,746 | 150,528 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Renee Zemljak | 2021 | 78,125 | 38,000 | – | – | – | 5,158 | 121,283 | ||||||||||||||||||||||||||||||||||||||||||||||||
Renee Zemljak | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Renee Zemljak | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Renee Zemljak | 2023 | 74,902 | 39,600 | — | 12,310 | 126,812 | ||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 74,056 | 38,000 | – | – | – | 5,159 | 117,215 | |||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 76,008 | 38,000 | – | – | – | 5,219 | 119,227 | |||||||||||||||||||||||||||||||||||||||||||||||||
Joanne Cox(6) | 2021 | 35,750 | 31,601 | – | – | – | 18,948 | 86,299 | ||||||||||||||||||||||||||||||||||||||||||||||||
Doug Suttles(7) | 2021 | 165,420 | 22,167 | 63,223 | – | 138,463 | 5,223 | 394,496 | ||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 172,960 | 38,000 | 58,380 | – | – | 7,884 | 277,224 | |||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 171,667 | 38,000 | 61,398 | – | – | 5,322 | 276,387 | |||||||||||||||||||||||||||||||||||||||||||||||||
Meghan Eilers | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Meghan Eilers | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Meghan Eilers | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Meghan Eilers | 2023 | 73,425 | 39,600 | — | 4,574 | 117,599 |
Notes:
(1) | The amounts in this column represent the matching contributions made by the |
(2) | The life spending allowance provides employees the flexibility to use this money in a manner that is most meaningful to them, such as transportation/parking, fitness club memberships, financial consulting, perquisite vehicles, etc. |
(3) | The amounts in this column represent the value of personal aircraft use. The aggregate incremental cost to Ovintiv for personal use of Ovintiv’s aircraft is calculated based on Ovintiv’s average variable operating costs including fuel, repairs and maintenance, landing and ramp fees and other miscellaneous variable costs. |
|
|
The amounts in this column include company match of respective investment plan contributions, limited personal club memberships and taxable benefit of company parking. |
|
|
Ovintiv Inc. | 2024 Proxy Statement | 55 |
Grants of Plan-Based Awards for 20212023
The following table provides information about 2023 annual bonus opportunities and LTI awards granted to our NEOs in 20212023 under the Omnibus Incentive Plan.
| Type of award | Grant Date | Approval Date | Estimated future payouts under non-equity incentive plan awards(1) | Estimated future payouts under equity incentive plan awards(2) | All other number | Grant date fair value of stock awards(4) | Type of award | Grant Date | Approval Date | Estimated future payouts under non-equity incentive plan awards(1) | Estimated future payouts under equity incentive plan awards(2) | All other number | Grant date fair value of stock awards(4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name |
Threshold |
Target |
Maximum |
Threshold |
Target |
Maximum |
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brendan McCracken | 0 | 807,506 | 1,615,012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | 2/26/2021 | 2/09/2021 | 60,979 | 1,390,931 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PSU | 2/26/2021 | 2/09/2021 | 0 | 60,979 | 121,958 | 1,390,931 |
| — |
| $ | 1,353,125 |
| $ | 2,706,250 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | 8/05/2021 | 6/08/2021 | 63,809 | 1,625,215 |
| RSU |
|
| 03/08/2023 |
|
| 02/23/2023 |
|
|
|
|
|
|
|
| 87,118 |
| $ | 3,875,009 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PSU | 8/05/2021 | 6/08/2021 | 0 | 63,809 | 127,618 | 1,625,215 |
| PSU |
|
| 03/08/2023 |
|
| 02/23/2023 |
|
|
|
| — |
| 87,118 |
|
| 174,236 |
|
| $ | 3,875,009 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corey Code | 0 | 294,413 | 588,826 |
|
|
|
| — |
| $ | 548,340 |
| $ | 1,096,680 |
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | 2/26/2021 | 2/09/2021 | 26,024 | 598,509 |
| RSU |
|
| 03/08/2023 |
|
| 02/23/2023 |
|
|
|
|
|
|
|
| 24,704 |
| $ | 1,111,520 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PSU | 2/26/2021 | 2/09/2021 | 0 | 26,024 | 52,048 | 598,509 |
| PSU |
|
| 03/08/2023 |
|
| 02/23/2023 |
|
|
|
| — |
| 24,704 |
|
| 49,408 |
|
| $ | 1,111,520 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greg Givens | 0 | 387,688 | 775,377 |
|
|
|
| — |
| $ | 656,250 |
| $ | 1,312,500 |
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | 2/26/2021 | 2/09/2021 | 32,881 | 750,016 |
| RSU |
|
| 03/08/2023 |
|
| 02/23/2023 |
|
|
|
|
|
|
|
| 33,724 |
| $ | 1,500,044 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PSU | 2/26/2021 | 2/09/2021 | 0 | 32,881 | 65,762 | 750,016 |
| PSU |
|
| 03/08/2023 |
|
| 02/23/2023 |
|
|
|
| — |
| 33,724 |
|
| 67,448 |
|
| $ | 1,500,044 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Renee Zemljak | 0 | 343,000 | 686,000 |
|
|
|
| — |
| $ | 401,000 |
| $ | 802,000 |
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | 2/26/2021 | 2/09/2021 | 32,881 | 750,016 |
| RSU |
|
| 03/08/2023 |
|
| 02/23/2023 |
|
|
|
|
|
|
|
| 20,234 |
| $ | 900,008 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PSU | 2/26/2021 | 2/09/2021 | 0 | 32,881 | 65,762 | 750,016 |
| PSU |
|
| 03/08/2023 |
|
| 02/23/2023 |
|
|
|
| — |
| 20,234 |
|
| 40,468 |
|
| $ | 900,008 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joanne Cox(5) | 0 | 191,520 | 383,040 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | 2/26/2021 | 2/09/2021 | 19,084 | 438,901 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PSU | 2/26/2021 | 2/09/2021 | 0 | 19,084 | 38,168 | 438,901 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doug Suttles(6) | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | 2/26/2021 | 2/09/2021 | 208,242 | 4,750,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PSU | 2/26/2021 | 2/09/2021 | 0 | 208,242 | 416,484 | 4,750,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Meghan Eilers |
|
|
|
| — |
| $ | 330,750 |
| $ | 661,500 |
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU |
|
| 03/08/2023 |
|
| 02/23/2023 |
|
|
|
|
|
|
|
| 16,862 |
| $ | 750,022 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PSU |
|
| 03/08/2023 |
|
| 02/23/2023 |
|
|
|
| — |
| 16,862 |
|
| 33,724 |
|
| $ | 750,022 |
|
Notes:
(1) |
|
(2) | These columns reflect the potential payout range, in units, of PSUs granted in |
(3) | RSU awards plus reinvested dividends vest annually over a three-year period. |
(4) | Canadian dollar awards have been converted to U.S. dollars using an exchange rate of C$1.00 = US$ |
|
|
Securities Authorized for Issuance Under Equity Compensation Plans
The following table presents information regarding equity awards outstanding under the company’s long-term incentiveCompany’s LTI plans as of December 31, 2021.2023.
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column)(1) | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column) | ||||||||||||||||||
Equity compensation plans approved by security holders(2) | 13,555,432 | $ | 26.03 | 4,736,720 | ||||||||||||||||||||
Equity compensation plans approved by security holders | ||||||||||||||||||||||||
Equity compensation plans approved by security holders | ||||||||||||||||||||||||
Equity compensation plans approved by security holders | ||||||||||||||||||||||||
Equity compensation plans approved by security holders | 5,262,502 | (1) | $46.16 | 4,414,954 | ||||||||||||||||||||
Equity compensation plans not approved by security holders | ||||||||||||||||||||||||
Equity compensation plans not approved by security holders | ||||||||||||||||||||||||
Equity compensation plans not approved by security holders | ||||||||||||||||||||||||
Equity compensation plans not approved by security holders | None | None | None | None | None | None | ||||||||||||||||||
Total | 13,555,432 | $ | 26.03 | 4,736,720 | ||||||||||||||||||||
Total | ||||||||||||||||||||||||
Total | ||||||||||||||||||||||||
Total | 5,262,502 | $46.16 | 4,414,954 |
Notes:Note:
(1) |
|
|
56 | 2024 Proxy Statement | Ovintiv Inc. |
Outstanding Equity Awards at Fiscal Year End
The following table shows outstanding equity awards held by the NEOs as of December 31, 2021.2023.
|
|
|
|
|
| Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Option Awards(1) | RSUs | PSUs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: number of securities underlying unexercised unearned options | Stock Option exercise price ($) | Stock Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested(2) ($) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested(3) ($) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brendan McCracken | — | — | – | 64,345 | $ | 2,168,427 | 64,345 | $ | 2,168,427 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | – | 61,914 | $ | 2,086,502 | 61,914 | $ | 2,086,502 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | – | 5,681 | $ | 191,450 | 8,522 | $ | 287,191 |
|
|
|
|
| Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | – | 32,160 | $ | 1,083,792 | 48,239 | $ | 1,625,688 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6,358 | 4,240 | – | $ | 22.95 | 9/10/2026 | 0 | $ | 0 | 4,645 | $ | 156,570 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6,222 | 4,151 | – | $ | 35.80 | 3/8/2026 | 5,475 | $ | 184,541 | 11,410 | $ | 384,551 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4,326 | — | – | $ | 54.35 | 2/26/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5,378 | — | – | $ | 58.75 | 2/27/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
19,441 | — | – | $ | 20.30 | 3/3/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7,917 | — | – | $ | 56.75 | 3/13/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corey Code | — | — | – | 26,421 | $ | 895,857 | 26,421 | $ | 895,857 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | – | 31,652 | $ | 1,073,259 | 47,479 | $ | 1,609,871 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
16,706 | 11,137 | – | $ | 45.05 | 5/8/2026 | 0 | $ | 0 | 12,625 | $ | 428,110 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4,198 | 2,799 | – | $ | 47.70 | 3/8/2026 | 3,537 | $ | 119,963 | 7,372 | $ | 249,963 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4,629 | — | – | $ | 68.80 | 2/26/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4,929 | — | – | $ | 77.15 | 2/27/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
19,760 | — | – | $ | 27.80 | 3/3/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
11,856 | — | – | $ | 71.70 | 3/13/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greg Givens | — | — | – | 33,385 | $ | 1,125,108 | 33,385 | $ | 1,125,108 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | – | 42,741 | $ | 1,440,372 | 64,111 | $ | 2,160,541 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10,696 | 7,130 | – | $ | 22.95 | 9/10/2026 | 0 | $ | 0 | 7,814 | $ | 263,332 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9,035 | 6,023 | – | $ | 35.80 | 3/8/2026 | 7,948 | $ | 267,881 | 16,564 | $ | 558,207 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3,696 | — | – | $ | 69.15 | 8/9/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Option Awards(1) | RSUs | PSUs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: number of securities underlying unexercised unearned options | Stock Option exercise price ($) | Stock Option expiration date | Number of that have not | Market value of shares or units of stock that have not vested(2) ($) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested(3) ($) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brendan McCracken |
| 187,960 |
|
| $8,255,203 |
|
| 320,554 |
|
| $14,078,732 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5,378 |
|
| — |
|
| — |
| $ | 58.75 |
|
| 02/27/2024 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corey Code |
| 50,936 |
|
| $2,195,166 |
|
| 81,156 |
|
| $3,497,544 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4,929 |
|
| — |
|
| — |
| C$ | 77.15 |
|
| 02/27/2024 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greg Givens |
| 65,055 |
|
| $2,857,216 |
|
| 102,295 |
|
| $4,492,796 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3,696 |
|
| — |
|
| — |
| $ | 69.15 |
|
| 08/09/2025 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Renee Zemljak | — | — | – | 33,385 | $ | 1,125,108 | 33,385 | $ | 1,125,108 |
| 44,073 |
|
| $1,935,686 |
|
| 77,761 |
|
| $3,415,263 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | – | 42,741 | $ | 1,440,372 | 64,111 | $ | 2,160,541 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
15,058 | 10,039 | – | $ | 35.80 | 3/8/2026 | 13,247 | $ | 446,424 | 27,606 | $ | 930,322 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12,500 | — | — | $ | 54.35 | 2/26/2025 |
| 11,976 |
|
| — |
|
| — |
| $ | 58.75 |
|
| 02/27/2024 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Meghan Eilers |
| 27,789 |
|
| $1,220,493 |
|
| 37,203 |
|
| $1,633,956 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
11,976 | — | — | $ | 58.75 | 2/27/2024 |
| 3,710 |
|
| — |
|
| — |
| $ | 35.80 |
|
| 03/08/2026 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
31,046 | — | — | $ | 20.30 | 3/3/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
27,765 | — | — | $ | 56.75 | 3/13/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joanne Cox(4) | — | — | — | 19,375 | $ | 656,982 | 19,375 | $ | 656,982 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | 23,211 | $ | 787,050 | 34,817 | $ | 1,180,541 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8,648 | 5,765 | — | $ | 47.70 | 3/8/2026 | 7,287 | $ | 247,080 | 15,185 | $ | 514,912 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7,629 | — | $ | 68.80 | 2/26/2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7,087 | — | — | $ | 77.15 | 2/27/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
14,500 | — | — | $ | 27.80 | 3/3/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | $ | 77.55 | 1/12/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doug Suttles(5) | — | — | — | 211,435 | $ | 7,125,360 | 211,435 | $ | 7,125,360 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | 242,192 | $ | 8,161,904 | 363,289 | $ | 12,242,873 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
85,327 | 56,884 | — | $ | 35.80 | 3/8/2026 | 75,064 | $ | 2,529,691 | 156,434 | $ | 5,271,826 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
70,831 | — | — | $ | 54.35 | 2/26/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
67,865 | — | — | $ | 58.75 | 2/27/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
246,378 | — | — | $ | 20.30 | 3/3/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
116,617 | — | — | $ | 56.75 | 3/13/2022 |
Notes:
(1) | Stock option awards vest over three years (30% the first two years and 40% the third year) and expire seven years from grant date. |
(2) | The values shown in this column are based on the NYSE or TSX closing price of shares of Ovintiv common stock on December 31, |
(3) | The values shown in this column are based on the NYSE or TSX closing price of shares of Ovintiv common stock on December 31, |
|
|
Ovintiv Inc. | 2024 Proxy Statement | 57 |
Stock Option Exercises and Stock Vested for 20212023
The following table provides information relating to the value realized upon the exercise of stock options and the vesting of RSUs and PSUs under the company’sCompany’s incentive plans during the last fiscal year.
| ||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
|
|
| Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
|
|
| Stock Awards | Stock Option Awards | RSUs | PSUs | ||||||||||||||||||||||||||||||||||||||||||
| Stock Option Awards | RSUs | PSUs | |||||||||||||||||||||||||||||||||||||||||||||
Name | Number of shares acquired on exercise (#) | Value realized on exercise(1) ($) | Number of shares acquired on vesting (#) | Value realized on vesting(1)(2) ($) | Number of shares acquired on vesting(3) (#) | Value realized on vesting(1)(4) ($) | ||||||||||||||||||||||||||||||||||||||||||
Name | ||||||||||||||||||||||||||||||||||||||||||||||||
Name | ||||||||||||||||||||||||||||||||||||||||||||||||
Name | Number of shares acquired on exercise (#) | Value realized on exercise(1) ($) | Number of shares acquired on vesting (#) | Value realized on vesting(1)(2) ($) | Number of shares acquired on vesting(3) (#) | Value realized on vesting(1)(4) ($) | ||||||||||||||||||||||||||||||||||||||||||
Brendan McCracken |
| – |
|
| – |
|
| 18,187 |
|
| 422,003 |
|
| 4,074 |
|
| 93,695 |
| ||||||||||||||||||||||||||||||
Brendan McCracken | ||||||||||||||||||||||||||||||||||||||||||||||||
Brendan McCracken | ||||||||||||||||||||||||||||||||||||||||||||||||
Brendan McCracken | — | — | 88,985 | 3,862,621 | 98,713 | 4,137,118 | ||||||||||||||||||||||||||||||||||||||||||
Corey Code |
| – |
|
| – |
|
| 18,232 |
|
| 423,038 |
|
| 4,143 |
|
| 95,282 |
| ||||||||||||||||||||||||||||||
Corey Code | ||||||||||||||||||||||||||||||||||||||||||||||||
Corey Code | ||||||||||||||||||||||||||||||||||||||||||||||||
Corey Code | — | — | 33,038 | 1,405,165 | 82,303 | 3,500,617 | ||||||||||||||||||||||||||||||||||||||||||
Greg Givens |
| – |
|
| – |
|
| 28,053 |
|
| 663,365 |
|
| 3,537 |
|
| 89,663 |
| ||||||||||||||||||||||||||||||
Greg Givens | ||||||||||||||||||||||||||||||||||||||||||||||||
Greg Givens | ||||||||||||||||||||||||||||||||||||||||||||||||
Greg Givens | — | — | 42,237 | 1,756,586 | 111,138 | 4,622,208 | ||||||||||||||||||||||||||||||||||||||||||
Renee Zemljak |
| – |
|
| – |
|
| 28,568 |
|
| 657,319 |
|
| 11,792 |
|
| 268,976 |
| ||||||||||||||||||||||||||||||
Joanne Cox(5) |
| – |
|
| – |
|
| 15,787 |
|
| 365,812 |
|
| 6,828 |
|
| 157,033 |
| ||||||||||||||||||||||||||||||
Doug Suttles(6) |
| 122,500 |
|
| 1,733,300 |
|
| 161,883 |
|
| 3,724,754 |
|
| 66,817 |
|
| 1,524,096 |
| ||||||||||||||||||||||||||||||
Renee Zemljak | ||||||||||||||||||||||||||||||||||||||||||||||||
Renee Zemljak | ||||||||||||||||||||||||||||||||||||||||||||||||
Renee Zemljak | — | — | 38,782 | 1,612,858 | 111,138 | 4,622,208 | ||||||||||||||||||||||||||||||||||||||||||
Meghan Eilers | ||||||||||||||||||||||||||||||||||||||||||||||||
Meghan Eilers | ||||||||||||||||||||||||||||||||||||||||||||||||
Meghan Eilers | ||||||||||||||||||||||||||||||||||||||||||||||||
Meghan Eilers | — | — | 10,972 | 456,256 | 24,543 | 1,020,732 |
Notes:
(1) | The value realized on shares acquired on exercise is based on the difference between the closing price per share of Ovintiv common stock on the date of exercise and the grant price. Canadian dollar awards have been converted to U.S. dollars using an exchange rate of C$1.00 = US$ |
(2) | The values realized upon vesting for RSUs are based on the NYSE or TSX |
(3) | The performance multiplier for the 2020 PSU grant was determined to be 170%. |
(4) | The values realized upon vesting for |
|
|
|
|
Change in Control Arrangements
Ovintiv does not have general employment contracts with our NEOs; however, each NEO has a change in control (“CIC”) agreement that provides for payment of severance and other termination benefits upon a qualifying termination following a CIC. Effective February 27, 2024, our NEO CIC agreements were amended in several regards and the table below is reflective of the terms and provisions of such agreements. The treatment of each NEO’s LTI awards upon a termination of employment following a CIC is governed by the applicable LTI plan. The relevant terms of our executive CIC arrangements and treatment of LTI awards are summarized in the table below.
Application | CEO and all other ELT members. | |
Trigger |
| |
Severance | Lump sum cash payment equal to | |
Benefits | Continuation of health, dental, life, disability, and accident insurance benefits | |
Pension | Continued accrual or crediting of contributions (for Defined Contribution pension plan participants) or cash payment equal to the value thereof for | |
Stock Options/SARs | All unvested stock options/ | |
PSUs | All outstanding PSUs immediately vest and become payable at the level specified in the plan document and at the price at which shares of Ovintiv common stock are valued for purposes of the CIC. | |
RSUs | Any unvested RSUs immediately vest and are payable based on the price at which shares of Ovintiv common stock are valued for purposes of the CIC. |
58 | 2024 Proxy Statement | Ovintiv Inc. |
TREATMENT OF LTIs UPON TERMINATION OR CHANGE IN CONTROL | ||
Voluntary or Involuntary Termination Outside a | Upon termination under the age of 55, all RSUs, PSUs and unvested stock options are forfeited and
Upon early retirement between the ages of 55 to 60, whether initiated by Ovintiv or due to the applicable employee’s resignation: (i) unvested RSUs and PSUs vest on a pro-rated basis based on the number of months from the grant date to the date of retirement, and are paid at the scheduled vesting date; (ii) vested stock options or SARs must be exercised within six months of termination of employment; and (iii) unvested options or SARs are
Upon retirement above the age of 60, whether initiated by Ovintiv or due to the applicable employee’s resignation, all outstanding RSUs, PSUs and stock options/SARs will continue to vest according to the vesting schedule, with any vested options or SARs exercisable up to the expiry date. | |
Termination Following a CIC | In February 2018, we amended our LTI award agreements to incorporate “double trigger” vesting provisions. For all LTI awards granted to our NEOs beginning February 2018, both a CIC and subsequent termination, of the executive by the | |
Termination Due to Death | Treatment of LTIs upon the death of |
Potential Payments Upon Termination or Change in Control
The following table illustrates the amount of compensation payable to each of our NEOs assuming various termination scenarios or a change in control of the companyCompany as if such event occurred on December 31, 2021.2023. The amounts shown below are calculated as atof December 31, 20212023, and all Canadian dollar amounts have been converted to U.S. dollars using the Bank of Canada exchange rate in effect on such date (being C$1.00 = US$0.789)0.756). As noted on page 58, effective February 27, 2024, the terms and provisions of our NEO CIC agreements were amended in several regards, including the amount of severance payable in qualifying circumstances. The amounts shown below are calculated based upon the terms of the NEO CIC agreements that were in effect on December 31, 2023, the calculation date, and are not reflective of the terms and provisions of the amended NEO CIC agreements.
In addition, on March 7, 2024, the Company and Ms. Zemljak also entered into a transition agreement (the “Transition Agreement”) in connection with the elimination of her position. Additional details on the terms of such Transition Agreement are discussed below.
| Voluntary Termination ($) | Involuntary Termination Without Cause ($) | Involuntary Termination Within a Change-in-Control ($) | Termination Due to Death ($) | ||||||||||||
Brendan McCracken | ||||||||||||||||
Salary Severance |
| – |
|
| 2,000,000 | (1) |
| 2,000,000 | (1) | |||||||
Annual Incentive Plan |
| – |
|
| 836,558 | (2) |
| 2,500,000 | (2) | |||||||
Value of Unvested LTIs |
| 260,506 |
|
| 260,506 |
|
| 12,662,342 | (3,4) |
| 4,681,677 |
| ||||
Incremental Value (Pension Benefits) |
| 367,200 | (5) |
| 367,200 | (5) | ||||||||||
Other Compensation and Benefits |
| 91,277 | (8) |
| 91,277 | (8) | ||||||||||
TOTAL: |
| 260,506 |
|
| 3,555,541 | (9) |
| 17,620,819 |
|
| 4,681,677 |
| ||||
Corey Code | ||||||||||||||||
Salary Severance |
| – |
|
| – |
|
| 785,000 | (1) | |||||||
Annual Incentive Plan |
| – |
|
| – |
|
| 598,500 | (2) | |||||||
Value of Unvested LTIs |
| 227,865 |
|
| 227,865 |
|
| 5,387,963 | (3,4) |
| 3,146,364 |
| ||||
Incremental Value (Pension Benefits) |
| – |
|
| – |
|
| 88,368 | (6) | |||||||
Other Compensation and Benefits |
| – |
|
| – |
|
| 104,809 | (8) | |||||||
TOTAL: |
| 227,865 |
|
| 227,865 |
|
| 6,964,640 |
|
| 3,146,364 |
| ||||
Greg Givens | ||||||||||||||||
Salary Severance |
| – |
|
| – |
|
| 1,050,000 | (1) | |||||||
Annual Incentive Plan |
| – |
|
| – |
|
| 787,500 | (2) | |||||||
Value of Unvested LTIs |
| – |
|
| – |
|
| 6,907,455 | (3,4) |
| 3,943,709 |
| ||||
Incremental Value (Pension Benefits) |
| – |
|
| – |
|
| 170,100 | (7) | |||||||
Other Compensation and Benefits |
| – |
|
| – |
|
| 80,950 | (8) | |||||||
TOTAL: |
| – |
|
| – |
|
| 8,996,005 |
|
| 3,943,709 |
|
Ovintiv Inc. | 2024 Proxy Statement | 59 |
| Voluntary Termination ($) | Involuntary Termination Without Cause ($) | Involuntary Termination Within a Change-in-Control ($) | Termination Due to Death ($) | ||||||||||||
Brendan McCracken | ||||||||||||||||
Salary Severance | 2,200,000 | (1) | 2,200,000 | 1) | ||||||||||||
Annual Incentive Plan | 2,853,233 | (2) | 2,853,233 | (2) | ||||||||||||
Value of Unvested LTIs | 21,578,072 | (3) | 12,704,826 | |||||||||||||
Incremental Value (Pension Benefits) | 403,920 | (4) | 403,920 | (4) | ||||||||||||
Other Compensation and Benefits | 82,620 | (7) | 82,620 | (7) | ||||||||||||
TOTAL: | 5,539,773 | (8) | 27,117,845 | 12,704,826 | ||||||||||||
Corey Code | ||||||||||||||||
Salary Severance | 1,145,340 | (1) | ||||||||||||||
Annual Incentive Plan | 1,122,615 | (2) | ||||||||||||||
Value of Unvested LTIs | 5,649,572 | (3) | 3,294,374 | |||||||||||||
Incremental Value (Pension Benefits) | 128,278 | (5) | ||||||||||||||
Other Compensation and Benefits | 141,156 | (7) | ||||||||||||||
TOTAL: | 8,186,961 | 3,294,374 | ||||||||||||||
Greg Givens | ||||||||||||||||
Salary Severance | 1,330,000 | (1) | ||||||||||||||
Annual Incentive Plan | 1,341,808 | (2) | ||||||||||||||
Value of Unvested LTIs | 7,150,132 | (3) | 4,094,486 | |||||||||||||
Incremental Value (Pension Benefits) | 215,460 | (6) | ||||||||||||||
Other Compensation and Benefits | 86,004 | (7) | ||||||||||||||
TOTAL: | 10,123,404 | 4,094,486 | ||||||||||||||
Renee Zemljak | ||||||||||||||||
Salary Severance | 1,010,000 | (1) | ||||||||||||||
Annual Incentive Plan | 972,117 | (2) | ||||||||||||||
Value of Unvested LTIs | 3,279,023 | 3,279,023 | 5,151,069 | (3) | 3,279,023 | |||||||||||
Incremental Value (Pension Benefits) | 163,620 | (6) | ||||||||||||||
Other Compensation and Benefits | 88,952 | (7) | ||||||||||||||
TOTAL: | 3,279,023 | 3,279,023 | 7,385,758 | 3,279,023 | ||||||||||||
Meghan Eilers | ||||||||||||||||
Salary Severance | 960,000 | (1) | ||||||||||||||
Annual Incentive Plan | 672,000 | (2) | ||||||||||||||
Value of Unvested LTIs | 2,846,583 | (3) | 1,384,354 | |||||||||||||
Incremental Value (Pension Benefits) | 155,520 | (6) | ||||||||||||||
Other Compensation and Benefits | 81,768 | (7) | ||||||||||||||
TOTAL: | 4,715,871 | 1,384,358 |
Notes:
| Voluntary Termination ($) | Involuntary Termination Without Cause ($) | Involuntary Termination Within a Change-in-Control ($) | Termination Due to Death ($) | ||||||||||||
Renee Zemljak | ||||||||||||||||
Salary Severance |
| – |
|
| – |
|
| 980,000 | (1) | |||||||
Annual Incentive Plan |
| – |
|
| – |
|
| 686,000 | (2) | |||||||
Value of Unvested LTIs |
| 4,669,091 |
|
| 4,669,091 |
|
| 7,606,417 | (3,4) |
| 4,669,091 |
| ||||
Incremental Value (Pension Benefits) |
| – |
|
| – |
|
| 158,760 | (7) | |||||||
Other Compensation and Benefits |
| – |
|
| – |
|
| 86,316 | (8) | |||||||
TOTAL: |
| 4,669,091 |
|
| 4,669,091 |
|
| 9,517,493 |
|
| 4,669,091 |
| ||||
Joanne Cox | ||||||||||||||||
Salary Severance |
| – |
|
| – |
|
| 628,000 | (1) | |||||||
Annual Incentive Plan |
| – |
|
| – |
|
| 383,040 | (2) | |||||||
Value of Unvested LTIs |
| 1,798,818 |
|
| 1,798,818 |
|
| 4,124,471 | (3,4) |
| 1,798,818 |
| ||||
Incremental Value (Pension Benefits) |
| 70,694 | (6) | |||||||||||||
Other Compensation and Benefits |
| 99,451 | (8) | |||||||||||||
TOTAL: |
| 1,798,818 |
|
| 1,798,818 |
|
| 5,305,656 |
|
| 1,798,818 |
|
Notes:
(1) | Calculated using two times NEOs’ base salary in effect at December 31, |
(2) | Calculated based on the greater of (i) two times current target Bonus or (ii) two times the average of annual bonus award paid in the immediately preceding three years |
(3) |
|
The PSU amounts have been valued, for illustration purposes, based on a payout of 100% of the respective target amount using the NYSE or TSX closing price of shares of Ovintiv common stock, on December 31, |
In the event of a CIC and termination of employment, Mr. McCracken would be compensated based on additional service for purposes of his |
In the event of a CIC and termination of employment, Mr. Code |
In the event of a CIC and termination of employment, Mr. Givens, Ms. Zemljak and Ms. |
Includes other compensation, including perquisites, annual allowances and five percent matching of participant contributions. |
Reflects estimated value for without Cause termination pursuant to Mr. McCracken’s offer of employment dated June 8, 2021. |
60 | 2024 Proxy Statement | Ovintiv Inc. |
Transition Agreement
As compensation for her services during the Transition Period, Ms. Zemljak will continue to receive her annual base salary, remain eligible to receive an annual bonus for the 2024 performance period and continue to participate in employee benefit plans. Additionally, during the Transition Period, Ms. Zemljak’s previously granted equity awards will remain outstanding and continue to vest in accordance with their existing terms. Ms. Zemljak will not be eligible to receive new equity awards under the equity incentive compensation program during the Transition Period. Additionally, at the conclusion of the Transition Period, Ms. Zemljak will receive a lump sum severance payment in the amount of $2,075,090. The Transition Agreement includes a customary general release of claims in favor of the Company.
Retirement and Other Benefits
Ovintiv provides retirement and other benefits to our NEOs as described below.
Canadian Registered and Supplemental Pension Plans
Our Canadian-based executives participate in our registered pension plan and supplemental pension plan (collectively, the “Canadian Plan”). Pension contributions to the registered plan are payable up to the level permitted by the Income Tax Act. Contributions beyond this level are made to the supplemental plan. The Canadian Plan has an active defined contribution component. It also has a legacy defined benefit component that has been closed to new members since 2003. Pensionable earnings, for purposes of the Canadian Plan, include a base salary and annual bonus award (capped to a maximum of base salary of 67% for the CEO and 40% for other NEOs).
Canadian Defined Contribution Plan
Mr. Code participates and Mr. McCracken participated (through August 2021) in the defined contribution component of the Canadian Plan. Ovintiv contributes 8% of pensionable earnings to an individual’s defined contribution account. Participants select from a variety of investment options and manage their own accounts.
Canadian Investment Plan
Our Canadian-based executives are also eligible to participate in our Canadian Investment Plan. Participants contribute up to a maximum of 25% base salary to self-selected investment options. Ovintiv matches these contributions to a maximum of 5% of base salary in shares of Ovintiv common stock purchased on the open market.
U.S. Defined Contribution Plans
Mr. Suttles, Mr.Messrs. McCracken and Givens Ms.and Mmes. Zemljak and Mr. McCracken (as of September 2021),Eilers, participate in the Ovintiv USA Retirement Plan. Ovintiv contributes 8% of base salary to a participant’s defined contribution account. Similar to the Canadian Investment Plan, participant contributions are matched by Ovintiv up to 5% of base salary. Participants select among various investment options and manage their own accounts. As with the supplemental component of the Canadian Plan, Ovintiv also credits an amount equal to 8% of the executives’ annual bonus award (to a maximum of 67% of base salary for the CEO and 40% for the other NEOs) to a U.S. non-qualified Deferred Compensation Plan (“NQDC Plan”). The NQDC Plan provides non-qualified benefits in excess of those permitted (under the Ovintiv USA Retirement Plan) by the Tax Code.
Canadian Registered and Supplemental Pension Plans
Our Canadian-based executives participate in our registered pension plan and supplemental pension plan (collectively, the “Canadian Plan”). Pension contributions to the registered plan are payable up to the level permitted by the Income Tax Act. Contributions beyond this level are made to the supplemental plan. The Canadian Plan has an active defined contribution component. Pensionable
earnings, for purposes of the Canadian Plan, include a base salary and annual bonus award (capped to a maximum of base salary of 67% for the CEO and 40% for other NEOs).
Canadian Defined Contribution Plan
Mr. Code participates in the defined contribution component of the Canadian Plan. Ovintiv contributes 8% of pensionable earnings to an individual’s defined contribution account. Participants select from a variety of investment options and manage their own accounts.
Canadian Investment Plan
Our Canadian-based executives are also eligible to participate in our Canadian Investment Plan. Participants contribute up to a maximum of 25% base salary to self-selected investment options. Ovintiv matches these contributions to a maximum of 5% of base salary in shares of Ovintiv common stock purchased on the open market.
Welfare Benefits
NEOs participate in the same company-sponsoredCompany-sponsored welfare benefit programs as Ovintiv’s other employees, based on the country in which they reside.
Employee Deferred Share Unit Plan
Under the Employee Deferred Share Unit Plan (“Employee DSU Plan”), executives can convert either 25% or 50% of their annual bonus award into DSUs. To defer part of an annual bonus award into DSUs, an executive must make an election prior to December 31 of the preceding calendar year. Once an election is made, the number of DSUs credited to an executive is calculated as follows:
DSUs are settled in cash and are payable only after an executive ceases to be an employee of Ovintiv.
Ovintiv Inc. | 2024 Proxy Statement | 61 |
Lump Sum Cash Payment in Lieu of Perquisites
Ovintiv provides employees, including NEOs, with a lump sum cash payment in lieu of offering specific perquisites.
Additional CEO Benefits
Mr. McCracken and Mr. Suttles received additional benefits as part of theirhis compensation arrangements entered into when they werehe was appointed as CEO. These benefits include a prescribed-value annual allowance for personal travel on company-ownedCompany-owned aircraft. These benefits are treated as employment income and are fully taxable. Mr. McCracken and Mr. Suttles receivereceives no tax gross-ups or loans in respect of the travel allowance, and any unused balance at year-end is forfeited and cancelled.canceled. See “All Other Compensation” column for Mr. McCracken and Mr. Suttles in the Summary Compensation Table on page 5054 of this Proxy StatementStatement.
2021 2023 Non-qualified Deferred Compensation
The table below provides information relating to the compensation deferred during fiscal year 20212023 under the terms of the NQDC by the NEOs:
Name | Executive contributions in last fiscal year(1)(5) ($) | Registrant contributions in last fiscal year(2)(5) ($) | Aggregate earnings in last fiscal year(3)(5) ($) | Aggregate withdrawals/ distributions(5) ($) | Aggregate balance at last fiscal year end(4)(6) ($) | Executive contributions in last fiscal year(1)(5) ($) | Registrant contributions in last fiscal year(2)(5) ($) | Aggregate earnings in last fiscal year(3)(5) ($) | Aggregate withdrawals/ distributions(5) ($) | Aggregate balance at last fiscal year end(4)(6) ($) | ||||||||||||||||||||||||||||||
Brendan McCracken |
| - |
|
| 43,982 |
|
| 2,413 |
|
| (45,887) |
|
| 19,547 |
| |||||||||||||||||||||||||
Brendan McCracken | ||||||||||||||||||||||||||||||||||||||||
Brendan McCracken | ||||||||||||||||||||||||||||||||||||||||
Brendan McCracken | - | $145,283 | $ 50,846 | - | $ 319,326 | |||||||||||||||||||||||||||||||||||
Corey Code |
| - |
|
| 19,569 |
|
| 52,065 |
|
| — |
|
| 134,205 |
| |||||||||||||||||||||||||
Corey Code | ||||||||||||||||||||||||||||||||||||||||
Corey Code | ||||||||||||||||||||||||||||||||||||||||
Corey Code | - | $ 36,783 | $ (7,101 | ) | - | $ 234,581 | ||||||||||||||||||||||||||||||||||
Greg Givens |
| - |
|
| 36,186 |
|
| 13,826 |
|
| — |
|
| 109,151 |
| |||||||||||||||||||||||||
Greg Givens | ||||||||||||||||||||||||||||||||||||||||
Greg Givens | ||||||||||||||||||||||||||||||||||||||||
Greg Givens | - | $ 61,315 | $ 29,003 | - | $ 210,713 | |||||||||||||||||||||||||||||||||||
Renee Zemljak |
| - |
|
| 41,168 |
|
| 198,063 |
|
| — |
|
| 1,713,663 |
| |||||||||||||||||||||||||
Joanne Cox |
| - |
|
| 12,441 |
|
| 106,877 |
|
| — |
|
| 283,228 |
| |||||||||||||||||||||||||
Doug Suttles |
| - |
|
| 148,126 |
|
| 125,249 |
|
| — |
|
| 725,094 |
| |||||||||||||||||||||||||
Renee Zemljak | ||||||||||||||||||||||||||||||||||||||||
Renee Zemljak | ||||||||||||||||||||||||||||||||||||||||
Renee Zemljak | - | $ 35,884 | $(64,705 | ) | $ | 125,989 | $1,485,831 | |||||||||||||||||||||||||||||||||
Meghan Eilers | ||||||||||||||||||||||||||||||||||||||||
Meghan Eilers | ||||||||||||||||||||||||||||||||||||||||
Meghan Eilers | ||||||||||||||||||||||||||||||||||||||||
Meghan Eilers | - | $ 30,525 | $ 6,703 | - | $ 51,184 |
Notes:
(1) | These include contributions made through election in the NQDC Plan and deferrals elected by NEOs through the Employee DSU Plan. These amounts are reported in the “Non-Equity Incentive Plan Compensation” column (for |
(2) | These include contributions made by Ovintiv to the NEO through the NQDC Plan and Canadian Supplemental DC Plan. These amounts are reported in the All Other Compensation column of the Summary Compensation Table on page |
(3) | Earnings are not included in the “Change in Pension Value and Non-qualified Deferred Compensation Earnings” column of the Summary Compensation Table on page |
(4) | The aggregate balances shown in this column include the following amount that was reported in the Summary Compensation Table in previous years: Mr. McCracken |
(5) | Canadian amounts are converted from Canadian dollars to U.S. dollars using the average exchange rate during |
(6) | Canadian amounts are converted from Canadian dollars to U.S. dollars using the December 31, |
The HRC Committee has reviewed, commented on and discussed with management this CD&A for the year ending December 31, 2021. Based on that review and discussion, the HRC Committee recommended to the Board that it be included in this Proxy Statement for the Meeting. The HRC Committee consists of Meg Gentle, Howard Mayson, Lee McIntire and Thomas Ricks.
Human Resources and Compensation Committee
Item 3. Increase Share Reserve of Omnibus Incentive Plan
| ||
| ||
| ||
|
On February 24, 2022, the Board, upon recommendation of the HRC Committee, unanimously approved, subject to shareholder approval, an amendment to the Omnibus Incentive Plan increasing the Share Reserve by 6,000,000 shares to an aggregate of 12,000,000 shares of Ovintiv common stock (the “Plan Amendment”). Section 12.3(a)(i) of the Omnibus Incentive Plan and applicable securities laws and exchange rules relating to issuer equity compensation plans require that Ovintiv seek shareholder approval of the Plan Amendment. Even though Ovintiv is not required to satisfy Awards through the issuance or purchase of Ovintiv common stock, and may settle such Awards in cash, the Board considers it advisable to increase the Share Reserve by 6,000,000 shares of Ovintiv common stock to maintain Ovintiv’s flexibility in determining whether to settle Awards in cash or shares of Ovintiv common stock. If approved by our shareholders, the Plan Amendment will become effective on May 5, 2022 and is anticipated to provide for sufficient settlement of Awards in shares of Ovintiv common stock through 2027 based upon (i) an assumed Ovintiv share price of US$40 per share of common stock on the NYSE and CAD$50 per share of common stock on the TSX; and (ii) historical Award issuances and settlements. If the Plan Amendment is not approved by our shareholders, then the current Omnibus Incentive Plan, including the maximum Share Reserve of 6,000,000 shares of Ovintiv common stock, will continue in full force and effect.
The Omnibus Incentive Plan was originally approved by shareholders and became effective on February 13, 2019 with an initial Share Reserve of 30,000,000 shares of Ovintiv common stock (then being common shares of Ovintiv’s predecessor, Encana Corporation (“Encana”)). As a result of Ovintiv’s common stock being consolidated on the basis of one post-consolidation share for each five pre-consolidation shares in connection with the reorganization of Encana to form Ovintiv, the Share Reserve was subsequently reduced to 6,000,000 shares of Ovintiv common stock by an amendment to the Omnibus Incentive Plan effective January 24, 2020. As of March 10, 2022, 3,357,954 shares of Ovintiv common stock have been issued to plan participants upon settlement of Awards granted under the Omnibus Incentive Plan and 2,642,046 shares of Ovintiv common stock remain available for issuance to plan participants upon settlement of Awards granted under the
Omnibus Incentive Plan. As of March 10, 2022, total Awards outstanding pursuant to the Omnibus Incentive Plan totaled 8,978,284, comprised of (i) 5,188,502 RSUs, 3,316,385 PSUs, and 190,544 TSARs (as defined herein), any of which may be settled in cash or shares of Ovintiv common stock issued from treasury or purchased on the open market, subject to the limit imposed by the Share Reserve; and (ii) 282,853 SARs which may only be settled in cash.
The grant of Awards under the Omnibus Incentive Plan is an integral component of compensation to Ovintiv employees and a key part of our short- and long-term incentive pay. A significant portion of Ovintiv employees’ compensation in 2021 was in the form of Awards, which vest over a period of not less than one year. This form of compensation (i) provides competitive pay opportunities to attract, motivate and retain employees through multi-year vesting periods; (ii) provides performance-based compensation that aligns the interests of employees and shareholders without excessive risk; (iii) rewards employee performance in achieving Ovintiv’s long-term corporate goals and shareholder objectives; and (iv) aligns Ovintiv with corporate governance and compensation best practices. Based on the current and projected number of Awards granted pursuant to the Omnibus Incentive Plan, as well as Ovintiv’s expectations regarding settlement of such Awards in Ovintiv common stock, management has determined the current Share Reserve is insufficient to satisfy Ovintiv’s equity compensation needs under the Omnibus Incentive Plan for calendar year 2023 and beyond. If our shareholders do not approve the Plan Amendment, we expect to experience a shortfall of shares of Ovintiv common stock available for issuance upon settlement of Awards prior to the 2023 Annual Meeting of Ovintiv Shareholders and this may adversely affect our ability to attract, retain and reward employees who contribute to our long-term success, placing us at a competitive disadvantage to our peers.
A copy of the Plan Amendment and a full text of the Omnibus Incentive Plan (including prior amendments) is attached as Schedule D to this Proxy Statement. Except for the change in Share Reserve outlined above, there are no other changes to the terms and provisions of the Omnibus Incentive Plan.
New Plan Benefits
Ovintiv has not approved any Awards that are conditioned upon shareholder approval of the Omnibus Incentive Plan. Awards under the Omnibus Incentive Plan will be determined by the HRC Committee (or another committee of the Board consisting of at least two directors) in its discretion and it is, therefore, not possible to predict the Awards that will be made in the future under the Omnibus Incentive Plan. However, as discussed in further detail in the section entitled “Our Director Compensation Program”, each of our current non-employee directors is entitled to receive certain grants of Director RSUs and DSUs in connection with
their service on the Board, pursuant to the terms of our director compensation program, which will be granted under the Omnibus Incentive Plan. The following table summarizes the aggregate value of the shares that our current non-employee directors as a group will receive if they remain a director following the Meeting. All other future awards are discretionary and cannot be determined at this time. For information regarding Awards granted in 2021 to our NEOs under the Omnibus Incentive Plan, see the “Executive Compensation Tables” on page 50.
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| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
|
Notes:
|
|
|
When considering the vote to approve this proposal, you should be aware that our directors and executive officers have interests in this proposal that are different from, or in addition to, those of our shareholders generally. Each of the persons and groups listed in the table above has an interest in this proposal in respect of the Awards they may receive in the future if this proposal is approved by our shareholders.
Existing Plan Benefits
In accordance with SEC rules, the table below indicates Awards previously granted under the Omnibus Incentive Plan as of March 10, 2022. No stock options have been granted since 2020. As of March 10, 2022, there were 190,544 shares of our common stock issuable upon exercise of stock options under the Omnibus Incentive Plan, with a
weighted average exercise price of US$36.98 and a weighted average remaining term of 4.05 years. As of March 10, 2022, the closing price of our common stock on the NYSE was $47.60 per share and the closing price of our common stock on the TSX was $60.83 per share.
Name | Title | Options | SARs | |||
Brendan M. McCracken | President & Chief Executive Officer | - | 20,970 | |||
Corey D. Code | Executive Vice President & Chief Financial Officer | 34,840 | - | |||
Greg D. Givens | Executive Vice President & Chief Operating Officer | - | 32,884 | |||
Renee Zemljak | Executive Vice President, Midstream, Marketing & Fundamentals | - | 10,039 | |||
Joanne Cox(1) | 14,413 | - | ||||
Doug Suttles(1) | - | 142,211 | ||||
Executive Officer Group (6 Persons) | 41,267 | 63,893 | ||||
Non-Employee Director Group (11 Persons) | - | - | ||||
Non-Executive Employee Group (1,289 Persons) | 28,536(2) | 42,971(2) |
Note:
|
|
TSX Approval of the Plan Amendment
The Toronto Stock Exchange has conditionally approved the proposed Plan Amendment, subject to receipt of shareholder approval at the meeting.
Form of Resolution Approving the Plan Amendment
Shareholders will be asked at the Meeting to consider and, if thought appropriate, approve the following ordinary resolution:
“BE IT RESOLVED THAT:
|
62 | 2024 Proxy Statement |
|
CEO Pay Ratio
Mr. McCracken’s 2023 annual total target compensation was $11,783,939 as reflected in the Summary Compensation Table included in this Proxy Statement. Our median employee’s annual total compensation for 2023 calculated in accordance with Item 402 of Regulation S-K (which includes 2023 base salary, target grant date fair value of LTI awards, annual bonus, Company contributions to retirement plan, annual allowance and other benefits) was $193,736. As a result, in accordance with Item 402(u) of Regulation S-K, we estimate that Mr. McCracken’s 2023 annual total compensation was approximately 61 times that of our median employee. The median employee was determined based on actual 2023 total cash compensation for the period from January 1, 2023 to December 31, 2023, for the employee population as of December 31, 2023. We used a foreign exchange rate of C$1.00 = US$0.741 (the average exchange rate during 2023) to convert Canadian compensation into U.S. dollars for purposes of comparison. The rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios. Pay v. Performance The Company’s pay versus performance tables and information, which discloses information about the relationship between executive compensation paid and the financial performance |
The foregoing resolutions require an affirmative majority of the votes duly cast at the Meeting. Abstentions are counted as votes “against” and broker non-votes have no effectCompany can be found in Schedule B, starting on the voting with respect to this Item 3.
The Board recommends that shareholders vote FOR the Plan Amendment.page 68.
Ovintiv Inc. | 2024 Proxy Statement | 63 |
AUDIT MATTERS
Item 4. 3. Ratify PricewaterhouseCoopers LLP as Independent Auditors: The Board recommends you vote FOR this proposal
| ||
You are voting on a proposal to ratify the appointment of PricewaterhouseCoopers LLP to serve as independent auditor of Ovintiv until the next annual meeting of shareholders. | ||
| ||
|
The Audit Committee has authority and responsibility to review and evaluate Ovintiv’s independent auditors and to recommend to the Board whether to propose the reappointment of such independent auditors at the Meeting. The Audit Committee is also responsible for compensation, retention, and general oversight of the work of the independent auditors. The Audit
Committee has appointed
PricewaterhouseCoopers LLP (“PwC”) to serve as Ovintiv’s independent auditors until the close of the next annual meeting of shareholders and shareholders are being asked to ratify such appointment. PwC (including its predecessors) has served as the company’sCompany’s independent auditors for over 10 years.
Evaluation and Selection of Independent Auditors
The Audit Committee conducted a competitive selection process to determine the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2024. The Committee invited several public accounting firms to participate in this process, including PwC, the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2023. The Committee considered a number of factors in evaluating the proposals from the registered public accounting firms including, but not limited to, the comprehensive content of the proposals, relevant experience, professional and technical qualifications of the proposed engagement team, audit approach, the results of external quality control reviews, and fees.
As a result of this process, following the Committee’s review and evaluation of the proposals from the participating firms, the Committee believes that the continued retention of PwC as Ovintiv’s independent auditors is in the best interest of the companyCompany and its shareholders. Factors considered byAccordingly, on February 27, 2024, the Audit Committee in reaching this determination included:approved the continued appointment of PwC as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2024.
|
|
The Audit Committee is responsible for approving audit and permissible non-audit services provided by the independent auditors and associated fees. The following table provides information about fees for audit and permissible non-audit services rendered by PwC during fiscal years 20212023 and 2020.2022.
(US$ thousands) | 2021(5) | 2020(5) | 2023(5) | 2022(5) | ||||||||||||
Audit Fees(1) | 2,494 | 2,288 | ||||||||||||||
Audit Fees(1) | ||||||||||||||||
Audit Fees(1) | ||||||||||||||||
Audit Fees(1) | 2,752 | 2,543 | ||||||||||||||
Audit-Related Fees(2) | 266 | 134 | ||||||||||||||
Audit-Related Fees(2) | ||||||||||||||||
Audit-Related Fees(2) | ||||||||||||||||
Audit-Related Fees(2) | 578 | 238 | ||||||||||||||
Tax Fees(3) | 108 | 161 | ||||||||||||||
Tax Fees(3) | ||||||||||||||||
Tax Fees(3) | ||||||||||||||||
Tax Fees(3) | 244 | 217 | ||||||||||||||
All Other Fees(4) | 7 | 5 | ||||||||||||||
All Other Fees(4) | ||||||||||||||||
All Other Fees(4) | ||||||||||||||||
All Other Fees(4) | 4 | 7 | ||||||||||||||
Total | 2,875 | 2,588 | ||||||||||||||
Total | ||||||||||||||||
Total | ||||||||||||||||
Total | 3,578 | 3,005 |
Notes:
(1) | Audit fees consist of fees for the audit of Ovintiv’s annual financial statements (including required quarterly reviews), subsidiary audits, or services that are normally provided in connection with statutory and regulatory filings or engagements. |
(2) | Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of Ovintiv’s financial statements and are not reported as Audit Fees. During fiscal |
(3) | Tax fees consist of fees for tax compliance services, tax advice and tax planning. During fiscal |
(4) | During fiscal |
(5) | Amounts paid in Canadian dollars have been converted to U.S. dollars using an average exchange rate of C$1.00 = US$ |
64 | 2024 Proxy Statement | Ovintiv Inc. |
All audit, audit-related, tax and other services were pre-approved by the Audit Committee, which concluded the provision of such services by PwC was compatible with the firm’s independence in conduct of its auditing functions. Ovintiv did not rely on the de minimis exemption provided by Section (c)(7)(i)(C) of Rule 2-01 of SEC Regulation S-X in 20212023 or 2020.2022.
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee approves all audit and non-audit services to be provided by our independent auditors. The Audit Committee has established a budget for the provision of a specified list of audit and permitted non-audit services that the committee believes to be typical, recurring, or
otherwise likely to be provided by PwC. It retains flexibility through the year to review as need may arise. Any such decision remains with the Audit Committee, not management.
Other Information
One or more representatives of PwC will attend the Meeting. The representatives will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.
Vote Required for ApprovalRatification
The ratification of PwC as Ovintiv’s independent auditors requires an affirmative majority of the votes duly cast at the Meeting.
Primary Responsibilities
Management is responsible for preparing Ovintiv’s consolidated financial statements, managing accounting and financial reporting processes, devising and maintaining systems of internal controls over financial reporting, and assessing the effectiveness of internal controls over financial reporting. The independent auditor is responsible for performing an independent audit of Ovintiv’s consolidated financial statements and internal controls over financial reporting. The Audit Committee’s primary responsibility is to monitor and oversee these processes and procedures on behalf of the Board.
The Audit Committee operates under an Audit Committee MandateCharter adopted by the Board that outlines its responsibilities and practices. The Audit Committee MandateCharter is available on ourOvintiv’s website atwww.ovintiv.com/mandates-guidelines/.under the “Investors-Corporate Governance” tab.
Oversight of Independent Auditors
The Audit Committee monitors the qualifications, performance and independence of Ovintiv’s independent auditors and recommends to the Board on an annual basis whether to propose the reappointment of the current independent auditors at the next annual meeting of shareholders or propose the appointment of another auditor. PwC served as Ovintiv’s independent auditors for the year ended December 31, 2021,2023, and, subject to an affirmative majority of the votes duly cast at the Meeting, will be reappointed to that role at the Meeting until the close of the next annual meeting of shareholders.
The Audit Committee has discussed with the independent auditors those matters required to be discussed under the standards of the Public Company Accounting Oversight Board (the “PCAOB”). The Audit Committee has also received written disclosures and the letter from the independent auditors required by the PCAOB regulating the independent auditors’ communication with the Audit Committee concerning independence and has discussed with the independent auditors their independence from management and Ovintiv generally, as well as whether the provision of non-audit services by PwC is compatible with maintaining auditor independence.
The Audit Committee has reviewed and discussed together with management and the independent auditors the audited consolidated financial statements in the Annual Report on Form 10-K for the fiscal year ended December 31,
In reliance on these reviews and discussions, and the reports of the independent auditors, the Audit Committee has recommended to the Board, and the Board has approved, that the audited consolidated financial statements be included in Ovintiv’s Annual Report on Form 10-K for the fiscal year ended December 31,
The Audit Committee consists of Sippy Chhina, Meg Gentle, Suzanne Nimocks, George Pita, and Brian
The Audit Committee
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Ovintiv Inc. | 2024 Proxy Statement | 65 |
SCHEDULE A
Additional Shareholder Information
Shareholder Proposals and Director Nominations
Shareholder Proposals For Inclusion In Next Year’s Proxy StatementAdvisory Regarding Non-GAAP Measures
Ovintiv is subject to the rules of the SEC under the Exchange Act with respect to shareholder proposals. Shareholder proposals submitted pursuant to SEC rules must be received no later than November 23, 2022 to be considered at Ovintiv’s 2023 Annual Meeting of Shareholders.
All shareholder proposals should be directed to the attention of our Corporate Secretary. Shareholders are advised that, under the rules of the SEC, the submission of a shareholder proposal does not guarantee its inclusion in the company’s proxy materials. Such proposals must also comply with all applicable provisions of Rule 14a-8 under the Exchange Act.
Director Nominations For Inclusion In Next Year’s Proxy Statement
Ovintiv’s proxy access bylaw permits a shareholder, or a group of up to 20 shareholders, owning at least 3% of Ovintiv’s outstanding common stock continuously for at least three years to nominate and include in Ovintiv’s proxy statement, director nominees constituting up to the greater of two individuals or 20% (rounding down), provided that any nominating shareholders and nominees satisfy certain
requirements specified in the Ovintiv bylaws, including in respect to form of notice and timely delivery.
Any proxy access nomination notice must be received no earlier than October 24, 2022 and no later than November 23, 2022.
Other Shareholder Proposals And Director Nominations
If a shareholder wishes to propose items of business or nominate a director for election to the Board without including such proposal or nomination in Ovintiv’s proxy statement, that proposal or nomination must comply with the notice procedures set out in Sections 2.2 and 3.3 of Ovintiv’s bylaws, respectively. These procedures require that Ovintiv receive written notice of shareholder proposals and director nominees at least 90 days (and not more than 120 days) before the anniversary of the prior year’s annual meeting of shareholders. In the case of a special shareholder meeting (which is not also an annual meeting), Ovintiv must receive written notice no earlier than 120 days before the
special meeting and no later than (i) the tenth day following the day on which the special meeting is announced; or (ii) 90 days before the special meeting (whichever date is later).
To comply with the universal proxy rules (once effective), shareholders who intend to solicit proxies in support of director nominees other than the company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 6, 2023.
A copy of our bylaws was filed on EDGAR and SEDAR on January 24, 2020, and is available on our website.
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Communication with the Board of Directors
Shareholders and other interested parties can communicate directly with our directors, including our Board Chair, at the following address:
Ovintiv Inc.
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Shareholders can also direct inquiries to our investor relations personnel at investor.relations@ovintiv.com.
Additional Information
Additional information about Ovintiv, including copies of our Proxy Statement and Annual Report (which includes ourconsolidated financial statements and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2021),2023 are presented in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Certain measures in this Proxy Statement do not have any standardized meaning as prescribed by U.S. GAAP and, therefore, are
considered non-GAAP measures. These measures may not be comparable to similar measures presented by other companies and should not be viewed as a substitute for measures reported under U.S. GAAP. This Proxy Statement contains references to non-GAAP measures as follows:
Non-GAAP Cash Flow, Non-GAAP Cash Flow per Share, Non-GAAP Free Cash Flow
Non-GAAP Cash Flow (or Cash Flow) is availabledefined as cash from (used in) operating activities excluding net change in other assets and liabilities, and net change in non-cash working capital. Non-GAAP Cash Flow per Share is Non-GAAP Cash Flow divided by the weighted average number of shares of common stock outstanding. Non-GAAP Free Cash Flow (or Free Cash Flow) is Non-GAAP Cash Flow in excess of capital expenditures, excluding net acquisitions and divestitures. Management believes these measures are useful to the Company and its investors as a measure of operating and financial performance
across periods and against other companies in the industry, and are an indication of the Company’s ability to generate cash to finance capital investment programs, to service debt and to meet other financial obligations. These measures are used, along with other measures, in the calculation of certain performance targets for the Company’s management and employees. Non-GAAP Cash Flow is also referenced in the Company’s 2023 Annual Report on our website at www.ovintiv.comForm 10-K in Part II, Item 7, Management’s Discussion and can also be obtained by accessing Ovintiv’s profileAnalysis of Financial Condition and Results of Operations on EDGAR at www.sec.gov or SEDAR at www.sedar.com. Shareholders can also request copies of these documents, free of charge, by contacting our Investor Relations department:page 79.
($ millions) | 2023 | |||
| 4,167 | |||
Deduct (Add back): | ||||
Net change in other assets and liabilities | (62 | ) | ||
Net change in non-cash working capital | 330 | |||
Non-GAAP Cash Flow | 3,899 | |||
Less: capital expenditures | 2,744 | |||
Non-GAAP Free Cash Flow | 1,155 | |||
Other Adjustments(1) | 39 | |||
Non-GAAP Free Cash Flow, including Other Adjustments(2) | 1,194 | |||
Non-GAAP Cash Flow | 3,899 | |||
Weighted Average Shares of Common Stock Outstanding — Diluted | 263.9 | |||
Non-GAAP Cash Flow per Share | 14.77 |
(1) | Other adjustments includes cash settled long-term incentive costs and capitalized long-term incentive costs. |
(2) | This measure is used as an internal metric for the Company’s Scorecard. |
Non-GAAP Total Costs
Non-GAAP Total Costs is defined as the summation of production, mineral and other taxes, upstream transportation and processing expense, upstream operating expense and administrative expense, excluding the impact of long-term incentive, restructuring and legal costs, and current expected credit losses. It is calculated as total operating expenses excluding non-upstream operating costs and non-cash items which include operating expenses from the Market Optimization, and Corporate and Other segments, depreciation, depletion and amortization, impairments, accretion of
asset retirement obligation, long-term incentive, restructuring and legal costs, and current expected credit losses. When presented on a per BOE basis, Non-GAAP Total Costs is divided by production volumes. Management believes this measure is useful to the Company and its investors as a measure of operational efficiency across periods. Non-GAAP Total Costs is also referenced in the Company’s 2023 Annual Report on Form 10-K in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations on page 79.
66 | 2024 Proxy Statement | Ovintiv Inc.
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References to information contained on our website atwww.ovintiv.com is not incorporated by reference into, and do not constitute a part of, this Proxy Statement. Ovintiv became the parent company of Encana and its subsidiaries as a result of a series of corporate reorganization transactions completed on January 24, 2020 (the “Reorganization”). Unless stated or the context otherwise requires, references to “Ovintiv,” the “company”, “we”, “us” and “our” in this Proxy Statement (i) for periods prior to the completion of the Reorganization, refer to Encana and its consolidated subsidiaries and partnerships and (ii) for periods after the completion of the Reorganization, refer to Ovintiv and its consolidated subsidiaries and partnerships.
Certain statements contained herein may constitute forward-looking statements or information within the meaning of applicable securities legislation, including
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements involve assumptions, risks and uncertainties that may cause such statements not to occur or results to differ materially from the estimated or anticipated events or results expressed or implied in such forward-looking statements. For additional information on such assumptions, risks and uncertainties, please consult Ovintiv’s Annual Report on Form 10-K, which can be obtained by accessing Ovintiv’s profile on EDGAR at www.sec.gov or SEDAR at www.sedar.com. Although Ovintiv believes such forward-looking statements are reasonable, there can be no assurance that they will prove to be correct.
Householding of Proxy Materials
Only one proxy statement is being delivered to multiple security holders sharing an address unless Ovintiv has received contrary instructions from one of the security holders. Ovintiv undertakes to deliver promptly upon written or oral request a separate copy of the proxy statement and provide instructions as to how a security holder can notify Ovintiv that such security holder wishes to receive a separate copy of the proxy statement. A security holder who wishes to receive a separate copy of the proxy statement can notify Ovintiv of such request by mail at Ovintiv Inc., 370 17th Street, Suite 1700, Denver, Colorado 80202 or telephone at (303) 623-2300. Security holders sharing an address who are receiving multiple copies of annual reports to security holders or proxy statements can request the delivery of single copies of such documents by notifying Ovintiv by mail at Ovintiv Inc., 370 17th Street, Suite 1700, Denver, Colorado 80202 or telephone at (303) 623-2300.
($ millions) | 2023 | |||
Total Operating Expenses | 8,019 | |||
Deduct (add back): | ||||
Market optimization operating expenses | 3,006 | |||
Depreciation, depletion and amortization | 1,825 | |||
Accretion of asset retirement obligation | 19 | |||
Long-term incentive costs | 41 | |||
Transaction and legal costs | 93 | |||
Current expected credit losses | — | |||
Non-GAAP Total Costs | 3,035 | |||
Divided by: | ||||
Production Volumes (MMBOE) | 206.4 | |||
Non-GAAP Total Costs ($/BOE) | 14.70 | |||
Non-GAAP Total Costs | 3,035 | |||
Other Adjustments(1) | (209 | ) | ||
Non-GAAP Total Costs, including Other Adjustments(2) | 2,826 | |||
Divided by: | ||||
Production Volumes (MMBOE) | 206.4 | |||
Non-GAAP Total Costs, including Other Adjustments(2) ($/BOE) | 13.69 |
(1) | Other adjustments excludes production, mineral and other taxes and includes capitalized indirect costs. |
(2) | This measure is used as an internal metric for the company’s Scorecard. |
Ovintiv Inc. | 2024 Proxy Statement | 67 |
Year | Summary Compensation Table Total For PEO (Brendan McCracken) (1) | Summary Compensation Table Total For PEO (Doug Suttles) (1) | Compensation Actually Paid to PEO (Brendan McCracken) (2) | Compensation Actually Paid to PEO (Doug Suttles) (2) | Average Summary Compensation Total For Other NEOs (1) | Average Compensation Actually Paid to Other NEOs (2) | Cumulative TSR (3) | Peer Group Cumulative TSR (4) | Post-tax Net Income ($ MM) | Free Cash Flow ($ MM) (5) | ||||||||||||||||||||||||||||||
2023 | $11,783,939 | $ — | $ 7,356,908 | $ — | $3,716,672 | $5,509,308 | $199.85 | $153.37 | $ 2,085 | $1,194 | ||||||||||||||||||||||||||||||
2022 | $10,165,373 | $ — | $10,743,260 | $ — | $2,880,058 | $5,128,685 | $223.90 | $148.50 | $ 3,637 | $2,374 | ||||||||||||||||||||||||||||||
2021 | $ 8,639,482 | $12,127,629 | $ 7,849,086 | $28,545,877 | $2,288,213 | $4,519,122 | $147.31 | $102.76 | $ 1,416 | $1,730 | ||||||||||||||||||||||||||||||
2020 | $ — | $11,183,487 | $ — | $ 3,266,825 | $2,526,345 | $1,082,048 | $ 62.84 | $ 61.71 | $(6,097 | ) | $ 193 |
(1) | The PEO and Other NEOs for the applicable years were as follows: |
(2) | The amounts disclosed reflect adjustments to the “Total” amounts in the Summary Compensation Table per the table below. |
(3) | Total Shareholder Return (TSR) is calculated by dividing (a) the sum of (i) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (ii) the difference between the Company’s share price at the end of each fiscal year shown and the beginning of the measurement period, and the beginning of the measurement period by (b) the Company’s share price at the beginning of the measurement period. The beginning of the measurement period for each year in the table is December 31, 2019. |
(4) | The peer group used for this purpose is the SPDR Oil & Gas Exploration & Production ETF. |
(5) | Free Cash Flow is defined as non-GAAP cash flow in excess of capital expenditures, excluding net acquisitions and divestitures. For additional information regardingnon-GAAP measures, refer toSchedule A of this Proxy Statement. |
2023 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||
PEO (Brendan McCracken) | Average for Other NEOs | PEO (Brendan McCracken) | Average for Other NEOs | PEO (Brendan McCracken) | PEO (Doug Suttles) | Average for Other NEOs | PEO (Doug Suttles) | Average for Other NEOs | |||||||||||||||||||||||||||||||||||||
Summary Compensation Table Total | $ | 11,783,939 | $ | 3,716,672 | $ | 10,165,373 | $ | 2,880,058 | $ | 8,639,482 | $ | 12,127,629 | $ | 2,288,213 | $ | 11,183,487 | $ | 2,526,345 | |||||||||||||||||||||||||||
Reported Value of Equity Awards | $ | (7,750,017 | ) | $ | (2,130,797 | ) | $ | (7,250,046 | ) | $ | (1,799,850 | ) | $ | (6,032,292 | ) | $ | (9,500,000 | ) | $ | (1,231,670 | ) | $ | (8,500,013 | ) | $ | (1,593,071 | ) | ||||||||||||||||||
Reported Change in Pension Value | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (55,338 | ) | ||||||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||||||||||||||||||||||||
Year End Fair Value of Equity Awards Granted During Year | $ | 118,686 | $ | 15,872 | $ | 776,094 | $ | 253,657 | $ | 2,477,559 | $ | 4,750,708 | $ | 614,356 | $ | 1,776,093 | $ | 285,468 | |||||||||||||||||||||||||||
Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards as of Year End | $ | (5,198,389 | ) | $ | (1,157,405 | ) | $ | 3,097,011 | $ | 1,321,292 | $ | 2,191,198 | $ | 15,918,690 | $ | 2,186,693 | $ | (2,821,841 | ) | $ | (322,909 | ) | |||||||||||||||||||||||
Change in Fair Value from Prior Year to Vesting Date of Equity Awards Granted in Prior Years that Vested in the Year | $ | 8,402,689 | $ | 5,064,967 | $ | 3,954,828 | $ | 2,473,527 | $ | 573,140 | $ | 5,248,850 | $ | 661,530 | $ | 1,629,100 | $ | 208,926 | |||||||||||||||||||||||||||
Pension Service Cost for the Year | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 32,628 |
68 | 2024 Proxy Statement | Ovintiv Inc. |
2023 | 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||
PEO (Brendan McCracken) | Average for Other NEOs | PEO (Brendan McCracken) | Average for Other NEOs | PEO (Brendan McCracken) | PEO (Doug Suttles) | Average for Other NEOs | PEO (Doug Suttles) | Average for Other NEOs | ||||||||||||||||||||||||||||
Total Equity Award Adjustments | $3,322,986 | $3,923,433 | $ 7,827,933 | $4,048,477 | $5,241,896 | $25,918,248 | $3,462,579 | $ 583,351 | $ 171,484 | |||||||||||||||||||||||||||
Compensation Actually Paid | $7,356,908 | $5,509,308 | $10,743,260 | $5,128,685 | $7,849,086 | $28,545,877 | $4,519,122 | $3,266,825 | $1,082,048 |
Ovintiv Inc. | 2024 Proxy Statement | 69 |
70 | 2024 Proxy Statement | Ovintiv Inc. |
Ovintiv Inc. | 2024 Proxy Statement | 71 |
Schedule ASCHEDULE C
Description of the Key Terms – Omnibus Incentive Plan
The Omnibus Incentive Plan was adopted by Encana on February 13, 2019 and approved by shareholders at Encana’s 2019 Annual Meeting of Shareholders. The Omnibus Incentive Plan replaced Encana’s Employee Stock Appreciation Rights Plan, Performance Share Unit Plan for Employees, ESOP, Restricted Share Unit Plan for Employees and Restricted Share Unit Plan for Directors (collectively, the “Prior Plans”) in respect of
all future awards, and no new awards will be granted under such Prior Plans. Outstanding awards granted under the Prior Plans continue to be governed by the terms of the applicable Prior Plan until such awards are exercised, expire, or are otherwise terminated or cancelled.canceled.
In connection with the Reorganization (as defined on page 66 of this Proxy Statement), Ovintiv became the parent company of Encana and its subsidiaries and adopted the Omnibus Incentive Plan in its entirety effective January 24, 2020.
Purpose
Purpose
The Omnibus Incentive Plan is designed to, among other things, promote a proprietary interest in the companyCompany among eligible individuals and to align the
interest of such individuals with the interests of the company’sCompany’s shareholders through the issuance of long-term incentive awards.
Eligibility
Eligibility
The Omnibus Incentive Plan permits the grant of stock options, SARs, RSUs, PSUs, restricted stock and other share-based awards (each, an “Award” and collectively, the “Awards”) to directors, officers and employees of the companyCompany and its affiliates, as well as prospective directors, officers and employees who have accepted offers of employment or directorship from the companyCompany or its affiliates (collectively, “Eligible Individuals”). As of March 10, 2022,8, 2024, there were
11 non-employee directors, 6 executive officers and 1,289 1,309 non-executive employees eligible to participate in the Omnibus Incentive Plan. A stock option designated as an “incentive stock option” under the applicable grant agreement may be granted only to employees of the companyCompany and its subsidiaries (within the meaning of Section 424(f) of the Tax Code).
Administration
Administration
The Omnibus Incentive Plan is administered by the HRC Committee or any other committee of the Board consisting of at least two directors (such
administering body to be referred to in this section as the “Committee”).
Awards Available for Issuance; Awards Outstanding
The maximum number of shares of Ovintiv common stock that can be issued from treasury or purchased in the open market and delivered to participants pursuant to Awards granted under the Omnibus Incentive Plan is 6,000,000,12,000,000, or approximately 2.34.9 percent of the issued and outstanding shares of Ovintiv common stock as of March 10, 2022. As disclosed above under Item 3, Ovintiv shareholders will be asked to approve an amendment to the Omnibus Incentive Plan at the Meeting to increase the available number of shares of Ovintiv common stock by 6,000,000 shares to a total of 12,000,000 shares.February 28, 2024. Shares of Ovintiv common stock that were reserved for Awards granted under the Omnibus Incentive Plan that expire, or are terminated, forfeited or cancelled,canceled, will not be counted against the limit, but will be available for issuance pursuant to Awards subsequently granted under the Omnibus Incentive Plan.
As of December 31, 2021,2023, there were 208,751107,444 stock options (together with tandem SARs); 315,119262,960 SARs; 8,022,2003,206,326 RSUs; and 3,649,5101,794,365 PSUs (calculated at target grant award) outstanding under the Omnibus
Incentive Plan representing, in the aggregate, 4.72.0 percent of the issued and outstanding shares of Ovintiv common stock as of such date. As of December 31, 2021, 4,736,7202023, 4,260,587 shares of Ovintiv common stock remained available for issuance pursuant to Awards granted under the Omnibus Incentive Plan, representing 1.81.6 percent of the issued and outstanding shares of Ovintiv common stock as of such date.
Limits on Awards to Insiders, Non-Employee Directors and Any One Person
The Omnibus Incentive Plan includes provisions that generally mirror the insider restrictions set out in the TSX Company Manual and provide that the aggregate number of shares of Ovintiv common stock issued to Ovintiv insiders, within any one-year
72 | 2024 Proxy Statement | Ovintiv Inc. |
period, or issuable to insiders of Ovintiv, at any time, under the Omnibus Incentive Plan and any other security-based compensation arrangement of Ovintiv cannot exceed 10 percent of the total issued and outstanding shares of Ovintiv common stock (calculated on a non-diluted basis).
The Omnibus Incentive Plan also provides that no non-employee director of the companyCompany shall be granted Awards covering shares of Ovintiv common stock with an aggregate grant date Fair Market Value (as defined below) in excess of US$800,000 during any one-year period, and no more than US$100,000 of such allocated grant date Fair Market Value shall be comprised of stock options or SARs. In addition, a non-employee director shall not be granted any Awards under the Omnibus Incentive Plan if, at the time of such grant, such grant could result in the aggregate number of shares of Ovintiv common stock issued to all non-employee directors exceeding one percent of the company’sCompany’s then issued and outstanding shares of common stock.
No stock option that is intended to qualify as an incentive stock option may be granted to any Eligible Individual who, at the time of such grant, owns shares of Ovintiv common stock possessing more than 10 percent of the total combined voting power of all shares of common stock of the company,Company, unless at the time such stock option is granted, the exercise price is at least 110 percent of the Fair Market Value of a share of Ovintiv common stock and such stock option expires before the fifth anniversary of the date on which it was granted.
Subject to the terms of the Omnibus Incentive Plan, “Fair Market Value” means, with respect to any particular date, the volume weighted average trading price per share of Ovintiv common stock on the stock exchange designated in the applicable grant agreement during the five trading days immediately preceding such date.
Adjustments
Adjustments
Adjustments may be made to the exercise price of outstanding Awards, the number and kind of securities subject to outstanding Awards, and the aggregate number and kind of securities reserved for issuance and delivery under the Omnibus Incentive Plan, in certain circumstances, including in the event
of a share split, share dividend, reverse share split, share combination, reorganization, recapitalization, merger, arrangement, consolidation, acquisition of property or shares, share rights offering, liquidation, or similar event affecting the companyCompany or its capital structure.
Awards of Stock Options and SARs
Each stock option granted under the Omnibus Incentive Plan entitles an Eligible Individual to purchase one or more shares of Ovintiv common stock upon payment of an exercise price, subject to the terms and conditions of the Omnibus Incentive Plan and the applicable grant agreement. SARs may be granted as a separate Award or in conjunction with a stock option. Upon the exercise of a SAR, the Eligible Individual will be entitled to receive an amount equal to the product of (i) the excess of the closing price of one share of Ovintiv common stock on the last trading day preceding the date of exercise of the SAR over the exercise price of the applicable SAR, multiplied by (ii) the number of shares of Ovintiv common stock in respect of which the SAR has been exercised. Stock options granted with a tandem SAR allow the Eligible Individual to surrender the stock option and exercise the related SAR, or to exercise the stock option (in which case the related SAR will immediately terminate, and no payment will be made or shares of Ovintiv common stock issued in respect thereof). The applicable grant agreements for SAR grants not made in conjunction with a stock option specify whether such payment shall be made in cash or shares of Ovintiv common stock or reserve to the Committee or the Eligible Individual the right to make that determination prior to or upon the exercise of the SAR.
The exercise price per share of Ovintiv common stock subject to a stock option or SAR is determined by the Committee and set forth in the applicable grant agreement and cannot be less than the Fair Market Value of a share of Ovintiv common stock on the applicable grant date.
The vesting provisions and term of each stock option and SAR is fixed by the Committee, however in no event will any stock option or SAR be exercisable more than 10 years following the grant date of such Award, subject to the terms of the Omnibus Incentive Plan. Notwithstanding the foregoing, if the date on which a stock option or SAR is meant to terminate, expire or lapse (the “Termination Date”) occurs during a trading blackout period imposed by the companyCompany and applicable to the relevant participant, or within 10 business days of the expiry thereof, then the Termination Date will be extended to the date that is 10 business days following the expiry date of such trading blackout period.
The effect of an Eligible Individual’s period of absence or termination of service on such Eligible Individual’s stock options and SARs is as set forth in the applicable grant agreement.
Ovintiv Inc. | 2024 Proxy Statement | 73 |
Awards of RSUs
RSUs are Awards denominated in shares of common stock that are settled in a specified number of shares of Ovintiv common stock or a cash amount equal to the Fair Market Value of a specified number of shares of Ovintiv common stock, as determined in the sole discretion of the Committee.
RSUs vest in accordance with the terms and conditions of the Omnibus Incentive Plan and the applicable grant agreement. The vesting of RSUs is conditioned upon the continued service of the applicable Eligible Individual.
An Eligible Individual to whom RSUs are awarded will have no rights as a shareholder with respect to the shares of Ovintiv common stock represented by the RSUs until such shares of Ovintiv common stock are actually delivered to the Eligible Individual in settlement thereof.
The effect of an Eligible Individual’s period of absence or termination of service on such Eligible Individual’s RSUs is as set forth in the applicable grant agreement.
Awards of PSUs
PSUs are Awards denominated in shares of common stock that are settled in shares of Ovintiv common stock or a cash amount equal to the Fair Market Value of shares of Ovintiv common stock, as determined in the sole discretion of the Committee. The number of PSUs settled will vary depending on the company’sCompany’s achievement over a designated performance period of performance criteria determined by the Committee and set forth in the applicable grant agreement.
PSUs vest in accordance with the terms and conditions of the Omnibus Incentive Plan and the applicable grant agreement. The vesting of PSUs is
conditioned upon the continued service of the applicable Eligible Individual.
An Eligible Individual to whom PSUs are awarded will have no rights as a shareholder with respect to the shares of Ovintiv common stock represented by the PSUs until such shares of Ovintiv common stock are actually delivered to the Eligible Individual in settlement thereof.
The effect of an Eligible Individual’s period of absence or termination of service on such Eligible Individual’s PSUs is as set forth in the applicable grant agreement.
Awards of Restricted Stock
Shares of Restricted Stock are actual shares of Ovintiv common stock issued to an Eligible Individual, subject to certain restrictions on the ability to sell, assign, transfer, pledge or otherwise encumber shares of Restricted Stock during the restriction period determined by the Committee. Subject to the foregoing and the terms of the applicable grant agreement, the applicable Eligible Individual will have, in respect of his or her shares of Restricted Stock, all the rights of a shareholder of Ovintiv holding the class or series of Ovintiv common stock that is the subject of the Restricted Stock, including the right to receive
dividends and, subject to TSX approval, the right to vote the shares of Ovintiv common stock.
Vesting of Restricted Stock is conditional upon the continued service of the applicable Eligible Individual and may be subject to the achievement of performance criteria as determined by the Committee.
The effect of an Eligible Individual’s period of absence or termination of service on such Eligible Individual’s shares of Restricted Stock is as set forth in the applicable grant agreement.
Other Share-Based Awards
Subject to the terms of the Omnibus Incentive Plan, the Committee may grant equity-based or equity-related awards not otherwise described in the Omnibus Incentive Plan in such amounts and subject to such terms and conditions consistent with the terms of the Omnibus Incentive Plan as the Committee may determine, which may: (i) involve the transfer of actual shares of Ovintiv common stock to Eligible Individuals, either at the time of grant or thereafter, or payment in cash or otherwise of
amounts based on the value of shares of Ovintiv common stock, (ii) be subject to performance-based and/or service-based conditions, (iii) be in the form of phantom stock, deferred share units or other awards denominated in, or with a value determined by reference to, a number of shares of Ovintiv common stock that is specified at the time of the grant of such award, and (iv) be designed to comply with applicable laws of jurisdictions other than the U.S. or Canada.
74 | 2024 Proxy Statement | Ovintiv Inc. |
Transferability
Transferability
Awards under the Omnibus Incentive Plan are not transferable except by will or by laws of descent and distribution (or otherwise for estate settlement purposes). A stock option that is not designated as an incentive stock option under the applicable grant agreement or a SAR may be transferred by a
participant, for no value or consideration, to such participant’s family members, whether directly or indirectly or by means of a trust or
partnership or otherwise, if such transfer is expressly permitted by the Committee.
Amendments
Amendments
The Board or the Committee may amend, alter or discontinue the Omnibus Incentive Plan or amend the terms of any Award granted thereunder from time to time without shareholder approval; provided however that:
(a) | approval of the holders of a majority of the shares of Ovintiv common stock present and voting in person or by proxy at a meeting of shareholders is necessary for any: |
i. | increase in the maximum number of shares of Ovintiv common stock issuable pursuant to Awards granted under the Omnibus Incentive Plan; |
ii. | amendment that would reduce the exercise price of a stock option or SAR; |
iii. | amendment to extend the maximum term of any Award; |
iv. | amendment to permit the transfer or assignment of Awards beyond what is contemplated by the Omnibus Incentive Plan; |
v. | amendment to increase the limits on non-employee director participation contained in the Omnibus Incentive Plan; |
vi. | amendment that removes or exceeds the insider participation limit contained in the Omnibus Incentive Plan; |
vii. | amendment to the Omnibus Incentive Plan’s amendment provisions; or |
viii. | amendment for which shareholder approval is otherwise required under the rules or policies of the TSX or the NYSE, as applicable, or any applicable law; and |
(b) | the consent of the Award holder is obtained for any amendment, alteration or discontinuation which adversely alters or impairs the rights of the holder in respect of a previously granted Award. |
Burn Rate
For the fiscal years ended December 31, 2019,2021, December 31, 20202022, and December 31, 2021,2023, the annual burn rate of the Omnibus Incentive Plan, as calculated by dividing the number of securities granted under the Omnibus Incentive Plan during the
applicable fiscal year that may be treasury-settled by the weighted average number of securities outstanding for the applicable fiscal year, in accordance with Section 613(p) of the TSX Company Manual, was 1.2%1.4%1, 3.2%0.7%2 and 1.4%0.8%3, respectively.
1 |
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Securities granted: 3,690,183; weighted average number of securities outstanding: 258,938,455 |
2 | Securities granted: 1,838,169; weighted average number of securities outstanding: 251,875,253 |
3 | Securities granted: 2,094,279; weighted average number of securities outstanding: 259,928,750 |
Ovintiv Inc. | 2024 Proxy Statement | 75 |
Summary of Certain Income Tax Consequences of AwardsSCHEDULE D
U.S. Federal Income Tax Consequences
The following discussion is intended only as a brief summary of certain U.S. federal income tax consequences to Eligible Individuals and to Ovintiv of Awards granted under the Omnibus Incentive Plan based on applicable U.S. federal income tax law in effect on the date of this Proxy Statement. The following discussion does not address state, local, or non-U.S. income tax rules applicable to Awards under the Omnibus Incentive Plan.
Incentive Stock Options. An Eligible Individual who is granted an incentive stock option generally does not recognize taxable income at the time the incentive stock option is granted or upon its exercise, except that Eligible Individuals subject to the alternative minimum tax may recognize taxable income upon exercise in certain circumstances. Upon a disposition of the common stock acquired upon exercise of an incentive stock option (“ISO Shares”) more than two years after grant of the incentive stock option and one year after exercise of the incentive stock option, any gain or loss is treated as long-term capital gain or loss. In such case, Ovintiv would not be entitled to a deduction. If the Eligible Individual sells the ISO Shares prior to the expiration of these holding periods, the Eligible Individual recognizes ordinary income at the time of disposition equal to the excess if any, of the lesser of (i) the aggregate fair market value of the ISO Shares at the date of exercise and (ii) the amount received for the ISO Shares, over the aggregate exercise price previously paid by the Eligible Individual. Any gain or loss recognized on such a premature disposition of the ISO Shares in excess of the amount treated as ordinary income is treated as long-term or short-term capital gain or loss, depending on how long the ISO Shares were held by the Eligible Individual prior to the sale. Ovintiv is generally entitled to a deduction at the same time and in the same amount as the Eligible Individual recognizes ordinary income.
Non-qualified Stock Options and SARs. An Eligible Individual who is granted a stock option that is not an incentive stock option (a “Non-qualified Stock Option”) does not recognize any taxable income at the time of grant. Upon exercise, the Eligible Individual recognizes taxable income in an amount equal to the aggregate fair market value of the common stock subject to the Non-qualified Stock Option over the aggregate exercise price of such common stock. Any taxable income recognized in connection with the exercise of a Non-qualified Stock Option by an Eligible Individual who is an employee is subject to payroll taxes. Ovintiv is generally entitled to a deduction at the same time and in the same amount as the Eligible Individual recognizes ordinary income.
Other Awards. An Eligible Individual will generally not recognize income at the time an Award of RSUs, PSUs or
restricted stock is granted. When the vesting restrictions lapse with regard to any installment of restricted stock, the Eligible Individual will recognize ordinary income in an amount equal to the fair market value of the common stock with respect to which the restrictions lapse, unless the Eligible Individual previously elected to realize ordinary income in the year the Award was granted in an amount equal to the fair market value of the restricted stock awarded, determined without regard to the restrictions. An Eligible Individual will recognize ordinary income at the time that cash or common stock are delivered pursuant to an Award of RSUs or PSUs, in an amount equal to the cash paid or to be paid or the fair market value of the common stock delivered or to be delivered. The amount of ordinary income recognized by an Eligible Individual who is an employee is subject to payroll taxes. Ovintiv is generally entitled to a deduction at the same time and in the same amount as the Eligible Individual recognizes ordinary income.
Canadian Federal Income Tax Consequences
The following discussion is intended only as a brief summary of certain Canadian federal income tax consequences to Eligible Individuals who are residents of and employed in Canada based on applicable provisions of the Income Tax Act (Canada) in effect on the date of this Proxy Statement. The following discussion does not address provincial, local, or non-Canadian income tax rules applicable to Awards under the Omnibus Incentive Plan.
Stock Options. An Eligible Individual who is granted a stock option generally does not recognize taxable income at the time the stock option is granted or upon its exercise. Upon exercise of a stock option, the Eligible Individual recognizes income from an office or employment equal to the excess, if any, of the aggregate fair market value of the common stock acquired pursuant to the stock option at the date of exercise over the aggregate exercise price paid by the Eligible Individual (such excess being the “Option Benefit”). Provided certain conditions are met, the Eligible Individual should be entitled to deduct 50% of the Option Benefit in calculating his or her tax payable in respect of the exercise of the stock option. The Company is generally not entitled to a deduction in respect of stock options or the common stock issued on the exercise of stock options.
Other Awards. An Eligible Individual will generally not recognize income at the time an Award of RSUs or PSUs is granted. An Eligible Individual will recognize ordinary income at the time that cash or common stock are delivered pursuant to an Award of RSUs or PSUs, in an amount equal to the cash paid or to be paid or the fair market value of the Common Shares delivered or to be delivered. The amount of ordinary income recognized by an Eligible Individual who is an employee is subject to payroll taxes. Ovintiv is generally not entitled to a deduction where it issues common stock in settlement of vested RSUs or PSUs.
Schedule B
Description of Key Terms – Employee Stock Option Plan
The ESOP is designed to encourage a proprietary interest in Ovintiv and align the interests of eligible employees, including our executives, with those of our shareholders. Under the ESOP, stock options are granted to eligible Canadian-based employees, including executives. The ESOP has been approved by our shareholders.
As of December 31, 2021,2023, there were 524,725159,788 stock options outstanding under the ESOP and zero additional options available for issuance under the ESOP, representing 0.2%0.1% and 0%, respectively, of the total number of outstanding shares of Ovintiv common stock at such date.
The ESOP is administered by the HRC Committee and the Board which have full authority to interpret the ESOP and any stock option granted thereunder. The HRC Committee also has discretion to attach tandem stock appreciation rights (“TSARs”) to stock options granted under the ESOP.
The ESOP includes provisions that generally mirror the insider restrictions set out in the TSX Company Manual, that provide the aggregate of shares of Ovintiv common stock issued to Ovintiv insiders, within any one-year period, or issuable to insiders of Ovintiv, at any time, under the ESOP and any other security-based compensation arrangement of Ovintiv cannot exceed 10% of the total issued and outstanding shares of Ovintiv common stock (calculated on a non-diluted basis).
Stock options may be granted from time to time to eligible employees. Subject to regulatory requirements, the HRC Committee and the Board determine the terms and conditions of stock options granted, which are set out in the ESOP and corresponding grant agreement with the recipient.
Stock options granted commencing in February 2015 are exercisable for a period of seven years from the grant date. Stock options granted prior to such date are exercisable for five years from the grant date. Stock options vest 30% on the first anniversary of grant, an additional 30% on the second anniversary of the grant, and an additional 40% on the third anniversary of the grant.
Upon termination of employment (other than by death or retirement), the stock option holder has until the earlier of 60 trading days or the stock option expiry date to exercise any vested unexercised stock options. In the event of death or retirement before age 60, the stock option holder has until the earlier of six months from such date or the stock option expiry date to exercise any vested unexercised stock
options. In any of these events, any stock options that are unvested as of the date of termination of employment, death or retirement do not vest and are cancelled.canceled. In the event of death or retirement after age 60, the stock option holder may exercise vested stock options, and any unvested stock options continue to vest until the stock option expiry date.
Stock options granted and outstanding under the ESOP have associated TSARs that entitle the stock option holder to surrender the right to exercise his or her stock option to purchase shares of Ovintiv common stock and to instead receive cash. Such amount is valued based on the difference between the strike price and for TSARs granted after February 2015, the VWAP of shares of Ovintiv common
stock on the TSX on the five trading days prior to vesting, and for TSARs granted prior to such date, the closing price of shares of Ovintiv common stock on the TSX on the immediately preceding trading day is used. In each case such stock price is multiplied by the number of optioned shares of Ovintiv common stock surrendered. Where a TSAR is exercised, the right to the underlying shares of Ovintiv common stock is forfeited and such number of shares of Ovintiv common stock are returned to the shares of Ovintiv common stock reserved for issuance under the ESOP.
A stock option can only be exercised by the stock option holder and is not assignable, except on death by the stock option holder’s estate. A stock option holder only has rights as a shareholder of Ovintiv with respect to shares of Ovintiv common stock he or she has acquired through exercise of a stock option.
Adjustments may be made to the exercise price of a stock option, the number of shares of Ovintiv common stock delivered to a stock option holder upon exercise of a stock option and the maximum number of shares of Ovintiv common stock that may be reserved for issuance under the ESOP, in certain circumstances, such as a stock dividend, split, recapitalization, merger, consolidation, combination or exchange of shares of Ovintiv common stock or other similar corporate change.
Where a stock option expires during or within 10 business days after a blackout period, the exercise period is extended 10 business days from the last day of the blackout period (“Blackout Extension Period”).
The Board may amend, suspend or terminate the ESOP in whole or in part; provided, however, no such amendment may, without the consent of stock option holders, adversely affect the rights under any stock option previously granted to the stock option holder under the ESOP.
76 | 2024 Proxy Statement | Ovintiv Inc. |
Shareholder approval is required in respect of any amendment of the ESOP that relates to:
any increase in the number of shares of Ovintiv common stock reserved for issuance under the ESOP;
• | any increase in the number of shares of Ovintiv common stock reserved for issuance under the ESOP; |
any reduction in the exercise price or cancellation and reissue of stock options;
• | any reduction in the exercise price or cancellation and reissue of stock options; |
any extension of the term of a stock option beyond the original expiry date, except as permitted under the Blackout Extension Period;
• | any extension of the term of a stock option beyond the original expiry date, except as permitted under the Blackout Extension Period; |
any extension to the length of the Blackout Extension Period;
• | any extension to the length of the Blackout Extension Period; |
• | the inclusion of non-employee directors as eligible participants under the ESOP; |
the inclusion of non-employee directors as eligible participants under the ESOP;
• | any allowance for the transferability of stock options (other than upon death of a stock option holder); or |
• | amendments which require shareholder approval under applicable law. |
any allowance for the transferability of stock options (other than upon death of a stock option holder); or
amendments which require shareholder approval under applicable law.
For the fiscal year ended December 31, 2019,2021, December 31, 20202022 and December 31, 2021,2023, the annual burn rate of the ESOP, as calculated in accordance with Section 613(p) of the TSX Company Manual, was 0%, 0% and 0%, respectively.
The amounts in this Schedule B have been adjusted to reflect the effects of the Share Consolidation.
Schedule C
Advisory Regarding Non-GAAP Measures
Ovintiv’s consolidated financial statements for the year ended December 31, 2021 are presented in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Certain measures in this Proxy Statement do not have any standardized meaning as prescribed by U.S. GAAP and, therefore, are considered non-U.S. GAAP (“non-GAAP”)
measures. These measures may not be comparable to similar measures presented by other companies and should not be viewed as a substitute for measures reported under U.S. GAAP. This Proxy Statement contains references to non-GAAP measures as follows:
Non-GAAP Cash Flow, Non-GAAP Free Cash Flow and Cash Return Yield
Non-GAAP Cash Flow (or Cash Flow) is defined as cash from (used in) operating activities excluding net change in other assets and liabilities, net change in non-cash working capital and current tax on sale of assets. Non-GAAP Free Cash Flow (or Free Cash Flow) is Non-GAAP Cash Flow in excess of capital expenditures, excluding net acquisitions and divestitures. Cash Return Yield is defined as the sum of Ovintiv’s base dividend and expected cash returned to shareholders under the Company’s capital allocation framework, which was announced on September 9, 2021, divided by the Company’s market capitalization. Management believes these measures are useful to the Company and its investors as a measure of operating and financial performance across periods and against other companies in the industry, and are an indication of the Company’s ability to generate cash to finance capital programs, to service debt and to meet other financial
obligations. These measures may be used, along with other measures, in the calculation of certain performance targets for the Company’s management and employees. Due to the forward-looking nature of projected free cash flow used in calculating Cash Return Yield herein, management cannot reliably predict certain of the necessary components of the most directly comparable forward-looking GAAP measures, such as changes in operating assets and liabilities. Accordingly, Ovintiv is unable to present a quantitative reconciliation of such forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures. Amounts excluded from this non- GAAP measure in future periods could be significant. Non-GAAP Cash Flow is also referenced in the Company’s 2021 Annual Report on Form 10-K in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations on page 77.
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Ovintiv Inc. |
Net Debt to Adjusted EBITDA
Net Debt to Adjusted EBITDA is a non-GAAP measure calculated as Net Debt divided by Adjusted EBITDA. Net Debt is defined as long-term debt, including the current portion, less cash and cash equivalents. Adjusted EBITDA is defined as trailing 12-month net earnings (loss) before income taxes, DD&A, impairments, accretion of asset retirement obligation, interest, unrealized gains/losses on risk management, foreign exchange gains/losses, gains/losses on divestitures and other gains/losses. Management believes this measure is useful to the Company and its
investors as a measure of financial leverage and the Company’s ability to service its debt and other financial obligations. This measure is used, along with other measures, in the calculation of certain performance targets for the Company’s management and employees. Net Debt to Adjusted EBITDA is also referenced in the Company’s 2021 Annual Report on Form 10-K in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations on page 79.
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Total Costs
Total Costs is defined as the summation of production, mineral and other taxes, upstream transportation and processing expense, upstream operating expense and administrative expense, excluding the impact of long-term incentive, restructuring and legal costs and current expected credit losses. It is calculated as total operating expenses excluding non-upstream operating costs and non-cash items which include operating expenses from the Market Optimization and Corporate and Other segments, depreciation, depletion and amortization, impairments,
accretion of asset retirement obligation, long-term incentive, restructuring and legal costs and current expected credit losses. When presented on a per BOE basis, Total Costs is divided by production volumes. Management believes this measure is useful to the Company and its investors as a measure of operational efficiency across periods. Total Costs is also referenced in the Company’s 2021 Annual Report on Form 10-K in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations on page 78.
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Schedule D
OMNIBUS INCENTIVE PLAN OF ENCANA CORPORATION
Effective from February 13, 2019
OMNIBUS INCENTIVE PLAN OF ENCANA CORPORATION
(Effective from February 13, 2019)
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In the Plan, the following terms shall have the meanings respectively set forth below:
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Awards may be granted under this Plan to Eligible Individuals; provided, however, that Incentive Stock Options may be granted only to employees of the Corporation and its subsidiaries (within the meaning of Section 424(f) of the Code).
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Sections 7.1 through 7.4 shall apply to Awards of PSUs, mutatis mutandis. The Performance Criteria to be achieved during any Performance Period and the length of the Performance Period shall be determined by the Committee upon the grant of each PSU. The conditions for grant or vesting and the other provisions of PSUs (including any applicable Performance Criteria) need not be the same with respect to each recipient. PSUs may be paid in cash or Shares, in the sole discretion of the Committee.
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Subject to applicable rules and policies of the TSX and NYSE (including, for greater certainty, any exchange or shareholder approval requirements), the Committee may grant equity-based or equity-related awards not otherwise described herein in such amounts and subject to such terms and conditions consistent with the terms of this Plan as the Committee shall determine. Without limiting the generality of the preceding sentence, each such Other Share-Based Award may (i) involve the transfer of actual Shares to Participants, either at the time of grant or thereafter, or payment in cash or otherwise of amounts based on the value of Shares, (ii) be subject to performance-based and/or service-based conditions, (iii) be in the form of phantom stock, deferred share units or other awards denominated in, or with a value determined by reference to, a number of Shares that is specified at the time of the grant of such award, and (iv) be designed to comply with Applicable Laws of jurisdictions other than the United States or Canada.
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unless the change to the Plan or an Award results from the application of Section 3.6 of the Plan; and
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It is intended that this Plan constitute an “unfunded” plan. The Committee may authorize the creation of trusts or other arrangements to meet the obligations created under this Plan to deliver Shares or make payments; provided, however, that unless the Committee otherwise determines, the existence of such trusts or other arrangements is consistent with the “unfunded” status of this Plan.
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AMENDING AGREEMENT
TO OMNIBUS INCENTIVE PLAN OF ENCANA CORPORATION
RECITALS:
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THEREFORE:
ARTICLE 1
AMENDMENTS
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This Amending Agreement (this “Agreement”) is effective as of January 24, 2020 (the “Effective Date”).
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All references to “Encana Corporation”, including its logo, in the Omnibus Plan are deleted and replaced with “Ovintiv Inc.” and the Corporation’s logo.
All references to “principal office in Calgary, Alberta” are deleted and replaced with “principal office in Denver, Colorado”.
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The language on the cover page and page 1 of the Omnibus Plan, which reads “Effective from February 13, 2019” is deleted and replaced with:
Adopted with effect from January 24, 2020
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Section 1.2(q) of the Omnibus Plan is deleted and replaced with:
(q) “Corporation” means Ovintiv Inc., a corporation incorporated under the laws of the State of Delaware, and any successor corporation whether by amalgamation, merger or otherwise.
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The provision forming part of Section 3.1 of the Omnibus Plan that reads “granted under this Plan shall be 30,000,000.” is deleted and replaced with:
granted under this Plan shall be 6,000,000.
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The provision forming part of Section 14.7 of the Omnibus Plan that reads “This Plan and all Awards made and actions taken hereunder shall be governed by and construed in accordance with the laws of the Province of Alberta, without reference to principles of conflict of laws, and the federal laws of Canada, as applicable.”, is deleted and replaced with:
This Plan and all Awards made and actions taken hereunder shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws.
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Section 12.1 of the Omnibus Plan is deleted and replaced with:
Effectiveness. This Plan is effective as of January 24, 2020 (the “Effective Date”).
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In accordance with Section 3.6 of the Omnibus Plan, the Board has determined that:
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Notwithstanding anything else in the Omnibus Plan or this Agreement, the Corporation and Ovintiv Canada ULC (formerly known as Encana) (“Ovintiv Canada”) may allocate the cost of the Encana Awards between them based on the amount of time that each such Encana Award was outstanding on a pre-Share Consolidation and post-Share Consolidation basis, or on such other basis as may be agreed to between the Corporation and Ovintiv Canada, acting reasonably .
ARTICLE 2
GENERAL
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This Agreement shall be governed by and construed in accordance with the laws in force in the State of Delaware, without reference to conflict of laws principles.
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This Agreement may be signed or executed by facsimile or portable document format and the signing or execution by way of facsimile or portable document format shall have the same effect as the signing or execution of the original.
[Signature Page Follows]
IN WITNESS OF WHICH the Corporation has executed this Agreement as of the Effective Date set forth above.
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FREQUENTLY ASKED QUESTIONS
Signature Page to Amendment to Omnibus Incentive Plan of Encana Corporation
SECOND AMENDMENT TO
OMNIBUS INCENTIVE PLAN OF OVINTIV INC.
THIS SECOND AMENDMENT TO OMNIBUS INCENTIVE PLAN OF OVINTIV INC. (this “Second Amendment”), is made this [5] day of May, 2022 (the “Effective Date”), by Ovintiv, Inc., a Delaware corporation (“Ovintiv”).
WHEREAS, Ovintiv administers and maintains the Omnibus Incentive Plan of Ovintiv Inc., dated effective February 13, 2019 (as amended on January 24, 2020, the “Omnibus Plan”);
WHEREAS, pursuant to Section 12.3(a)(i) of the Omnibus Plan, and as required by applicable securities laws and exchange rules, a majority of Shares present and voting in person or by proxy at a meeting of holders of Shares must be obtained to increase the maximum number of Shares issuable pursuant to Awards granted under the Omnibus Plan (the “Share Reserve”);
WHEREAS, on February 24, 2022, the Board of Directors, upon recommendation of the Human Resources and Compensation Committee, unanimously approved, subject to shareholder approval, an amendment to the Omnibus Plan increasing the Share Reserve by 6,000,000 Shares to an aggregate of 12,000,000 Shares (the “Share Reserve Increase”);
WHEREAS, a majority of Shares present and voting in person or by proxy at Ovintiv’s May 4, 2022 annual general meeting authorized the Share Reserve Increase; and
WHEREAS, Ovintiv desires to amend the Omnibus Plan to provide for the Share Reserve Increase.
NOW, THEREFORE, as of the Effective date, the Omnibus Plan is amended as follows:
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Plan Maximums. The maximum number of Shares that may be issued from treasury or purchased in the open market and delivered to Participants pursuant to Awards, including Incentive Stock Options, granted under this Plan shall be 12,000,000. Shares made available under this Plan in respect of Awards may, subject to the terms of the Grant Agreement in respect of an Award, be issued from treasury or purchased in the open market or otherwise, at the sole discretion of the Committee.
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[Remainder of Page Left Intentionally Blank]
IN WITNESS OF, Ovintiv has executed this Second Amendment as of the Effective Date.
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[Signature Page to Second Amendment to Omnibus Incentive Plan of Ovintiv Inc (May [5], 2022)]
Please read this section carefully for important information on how to vote your shares of Ovintiv common stock.
When is the Meeting?
The Meeting will be held at 8:00 a.m. (Mountain Time) on May 4, 2022.2, 2024. The Meeting will be held virtually. Shareholders as of the Record Date can participate in the Meeting by visiting www.virtualshareholdermeeting.com/ovv2022ovv2024. If you wish to only listen to the Meeting, you can simply follow the Meeting link and sign on. If you wish to vote or ask a question during the Meeting, you will need the control number provided on your proxy card or Notice of Internet Availability of Proxy Materials.
Who is entitled to vote?
Only shareholders as of the close of business on the Record Date are entitled to vote at the Meeting, or at any adjournments or postponements thereof.
Am I a registered or non-registered shareholder?
You are a registered shareholder if you hold shares of Ovintiv common stock in your own name. If your name appears on a certificate for shares of Ovintiv common stock, you are a registered shareholder.
You are a non-registered shareholder if your shares of Ovintiv common stock are not registered in your name and are instead registered in the name of a nominee, such as a trustee, financial institution or securities broker. If your shares of Ovintiv common stock are listed in an account statement provided to you by your broker, you are likely a non-registered shareholder.
How do I vote?
Registered Shareholders
If you are a registered shareholder as of the Record Date, you can vote your shares of Ovintiv common stock using the methods described below.
YOU CAN VOTE YOUR SHARES OF OVINTIV COMMON STOCK IN ANY OF THE FOLLOWING WAYS: | ||
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ONLINE Before the Meeting, you may vote your shares through the Internet by following the directions on your proxy card or Notice of Internet Availability of Proxy Materials. Internet voting is available 24 hours a day. To vote online, you will need the control number located on your proxy card or Notice of Internet Availability of Proxy Materials. | |
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PHONE Call 1-800-690-6903 from a touch-tone phone and follow the voice instructions. To vote by phone, you will need the control number located on your proxy card or Notice of Internet Availability of Proxy Materials. | |
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If you received a proxy card by mail, you can complete, sign and date the form and return it by mail using the postage-paid envelope included in your package. | |
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AT THE MEETING Shareholders can vote at the Meeting by visiting www.virtualshareholdermeeting.com/
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Non-Registered Shareholders
If you are a non-registered shareholder as of the Record Date, you can vote your shares of Ovintiv common stock online at the Meeting or by giving voting instructions, as described below.
| If you are a non-registered shareholder, please refer to the information forwarded by your bank, broker or other holder of record to see which voting methods are available to you to vote in advance of the Meeting. |
78 | 2024 Proxy Statement | Ovintiv Inc. |
Who is soliciting my proxy?
The Board is soliciting proxies in connection with the Meeting. This solicitation is being made primarily by mail, but proxies may also be solicited personally by directors, employees or agents of Ovintiv using telephone, email or other electronic means.
Who pays for the proxy solicitation?
Ovintiv pays the costs of preparing, printing and distributing the proxy materials used in the solicitation of proxies. These costs may include the reimbursement of brokers and other entities who incur costs forwarding proxy materials to Ovintiv’s non-registered shareholders. Ovintiv has retained Innisfree M&A Incorporated (“Innisfree”) to assist with the solicitation of proxies. Aggregate fees payable to Innisfree in connection with the solicitation of proxies will be approximately $25,000, plus reasonable out-of-pocket disbursements.
What is the deadline to return my voting instructions?
The deadline for submitting voting instructions by Internet, telephone or mail as a registered shareholder is 9:59 p.m., MT, on May 3, 2022.1, 2024. For shareholders whose shares are registered in the name of a bank, broker or another nominee, please refer to the information provided by your nominee for information about the deadline for submitting voting instructions.
How will my shares be voted if I am represented at the Meeting by proxy?
All shares represented by a properly executed proxy will be voted or withheld from voting in accordance with the shareholder’s instructions.
What happens if I return a proxy card without voting instructions?
If you submit a proxy and do not provide instructions regarding any matter identified in the Notice of the Meeting, your shares will be voted by the proxy holders as follows:
FOR the election of the 12 director nominees nominated in this Proxy Statement;
• | FOR the election of each of the 11 director nominees nominated in this Proxy Statement; |
FOR approval of the company’s approach to executive compensation;
• | FOR advisory approval of the Company’s executive compensation; and |
• | FOR the ratification of PricewaterhouseCoopers LLP as the Company’s independent auditors. |
FOR approval of the Amendment to the Omnibus Incentive Plan of Ovintiv; and
FOR the ratification of PricewaterhouseCoopers LLP as the company’s independent auditors.
What should I do if I receive more than one form of proxy or voting instruction form?
If some of your shares are registered in your name and some are registered in the name of one or more nominees (such as a bank or broker), you will need to return more than one proxy card in order to vote all of your shares. Please follow the instructions provided on the proxy card carefully, as the voting process differs for registered and non-registered shareholders.
Can I change or revoke my proxy once I have given it?
If you are a registered shareholder, you can change or revoke your proxy prior to the vote being taken at the Meeting by:
• | submitting a written notice to Ovintiv’s Corporate Secretary at Ovintiv Inc., 370 17th Street, Suite 1700, Denver, Colorado, 80202 prior to the Meeting; |
submitting a new proxy or new voting instructions bearing a later date through any of the voting methods described above; or
• | submitting a new proxy or new voting instructions bearing a later date through any of the voting methods described above; or |
• | voting online at the Meeting. |
voting online at the Meeting.
If you are a non-registered shareholder, you can change or revoke your proxy by following the specific instructions provided to you by your respective bank, broker or other nominee. Non-registered shareholders who have voted and wish to change their voting instructions should contact their nominee as soon as possible to ensure any changes to voting instructions are communicated sufficiently in advance of the Meeting.
Only the latest validly executed proxy that you submit will be counted.
What is the quorum requirement for the Meeting?
The quorum requirement for the Meeting is a majority of all outstanding shares of Ovintiv common stock entitled to vote at the Meeting, either present in person or represented by proxy. As of the Record Date there were 258,691,896268,953,641 issued and outstanding shares of Ovintiv common stock.
Why did I receive a notice in the mail regarding the Internet availability of the proxy materials instead of a paper copy of the proxy materials?
We are providing access to this Proxy Statement, and our Annual Report on Form 10-K for the fiscal year ended December 31, 2021,2023, via the Internet using the U.S. SEC’s “notice and access” system. As a result, a Notice of Internet Availability of Proxy Materials will be mailed to each shareholder of record as of the Record Date. Shareholders may choose to access our
Ovintiv Inc. | 2024 Proxy Statement | 79 |
proxy materials on the website referenced in the Notice of Internet Availability of Proxy Materials or may request to receive a printed set of our proxy materials.
How can I obtain a paper copy of the proxy materials?
Shareholders receiving a Notice of Internet Availability of Proxy Materials will find instructions on how to obtain a paper copy of such materials on their notice.
How many votes do I have?
You have one vote for each share of Ovintiv common stock that you held as of the close of business on the Record Date.
What happens if amendments, variations, or other matters are brought before the Meeting?
The appointee or appointees named in your proxy card will have discretionary authority to vote on any amendments or variations to the matters identified in the Notice of the Meeting and on any other matters that properly come before the Meeting. As of the date of this Proxy Statement, management is not aware of any such amendment, variation or other matter.
What is a broker non-vote?
Without specific instructions, U.S. brokers and their agents or nominees cannot vote shares of common stock for their clients on “non-routine” matters, including the election of directors and advisory votes to approve executive compensation, however they may vote on “routine” matters, such as the ratification of an auditor.certain proposals. Without specific instructions, Canadian brokers and their agents or nominees cannot vote shares of common stock for their clients. When a broker is unable to vote becauseIf the beneficial owner does not provide voting instructions and the broker elects to vote the beneficial owner’s shares on some but not all matters, it will result in a “broker non-vote” for the matters on which the broker does not vote. Broker non-votes will be counted for purposes of calculating whether a quorum is present at the Meeting but will not be tabulated in determining whether any of the sharesitems presented at the Meeting has not provided voting instructions, a “broker non-vote” may occur.obtained the requisite vote to be approved.
How are abstentions and broker non-votes counted?What vote is required to approve each item?
Broker non-votes are not consideredIn the election of directors, each nominee must receive more “FOR “ votes castthan “AGAINST” votes in order to be elected as a director. Abstentions and therefore do not affectbroker non-votes will have no effect on the outcomeelection of directors.
For Item 2 (advisory approval of executive compensation) and Item 3 (ratification of PricewaterhouseCoopers LLP as the Company’s independent auditors) the affirmative vote of a majority of the voting power of shares of stock of the Company present in person or represented by proxy and entitled to vote on any proposal.the items will be required for approval. Abstentions are not considered votes cast on Item 1 and therefore do not affect the outcome of the vote on such proposal butwill have the effect of a negative vote against these Items. Broker non-votes will have no effect on Items 2, 3 and 4.outcome of votes for these items.
Who counts the votes?
Representatives of Broadridge Financial Solutions, Inc. (“Broadridge”) will count the votes and act as inspectors of election for the Meeting. Broadridge maintains the confidentiality of individual shareholder votes, but proxies will be submitted to management if they contain comments clearly intended for management or to meet legal requirements.
Do shareholders have dissenters’ rights?
Ovintiv’s shareholders do not have dissenters’ rights or similar rights of appraisal regarding matters described in this Proxy Statement and do not have cumulative voting rights with respect to the election of directors.
Who can I contact if I have questions?
Innisfree M&A Incorporated
If you have questions about this Proxy Statement or require assistance completing your form of proxy or voting instruction form, please contact Innisfree at:
INNISFREE M&A INCORPORATED
Shareholders may call toll-free: (877) 750-8332750-0537
Banks and brokers may call collect: (212) 750-5833
Purpose of the Meeting
The 2022 Annual Meeting of Shareholders (the “Meeting”) of Ovintiv Inc. will be held on May 4, 2022 at 8:00 a.m. (Mountain Time) via live webcast at www.virtualshareholdermeeting.com/ovv2022.
At the Meeting, shareholders will be asked to vote on the following proposals:
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Shareholder Proposals and Director Nominations
Shareholder Proposals For Inclusion In Next Year’s Proxy Statement
Ovintiv is subject to hear our presentation and vote on allthe rules of the SEC under the Exchange Act with respect to shareholder proposals. Shareholder proposals submitted pursuant to SEC rules must be received no later than November 21, 2024 to be considered at Ovintiv’s 2025 Annual Meeting of Shareholders.
All shareholder proposals should be directed to the Meeting.attention of the Corporate Secretary of Ovintiv, 370 17th Street, Suite 1700, Denver, Colorado 80202. Shareholders are advised that, under the rules of the SEC, the submission of a shareholder proposal does not guarantee its inclusion in the Company’s proxy materials. Such proposals must also comply with all applicable provisions of Rule 14a-8 under the Exchange Act.
Record DateDirector Nominations For Inclusion In Next Year’s Proxy Statement
Shareholders
Ovintiv’s proxy access bylaw permits a shareholder, or a group of up to 20 shareholders, owning at least 3% of Ovintiv’s outstanding common stock continuously for at least three years to nominate and include in Ovintiv’s proxy statement, director nominees constituting up to the closegreater of two individuals or 20% (rounding down), provided that any nominating shareholders and nominees satisfy certain
requirements specified in the Ovintiv bylaws, including in respect to form of notice and timely delivery.
Any proxy access nomination notice must be received no earlier than October 22, 2024 and no later than November 21, 2024.
Other Shareholder Proposals And Director Nominations
If a shareholder wishes to propose items of business onor nominate a director for election to the Record Date are entitled toBoard without including such proposal or nomination in Ovintiv’s proxy statement, that proposal or nomination must comply with the notice procedures set out in Sections 2.2 and 3.3 of Ovintiv’s bylaws (which includes information required by Rule 14a-19 of the Exchange Act), respectively. These procedures require that Ovintiv receive written notice of shareholder proposals and votedirector nominees at least 90 days (and not more than 120 days) before the Meeting and any adjournments or postponements thereof. As
anniversary of the Record Date, there were 258,691,896 sharesprior year’s annual meeting of Ovintiv common stock issuedshareholders, which will be no earlier than January 2, 2025 and outstanding.no later than February 1, 2025 for Ovintiv’s 2025 Annual Meeting on which the special meeting is announced; or (ii) 90 days before the special meeting (whichever date is later).
The NoticeA copy of Internet Availability of Proxy Materials is being mailed to shareholdersour amended and restated bylaws are filed on or about March 23, 2022.
By Order ofEDGAR and SEDAR+, and also are available on our website under the Board,“Investors-Corporate Governance” tab.
Meghan N. Eilers
Executive Vice-President, General Counsel & Corporate Secretary
Ovintiv Inc.
March 23, 2022
Your Vote is Important
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Management is not aware of any business to be presented for action by shareholders at the Meeting other than the items referred to in this Proxy Statement. |
Communication with the Board of Directors
Shareholders and other interested parties can communicate directly with our directors, including our Board Chair, at the following address:
Ovintiv Inc.
Attention: | Corporate Secretary 370 17th Street, Suite 1700 Denver, Colorado 80202 corporatesecretary@ovintiv.com |
Shareholders can also direct inquiries to our investor relations personnel at investor.relations@ovintiv.com.
Ovintiv Inc. | 2024 Proxy Statement | 81 |
ADDITIONAL SHAREHOLDER INFORMATION
Additional Information
Additional information about Ovintiv, including copies of our Proxy Statement and Annual Report (which includes our financial statements and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2023), is available on our website at www.ovintiv.com and can also be obtained by accessing Ovintiv’s profile on EDGAR at www.sec.gov or SEDAR+ at www.sedarplus.com. Shareholders can also request copies of these documents, free of charge, by contacting our Investor Relations department:
Ovintiv Inc. Attention: Investor Relations 370 17th Street, Suite 1700 Denver, Colorado 80202 |
References to information contained on our website atwww.ovintiv.com is not incorporated by reference into, and do not constitute a part of, this Proxy Statement.
Certain statements contained herein may constitute forward-looking statements or information within the meaning of applicable securities legislation, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements involve assumptions, risks and uncertainties that may cause such statements not to occur or results to differ materially from the estimated or anticipated events or results expressed or implied in such forward-looking statements. For additional information on such assumptions, risks and uncertainties, please
consult Ovintiv’s Annual Report on Form 10-K, which can be obtained by accessing Ovintiv’s profile on EDGAR at www.sec.gov or SEDAR+ at www.sedarplus.com. In addition, historical, current, and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. Although Ovintiv believes such forward-looking statements are reasonable, there can be no assurance that they will prove to be correct.
Housing of Proxy Materials
Only one proxy statement is being delivered to multiple security holders sharing an address unless Ovintiv has received contrary instructions from one of the security holders. Ovintiv undertakes to deliver promptly upon written or oral request a separate copy of the proxy statement and provide instructions as to how a security holder can notify Ovintiv that such security holder wishes to receive a separate copy of the proxy statement. A security holder who wishes to receive a separate copy of the proxy statement can notify Ovintiv of such request by mail at Ovintiv Inc., 370 17th Street, Suite 1700, Denver, Colorado 80202 or telephone at (303) 623-2300. Security holders sharing an address who are receiving multiple copies of annual reports to security holders or proxy statements can request the delivery of single copies of such documents by notifying Ovintiv by mail at Ovintiv Inc., 370 17th Street, Suite 1700, Denver, Colorado 80202 or telephone at (303) 623-2300.
82 | 2024 Proxy Statement | Ovintiv Inc. |
Any questions and requests for assistance may be directed to:
Strategic Shareholder Advisor and Proxy Solicitation Agent:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
w SCAN TO VIEW MATERIALS & VOTE OVINTIV INC.
370 17TH STREET, SUITE 1700 DENVER, CO 80202 VOTE BY INTERNET Before The Meeting—Meeting - Go to www.proxyvote.com or scan the QR Barcode above
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:9:59 p.m. EasternMountain Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting—Meeting - Go to www.virtualshareholdermeeting.com/ovv2022ovv2024 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE—PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:9:59 p.m. EasternMountain Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. D73531-P66498TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V34164-P06624 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY OVINTIV INC. The Board of Directors recommends you vote FOR the following proposals:
Proposals 1, 2 and 3: ITEM 1. Election of the 1211 Director Nominees Named in the Proxy Statement Nominees: For Against Abstain Nominees:! ! ! 1a. Peter A. Dea For Against Abstain! ! ! ! ! ! 1b. Sippy Chhina 1c. Meg A. Gentle 1d. Ralph Izzo 1e. Howard J. Mayson 1f. Brendan M. McCracken 1g. Steven W. Nance 1h. Suzanne P. Nimocks 1i. George L. Pita 1j. Thomas G. Ricks 1k. Brian G. Shaw! ! ! ! ! ! 1c. Howard J. Mayson 1l. Bruce G. Waterman! ! ! ! ! ! ITEM 2. Advisory Vote to Approve Compensation of Named Executive Officers 1d. Brendan M. McCracken! ! ! ! ! ! 1e. Lee A. McIntire ITEM 3. Increase Share Reserve of Omnibus Incentive Plan! ! ! ! ! ! ITEM 4. Ratify PricewaterhouseCoopers LLP as Independent Auditors 1f. Katherine L. Minyard! ! ! 1g. Steven W. Nance NOTE: Such other business as may properly come before the meeting or any adjournment thereof.! ! ! 1h. Suzanne P. Nimocks! ! ! 1i. George L. Pita! ! ! 1j. Thomas G. Ricks For Against Abstain Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.D73532-P66498
V34165-P06624 OVINTIV INC.
Annual Meeting of Stockholders
Shareholders May 4, 20222, 2024 8:00 AM (MT)
This proxy is solicited by the Board of Directors
The stockholder(s)shareholder(s) hereby appoint(s) Peter A. Dea and Brendan M. McCracken, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of OVINTIV INC. that the stockholder(s)shareholder(s) is/are entitled to vote at the Annual Meeting of StockholdersShareholders to be held at 8:00 AM MT(MT) on May 4, 2022,2, 2024, at www.virtualshareholdermeeting.com/ovv2022,ovv2024, and any adjournment or postponement thereof.
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations.
Continued and to be signed on reverse side