| Schlumberger Limited20182020 Proxy Statement | | | 2832 |
Pay-for-Performance — Executive Pay and Alignment As part of the Compensation Committee’s annual review of our executive compensation program, in July 2019 the Committee directed Pay Governance to prepare a comparative pay-for-performance assessment against two sets of peer group companies: | • | the companies in our oil industry peer group, as identified in the section entitled “Other Aspects of Our Executive Compensation Framework—Peer Group Companies” beginning on page 43; and | | • | a core group of our key oilfield services competitors, namely Halliburton, Baker Hughes and National Oilwell Varco (our “core competitor peer group”). |
The purpose of the comparative assessment was to determine the degree of alignment between the total realizable compensation of our named executive officers from our 2019 proxy statement and our performance relative to these companies as measured by ROCE, free cash flow growth and TSR. We selected these metrics for their effectiveness in assessing long-term Company performance. Pay MixWe assessed performance on a three- and Internal Pay Equity Review
In January 2017,five-year basis ending on December 31, 2018, because the Compensation Committee analyzedbelieves that alignment of pay and performance is more effectively assessed over the mix of our executives’ compensation elements. In carrying out its analysis, the Compensation Committee considered the relative size of direct compensation elements of companies in Schlumberger’s two main comparator groups in the section entitled “Other Aspects of our Executive Compensation Framework—Peer Group Companies” as well as internal factors. With regard to pay mix, the Compensation Committee also reviewed the elements of compensation for the Company’s NEOs, both in relation to one anothermid- and in comparison with the average pay mix of the Company’s executive officers. Based on its review, the Committee concluded that the mix of base salary, target annual cash incentive and LTI was appropriate for each of Schlumberger’s NEOs.
long-term. The Compensation Committee also reviewed internal pay equity at its January 2017 and October 2017 meetings. Our executive officers operate as team. Therefore, the Compensation Committee considers internal pay equity to be an important factor in its executive compensation decisions. The Committee reviewed the total realizable compensation of Mr. Kibsgaard, our former CEO, against that of other CEOs (i) in our oil industry peer group and (ii) in our core competitor peer group. It then separately reviewed the CEO in relation to thetotal realizable compensation of our named executive officers from our 2019 proxy statement as a group against that of named executive officers at other executive officer positions, and our executives’ compensation both in relation to one another and in comparison with the averagecompanies comprising these two peer groups. As a result of the assessment, the Committee determined that the total realizable compensation of our othernamed executive officer positions. The Compensation Committee noted thatofficers from our 2019 proxy statement was generally aligned with performance, with especially strong alignment between their realizable compensation and free cash flow growth and ROCE performance over the ratiofive-year period. For purposes of target total direct compensation between the CEO andCommittee’s assessment, “total realizable compensation” for each period consisted of the second-highest paid executive officer was similar to that in the three prior years. The Compensation Committee also noted that the levels of target total direct compensation for the third- to the fifth-highest paid officers were very closely clustered together, consistent with their relative positions within the Company. As a result, the Compensation Committee concluded that internal pay equity was appropriate.following: | • | actual base salary paid; | | • | actual cash incentive payouts; and | | • | the December 31, 2018 market value of the following: | | | • | the intrinsic value of in-the-money stock options granted during the applicable period; | | | • | the intrinsic value of any unvested RSUs; and | | | • | for performance-based incentive awards, (i) the actual award payout value of awards vesting during the applicable period and (ii) the estimated payout values for awards granted in 2017 and 2018, based on company disclosures (and in all cases based on actual stock prices as of the end of the period, not as of the date of grant). |
Elements of Total Direct Compensation; 20172019 Decisions Base Salary Base salary is the fixed portion of an executive’s annual compensation, which provides some stability of income since the other compensation elements are variable and not guaranteed.at risk. On appointment to an executive officer position, base salary is set at a level that is competitive with base salaries in the applicable peer compensation groups for that position, and takes into account other factors described below. Base salaries for each executive officer position are compared annually with similar positions in the applicable compensation peer groups. Base salary changes for executive officers, except the CEO, are recommended by the CEO and subject to approval by the Compensation Committee, taking into account: | • | comparable salaries for executives with similar responsibilities in the applicable peer groups; | | | | | • | comparison to internal peer positions; | | | | | • | the Company’s performance during the year relative to the previous year and to its market peers; | | | | | • | individual business experience and potential; and | | | | | • | overall individual performance. |
The Compensation Committee reviews the base salary of the CEO is reviewed by the Compensation Committee in executive session and recommendedrecommends his base salary to the independentnon-executive members of our Board for approval, based on the criteria described above. In addition to periodic reviews based on the factors described above, the Compensation Committee may adjust an executive officer’s base salary during the year if he or she is promoted or if there is a significant change in his or her responsibilities. In this situation, the CEO (in the case of executive officers other than himself) and the Compensation Committee carefully consider these new responsibilities, external pay practices, retention considerations and internal pay equity, as well as past performance and experience. Base salary may also be reduced when an executive officer moves to a position of lesser responsibility in the Company. Alternatively, an executive’s base salary can be frozen for a number of years until it falls in line with comparable positions in the applicable compensation peer groups. Base Salary Decisions in 20172019 Annual Base Salary Review The Compensation Committee reviewed the compensation of each of our NEOs in January 2017.2019. Upon review of comparative market data and taking into consideration that all of our NEOs were already positioned competitively,other relevant factors, the Compensation Committee determined to maintain the base salaries of Messrs. Le Peuch, Ayat, Al Mogharbel and Kibsgaard, as well as that of Ms. Gharbi, at their current levels for all of our NEOs who held the same position in the prior year.then-current levels. Mr. Kibsgaard’s base salary was frozen from 2015 until his retirement, while Mr. Ayat’s base salary was frozen from 2011 until his retirement. NEO Promotions In April 2019, the Compensation Committee approved the following base salary increases to the following NEOs, in connection with their promotions: | • | an increase to Mr. Le Peuch’s base salary from $770,000 to $1,000,000, in connection with his promotion to Chief Operating Officer; | | • | an increase to Mr. Al Mogharbel’s base salary from $840,000 to $900,000, in connection with his promotion to Executive Vice President, Operations; and | | • | an increase to Ms. Gharbi’s base salary from $700,000 to $770,000, in connection with her promotion to Executive Vice President, Reservoir and Infrastructure. |
In July 2019, in connection with Mr. Le Peuch’s promotion to CEO, our Compensation Committee approved a further increase to his base salary from $1,000,000 to $1,400,000, which placed him at approximately the 50thpercentile of both the oil industry peer group and the general industry peer group. | Schlumberger Limited2020 Proxy Statement | | 33 |
Annual Cash Incentive Awards The Company pays annual performance-based cash incentives to its executives to foster a results-driven, pay-for-performance culture and to align their interests with those of Schlumberger’sour stockholders. The Compensation Committee selects performance-based measures that it believes strike a balance between motivating an executive to increase near-term operating and financial results in the near-term and driving profitable long-term Company growth and value for stockholders. Annual cash incentive award paymentsawards are made each Februaryearned according to the achievement of financial, strategic, operational and personal objectives, as described below. | Schlumberger Limited2018 Proxy Statement | | 29 |
One half of an executive’s annual cash incentive payout potential is based on the achievement of pre-established personal objectives, while the other half is based on the Company’s achievement of pre-established financial goals. The financial half of the annual cash incentive has an incremental financial element applicable to our CEO and the other NEOs, which means that the maximum cash incentive opportunity can be up to 300% of target, based on achievement of superior financial results. The personal half of the incentive cash payment has no upside potential, meaning the maximum payout with respect to this half of the target annual cash incentive is 100% of target. Under this approach, the maximum cash incentive opportunity based on both financial and personal strategic objectives combined cannot exceed 200% of target.
The Compensation Committee reviews and approves the financial and other objectives applicable to the NEOs (and, in the case of the CEO, recommends to the independentnon-executive directors of the Board the financial objectives ofapplicable to the CEO and the other NEOs.CEO). The Compensation Committee believes that, with regard to Company financial targets or financial performance goals, as well as our NEOs’ key personal objectives, it is important to establish criteria that, while very difficult to achieve in an uncertain global economy, are realistic. When Financial Objectives As discussed above, based on stockholder feedback in 2018, the Compensation Committee approved new financial performance criteria and weightings for the NEOs’ 2019 target annual cash incentive in January 2019, with 30% of their 2019 target annual cash incentive opportunity being based on achievement of adjusted EPS targets and 40% on achievement of pre-established cash flow generation targets. As a result, for our 2019 annual cash incentive program, the 70% quantitative financial component included two different metrics—adjusted EPS and cash flow generation—in addition to the 30% qualitative portion, as reflected in the following chart: As shown in the above chart under “Payout Range,” an executive’s 2019 maximum annual cash incentive payment would equal 200% of target, consistent with the maximum payment opportunity for 2017 and 2018. In 2018, one half of our NEOs’ target annual cash incentive opportunity was based on adjusted EPS targets, and 20% was based on revenue and pretax operating income (“PTOI”) targets, rather than cash flow generation targets. The Compensation Committee determined that it was appropriate to replace the 2018 revenue and PTOI goals with 2019 cash flow generation goals, because it was consistent with Schlumberger’s stated commitment in early 2019 to meet its cash commitments in that year without increasing net debt. This metric also supports our goal to pursue opportunities that enhance stockholder value consistent with our CEO’s new strategy, such as reinvesting in the Company’s future growth, returning value to stockholders through dividends, reducing debt and other strategic initiatives. The Committee also considered that the cash flow generation goals in the annual cash incentive portion of our NEOs’ compensation program differed from the free cash flow conversion goals contained in the LTI portion of our NEOs’ compensation program. This is because the annual cash incentive portion focuses solely on the absolute amount of cash generated over a one-year period, whereas the free cash flow conversion PSU payout is based on the percentage of free cash flow converted from cumulative net income over a two-year period. The Compensation Committee also determined that it was appropriate to more heavily weight the financial portion of our NEO’s 2019 target annual cash incentive opportunity toward cash flow generation targets instead of adjusted EPS targets. The Compensation Committee further determined that it was appropriate in 2019 to continue to tie a significant portion—30%—of our NEOs’ annual cash incentive opportunity to the achievement of adjusted EPS goals, because adjusted EPS closely reflects stockholder value creation and aligns the interests of management with those of our stockholders. �� The Compensation Committee selected adjusted EPS and cash flow generation as the absolute measures upon which to base the financial portion of our NEOs’ annual cash incentive payout opportunity because they are the primary absolute bases on which we set our performance expectations for the year. We also believe that consistent adjusted EPS growth and cash flow generation lead to long-term stockholder value. As a general matter, when considering the Company’s operating results for purposes of the financial portion of the annual cash incentive opportunity, the Compensation Committee may take into accountmake adjustments for unusual or infrequent charges or gains, depending on the nature of the item. The Compensation Committee may make adjustmentsitem, when it believes that our executives and other employees would be inappropriately penalized by, or would inappropriately benefit from, these items. For example, the Compensation Committee may exclude charges that arise from actions that management takes to proactively address events beyond its control, such as the industry downturn over the past few years, or to adjust for mergers, acquisitions and divestitures. | Schlumberger Limited2020 Proxy Statement | | 34 |
Key Personal Objectives PersonalOur NEOs’ key personal objectives are established at the start ofapproved early in the fiscal year. The Compensation Committee reviews and, subject to approval by the non-executive members of the Board, approves the key personal strategic objectives of the CEO and assesses his performance against those objectives in determining a portion of his annual cash incentive award opportunity, taking into account performance for the just-completed fiscal year versus predefined commitments for the fiscal year; unforeseen financial, operational and strategic issues of the Company; and any other information it determines is relevant, subject to approval by the independent directors of the Board.relevant. The CEO reviews and approves the key personal strategic objectives of the other NEOs, and assesses each such NEO’stheir performance against their pre-determinedpre-approved objectives in a similar way.
Each NEO’s annual cash incentive opportunity is tied to achievement of quantitative and qualitative objectivesgoals that are specific to that NEO’s position, and may relate to: | • | group or geographical profitability or revenue growth;growth in the NEO’s area of responsibility; | | | | | | • | market penetration; | | | | | | • | acquisitions or divestitures; | | | | | | • | non-financial goals that are important to the Company’s success, including: | | | | | | | • | people-related objectives such as retention, engagement and diversity; | | | | | | | • | ethics compliance and governance; | | | | compliance; | | | • | health safety and environmentalsafety objectives; | | | • | ESG objectives; | | | • | service quality; | | | • | new technology introduction; and | | | | | | • | any other business priorities. |
2019 Annual Cash Incentive Decisions for 2017Results Upon review of market data, of the applicable compensation comparator groups, and taking into consideration internal pay equity and that the target annual cash incentive opportunity of our NEOs werewas already positioned competitively from a market perspective, the Compensation Committee determined in January 20172019 to leave the target annual cash incentive opportunity for all NEOs unchanged from 2016.2018. In July 2019, the Compensation Committee approved an increase to Mr. Le Peuch’s target annual cash incentive opportunity from 100% to 150% when he was promoted to Chief Executive Officer. As a result, the 20172019 target annual cash incentive for our CEOopportunity was 150% of his base salary, 75% of base salary for Mr. Juden,Kibsgaard and Mr. Le Peuch (effective August 2019), and 100% of base salary for theour other NEOs. The target annual cash incentive forNEOs (including Mr. Le Peuch increased from 60% to 100% in connection with his promotion to President of the Cameron Group.through July 2019). Financial Objectives
In January 2017, the Compensation Committee approved a change to the financial half of the NEOs’ 2017 target annual cash incentive, with the result that payout of the financial half was based entirely on achievement of diluted earnings per share, excluding charges2019 Cash Flow Generation Targets and credits (“adjusted EPS”) targets. Prior to 2017, one half of our NEOs’ target annual cash incentive was based on achievement of relative performance goals and the other half was based on adjusted EPS targets. In approving this change, the Compensation Committee determined that it was appropriate to base all of our NEOs’ financial half payout solely on achievement of adjusted EPS goals, because it best reflects ultimate stockholder value creation for the year.
The Compensation Committee also selected adjusted EPS as an absolute measure upon which to base the financial portion of the annual cash incentive because it is the primary absolute basis on which we set our performance expectations for the year. It is also consistent with the manner in which we present adjusted EPS in our earnings announcements and presentations to investors. We believe that consistent adjusted EPS growth leads to long-term stockholder value. We also believe that it is the metric most widely used by our stockholders and analysts to evaluate our performance.
2017 Adjusted EPS TargetsResults
The process used to set annual adjusted EPScash flow generation targets starts with a review of plans and projections following bottom-up planning from the field. Adjusted EPSCash flow generation targets may increase or decrease year-over-year, taking into account: | • | our operating and non-operating cash requirements; | | • | industry cycles; | | • | anticipated customer spending; | | • | commodity prices; | | | | | • | activity growth potential; | | • | pricing; | | • | introduction of new technology; and | | • | commodity prices. |
The Compensation Committee approved a cash flow generation metric to align our executives’ short-term incentive compensation with our publicly-stated goal of meeting all cash commitments in 2019 without increasing our net debt. The Committee also believed the metric should encourage management to pursue its strategy of divesting certain non-core businesses and assets while at the same time holding management accountable for investment and acquisition opportunities that it chose to pursue. However, the Committee believed that it was appropriate to exclude acquisitions requiring cash investments and divestitures generating proceeds in excess of $500 million from our cash flow generation goals, because the Committee considered that such transactions would be enterprise-level transactions that should be evaluated and pursued independently, and not be tied to short-term cash incentive payouts. Based on the foregoing, and for purposes of the 2019 annual cash incentive payouts, the Compensation Committee approved the following formulation for measuring our cash flow generation: | • | cash flow from operations less capital expenditures, investments in existing assets under Asset Performance Solutions (“APS”) (formerly Schlumberger Production Management), and multiclient seismic data costs capitalized; | | • | lesscertain charges set forth in Appendix A; | | • | lesscash paid for business acquisitions and investments, net of cash acquired, provided that the purchase price for each of the individual transactions was less than $500 million; and | | • | plusproceeds from the divestiture of businesses or assets, net of cash divested, provided that the proceeds from each of the individual transactions was less than $500 million. |
The Compensation Committee set the following full-year cash flow generation targets and corresponding payouts for 2019. In setting these goals for 2019, the Compensation Committee approved cash flow generation targets at levels that reflected an 11 percent increase over the 2018 cash flow generation of $2.52 billion. 2019 Cash Flow Generation Performance Targets | | % of Cash Flow Generation Portion (Payout %) | Less than | $2.24 billion | | | | 0% | | | •$2.24 billion | pricing, including pricing concessions and the period it takes to recoup previous pricing levels; | | | | 50% | | | •$2.80 billion | anticipated E&P spending; and | | | | 100% | | | •$3.36 billion | introduction of new technology. | | | 275% | |
In responseFor cash flow generation results between any two targets, payout is prorated. No cash incentive is earned if we do not achieve the threshold cash flow generation target.
Our 2019 cash flow generation was $3.39 billion. This resulted in a payout of 275% of the cash flow generation portion of the 2019 cash incentive opportunity. For a reconciliation of cash flow generation to stockholder feedback during our outreach efforts in the fall of 2016, the Compensation Committee determined at itscash flow from operations, see Appendix A. | Schlumberger Limited20182020 Proxy Statement | | | 3035 |
2019 Adjusted EPS Targets and Results January 2017 meeting to set full-yearIn 2019, the Compensation Committee changed the process for setting annual adjusted EPS targets. Rather than setting adjusted EPS targets rather than dividebased on the measurement period into two six-month periodssame process as it haddoes for setting cash flow generation targets (as described above), the Compensation Committee at its January 2019 meeting approved an adjusted EPS performance matrix informed by market analysts’ consensus estimates of our 2019 adjusted EPS as reported on Bloomberg in late February 2019 (“EPS consensus”).
The Compensation Committee believed that this methodology—setting our 100% performance target equal to EPS consensus—would more accurately reflect our performance against stockholders’ and analysts’ expectations of Company performance in 2019. The Committee also believed that this methodology would allow our adjusted EPS performance goals to be informed by analysts’ consensus estimates as to our whole industry, because by late February most of our competitors and customers would have reported their full-year audited results for the prior two years. At that meeting,year and provided forecasts for the current year. As a result of this change, in late February 2019, the Compensation Committee approved the following full-year adjusted EPS targets and corresponding payouts for 2017:2019 based on EPS consensus: 2017 EPS Performance Targets | | % of EPS Portion of Financial Half (Payout %) | | 2019 Adjusted EPS Performance Targets | | 2019 Adjusted EPS Performance Targets | | % of Adjusted EPS Portion (Payout %) | Less than | $1.20 | | | | 0% | | $1.28 | | | | 0% | | | $1.20 | | | | 50% | | $1.28 | | 50% | | | $1.30 | | | | 100% | | $1.60 | | 100% | | | $1.50 | | | | 200% | | $1.92 | | 200% | | | $1.70 | | | | 300% | | |
For adjusted EPS results between any two targets, the payout would beis prorated. No cash incentive would be paidis earned if we do not achieve the minimumthreshold adjusted EPS target was not achieved.target. The Compensation Committee approved these targets at levels that reflected expected significant improvement fromnew methodology described above resulted in our 2019 adjusted EPS of $1.14 achieved in 2016, but taking into account continued depressed market conditions, management’s continued low visibility as to when customer spending would meaningfully improve, and its awareness that pricing concessions granted to customers during the downturn would not be recovered immediately, thereby limitingperformance goals being lower than our 2018 adjusted EPS gains. 2017 Adjustedgoals, and a target performance goal that was slightly lower than our actual 2018 adjusted EPS. The Committee considered these factors in approving the new methodology and determined that the benefits of a more market-derived adjusted EPS Results
Schlumberger’s 2017matrix informed by analysts’ estimates, full-year 2018 industry data and customer and competitor forecasts for 2019 outweighed possible concerns that our 2019 adjusted EPS(1)was $1.50, while 2017 loss per share on a GAAP basis was $1.08, reflecting $3.6 billion of charges attributable performance goals may superficially appear less rigorous compared to the restructuring of our WesternGeco division, the write-down of our investment in Venezuela, a promissory note fair value adjustment, workforce reductions and other restructuring charges, impairment of multiclient seismic data, a provision for loss on a long-term construction project, and merger and integration charges related to the Cameron acquisition.prior year’s goals.
As in prior years, the Compensation Committee evaluated our performance based on adjusted EPS, consistent with the manner in which the Company presents adjusted EPSwe present our results in its earnings announcements and in presentations to investors. Furthermore,It is also consistent with how analysts present their estimates. In deciding to exclude the charges and credits set forth in Appendix A in calculating our adjusted EPS, the Compensation Committee considered that the charges were almost entirely noncash and were driven primarily by external market conditions. In addition, the Committee believeddetermined that the $3.6 billion of charges in 2017 resulted in earningsdid not reflect Schlumberger’s operating trends. Schlumberger’s 2019 adjusted EPS was $1.47, while 2019 loss per share on a GAAP basis that did not reflect Schlumberger’s operating trends and generally arose from actions that management tookwas $7.32. For a reconciliation of adjusted EPS to proactively address the industry downturn, and expenses related to the Cameron acquisition. loss per share on a GAAP basis, see Appendix A. Based on these results, the Compensation Committee approved a payout of 200%80% of target for 20172019 for the adjusted EPS component of theour NEOs’ annual cash incentive.incentive opportunity. 20172019 Key Personal Objectives and Results
| In 2017, Mr. Kibsgaard was evaluated againstLe Peuch had the following objectives, which were established at the beginning of the year:key personal objectives: | | | | | | | | | | GOAL | | ACHIEVEMENT | | | •Streamline organizational structure Oversee development of new corporate strategy; secure Board approval; and reduce structural costs by a baseline amount.oversee deployment of the same. This objective was critical to the long-term success and performance of the Company following our CEO transition and the multi-year industry downturn. | | •Achieved. | | | •Form the OneStim organization within Schlumberger; deploy Company’s idle pressure pumping capacity; Implement key organizational changes, including a new Integrated Performance Management (“IPM”) group and close Weatherford transaction.a corporate performance management function. | | •Mostly achieved. Achieved. | | | •Grow Improve Company service and product quality, measured by a reduction in the Schlumberger Production Management (“SPM”) segmentCompany’s rate of non-productive time by identifying and closing specified strategic transactions.a target threshold. | | •Achieved. | | | • Implement the “Schlumberger Safe” program and reduce Company’s total recordable injury frequency rate by set targets. | | • Mostly achieved. | | | • Identify new candidates for executive succession planning. | | • Achieved. | | | • Lead Company in increasing employee engagement and in executing 2017 employee engagement plan. | | • Achieved. | | | In addition to the above objectives, Mr. Kibsgaard was evaluated against strategic personal objectives such as resolutionof the outstanding receivables situations in Venezuela and Ecuador; recruiting; R&D; manufacturing; continued successfuldeployment of the Company’s Transformation, resulting in greater efficiency and reduced costs; and investor engagement. | | | Mr. KibsgaardLe Peuch earned 85%100% of his total 20172019 cash incentive award opportunity under his key personal objectives. | | | | | | |
| In 2017, Messrs. Ayat, Belani, Le Peuch, and Juden sharedMr. Al Mogharbel had the following quantitative objectives, which constituted 40% of thekey personal half of each of their annual cash incentive opportunity:objectives: | | | | | | GOAL | | ACHIEVEMENT | | | •Achieve greater Company revenue growth year over year as compared Reduce total reportable incident frequency to weighted average revenue growth of two main competitors.a target threshold for all regions outside North America. | | •Partially achieved. Achieved. | | | •Reduce Company’s total recordable injury frequency Achieve, through his leadership and involvement, a win rate by set targets.over a target threshold for material Company tenders. | | •Mostly Partially achieved. | | | •Support Company Increase margins for two major Integrated Drilling Services projects in increasing employee engagement and in executing 2017 employee engagement plan.second half of 2019 versus first half of 2019. | | •Achieved. | | | Mr. Al Mogharbel earned 83.3% of his total 2019 cash incentive award opportunity under his key personal objectives. | | | | |
(1) | See the reconciliation of non-GAAP measures to the comparable GAAP measures on Appendix A. |
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| Mr. AyatSchorn had the following key personal objectives in addition to the shared objectives described above:objectives: | | | | | | | | | | GOAL | | ACHIEVEMENT | | | •Oversee closure Define and execute the newly-established IPM organization, to support the growth of at least 90% of audits identified in action plan; reduce audit turn-around time to fewer than 50 days.the IPM product lines. | | •Achieved. | | | •Reduce the Company’s Days Sales Outstanding (“DSO”) by pre-established quarterly targets. Execute on Schlumberger Production Management realignment strategy. | | •Substantially achieved. Achieved. | | | •Succesfully Develop and implement working capital reduction project.individual product line strategies aligned with new corporate strategy. | | •Achieved. | | | Mr. AyatSchorn earned 85%100% of his total 20172019 cash incentive award opportunity under his key personal and shared objectives. | | | | | | | | | Ms. Gharbi had the following key personal objectives: | | | | | | | | |
| Mr. Belani had the following personal objectives in addition to the shared objectives described above: | | | GOAL | | ACHIEVEMENT | | | •Reduce oustanding Company inventory by quarterly value thresholds. Define and execute restructuring of rig and rig equipment product lines. | | •Substantially achieved. Achieved. | | | •Realign Company research priorties Develop strategy for OneSurface®product line to align with Company’s long-termnew corporate strategy. | | •Achieved. | | | •Adjust Company engineering portfolio for greater focus on customer-oriented software development. Reduce Cameron inventory to a specified amount. | | •Achieved. Partially achieved. | | | Mr. Belani• Increase Cameron bookings to a specified amount. | | • Partially achieved. | | | Ms. Gharbi earned 82.1%66.7% of hisher total 20172019 cash incentive award opportunity under hisher key personal and shared objectives. | | | | | | | |
| Mr. Le PeuchKibsgaard had the following key personal objectives in addition to the shared objectives described above:objectives: | | | | | | | | GOAL | | ACHIEVEMENT | | | •Reduce DSO by pre-established quarterly targets. Prepare for, support and oversee transition plan of successor Chief Executive Officer. | | •Mostly achieved. Achieved. | | | •Reduce oustanding Company inventory by quarterly value thresholds. Oversee the development and strategic planning for key climate-related sustainability initiative. | | •Substantially achieved. Achieved. | | | •Increase margins and growth in the Surface and V&M product lines in second half of 2017 versus first half of 2017. Reduce Company’s global total reportable incident frequency to a target threshold. | | •Substantially achieved. Achieved. | | | Mr. Le PeuchKibsgaard earned 70%100% of his total 20172019 cash incentive award opportunity under his key personal and shared objectives. | | | | | | | | | Mr. Ayat had the following key personal objectives: | | | | | | | | |
| Mr. Juden had the following personal objectives in addition to the shared objectives described above: | | | GOAL | | ACHIEVEMENT | | | •Oversee training of officers Develop and directors of high-risk Company subsidiariesimplement debt refinance and joint ventures.long-term liquidity plan to align capital structure with new corporate strategy. | | •Achieved. | | | •Oversee completion Complete strategic reviews of various Company site audits by Legal Function.Schlumberger Production Management and North America business and capital structure; and develop plans for alignment with new corporate strategy. | | •Achieved. | | | •Investigate Prepare for, support and close 80%oversee transition plan of specified ethics & compliance investigations in fewer than 90 days.successor Chief Financial Officer. | | •Achieved. | | | • Oversee training of new managers (90% of relevant target population of the business unit under consideration). | | • Not achieved | | | Mr. JudenAyat earned 80%100% of his total 20172019 cash incentive award opportunity under his key personal and shared objectives. | | | | |
2017 Annual Cash Incentive as a Percentage of Base Salary
Name | | Total Incentive Range Eligibility (%) | | Financial Half Range Eligibility (%) | | Financial Half Incentive Achieved (%) | (1) | Personal Half Range Eligibility (%) | | Personal Half Incentive Achieved (%) | (2) | Total 2017 Incentive Paid as a % of Base Salary | (3) | P. Kibsgaard | | 0-150 | | 75 | | 150 | | 75 | | 63.75 | | 213.75 | | S. Ayat | | 0-100 | | 50 | | 100 | | 50 | | 40.15 | | 140.15 | | A. Belani | | 0-100 | | 50 | | 100 | | 50 | | 41.05 | | 141.05 | | O. Le Peuch | | 0-100 | (4) | 50 | | 83 | | 50 | | 39.59 | | 122.92 | | A. Juden | | 0-75 | | 37.5 | | 75 | | 37.5 | | 30.00 | | 105.00 | |
(1) | Represents the combined adjusted EPS payout percentage of 200% of target, multiplied by the percentage of base salary attributable to the financial half of the annual cash incentive opportunity. | (2) | Represents the personal objectives payout percentage (out of a range of 0 to 100%) multiplied by the percentage of base salary attributable to the personal objectives half of the annual cash incentive opportunity. | (3) | Equals the sum of both the financial half and the personal half of the annual cash incentive achieved, expressed as a percentage of base salary. | (4) | Mr. Le Peuch’s target annual cash incentive increased from 60% to 100% as a result of his promotion to President of the Cameron Group in April 2017. His total 2017 cash incentive paid represents the weighted average of his personal objectives based on both positions of employment throughout the year. |
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Long-Term Equity Incentive Awards LTI awards are designed to give NEOs and other high-value employees a longer-termlong-term stake in the Company, provide incentives for the creation of sustained stockholder value, act as long-term retention and motivation tools, and directly tie employee and stockholder interests over the longerlong term. Since 2017, the Compensation Committee has granted 100% of our executives’ annual LTI awards in the form of PSUs, with payouts contingent on achievement of both absolute and relative Company financial performance goals. In January 2017, the Compensation Committee approved2019, in response to stockholder feedback, we incorporated a significant change to our LTI award mix. Takingthree-year relative TSR modifier into account feedback from our stockholders in 2016, the Committee determined that 100%all of our 2019 PSU awards, in order to better tie our executives’ 2017 LTI awards should be incompensation to the formcreation of performance-based equity awards with payout contingent on achievement of absolute and relative Company performance goals. In prior years, our NEOs and other executive officers received 50% of their target LTI compensation in the form of performance-based equity awards and 50% in the form of stock options.stockholder value. The Compensation Committee also approved the change to thebelieves that our current LTI mix based onprogram serves the following factors:objectives: | • | to createcreates a stronger and more visible link between executive pay and Company performance; | | • | | | • | to furtherfurthers align our executives’ interests with those of our stockholders; | | • | disincentivizes substandard performance relative to other companies in our industry; | | • | to mitigatemitigates the impact of the volatility of the stock market and the cyclical nature of our industry on our LTI program; | | | | | • | to better incentivize and retain our senior executives during any business cycle; | | | | | • | the view of many of our stockholders favoring performance-based incentive awards to stock options; and | | • | | | • | to tieties management incentives to key metrics that our management can more readily control. |
In January 2017, the Committee approved PSUs with a three-year performance period (the “ROCE PSUs”), which constitute 50% of our executives’ 2017 target LTI dollar value. They will vest, if at all, based on our average annual ROCE achieved over the three-year performance period as compared to the average annual ROCE of several oilfield services competitors taken together, over the same period. See “—ROCE PSUs: Performance Measure and Goals.”
The Committee also approved 2017 PSUs with a two-year performance period (the “FCF PSUs”), which constitute the other 50% of our executives’ 2017 target LTI dollar value. These PSUs will vest, if at all, based on our cumulative absolute free cash flow over the two-year performance period as a percentage of our cumulative net income, excluding charges and credits, over the same performance period. Any FCF PSUs earned will initially be in the form of restricted stock and be subject to a mandatory one-year hold period, and will vest contingent on continued employment with the Company at the conclusion of the one-year hold period. See “—Free Cash Flow PSUs: Performance Measure and Goals.”
Awards of PSUs are currently limited to our NEOs and other senior executive officers. No shares will vest under the PSUs awarded to our NEOs if we do not achieve pre-established threshold performance levels. No dividends will accrue or be paid on any unvested PSUs during the applicable performance periods.
In January 2019, our NEOs earned 171% of the target shares of our common stock upon vesting of the three-year PSUs that were granted to our NEOs in 2016, and 250% of the target shares of our common stock upon vesting of the two-year PSUs that were granted in 2017. In January 2020, our NEOs earned 141% of the target shares of our common stock upon vesting of the three-year PSUs that were granted to our NEOs in 2017, and 250% of the target shares of our common stock upon vesting of the two-year PSUs that were granted in 2018. See “Payouts Under PSU Awards” beginning on page 41. How We Determined the Value of 2017 Long-Term2019 LTI Equity Awards The value of an executive’s LTI grant increases with the level of an executive’s responsibility at the Company, and forCompany. For the CEO and our other NEOs, it is the largest element of their total direct compensation package.compensation. In determining the value of LTI awards granted to NEOs, the Compensation Committee (in recommending approval by the Board of the CEO’s awards) and the CEO (in recommending awards for the other NEOs) first considersconsider market data regarding the LTI value for the most comparable positions in the Company’s executive compensation comparatorpeer groups, as well as several other factors, which may include: | • | the Company’s financial and operating performance during the relevant period; | | | | | • | the size and mix of the compensation elements for the executive officer; | | | | | • | retention; | | | | | • | achievement of non-financial goals; | | | | | • | the executive officer’s contribution to the Company’s success; | | | | | • | the level of competition for executives with comparable skills and experience; | | | | | • | the total value and number of equity-based awards granted to an executive over the course of his or her career, together with the retentive effect of additional equity-based awards; and | | | | | • | internal equity of peer position career grants. |
The Compensation Committee determinedapproved the target dollar value of annual LTI awards for our NEOs in 20172019 at its January meeting, based on the relevant factors above. For 2017 compensation, the target number of ROCE PSUs awarded to an NEO was determined by dividing 50% of the total target LTI value by the estimated grant date fair value of a PSU; the number of FCF PSUs awarded was determined by dividing 50% of the total target LTI value by the estimated grant date fair value of a PSU. The actual grant date fair value of each grant, computedLTI Grants to Our NEOs in accordance with applicable accounting standards, is disclosed in the Grants of Plan-Based Awards for Fiscal Year 2017 table below. The tables below detail the estimated grant date fair value and number of ROCE PSUs and FCF PSUs granted to the NEOs.
| Schlumberger Limited2018 Proxy Statement | | 33 |
2019 Annual PSU Grants; TSR Modifier PSU Grants in 2017
In January 2019, the Compensation Committee decided to hold flat the 2019 target annual LTI grant values for all our NEOs, based on its review of comparator peer group data and the market environment. The Compensation Committee approved (and in the case of Mr. Kibsgaard, our CEO, the independentnon-executive members of the Board approved): | • | awards of PSUs with a three-year ROCE performance period (the “2019 ROCE PSUs”). These PSUs will vest, if at all, based on our average annual ROCE achieved over a three-year performance period commencing in 2019 as compared to the average annual ROCE of our key oilfield services competitors taken together over the same period. The 2019 ROCE PSUs constitute 50% of our executives’ 2019 target annual LTI dollar value. See “—2019 ROCE PSUs: Performance Measures and Goals” beginning on page 39. | | • | awards of PSUs with a two-year FCF conversion performance period (the “2019 FCF Conversion PSUs”). These PSUs will vest, if at all, based on the percentage of our cumulative net income, excluding charges and credits, that we are able to convert to free cash flow in 2019 and 2020. The 2019 FCF Conversion PSUs constitute the other 50% of our executives’ 2019 target annual LTI dollar value. See “—2019 FCF Conversion PSUs: Performance Measures and Goals” beginning on page 40. |
The Board also approved a three-year relative TSR modifier that applies to all 2019 ROCE PSUs and 2019 FCF Conversion PSUs. As a result, all of our NEOs’ 2019 PSUs are subject to a three-year TSR performance metric and will vest, if at all, only after a three-year TSR performance period. Under this modifier, the number of shares that our NEOs would earn will be reduced by 25 percentage points (e.g. from 100% of target to 75% of target) if our cumulative TSR during the three-year TSR performance period commencing in 2019 is in the bottom 33rdpercentile relative to the TSR of the individual companies comprising the OSX Index. This modifier will only reduce the number of shares earned under a PSU award, but will not increase the number of shares earned. | Schlumberger Limited2020 Proxy Statement | | 38 |
The following awards fortable details the target number of ROCE PSUs and FCF Conversion PSUs granted to our NEOs in January 2017. The Compensation Committee, based on its review of comparator peer group data, determined to hold annual target LTI2019 and the estimated grant values flat for Messrs. Kibsgaard, Ayat and Belani. Mr. Le Peuch was awarded PSUs with a target dollar value of $3.2 million in connection with his appointment in April 2017 to President of our Cameron Group. In addition, Mr. Juden’s annual target LTI dollar value was increased from $2.7 million to $3.0 million based on a comparative market analysis. The following table shows the grantdate fair values of the NEOs’ 20172019 and 2018 annual LTI awards, andas well as the year-over-year percentage change between the two amounts. This table does not include
Name | | Target Number of ROCE PSUs | | Target Number of FCF Conversion PSUs | | Target Value of 2019 Annual LTI Grants(1)(2) | | Target Value of 2018 Annual LTI Grants(2) | | % Change | O. Le Peuch | | 44,800 | | 44,800 | | $3,200,000 | | $3,200,000 | | 0% | K. Al Mogharbel | | 44,800 | | 44,800 | | $3,200,000 | | $3,200,000 | | 0% | P. Schorn | | 44,800 | | 44,800 | | $3,200,000 | | $3,200,000 | | 0% | H. Gharbi | | 44,800 | | 44,800 | | $3,200,000 | | $3,200,000 | | 0% | P. Kibsgaard | | 168,000 | | 168,000 | | $12,000,000 | | $12,000,000 | | 0% | S. Ayat | | 56,000 | | 56,000 | | $4,000,000 | | $4,000,000 | | 0% |
(1) | Excludes PSU grants awarded to Messrs. Le Peuch and Al Mogharbel in connection with their promotions in 2019. | (2) | The actual grant date fair value of each grant, computed in accordance with applicable accounting standards, is disclosed in the Grants of Plan-Based Awards for Fiscal Year 2019 table on page 51. |
NEO Promotions The Compensation Committee approved the options grantedfollowing PSU awards to certain NEOs in 2019 in connection with their promotions, each such award having terms identical to the grants made in January 2019: | • | an award to Mr. Le Peuch of PSUs having an estimated grant date fair value of $800,000, in connection with his promotion to Chief Operating Officer. | | • | an award to Mr. Al Mogharbel of PSUs having an estimated grant date fair value of $520,000, in connection with his promotion to Executive Vice President, Operations. | | • | the July 2019 PSU award to Mr. Le Peuch of PSUs having an estimated grant date fair value of $10.5 million, in connection with his promotion to CEO in July 2019 and in lieu of any annual LTI award that he would have otherwise received in 2020. |
Because the July 2019 PSU award represented Mr. Le Peuch’s estimated annual LTI target award in his new role as CEO, and in light of Mr. Le Peuch’s PSU award earlier in 2019 upon his appointment as Chief Operating Officer (described above), the Board determined that Mr. Le Peuch before his promotion toshould not receive an executive officer position. | | Target Number | | Target Number | | Target Value | | Target Value | | | Name | | of ROCE PSUs | | of FCF PSUs | | of 2017 Grants | | of 2016 Grants | | % Change | P. Kibsgaard | | 73,600 | | 71,900 | | $12,000,000 | | $12,000,000 | | 0% | S. Ayat | | 24,500 | | 24,000 | | $4,000,000 | | $4,000,000 | | 0% | A. Belani | | 22,100 | | 21,600 | | $3,600,000 | | $3,600,000 | | 0% | O. Le Peuch | | 22,400 | | 21,800 | | $3,200,000 | | N/A | | N/A | A. Juden | | 18,400 | | 18,000 | | $3,000,000 | | $2,700,000 | | 11% |
No Payout under 2015-2017 PSUsannual LTI award in January 2020.
In January 2015,addition, in connection with our Compensation Committee granted PSUs to our NEOs and conditioned payout based on the Company’s achievement of absolute ROCE goals over a three-year performance period. In January 2018,CEO transition, the Compensation Committee determinedapproved grants of RSUs to three of our senior operational executives. The purpose of these awards was to retain these key executives through the resultsCEO transition. The awards represented only 25% of our key executives’ total reported compensation for 2019. They will vest only after three years, which provides senior executive stability to us and our shareholders. The three NEOs received the three-year performance period for these PSUs, relativefollowing grants of RSUs in April 2019: | • | an award to Mr. Al Mogharbel of RSUs having an estimated grant date fair value of $2.0 million; | | • | an award to Ms. Gharbi of RSUs having an estimated grant date fair value of $1.5 million; and | | • | an award to Mr. Schorn of RSUs having an estimated grant date fair value of $1.5 million. |
These RSUs will vest in April 2022, subject to the performance criteria established at that time.executive’s continued employment with us through the vesting date. We achieved average annual ROCE of 6.3% for the three-year period 2015-2017, representing achievement below threshold. As a result, the Compensation Committee determined that no shares of Schlumberger common stock were earned under the 2015 PSUs, and our NEOs received no payout under those PSUs.
2019 ROCE PSUs: Performance MeasureMeasures and Goals In January 2017,2019, the Compensation Committee set goals for the 2019 ROCE PSUs based on our average annual ROCE over a three-year performance period as compared to the average annual ROCE of severalthe following oilfield services competitors, taken together over the same period. period: Halliburton, Baker Hughes, Weatherford, National Oilwell Varco and TechnipFMC (collectively, the “ROCE comparator group”). ROCE is a measure of the efficiency of our capital employed and is a comprehensive indicator of long-term Company and management performance. The Compensation Committee selected Halliburton, Baker Hughes, a GE company, Weatherford, National Oilwell Varco and TechnipFMC as the comparator group of oilfield services companies for the ROCE PSUs. The performance period for the ROCE PSUs began on January 1, 2017 and ends on December 31, 2019. We selected a ROCE metric that is relative because we believe it is better suited to our cyclical industry, and because it allows us to directly compare how we deploy our capital against key comparator companies in oilfield services. Furthermore, ROCE measures performance in a way that is tracked and understood by many of our investors. This is also the metric that the Compensation Committee approved for the PSUs issued to our NEOs in 2016.2018. Our selection of ROCE as thea performance metric for the ROCEour 2019 PSUs is also consistent with our strategic direction and transformation initiatives. Furthermore, ROCE measures performance in a way that is tracked and understood by many of our investors.priorities. The Compensation Committee believes that tying a part of our senior executives’ LTI pay to achieving our capital efficiency goals and comparing themthese results to that of key comparator companiescompetitors in oilfield services will motivate our executives to continue to be innovative.innovate. The Compensation Committee also believes that improvements in efficiency through innovation will increase revenue and improve margins through our continued focus on pricing and cost control. Vesting ofThe ROCE performance period for the 2019 ROCE PSUs is conditionedbegan on January 1, 2019 and ends on December 31, 2021. They are also subject to a three-year TSR performance period under the Company’s achievement of a pre-determined threshold of relative annual ROCE of no fewer than 600 basis points (“bps”) below the average of all companies comprising the comparator group for the performance period. In calculating this achievement, the Committee will certify the average ROCE for each of the Company and the comparator group as a whole, in each caseTSR modifier, over the three-year performancesame period. If the relative ROCE achieved is less than or equal to 600 bps below the average of the competitor group, no shares will be earned.
| Schlumberger Limited20182020 Proxy Statement | | | 3439 |
Vesting of these PSUs will depend on our performance compared to average ROCE of our comparator group, as illustrated in the graph below. If our average annual ROCE over the three-year period is equal to that of our ROCE comparator group as a whole, then the 2019 ROCE PSUs will vest at 100% of target. The number of PSUs that will vest and convert to shares as of the vesting date can range from 0% to 250% of the number of ROCE PSUs awarded.. In no event will payout exceed 250%. TheIf our ROCE achieved is less than or equal to six percentage achievedpoints below the average of the ROCE comparator group, no 2019 ROCE PSUs will depend on our performance compared to that of our competitors during the performance period as illustrated in the following table. vest and no shares will be earned. At the end of the ROCE and TSR performance period,periods, the Compensation Committee will certify our average ROCE and that of the ROCE comparator group as a whole. The Committee will then determine the percentage of shares earned based on the table below.graph below, as adjusted for the three-year relative TSR modifier: Average Annual Relative ROCE Achieved | % of Target Shares Earned (Payout %) | (1) | Less than or equal to 600 bps below the average of the PSU comparator group | 0% | | Inclusive of and between 50 bps above the average of the PSU comparator group and 50 bps below the average of the PSU comparator group | 100% | | Greater than or equal to 600 bps above the average of the PSU comparator group | 250% | |
(1) | Fractional shares rounded up to the next whole share. Number of shares determined by linear interpolation between performance levels. |
2019 ROCE PSU Payout Matrix
We calculate ROCE as a ratio, the numerator of which is (a) income from continuing operations, excluding charges and creditsplus (b) after-tax net interest expense, and the denominator of which is (x) stockholders’ equity, including non-controlling interests (average of beginning and end of each quarter in the year),plus (y) net debt (average of beginning and end of each quarter in the year). The Compensation Committee may adjust the Company’s income from continuing operations to take into account the effect of significant impacts or activities that are not representative of underlying business operations, such as acquisitions, divestitures, asset impairments and restructurings. Furthermore, the Compensation Committee evaluates, and may adjust for, the effect of acquisitions or divestments on a case-by-case basis for purposes of the ROCE calculation. Free Cash Flow2019 FCF Conversion PSUs: Performance MeasureMeasures and Goals
In January 2017,2019, the Compensation Committee set goals for the 2019 FCF Conversion PSUs based on our cumulative absolute free cash flow over a two-year performance period as athe percentage of our cumulative net income, excluding charges and credits, that we are able to convert to free cash flow over a two-year performance period. The performance period for the FCF Conversion PSUs began on January 1, 2019 and ends on December 31, 2020. The Committee believed it was appropriate to set two-year FCF conversion performance goals due to the difficulty in setting meaningful cash flow performance targets over longer periods of time in our cyclical industry. The Compensation Committee set the target free cash flow conversion goal at 70%, which was the same as in 2018. As stated previously, the 2019 FCF Conversion PSUs are also subject to a three-year TSR performance period. period under the relative TSR modifier, from January 1, 2019 to December 31, 2021. Free cash flow is an important liquidity measure for the Company and is useful to investors and to management as a measure of the Company’s ability to generate cash. The performance period for the FCF PSUs began on January 1, 2017 and ends on December 31, 2018. Our selection of free cash flow as a percentage of cumulative net income converted as the performance metric for the 2019 FCF Conversion PSUs is also part of our goal to better align executive compensation with stockholder return. We present free cash flowreturns and encourage our executives to our investors as a measure of our ability to generate cash.maintain capital discipline through business cycles. Once business needs and obligations are met, this cash can be used to reinvest in the Company for future growth or to return to stockholders through dividend payments or share repurchases. The Compensation Committee believes that tying a part of our NEO’s LTI paypayout to our efficiency in converting cumulative net income to free cash flow will incentivizeincentivizes our management to seek out appropriate opportunitiesexecutives to increase the liquidity of the Company in accordance with our transformation goals.Company. FreeFor purposes of the 2019 FCF Conversion PSUs, free cash flow represents cash flow from operations, excluding charges and credits, less capital expenditures, SPM investments in APS projects (formerly known as Schlumberger Production Management), and multiclient seismic data costs capitalized. For the purposesThe terms of the FCFthese PSUs freeallow for cash flow will also excludepayments made in the acquisition of baseline production and investments up to first production for SPM projects. Not excludingAPS projects to be excluded from the calculation of free cash flow. The purpose of these payments would createexclusions is to avoid creating a potential disincentive to appropriately invest in the growthAPS business. However, in 2019, as part of the SPM businesses becauseour new strategy, we announced that we would no longer take equity positions in oil and gas assets. We also stated that we would not use cash to pay upfront costs of new projects. As a result, we do not anticipate any such costs would reduceexclusions to our free cash flow. flow under our 2019 FCF Conversion PSUs.
The Compensation Committee has the discretion to adjust the Company’s income from continuing operations to take into account the effect of significant impacts or activities that are not representative of underlying business operations, such as acquisitions, divestitures, asset impairments and restructurings. Furthermore, the Compensation Committee evaluates, and may adjust for, the effect of acquisitions or divestments on a case-by-case basis for purposes of the free cash flow calculations. | Schlumberger Limited2020 Proxy Statement | | 40 |
Vesting of the 2019 FCF Conversion PSUs is conditioned on the Company’s achievement of a pre-determined threshold of free cash flow conversion ofrequires us to convert no less than 50% forof our cumulative net income to free cash flow over the FCF conversion performance period. In calculating this achievement, the Compensation Committee will certify the cumulative free cash flow and net income generated by the Company over the two-year FCF conversion performance period. If the percentage of free cash flow conversion is less than or equal to 50%, no shares of our common stock will be earned. The number of PSUs that will convert to shares at the end of the performance period can range from 0% to 250% of the number of FCF PSUs awarded.. In no event will payout exceed 250%. The percentage achieved will depend on our performance over the FCF conversion performance period as illustrated in the following table. At the end of the FCF conversion and TSR performance period,periods, the Compensation Committee will determine the number of shares earned based on the table below.below, as adjusted for the three-year relative TSR modifier: Cumulative Free Cash Flow Conversion Percentage | % of Target Shares Earned (Payout %) | (1) | Less than or equal to 50% | 0% | | 62.5% | 50% | | 75% | 100% | | 100% | 200% | | Equal to or greater than 112.5% | 250% | |
Cumulative Cash Converted to FCF | % of Target Shares Earned (Payout %)(1) | Less than or equal to 50% | 0% | 60% | 50% | 70% | 100% | 90% | 200% | Equal to or greater than 100% | 250% |
(1) | Fractional shares rounded up to the next whole share. Number of shares determined by linear interpolation between performance levels. |
AnyPayouts Under PSU Awards
2019 Payouts Under 2016 ROCE PSUs In January 2016, the Compensation Committee granted PSUs to our NEOs and conditioned payout based on our average annual ROCE achieved over a three-year performance period as compared to the average annual ROCE of the ROCE comparator companies (the “2016 ROCE PSUs”). In January 2019, the Compensation Committee approved the results for the 2016 ROCE PSUs relative to the performance criteria that the Compensation Committee had previously approved. Specifically, the Compensation Committee determined that, based on the then-available reported results of the ROCE comparator companies, the 2016 ROCE PSUs had been earned at 171% of target, based on Schlumberger’s annual average ROCE of 310 basis points above the average of the ROCE comparator group through September 30, 2018, which was at the time the most recent fiscal period end reported by all of the companies comprising the ROCE comparator group. Because the award agreements for the 2016 ROCE PSUs provide that the PSUs are earned and settled in common stock as soon as practicable following the end of the ROCE performance period, the Compensation Committee approved the issuance of 90% of the shares that the Compensation Committee determined had been earned under the 2016 ROCE PSUs for the period from January 2016 through September 2018, since most of the companies in the ROCE comparator group had not yet reported their 2018 audited results. In March 2019, the Company issued the number of additional shares determined to have been earned upon the disclosure of all of the ROCE comparator companies’ full-year 2018 audited results based on achievement of the 171% of target. 2019 Payouts Under 2017 Free Cash Flow PSUs In January 2017, the Compensation Committee granted PSUs to our NEOs and conditioned payout based on the cumulative free cash flow generated from January 1, 2017 to December 31, 2018, as a percentage of cumulative net income generated over that same period, excluding charges and credits (the “2017 FCF PSUsConversion PSUs”). In January 2019, the Compensation Committee determined that we achieved cumulative free cash flow conversion of 133% for the two-year performance period, representing achievement of 250% of target, based on the Committee’s previously approved performance criteria. As a result, our NEOs earned will initially be250% of target under the 2017 FCF Conversion PSUs. We issued the shares that were earned under the FCF Conversion PSUs in the form of restricted stock. These shares were subject to a mandatory one-year hold period, and were converted to non-restricted shares in January 2020. 2020 Payouts Under 2017 ROCE PSUs In January 2017, the Compensation Committee granted PSUs to our NEOs and conditioned payout based on our average annual ROCE achieved over a three-year performance period as compared to the average annual ROCE of the ROCE comparator companies (the “2017 ROCE PSUs”). In January 2020, the Compensation Committee approved the results for the 2017 ROCE PSUs relative to the performance criteria that the Compensation Committee had previously approved. Specifically, the Compensation Committee determined that, based on the then-available reported results of the ROCE comparator companies, the 2017 ROCE PSUs had been earned at 141% of target, based on Schlumberger’s annual average ROCE of 200 basis points above the average of the ROCE comparator group through September 30, 2019, which was at the time the most recent fiscal period end reported by all of the companies comprising the ROCE comparator group. Because the award agreements for the 2017 ROCE PSUs provide that the PSUs are earned and settled in common stock as soon as practicable following the end of the ROCE performance period, the Compensation Committee approved the issuance of 90% of the shares that the Compensation Committee determined had been earned under the 2017 ROCE PSUs for the period from January 2017 through September 2019, since most of the companies in the ROCE comparator group had not yet reported their 2019 audited results. Any additional shares finally determined to have been earned will be issued after all of the ROCE comparator companies disclose their full-year 2019 audited results. | Schlumberger Limited2020 Proxy Statement | | 41 |
2020 Payouts Under 2018 Free Cash Flow PSUs In January 2018, the Compensation Committee granted PSUs to our NEOs and beconditioned payout based on the cumulative free cash flow generated from January 1, 2018 to December 31, 2019, as a percentage of cumulative net income generated over that same period, excluding charges and credits (the “2018 FCF Conversion PSUs”). In January 2020, the Compensation Committee determined that we achieved cumulative free cash flow conversion of 129% for the two-year performance period, representing achievement of 250% of target, based on the Committee’s previously approved performance criteria. As a result, our NEOs earned 250% of target under the 2018 FCF Conversion PSUs. These shares are subject to a mandatory one-year hold period. The restricted sharesThey will convert to non-restricted shares in January 2021 at the end of the one-year hold period, on December 31, 2019, contingent on an NEO’s continued employment with us as of that date. We believe this hold period will foster retention of our executive talent and better align the interests of our executives with that of our stockholders. The actual earned dollar value of our NEOs’ PSU payouts in January 2020 was substantially less than the grant values that the Committee approved when it awarded the PSUs. Although the 2017 ROCE PSUs paid out at 141% of target and the 2018 FCF Conversion PSUs paid out at 250% of target, the actual earned dollar value of these grants together in January 2020 was approximately 106% of the grant value. |
Agreements with Former NEOs Schlumberger and Mr. Kibsgaard, our former Chairman and CEO, entered into an agreement effective as of August 1, 2019 that provides for, among other things, certain payments to Mr. Kibsgaard in exchange for three-year non-competition and non-solicitation covenants. Under the terms of the agreement, Mr. Kibsgaard has agreed to provide certain services to Schlumberger as needed to secure an orderly CEO transition. Under the agreement, Mr. Kibsgaard will receive payments and benefits through July 31, 2022, consisting of (1) $2,000,000 per year, to be paid in accordance with the Company’s standard employee payroll practices; (2) medical and pension benefits for which he is eligible as an employee; and (3) reimbursement for reasonable business expenses incurred in the normal course of performing his duties under the agreement. In addition, Mr. Kibsgaard received his annual cash incentive award for his 2019 performance based on achievement of previously-established personal and financial performance targets, and a payment for accrued and unused vacation of $113,702. As a high-technology services company, we believe that our greatest competitive strengths are our people and our intellectual property. Mr. Kibsgaard has extensive strategic, financial and market knowledge about us and our industry, important relationships with our customers, and deep ties to the scientific community at Schlumberger. Thus, our Board believed it to be in the best interest of the Company and our shareholders to enter into an agreement with Mr. Kibsgaard to secure his covenant not to compete with us for a period of three years, and to prohibit him from soliciting key employees to leave us, while retaining him to provide services as needed for the CEO transition. Under the terms of the agreement, if Mr. Kibsgaard breaches his non-competition covenant, we may immediately stop payment of all cash amounts that would otherwise be due to him, and all outstanding equity awards will be subject to cancellation. In addition, in the event of any such breach, we may require that Mr. Kibsgaard repay all payments or benefits received under the agreement. In addition, Schlumberger and Mr. Ayat, our former CFO, entered into an agreement effective as of January 22, 2020 that provides for, among other things, certain payments to Mr. Ayat in exchange for three-year non-competition and non-solicitation covenants. Under the terms of the agreement, Mr. Ayat has agreed to devote 50% of his business time to Schlumberger as Senior Strategic Advisor to our CEO for a two-year period. Under the agreement, Mr. Ayat will receive payments and benefits through January 21, 2022, consisting of (1) $1,000,000 per year, to be paid in accordance with the Company’s standard employee payroll practices; (2) continued participation in Schlumberger’s health, welfare and insurance plans on a basis comparable to that of other U.S. employees; and (3) an award of PSUs in January 2020 with a target LTI dollar value equal to 100% of Mr. Ayat’s aggregate PSU target dollar grant in January 2019, awarded on the same terms and conditions as the PSU grants to the Company’s NEOs in January 2020. In addition, Mr.Ayat received his annual cash incentive award for his 2019 performance based on achievement of previously-established personal and financial performance targets, and a payment for his accrued and unused vacation of $5,817. As in the case of the agreement between Schlumberger and Mr. Kibsgaard, our Board believed it to be in the best interest of the Company and our shareholders to enter into an agreement with Mr. Ayat to secure his covenant not to compete with us for a period of three years, and to prohibit him from soliciting key employees to leave us, while retaining his services for up to 50% of his business time to help foster an orderly CFO transition. Under the terms of the agreement, if Mr. Ayat breaches his non-competition covenant, we may immediately stop payment of all cash amounts that would otherwise be due to him, and all outstanding equity awards will be subject to cancellation. In addition, in the event of any such breach, we may require that Mr. Ayat repay all payments or benefits received under the agreement. The agreements with Messrs. Kibsgaard and Ayat also contain other covenants. In connection with their agreements, each of Messrs. Kibsgaard and Ayat entered into a release and waiver. | Schlumberger Limited20182020 Proxy Statement | | | 3542 |
2017 RSU Retention Grants
At the October 2017 Compensation Committee meeting, the Committee reviewed the LTI grants made to executive officers from 2011 through 2017. The Committee noted that our executive officers are expected to realize significantly less than the target value of their LTI awards for this period. The Committee determined that this was largely because the PSUs that were awarded to them in 2014 and 2015, which were subject to vesting conditions based solely on absolute ROCE targets, did not vest at all because industry conditions were much worse than was expected at the time that the Committee established and approved performance goals under those PSU awards.
The Committee noted further that it had approved absolute ROCE targets for the 2014 PSUs (with a three-year performance period ending December 31, 2016) almost a full year before the downturn began, and had approved absolute ROCE targets for the 2015 PSUs (with a three-year performance period ending December 31, 2017) only two months after the downturn had begun. Moreover, the Committee considered that the Company generated higher ROCE in 2015 and 2016 than all other major oilfield service companies, and had recorded positive ROCE throughout the downturn, even though two of the Company’s three major competitors recorded negative ROCE during that period. In short, the Committee determined, with the benefit of hindsight, that the absolute ROCE performance goals established for the 2014 and 2015 PSUs were unachievable due to the unexpected severity and duration of the industry downturn. Because of this outcome, the Committee believed that those PSUs have not had their desired effect of aligning pay with performance, which raised retention concerns as the industry began to recover and competition for our executive talent increased.
Based on these factors, the Committee awarded 20,000 RSUs to each of Messrs. Ayat, Belani and Le Peuch, and 15,000 to Mr. Juden, which will all vest in October 2020, subject to their continued employment with us through that date. The Committee considered that, in setting the size of these awards, it did not intend to replace the value of past LTI awards, as reflected by the awards’ value being equal to only approximately 35% of the 2017 target LTI value for each such NEO. The Committee took particular note that, even after giving effect to these RSU awards, each of these individuals is still expected to realize significantly less than the target value of their LTI awards for the six-year period from 2011 through 2017. Mr. Juden also received a grant of 15,000 RSUs in April 2017 for retention purposes. The Committee intends for these awards to help motivate the executives to remain with Schlumberger while we implement the re-designed LTI compensation program, which includes relative metrics. Mr. Kibsgaard, our CEO, did not accept a retention award in 2017.
Other Aspects of ourOur Executive Compensation Framework Peer Group Companies The Compensation Committee considers formal executive compensation survey data prepared by Pay Governance when it reviews and determines executive compensation. The Compensation Committee also reviews information on the executive compensation practices at various “peer group” companies when considering changes to the Company’s executive compensation program. To prepare for its executive compensation analysis, the Company’s executive compensation department works with Pay Governance to match Company positions and responsibilities against survey positions and responsibilities and to compile the annual compensation data for each executive officer. The Company has two main executive compensation peer groups, the oil industry and general industry peer groups (our “main comparatorexecutive compensation peer groups”). The survey data prepared by Pay Governance summarize the compensation levels and practices of our main comparatorexecutive compensation peer groups, as follows: | • | the “oil industry peer group,” which is comprised ofcomprises companies in the oil services industry, as well as E&P companies and integrated oil and gas companies, in each case with annual revenues between $6$6.4 billion and $123$127.5 billion; and | | | | | • | the “general industry peer group,” which is comprised ofcomprises other large technology-focused companies with significant international operations and annual revenues between $13$14.9 billion and $77$62.8 billion and market capitalizations of greater than $7$8 billion. |
The Compensation Committee’s selection criteria for companies comprising the main comparatorexecutive compensation peer groups include: | • | potential competition for executive talent; | | | | | • | revenue and market capitalization; | | | | | • | global presence and scope of international operations; and | | | | | • | companies viewed as leaders in their industry. |
The Compensation Committee, with the assistance of Pay Governance, annually reviews specific criteria and recommendations regarding companies to add to or remove from the comparatorpeer groups. As a general matter, the Company selects suitable comparator companies such that companies in each of our two main comparatorexecutive compensation peer groups, at the median, approximate Schlumberger’s estimated revenue in the then-current year and its then-current market capitalization. The Compensation Committee modifies the peer group criteria as appropriate while seeking a satisfactory degree of stability, to provide a consistent basis for comparison. A challenge facing the Company in determining the companies appropriate for inclusion in our two main comparator peer groups for 2017 executive compensation decisions was the Company’s relatively high market capitalization, rendering it difficult to position Schlumberger at the median of each group. | Schlumberger Limited2018 Proxy Statement | | 36 |
Oil Industry Peer Group The oil industry peer group comprises companies in the oil services industry, as well as E&P companies and integrated oil and gas companies, allin each case with annual revenues between $6$6.4 billion and $123$127.5 billion. The broad revenue range is due to the limited number of peer companies in Schlumberger’s immediate revenue range.range, and the fact that all other oilfield service companies have lower revenue than Schlumberger. Because of Schlumberger’s significant international operations, this peer group includes non-U.S. energy and energy-related companies that also meet the criteria set forth above. Some members of this peer group frequently target Company executives for positions at the peer company. See “—The Competition for Our Executive Talent,” on pages 31-32. The Compensation Committee decided to include E&P companies in this peer group based on a number of factors. First, because Schlumberger was significantly larger than all of its direct competitors in the oilfield services industry in terms of revenue and market capitalization, the Compensation Committee believed that the addition of E&P companies provided a more appropriate and complete comparator group. In addition, the Compensation Committee believed that the inclusion of E&P companies is appropriate because our executives have been hired by E&P companies in the past, and market consolidation has reduced the number of direct competitors in the oilfield services industry, thus increasing the prominence of E&P companies as competitors for executive talent. In July 2016,2018, the Compensation Committee reviewed the companies constituting our two main comparatorexecutive compensation peer groups effective for 20172019 executive compensation decisions, based on the criteria set forth above. At the time of its review, Schlumberger’s full-year 20162018 revenue was forecast to be approximately $30$34 billion. ApplyingBecause Weatherford International Plc did not meet the selection criteriastrict revenue criterion set forth above for the oil industry peer group, the Compensation Committee approved the removal of Royal Dutch Shell, ExxonMobil, British Petroleum plc and TOTALWeatherford from the oil industrythis peer group because their annual revenues exceeded the new revenue maximum. The Compensation Committee also approved the addition of Devon Energy and Anadarko Petroleum to this group based on the selection criteria set forth above, effective for 2017 compensation decisions. In October 2016, the Compensation Committee also approved the addition of GE Oil and Gas to the oil industry peer group effective for 2017 compensation decisions, for evaluation of the competitiveness of compensation for our Group Presidents.group. As a result of the foregoing, Schlumberger was in the 6167stthpercentile of the oil industry peer group in terms of revenue, and in the 9490thpercentile of the oil industry peer group in terms of market capitalization. | Schlumberger Limited2020 Proxy Statement | | 43 |
The following 18 companies comprisedconstitute the oil industry peer group effective for relevant 20172019 compensation decisions: | | | | | | | | | | | Oil Industry Peer Group | | | | | | Oil services, E&P, and integrated oil and gas companies with annual revenues between $6B$6.4B and $123B$127.5B | | | Apache Corp.Anadarko Petroleum | Anadarko Petroleum* | Baker Hughes | | BHP Billiton | | Chevron | | ConocoPhillips | | | ConocoPhillipsDevon Energy | Devon Energy* | Eni SpA | | EOG Resources | GE | Halliburton | | Imperial Oil and Gas*Limited | | | Halliburton | Imperial Oil Limited | Marathon Petroleum | | National Oilwell Varco | | Occidental Petroleum | | Petrofac | | Phillips 66 | | | Phillips 66 | Suncor Energy | Valero | WeatherfordTechnipFMC | | Valero | | |
* Added to the group for 2017 executive compensation decisions. | | |
General Industry Peer Group The Compensation Committee considers data from the general industry peer group as it deems necessary or advisable to the extent that data from the first peer group may not exist, or may be insufficient, for some executive officer positions. The second group is also particularly relevant for non-operations positions, where the skills and experience may be easily transferable to other industries outside the oil and gas industry. The general industry peer group provides data offrom large companies with significant international operations, and supplements the compensation data from the oil industry peer group, whose companies are closer to Schlumberger in industry type but have widely varying revenue sizes. The general industry peer group: | • | includes multi-national companies with (i) non-U.S. annual revenue of at least 20 percent20% of consolidated revenue; (ii) a technical focus; (iii) annual revenues between $13$14.9 billion and $77$62.8 billion; and (iv) market capitalization of at least $7$8 billion; | | | | | • | excludes companies that do not have a significant international scope; | | • | includes a variety of industries, such that no single industry represents more than 25% of the general industry peer group; | | • | includes companies in sectors that are most relevant to Schlumberger, such as the technology, engineering, chemical and mining industries, and that require highly skilled human capital; and | | | | | • | excludes companies in industries that are leastless comparable to Schlumberger’s, such as entertainment, finance, retail, life sciences and retail.pharmaceutical companies. |
In July 2016,2018, the Compensation Committee, applying the selection criteria set forth above, approved the additionremoval of three14 life sciences and pharmaceutical companies — QUALCOMM, Thermo Fisher Scientific and Texas Instruments — tofrom the general industry peer group, effective for 20172019 compensation decisions. Tendecisions, to more closely align this peer group with companies in industries more similar to Schlumberger’s. The 14 life sciences and pharmaceutical companies removed were Abbott Laboratories, AbbVie, AstraZeneca, Bayer, Eli Lilly and Co., Gilead Sciences, GlaxoSmithKline, Medtronic, Merck & Co, Novartis, Pfizer, Roche Holding, Sanofi and Thermo Fisher Scientific. In addition, BASF SE was removed from this peer group.group because its annual revenue exceeded the criterion described above. The Compensation Committee also approved the removaladdition of Archer Daniels Midland, Danone, International Paper, FedExone company—DowDupont—as a result of the merger of Dow Chemical and UPS because these companies did not meetE.I. DuPont de Nemours, each of which had been included in the technology focus criterion above. Amazon, Alstom, Boeing, Microsoft and Siemens were removed because they did not meet the revenue criteria described above.general industry peer group for 2018 executive compensation decisions. As a result of the foregoing, Schlumberger was positioned at the 3058thpercentile of the general industry peer group in terms of revenue, and the 6068thpercentile of that peer group in terms of market capitalization. | Schlumberger Limited2018 Proxy Statement | | 37 |
The following 30 companies comprisedconstitute the general industry peer group effective for relevant 2017 compensation decisions: | | | | General Industry Peer Group | | | | | | Annual revenues between $13B and $77B with technical and global focus | | | 3M | ABB Ltd. | Airbus Group | Alphabet Inc. | Anglo American | | | AstraZeneca PLC | BAE Systems | BASF | Bayer AG | Caterpillar Inc. | | | Cisco Systems | Coca-Cola | Compagnie de Saint-Gobain | Deere & Co | Dow Chemical | | | E.I. Dupont de Nemours | Fluor Corporation | General Dynamics | GlaxoSmithKline | Honeywell | | | Intel | Johnson Controls | Johnson & Johnson | Koninklijke Philips | Lockheed Martin | | | LyondellBasell | Merck & Co. | Novartis AG | Oracle | PepsiCo, Inc. | | | Pfizer | Procter & Gamble | QUALCOMM* | Raytheon | Roche Holding AG | | | Rio Tinto plc | Rolls Royce | Sanofi | Schneider Electric | Thermo Fisher Scientific* | | | Texas Instruments* | Unilever | United Technologies | | | | | * Added to the group for 2017 executive compensation decisions. | | | | |
Additional Peer Groups for Select Positions
The Compensation Committee refers to two additional executive compensation peer groups, which were effective for 2017 compensation decisions only as to our EVP Technology. These are:
| • | the “lower-revenue oil industry peer group,” which is comprised of smaller companies in the oil services, E&P, refining and pipeline industries with annual revenues between $1.4 billion and $10 billion; and | | | | | • | an “R&D-focused peer group,” which is comprised of various companies from the S&P 500 Index with research and development (“R&D”) expenditures, at the median, close to Schlumberger’s R&D expenditures. |
These two additional peer groups serve as a point of reference for the Compensation Committee, given the scope and level of responsibility of executive positions as to which the Compensation Committee requires additional compensation data. Prior to the introduction of these two peer groups, the Compensation Committee had determined that select executives who held very senior positions within the Company (including our EVP Technology) could, by virtue of their leadership experience and professional background at Schlumberger, become chief executives of other, smaller companies in the oil and gas industry.
The Compensation Committee applies the same selection criteria for companies comprising these two peer groups as for the main comparator groups; however, the global scope of international operations criteria does not apply to the lower-revenue oil industry peer group.
Lower-Revenue Oil Industry Peer Group
Among our NEOs, the lower-revenue oil industry peer group is relevant only for the compensation of our EVP Technology. In October 2016, the Compensation Committee, applying the selection criteria set forth, approved the addition of five companies — Aker Solutions, Transocean, Petrofac, Rowan Companies and Shawcor — to the lower-revenue oil industry peer group, effective for 2017 compensation decisions. The Compensation Committee approved the removal of Cameron International Corporation and Dresser-Rand because each was acquired in 2016, and approved the removal of Oil States International because its revenue no longer met the criteria described above.
As a result of the foregoing, the following companies formed this peer group effective for relevant 2017 compensation decisions:
| | | | Smaller Oil Industry Companies Peer Group | | | | | | Oil services, E&P, refining and pipeline companies with annual revenue between $1.4B and $10B | | | Aker Solutions | AMEC plc | CGG-Veritas | Diamond Offshore Drilling | Ensco plc | | | Exterran Holdings | FMC Technologies | Helmerich & Payne, Inc. | John Wood Group plc | McDermott International | | | Noble Corp. | Oceaneering International | Patterson-UTI Energy | Petrofac Corporation | Rowan Companies | | | Shawcor Ltd. | SBM Offshore | Subsea 7 SA | Superior Energy Services | Transocean Ltd. | | | | | | | | |
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R&D Focused Peer Group — Similar R&D Expenditures
The R&D-focused peer group comprises large companies with significant international operations, some of which also are in our general industry peer group. While the 2016 consolidated revenue of these companies varied greatly, their R&D expenditures, at the median, approximated Schlumberger’s R&D expenditures in that year. As with the lower-revenue oil industry peer group, this peer group is relevant only for the compensation of our EVP Technology.
In October 2016, the Compensation Committee reviewed the criteria for the R&D-focused peer group. The Compensation Committee made substantial changes to this peer group, removing 11 companies from the list and adding 22 new companies. The 11 companies removed were AbbVie, Inc., Advanced Micro Devices, Baxter International, Boeing, Celgene Corp, EMC Corp., Forest Laboratories, LSI Corp., Motorola Solutions, Raytheon and United Technologies. The following 50 companies comprised the R&D-focused peer group effective for relevant 20172019 compensation decisions:
| | | | | | | | | | | | General Industry Peer Group Companies with R&D Focus | | | | | | | | | Median R&D expenses similar to Schlumberger’s R&D expensesAnnual revenues between $14.9B and $62.8B with technical and global focus | | | | 3M Company | Abbott Laboratories* | AdobeABB Ltd. | | Anglo American | | BAE Systems | Allergan Inc. | Applied MaterialsCaterpillar | | | AT&T, Inc.*Cisco Systems | Autodesk, Inc.* | Biogen Idec Inc.Compagnie de Saint-Gobain | Boston Scientific | Broadcom Corp.Deere & Company | | DowDupont | | Emerson Electric | | | CA, Inc.*Fluor Corporation | Caterpillar Inc. | Corning Inc.Freeport-McMoRan | Cummins Inc. | Danaher Corp.General Dynamics | | Hewlett Packard Enterprise | | Honeywell | | | Deere & Co.HP Inc. | Dell EMC | Delphi Automotive, PLC*Intel | Dow Chemical | E.I. Dupont de NemoursJohnson Controls | | Koninklijke Philips | | Lockheed Martin | | | eBay Inc.LyondellBasell | Electronic Arts Inc. | Exxon Mobil Corporation*Oracle | Gilead Sciences | Harris Corporation*QUALCOMM | | Raytheon | | Rio Tinto | | | Hewlett Packard Enterprise Company* | Honeywell International Inc.* | Intuit Inc.* | Johnson Controls International plc* | Juniper NetworksRolls-Royce Holdings | | SAP SE | | Lam Research Corporation*Schneider Electric | Lockheed Martin Corporation* | Medtronic, Inc. | Micron Technology | Monsanto | | | NetApp, Inc. | NVIDIA Corp. | Paypal Holdings, Inc.* | Pepsico, Inc.* | Procter & Gamble Company* | | | Regeneron Pharmaceuticals Inc.* | Rockwell Collins Inc.* | Salesforce.com Inc.* | Seagate Technology | Symantec | | | Texas Instruments | Textron Inc.* | Vertex Pharmaceuticals Inc.* | Western Digital Corp. | Yahoo! Inc. | | | * Added to the group for 2017 executive compensation decisions. | | | United Technologies | |
Relative Size of Direct Compensation Elements
Schlumberger’s executive compensation program consists of three primary elements, comprising our executives’ total direct compensation:
| • | long-term equity incentives; | | | | | • | annual cash incentives, based upon Company and individual performance; and | | | | | • | base salary. |
These elements allow the Company to remain competitive and attract, retain and motivate top executive talent with current and potential future financial rewards. At the same time, this relatively simple compensation program is applied and communicated consistently to our exempt employees of more than 140 nationalities operating in approximately 85 countries.
The Compensation Committee reviews the elements of total direct compensation for the NEOs throughout the year, to evaluate whether each element of direct compensation remains at levels that are competitive with companies in Schlumberger’s two main peer groups described above. The Compensation Committee relies on its own judgment in making these compensation decisions after its review
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of external market practices of companies comprising our executive compensation peer groups, including the size and mix of direct compensation for executives in those companies. The Compensation Committee seeks to achieve an appropriate balance between annual cash rewards that encourage achievement of annual financial and non-financial objectives, and LTI awards that encourage positive long-term stock price performance, with a greater emphasis on LTI awards for more senior executives. However, the Compensation Committee does not aim to achieve a specific target of cash versus equity-based compensation.
While external market data provide important guidance in making decisions on executive compensation, the Compensation Committee does not set compensation based on market data alone. When determining the size and mix of each element of an NEO’s total direct compensation, the Compensation Committee also considers the following factors:
| • | the size and complexity of the executive’s scope of responsibilities; | | | | | • | leadership, management and technical expertise, performance history, growth potential, and position in reporting structure; | | | | | • | overall Company and individual performance; | | | | | • | retention needs; | | | | | • | the recommendations of the CEO (except for his own compensation); and | | | | | • | internal pay equity. |
The charts below show the percentage of 2017 base salary, target annual cash incentive and LTI compensation established by the Compensation Committee in January 2017 for our CEO and other NEOs. Approximately 88 percent of the direct compensation of our CEO and 87 percent of our other NEOs was at risk, demonstrating management’s alignment with stockholders’ interests. In 2017, the portion of total compensation that was at risk is as follows:
Schlumberger CEO 2017 Pay Mix
| | Schlumberger Other NEO 2017 Pay Mix
| | | | | | |
Based on market data provided by Pay Governance, Schlumberger’s pay mix generally aligns with that of both of our main comparator groups. The Compensation Committee may, at its discretion, modify the CEO’s, or any other NEO’s mix of base pay, annual cash incentive and LTIs, or otherwise adjust an NEO’s total compensation, to best fit his specific circumstances. This provides flexibility to the Compensation Committee to compensate NEOs appropriately as they near retirement, when they might not receive any LTI awards for their final years of service. The Compensation Committee may also increase the size of an LTI award to an NEO if the aggregate career LTI awards granted do not adequately reflect the executive’s current position and level of responsibility within the Company, taking into account external market practices and the other factors described above.
Role of the Independent Executive Compensation Consultant The Compensation Committee has retained Pay Governance as its independent consultant with respect to executive compensation matters. Pay Governance reports only to, and acts solely at the direction of, the Compensation Committee. Schlumberger’s management does not direct or oversee the activities of Pay Governance with respect to the Company’s executive compensation program. Pay Governance prepares compensation surveys for review by the Compensation Committee at its October meeting. One of the purposes of the October meeting is to assess compensation decisions made in January of that year in light of comparative data to date; another purpose of the October meeting is to prepare for the annual executive officer compensation review the following January. Pay Governance works with the Company’s executive compensation department to compare compensation opportunities of the Company’s executive officers with compensation opportunities for comparable positions at companies included in the compensation surveys conducted by Pay Governance at the direction of the Compensation Committee. Pay Governance and the Company’s executive compensation department also compile annual compensation data for each executive officer. The Compensation Committee has also instructed Pay Governance to prepare an analysis of each named executive officer’s compensation. The Compensation Committee has also retained Pay Governance as an independent consulting firm with respect to non-employee director compensation matters. Pay Governance prepares an analysis of competitive non-employee director compensation levels and market trends using the same two main peer groups as those used in the executive compensation review. The Compensation Committee has assessed the independence of Pay Governance pursuant to SEC rules and has concluded that its work did not raise any conflict of interest that would prevent Pay Governance from independently representing the Compensation Committee. | Schlumberger Limited2018 Proxy Statement | | 40 |
Procedure for Determining Executive Compensation; Role of Management The Compensation Committee evaluates all elements of executive officer compensation each January, after a review of the achievement of financial and personal objectives with respect to the prior year’s results. The purpose is to determine whether any changes in an officer’s compensation aremay be appropriate. The CEO does not participate in the Compensation Committee’s deliberations with regard toregarding his own compensation. At the Compensation Committee’s request, the CEO reviews with the Compensation Committee the performance of the other executive officers, but no other named executive officer has any input in executive compensation decisions. The Compensation Committee gives substantial weight to the CEO’s evaluations and recommendations because he is particularly able to assess the other executive officers’ performance and contributions to the Company. Our Vice President of Human of Resources assists the CEO in developing the executive officers’ performance reviews and reviewing market compensation data to determine compensation recommendations for our executives. The Compensation Committee independently determines each executive officer’s mix of total direct compensation based on the factors described in “Compensation Discussion and Analysis—Other Aspects of ourFramework for Setting Executive Compensation Framework—in 2019—Relative Size of Direct Compensation Elements.” Early in the calendar year, financial and personal objectives for each executive officer are determined for that year. The Compensation Committee may, however, review and adjust compensation at other times as the result of new appointments or promotions during the year. The following table summarizes the approximate timing of significant executive compensation events: EVENT | | TIMING | Establish Company financial objectives and NEO key personal objectives | | JanuaryFirst quarter of each fiscal year for current year | Establish CEO personal objectives Review and approve the peer group companies used for compensation benchmarking | | EarlyJuly of each year for compensation in the first quarter of thefollowing fiscal year for current year and finalized during April | Perform competitive assessment to determine how Schlumberger’s compensation decisions compared to decisions made by companies included in the compensation surveys | | October of each fiscal year for current year | Independent compensation consultant provides analysis for the Compensation Committee to evaluate executive compensation | | October of each year for compensation in the following fiscal year | Evaluate Company and executive performance (achievement of objectives established in previous fiscal year) and recommend annual cash incentive compensation based on those results | | Results approved in January of each fiscal year for annual cash incentive compensation with respect to prior year. The annual cash incentive earned infor the prior fiscal year is paid in February of the current fiscal year | Review and recommend executive base salary and determine equity-based grants | | January of each fiscal year for base salary for that year and for equity-based grants |
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Long-Term Equity Awards — Granting Process The Compensation Committee is responsible for granting long-term equity-based compensation under our omnibus stock incentive plans. The Compensation Committee approves a preliminary budget for equity-based grants for the following year at each October meeting. Management determines the allocation for groups within the Company and individual recommendations are made by the heads of the Groupsgroups and approved by the CEO. The Compensation Committee approves all equity-based awards, including executive officer awards, which are recommended by the CEO, except for his own. Awards for executive officers other than the CEO are granted by the Compensation Committee and discussed with the Board. Awards for the CEO are granted by the Compensation Committee following approval by the full Board. In addition to considering the value of each equity-based award, management and the Compensation Committee also consider the overall potential stockholder dilution impact and “burn rate,” which is the rate at which awards are granted as a percentage of common shares outstanding. Each year, the Compensation Committee reviews a budgeted grant date value of equity-based awards to our executives and other eligible employees and makes a recommendation to the Board for approval. This review and recommendation process includes an analysis of potential dilution levels and burn rates resulting from the potential grant of such awards. The Compensation Committee and management use this analysis regarding dilution levels and burn rates as an additional factor in approving long-term equity awards. The regular Board and Compensation Committee meeting schedule is set at least a year in advance with Board meetings held quarterly, generally toward the end of January,in mid-January, April, July and October. The timing of these committee meetings is not determined by any of the Company’s executive officers and is usually two days in advance of the Company’s announcement of earnings. The Compensation Committee usually sets the equity award grant date as the day of the BoardCompensation Committee meeting. The Company does not time the release of material non-public information for the purpose of affecting the values of executive compensation. At the time equity grant decisions are made, the Compensation Committee is aware of the earnings results and takes them into account, but it does not adjust the size or the mix of grants to reflect possible market reaction. Annual grants of equity-based awards to the NEOs, other senior executive officers and the rest of the Company’s eligible employees are made at the January meeting of the Compensation Committee. However, specific grants may be made at other regular meetings, to | Schlumberger Limited2018 Proxy Statement | | 41 |
recognize the promotion of an employee, a change in responsibility or a specific achievement.achievement, or to achieve other key compensation objectives. The exercise price for all stock options granted to executive officers and other employees is the average of the high and low trading priceprices of the Schlumberger common stock on the NYSE on the date of grant, which has been Schlumberger’s practice for many years. The Board and the Compensation Committee have the discretion to grant equity awards with different vesting schedules as they deem appropriate or necessary. Executive Stock Ownership Guidelines The Compensation Committee and management believe strongly in linking executive long-term rewards to stockholder value. OurIn 2019, our Board, upon recommendation of the Nominating and Governance Committee and the Compensation Committee, adopted revised executive stock ownership guidelines in 2011 applicable to our executive officers and other key position holders. Senior executives are required to hold the numbers of shares equal to the multiple of base salary set forth below.below: Title | Stock Ownership Multiple | Chief Executive Officer | 6x base salary | Executive Vice Presidents | 3x base salary | Executive Officers (non-EVP) | 2x base salary | Key Staff Positions | 1x base salary |
All executives subject to the guidelines must retain 50% of net shares acquired upon the exercise of stock options and after the vesting of PSUs and RSUs, after payment of applicable taxes, until they achieve the required ownership level. The guidelines provide that executives have five years to satisfy the ownership requirements. After the five-year period, executives who have not met their minimum stock ownership requirement must retain 100% of the net shares acquired upon stock option exercises and any PSU and RSU vesting until they achieve their required ownership level. Stock ownership for the purpose of these guidelines does not include shares underlying vested or unvested stock options, unvested RSUs or unvested PSUs. As of December 31, 2019, all of our then-serving NEOs were in compliance with our stock ownership guidelines. | Schlumberger Limited2020 Proxy Statement | | 46 |
Other Executive Benefits and Policies No Hedging or Pledging of Schlumberger StockEmployment Agreements with Current Executive Officers Schlumberger’s insider trading policy prohibits executives from speculating inHistorically, our named executive officers have not had employment, severance or change-in-control agreements with the Company’s stock, which includes, pledging; hedging; short selling; buyingCompany, and serve at the will of the Board. This enables the Company to terminate their employment using judgment as to the terms of any severance arrangement and based on specific circumstances at the time they cease being executive officers. We do not enter into employment, severance or selling publicly-traded options, including writing covered calls; orchange-in-control agreements with any other type of derivative arrangement on the Company’s stock that has a similar economic effect.newly-hired executive officers.
Retirement Benefits In line with Schlumberger’s aim to encourage long-term careers with the Company and to promote retention, retirement plans are provided, where possible, for all employees, including named executive officers, according to local market practice. Schlumberger considers longer-termlong-term benefit plans to be an important element of the total compensation package. The pension plans provide for lifetime benefits for certain employees upon retirement after a specified number of years of service and take into account local practice with respect to retirement ages. They are designed to complement but not be a substitute for local government plans, which may vary considerably in terms of the replacement income they provide, and other Company sponsored savings plans. Employees may participate in multiple retirement plans in the course of their career with the Company or its subsidiaries, in which case they become entitled to a benefit from each plan based upon the benefits earned during the years of service related to each plan. The qualified plans are funded through cash contributions made by the Company and its subsidiaries based on actuarial valuations and/or regulatory requirements. Some of the Schlumberger U.S. retirement plans are non-qualified plans that provide an eligible employee with additional retirement savings opportunities that cannot be achieved with tax-qualified plans due to limits on annual compensation that can be taken into account or annual benefits that can be provided under qualified plans. Officers and other employees in the United States whose compensation exceeds the qualified plan limits are eligible to participate in non-qualified excess benefit programs for 401(k), profit-sharing and pension, whereby they receive correspondingly higher benefits.pension. Employees and executive officers assigned outside the United States are entitled to participate in the applicable plans of the country where they are assigned, including supplemental plans where available. | Schlumberger Limited2018 Proxy Statement | | 42 |
Retirement Practices The Company has a practice of phased retirement, which, at the discretion of the Company, may be offered to certain executive officers (other than the CEO) who are approaching retirement.from time to time. This practice involves a transitionentering into retirementan agreement whereby the individual ceases being an executive officer and relinquishes primary responsibilities. He or she remains an employee and generally receives lesser salary over time for reduced responsibilities and reduced working time. The arrangements are typically in place for an average of two to three years, as agreed at the start of the term. The purpose is to allow the outgoing executive officer to support the incoming executive officer for a period of time to provide for a smooth succession and to provide resources to the Company in particular areas of expertise while agreeing not to join a competitor during the employment period. In these circumstances, the Company maintains pension contributions and other benefits such as medical and insurance, and the executive officer continues to vest in previously-granted LTI awards. During this period, however, the executive officer generally is no longer eligible for additional equity incentive compensation or, once his or her work time is reduced, for an annual cash incentive opportunity. Other Benefits Schlumberger seeks to provide benefit plans, such as medical coverage and life and disability insurance, on a country-by-country basis in line with market conditions. Where the local practice is considered to be less than the Schlumberger minimum standard, the Company generally offers the Schlumberger standard. Our named executive officers are eligible for the same benefit plans provided to other employees, including medical coverage and life and disability insurance as well as supplemental plans chosen and paid for by employees who wish additional coverage. There are no special insurance plans for our named executive officers. Limited Perquisites Schlumberger provides only limited perquisites to its named executive officers, which are identified in the narrative notes to the Summary Compensation Table. No Employment Agreements or Other Arrangements
Our named executive officers do not have employment, severance or change-in-control agreements, but serve at the will of the Board. This enables the Company to terminate their employment using judgment as to the terms of any severance arrangement and based on specific circumstances at the time they cease being executive officers.
| Schlumberger Limited2020 Proxy Statement | | 47 |
Recoupment of Performance-Based Cash and Equity Awards (Clawback) OnIn January 2019, our Board, upon the recommendation of the Compensation Committee, our Board in July 2006 adopted a revised policy on recoupingregarding recoupment of performance-based incentive compensation, whether paid in the form of equity or cash, awards in the event of specified restatements of financial results. Under the revised policy, if financial results are significantly restated due to fraud or other intentional misconduct, the BoardCompensation Committee will review any performance-based cash awardsor incentive compensation paid to executive officers who are found to be personally responsible for the fraud or other intentional misconduct that caused, in whole or in part, the need for the restatement andrestatement. Based on that review, the Committee will to the extent permitted by applicable law, requiretake such actions as it deems appropriate or necessary, including recoupment of any amounts paid in excess of the amounts that would have been paid based on the restated financial results. In addition, our performance-based equity awards and any shares of stock that are issued as a result of vesting of these awards are subject to recoupment under the terms of those awards.
Impact of Tax Treatment Section 162(m) of the Internal Revenue Code limits the amount of compensation that may be deducted per covered employee to $1 million per taxable year. For 2017 and prior years, covered employees for this purpose included our Chief Executive Officer and the three next most highly compensated executive officers (other than the Chief Financial Officer) required to be reported as named executive officers, although any compensation that met the requirements of qualified performance-based compensation under Section 162(m) was not subject to this deduction limitation. For grants made prior to 2018, the Company’s equity incentive plans were intended to provide stock options and PSUs that generally qualified as performance-based compensation for purposes of Section 162(m) so that stock options and PSUs were not expected to be subject to the $1 million limitation. Following the enactment of the Tax Cuts and Jobs Act, beginning with the 2018 calendar year, thethis $1 million annual deduction limitation applies to all compensation paid to any individual who is the Chief Executive Officer, Chief Financial Officer or one of the other three most highly compensated executive officers for 2017 or any subsequent calendar year, and thereyear. There is no longer any exception to this limitation for qualified performance-based compensation. Although some outstanding stock options and PSUs will not result in a compensation deduction until after 2017, the transition rules in effect(as there was for binding contracts in effect on November 2, 2017 may allow these awardsperiods prior to qualify for the exemption from the $1 million annual | Schlumberger Limited2018 Proxy Statement | | 43 |
deduction limitation provided that such grants are not materially modified. For periods after 2017, without the performance-based compensation exception,2018). Thus, it is expected that any compensation deductions (other than grandfathered amounts) for any covered individual who is our Chief Executive Officer, Chief Financial Officer or one of our other three most highly compensated executive officers in 2017 or any later year will be subject to a $1 million annual deduction limitation.limitation (other than for certain compensation that satisfies requirements for grandfathering under the new law). Although the deductibility of compensation is a consideration evaluated by the Compensation Committee, the Compensation Committee believes that the lost deduction on compensation payable in excess of the $1 million limitation for the named executive officers is not material relative to the benefit of being able to attract and retain talented management. Accordingly, the Compensation Committee will continue to retain the discretion to pay compensation that is not deductible.
Compensation Committee Report The Compensation Committee has reviewed and discussed with the Company’s management the Compensation Discussion and Analysis included in this proxy statement. Based on that review and discussion, the Compensation Committee has recommended to theour Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement. SUBMITTED BY THE COMPENSATION COMMITTEE OF THE SCHLUMBERGER BOARD OF DIRECTORS | | Peter L.S. Currie | Indra K. Nooyi, Chair | Peter L.S. Currie | Leo Rafael Reif | Henri Seydoux | Jeff W. Sheets |
| | | | | Schlumberger Limited20182020 Proxy Statement | | | 4448 |
Executive Compensation Tables and Accompanying Narrative 20172019 Summary Compensation Table
The following table sets forth the compensation paid by the Company and its subsidiaries for the fiscal year ended December 31, 20172019 to the Chief Executive Officer, the Chief Financial Officer and the next three most highly compensated executive officers who were serving as executive officers aseach of December 31, 2017 (each an “NEO” or a “named executive officer”).our NEOs. Name | | Year | | Salary ($) | | Bonus ($) | (1) | | Stock Awards ($) | (2) | | Option Awards ($) | (3) | | Non-Equity Incentive Plan Compensation ($) | (1) | | Change in Pension Value & Nonqualified Deferred Compensation Earnings ($) | (4) | | Estimated All Other Compensation ($) | (5) | | Total ($) | Paal Kibsgaard | | 2017 | | 2,000,000 | | | N/A | | | | 11,998,506 | | | | 0 | | | | 4,275,000 | | | | 2,344,577 | | | | 141,257 | (6) | | | 20,759,340 | Chairman & CEO | | 2016 | | 2,000,000 | | | N/A | | | | 6,000,813 | | | | 5,998,080 | | | | 2,775,000 | | | | 1,733,155 | | | | 52,546 | | | | 18,559,594 | | | 2015 | | 1,925,000 | | | N/A | | | | 6,022,706 | | | | 5,995,640 | | | | 3,254,600 | | | | 931,676 | | | | 145,180 | | | | 18,274,802 | Simon Ayat | | 2017 | | 1,000,000 | | | N/A | | | | 5,206,165 | | | | 0 | | | | 1,401,500 | | | | 745,143 | | | | 105,875 | (7) | | | 8,458,683 | EVP & CFO | | 2016 | | 1,000,000 | | | N/A | | | | 2,000,271 | | | | 1,999,360 | | | | 925,000 | | | | 539,375 | | | | 84,616 | | | | 6,548,982 | | | 2015 | | 1,000,000 | | | N/A | | | | 2,005,173 | | | | 2,006,060 | | | | 1,115,400 | | | | 388,393 | | | | 130,126 | | | | 6,645,152 | Ashok Belani | | 2017 | | 900,000 | | | N/A | | | | 4,810,285 | | | | 0 | | | | 1,269,450 | | | | 763,364 | | | | 94,050 | (8) | | | 7,837,149 | EVP Technology | | 2016 | | 900,000 | | | N/A | | | | 2,907,663 | | | | 1,802,240 | | | | 810,000 | | | | 609,364 | | | | 84,466 | | | | 7,113,733 | | | 2015 | | 900,000 | | | N/A | | | | 1,803,937 | | | | 1,803,200 | | | | 1,015,100 | | | | 348,110 | | | | 116,708 | | | | 5,987,055 | Olivier Le Peuch | | 2017 | | 683,333 | | | N/A | | | | 4,717,540 | | | | 316,950 | | | | 840,000 | | | | 877,867 | | | | 61,287 | (9) | | | 7,496,977 | President, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cameron Group | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Alexander Juden | | 2017 | | 750,000 | | | N/A | | | | 4,969,712 | | | | 0 | | | | 787,500 | | | | 541,291 | | | | 69,251 | (10) | | | 7,117,754 | Secretary and | | 2016 | | 750,000 | | | N/A | | | | 1,350,323 | | | | 1,351,680 | | | | 509,100 | | | | 413,477 | | | | 55,099 | | | | 4,429,679 | General Counsel | | 2015 | | 750,000 | | | N/A | | | | 1,358,343 | | | | 1,352,400 | | | | 627,450 | | | | 192,315 | | | | 83,178 | | | | 4,363,686 |
Name | | Year | | Salary ($) | | Bonus ($) | (4) | | Stock Awards ($) | (5) | | Option Awards ($) | | Non-Equity Incentive Plan Compensation ($) | (4) | | Change in Pension Value & Nonqualified Deferred Compensation Earnings ($) | (6) | | All Other Compensation ($) | (7) | | Total ($) | Olivier Le Peuch(1) | | 2019 | | 1,147,500 | | | N/A | | | | 14,515,858 | | | — | | | 2,360,250 | | | | 981,058 | | | | 112,504 | (8) | | 19,117,170 | Chief Executive Officer | | 2018 | | 764,167 | | | N/A | | | | 3,200,205 | | | — | | | 266,007 | | | | 288,375 | | | | 119,025 | | | 4,637,779 | | | 2017 | | 683,333 | | | N/A | | | | 4,717,540 | | | 316,950 | | | 840,000 | | | | 877,867 | | | | 61,287 | | | 7,496,977 | Khaled Al Mogharbel | | 2019 | | 895,000 | | | N/A | | | | 5,770,142 | | | — | | | 1,423,050 | | | | 327,754 | | | | 211,550 | (9) | | 8,627,496 | Executive Vice | | 2018 | | 834,167 | | | N/A | | | | 3,200,205 | | | — | | | 315,399 | | | | (116,122 | ) | | | 284,222 | | | 4,517,871 | President, Operations | | 2017 | | 770,000 | | | N/A | | | | 4,406,252 | | | — | | | 1,063,755 | | | | 195,703 | | | | 244,757 | | | 6,680,467 | Patrick Schorn | | 2019 | | 840,000 | | | N/A | | | | 4,729,651 | | | — | | | 1,377,600 | | | | 1,858,283 | | | | 101,182 | (10) | | 8,906,716 | Executive Vice | | | | | | | | | | | | | | | | | | | | | | | | | | | | | President, Wells | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Hinda Gharbi | | 2019 | | 764,167 | | | N/A | | | | 4,729,651 | | | — | | | 1,176,800 | | | | 623,734 | | | | 186,226 | (11) | | 7,480,578 | Executive Vice President, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Reservoir and Infrastructure | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Paal Kibsgaard(2) | | 2019 | | 2,000,000 | | | N/A | | | | 11,998,560 | | | — | | | 4,920,000 | | | | 3,172,244 | | | | 156,356 | (12) | | 22,247,160 | Former Chairman and | | 2018 | | 2,000,000 | | | N/A | | | | 11,998,751 | | | — | | | 1,132,500 | | | | 1,014,077 | | | | 53,872 | | | 16,199,200 | Chief Executive Officer | | 2017 | | 2,000,000 | | | N/A | | | | 11,998,506 | | | — | | | 4,275,000 | | | | 2,344,577 | | | | 141,257 | | | 20,759,340 | Simon Ayat(3) | | 2019 | | 1,000,000 | | | N/A | | | | 3,999,520 | | | — | | | 1,640,000 | | | | 863,630 | | | | 40,743 | (13) | | 7,543,893 | Former Executive | | 2018 | | 1,000,000 | | | N/A | | | | 3,994,767 | | | — | | | 358,100 | | | | 163,106 | | | | 72,045 | | | 5,588,018 | Vice President and | | 2017 | | 1,000,000 | | | N/A | | | | 5,206,165 | | | — | | | 1,401,500 | | | | 745,143 | | | | 105,875 | | | 8,458,683 | Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) | Effective August 1, 2019, Mr. Le Peuch became our Chief Executive Officer. As discussed above in the sections entitled “Compensation Discussion and Analysis—Overview of Compensation Decisions for 2019” and “—Elements of Total Direct Compensation; 2019 Decisions—Long-Term Equity Incentive Awards—LTI Grants to Our NEOs in 2019,” in connection with that appointment, the Board approved an award to Mr. Le Peuch of PSUs with a target value of $10.5 million in July 2019, in order to align his incremental 2019 compensation with his new role. The amount reflected in the “Stock Awards” column for Mr. Le Peuch includes this July 2019 PSU award. Because the July 2019 PSU award represented Mr. Le Peuch’s estimated annual LTI target award in his new role as CEO, and in light of his PSU award in April 2019 upon his appointment as Chief Operating Officer, the Board determined that the July 2019 PSU award should be in lieu of any annual LTI award that he otherwise would have received in 2020.As a result, Mr. Le Peuch did not receive an annual LTI award in January 2020. | (2) | Mr. Kibsgaard retired as our Chairman and Chief Executive Officer effective August 1, 2019. | (3) | Mr. Ayat retired as our Executive Vice President and Chief Financial Officer effective January 22, 2020, following the filing of our Annual Report on Form 10-K for the year ended December 31, 2019. | (4) | Annual cash incentive awards paid to our NEOs is includedare reflected in the column “Non-Equity Incentive Plan Compensation.” | (2)(5) | Includes the value of PSU awards and RSU awards. For 2015, each amount reflected in the “Stock Awards” column is the aggregate grant date fair value for standard three-year PSUs at target level performance that were granted in January 2015. For 2016, each amount reflected in the “Stock Award” column is the aggregate grant date fair value for standard three-year PSUs at target level performance that were granted in January 2016 and, for Mr. Belani the RSU award that was granted to him in July 2016. For 2017,2019, each amount reflected in the “Stock Awards” column is the aggregate grant date fair value for both the 2019 FCF Conversion PSUs and 2019 ROCE PSUs at target level performance that were granted to our NEOs in January 2017 to Messrs. Kibsgaard, Ayat, Belani and Juden and granted in April 2017 to Mr. Le Peuch, and the2019, as well as RSU awards that were granted to Mr. Le Peuchselect NEOs as described in January 2017, to Mr. Juden in April 2017 and to Messrs. Ayat, Belani, Juden and Le Peuch in October 2017.the CD&A. Each amount reflects an accounting expense and does not correspond to actual value that may be realized by an NEO in the future. The number of equity awards granted in 20172019 to each NEO is provided in the Grants of Plan-Based Awards for Fiscal Year 20172019 table on page 47.51. The grant date fair value of these awards is calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (ASC Topic 718), as described in Note 13,12, “Stock-based Compensation Plans,” to the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2017. | | The value of the 2017 PSUs at the grant date, assuming achievement of the maximum performance level of 250%, would be: Mr. Kibsgaard — $29,996,265; Mr. Ayat — $9,998,913; Mr. Belani — $9,009,213; Mr. Le Peuch — $8,002,815; and Mr. Juden — $7,504,280. | | 2019. The NEOs may never realize any value from these PSUs or RSUs and, to the extent that they do, the amounts realized may have no correlation to the amounts reported above. | (3) | The amount reflected in the “Option Awards” column is the aggregate grant date fair value for option grants, computed in accordance with ASC Topic 718. This amount reflects an accounting expense and does not correspond to actual value that may be realized by the NEOs in the future. Mr. Le Peuch was the only NEO to receive stock options in 2017. The number of options granted to Mr. Le Peuch is provided in the Grants of Plan-based Awards for Fiscal Year 2017 table on page 47. The fair value of the stock option grant to Mr. Le Peuch was established on the date of the grant using the Black-Scholes option-pricing model with the following assumptions. |
| 1/19/2017 (5-year vest options) | Dividend yield | 2.29% | Expected volatility | 27.19% | Risk-free interest rate | 2.39% | Expected option life | 7 years |
Mr. Le Peuch may never realize any value from these stock options and, to the extent that he does, the amounts realized may have no correlation to the amounts reported above.
| Schlumberger Limited2018 Proxy Statement | | 45 |
(4)(6) | The changes in pension value reported in this column represent the increase in the actuarial present value of a named executive officer’s accumulated benefit under all benefit and actuarial pension plans in which he or she participates. This change in present value is not a current cash payment. It represents the change in the value of the named executive officer’s pensions, which are only paid after retirement. There are no nonqualified deferred compensation earnings reflected in this column because no NEO received above-market or preferential earnings on such compensation during 2017, 20162019, 2018 or 2015.2017. |
(5) | Schlumberger Limited2020 Proxy Statement | | 49 |
(7) | All of the perquisites included in the column “All Other Compensation” and described in the accompanying footnotes are generally available to all of the Company’s professional-level employees. Relocation assistance is provided to all employees on a Company-wide basis. | (6)(8) | The amount disclosed for Mr. KibsgaardLe Peuch consists of the following: |
| Unfunded credits to the Schlumberger Restoration Savings Plan | | $ | 33,492 | | Contributions to Schlumberger 401(k) Plan | | | 8,400 | | Perquisites: | | | | | Vacation Travel Allowance | | | 13,740 | | Housing Allowance | | | 56,872 | | TOTAL | | $ | 112,504 | (9) | The amount disclosed for Mr. Al Mogharbel consists of the following: | | | | | Unfunded credits to the Schlumberger Restoration Savings Plan | | $ | 55,709 | | Contributions to Schlumberger 401(k) Plan | | | 16,800 | | Perquisites: | | | | | Vacation Travel Allowance | | | 61,042 | | Children’s Education | | | 78,000 | | TOTAL | | $ | 211,550 | (10) | The amount disclosed for Mr. Schorn consists of the following: | | | | | Perquisites: | | | | | Expatriate Tax Preparation | | $ | 1,349 | | Vacation Travel Allowance | | | 8,084 | | Housing Allowance | | | 76,336 | | Vacation Payout | | | 15,413 | | TOTAL | | $ | 101,182 | (11) | The amount disclosed for Ms. Gharbi consists of the following: | | | | | Unfunded credits to the Schlumberger Restoration Savings Plan | | $ | 21,081 | | Contributions to Schlumberger 401(k) Plan | | | 8,400 | | Perquisites: | | | | | Expatriate Tax Preparation | | | 1,551 | | Vacation Travel Allowance | | | 40,012 | | Children’s Education | | | 73,694 | | Relocation Fees and Costs | | | 41,488 | | TOTAL | | $ | 186,226 | (12) | The amount disclosed for Mr. Kibsgaard consists of the following: | | | | | Perquisites: | | | | | Housing Allowance | | $ | 42,654 | | Vacation Payout | | | 113,702 | | TOTAL | | $ | 156,356 | (13) | The amount disclosed for Mr. Ayat consists of the following: | | | | | Unfunded credits to the Schlumberger Restoration Savings Plan | | $ | 32,343 | | Contributions to Schlumberger 401(k) Plan | | | 8,400 | | TOTAL | | $ | 40,743 |
| Unfunded credits to the Schlumberger Supplementary Benefit Plan | | $ | 113,975 | | Contributions to Schlumberger Profit-Sharing Plans | | | 5,400 | | Perquisites: | | | | | Housing Allowance | | | 21,882 | | TOTAL | | $ | 141,257 | (7) | The amount disclosed for Mr. Ayat consists of the following: | | | | | Unfunded credits to the Schlumberger Supplementary Benefit Plan | | $ | 42,725 | | Unfunded credits to the Schlumberger Restoration Savings Plan | | | 49,650 | | Contributions to Schlumberger Profit-Sharing Plans | | | 5,400 | | Contributions to Schlumberger 401(k) Plan | | | 8,100 | | TOTAL | | $ | 105,875 | (8) | The amount disclosed for Mr. Belani consists of the following: | | | | | Unfunded credits to the Schlumberger Supplementary Benefit Plan | | $ | 37,350 | | Unfunded matching credits to the Schlumberger Restoration Savings Plan | | | 43,200 | | Contributions to Schlumberger Profit-Sharing Plans | | | 5,400 | | Contributions to Schlumberger 401(k) Plan | | | 8,100 | | TOTAL | | $ | 94,050 | (9) | The amount disclosed for Mr. Le Peuch consists of the following: | | | | | Unfunded credits to the Schlumberger Supplementary Benefit Plan | | $ | 23,097 | | Contributions to Schlumberger Profit-Sharing Plans | | | 5,400 | | Contributions to Schlumberger 401(k) Plan | | | 7,050 | | Perquisites: | | | | | Vacation Travel Allowance | | | 10,442 | | Housing Allowance | | | 13,348 | | Relocation Fees | | | 1,950 | | TOTAL | | $ | 61,287 | (10) | The amount disclosed for Mr. Juden consists of the following: | | | | | Unfunded credits to the Schlumberger Supplementary Benefit Plan | | $ | 26,078 | | Unfunded credits to the Schlumberger Restoration Savings Plan | | | 29,673 | | Contributions to Schlumberger Profit-Sharing Plans | | | 5,400 | | Contributions to Schlumberger 401(k) Plan | | | 8,100 | | TOTAL | | $ | 69,251 |
| Schlumberger Limited20182020 Proxy Statement | | | 4650 |
Grants of Plan-Based Awards for Fiscal Year 20172019 The following table provides additional information about stock and option awards and equityother incentive plan awards granted to our named executive officersNEOs in 2017.2019. | | | | | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(2) | | Estimated Possible Payouts Under Equity Incentive Plan Awards(3) | | All Other Stock Awards: | | All Other Option Awards: | | Exercise | | Full Grant Date Fair Value | | Name | | | Award Type(1) | | Grant Date | | Threshold ($) | | Target ($) | | Maximum ($) | | Threshold (#) | | Target (#) | | Maximum (#) | | Number of Shares of Stock or Units (#) | | Number of Securities Underlying Options (#) | | or Base Price of Option Awards ($/Sh) | | of Stock and Option Awards ($) | (4) | O. Le Peuch | | | | | | | 263,157 | | 689,575 | | 1,490,972 | | | | | | | | | | | | | | | | | | | Estimated Possible Payouts | | Estimated Possible Payouts | | All Other | | | All Other | | | | | | | | FCFC PSU | | 1/16/19 | | 44,800 | | 112,000 | | 1,599,808 | | | | | Under Non-Equity Incentive | | Under Equity Incentive | | Stock | | | Option | | | | | Full | | | ROCE PSU | | 1/16/19 | | 44,800 | | 112,000 | | 1,599,808 | | | | | | | | Plan Awards(2) | | Plan Awards(3) | | Awards: | | | Awards: | | | Exercise | | | Grant Date | | | FCFC PSU | | 4/17/19 | | 9,770 | | 24,425 | | 408,093 | | | | | | | | | | | | | | | | Number | | | Number of | | | or Base | | | Fair Value | | | ROCE PSU | | 4/17/19 | | 9,770 | | 24,425 | | 408,093 | | | | | | | | | | | | | | | | of Shares | | | Securities | | | Price of | | | of Stock and | | | FCFC PSU | | 8/1/19 | | 154,640 | | 386,600 | | 5,250,028 | | | | | | | | | | | | | | | | of Stock | | | Underlying | | | Option | | | Option | | | ROCE PSU | | 8/1/19 | | 154,640 | | 386,600 | | 5,250,028 | | K. Al Mogharbel | | | | | 315,935 | | 827,875 | | 1,790,000 | | | | | | Award | | Grant | | Threshold | | | Target | | | Maximum | | | Threshold | | | Target | | | Maximum | | | or Units | | | Options | | | Awards | | | Awards | | | FCFC PSU | | 1/16/19 | | 44,800 | | 112,000 | | 1,599,808 | | Name | | Type(1) | | Date | | ($) | | | ($) | | | ($) | | | (#) | | | (#) | | | (#) | | | (#) | | | (#) | | | ($/Sh) | (4) | | ($) | | | | | | ROCE PSU | | 1/16/19 | | 44,800 | | 112,000 | | 1,599,808 | | | | | FCFC PSU | | 4/17/19 | | 6,350 | | 15,875 | | 265,240 | | | | | ROCE PSU | | 4/17/19 | | 6,350 | | 15,875 | | 265,240 | | | | | 3-year RSU | | 4/17/19 | | 48,840 | | 2,040,047 | | P. Schorn | | | | | 296,520 | | 777,000 | | 1,680,000 | | | | | | | FCFC PSU | | 1/16/19 | | 44,800 | | 112,000 | | 1,599,808 | | | | | ROCE PSU | | 1/16/19 | | 44,800 | | 112,000 | | 1,599,808 | | | | | 3-year RSU | | 4/17/19 | | 36,630 | | 1,530,035 | | H. Gharbi | | | | | 269,751 | | 706,854 | | 1,528,333 | | | | | | | FCFC PSU | | 1/16/19 | | 44,800 | | 112,000 | | 1,599,808 | | | | | ROCE PSU | | 1/16/19 | | 44,800 | | 112,000 | | 1,599,808 | | | | | 3-year RSU | | 4/17/19 | | 36,630 | | 1,530,035 | | P. Kibsgaard | | | | | | | 765,000 | | | | 2,625,000 | | | | 6,000,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,059,000 | | 2,775,000 | | 6,000,000 | | | | | | 2-year PSU | | 1/19/17 | | | | | | | | | | | | | | | | | 71,900 | | | | 179,750 | | | | | | | | | | | | | | | | 5,997,898 | | | FCFC PSU | | 1/16/19 | | 168,000 | | 420,000 | | 5,999,280 | | | | 3-year PSU | | 1/19/17 | | | | | | | | | | | | | | | | | 73,600 | | | | 184,000 | | | | | | | | | | | | | | | | 6,000,608 | | | ROCE PSU | | 1/16/19 | | 168,000 | | 420,000 | | 5,999,280 | | S. Ayat | | | 255,000 | | | | 875,000 | | | | 2,000,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 353,000 | | 925,000 | | 2,000,000 | | | | | | 2-year PSU | | 1/19/17 | | | | | | | | | | | | | | | | | 24,000 | | | | 60,000 | | | | | | | | | | | | | | | | 2,002,080 | | | FCFC PSU | | 1/16/19 | | 56,000 | | 140,000 | | 1,999,760 | | | | 3-year PSU | | 1/19/17 | | | | | | | | | | | | | | | | | 24,500 | | | | 61,250 | | | | | | | | | | | | | | | | 1,997,458 | | | ROCE PSU | | 1/16/19 | | 56,000 | | 140,000 | | 1,999,760 | | | | 3-year RSU | | 10/18/17 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,206,600 | | | A. Belani | | | 229,500 | | | | 787,500 | | | | 1,800,000 | | | | | | | | | | | | | | 20,000 | | | | | | | | | | | | | | | | | 2-year PSU | | 1/19/17 | | | | | | | | | | | | | | | | | 21,600 | | | | 54,000 | | | | | | | | | | | | | | | | 1,801,872 | | | | | 3-year PSU | | 1/19/17 | | | | | | | | | | | | | | | | | 22,100 | | | | 55,250 | | | | | | | | | | | | | | | | 1,801,813 | | | | | 3-year RSU | | 10/18/17 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,206,600 | | | O. Le Peuch | | | 148,750 | | | | 510,417 | | | | 1,166,667 | | | | | | | | | | | | | | 20,000 | | | | | | | | | | | | | | | | | Option | | 1/19/17 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 15,000 | | | | 87.38 | | | | 316,950 | | | | | 3-year RSU | | 1/19/17 | | | | | | | | | | | | | | | | | | | | | | | | | 3,800 | | | | | | | | | | | | 309,814 | | | | | 2-year PSU | | 4/20/17 | | | | | | | | | | | | | | | | | 21,800 | | | | 54,500 | | | | | | | | | | | | | | | | 1,597,286 | | | | | 3-year PSU | | 4/20/17 | | | | | | | | | | | | | | | | | 22,400 | | | | 56,000 | | | | | | | | | | | | | | | | 1,603,840 | | | | | 3-year RSU | | 10/18/17 | | | | | | | | | | | | | | | | | | | | | | | | | 20,000 | | | | | | | | | | | | 1,206,600 | | | A. Juden | | | 143,438 | | | | 492,188 | | | | 1,125,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2-year PSU | | 1/19/17 | | | | | | | | | | | | | | | | | 18,000 | | | | 45,000 | | | | | | | | | | | | | | | | 1,501,560 | | | | | 3-year PSU | | 1/19/17 | | | | | | | | | | | | | | | | | 18,400 | | | | 46,000 | | | | | | | | | | | | | | | | 1,500,152 | | | | | 3-year RSU | | 4/20/17 | | | | | | | | | | | | | | | | | | | | | | | | | 15,000 | | | | | | | | | | | | 1,063,050 | | | | | 3-year RSU | | 10/18/17 | | | | | | | | | | | | | | | | | | | | | | | | | 15,000 | | | | | | | | | | | | 904,950 | | |
(1) | All stock options,PSUs and RSUs and PSUs were awarded under our 20132017 Omnibus Stock Incentive Plan. | (2) | These columns show the possible payouts for each NEO for fiscal year 20172019 based on performance goals set in January 2017.the first quarter of 2019. Possible payouts are performance-driven. Threshold, target and maximum potential payouts are based on the annual cash incentive range established for each NEO, which is expressed as a percentage of base salary for the year. For those NEOs who received base salary increases or annual cash incentive range increases, or both, during the year, potential payouts are determined by pro-rating the potential payout based upon the number of months a cash incentive range or base salary rate was in effect. | | Actual cash incentive amounts earned for 20172019 are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. For information regarding the annual cash incentive paid to Schlumberger’sour NEOs with respect to 20172019 performance, see “Compensation Discussion and Analysis—Elements of Total Direct Compensation; 20172019 Decisions—Annual Cash Incentive Decisions for 2017”Awards” beginning on page 30.34. | (3) | Relates to PSUs. See “Compensation Discussion and Analysis—Elements of Total Direct Compensation; 20172019 Decisions—Long-Term Equity Incentive Awards” beginning on page 3338 for a detailed description of our PSUs, including the criteria to be applied in determining vesting of PSUs. See also “—Potential Payments Upon Termination or Change in Control for Fiscal Year 2017—2019—Termination of Employment—PSUs” and “—Potential Payments Upon Termination or Change in Control for Fiscal Year 2017—2019—Change in Control—PSUs and RSUs,” beginning on page 58.60. We valued the PSUs by multiplying the number of PSUs (at threshold, target or maximum, as applicable) by $83.42 for the January FCF PSUs, $81.53 for the January ROCE PSUs, $73.27 for the April FCF PSUs and $71.60 for the April ROCE PSUs, the applicable grant date fair values for the PSUs.PSUs: (i) $35.71 for the PSUs issued to our NEOs in January 2019; (ii) $41.77 for the PSUs issued to Messrs. Le Peuch and Al Mogharbel in April 2019; and (iii) $33.95 for the PSUs approved by the Compensation Committee in July 2019 and issued to Mr. Le Peuch in August 2019. “Target” represents the number of PSUs awarded in 2017,under each grant, and “Maximum” reflects the highest possible payout (250% of the grant). The award agreements under which the PSUs were issued provide that no PSUs will vest unless a specified threshold level of performance is achieved. Vested PSUs are paid in shares of our common stock, and the payout, if any, with respect to PSUs will occur at the end of all applicable performance periods, including the TSR performance period (January 20172019 through December 2019)2021 for all PSUs), and is calculated in the manner described in the sections of the CD&A entitled “How We Determined 2017 Long-Term“Long Term Equity Incentive Awards—LTI Grants to our NEOs in 2019—2019 ROCE PSUs: Performance Measures and Goals” and “How We Determined 2017 Long-Term“Long Term Equity Incentive Awards—Free Cash FlowLTI Grants to our NEOs in 2019—2019 FCF Conversion PSUs: Performance Measures and Goals,” beginning on page 35.39. PSUs do not accrue dividends or dividend equivalents prior to vesting. | (4) | Mr. Le Peuch wasWith respect to PSU awards, this column reflects the only NEO to receive stock options in 2017. The options granted to Mr. Le Peuch vest in five equal annual installments. The stock option award has an exercise price equal to the average of the high and low per share prices of our common stock on thegrant date of grant. Stock option exercises may be paid in cash, by tendering shares of our common stock or by withholding of shares of our common stock. Applicable tax obligations may be paid in cash or by withholding of shares of our common stock.fair value for such PSUs at target. |
| Schlumberger Limited20182020 Proxy Statement | | | 4751 |
Outstanding Equity Awards at Fiscal Year-End 20172019 The following table provides information regarding outstanding and unexercised stock options and other outstanding and outstanding PSU and RSUequity awards for each of our NEOs as of December 31, 2017.2019. | Option Awards | | | Stock Awards | Name | | Option/ PSU/RSU Grant Date | | | Number of Securities Underlying Unexercised Options Exercisable (#) | (1) | | | Number of Securities Underlying Unexercised Option Unexercisable (#) | (1) | | | Option Exercise Price ($) | | | 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 ($) | (2) | | | Equity Incentive Plan Awards Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | (2) | P. Kibsgaard | | 1/17/2008 | | | 47,000 | | | | 0 | | | | 84.930 | | | 1/17/2018 | | | | | | | | | | | | | | | | | | | 1/21/2010 | | | 9,400 | | | | 0 | | | | 68.505 | | | 1/21/2020 | | | | | | | | | | | | | | | | | | | 2/4/2010 | | | 12,800 | | | | 0 | | | | 63.760 | | | 2/4/2020 | | | | | | | | | | | | | | | | | | | 1/20/2011 | | | 138,000 | | | | 0 | | | | 83.885 | | | 1/20/2021 | | | | | | | | | | | | | | | | | | | 7/21/2011 | | | 125,000 | | | | 0 | | | | 89.995 | | | 7/21/2021 | | | | | | | | | | | | | | | | | | | 1/19/2012 | | | 257,400 | | | | 0 | | | | 72.110 | | | 1/19/2022 | | | | | | | | | | | | | | | | | | | 1/17/2013 | | | 138,600 | | | | 46,200 | | | | 73.250 | | | 1/17/2023 | | | | | | | | | | | | | | | | | | | 1/16/2014 | | | 119,400 | | | | 79,600 | | | | 88.756 | | | 1/16/2024 | | | | | | | | | | | | | | | | | | | 1/15/2015 | | | | | | | | | | | | | | | | | | | | | | | | | 0 | (3) | | | 5,647,282 | | | | 1/15/2015 | | | 106,400 | | | | 159,600 | | | | 77.795 | | | 1/15/2025 | | | | | | | | | | | | | | | | | | | 1/21/2016 | | | | | | | | | | | | | | | | | | | | | | | | | 107,100 | (4) | | | 7,217,469 | | | | 1/21/2016 | | | 85,200 | | | | 340,800 | | | | 61.920 | | | 1/21/2026 | | | | | | | | | | | | | | | | | | | 1/19/2017 | | | | | | | | | | | | | | | | | | | | | | | | | 71,900 | (5) | | | 4,845,341 | | | | 1/19/2017 | | | | | | | | | | | | | | | | | | | | | | | | | 73,600 | (6) | | | 4,959,904 | | S. Ayat | | 1/17/2008 | | | 60,000 | | | | 0 | | | | 84.930 | | | 1/17/2018 | | | | | | | | | | | | | | | | | | | 1/22/2009 | | | 125,000 | | | | 0 | | | | 37.845 | | | 1/22/2019 | | | | | | | | | | | | | | | | | | | 1/21/2010 | | | 95,000 | | | | 0 | | | | 68.505 | | | 1/21/2020 | | | | | | | | | | | | | | | | | | | 1/20/2011 | | | 188,000 | | | | 0 | | | | 83.885 | | | 1/20/2021 | | | | | | | | | | | | | | | | | | | 1/19/2012 | | | 137,000 | | | | 0 | | | | 72.110 | | | 1/19/2022 | | | | | | | | | | | | | | | | | | | 1/17/2013 | | | 64,000 | | | | 16,000 | | | | 73.250 | | | 1/17/2023 | | | | | | | | | | | | | | | | | | | 1/16/2014 | | | 39,600 | | | | 26,400 | | | | 88.765 | | | 1/16/2024 | | | | | | | | | | | | | | | | | | | 1/15/2015 | | | | | | | | | | | | | | | | | | | | | | | | | 0 | (3) | | | 1,880,181 | | | | 1/15/2015 | | | 35,600 | | | | 53,400 | | | | 77.795 | | | 1/15/2025 | | | | | | | | | | | | | | | | | | | 1/21/2016 | | | | | | | | | | | | | | | | | | | | | | | | | 35,700 | (4) | | | 2,405,823 | | | | 1/21/2016 | | | 28,400 | | | | 113,600 | | | | 61.920 | | | 1/21/2026 | | | | | | | | | | | | | | | | | | | 1/19/2017 | | | | | | | | | | | | | | | | | | | | | | | | | 24,000 | (5) | | | 1,617,360 | | | | 1/19/2017 | | | | | | | | | | | | | | | | | | | | | | | | | 24,500 | (6) | | | 1,651,055 | | | | 10/18/2017 | | | | | | | | | | | | | | | | | 20,000 | (7) | | | 1,347,800 | | | | | | | | | | A. Belani | | 1/22/2009 | | | 125,000 | | | | 0 | | | | 37.845 | | | 1/22/2019 | | | | | | | | | | | | | | | | | | | 1/21/2010 | | | 59,000 | | | | 0 | | | | 68.505 | | | 1/21/2020 | | | | | | | | | | | | | | | | | | | 1/20/2011 | | | 51,600 | | | | 0 | | | | 83.885 | | | 1/20/2021 | | | | | | | | | | | | | | | | | | | 1/19/2012 | | | 127,000 | | | | 0 | | | | 72.110 | | | 1/19/2022 | | | | | | | | | | | | | | | | | | | 1/17/2013 | | | 57,600 | | | | 14,400 | | | | 73.250 | | | 1/17/2023 | | | | | | | | | | | | | | | | | | | 1/16/2014 | | | 36,000 | | | | 24,000 | | | | 88.765 | | | 1/16/2024 | | | | | | | | | | | | | | | | | | | 1/15/2015 | | | | | | | | | | | | | | | | | | | | | | | | | 0 | (3) | | | 1,691,489 | | | | 1/15/2015 | | | 32,000 | | | | 48,000 | | | | 77.795 | | | 1/15/2025 | | | | | | | | | | | | | | | | | | | 1/21/2016 | | | | | | | | | | | | | | | | | | | | | | | | | 32,100 | (4) | | | 2,163,219 | | | | 1/21/2016 | | | 25,600 | | | | 102,400 | | | | 61.920 | | | 1/21/2026 | | | | | | | | | | | | | | | | | | | 7/20/2016 | | | | | | | | | | | | | | | | | 15,000 | (8) | | | 1,010,850 | | | | | | | | | | | | 1/19/2017 | | | | | | | | | | | | | | | | | | | | | | | | | 21,600 | (5) | | | 1,455,624 | | | | 1/19/2017 | | | | | | | | | | | | | | | | | | | | | | | | | 22,100 | (6) | | | 1,489,319 | | | | 10/18/2017 | | | | | | | | | | | | | | | | | 20,000 | (7) | | | 1,347,800 | | | | | | | | | |
| | Option Awards | | Stock Awards | Name | | Option/ PSU/RSU Grant Date | | Number of Securities Underlying Unexercised Options Exercisable (#) | (1) | | Number of Securities Underlying Unexercised Option Unexercisable (#) | (1) | | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($) | (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 ($) | (2) | O. Le Peuch | | 1/21/2010 | | | 15,000 | | | | — | | | 68.505 | | 1/21/2020 | | | | | | | | | | | | | | | | | | | 7/22/2010 | | | 30,000 | | | | — | | | 61.070 | | 7/22/2020 | | | | | | | | | | | | | | | | | | | 1/20/2011 | | | 27,000 | | | | — | | | 83.885 | | 1/20/2021 | | | | | | | | | | | | | | | | | | | 1/19/2012 | | | 30,000 | | | | — | | | 72.110 | | 1/19/2022 | | | | | | | | | | | | | | | | | | | 4/18/2013 | | | 30,000 | | | | — | | | 70.925 | | 4/18/2023 | | | | | | | | | | | | | | | | | | | 4/16/2014 | | | 30,000 | | | | — | | | 100.555 | | 4/16/2024 | | | | | | | | | | | | | | | | | | | 4/16/2015 | | | 19,200 | | | | 4,800 | | | 91.740 | | 4/16/2025 | | | | | | | | | | | | | | | | | | | 4/20/2016 | | | 18,000 | | | | 12,000 | | | 80.525 | | 4/20/2026 | | | | | | | | | | | | | | | | | | | 1/19/2017 | | | 6,000 | | | | 9,000 | | | 87.380 | | 1/19/2027 | | | | | | | | | | | | | | | | | | | 1/19/2017 | | | | | | | | | | | | | | | 3,800 | (3) | | | 152,760 | | | | | | | | | | | | 4/20/2017 | | | | | | | | | | | | | | | | | | | | | | | 22,400 | (4) | | | 900,480 | | | | 10/18/2017 | | | | | | | | | | | | | | | 20,000 | (5) | | | 804,000 | | | | | | | | | | | | 1/17/2018 | | | | | | | | | | | | | | | | | | | | | | | 22,400 | (6) | | | 900,480 | | | | 1/17/2018 | | | | | | | | | | | | | | | | | | | | | | | 21,900 | (7) | | | 880,380 | | | | 1/16/2019 | | | | | | | | | | | | | | | | | | | | | | | 44,800 | (8) | | | 1,800,960 | | | | 1/16/2019 | | | | | | | | | | | | | | | | | | | | | | | 44,800 | (9) | | | 1,800,960 | | | | 4/17/2019 | | | | | | | | | | | | | | | | | | | | | | | 9,770 | (8) | | | 392,754 | | | | 4/17/2019 | | | | | | | | | | | | | | | | | | | | | | | 9,770 | (9) | | | 392,754 | | | | 8/1/2019 | | | | | | | | | | | | | | | | | | | | | | | 154,640 | (8) | | | 6,216,528 | | | | 8/1/2019 | | | | | | | | | | | | | | | | | | | | | | | 154,640 | (9) | | | 6,216,528 | | K. Al Mogharbel | | 1/19/2012 | | | 15,000 | | | | — | | | 72.110 | | 1/19/2022 | | | | | | | | | | | | | | | | | | | 4/18/2013 | | | 20,000 | | | | — | | | 70.925 | | 4/18/2023 | | | | | | | | | | | | | | | | | | | 7/18/2013 | | | 50,000 | | | | — | | | 78.305 | | 7/18/2023 | | | | | | | | | | | | | | | | | | | 1/16/2014 | | | 53,000 | | | | — | | | 88.765 | | 1/16/2024 | | | | | | | | | | | | | | | | | | | 1/15/2015 | | | 56,800 | | | | 14,200 | | | 77.795 | | 1/15/2025 | | | | | | | | | | | | | | | | | | | 1/21/2016 | | | 68,400 | | | | 45,600 | | | 61.920 | | 1/21/2026 | | | | | | | | | | | | | | | | | | | 1/19/2017 | | | | | | | | | | | | | | | | | | | | | | | 19,600 | (4) | | | 787,920 | | | | 10/18/2017 | | | | | | | | | | | | | | | 20,000 | (5) | | | 804,000 | | | | | | | | | | | | 1/17/2018 | | | | | | | | | | | | | | | | | | | | | | | 22,400 | (6) | | | 900,480 | | | | 1/17/2018 | | | | | | | | | | | | | | | | | | | | | | | 21,900 | (7) | | | 880,380 | | | | 1/16/2019 | | | | | | | | | | | | | | | | | | | | | | | 44,800 | (8) | | | 1,800,960 | | | | 1/16/2019 | | | | | | | | | | | | | | | | | | | | | | | 44,800 | (9) | | | 1,800,960 | | | | 4/17/2019 | | | | | | | | | | | | | | | | | | | | | | | 6,350 | (8) | | | 255,270 | | | | 4/17/2019 | | | | | | | | | | | | | | | | | | | | | | | 6,350 | (9) | | | 255,270 | | | | 4/17/2019 | | | | | | | | | | | | | | | 48,840 | (10) | | | 1,963,368 | | | | | | | | | | P. Schorn | | 1/21/2010 | | | 6,000 | | | | — | | | 68.505 | | 1/21/2020 | | | | | | | | | | | | | | | | | | | 1/20/2011 | | | 45,000 | | | | — | | | 83.885 | | 1/20/2021 | | | | | | | | | | | | | | | | | | | 1/19/2012 | | | 62,000 | | | | — | | | 72.110 | | 1/19/2022 | | | | | | | | | | | | | | | | | | | 1/17/2013 | | | 50,000 | | | | — | | | 73.250 | | 1/17/2023 | | | | | | | | | | | | | | | | | | | 1/16/2014 | | | 53,000 | | | | — | | | 88.765 | | 1/16/2024 | | | | | | | | | | | | | | | | | | | 1/15/2015 | | | 56,800 | | | | 14,200 | | | 77.795 | | 1/15/2025 | | | | | | | | | | | | | | | | | | | 1/21/2016 | | | 68,400 | | | | 45,600 | | | 61.920 | | 1/21/2026 | | | | | | | | | | | | | | | | |
| Schlumberger Limited20182020 Proxy Statement | | | 4852 |
| | Option Awards | | Stock Awards | Name | | Option/ PSU/RSU Grant Date | | Number of Securities Underlying Unexercised Options Exercisable (#) | (1) | | Number of Securities Underlying Unexercised Option Unexercisable (#) | (1) | | Option Exercise Price ($) | | 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 ($) | (2) | | Equity Incentive Plan Awards Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | (2) | | | 1/19/2017 | | | | | | | | | | | | | | | | | | | | | | | 19,600 | (4) | | | 787,920 | | | | 10/18/2017 | | | | | | | | | | | | | | | 20,000 | (5) | | | 804,000 | | | | | | | | | | | | 1/17/2018 | | | | | | | | | | | | | | | | | | | | | | | 22,400 | (6) | | | 900,480 | | | | 1/17/2018 | | | | | | | | | | | | | | | | | | | | | | | 21,900 | (7) | | | 880,380 | | | | 1/16/2019 | | | | | | | | | | | | | | | | | | | | | | | 44,800 | (8) | | | 1,800,960 | | | | 1/16/2019 | | | | | | | | | | | | | | | | | | | | | | | 44,800 | (9) | | | 1,800,960 | | | | 4/17/2019 | | | | | | | | | | | | | | | 36,630 | (10) | | | 1,472,526 | | | | | | | | | | H. Gharbi | | 1/21/2010 | | | 15,000 | | | | — | | | 68.505 | | 1/21/2020 | | | | | | | | | | | | | | | | | | | 7/22/2010 | | | 20,000 | | | | — | | | 61.070 | | 7/22/2020 | | | | | | | | | | | | | | | | | | | 1/19/2012 | | | 20,000 | | | | — | | | 72.110 | | 1/19/2022 | | | | | | | | | | | | | | | | | | | 4/18/2013 | | | 20,000 | | | | — | | | 70.925 | | 4/18/2023 | | | | | | | | | | | | | | | | | | | 4/16/2014 | | | 24,000 | | | | — | | | 100.555 | | 4/16/2024 | | | | | | | | | | | | | | | | | | | 4/16/2015 | | | 19,200 | | | | 4,800 | | | 91.740 | | 4/16/2025 | | | | | | | | | | | | | | | | | | | 4/20/2016 | | | 18,000 | | | | 12,000 | | | 80.525 | | 4/20/2026 | | | | | | | | | | | | | | | | | | | 1/19/2017 | | | | | | | | | | | | | | | 7,500 | (3) | | | 301,500 | | | | | | | | | | | | 7/19/2017 | | | | | | | | | | | | | | | | | | | | | | | 25,800 | (4) | | | 1,037,160 | | | | 10/18/2017 | | | | | | | | | | | | | | | 20,000 | (5) | | | 804,000 | | | | | | | | | | | | 1/17/2018 | | | | | | | | | | | | | | | | | | | | | | | 22,400 | (6) | | | 900,480 | | | | 1/17/2018 | | | | | | | | | | | | | | | | | | | | | | | 21,900 | (7) | | | 880,380 | | | | 1/16/2019 | | | | | | | | | | | | | | | | | | | | | | | 44,800 | (8) | | | 1,800,960 | | | | 1/16/2019 | | | | | | | | | | | | | | | | | | | | | | | 44,800 | (9) | | | 1,800,960 | | | | 4/17/2019 | | | | | | | | | | | | | | | 36,630 | (10) | | | 1,472,526 | | | | | | | | | | P. Kibsgaard | | 1/21/2010 | | | 9,400 | | | | — | | | 68.505 | | 1/21/2020 | | | | | | | | | | | | | | | | | | | 2/4/2010 | | | 12,800 | | | | — | | | 63.760 | | 2/4/2020 | | | | | | | | | | | | | | | | | | | 1/20/2011 | | | 138,000 | | | | — | | | 83.885 | | 1/20/2021 | | | | | | | | | | | | | | | | | | | 7/21/2011 | | | 125,000 | | | | — | | | 89.995 | | 7/21/2021 | | | | | | | | | | | | | | | | | | | 1/19/2012 | | | 257,400 | | | | — | | | 72.110 | | 1/19/2022 | | | | | | | | | | | | | | | | | | | 1/17/2013 | | | 184,800 | | | | — | | | 73.250 | | 1/17/2023 | | | | | | | | | | | | | | | | | | | 1/16/2014 | | | 199,000 | | | | — | | | 88.765 | | 1/16/2024 | | | | | | | | | | | | | | | | | | | 1/15/2015 | | | 212,800 | | | | 53,200 | | | 77.795 | | 1/15/2025 | | | | | | | | | | | | | | | | | | | 1/21/2016 | | | 255,600 | | | | 170,400 | | | 61.920 | | 1/21/2026 | | | | | | | | | | | | | | | | | | | 1/19/2017 | | | | | | | | | | | | | | | | | | | | | | | 73,600 | (4) | | | 2,958,720 | | | | 1/17/2018 | | | | | | | | | | | | | | | | | | | | | | | 84,100 | (6) | | | 3,380,820 | | | | 1/17/2018 | | | | | | | | | | | | | | | | | | | | | | | 82,000 | (7) | | | 3,296,400 | | | | 1/16/2019 | | | | | | | | | | | | | | | | | | | | | | | 168,000 | (8) | | | 6,753,600 | | | | 1/16/2019 | | | | | | | | | | | | | | | | | | | | | | | 168,000 | (9) | | | 6,753,600 | | S. Ayat | | 1/21/2010 | | | 95,000 | | | | — | | | 68.505 | | 1/21/2020 | | | | | | | | | | | | | | | | | | | 1/20/2011 | | | 188,000 | | | | — | | | 83.885 | | 1/20/2021 | | | | | | | | | | | | | | | | | | | 1/19/2012 | | | 137,000 | | | | — | | | 72.110 | | 1/19/2022 | | | | | | | | | | | | | | | | | | | 1/17/2013 | | | 80,000 | | | | — | | | 73.250 | | 1/17/2023 | | | | | | | | | | | | | | | | | | | 1/16/2014 | | | 66,000 | | | | — | | | 88.765 | | 1/16/2024 | | | | | | | | | | | | | | | | | | | 1/15/2015 | | | 71,200 | | | | 17,800 | | | 77.795 | | 1/15/2025 | | | | | | | | | | | | | | | | | | | 1/21/2016 | | | 85,200 | | | | 56,800 | | | 61.920 | | 1/21/2026 | | | | | | | | | | | | | | | | | | | 1/19/2017 | | | | | | | | | | | | | | | | | | | | | | | 24,500 | (4) | | | 984,900 | | | | 10/18/2017 | | | | | | | | | | | | | | | 20,000 | (5) | | | 804,000 | | | | | | | | | | | | 1/17/2018 | | | | | | | | | | | | | | | | | | | | | | | 28,000 | (6) | | | 1,125,600 | | | | 1/17/2018 | | | | | | | | | | | | | | | | | | | | | | | 27,300 | (7) | | | 1,097,460 | | | | 1/16/2019 | | | | | | | | | | | | | | | | | | | | | | | 56,000 | (8) | | | 2,251,200 | | | | 1/16/2019 | | | | | | | | | | | | | | | | | | | | | | | 56,000 | (9) | | | 2,251,200 | |
| | Option Awards | | | Stock Awards | Name | | Option/ PSU/RSU Grant Date | | | Number of Securities Underlying Unexercised Options Exercisable (#) | (1)
| | | Number of Securities Underlying Unexercised Option Unexercisable (#) | (1)
| | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | | Market Value of Shares or Units of Stock That Have Not Vested ($) | (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 ($) | (2) | O. Le Peuch | | 4/17/2008 | | | 20,000 | | | | 0 | | | | 93.970 | | | 4/17/2018 | | | | | | | | | | | | | | | | | | | 1/22/2009 | | | 15,000 | | | | 0 | | | | 37.845 | | | 1/22/2019 | | | | | | | | | | | | | | | | | | | 1/21/2010 | | | 15,000 | | | | 0 | | | | 68.505 | | | 1/21/2020 | | | | | | | | | | | | | | | | | | | 7/22/2010 | | | 30,000 | | | | 0 | | | | 61.070 | | | 7/22/2020 | | | | | | | | | | | | | | | | | | | 1/20/2011 | | | 27,000 | | | | 0 | | | | 83.885 | | | 1/20/2021 | | | | | | | | | | | | | | | | | | | 1/19/2012 | | | 30,000 | | | | 0 | | | | 72.110 | | | 1/19/2022 | | | | | | | | | | | | | | | | | | | 4/18/2013 | | | 24,000 | | | | 6,000 | | | | 70.925 | | | 4/18/2023 | | | | | | | | | | | | | | | | | | | 4/16/2014 | | | 18,000 | | | | 12,000 | | | | 100.555 | | | 4/16/2024 | | | | | | | | | | | | | | | | | | | 4/16/2015 | | | 9,600 | | | | 14,400 | | | | 91.740 | | | 4/16/2025 | | | | | | | | | | | | | | | | | | | 4/20/2016 | | | | | | | | | | | | | | | | | 4,100 | (9) | | | 304,466 | | | | | | | | | | | | 4/20/2016 | | | 6,000 | | | | 24,000 | | | | 80.525 | | | 4/20/2026 | | | | | | | | | | | | | | | | | | | 7/20/2016 | | | | | | | | | | | | | | | | | 10,000 | (8) | | | 739,400 | | | | | | | | | | | | 1/19/2017 | | | 0 | | | | 15,000 | | | | 87.380 | | | 1/19/2027 | | | | | | | | | | | | | | | | | | | 1/19/2017 | | | | | | | | | | | | | | | | | 3,800 | (10) | | | 256,082 | | | | | | | | | | | | 4/20/2017 | | | | | | | | | | | | | | | | | | | | | | | | | 21,800 | (5) | | | 1,469,102 | | | | 4/20/2017 | | | | | | | | | | | | | | | | | | | | | | | | | 22,400 | (6) | | | 1,509,536 | | | | 10/18/2017 | | | | | | | | | | | | | | | | | 20,000 | (7) | | | 1,347,800 | | | | | | | | | | A. Juden | | 1/21/2010 | | | 10,400 | | | | 0 | | | | 68.505 | | | 1/21/2020 | | | | | | | | | | | | | | | | | | | 1/20/2011 | | | 69,000 | | | | 0 | | | | 83.885 | | | 1/20/2021 | | | | | | | | | | | | | | | | | | | 1/19/2012 | | | 98,000 | | | | 0 | | | | 72.110 | | | 1/19/2022 | | | | | | | | | | | | | | | | | | | 1/17/2013 | | | 43,200 | | | | 10,800 | | | | 73.250 | | | 1/17/2023 | | | | | | | | | | | | | | | | | | | 1/16/2014 | | | 27,000 | | | | 18,000 | | | | 88.765 | | | 1/16/2024 | | | | | | | | | | | | | | | | | | | 1/15/2015 | | | 24,000 | | | | 36,000 | | | | 77.950 | | | 1/15/2025 | | | | | | | | | | | | | | | | | | | 1/15/2015 | | | | | | | | | | | | | | | | | | | | | | | | | 0 | (3) | | | 1,358,343 | | | | 1/21/2016 | | | 19,200 | | | | 76,800 | | | | 61.920 | | | 1/21/2026 | | | | | | | | | | | | | | | | | | | 1/21/2016 | | | | | | | | | | | | | | | | | | | | | | | | | 24,100 | (4) | | | 1,624,099 | | | | 1/19/2017 | | | | | | | | | | | | | | | | | | | | | | | | | 18,000 | (5) | | | 1,213,020 | | | | 1/19/2017 | | | | | | | | | | | | | | | | | | | | | | | | | 18,400 | (6) | | | 1,239,976 | | | | 4/20/2017 | | | | | | | | | | | | | | | | | 15,000 | (11) | | | 1,074,000 | | | | | | | | | | | | 10/18/2017 | | | | | | | | | | | | | | | | | 15,000 | (7) | | | 904,950 | | | | | | | | | |
| Schlumberger Limited2020 Proxy Statement | | 53 |
(1) | Stock option awardsoptions granted after January 2008 vestprior to April 2013 vested ratably over five years, except that awardsfor options granted to Mr. Le Peuchemployees in 2011 and 2012France, which vested all at once (“cliff” vesting) after four years because he received the awards while he was an employee in France.years. All stock options granted from and after April 2013 vest ratably over five years. | (2) | Market value equal to the product of (x) $67.39,$40.20, the closing price of Schlumberger’s common stock at December 29, 2017,31, 2019, and (y) the number of unvested PSUs or RSUs, as applicable, reflected in the previous column. | (3) | No shares were awarded under the three-year PSUs that were issued in January 2015, because the performance conditions were not achieved. | (4) | Reflects the target number of three-year PSUs that were issued in January 2016 and that will vest, if at all, on January 15, 2019, subject to the achievement of performance conditions. | (5) | Reflects the target number of FCF PSUsRSUs that were issued in January 2017 or April 2017 and that will vest, if at all,vested on January 19, 2019, subject to the achievement of performance conditions.2020. | (6)(4) | Reflects the target number of ROCE PSUs that were issued in January 2017, April 2017 or July 2017 and that willwere scheduled to vest if at all, on January 19,17, 2020, subject to the achievement of performance conditions. | (7)(5) | Reflects the number of three-year RSUs that were issued in October 2017 and that will vest on October 18, 2020, subject to continued employment with the Company. | (8)(6) | Reflects the target number of three-year RSUsROCE PSUs that were issued in July 2016January 2018 and that will vest, if at all, on July 20, 2019,January 22, 2021, subject to continued employment with the Company.achievement of performance conditions. | (7) | Reflects the target number of FCF Conversion PSUs that were issued in January 2018 and that were scheduled to vest on January 17, 2020, subject to the achievement of performance conditions. | (8) | Reflects the target number of ROCE PSUs that were issued in January 2019, April 2019 or July 2019 and that will vest, if at all, on January 16, 2022, subject to the achievement of performance conditions. | (9) | Reflects the target number of three-year RSUsFCF Conversion PSUs that were issued in January 2019, April 20162019 or July 2019 and that will vest, if at all, on April 20, 2019,January 16, 2022, subject to continued employment with the Company.achievement of performance conditions. | (10) | Reflects the number of three-year RSUs that were issued in January 2017 and that will vest on January 19, 2020, subject to continued employment with the Company. | (11) | Reflects the number of three-year RSUs that were issued in April 20172019 and that will vest on April 20, 2020,17, 2022, subject to continued employment with the Company. |
| Schlumberger Limited20182020 Proxy Statement | | | 4954 |
Option Exercises and Stock Vested for Fiscal Year 20172019 The following table sets forth certain information with respect to stock options exercised and PSUs and RSUs that vested during 20172019 for our NEOs. | Option Awards | | Stock Awards | | Option Awards | | Stock Awards | Name (a) | Number of Shares Acquired on Exercise (#) (b) | Value Realized on Exercise ($) (c) | | Number of Shares Acquired on Vesting (#) (d) | Value Realized on Vesting ($) (e) | | Number of Shares Acquired on Exercise (#) (b) | | Value Realized on Exercise ($) (c) | | Number of Shares Acquired on Vesting (#) (d) | | Value Realized on Vesting ($) (e) | O. Le Peuch | | | 15,000 | | 92,327 | | 68,600 | | 2,973,015 | K. Al Mogharbel | | | 1,600 | | 5,432 | | 111,906 | | 4,828,590 | P. Schorn | | | — | | — | | 111,906 | | 4,828,590 | H. Gharbi | | | 1,200 | | 3,654 | | 72,500 | | 3,131,275 | P. Kibsgaard | 0 | | 0 | 0 | | — | | — | | 362,891 | | 15,929,762 | S. Ayat | 100,000 | 2,672,000 | | 0 | 0 | | — | | — | | 121,047 | | 5,313,584 | A. Belani | 0 | | 0 | 0 | | O. Le Peuch | 0 | | 12,000 | 807,660 | | A. Juden | 0 | | 0 | 0 | |
Stock Awards (Columns (d) and (e)) The following table provides details of the stock awards vested and value realized in 2017.2019. Name | Grant Date | Release Date | Number of Shares | Stock Price on Release Date | Value Realized on Release ($) | Description | | Grant Date | | Release Date | | Number of Shares | | Stock Price on Release Date ($) | | Value Realized on Release ($) | | Description | O. Le Peuch | 10/16/2014 | 10/16/2017 | 12,000 | 67.305 | 807,660 | Shares underlying vested RSUs | | 4/20/2016 | | 4/18/2019 | | 4,100 | | 47.195 | | 193,500 | | Shares underlying vested RSUs | | | | 7/20/2016 | | 7/19/2019 | | 10,000 | | 38.315 | | 383,150 | | Shares underlying vested RSUs | | | | 4/20/2017 | | 1/18/2019 | | 54,500 | | 43.970 | | 2,396,365 | | Shares underlying vested PSUs | K. Al Mogharbel | | | 1/21/2016 | | 1/18/2019 | | 44,015 | | 43.970 | | 1,935,340 | | Shares underlying vested PSUs | | | | 1/21/2016 | | 3/12/2019 | | 4,891 | | 42.520 | | 207,965 | | Shares underlying vested PSUs | | | | 7/20/2016 | | 7/19/2019 | | 15,000 | | 38.315 | | 574,725 | | Shares underlying vested RSUs | | | | 1/19/2017 | | 1/18/2019 | | 48,000 | | 43.970 | | 2,110,560 | | Shares underlying vested PSUs | P. Schorn | | | 1/21/2016 | | 1/18/2019 | | 44,015 | | 43.970 | | 1,935,340 | | Shares underlying vested PSUs | | | | 1/21/2016 | | 3/12/2019 | | 4,891 | | 42.520 | | 207,965 | | Shares underlying vested PSUs | | | | 7/20/2016 | | 7/19/2019 | | 15,000 | | 38.315 | | 574,725 | | Shares underlying vested RSUs | | | | 1/19/2017 | | 1/18/2019 | | 48,000 | | 43.970 | | 2,110,560 | | Shares underlying vested PSUs | H. Gharbi | | | 7/20/2016 | | 7/19/2019 | | 10,000 | | 38.315 | | 383,150 | | Shares underlying vested RSUs | | | | 7/19/2017 | | 1/18/2019 | | 62,500 | | 43.970 | | 2,748,125 | | Shares underlying vested PSUs | P. Kibsgaard | | | 1/21/2016 | | 1/18/2019 | | 164,827 | | 43.970 | | 7,247,443 | | Shares underlying vested PSUs | | | | 1/21/2016 | | 3/12/2019 | | 18,314 | | 42.520 | | 778,711 | | Shares underlying vested PSUs | | | | 1/19/2017 | | 1/18/2019 | | 179,750 | | 43.970 | | 7,903,608 | | Shares underlying vested PSUs | S. Ayat | | | 1/21/2016 | | 1/18/2019 | | 54,942 | | 43.970 | | 2,415,800 | | Shares underlying vested PSUs | | | | 1/21/2016 | | 3/12/2019 | | 6,105 | | 42.520 | | 259,585 | | Shares underlying vested PSUs | | | | 1/19/2017 | | 1/18/2019 | | 60,000 | | 43.970 | | 2,638,200 | | Shares underlying vested PSUs |
| Schlumberger Limited2020 Proxy Statement | | 55 |
Pension Benefits for Fiscal Year 20172019 Schlumberger maintainsWe maintain the following pension plans for itsour named executive officers and other employees, which provide for lifetime pensions upon retirement, based on years of service:
| • | Schlumberger Limited Pension Plan (“SLB Pension Plan”); | | | | | • | Schlumberger Technology Corporation Pension Plan (“STC Pension Plan”); | | | | | • | Schlumberger Pension Plan for U.S. Taxpayers Employed Abroad (“SLB USAB Pension Plan”); | | | | | • | Schlumberger Limited Supplementary Benefit Plan (“SLB Supplementary Plan”); | | | | | • | Schlumberger Technology Corporation Supplementary Benefit Plan (“STC Supplementary Plan”); | | • | Schlumberger Limited Supplementary Benefit Plan (“SLB Supplementary Plan”); | | • | Schlumberger French Supplementary Pension Plan for U.S. Taxpayers Employed Abroad (“SLB French SupplementaryUSAB Pension Plan”); and the | | | | | • | Schlumberger International Staff Pension Plan (“SLB International Staff Pension Plan”). |
| Schlumberger Limited2018 Proxy Statement | | 50 |
The following table and narrative disclosure set forth certain information with respect to pension benefits payable to theour named executive officers. Name | Plan Name | Number of Years of Credited Service (#) | (1) | Present Value of Accumulated Benefits ($) | (2) | Payments During Last Fiscal Year | | Plan Name | | Number of Years of Credited Service (#) | (1) | | Present Value of Accumulated Benefits ($) | (2) | | Payments During Last Fiscal Year | O. Le Peuch | | | STC Pension Plan | | 9.75 | | 745,179 | | — | | | | STC Supplementary Plan | | 7.25 | | 1,438,592 | | — | | | | SLB Supplementary Plan | | 1.00 | | 396,337 | | — | | | | SLB International Staff Pension Plan | | 6.50 | | 2,694,348 | | — | K. Al Mogharbel | | | SLB International Staff Pension Plan | | 16.20 | | 1,639,791 | | — | P. Schorn | | | STC Pension Plan | | 10.59 | | 699,706 | | — | | | | STC Supplementary Plan | | 8.67 | | 1,108,094 | | — | | | | SLB Supplementary Plan | | 4.33 | | 2,674,536 | | — | | | | SLB USAB Pension Plan | | 4.33 | | 532,775 | | — | | | | SLB International Staff Pension Plan | | 12.50 | | 2,336,849 | | — | H. Gharbi | | | STC Pension Plan | | 4.26 | | 220,077 | | — | | | | SLB Supplementary Plan | | 1.00 | | 224,828 | | — | | | | SLB International Staff Pension Plan | | 9.80 | | 1,452,778 | | — | P. Kibsgaard | SLB Pension Plan | 9.75 | | 570,569 | | 0 | | STC Pension Plan | | 16.75 | | 1,117,624 | | — | | STC Pension Plan | 5.00 | | 262,041 | | 0 | | | SLB Supplementary Plan | 9.75 | | 7,872,769 | | 0 | | STC Supplementary Plan | | 4.25 | | 422,435 | | — | | STC Supplementary Plan | 4.25 | | 371,531 | | 0 | | SLB Supplementary Plan | | 11.75 | | 11,677,957 | | — | | SLB International Staff Pension Plan | 3.20 | | 348,325 | | 0 | | SLB International Staff Pension Plan | | 3.20 | | 393,540 | | — | S. Ayat | SLB Pension Plan | 11.25 | | 831,988 | | 0 | | STC Pension Plan | | 14.00 | | 1,058,240 | | — | | STC Pension Plan | 0.75 | | 73,823 | | 0 | | STC Supplementary Plan | | 0.50 | | 5,297 | | — | | SLB Supplementary Plan | 11.25 | | 4,810,843 | | 0 | | SLB Supplementary Plan | | 13.25 | | 5,694,314 | | — | | STC Supplementary Plan | 0.50 | | 5,340 | | 0 | | SLB International Staff Pension Plan | | 10.60 | | 846,759 | | — | | SLB French Supplementary Plan | 0.75 | | 186,833 | | 0 | | | SLB International Staff Pension Plan | 10.60 | | 848,759 | | 0 | | A. Belani | SLB Pension Plan | 12.75 | | 1,068,453 | | 0 | | | STC Pension Plan | 2.58 | | 54,300 | | 0 | | | SLB Supplementary Plan | 12.75 | | 4,564,281 | | 0 | | | STC Supplementary Plan | 2.58 | | 132,559 | | 0 | | | SLB International Staff Pension Plan | 10.00 | | 655,489 | | 0 | | O. Le Peuch | STC Pension Plan | 7.75 | | 516,183 | | 0 | | | STC Supplementary Plan | 6.25 | | 910,921 | | 0 | | | SLB French Supplementary Plan | 5.00 | | 1,231,263 | | 0 | | | SLB International Staff Pension Plan | 6.50 | | 2,511,121 | | 0 | | A. Juden | SLB Pension Plan | 13.75 | | 645,726 | | 0 | | | SLB Supplementary Plan | 12.83 | | 1,727,010 | | 0 | | | SLB International Staff Pension Plan | 2.40 | | 207,642 | | 0 | |
(1) | The Company doesWe do not grant and doesdo not expect to grant extra years of credited service to itsour named executive officers under the pension plans. The “Number of Years of Credited Service” column reflects each named executive officer’s actual years of service as a participant in each plan. | (2) | The present value of accumulated benefits is calculated using the RP 2014Pri-2012 with SSA’s 2019 Generational Scale SSA Mortality Table and a discount rate of 3.70%3.30% at December 31, 2017.2019. Retirement in each case is assumed to be the earlier of normal retirement age or December 31, 20172019 if the named executive officer is employed after normal retirement age, or, as to Schlumberger’sour U.S. plans, the date that the sum of the named executive officer’s age plus years of service has reached, or is expected to reach, 85, but not before the named executive officer reaches age 55. Additional assumptions used by the Companythat we use in calculating the present value of accumulated benefits are incorporated herein by reference to Note 18,17, “Pension and other Benefit Plans” to the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2017.2019. |
| Schlumberger Limited2020 Proxy Statement | | 56 |
Tax-Qualified Pension Plans The SLB Pension Plan, the STC Pension Plan and the SLB USAB Pension Plan are all U.S. tax-qualified pension plans. The SLB Pension Plan and the STC Pension Plan have substantially identical terms. The SLB USAB Pension Plan, the material terms of which are described below, has similar, but not identical, terms.terms to the STC Pension Plan. Employees may participate in any one of these plans induring the course of their careers with Schlumberger, in which case they become entitled to a pension from each such plan based upon the benefits accrued during the years of service related to such plan. These plans are funded through cash contributions made by the Company and its subsidiaries based on actuarial valuations and regulatory requirements. Benefits under these plans are based on an employee’s admissible compensation (generally base salary and cash incentive) for each year in which an employee participates in the plan, and the employee’s length of service with Schlumberger. Since January 1, 1989, the benefit earned under the SLB Pension Plan and the STC Pension Plan has been 1.5% of admissible compensation for service prior to the employee’s completion of 15 years of active service and 2% of admissible compensation for service after completion of 15 years of active service. Since 2009, the benefit earned under the SLB USAB Pension Plan has been 3.5% of admissible compensation for all service. Normal retirement under these plans is at age 65; however, early retirement with a reduced benefit is possible at age 55 or as early as age 50 with 20 years of service. Mr. Schorn and Mr. Kibsgaard are eligible for early retirement with a reduced pension. Additionally, under the “rule of 85,” an employee or executive officer who terminates employment after age 55 and whose combined age and service is 85 or more, is eligible for retirement with an unreduced pension. Messrs.Mr. Le Peuch and Mr. Ayat and Belani are eligible for retirement with an unreduced pension under the rule of 85. The benefits are usually paid as a lifetime annuity. | Schlumberger Limited2018 Proxy Statement | | 51 |
In 2004, we amended the SLB Pension Plan and the STC Pension Plan to generally provide that employees hired on or after October 1, 2004 would not be eligible to participate. Newly-hired employees are eligible to participate in an enhanced defined contribution plan, which provides a Company contribution, depending on an employee’s 401(k) contribution and the profitability of the Company in a given year. Schlumberger Supplementary Benefit Plans—Nonqualified Pension The SLB Supplementary Plan and the STC Supplementary Plan each provide non-tax-qualified pension benefits. Each of these plans, which have substantially identical terms, provides an eligible employee with benefits equal to the benefits that the employee is unable to receive under the applicable qualified pension plan due to the U.S. Internal Revenue Code of 1986, as amended (the “Code”), limits on (i) annual compensation that can be taken into account under qualified plans and (ii) annual benefits that can be provided under qualified plans. The retirement age under nonqualified pension plans is the same as under the tax-qualified pension plans. These benefits are subject to forfeiture if the employee leaves the Company or its subsidiaries before the age of 50 with five years of service, engages in certain dishonest acts or has violated a confidentiality arrangement involving the Company or its affiliates. Messrs.AyatMr. Le Peuch and BelaniMr. Ayat are eligible for retirement with an unreduced pension under the rule of 85, described above. Nonqualified plan reduced benefits are paid to an employee upon separation from service, provided the employee has attained the age of 55, or if earlier, the age of 50 with 20 years of service. Payment is made as a joint and survivor annuity, if married; otherwise, payment is made as a life-only annuity. Payment to key employees is delayed six months following separation from service. These nonqualified plan benefits are payable in cash from the Company’s general assets and are intended to qualify as “excess benefit plans” exempt from certain requirements of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”)(ERISA). French Supplementary Pension Plan
Effective January 2006, the Company adopted the SLB French Supplementary Plan for exempt employees in France. The plan complements existing national plans and provides a pension beginning after age 60 when an employee retires from Schlumberger and is eligible for a French state pension under the current rules at the time of retirement. The benefit is equivalent to 1.5% of admissible compensation (generally base salary and cash incentive) above the earnings cap for fewer than 15 years of service and 2% of admissible compensation for more than 15 years of service. No employee contributions are required or permitted. The benefit is paid as a lifetime annuity. If an eligible employee were to leave the Company before the minimum age of 60 to receive his or her French pension, then the employee would not receive a benefit under the plan. If the eligible employee is terminated after age 55, is not subsequently employed and is otherwise entitled to a French pension, then the employee would receive a benefit under the plan. The Company does not grant and does not expect to grant extra years of credited service under the supplementary pension plans to its named executive officers.
International Staff Pension Plan Recognizing the need to maintain a high degree of mobility for certain of the Company’s employees who otherwise would be unable to accumulate any meaningful pension because they are required to work in many different countries, the Company maintains the SLB International Staff Pension Plan for such employees. All of the Company’s named executive officers have either been in the SLB International Staff Plan at some time during their career prior to becoming an executive officer or are in the plan because of their current assignment. This plan provides for a lifetime annuity upon retirement based on a specified number of years of service. The plan is funded through cash contributions made by the Company or its subsidiaries, along with mandatory contributions by employees. Prior to January 2010, benefits under this plan were based on a participant’s admissible compensation (base salary, geographical or rotational coefficient, as applicable, and cash incentive) for each year in which the employee participated in the plan and the employee’s length of service. The benefit earned up to December 31, 2009 is 2.4% of admissible compensation prior to completion of 15 years of service, and 3.2% of admissible compensation for each year of service after 15 years. Following the completion of 20 years of service, the benefit earned with respect to the first 15 years of service is increased to 3.2%. Benefits are payable upon normal retirement age, at or after age 55, or upon early retirement with a reduction, at or after age 50 with 20 years of service. Messrs.Ayat, BelaniMr. Le Peuch and JudenMr. Ayat are eligible for normal retirement with no reduction. Mr. Schorn and Mr. Kibsgaard are eligible for early retirement with a reduced pension. Since January 1, 2010, the benefit earned has been equal to 3.5% of admissible compensation regardless of an employee’s years of service. Benefits earned on or after this date are payable upon normal retirement age, at or after age 60, or upon early retirement with a reduction, at or after age 55. | Schlumberger Limited20182020 Proxy Statement | | 5257 |
Nonqualified Deferred Compensation for Fiscal Year 20172019 The following table and narrative disclosure set forth certain information with respect to nonqualified deferred compensation payable to the NEOs. Name | | | Plan Name | | Executive Contributions in Last FY ($) | (1) | | Company Contributions in Last FY ($) | (2) | | Aggregate Earnings in Last FY ($) | | Aggregate Withdrawals/ Distributions ($) | | Aggregate Balance at Last FYE ($) | (3) | O. Le Peuch | | | SLB Supplementary Plan | | — | | — | | 15,716 | | — | | 94,286 | | | | Executive | | Company | | Aggregate | | Aggregate | | Aggregate | | | SLB Restoration Savings Plan | | 334,918 | | 33,492 | | 72,150 | �� | — | | 1,120,588 | | | | Contributions | | Contributions | | Earnings | | Withdrawals/ | | Balance at | | | International Staff Plan | | — | | — | | 234,904 | | — | | 1,306,540 | | K. Al Mogharbel | | | SLB Supplementary Plan | | — | | — | | 28,266 | | — | | 148,433 | | | | in Last FY | | in Last FY | | in Last FY | | Distributions | | Last FYE | | | SLB Restoration Savings Plan | | 232,119 | | 55,709 | | 117,308 | | — | | 1,564,125 | | Name | Plan Name | ($) | (1) | ($) | (2) | ($) | | ($) | | ($) | (3) | | | | | International Staff Plan | | — | | — | | 117,805 | | — | | 655,235 | | P. Schorn | | | STC Supplementary Plan | | — | | — | | 62,007 | | — | | 502,515 | | | | | STC Restoration Savings Plan | | — | | — | | 88,049 | | — | | 896,511 | | | | | International Staff Plan | | — | | — | | 58,482 | | — | | 325,275 | | H. Gharbi | | | SLB Restoration Savings Plan | | 42,161 | | 21,081 | | 25,547 | | — | | 67,709 | | | | | International Staff Plan | | — | | — | | 111,401 | | — | | 619,614 | | P. Kibsgaard | SLB Supplementary Plan | 0 | | 113,975 | | 213,944 | | 0 | | 1,239,900 | | | SLB Supplementary Plan | | — | | — | | 234,845 | | — | | 1,408,930 | | | SLB Restoration Savings Plan | 0 | | 0 | | 1,710 | | 0 | | 90,350 | | | SLB Restoration Savings Plan | | — | | — | | 4,227 | | — | | 95,630 | | | International Staff Plan | 0 | | 0 | | 19,995 | | 0 | | 147,226 | | | International Staff Plan | | — | | — | | 30,736 | | — | | 170,952 | | S.Ayat | SLB Supplementary Plan | 0 | | 42,725 | | 90,920 | | 0 | | 697,311 | | | S. Ayat | | | SLB Supplementary Plan | | — | | — | | 108,305 | | — | | 784,897 | | | SLB Restoration Savings Plan | 496,500 | | 49,650 | | 201,144 | | 0 | | 2,238,085 | | | SLB Restoration Savings Plan | | 323,430 | | 32,343 | | 460,804 | | — | | 3,606,106 | | | International Staff Plan | 0 | | 0 | | 223,981 | | 0 | | 1,685,759 | | | International Staff Plan | | — | | — | | 345,260 | | — | | 1,953,421 | | A. Belani | SLB Supplementary Plan | 0 | | 37,350 | | 84,955 | | 0 | | 625,442 | | | | SLB Restoration Savings Plan | 216,000 | | 43,200 | | 91,446 | | 0 | | 2,722,552 | | | | International Staff Plan | 0 | | 0 | | 76,909 | | 0 | | 1,171,934 | | | O. Le Peuch | STC Supplementary Plan | 0 | | 23,097 | | 17,369 | | 0 | | 83,051 | | | | International Staff Plan | 0 | | 0 | | 152,818 | | 0 | | 1,125,212 | | | A. Juden | SLB Supplementary Plan | 0 | | 26,078 | | 70,916 | | 0 | | 363,812 | | | | SLB Restoration Savings Plan | 148,365 | | 29,673 | | 397,053 | | 0 | | 2,246,609 | | |
| | (1) | The amounts reported in the “Executive Contributions in Last FY” column represent elective contributions of a portion of a named executive officer’s base salary and non-equity incentive plan compensation to the SLB Restoration Savings Plan or STC Restoration Savings Plan (which amounts are also included as 20172019 “Salary” and 20172019 “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table). | (2) | The amounts reported in the “Company Contributions in Last FY” column represent Schlumberger’s contributions to each named executive officer’s SLB Supplementary Plan, SLB Restoration Savings Plan, STC Supplementary Plan, STC Restoration Savings Plan and the International Staff Plan accounts, as applicable, which amounts are also reported as 20172019 “All Other Compensation” in the Summary Compensation Table. | (3) | The amounts reported in the “Aggregate Balance at Last FYE” column represent balances from the SLB Restoration Savings Plan, the STC Restoration Savings Plan, the STC Supplementary Plan, the SLB Supplementary Plan and the International Staff Plan, and include various amounts previously reported in the Summary Compensation Table as All Other Compensation. |
SLB Supplementary Benefit Plan—Non-Qualified Profit Sharing The SLB Supplementary Plan provides certain non-tax-qualified defined contribution benefits for eligible employees, including named executive officers. Schlumberger Technology Corporation, an indirect wholly-owned subsidiary of Schlumberger Limited, maintains the STC Supplementary Plan with substantially identical terms. The SLB Supplementary Plan and the STC Supplementary Plan provide an eligible employee with discretionary Company profit sharing contributions that are not permissible under the applicable tax-qualified plan due to Internal Revenue Code limits on (1) annual compensation that can be taken into account under the qualified plan and (2) annual benefits that can be provided under the qualified plan. These nonqualified plan benefits are credited with earnings and losses as if they were invested in the qualified plan, with the same employee investment elections as the qualified plan. An employee forfeits all rights under the non-qualified plans if the employee terminates employment before completing four years of service, engages in certain dishonest acts or has violated a confidentiality arrangement involving the Company or its affiliates. These nonqualified plan benefits are paid in a lump-sum payment following the end of the year in which the employee terminates active service, or the employee can elect to receive payment in installments of five or ten years following the termination of service. If the employee dies before full payment of these benefits, the unpaid benefits are paid in a lump sum to the beneficiaries designated under the applicable qualified plan. Payment to key employees is delayed six months following separation from service. | Schlumberger Limited2020 Proxy Statement | | 58 |
SLB Restoration Savings Plan The SLB Restoration Savings Plan, a non-qualified deferred compensation plan, provides certain defined contribution benefits for the named executive officers and other eligible employees. The SLB Restoration Savings Plan allows an eligible employee to defer compensation (and receive an associated employer match) that the employee cannot defer under the applicable tax-qualified plan because of Internal Revenue Code limits on the amount of compensation that can be taken into account. | Schlumberger Limited2018 Proxy Statement | | 53 |
Schlumberger Technology Corporation maintains the STC Restoration Savings Plan with substantially identical terms. An eligible employee may elect in advance to defer a percentage (from 1% to 50%) of his or her compensation (generally base salary and cash incentive) over the Internal Revenue Code annual compensation limits. The election cannot be changed during the year. The Company makes an annual matching contribution with respect to each employee’s deferrals for a year, if the employee is still employed by the Company or an affiliate on the last day of the year. For employees who participate in a Schlumberger pension plan, the amount of the matching contribution is equal to one-half of the first 6% deferred by the employee in profitable years. For employees who do not participate in a Schlumberger pension plan, the matching contribution is 100% of the first 6% deferred by the employee. The match is made each payroll period and is not contingent on profitability of the Company. Employees’ accounts are credited with earnings, calculated to mirror the earnings of the relevant funds under the Schlumberger Master Profit Sharing Trust as chosen by the employee. If the employee is eligible for the SLB Savings and Profit Sharing Plan, matching contributions and related earnings vest based on the employee’s years of service, as follows: 2 years | 33⅓% vested | 3 years | 66⅔% vested | 4 years | 100% vested |
If the employee is eligible for the SLB Savings and Profit Sharing Plan for U.S. Taxpayers Employed Abroad, matching contributions and related earnings vest based on the employee’s years of service, as follows: 2 years | 20% vested | 3 years | 40% vested | 4 years | 60% vested | 5 years | 80% vested | 6 years | 100% vested |
An employee’s account fully vests on his or her death, his or her 60th birthday or plan termination. An employee’s vested account balance is paid in a single lump sum (subject to tax withholding) following the participant’s death, qualifying disability, retirement or other qualifying termination of employment or, subject to certain limitations, the employee can elect to receive payment in installments of five or ten years for contributions made after June 30, 2017, following the termination of employment. However, an employee forfeits all benefits under the plan if a determination is made that the employee has engaged in certain dishonest acts or violated a confidentiality arrangement involving Schlumberger or its affiliates. Payment to key employees is delayed six months following separation from service. SLB International StaffProfit-Sharing Profit-Sharing Plan Schlumberger maintains the SLB International Staff Profit-Sharing Plan, which provides for an annual employer contribution based on admissible compensation (base salary, geographical or rotational coefficient, as applicable, and cash incentive). Amounts allocated to the participants’ accounts share in investment gains and/or losses of the trust fund and are generally distributed in a lump sum upon the satisfaction of certain conditions on termination of employment. Benefits earned under the SLB International Staff Profit-Sharing Plan will be forfeited upon a determination by the SLB International Staff Profit-Sharing Plan’s administrator that the employee’s separation from service was due to circumstances of fraud or misconduct detrimental to the Company, an affiliate or any customer. Pay Ratio of CEO to Median Employee The following information is a reasonable estimateIn accordance with SEC rules, we are providing the ratio of the total compensation of Mr. Kibsgaard, our former CEO, to the annual total compensation of our employees as relates to the 2017 total compensation of our CEO.median employee. Based on the methodology described below, our former CEO’s 2017 total compensation for the full year 2019 was 234313 times that of our median employee.
To identifyWe had two CEOs during 2019. For purposes of the CEO pay ratio calculation, we used the total compensation paid to Mr. Kibsgaard, our CEO on October 1, 2017, our median employee identification date, for the full year 2019. Pursuant to Mr. Kibsgaard’s agreement with the Company as described in “Compensation Discussion and Analysis—Agreements with Former NEOs” on page 42, Mr. Kibsgaard’s compensation with respect to the five-month period following his retirement was consistent with his compensation for the seven-month period in 2019 in which he served as CEO; therefore, we determined that Mr. Kibsgaard’s annualized 2019 compensation equaled his actual total compensation for the full year 2019 as reported in the “Total” column of our 2019 Summary Compensation Table included in this proxy statement: $22,247,160.
In 2019, we used the same median employee identified for purposes of our 2018 CEO pay ratio disclosure, as permitted under SEC rules, because we believe the changes to our employee population and compensation arrangements in 2019 have not significantly impacted our pay ratio disclosure. Our 2019 and 2018 median employee was in the same pay grade and in a similar position to the median annual total compensation of all our employees, as well as to determine the annual total compensation of the “median employee” the methodology and the material assumptions, adjustments and estimates that we used were as follows: We determined that,had identified as of October 1, 2017, we had approximately 99,000 employees workingbut was not the same employee as was used in 140 countries around2017, because the world. This is the number of all our employees on our different payroll systems as of that date. Consistent with our global operations, we maintain multiple human resources systems around the world, on which we store and maintain relevant payroll and other compensation data for our employees. We excluded our employees2017 median employee was promoted in India, Pakistan, Ukraine, Sudan and Venezuela from the calculation of2018.
As in 2018, our median employee as the employees from those countries combined represented fewer than 5% of our employees. The excluded employees represented 3,206 employees from India, 933 employees from Venezuela, 726 employees from Pakistan, 29 employees from Ukraine and 4 employees from Sudan. We believe it was appropriate to exclude India and Pakistan from our calculations because base salary in those countries represents only a relatively small portion of guaranteed annual compensation; we also believe that it was appropriate to exclude Venezuela because dramatic local currency fluctuations in 2017 have drastically and negatively affected those employees. After excluding these employees and for purposes of determining our median employee, we had approximately 94,000 employees working in 135 countries. We did not make any cost-of-living adjustments when identifying our median employee. Given the wide geographical distribution of our employees, a variety of pay elements comprise the total compensation of our employees. This includes annual base salary, equity awards, annual cash incentive payments based on achievement of personal objectives, company outperformance of competitors in the employee’s geography, sales or commission incentives, and various field bonuses. The incentive awards an employee is eligible for is based on his or her pay grade and reporting level, and are consistently applied across the organization. Cash incentives, rather than equity, is the primary vehicle of incentive compensation for most of our employees throughout the organization. While all employees earn a base salary, not all receive such cash incentive payments. Furthermore, fewer than 1% of our employees receive equity awards. Consequently, for purposes of applying a consistently-applied compensation metric
| Schlumberger Limited2018 Proxy Statement | | 54 |
for determining our median employee, we selected annual base salary as the sole, and most appropriate, compensation element for determining the median employee. We used the annual base salary of our employees as reflected on our human resources systems on October 2, 2017, excluding that of our CEO, in preparing our data set.
Using this methodology, we determined that the median employee2019 was a full-time, salaried employee locatedworking in Colombia and working as a Wireline Field Engineer, who is paid a base salaryEngineer. We calculated all of $38,893. For purposesthe elements of this disclosure, wethat employee’s compensation for 2019 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. We then converted allthe total compensation of the median employee compensation to U.S. dollars atusing a blended exchange rate representing the average exchange rate from January 1, 20172019 to October 1, 2017. For the median employee, this resultedDecember 31, 2019, resulting in an exchange rate of 2,9593,293 Colombian Pesos to each U.S. dollar.
Once we identified The resulting 2019 total compensation of our median employee we identifiedwas $71,021.
| Schlumberger Limited2020 Proxy Statement | | 59 |
The pay ratio set forth above is a reasonable estimate calculated in a manner consistent with SEC rules based on our human resources systems of record and calculated all of the elements of that employee’s compensationmethodology described above. Because the SEC rules for 2017 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation to that employee of $88,604. The difference betweenidentifying the median employee’s annual base salaryemployee and calculating the pay ratio based on that employee’s annual total compensation representsallow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the cash incentive compensation earnedpay ratio reported by the employee in 2017 due to field bonus pay plus payments related to a food stipend and cost of living expenses for his location. With respectother companies may not be comparable to the 2017 totalpay ratio that we report above, as other companies may have different employment and compensation practices, different types of our CEO, we used the amount reportedworkforce, and operate in the “Total” column (column (j)) of our 2017 Summary Compensation Table includeddifferent countries, and may use different methodologies, exclusions, estimates and assumptions in this proxy statement. To confirm our consistently-applied compensation metric described above was appropriate, we also engaged a large independent auditing firm with substantial statistical analysis experience to conduct a stratified statistical analysis of our employee population to determine the median employee. This third-party review concluded that our median employee was appropriate and had a salary less than $100 different from the median employee identified by its statistical sampling. It was also within $100 of the average estimated salary identified by the third party when that party conducted its largest stratified sample analysis.calculating their own pay ratios.
Potential Payments Upon Termination or Change in Control for Fiscal Year 20172019 No Additional Payments Upon Termination or Change in Control Our named executive officers generally receive the same benefits as our other employees. As is the case with other compensation arrangements, any differences are generally due to local (country-specific) requirements. In line with this practice, our currently serving named executive officers do not have employment agreements, “golden parachutes” or change in control agreements. The Company’s executive officers serve at the will of the Board, which enables the Company to terminate their employment using judgment as to the terms of any severance arrangement and based on specific circumstances at the time they cease being executive officers. All employees who receive equity awards, including our NEOs, are subject to the same terms and conditions in the event of a termination or change in control, except for certain stock options that were assumed in connection with our acquisition of Cameron, none of which are held by the NEOs. Phased Retirement
Schlumberger has a practice of phased retirement, which may be offered to executive officers (other than the CEO) approaching retirement, at the discretion of the Company. See “Compensation Discussion and Analysis—Other Executive Benefits and Policies—Retirement Practices” on page 43.
| Schlumberger Limited2018 Proxy Statement | | 55 |
Termination of Employment Stock Options This section summarizes the consequences for NEOs and other employees under our omnibus incentive plans and standard form of stock option award agreement in the event an option holder’s employment terminates. REASON FOR TERMINATION OF EMPLOYMENTReason for Termination of Employment | | VESTINGVesting | | POST-EMPLOYMENT EXERCISE PERIODPost-Employment Exercise Period | Voluntary termination with consent of the Company or termination by the Company other than for cause | | No additional vesting | | Exercisable (to the extent exercisable at termination) at any time within three months after termination. | Termination by the Company for cause | | None | | Vested and unvested options forfeited immediately. | Disability | | Full vesting | | Exercisable at any time during the 60-month period after termination due to disability or during the remainder of the option period, whichever is shorter.* | Retirement (as defined in the applicable plan or award agreement) | | Effective for grants after April 1, 2015, continued vesting as if still employed with the Company | | Effective for grants on or after April 1, 2015, exercisable for 10 years from the original grant date. | Special Retirement (or Retirement for grants prior to April 1, 2015, in each case as defined in the applicable plan or award agreement) | | No additional vesting | | Exercisable (to the extent exercisable at termination) at any time during the 60-month period after termination due to retirement or during the remainder of the option period, whichever is shorter. | Death | | Full vesting | | Exercisable at any time during the 60-month period after termination due to death or during the remainder of the option period, whichever is shorter. |
* | In order to preserve U.S. preferential tax treatment, the additional 60-month exercise period following a termination due to disability does not apply to incentive stock options granted prior to January 2008, and such awards are exercisable for only three months following termination of employment.Schlumberger Limited2020 Proxy Statement | | 60 |
Notwithstanding the vesting and exercisability provisions described above, an option holder may forfeit his or her right to exercise stock options, and may have certain prior option exercises rescinded, if he or she engages in “detrimental activity” within one year after termination of employment (or five years after termination of employment in the event of retirement or disability). If an option holder dies following termination of employment, but during the period in which he or she would otherwise be able to exercise the option, then the person entitled under the option holder’s will or by the applicable laws of descent and distribution will be entitled to exercise an outstanding option until the earlier of (i) 60 months following the date of his or her termination of employment or (ii) the expiration of the original term. Death following termination of employment will not result in any additional vesting, so that the option will be exercisable to the extent provided in the matrix above based on the circumstances of his or her termination of employment. PSUs This section summarizes the consequences for NEOs holding PSUs granted under the Company’s 2010 Omnibus Stock Incentive Plan, 2013 Omnibus Stock Incentive Plan and 20132017 Omnibus Stock Incentive Plan and subject to the Company’s standard form of two-yearROCE PSU award or three-yearFCF Conversion PSU award, as applicable, in the event the PSU holder’s employment terminates. Three-Year2019 and 2020 FCF Conversion PSUs; ROCE PSUs
All PSUs awarded prior to January 1, 2016 are three-year PSUs, and are treated as follows upon the holder’s termination of employment with the Company and its subsidiaries prior to the vesting date (i.e., the three-year anniversary of the grant date).
| • | If the holder’s employment terminates on account of special retirement, disability, or death or the holder ceases to be employed in a PSU-eligible position, in each case on or after the first anniversary of the grant date, the holder will vest on the regularly-scheduled vesting date in the number of PSUs determined by multiplying (i) the number of PSUs that would have vested as determined based on satisfaction of the specified performance conditions had the holder’s employment not terminated and (ii) a fraction, the numerator of which is the number of days that elapsed between the grant date and the date of the holder’s termination of employment and the denominator of which is 1,095. | | | | | • | If an individual terminates employment for another reason, terminates employment on account of retirement, special retirement, disability or death, or ceases to be employed in a PSU eligible position, in each case before the first anniversary of the grant date, no additional vesting is provided and the individual will automatically forfeit all such PSUs without any additional consideration on the part of the Company. | | | |
Three-yearFCF Conversion PSUs granted after January 1, 2016in 2019 and 2020 and all ROCE PSUs are treated as follows upon the holder’s termination of employment with the Company and its subsidiaries prior to the vesting date (i.e., the third anniversary of the grant date).
| Schlumberger Limited2018 Proxy Statement | | 56 |
| • | If the holder’s employment terminates on account of disability or death, the target number of PSUs will immediately vest. | | | | | • | If the holder’s employment terminates on account of retirement or, with Compensation Committee approval, early retirement or special retirement, the holder will vest on the regularly-scheduled vesting date with the number of PSUs determined as if the holder’s employment had not been terminated. | | | | | • | If an individual terminates employment for another reason, no additional vesting is provided and the individual will automatically forfeit all outstanding PSUs without any additional consideration on the part of the Company. |
Two-Year2017 and 2018 FCF Conversion PSUs
Two-yearFCF Conversion PSUs granted in 2017 and 2018 are treated as follows upon the holder’s termination of employment with the Company and its subsidiaries prior to the conversion date (the second anniversary of the grant date, when such FCF Conversion PSUs are converted, if at all, into shares of restricted stock based on performance) or the vesting date (the first anniversary of the date that restricted shares are received following the conversion date).
| • | If the holder’s employment terminates on account of disability or death: (i) prior to the conversion date, the target number of FCF Conversion PSUs will immediately convert into shares of common stock and such shares will not be subject to any transfer restrictions or (ii) after the conversion date but prior to the vesting date, the restricted shares will immediately vest. | | | | | • | If the holder’s employment terminates on account of retirement or, with Compensation Committee approval, early retirement or special retirement: (i) prior to the conversion date, the FCF Conversion PSUs will convert into restricted stock on the regularly-scheduled conversion date with the number of FCF Conversion PSUs determined as if the holder’s employment had not been terminated and the restricted stock will be subject to further transfer restrictions until the normal vesting date, or (ii) after the conversion date and before the vesting date, the restricted shares will not be forfeited but will continue to be subject to transfer restrictions until the normal vesting date as if the holder’s employment had not been terminated. | | | | | • | If an individual terminates employment for another reason, no additional vesting is provided and the individual will automatically forfeit all outstanding FCF Conversion PSUs or restricted shares received on conversion of FCF Conversion PSUs without consideration. | | | any additional consideration on the part of the Company. |
For these purposes, “retirement” is defined as termination of employment with the Company and its subsidiaries either at or after (i) age 60 and completion of at least 25 years of service with the Company and its subsidiaries or (ii) age of 55 and completion of at least 20 years of service with the Company and its subsidiaries subject to the approval of the Compensation Committee;“retirement,” “early retirement,” “special retirement” is defined as termination of employment with the Company and its subsidiaries either at or after (i) age 55 or (ii) age 50 and completion of at least 10 years of service with the Company and all subsidiaries; and “disability” is defined as a disability (whether physical or mental impairment) which totally and permanently incapacitateshave the holder from any gainful employmentmeanings assigned to such terms in any field which the holder is suited by education, training, or experience, as determined by the Compensation Committee.applicable award agreements. | Schlumberger Limited2020 Proxy Statement | | 61 |
Change in Control Stock Options Pursuant to Schlumberger’s omnibus incentive plans and standard form of stock option award agreement (other than awards issued under the 2010 Omnibus Stock Incentive Plan, the 2013 Omnibus Stock Incentive Plan and the 20132017 Omnibus Stock Incentive Plan), in the event of any reorganization, merger or consolidation wherein Schlumberger is not the surviving corporation, or upon the liquidation or dissolution of Schlumberger, all outstanding stock option awards will, unless alternate provisions are made by Schlumberger in connection with the reorganization, merger or consolidation for the assumption of such awards, become fully exercisable and vested, and all holders will be permitted to exercise their options for 30 days prior to the cancellation of the awards as of the effective date of such event. Under both our 2010 Omnibus Stock Incentive Plan, and our 2013 Omnibus Stock Incentive Plan and 2017 Omnibus Stock Incentive Plan, the Compensation Committee retains the discretion to adjust outstanding awards in the event of corporate transactions and outstanding options may be, but are not required to be, accelerated upon such a transaction. The following table sets forth the intrinsic value of the unvested stock options held by each NEO as of December 31, 20172019 that would become vested upon the occurrence of death, disability or a change in control in which Schlumberger is not the surviving entity and alternative provisions are not made for the assumption of awards, as described in the preceding paragraphs. Due to the number of factors that affect the nature and amount of any benefits provided upon these events, any amounts actually paid or distributed may be different. Factors that could affect these amounts include the time during the year of any such event and the price of Schlumberger common stock. Name | Amount ($) | (1) | O. Le Peuch | — | | K. Al Mogharbel | — | | P. Schorn | — | | H. Gharbi | — | | P. Kibsgaard | 17,224,884— | | S. Ayat | 9,030,260 | | A. Belani | 5,175,687 | | O. Le Peuch | 0 | | A. Juden | 3,881,799— | |
(1) | Reflects that the closing price of Schlumberger common stock on December 29, 201731, 2019 ($67.39)40.20) was higherlower than the exercise price of someall stock options held by the executive as of that date. |
If Schlumberger merges or consolidates with another entity and is the surviving entity, then a holder of stock options granted pursuant to Schlumberger’s stock options plans will be entitled to receive, upon exercise or vesting, in lieu of the number of shares with respect to which the award is exercisable or vested, the number and class of shares of stock or other securities that the holder would have been entitled to receive under the terms of such merger or consolidation if, immediately prior to such event, such holder had been the holder of record of the number of shares of Schlumberger common stock equal to the number of shares as to which such award is then exercisable or vested. | Schlumberger Limited2018 Proxy Statement | | 57 |
PSUs and RSUs Under our 2010 Omnibus Stock Incentive Plan, 2013 Omnibus Stock Incentive Plan and 20132017 Omnibus Stock Incentive Plan, in the event of a merger, consolidation, acquisition of property or stock, separation, spinoff, reorganization or liquidation, our Board may, in its sole discretion, (1) provide for the acceleration of the vesting of any awards, including RSUs and PSUs, or (2) decide to cancel any awards, including RSUs and PSUs, and deliver cash to the holders in an amount that our Board determines in its sole discretion is equal to the fair market value of such awards on the date of such event. However, no current agreement with respect to the RSUs and PSUs currently provides for any definitive special treatment upon such a merger, consolidation, acquisition of property or stock, separation, spinoff, reorganization or liquidation. The following table sets forth the value of the unvested RSUs and unvested PSUs at target held by each NEO at December 31, 20172019 that would become vested upon the occurrence of a merger, consolidation, acquisition of property or stock, separation, spinoff, reorganization or liquidation assuming that the Board elects to accelerate the vesting of RSUs and PSUs as provided in the previous paragraph. Due to the various factors that could affect the nature and amount of any benefits provided upon these events, any amounts actually paid or distributed may be different. Factors that could affect these amounts include the price of Schlumberger common stock and achievement by the Company of the relevant performance metric. Name | Amount ($) | (1) | O. Le Peuch | 20,458,584 | | K. Al Mogharbel | 9,448,608 | | P. Schorn | 8,447,226 | | H. Gharbi | 8,997,966 | | P. Kibsgaard | 22,669,99623,143,140 | | S. Ayat | 7,554,419 | | A. Belani | 6,799,651 | | O. Le Peuch | 2,978,638 | | A. Juden | 5,350,7668,514,360 | |
(1) | Calculated based on the product of the closing price of Schlumberger common stock on December 29, 201731, 2019 ($67.39)40.20) and the number of outstanding, unvested two-yearRSUs, unvested ROCE PSUs (at target) and three-yearunvested FCF Conversion PSUs (at target) held by the executive as of that date. |
| Schlumberger Limited2020 Proxy Statement | | 62 |
Retirement Plans Schlumberger’s pension plans and non-qualified deferred compensation plans include the same terms and conditions for all participating employees in the event of a termination or change in control. Other than the Schlumberger Restoration Savings Plan, none of Schlumberger’s non-qualified plans provide for the accelerated payment of benefits upon a change in control. For more information on these plans, see the Pension Benefits for Fiscal Year 20172019 table and accompanying narrative above and the Nonqualified Deferred Compensation for Fiscal Year 20172019 table and accompanying narrative above. The following table sets forth the amounts as of December 31, 20172019 of benefit payments that would be accelerated under the Schlumberger Restoration Savings Plan upon a change in control. Name | Amount ($) | | P. Kibsgaard | 90,350 | | S. Ayat | 2,188,435 | | A. Belani | 2,679,352 | | O. Le Peuch | 0 | (1)1,120,588 | A. JudenK. Al Mogharbel | 2,216,9361,564,125 | P. Schorn | 896,511 |
(1)H. Gharbi | Mr. Le Peuch did not contribute to the Schlumberger Restoration Savings Plan in 2017 or in previous years.67,709 | P. Kibsgaard | 95,630 | S. Ayat | 3,606,106 |
Retiree Medical Subject to satisfying certain age, service and contribution requirements, most U.S. employees are eligible to participate in a retiree medical program. Generally, this program provides comprehensive medical, prescription drug and vision benefits for retirees and their dependents until attaining age 65. Historically, for Schlumberger employees who turned age 40 prior to 2014, and excluding those employees who became Schlumberger employees as a result of the Smith acquisition, retiree medical benefits continue beyond age 65, at which time Medicare becomes primary and the Schlumberger plan becomes secondary, paying eligible charges after Medicare has paid. However, effective April 1, 2015, participants who reach age 65 no longer continue in Schlumberger medical coverage after reaching age 65, but instead receive a monthlyan annual contribution to a health reimbursement arrangement that can be used to purchase Medicare supplemental coverage and pay other tax-deductible expenses. Agreements with Former NEOs See “Compensation Discussion and Analysis—Agreements with Former NEOs” on page 42 for details regarding our agreements with Messrs. Kibsgaard and Ayat. | Schlumberger Limited20182020 Proxy Statement | | 5863 |
Director Compensation in Fiscal Year 20172019 Our director compensation philosophy is to appropriately compensate our non-employee directors for the time, expertise and effort required to serve as a director of a large and complex global company and to align the interests of our directors with those of our long-term stockholders. Annual payments are made after the non-employee directors are elected by stockholders. Non-employee directors who begin their Board, Board Chair, committee or committee chair service other than immediately following the annual general meeting of stockholders receive a prorated amount of annual compensation. Directors who are employees of Schlumberger do not receive compensation for serving on the Board. Director Pay Components Non-employee directors receive an annual cash retainer of $100,000$115,000 plus an additional annual fee of $10,000 for membership on a committee. The chair of each committee receives an additional annual fee of $20,000 in lieu of the additional annual fee of $10,000 for committee membership. Beginning in 2016,In August 2019, Mr. CurriePapa began receiving an additional $100,000 annually, reflecting his additional responsibilities as the Board’s non-executive Chairman. Mr. Currie has also earned an additional $50,000 annually, reflecting his additional responsibilities as the Board’s lead independent director. In July 2017, the Board re-evaluated non-employee director compensation and approved an increase for the first time since 2008. Beginning in July 2017, each director receives an annual cash retainer of $115,000 plus the additional fees for membership on, or for chairing, a Board committee. The additional pay for committee service did not change. Directors who are employees of Schlumberger do not receive compensation for serving on the Board. Additionally, Schlumberger’s current practice is to grant each newly-appointed or elected non-employee director (including non-employee directors re-elected at the annual general meeting) shares of Schlumberger common stock valued at approximately $190,000 (or $290,000 for the non-executive Chairman of the Board) each April. Effective May 1, 2017, Schlumberger granted each such 2019 Director Pay Review Our Compensation Committee annually reviews and periodically recommends updates to our non-employee director 2,250 sharescompensation program to our Board for approval. The Committee’s recommendation takes into account our director compensation philosophy, changes in market practices, and consultation with the Committee’s independent compensation consultant, Pay Governance. In 2019, the Committee reviewed non-employee director compensation taking into account multiple factors including director pay practices at publicly-traded companies and continued expansion of director and independent committee chair responsibilities. Based on that review, the Committee determined that no changes in non-employee director compensation were necessary for 2019 (other than the additional cash retainer and stock award to the non-executive Chairman of the Board, each effective August 2019). Director Deferral Plan Non-employee directors may elect to defer all or a portion of their annual stock or cash awards through the Schlumberger 2004 Stock and Deferral Plan for Non-Employee Directors (the “Directors Stock Plan”). When directors elect to defer their stock award, their deferred compensation account is credited with a number of “stock units.” Each stock unit is equal in value to a share of our common stock, but because it is not an actual share of our common stock it does not have any voting rights. When directors elect to defer their cash award, they may choose to invest such deferred cash compensation into either (i) Schlumberger common stock.stock, (ii) money market equivalents, or (iii) an S&P 500 equivalent. Deferrals into a stock account are credited with dividend equivalents in the form of cash to be paid at the time of vesting and deferrals into the cash account are credited with gains or losses based on the monthly performance of the various investment options described above. Following retirement from our Board and depending on the director’s election, a non-employee director may receive the deferred compensation on the date of the director’s retirement or a date that is one year following the date of the director’s retirement. Although Schlumberger’sour Directors Stock and Deferral Plan provides that annual stock awards to non-employee directors may be in the form of shares of common stock, shares of restricted common stock or restricted stock units, Schlumberger’sour practice has been to issue only shares of common stock. SchlumbergerOur directors have never received restricted common stock or restricted stock units as director compensation. | Schlumberger Limited2020 Proxy Statement | | 64 |
The following table provides information on Schlumberger’sthe compensation forpaid to our non-employee directors in 2017.2019. | | Fees Earned or Paid in Cash | (1) | Stock Awards | (2) | Option Awards | | Non-Equity Incentive Plan Compensation | | Change in Pension Value & Nonqualified Deferred Compensation Earnings | | All Other Compensation | | Total | (3) | | Name | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | | Fees Earned or Paid in Cash ($) | (1) | Stock Awards ($) | (2) | | Option Awards ($) | | Non-Equity Incentive Plan Compensation ($) | | Change in Pension Value & Nonqualified Deferred Compensation Earnings ($) | | All Other Compensation ($) | | Total ($) | (3) | Peter L.S. Currie | | 187,500 | | 162,750 | | — | | — | | — | | 35,305 | (4) | | 435,555 | | | 195,000 | | 184,180 | | — | | — | | — | | 20,185 | (4) | | 399,365 | | Patrick de La Chevardière(5) | | | 35,045 | | — | (5) | | — | | — | | — | | — | | 35,045 | | Miguel Galuccio | | 97,500 | | 162,750 | | — | | — | | — | | 260,250 | | | 145,000 | | 184,180 | | — | | — | | — | | — | | 329,180 | | V. Maureen Kempston Darkes(6) | | 137,500 | | 162,750 | | — | | — | | — | | — | | 300,250 | | | 13,050 | | — | | — | | — | | — | | — | | 13,050 | | Helge Lund | | 132,500 | | 162,750 | | — | | — | | — | | — | | 295,250 | | | Nikolay Kudryavtsev | | 137,500 | | 162,750 | | — | | — | | — | | — | | 300,250 | | | 145,000 | | 184,180 | | — | | — | | — | | 20,298 | (4) | | 349,478 | | Michael E. Marks | | 137,500 | | 162,750 | | — | | — | | — | | 38,539 | (4) | | 338,789 | | | Michael E. Marks(6) | | | 11,250 | | — | | — | | — | | — | | — | | 11,250 | | Tatiana A. Mitrova | | | 132,500 | | 184,180 | | — | | — | | — | | — | | 316,680 | | Indra K. Nooyi | | 127,500 | | 162,750 | | — | | — | | — | | — | | 290,250 | | | 145,000 | | 184,180 | | — | | — | | — | | — | | 329,180 | | Lubna S. Olayan | | 127,500 | | 162,750 | | — | | — | | — | | — | | 290,250 | | | 142,500 | | 184,180 | | — | | — | | — | | — | | 326,680 | | Mark G. Papa(7) | | | 207,569 | (8) | 258,774 | | — | | — | | — | | — | | 466,343 | | Leo Rafael Reif | | 147,500 | | 162,750 | | — | | — | | — | | 25,506 | (4) | | 335,756 | | | 155,000 | | 184,180 | | — | | — | | — | | 18,085 | (4) | | 357,265 | | Tore I. Sandvold | | 137,500 | | 162,750 | | — | | — | | — | | — | | 300,250 | | | Jeff W. Sheets(5) | | | 35,045 | | — | (5) | | — | | — | | — | | — | | 35,045 | | Henri Seydoux | | 137,500 | | 162,750 | | — | | — | | — | | — | | 300,250 | | | 145,000 | | 184,180 | | — | | — | | — | | — | | 329,180 | |
(1) | Reflects cash fees earned, without taking into account any election to defer receipt of such fees. Ordinarily, the annual cash retainer is paid in cash, but non-employee directors can elect to have their retainer paid in stock or deferred under the Schlumberger 2004Directors Stock and Deferral Plan for Non-Employee Directors. | | Plan. | | If a non-employee director joins our Board, becomes Chairman of the Board, or joins or becomes Chairchair of a committee of our Board after the start of any year, he or she will receive compensation prorated according tofor the numberperiod of monthsservice during which he or she served in that position during that year. As a result, the fees disclosed in this column are subject to adjustment in cases where a non-employee director has served less than one full year or has changed committee memberships or chairmanships during the year. | | | (2) | Effective May 1, 2019, Schlumberger granted each non-employee director elected at our 2019 annual general meeting 4,452 shares of Schlumberger common stock. The amounts reported reflect the aggregate grant date fair value of the stock awards granted in 20172019 computed in accordance with applicable accounting standards, based on the closing stock price on the grant date, without taking into account any election to defer receipt of such stock award. Amounts rounded up to nearest dollar. A non-employee director may elect to defer the receipt of all or part of a stock award. For information on the number of shares of Schlumberger common stock deferred by our directors, please read the footnotes to the table below under “Stock Ownership Information—Security Ownership by Management.” | | | (3) | Schlumberger reimburses non-managementnon-employee directors for travel and other business expenses incurred in the performance of their services for Schlumberger. | | | (4) | Represents amounts paid for spousal transportationairfare and hotel days in connection with Board meetings. | (5) | Messrs. de La Chevardière and Sheets were appointed to the Board effective October 28, 2019. In January 2020, each of Messrs. de La Chevardière and Sheets received a grant of stock 2,269 shares of Schlumberger common stock, reflecting a prorated amount for their service beginning October 28, 2019. | (6) | Did not stand for re-election at our April 2019 annual general meeting of stockholders. | (7) | Mr. Papa was appointed Chairman of the Board effective August 1, 2019. In connection with such appointment, Mr. Papa received on such date (i) an additional $75,069 as an annual retainer paid in cash, and (ii) an additional grant of 1,937 shares of Schlumberger common stock, which had a grant date fair value of approximately $74,594. Such additional compensation reflected a prorated amount for the period of his service as non-executive Chairman through April 2020. | (8) | Includes $33,151 in Chairman fees paid during 2019 but that will be earned in 2020. |
Director Stock Ownership Guidelines The Board believes that ownership of Schlumberger stock by Board members aligns their interests with the interests of the Company’sour stockholders. Accordingly, the Board has established a guideline that each non-employee Board member must, within five years of joining the Board, own at least 10,000 shares of Schlumberger common shares or restricted stock units.stock. As of December 31, 2017,2019, each of our non-employee director nominees who havehas been a Board membersmember for at least five years iswas in compliance with these stock ownership guidelines. | Schlumberger Limited20182020 Proxy Statement | | | 5965 |
Equity Compensation Plan Information The table below sets forth the following information as of December 31, 20172019 for all equity compensation plans approved and not approved by our stockholders. Plan category | | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | | (b) Weighted-average exercise price of such outstanding options, warrants and rights | (1) | | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | | | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | | (b) Weighted-average exercise price of such outstanding options, warrants and rights | (1) | | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | | Equity compensation plans approved by security holders | | | 47,210,495 | (2) | | | 79.13 | | | | 66,283,624 | (3) | | | 44,125,341 | (2) | | | 76.12 | | | | 46,629,195 | (2) | Equity compensation plans not approved by security holders(3) | | | N/A | | | | N/A | | | | N/A | | | | 2,143,535 | | | | 65.96 | | | | — | | TOTAL | | | 47,210,495 | (2) | | | 79.13 | | | | 66,283,624 | (3) | | | 46,268,876 | (2) | | | 75.65 | | | | 46,629,195 | (2) |
(1) | The weighted average price does not take into account the shares issuable upon vesting of outstanding restricted stock units,PSUs or RSUs, which have no exercise price. | | | (2) | Includes 2,420,342 shares of common stock issuable upon the exercise of outstanding stock options assumed in the 2016 acquisition of Cameron. | | | (3) | Includes 67,562194,156 shares of common stock issuable under Schlumberger’s 2004the Directors Stock and Deferral Plan for Non-Employee Directors.at December 31, 2019. | (3) | Consist solely of options that were assumed in connection with our acquisition of Cameron, none of which are held by the NEOs. |
Equity compensation plans approved by Schlumberger stockholders include the 2017 Schlumberger Omnibus Incentive Plan; 2013 Schlumberger Omnibus IncentiveDirectors Stock Plan; the 20102017 Schlumberger Omnibus Stock Incentive Plan;Plan, as amended and restated; the French Sub2013 Schlumberger Omnibus Stock Incentive Plan, underas amended and restated; the 2010 Schlumberger Omnibus Stock Incentive Plan, as amended;amended and restated; the French Sub Plan under the 2010, 2013 and 2017 Schlumberger Omnibus Stock Incentive Plans, as amended and restated; the Schlumberger Discounted Stock Purchase Plan, as amended; the Schlumberger 2004 Stock and Deferral Plan for Non-Employee Directors; the Schlumberger 2008 Stock Incentive Plan, as amended;amended and restated; the Schlumberger 2005 Stock Incentive Plan, as amended;amended and restated; and the Schlumberger 2001 Stock Option Plan, as amended;amended and the Schlumberger 1998 Stock Option Plan, as amended.restated. | Schlumberger Limited20182020 Proxy Statement | | | 6066 |
ITEM 3. | Approval of Financial Statements and Dividends |
Following completion of the audit procedures performed by PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm, we are submitting the following for approval by our shareholders,stockholders, as required by Curaçao law: | • | our consolidated balance sheet as at December 31, 2017; | | | 2019; | | • | our consolidated statement of income for the year ended December December��31, 2017;2019; and | | | | | • | the declarations of dividends by our Board in 2017.2019. |
These items are included in our 20172019 Annual Report to Stockholders, which is provided concurrently with this proxy statement. Stockholders should refer to these items in considering this agenda item. Required Vote A majority of the votes cast is required for the approval of the financial results as set forth in the financial statements and of the declaration of dividends by the Board as reflected in our 20172019 Annual Report to Stockholders. Brokers have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker may vote on this proposal in its discretion. The Board of Directors Recommends a VoteFORItem 3. |
| Schlumberger Limited20182020 Proxy Statement | | | 6167 |
ITEM 4. | Ratification of Appointment of Independent Auditors for 20182020 |
PricewaterhouseCoopers LLP has been selected by the Audit Committee as the independent registered public accounting firm to audit the annual financial statements of the Company for the year ending December 31, 2018.2020. Although ratification is not required by our bylaws or otherwise, as a matter of good corporate governance, we are asking our stockholders to approveratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm.auditor for the year ending December 31, 2020. If the selectionappointment is not approved,ratified, the Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm. A representative of PricewaterhouseCoopers LLP is expected to attend our 20182020 annual general meeting of stockholders, and he will be available to respond to appropriate questions. Fees Paid to PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP has billed the Company and its subsidiaries the fees set forth in the table below for: | • | the audit of the Company’s 20172019 and 20162018 annual financial statements and reviews of the Company’s quarterly financial statements and other audit services, and | | | | | • | the other services described below that were billed in 20172019 and 2016.2018. |
| | Year Ended December 31, | | | Year Ended December 31, | (in thousands) | | | 2017 | | | | 2016 | | | 2019 | | 2018 | | Audit Fees(1) | | $ | 13,913 | | | $ | 14,253 | | | $ | 14,376 | | | $ | 13,982 | | Audit-Related Fees(2) | | | 1,153 | | | | 470 | | | | 469 | | | | 430 | | Tax Fees(3) | | | 3,091 | | | | 2,417 | | | | 2,701 | | | | 3,613 | | All Other Fees(4) | | | 77 | | | | 1,099 | | | | 51 | | | | 81 | | TOTAL | | $ | 18,234 | | | $ | 18,239 | | | $ | 17,597 | | | $ | 18,106 | |
(1) | Includes fees for statutory audits. | | | (2) | Consists of fees for employee benefit plan audits and other audit-related items. | | | (3) | Consists of fees for tax compliance, tax planning and other permitted tax services. | | | (4) | Consists of fees for permitted advisory services. |
The Audit Committee considers the provision of services by PricewaterhouseCoopers LLP not related to the audit of the Company’s annual financial statements and reviews of the Company’s interim financial statements when evaluating PricewaterhouseCoopers LLP’s independence. Audit Committee’s Pre-Approval Policy and Procedures The Audit Committee pre-approves all services provided to the Company and its subsidiaries by Schlumberger’s independent registered public accounting firm. The Audit Committee has adopted a schedule for annual approval of the audit and related audit plan, as well as approval of other anticipated audit-related services; anticipated tax compliance, tax planning and tax advisory services; and other anticipated services. In addition, the Audit Committee (or an authorized committee member acting under delegated authority of the committee) will consider any proposed services not approved as part of this annual process. During 20172019 and 2016,2018, all audit and non-audit services were pre-approved by the Audit Committee. Required Vote A majority of the votes cast is required to approve this Item 4. Brokers have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will vote on this proposal in its discretion. The Board of Directors Recommends a VoteFORItem 4. |
| Schlumberger Limited20182020 Proxy Statement | | | 6268 |
Audit Committee Report During 2017,2019, the Audit Committee periodically reviewed and discussed the Company’s consolidated financial statements with Company management and PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm, including matters raised by the independent registered public accounting firm pursuant to applicable Public Company Accounting Oversight Board (“PCAOB”) requirements. The Audit Committee also discussed with Company management and PricewaterhouseCoopers LLP the evaluation of the Company’s reporting and internal controls undertaken in connection with certifications made by the Company’s Chief Executive Officer and Chief Financial Officer in the Company’s periodic SEC filings pursuant to the Sarbanes-Oxley Act of 2002. The Audit Committee also reviewed and discussed such other matters as it deemed appropriate, including the Company’s compliance with Section 404 and other relevant provisions of the Sarbanes-Oxley Act of 2002 and rules adopted or proposed to be adopted by the SEC and the NYSE. The Audit Committee also reviewed with PricewaterhouseCoopers LLP the matters required to be discussed by the independent registered public accounting firm with the Audit Committee under applicable rules adopted byrequirements of the PCAOB.PCAOB and the SEC. PricewaterhouseCoopers LLP provided the Audit Committee with the required PCAOB disclosures and letters concerning its independence with respect to the Company, and the Committee discussed PricewaterhouseCoopers LLP’s independence with them. Based on the foregoing reviews and discussions, the Audit Committee recommended that the Board include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017,2019, as filed with the SEC on January 24, 2018. SUBMITTED BY THE AUDIT COMMITTEE OF THE SCHLUMBERGER BOARD OF DIRECTORS22, 2020.
SUBMITTED BY THE AUDIT COMMITTEE OF THE SCHLUMBERGER BOARD OF DIRECTORS | V. Maureen Kempston Darkes, Chair | Michael Marks | | Peter L.S. Currie, Chair | Nikolay Kudryavtsev | Tatiana A. Mitrova | Indra K. Nooyi | | | Helge Lund | | Jeff W. Sheets |
| Schlumberger Limited20182020 Proxy Statement | | | 6369 |
ITEM 5.
| Approval of Amended and Restated French Sub Plan for Purposes of Qualification under French Law |
Proposal
As required under applicable French law, we are asking our stockholders to approve our amended and restated 2018 French Sub Plan (the “French Sub Plan”), which is a single sub plan established under the Schlumberger 2010 Omnibus Stock Incentive Plan (the “2010 Plan”), the Schlumberger 2013 Omnibus Stock Incentive Plan (the “2013 Plan”) and the Schlumberger 2017 Omnibus Stock Incentive Plan (the “2017 Plan” and, together with the 2010 Plan and the 2013 Plan, the “Omnibus Plans”). Stockholders approved the 2010 Plan at our 2010 annual general meeting; approved the 2013 Plan at our 2013 annual general meeting; and approved the 2017 Plan at our 2017 annual general meeting.
We are seeking stockholder approval of the French Sub Plan to qualify under the so-called “2018 Finance Law” in France, so that restricted stock units and performance stock units granted following stockholder approval under the French Sub Plan to individuals who are subject to taxation under French law may qualify as “Free Share Grants,” which are subject to more favorable tax treatment.
Any such Free Share Grants will be satisfied from the existing share reserve of the applicable Omnibus Plan and will have terms consistent with the existing terms of the applicable Omnibus Plan.
This Item does not propose to make any changes to the Omnibus Plans themselves, nor to increase the number of shares or awards authorized for issuance under the Omnibus Plans.
Effect of the Proposal
We and our subsidiaries employ individuals who are subject to taxation under French law. Due to the recent enactment on December 30, 2017 of the 2018 Finance Law, certain equity compensation awards granted under the French Sub Plan will qualify as Free Share Grants, if so designated by our Compensation Committee, assuming that stockholders approve the French Sub Plan.
Such stockholder approval would allow these grants to qualify as Free Share Grants, which would result in lower taxation on the vesting of the grant by the individual and lower withholding taxes on the Company.
Consequently, we are asking our stockholders to approve the French Sub Plan for purposes of qualification in France under the 2018 Finance Law, so that the equity grants that we make under the French Sub Plan to individuals who are subject to taxation under French law may qualify as Free Share Grants.
This proposal will not in any manner alter the Omnibus Plans nor will it increase the number of shares of our common stock reserved for grant pursuant to awards issued under the Omnibus Plans.
In the event that the French Sub Plan is not approved, we may still grant equity awards to employees who are subject to taxation under French law under the terms of the French Sub Plan as adopted by the Board effective on January 1, 2016 and approved by stockholders on April 6, 2016; however, in that event, such grants would not benefit from the provisions of the 2018 Finance Law relating to Free Share Grants.
Summary of the Omnibus Plans
Under the terms of each of the Omnibus Plans, the Compensation Committee may, subject to applicable law, grant awards to persons outside the United States under such terms and conditions as may, in its judgment, be necessary or advisable to comply with the laws of the applicable foreign jurisdictions and, to that end, may establish sub-plans. Pursuant to these provisions, the Compensation Committee in 2018 adopted an amendment and restatement of the French Sub Plan, which shall be effective as of the date that stockholders approve this Item, that is intended to address the conditions for being able to grant Free Share Grants under the 2018 Finance Law. We are submitting the French Sub Plan as so amended and restated for stockholder approval so that restricted stock units and performance stock units granted under the French Sub Plan following such stockholder approval may qualify as Free Share Grants.
This summary of the French Sub Plan is a summary of the principal features of the French Sub Plan, and does not purport to be a complete description of all of the provisions of the French Sub Plan. This summary is qualified in its entirety by the full text of the French Sub Plan, which is set forth as Appendix B to this proxy statement.
| Schlumberger Limited2018 Proxy Statement | | 64 |
Purpose of the Omnibus Plans
The purpose of the Omnibus Plans is to provide incentives to our employees in order to:
| • | retain employees with a high degree of training, experience and ability; | | | | | • | attract new employees whose services are considered particularly valuable; | | | | | • | encourage the sense of proprietorship of such persons; and | | | | | • | promote the active interest of such persons in our growth and financial success. |
The Board of Directors recommends that our stockholders approve the French Sub Plan to take advantage of the favorable tax provisions for both the Company and the recipient of restricted stock units and performance stock units when issued under an incentive plan qualified under the 2018 Finance Law to employees in France.
Types of Awards
The Compensation Committee established the French Sub Plan for the purpose of granting awards that qualify for the specific treatment applicable to French qualified stock options, French qualified restricted share units and French qualified performance share units awards to employees who are resident of France and who are or may become subject to French tax. A maximum of 29,442,207 shares remain available to be the subject of future awards of restricted stock units or performance stock units under the Omnibus Plans, all of which could be granted under the French Sub Plan. The number of available shares shall be adjusted in connection with stock splits, stock dividends, reorganizations and similar events as and to the extent permitted under the Omnibus Plans. The terms, conditions and limitations applicable to awards of restricted stock units and performance stock units will be determined by our Compensation Committee. Restricted stock units intended to qualify as Free Share Grants will be subject to a restriction period under which such shares will not be delivered earlier than two years from the grant date, except that the Compensation Committee may provide for earlier delivery upon termination of employment by reason of death. One year performance stock units intended to qualify as Free Share Grants will be subject to a restriction period under which such shares will not be delivered earlier than one year from the date of grant and will be subject to a minimum one year holding period. Two and three-year performance stock units intended to qualify as Free Share Grants will be subject to a restriction period under which such shares will not be delivered earlier than two and three years, respectively from the grant date. Except, however, that the Compensation Committee may provide for earlier vesting upon termination of employment by reason of death. Restricted stock units and performance stock units may not be transferred to any third party except in the event of the eligible employee’s death.
Term
Awards may be granted (i) under the 2010 Plan on or before April 6, 2020, (ii) under the 2013 Plan on or before April 9, 2023 and (iii) under the 2017 Plan on or before April 5, 2027. Awards may be granted under the French Sub Plan until the termination of the applicable Omnibus Plan.
Eligible Participants: | All employees of Schlumberger and our subsidiaries are eligible under the Omnibus Plans. Employees of Schlumberger or its subsidiaries in France and directors of a Schlumberger subsidiary with a management function in France are eligible under the French Sub Plan.As of January 31, 2018, approximately 1,765 employees would qualify for grants under the French Sub Plan. | Ineligible Participants: | Directors who are not also employees and any person who owns, directly or indirectly, stock representing more than 10% of the total combined voting power or value of all classes of our stock. | Shares Available for Issuance under the Omnibus Plans: | As of January 31, 2018, a maximum of 29,442,207 shares remain available to be the subject of future awards of restricted stock units or performance stock units under the Omnibus Plans. The amendments to the French Sub Plan will not increase the number of shares or awards available under the Omnibus Plans. The number of shares available for issuance under each Omnibus Plan is subject to adjustment to reflect stock splits, reorganizations and similar events.
The provisions of the Omnibus Plans permit the grant of stock and stock-based awards, including stock options, incentive stock options and stock appreciation rights. The French Sub Plan provides for the grant of stock options, restricted stock units and performance stock units. The awards that will be made in the future under the French Sub Plan are not currently determinable, and such awards are within the discretion of the Compensation Committee.
|
| Schlumberger Limited2018 Proxy Statement | | 65 |
Material Tax Consequences
If the French Sub Plan is approved by our stockholders and restricted stock units and performance stock units otherwise qualify under the 2018 Finance Law, the gain realized upon vesting of awards (the “vesting gain”) with respect to grants of Free Share Grants to French-resident employees subject to the French social security regime should be subject to progressive income tax rates that employees pay upon sale of shares received under such Free Share Grants.
However, under the 2018 Finance Law, the amount of such vesting gain not exceeding € 300,000 per annum shall be reduced by 50% without any minimal holding period requirement. In contrast, under the current regime applicable to Free Share Grants attributed pursuant to stockholders’ resolution approved between August 8, 2015 and December 31, 2017 (the “Macron” regime), the 50% reduction is subject to a holding period requirement of the shares received under such Free Share Grants of two years (such 50% rate can be increased to 65% if the shares are held for eight years).
Under the 2018 Finance Law, the portion of the vesting gain exceeding € 300,000 per annum will be subject to progressive income tax rates that employees pay upon sale of shares received under such Free Share Grants without any rebate, whereas under the terms of the French Sub Plan which was amended by the Company as of January 1, 2016 and approved by stockholders on April 6, 2016, the portion of the vesting gain exceeding € 300,000 is eligible for a 50% reduction subject to a holding period requirement of the shares received under such Free Share Grants of two years (such 50% rate can be increased to 65% if the shares are held for eight years).
Notwithstanding the 2018 Finance Law, the vesting period of the Free Share Grants cannot be less than one year and the shares received under the Free Share Grants cannot be sold before the second anniversary of the date of grant when the vesting period is less than two years.
In addition, under the 2018 Finance Law, the employing company will be subject to a 20% social security tax upon vesting of qualifying RSUs, in contrast to the current 30% social security tax that is imposed to Free Share Grants attributed pursuant to stockholders’ authorization approved between December 31, 2016 and December 31, 2017 (the rate being 20% for Free Share Grants attributed pursuant to stockholders’ authorization approved between August 8, 2015 and December 30, 2016).
The 2018 Finance Law has increased the French social security taxes applicable on the vesting gain resulting from Free Share Grants to French-resident employees subject to the French social security regime to 17.2% for the portion of the annual gain not exceeding € 300,000 and 9.2% for the portion of the vesting gain exceeding such threshold. In addition to such social security taxes, the portion of the vesting gain exceeding € 300,000 is also subject to an employee social contribution of 10% upon sale of shares received under such Free Share Grants.
The tax consequences of participating in the French Sub Plan may vary with respect to individual situations and it should be noted that income tax laws, regulations and interpretations thereof change frequently. Participants should rely upon their own tax advisors for advice concerning the specific tax consequences applicable to them, including the applicability and effect of state, local and foreign tax laws.
Our Board believes that it is in the best interests of the Company and its stockholders to enable the Company to grant Free Share Grants under the French Sub Plan that would qualify for the income and social security tax and social treatment authorized under the 2018 Finance Law. If stockholders do not approve the French Sub Plan, the Company expects to continue to rely on its existing qualified French Sub Plan to grant restricted stock units to French employees, or may make alternative compensation arrangements.
In addition, nothing in this proposal precludes us from making any payment or granting equity awards that do not qualify for such tax treatment, and submission of this proposal to the Company’s stockholders should not be viewed as a guarantee that all grants to individuals subject to taxation under French law will qualify as Free Share Grants under the 2018 Finance Law.
Required Vote
A majority of the votes cast is required to approve this Item 5.Brokers do not have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal.
The Board of Directors Recommends a VoteFORItem 5. |
| Schlumberger Limited2018 Proxy Statement | | 66 |
Stock Ownership Information Security Ownership by Certain Beneficial Owners The following table sets forth information as of December 31, 20172019 (except as otherwise noted) with respect to persons known by the Companyus to be the beneficial owners of more than 5% of the Company’sour common stock, based solely on the information reported by such persons in their Schedule 13D and 13G filings with the SEC. For each entity included in the table below, percentage ownership is calculated by dividing the number of shares reported as beneficially owned by such entity by the 1,386,052,1901,387,980,608 shares of our common stock outstanding on January 31, 2018.2020. BENEFICIAL OWNERSHIP OF COMMON STOCK
| | Beneficial Ownership of Common Stock | Name and Address | | | Number of Shares | | | | Percentage of Class | | BlackRock, Inc.(1) | | | 89,663,112 | | | | 6.5% | | 55 East 52nd Street | | | | | | | | | New York, NY 10055 | | | | | | | | | State Street Corporation(2) | | | 70,814,575 | | | | 5.1% | | One Lincoln Street | | | | | | | | | Boston, MA 02111 | | | | | | | | | The Vanguard Group(3) | | | 100,652,649 | | | | 7.3% | | 100 Vanguard Blvd. | | | | | | | | | Malvern, PA 19355 | | | | | | | | |
| Beneficial Ownership of Common Stock | Name and Address | Number of Shares | | Percentage of Class | The Vanguard Group(1) | 114,027,924 | | 8.2% | 100 Vanguard Blvd. Malvern, PA 19355 | | | | BlackRock, Inc.(2) | 91,439,070 | | 6.6% | 55 East 52nd Street New York, NY 10055 | | | |
(1) | Based solely on a Statement on Schedule 13G/A filed on February 8, 2017.12, 2020. Such filing indicates that The Vanguard Group has sole voting power with respect to 2,066,222 shares, shared voting power with respect to 379,773 shares, sole investment power with respect to 111,712,066 shares and shared investment power with respect to 2,315,858 shares. | (2) | Based solely on a Statement on Schedule 13G/A filed on February 10, 2020. Such filing indicates that BlackRock, Inc. has sole voting power with respect to 77,482,84975,909,570 shares and sole investment power with respect to 89,663,112 shares. | | | (2) | Based solely on a Statement on Schedule 13G filed on February 9, 2017. Such filing indicates that State Street Corporation has shared voting and investment power with respect to 70,814,575 shares. | | | (3) | Based solely on a Statement on Schedule 13G/A filed on February 8, 2017. Such filing indicates that Vanguard has sole voting power with respect to 1,940,954 shares, shared voting power with respect to 375,527 shares, sole investment power with respect to 98,381,213 shares and shared investment power with respect to 2,271,43691,439,070 shares. |
Security Ownership by Management The following table sets forth information known to Schlumbergerus with respect to beneficial ownership of the Company’sour common stock as of January 31, 20182020 by (i) each director and director nominee, (ii) each of the named executive officers and (iii) all directors and executive officers as a group. Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to securities. Except as indicated in the footnotes to the table below and subject to applicable community property laws, to Schlumberger’sour knowledge the persons named in the table below have sole voting and investment power with respect to the securities listed. None of the shares are subject to any pledge. The number of shares beneficially owned by each person or group as of January 31, 20182020 includes shares of common stock that such person or group has the right to acquire within 60 days of January 31, 2018,2020, including upon the exercise of options to purchase common stock or the vesting of restricted stock unitsRSUs or PSUs. References to options in the footnotes to the table below include only options outstanding as of January 31, 20182020 that are currently exercisable or that become exercisable within 60 days of January 31, 2018, and references2020. References to any restricted stock, restricted stock unitsRSUs or PSUs (collectively, “restricted stock”) in the footnotes to the table below include only restricted stock, RSUs and PSUs outstanding as of January 31, 20182020 and that are currently vested or that will vest within 60 days of January 31, 2018.2020. The table below excludes the number of shares that have been earned under our 2017 ROCE PSUs but not yet finally determined, as described in “Compensation Discussion and Analysis—Payouts Under PSU Awards—2020 Payouts Under 2017 ROCE PSUs,” on page 41 above. For each individual and group included in the table below, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the 1,394,023,4501,387,980,608 shares of common stock outstanding on January 31, 2018,2020, plus the number of shares of common stock that such person or group had the right to acquire on or within 60 days afterof January 31, 2018. | Schlumberger Limited2018 Proxy Statement | | 67 |
2020. As of January 31, 2018,2020, no director, director nominee or named executive officer owned more than 1% of the outstanding shares of Schlumberger’s common stock. All directors and executive officers as a group owned less than 1% of the outstanding shares of our common stock as of January 31, 2018.2020. | Schlumberger Limited2020 Proxy Statement | | 70 |
Name | | Shares | | Khaled Al Mogharbel | | | 418,595 | (1) | Simon Ayat | | | 926,827 | (1) | Ashok Belani | | | 660,865941,762 | (2) | Peter L.S. Currie | | | 41,92549,148 | (3) | V. Maureen Kempston DarkesPatrick de La Chevardière | | | 12,0002,269 | | Hinda Gharbi | | | 268,453 | (4) | Miguel M. Galuccio | | | 2,250 | | Alexander Juden | | | 368,03711,469 | (3) | Paal Kibsgaard | | | 1,321,6002,179,268 | (4)(5) | Nikolay Kudryavtsev | | | 10,000 | | Helge Lund | | | 6,925 | (5) | Olivier Le Peuch | | | 243,866346,812 | (6) | Michael E. MarksTatiana A. Mitrova | | | 57,2505,953 | (7) | Indra K. Nooyi | | | 18,55025,773 | (7) | Lubna S. Olayan | | | 22,25029,473 | | Mark G. Papa | | | 17,890 | | Leo Rafael Reif | | | 24,25031,473 | | Tore I. SandvoldPatrick Schorn | | | 1,500483,904 | (8) | Henri Seydoux | | | 20,25027,473 | | Jeff W. Sheets | | | 2,269 | | ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (33(32 PERSONS) | | | 6,738,9268,023,512 | (8)(9) |
(1) | Includes options to purchase 788,000300,200 shares. | | | (2) | Includes options to purchase 581,800673,600 shares. | | | (3) | Includes options to purchase 341,800 shares. | | | (4) | Includes options to purchase 1,216,600 shares. | | | (5) | Consists of shares held by a company controlled by Mr. Lund. | | | (6) | Includes options to purchase 197,600 shares. | | | (7) | Includes 39,250 shares held by limited liability companies controlled by Mr. Marks. Also includes 18,00031,550 shares held by a family trust of which Mr. MarksCurrie is a co-trusteetrustee. | (4) | Includes options to purchase 121,200 shares and co-beneficiary. Excludes 2,000218 shares the receiptbeneficially owned by Ms. Gharbi’s spouse. | (5) | Includes options to purchase 1,523,800 shares. | (6) | Includes options to purchase 193,200 shares. | (7) | Includes 18,550 shares held by a grantor retained annuity trust of which Mr. Marks has deferred under Schlumberger’s 2004 StockMs. Nooyi is the trustee and Deferral Plan for Non-Employee Directors. | | sole annuitant. | (8) | Includes options to purchase 5,616,500372,200 shares. | (9) | Includes options to purchase 5,390,690 shares. |
Delinquent Section 16(a) Beneficial Ownership Reporting ComplianceReports Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires the Company’sour executive officers and directors, among others, to file an initial report of ownership of Schlumberger common stock on Form 3 and reports of changes in ownership on Form 4 or Form 5. Persons subject to Section 16 are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms that they file. The Company believes, based solely on a review of the copies of such forms in its possession and on written representations from reporting persons, that with respect to the fiscal year ended December 31, 2017, all of its executive officers and directors filed on a timely basis the reportstwo transactions required to be filed under Section 16(a) were not timely filed during the fiscal year ended December 31, 2019 or prior fiscal years. Two Form 4s required to be filed by Mr. Le Peuch relating to the vesting of the Exchange Act.RSUs were not timely filed, but were filed on January 22, 2020. | Schlumberger Limited20182020 Proxy Statement | | | 6871 |
Other Information Stockholder Proposals for our 20192021 Annual General Meeting In order for a stockholder proposal to be considered for inclusion in the proxy statement for the 20192021 annual general meeting of stockholders pursuant to Exchange Act Rule 14a-8, or for director nominations to be included pursuant to the Company’s proxy access bylaw provisions, such proposals or notice of nominations must be received by the Secretary of the Company, 5599 San Felipe, 17thFloor, Houston, Texas 77056, no later than November 2, 2018,October 24, 2020, and, in the case of a proxy access nomination, no earlier than October 3, 2018.September 24, 2020. For stockholder proposals to be introduced for consideration at our 20192021 annual general meeting of stockholders other than pursuant to Rule 14a-8 and for stockholder candidates to be nominated for election as directors other than pursuant to our proxy access bylaw provisions, notice generally (unless the date of our 20192021 annual general meeting is moved as stated in our bylaws) must be delivered to the Secretary of the Company at our executive offices in Houston, Texas, not later than 120 days nor earlier than 150 days before the first anniversary of the date of the 20182020 annual general meeting of stockholders. Accordingly, any such notice must be received no earlier than November 5, 2018,2, 2020, and no later than December 5, 2018,2, 2020, and must otherwise satisfy the requirements of our bylaws. Under the rules of the Exchange Act, we may use discretionary authority to vote with respect to any proposal not included in our proxy materials that is presented by a stockholder in person at the 20192021 annual general meeting of stockholders if the stockholder making the proposal has not given notice to us by December 5, 2018.2, 2020. Other Matters Stockholders may obtain a copy of Schlumberger’sour most recent Form 10-K filed with the SEC, including financial statements and schedules, without charge by writing to the Company’sour Investor Relations Department, 5599 San Felipe, 17th Floor, Houston, Texas 77056, or by calling (713) 375-3535. The Company will pay the cost of furnishing proxy material to all stockholders and of soliciting proxies by mail and telephone. We have retained D. F. King & Co., Inc. has been retained by the Company to assist in the solicitation of proxies for a fee estimated at $15,500 plus reasonable expenses. Directors, officers and employees of the Company may also solicit proxies for no additional compensation. The CompanyWe will reimburse brokerage firms, fiduciaries and custodians for their reasonable expenses in forwarding the solicitation material to beneficial owners. The Board knows of no other matter to be presented at the meeting. If any additional matter is properly presented at the meeting, we intend to vote the enclosed proxy in accordance with the discretion of the persons named in the proxy. Please sign, date, and return the accompanying proxy in the enclosed envelope at your earliest convenience. By order of the Board of Directors,
Alexander C. Juden Secretary
Houston, Texas March 2, 2018February 21, 2020
| Schlumberger Limited20182020 Proxy Statement | | | 6972 |
Appendix A Reconciliation of Non-GAAP Financial MeasureMeasures In addition to financial results determined in accordance with US generally accepted accounting principles (“GAAP”), this 2018Our 2020 proxy statement also includes non-GAAP financial measures (as defined under the SEC’s Regulation G).measures. Net income, excluding charges and credits, and earnings per share, excluding charges and credits, free cash flow and cash flow generation are non-GAAP financial measures. These measures are used by management in determining certain incentive compensation.
The following is a reconciliation of these non-GAAP financial measures to the comparable GAAP measures. Management believes that the exclusion of charges and credits from thesecertain non-GAAP financial measures enables it to evaluate more effectively Schlumberger’s operations period-over-period and to identify operating trends that could otherwise be masked by the excluded items. These measures are also used by management in determining certain incentive compensation. The foregoing non-GAAP financial measures should be considered in addition to, not as a substitute for, or superior to, other measures of financial performance prepared in accordance with GAAP. | | (Stated in millions, except per share amounts) | | | January 1, 2017 – December 31, 2017 | | | | | | | | | Noncont. | | | | | | Diluted | | | | Pretax | | | Tax | | | Interest | | | Net | | | EPS* | | Schlumberger net loss (GAAP basis) | | $ | (1,183 | ) | | $ | 330 | | | $ | (8 | ) | | $ | (1,505 | ) | | $ | (1.08 | ) | Impairments & other: | | | | | | | | | | | | | | | | | | | | | WesternGeco seismic restructuring | | | 1,114 | | | | 20 | | | | — | | | | 1,094 | | | | 0.78 | | Venezuela investment write-down(1) | | | 938 | | | | — | | | | — | | | | 938 | | | | 0.67 | | Promissory note fair value adjustment and other | | | 510 | | | | — | | | | 12 | | | | 498 | | | | 0.36 | | Workforce reductions(2) | | | 247 | | | | 13 | | | | — | | | | 234 | | | | 0.17 | | Multiclient seismic data impairment | | | 246 | | | | 81 | | | | — | | | | 165 | | | | 0.12 | | Other restructuring charges | | | 156 | | | | 10 | | | | 22 | | | | 124 | | | | 0.09 | | Merger and integration(3) | | | 308 | | | | 70 | | | | — | | | | 238 | | | | 0.17 | | Provision for loss on long-term construction project(4) | | | 245 | | | | 22 | | | | — | | | | 223 | | | | 0.16 | | U.S. tax reform charge | | | — | | | | (76 | ) | | | — | | | | 76 | | | | 0.05 | | Schlumberger net income, excluding charges and credits | | $ | 2,581 | | | $ | 470 | | | $ | 26 | | | $ | 2,085 | | | $ | 1.50 | |
| | (Stated in millions, except per share amounts) | | | | Twelve Months 2019 | | | | | Pretax | | | | Tax | | | | Noncont. Interests | | | | Net | | | | Diluted EPS* | | Schlumberger net income (loss) (GAAP basis) | | $ | (10,418 | ) | | $ | (311 | ) | | $ | 30 | | | $ | (10,137 | ) | | $ | (7.32 | ) | Fourth Quarter | | | | | | | | | | | | | | | | | | | | | North America restructuring | | | 225 | | | | 51 | | | | — | | | | 174 | | | | 0.13 | | Other restructuring | | | 104 | | | | (33 | ) | | | — | | | | 137 | | | | 0.10 | | Workforce reductions | | | 68 | | | | 8 | | | | — | | | | 60 | | | | 0.04 | | Pension settlement accounting | | | 37 | | | | 8 | | | | — | | | | 29 | | | | 0.02 | | Repurchase of bonds | | | 22 | | | | 5 | | | | — | | | | 17 | | | | 0.01 | | Gain on formation of Sensia | | | (247 | ) | | | (42 | ) | | | — | | | | (205 | ) | | | (0.15 | ) | Third Quarter | | | | | | | | | | | | | | | | | | | | | Goodwill impairment | | | 8,828 | | | | 43 | | | | — | | | | 8,785 | | | | 6.34 | | North America pressure pumping | | | 1,575 | | | | 344 | | | | — | | | | 1,231 | | | | 0.89 | | Intangible assets impairment | | | 1,085 | | | | 248 | | | | — | | | | 837 | | | | 0.60 | | Other North America-related | | | 310 | | | | 53 | | | | — | | | | 257 | | | | 0.19 | | Asset Performance Solutions | | | 294 | | | | — | | | | — | | | | 294 | | | | 0.21 | | Equity-method investments | | | 231 | | | | 12 | | | | — | | | | 219 | | | | 0.16 | | Argentina | | | 127 | | | | — | | | | — | | | | 127 | | | | 0.09 | | Other | | | 242 | | | | 13 | | | | — | | | | 229 | | | | 0.17 | | Schlumberger net income, excluding charges and credits | | $ | 2,483 | | | $ | 399 | | | $ | 30 | | | $ | 2,054 | | | $ | 1.47 | |
| (1) | Given economic and political developments in Venezuela, Schlumberger determined that it was appropriate to write-down its investment in the country. As a result, Schlumberger recorded a charge of $938 million, consisting of: $469 million of accounts receivable, a $105 million other-than-temporary impairment charge relating to promissory notes, $285 million of fixed assets, and $79 million of other assets. | | (2) | Represents reductions associated with the restructuring of our geographical and product line organizations. | | (3) | Represents merger and integration charges relating to the Cameron and Weatherford transactions. | | (4) | Represents a provision for an estimated loss on a long-term surface facility construction project that is accounted for under the percentage-of-completion method. | | * | Does not add due to rounding. |
| | (Stated in millions) | | Periods Ended December 31, | | Twelve Months 2019 | | | Twelve Months 2018 | | Cash flow from operations | | $ | 5,431 | | | $ | 5,713 | | Capital expenditures | | | (1,724 | ) | | | (2,160 | ) | APS investments | | | (781 | ) | | | (981 | ) | Multiclient seismic data capitalized | | | (231 | ) | | | (100 | ) | Free cash flow | | $ | 2,695 | | | $ | 2,472 | | Net proceeds from formation of Sensia joint venture and from asset divestiture | | | 586 | | | | — | | Business acquisitions and investments, net of cash acquired plus debt assumed | | | (23 | ) | | | (292 | ) | Cash paid for severance | | | 128 | | | | 340 | | Cash flow generation | | $ | 3,386 | | | $ | 2,520 | |
Free cash flow represents cash flow from operations less capital expenditures, APS investments and multiclient seismic data costs capitalized. Management believes that free cash flow is an important liquidity measure for the Company and that it is useful to investors and management as a measure of Schlumberger’s ability to generate cash. Free cash flow does not represent the residual cash flow available for discretionary expenditures. | Schlumberger Limited20182020 Proxy Statement | | | A-1 |
Appendix B
2018 Rules of the Schlumberger
2010, 2013 and 2017 Omnibus Stock Incentive Plan for Employees in France
The Board of Directors (the “Board”) of Schlumberger Limited (the “Company”) has established the Schlumberger 2010 Omnibus Stock Incentive Plan (the “2010 Plan”), the Schlumberger 2013 Omnibus Stock Incentive Plan (the “2013 Plan”) and the Schlumberger 2017 Omnibus Stock Incentive Plan (the “2017 Plan”) (the 2010 Plan, the 2013 Plan and the 2017 Plan being hereafter referred to as the “Plans”) in order to retain employees with a high degree of training, experience and ability, to attract new employees whose services are considered particularly valuable, to encourage the sense of proprietorship of such persons and to promote the active interest of such persons in the development and financial success of the Company and its Subsidiaries. This includes the Company’s branch in France and the Company’s subsidiaries in France of which the Company holds directly or indirectly at least 10% of the share capital (the “French Subsidiary”).
Section 21 of the Plans specifically authorizes the Committee to establish sub-plans as the Committee deems appropriate or advisable to implement the Plans.
The Committee, therefore, intends with this document to establish a sub-plan of the Plans for the purpose of granting awards that qualify for the specific treatment applicable to French Qualified Stock Options, French Qualified Restricted Share Units and French Qualified Performance Share Units awards to employees who are resident of France and who are or may become subject to French tax (i.e. income tax and/or social security tax) as a result of awards granted under the Plans (the “French Grantees”) and (the “French Tax Regime”). The terms of the Plans, shall, subject to the modifications in the following rules of such Plans as set out in Appendix 1, 2, 3 & 4 hereto, constitute the Rules of the “2010, 2013 and 2017 Schlumberger Omnibus Stock Incentive Plans for Employees in France” (the “French Plan”). Unless otherwise expressly stated, the rules of the French Plan shall also automatically (i) applymutatis mutandisto any awards granted to French Grantees pursuant to any new Schlumberger Omnibus Stock Incentive Plan established by the Board of the Company in accordance with any stockholders’ resolution approving such new Schlumberger Omnibus Stock Incentive Plan and (ii) prevail over the rules of such new Schlumberger Omnibus Stock Incentive Plan in case of conflict, the Committee intending the awards granted to French Grantees to qualify for the French Tax Regime applicable at the date of such stockholders’ approval.
The adoption of this French Plan shall not confer upon the French Grantees, or any employees of the French Subsidiary, any employment rights and shall not be construed as part of the French Grantees’ employment contracts, if any. Subject to the terms of the Plans, the Committee reserves the right to amend or terminate the French Plan at any time. Such amendments would only apply to future grants and would not be retroactive.
This amendment and restatement of the French Plan is effective as of April 4, 2018 (being the date of approval of such French Plan by the Company’s stockholders)(the “Effective Date”). It applies to any awards granted to French Grantees as of the Effective Date and overrides, for such purpose, (i) the amendment and restatement of the French Plan which was effective on January 1, 2016 and has been adopted on April 6, 2016 (the “2016 French Subplan”) as well as (ii) any previous amendment and restatement of the French Plan as the case may be. For the avoidance of doubt, the 2016 French Plan will continue to apply to any awards granted to French Grantees pursuant to such 2016 French Plan prior to the Effective Date.
Appendix 1: French Terms applicable to Stock-Options
It is intended that Stock-Options granted under the French Plan shall qualify for the specific tax and social security charges treatment applicable to French Qualified Stock-Options granted under Articles L. 225-177 to L. 225-186 of the French Commercial Code, as subsequently amended, and in accordance with the relevant provisions set forth by French tax law and the French tax administration. The terms of the French Plan shall be interpreted accordingly and in accordance with the relevant provisions set forth by French tax and social security laws, and relevant Guidelines published by French tax and social security administrations and subject to the fulfillment of legal, tax and reporting obligations.
Capitalized terms not otherwise defined herein shall have the same meanings as set forth in the Plans. The terms set out below will have the following meanings:
| Schlumberger Limited2018 Proxy Statement | | B-1 |
| (a) | Option. The term “Option” shall have the following meaning: |
| (1) | Purchase stock options that are rights to acquire shares of Common Shares of the Company (“Shares”) repurchased by the Company prior to the vesting of the Options; or |
| (2) | Subscription stock options that are rights to subscribe for newly issued Shares. |
| (b) | Closed Period. The term “Closed Period” means specific periods as set forth by Article L. 225-177 of the French Commercial Code, as amended, during which French Qualified Stock-Options cannot be granted, so long as such Closed Periods are applicable to Options, as described in Section 8 below. |
| (c) | Grant Date. The term “Grant Date” shall be the date on which both (a) the French Grantee is designated, and (b) the terms and conditions of the Award including the reference of the applicable Schlumberger Omnibus Stock Incentive Plan out of which the Award is made, the number of Shares and the method for determining the Exercise Price are specified. In no event shall the Grant Date be during a Closed Period. In such a case, the Grant Date for the French Grantee would be the date described in Section 8 below. |
Options may not be granted under this Appendix 1 to an individual:
| (a) | unless he is employed by Schlumberger Limited or by a company which is a corporate subsidiary of Schlumberger Limited, as defined in Article 225-197-2 of the French “Code de Commerce” in France; or |
| (b) | unless he is a director with a management function as defined in Article 225-185 of the French “Code de Commerce” of a company which is a corporate subsidiary of Schlumberger Limited, as defined in Article 225-197-2 of the French “Code de Commerce” in France; or |
| (c) | who owns more than 10% of the share capital of Schlumberger Limited and who may not therefore be granted an option to satisfy the requirements of sub-paragraph 2 of Article 225-182 of the French “Code de Commerce” in France. |
Notwithstanding any provision in the Plans and, except in the case of death, Awards cannot be transferred to any third party. In addition, the Awards are only exercisable by the French Grantee during the lifetime of the French Grantee, to the extent applicable.
| 4. | Conditions of the Option/Exercise Price |
| (a) | Notwithstanding any provision in the Plans, the terms and conditions of the Options shall not be modified after the Grant Date, except that the Exercise Price and number of Shares subject to the Option may be modified as provided under Section 7 below, or as otherwise in keeping with French law. |
| (b) | The Options will vest and become exercisable pursuant to the terms and conditions set forth in the Plans, the French Plan and the respective Option agreement delivered to each French Grantee. |
| (c) | The method for determining the exercise price payable pursuant to Options issued under the French Plan shall be fixed by the Committee on the Grant Date, but in no event shall the Exercise Price per Share be less than the greater of: |
| (1) | With respect to purchase stock options, the higher of either 80% of the average quotation price of Shares during the 20 days of quotation immediately preceding the Grant Date or 80% of the average purchase price paid for such Shares by the Company; |
| (2) | With respect to subscription stock options, 80% of the average quotation price of Shares during the 20 days of quotation immediately preceding the Grant Date; and |
| (3) | The minimum exercise price permitted under Section 5(b) of the Plans. |
| (d) | The Shares acquired upon exercise of an Option will be recorded in an account in the name of the stockholder with a broker or in such other manner as the Company may otherwise determine in order to ensure compliance with applicable law. |
| 5. | Payment of Exercise Price and Withholding |
Notwithstanding any provisions in the Plans, upon exercise or vesting of an Award, as applicable, the full Exercise Price and any required tax and/or social security contributions to be withheld by the French Subsidiary on behalf of the French Grantee will have to be paid either in cash, by check or by wire transfer. No other method of payment is authorized under this French Plan.
Notwithstanding any provision in the Plans, adjustments to the Exercise Price and/or the number of Shares subject to an Award issued hereunder shall be made to preclude the dilution or enlargement of benefits under the Award only in the event of certain transactions by the Company listed under Article L. 225-181 of the French Commercial Code, as amended, a repurchase of Shares by the Company at a price higher than the stock quotation price on the open market, and according to the provisions of Section L. 228-99 of the French Commercial Code, as amended, as well as according to specific decrees.
| Schlumberger Limited2018 Proxy Statement | | B-2 |
In the event that a significant decrease in the value of Awards granted to French Grantees occurs or is likely to occur as a result of a reorganization as described in the Plans, the Administrator may, in its sole discretion, but shall not be required to, authorize the immediate vesting and exercise of Awards before the date on which any such reorganization becomes effective. If this occurs, the Awards may not qualify for favorable tax and social security treatment under French law.
Notwithstanding any provisions in the Plans to the contrary and since Shares are traded on a regulated market, Awards shall not be granted to French Grantees during the Closed Periods defined by Article L. 225-177 of the French Commercial Code, as amended, so long as such Closed Periods are applicable to the Awards. If the Grant Date were to occur during an applicable Closed Period, the Grant Date for French Grantees shall be the first date following the expiration of the Closed Period which would not be a prohibited Grant Date under the Plans rules, as determined by the Administrator.
| 9. | Termination of Employment/Service |
If a termination of employment is due to death, the Award shall be exercisable and vested as set forth in Section 11 below.
In the event of a termination of employment for reasons other than death, the Award shall be exercisable and vested as set forth in the applicable agreement entered into with the French Grantee.
In the event of the death of a French Grantee, all unforfeited Awards shall become immediately vested and exercisable. The French Grantee’s heirs may exercise the Options within six months following the death, but any outstanding Option which remains unexercised shall expire six months following the date of the French Grantee’s death. The six-month exercise period will apply without regard to the term of the Option.
The term of the Option will be ten years unless otherwise specified in the applicable Option Agreement. This term can be extended only in the event of the death of the French Grantee, and in no event will the term exceed ten years.
In the event of any conflict between the provisions of the present French Plan and the provisions of any of the Plans, the provisions of the French Plan shall control for any grants made thereunder to French Grantees.
Appendix 2: French Terms applicable to Restricted Share Units
It is intended that Restricted Share Units granted under the French Plan shall qualify for the specific tax and social security charges treatment applicable to French Qualified Restricted Share Units granted under Articles L.225-197-1 to L.225-197-6 of the French Commercial Code, as subsequently amended, and in accordance with the relevant provisions set forth by French tax law and the French tax administration. The terms of the French Plan shall be interpreted accordingly and in accordance with the relevant provisions set forth by French tax and social security laws, and relevant Guidelines published by French tax and social security administrations and subject to the fulfillment of legal, tax and reporting obligations. The Restricted Share Units granted under this Appendix 2 will be deemed French Qualified Restricted Share Units.
French Qualified Restricted Share Units may not be granted under this Addendum to an individual:
| (a) | unless he is employed by Schlumberger Limited or by a company which is a corporate subsidiary of Schlumberger Limited, as defined in Article 225-197-2 of the French “Code de Commerce” in France; or |
| (b) | unless he is a director with a management function as defined in Article 225-197-1 of the French “Code de Commerce” in France of a company which is a corporate subsidiary of Schlumberger Limited, as defined in Article 225-197-2 of the French “Code de Commerce” in France; or |
| (c) | who owns more than 10% of the share capital of Schlumberger Limited. |
| 2. | Vesting, Settlement and Delivery of French Qualified Restricted Share Units |
| (a) | Vesting. French Qualified Restricted Share Units shall vest as provided for in the Share Unit Agreement. The Share Unit Agreement shall provide the reference of the applicable Schlumberger Omnibus Stock Incentive Plan out of which the award is made. |
| (b) | Settlement. Payment of vested Restricted Share Units shall only be made in shares of Common Stock. |
| Schlumberger Limited2018 Proxy Statement | | B-3 |
| (c) | Delivery. Notwithstanding the vesting date of the Restricted Share Units, under no circumstances, except in case of employee’s death as provided for in section 2 (d) below, shall the delivery of the shares related to a French Qualified Restricted Share Unit occur prior to the second anniversary of the Grant Date. |
| (d) | Acceleration on Death. Upon Termination of Employment from the Company by reason of employee’s death, all French Qualified Restricted Share Units that are not vested at that time immediately will become vested in full. The Company shall issue the underlying shares to the employee’s heirs, at their request, within six months following the death of the employee. Notwithstanding the foregoing, the employee’s heirs must comply with the restriction on the sale of shares set forth in Section 4 below, to the extent and as long as applicable under French law. |
Unless provided otherwise in the Share Unit Agreement, the sale of shares issued pursuant to the conversion of the French Qualified Restricted Share Units may occur as soon as the shares are delivered to the employee provided the Closed Periods (as defined in section 4) below are respected.
Shares underlying French Qualified Restricted Share Units may not be sold during the following period (“Closed Periods”):
| (a) | within the 10 days before or after the publication of the annual accounts; |
| (b) | within a period beginning with the date at which executives of Schlumberger Limited become aware of any information which, were it to be public knowledge, could have a significant impact on the price of shares in and ending 10 trading days after the information becomes public knowledge. |
These Closed Periods will apply to grant of French Qualified Restricted Share Units as long as and to the extent such Closed Periods are applicable under French law.
| 5. | Non-transferability of French Qualified Restricted Share Units |
Except in the case of death, French Qualified Restricted Share Units may not be transferred to any third party.
| 6. | Adjustments to certain corporate events |
Adjustments to the terms and conditions of the French Qualified Restricted Share Units or underlying shares may be made only pursuant to applicable French legal and tax rules. Nevertheless, the Board or the Compensation Committee, at its discretion, may determine to make adjustments in the case of a transaction for which adjustments are not authorized under French law, in which case the Restricted Share Units may no longer qualify as French Qualified Restricted Share Units.
Appendix 3: French Terms applicable to one year Performance Share Units
It is intended that Performance Share Units granted under the French Plan shall qualify for the specific tax and social security charges treatment applicable to French Qualified Performance Share Units granted under Articles L.225-197-1 to L.225-197-6 of the French Commercial Code, as subsequently amended, and in accordance with the relevant provisions set forth by French tax law and the French tax administration. The terms of the French Plan shall be interpreted accordingly and in accordance with the relevant provisions set forth by French tax and social security laws, and relevant Guidelines published by French tax and social security administrations and subject to the fulfillment of legal, tax and reporting obligations. The Performance Share Units granted under this Appendix 3 will be deemed French Qualified Performance Share Units.
French Qualified Performance Share Units may not be granted under this Addendum to an individual:
| (a) | unless he is employed by Schlumberger Limited or by a company which is a corporate subsidiary of Schlumberger Limited; or |
| (b) | unless he is a director with a management function as defined in Article 225-197-1 of the French “Code de Commerce” in France of a company which is a corporate subsidiary of Schlumberger Limited; or |
| (c) | who owns more than 10% of the share capital of Schlumberger Limited. |
| 2. | Vesting, Settlement and Delivery of French Qualified Performance Share Units |
| (a) | Vesting. French Qualified Performance Share Units shall vest as provided for in the Share Unit Agreement. The Share Unit Agreement shall provide the reference of the applicable Schlumberger Omnibus Stock Incentive Plan out of which the award is made. |
| (b) | Settlement. Payment of vested Performance Share Units shall only be made in shares of Common Stock. |
| (c) | Delivery. Notwithstanding the vesting date of the Performance Share Units, under no circumstances, except in case of employee’s death as provided for in section 2 (d) below, shall the delivery of the shares related to a French Qualified Performance Share Unit occur prior to the first anniversary of the Grant Date. |
| Schlumberger Limited2018 Proxy Statement | | B-4 |
| (d) | Acceleration on Death. Upon Termination of Employment from the Company by reason of employee’s death, all French Qualified Performance Share Units that are not vested at that time immediately will become vested in full. The Company shall issue the underlying shares to the employee’s heirs, at their request, within six months following the death of the employee. Notwithstanding the foregoing, the employee’s heirs must comply with the restriction on the sale of shares set forth in Section 4 below, to the extent and as long as applicable under French law. However, the employee’s heirs shall not need to comply with the restriction on the sale of shares set forth in Sections 3 below. |
The sale of shares issued pursuant to the conversion of the French Qualified Performance Share Units may not occur prior to the expiration of a one-year period as calculated from the date the Performance Share Units are converted into shares or such other period as is required to comply with the minimum two-year period between the date of grant and the date of sale of the shares issued pursuant to French Qualified Performance Share Units as provided under Article L. 225-197-1 of the French Commercial Code. Notwithstanding the above, in case of employee’s death, the employee’s heirs shall not need to comply with the restriction on the sale of shares. In addition, in the event of the 2ndor 3rdcategory disability (as defined under Article L.341-4 of the French Social Security Code) of an employee, the employee shall not need to comply with the restriction on the sale of Shares.
Shares underlying French Qualified Performance Share Units may not be sold during the following period (“Closed Periods”):
| (a) | within the 10 days before or after the publication of the annual accounts; |
| (b) | within a period beginning with the date at which executives of Schlumberger Limited become aware of any information which, were it to be public knowledge, could have a significant impact on the price of shares in and ending 10 trading days after the information becomes public knowledge. |
| (2) | These Closed Periods will apply to grant of French Qualified Performance Share Units as long as and to the extent such Closed Periods are applicable under French law. |
| 5. | Non-transferability of French Qualified Performance Share Units |
Except in the case of death, French Qualified Performance Share Units may not be transferred to any third party.
The shares issued pursuant to the French Qualified Performance Share Units shall be recorded in an account in the name of the employee with the Company or in such other manner as the Company may otherwise determine in order to ensure compliance with the sale restrictions set forth above in section 3.
| 7. | Adjustments to certain corporate events |
Adjustments to the terms and conditions of the French Qualified Performance Share Units or underlying shares may be made only pursuant to applicable French legal and tax rules. Nevertheless, the Board or the Compensation Committee, at its discretion, may determine to make adjustments in the case of a transaction for which adjustments are not authorized under French law, in which case the Performance Share Units may no longer qualify as French Qualified Performance Share Units.
Appendix 4: French Terms applicable to two and three-year Performance Share Units
It is intended that Performance Share Units granted under the French Plan shall qualify for the specific tax and social security charges treatment applicable to French Qualified Performance Share Units granted under Articles L.225-197-1 to L.225-197-6 of the French Commercial Code, as subsequently amended, and in accordance with the relevant provisions set forth by French tax law and the French tax administration. The terms of the French Plan shall be interpreted accordingly and in accordance with the relevant provisions set forth by French tax and social security laws, and relevant Guidelines published by French tax and social security administrations and subject to the fulfillment of legal, tax and reporting obligations. The Performance Share Units granted under this Appendix 4 will be deemed French Qualified Performance Share Units.
French Qualified Performance Share Units may not be granted under this Addendum to an individual:
| (a) | unless he is employed by Schlumberger Limited or by a company which is a corporate subsidiary of Schlumberger Limited; or |
| (b) | unless he is a director with a management function as defined in Article 225-197-1 of the French “Code de Commerce” in France of a company which is a corporate subsidiary of Schlumberger Limited; or |
| (c) | who owns more than 10% of the share capital of Schlumberger Limited. |
| Schlumberger Limited2018 Proxy Statement | | B-5 |
| 2. | Vesting, Settlement and Delivery of French Qualified Performance Share Units |
| (a) | Vesting. French Qualified Performance Share Units shall vest as provided for in the Share Unit Agreement. The Share Unit Agreement shall provide the reference of the applicable Schlumberger Omnibus Stock Incentive Plan out of which the award is made. |
| (b) | Settlement. Payment of vested Performance Share Units shall only be made in shares of Common Stock. |
| (c) | Delivery. Notwithstanding the vesting date of the Performance Share Units, under no circumstances, except in case of employee’s death as provided for in section 2 (d) below, shall the delivery of the shares related to a French Qualified Performance Share Unit occur prior to the second anniversary of the Grant Date. |
| (d) | Acceleration on Death. Upon Termination of Employment from the Company by reason of employee’s death, all French Qualified Performance Share Units that are not vested at that time immediately will become vested in full. The Company shall issue the underlying shares to the employee’s heirs, at their request, within six months following the death of the employee. Notwithstanding the foregoing, the employee’s heirs must comply with the restriction on the sale of shares set forth in Section 4 below, to the extent and as long as applicable under French law. |
Unless provided otherwise in the Share Unit Agreement, the sale of shares issued pursuant to the conversion of the French Qualified Performance Share Units may occur as soon as the shares are delivered to the employee provided the Closed Periods (as defined in section 4 below) are respected.
Shares underlying French Qualified Performance Share Units may not be sold during the following period (“Closed Periods”):
| (a) | within the 10 days before or after the publication of the annual accounts; |
| (b) | within a period beginning with the date at which executives of Schlumberger Limited become aware of any information which, were it to be public knowledge, could have a significant impact on the price of shares in and ending 10 trading days after the information becomes public knowledge. |
These Closed Periods will apply to grant of French Qualified Performance Share Units as long as and to the extent such Closed Periods are applicable under French law.
| 5. | Non-transferability of French Qualified Performance Share Units |
Except in the case of death, French Qualified Performance Share Units may not be transferred to any third party.
| 6. | Adjustments to certain corporate events |
Adjustments to the terms and conditions of the French Qualified Performance Share Units or underlying shares may be made only pursuant to applicable French legal and tax rules. Nevertheless, the Board or the Compensation Committee, at its discretion, may determine to make adjustments in the case of a transaction for which adjustments are not authorized under French law, in which case the Performance Share Units may no longer qualify as French Qualified Performance Share Units.
| Schlumberger Limited2018 Proxy Statement | | B-6 |
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