UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES
EXCHANGE ACT OF 1934
(Amendment No. )
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SCHLUMBERGER N.V. (SCHLUMBERGER LIMITED)
(Name of Registrant as Specified in Its Charter)
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Notice of 20182022 Annual General Meeting of Stockholders
April 4, 2018
10:00 a.m. Curaçao time
Avila Beach Hotel, Penstraat 130, Willemstad, Curaçao
ITEMS OF BUSINESS
| ITEMS OF BUSINESS | |||
| 1. | |||
| nominees. | |||
| 2. | |||
| 3. | |||
| 2021. | |||
| 4. | |||
| LLP. | |||
| Such other matters as may properly be brought before the meeting. | |||
| By order of the Board of Directors, | |||
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| Dianne B. Ralston Chief Legal Officer and Secretary | |||
| February 24, 2022 | |||
Wednesday, April 6, 2022
10:00 a.m. Curaçao time
Curaçao Marriott Beach Resort, John F Kennedy Boulevard, 3, Piscadera Bay, Willemstad, Curaçao
RECORD DATE
February 7, 20189, 2022
HOW TO CAST YOUR VOTE
Please refer to the enclosed proxy materials or to the information forwarded by your bank, broker, or other nominee to see which voting methods are available to you. Stockholders with shares registered in their names with Schlumberger’s transfer agent may authorize a proxy:
 | BY INTERNET www.proxypush.com/SLB |  | BY TELEPHONE (866) 240-5191 | |
 | BY MAIL Sign, date, and mail your proxy card |
If you are a beneficial holder of Schlumberger common stock, you should follow any instructions provided by your bank, broker, or other nominee. See “Meeting Information” in this proxy statement.
PROXY VOTING
Your vote is very important. Whether or not you plan to attend the annual general meeting in person, please (i) sign, date, and promptly return the enclosed proxy card in the enclosed envelope, or (ii) grant a proxy and give voting instructions by telephone or internet, so that you may be represented at the meeting. Voting instructions are provided on your proxy card or on the voting instruction cardform provided by your broker.
Brokers cannot vote foron Items 1 and 2 or 5 without your instructions.
March 2, 2018IMPORTANT INFORMATION REGARDING MEETING ATTENDANCE
By orderDepending on the level of COVID-19 protocols in effect at the Boardtime, your ability to attend the 2022 Annual General Meeting of Directors,Stockholders (“2022 AGM”) in person may be restricted or may require additional safeguards, which could include face coverings, proof of vaccination, proof of a negative COVID-19 test result within a specified number of days, and maintaining appropriate social distancing. Please review www.proxydocs.com/SLB for any updates to the “Meeting Information” section of this proxy statement prior to traveling.
Alexander C. JudenThis Notice and Proxy Statement, our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and our 2021 Annual Report to Stockholders are each available free of charge at https://investorcenter.slb.com and www.proxydocs.com/SLB.
Secretary
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General
This proxy statement is furnished in connection with the solicitation by the Board of Directors (the “Board”) of Schlumberger Limited (Schlumberger N.V.) (“Schlumberger” or the “Company”) of proxies to be voted at its 2018 annual general meeting of stockholders, which will be held at the Avila Beach Hotel, Penstraat 130, Willemstad, Curaçao, on Wednesday, April 4, 2018 beginning at 10:00 a.m., Curaçao time, and at any postponement(s) or adjournment(s) thereof.
To gain admittance to the meeting, stockholders of record and beneficial owners as of the close of business on the record date for the meeting, February 7, 2018, must present a passport or other government-issued identification bearing a photograph and, for beneficial owners, proof of ownership as of the record date, such as the top half of the proxy card or voting instruction card that was sent to you with this proxy statement.
The mailing date of this proxy statement, is March 2, 2018. Business at the meeting will be conducted in accordance with the procedures determined by the Chairmanbut it does not contain all of the meeting and will be limited to matters properly broughtinformation that you should consider. You should read this entire proxy statement carefully before the meeting by or at the direction of our Board of Directors or by a stockholder.
Wevoting. In addition, we are providing our 20172021 Annual Report to Stockholders concurrently with this proxy statement. StockholdersYou should refer to its contents in considering agenda Item 3.
Record Date; ProxiesAll references in this proxy statement to “the Company,” “Schlumberger,” “we,” or “our” are to Schlumberger Limited (Schlumberger N.V.) and its subsidiaries.
Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this document.
This proxy statement is first being made available to our stockholders on or about February 24, 2022.
The 2022 AGM will be held at the Curaçao Marriott Beach Resort, John F Kennedy Boulevard, 3, Piscadera Bay, Willemstad, Curaçao, on Wednesday, April 6, 2022 beginning at 10:00 a.m., Curaçao time.
Each stockholder of record at the close of business on the February 9, 2022 (the “record date February 7, 2018,”) is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on with respect to each share registered in thesuch stockholder’s name. A stockholder of record is a person or entity who heldIf your shares on that dateare registered in itsyour name onwith Schlumberger’s transfer agent, you may vote in person at the records2022 AGM, or you may authorize a proxy to vote your shares by one of Computershare Trust Company, N.A. (“Computershare”)the following methods:
 | BY INTERNET www.proxypush.com/SLB |  | BY TELEPHONE (866) 240-5191 |  | BY MAIL Sign, date, and mail your proxy card |
If you are a beneficial owner of Schlumberger common stock (i.e., Schlumberger’s stock transfer agent. Persons who heldyou hold your shares on the record date through a broker, bank, or other nominee are referred to as beneficial owners.nominee), you should follow the voting instructions provided by your bank, broker, or other nominee.
Shares cannot be voted atIf you plan to attend the meeting unless the owner of record is present2022 AGM in person, see “Meeting Information” beginning on page 68 for the requirements for admission to the meeting. Whether or is represented by proxy. Schlumberger is incorporated in Curaçao and, as required by Curaçao law, meetings of stockholders are held in Curaçao. Because many stockholders cannot personallynot you plan to attend the meeting, it is necessary that a large number be represented by proxy.
Shares Outstanding
On February 7, 2018, there were 1,385,957,138 shares of Schlumberger common stock outstanding and entitled to vote.
Quorum
Holders of at least one-half of the outstanding shares entitling the holders thereof to vote at the meeting must be present2022 AGM in person, please (i) sign, date, and promptly return the enclosed proxy card in the enclosed envelope, or (ii) grant a proxy and give voting instructions by proxy to constitute a quorum for the taking of any actiontelephone or internet, so that you may be represented at the meeting.
Abstentions and proxies submitted by brokers that do not indicate a vote because they do not have discretionary voting authority and have not received instructions from the beneficial owner of the shares as to how to vote on a proposal (so-called “broker non-votes”) will be considered as present for quorum purposes. If a quorum is not present at the meeting, the Board may call a second general meeting of stockholders, at which the quorum requirement will not apply.Voting Matters
| Item | Our Board’s Recommendation | Vote Required for Election / Approval | Page Reference (for more detail) | |||
| 1 | Election of 11 director nominees. | FOR each nominee | Majority of votes cast for the nominee | 11 | ||
| 2 | Advisory “say-on-pay” approval of our executive compensation. | FOR | Majority of votes cast | 30 | ||
| 3 | Approval of our consolidated balance sheet at December 31, 2021, our consolidated statement of income for the year ended December 31, 2021, and the declarations of dividends by our Board in 2021. | FOR | Majority of votes cast | 65 | ||
| 4 | Ratification of the appointment of PricewaterhouseCoopers LLP (“PwC”) as our independent auditor for 2022. | FOR | Majority of votes cast | 66 | ||
| Schlumberger Limited | |
2021 was an exceptional year for Schlumberger, in which we demonstrated the strength and agility of our emergent strategy—rooted in operational execution, superior returns, and capital discipline. After two years of extraordinary industry, market, and social uncertainty, the Schlumberger team delivered a year of remarkable financial results, surpassing all of our 2021 financial targets and closing the year with excellent momentum.
Votes Required to Adopt Proposals
To be elected, director nominees must receive a majorityHighlights of votes cast (the numberour 2021 financial performance, reflecting the success of votes cast “for” a director nominee must exceed the number of votes cast “against” that nominee). Approval of each of the other matters on the agenda also requires the affirmative vote of the majority of votes cast.
Important Voting Information for Beneficial Owners
If your Schlumberger shares are held for you in a brokerage, bank or other institutional account, you are considered the beneficial owner of those shares, but not the record holder. This means that you vote by providing instructions to your broker rather than directly to Schlumberger. Unless you provide specific voting instructions, your broker is not permitted to vote your shares on your behalf, except on Item 3our returns-focused strategy and Item 4.
Effect of Abstentions and Broker Non-Votes
Brokers holding shares must vote according to specific instructions they receive from the beneficial owners of those shares. If brokers do not receive specific instructions, brokers may in some cases vote the shares in their discretion. However, the New York Stock Exchange (the “NYSE”) precludes brokers from exercising voting discretion on other proposals without specific instructions from the beneficial owner, as follows:execution, include:
Abstentions and broker non-votes are not considered as votes cast and will not be counted in determining the outcome of the vote on the election of directors or on any of the other proposals, except that for purposes of satisfying NYSE rules, abstentions are counted in the denominator for determining the total votes cast on Item 5.
How to Vote
Stockholders with shares registered in their names with Computershare and participants who hold shares in the Schlumberger Discounted Stock Purchase Plan may authorize a proxy:
 | $4.925 billion | Free Cash Flow(2) $2.997 billion | Revenue $22.9 billion | |
 | 14% increase over 2020 | 110% increase over 2020 | H2 2021 revenue increased 18% | |
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| Adjusted EBITDA Margin 21.5% | Net Debt Reduced by $2.8 billion | Earnings per Share (GAAP) $1.32 | ||
Expanded 320 basis points | Net debt to adjusted EBITDA Lowest net debt level since 2016 | Earnings per share, excluding | ||
The internet On the strength of these financial results, driven by excellent operational leverage as a result of our Performance Strategy and telephone voting facilities for stockholders of record will close at 11:59 p.m. Easternstrong working capital management, we were able to reduce our net debt to adjusted EBITDA ratio from 3.2x to 2.2x year-on-year. At the same time, on Tuesday, April 3,we achieved double-digit pretax operating margins in North America—the highest levels since 2014—and we expanded our international pretax operating margins to the highest levels since 2018. The internet and telephone voting procedures have been designed to authenticate stockholders and to allow you to vote your shares and to confirm that your instructions have been properly recorded.
A numberThe success of banks2021 was built upon the continued growth of our strategic business pillars—strengthening our core, digital, and brokerage firms participatenew energy—to deliver high performance sustainably.
In our Core business, we fully operationalized our returns-focused strategy through our new Division and Basin organization and high-graded business portfolio, which have significantly increased our operating leverage. As a result of our differentiated capabilities, exceptional execution, and technology performance, we enhanced our market positions and won significant project awards during the year. With increased operating leverage and our outstanding customer performance, we ended the year marking six consecutive quarters of pretax segment operating margin expansion.
In Digital, we expanded market access and accelerated the adoption of our platform, which brings our customers AI capabilities and powerful digital tools to reduce cycle time, improve performance, and lower carbon intensity. We built partnerships to achieve comprehensive cloud access globally, collaborated with AI innovators to deploy machine-learning and AI solutions, and enabled digital operations through the automation of key workflows in programs thatwell construction and production operations.
In Schlumberger New Energy, we continued to advance the development of clean energy technologies and low-carbon projects. In 2021, we invested in stationary energy storage—expanding our total addressable market—and progressed our ventures in hydrogen, lithium, geoenergy, and a suite of carbon capture, utilization, and storage (“CCUS”) opportunities, including our bioenergy carbon capture and storage (“BECCS”) project.
2021 also permit beneficial stockholderssaw continued excellence in Safety and Service Quality, as we successfully navigated the challenges of the ongoing pandemic to direct their voteensure continued execution and performance for our customers. Our total recordable injury frequency showed a 31% improvement since 2019, and we also improved our automotive accident rate by 30% compared to 2019. Furthermore, our service quality performance was the internet or telephone. If you arebest on record, despite increasing activity coupled with ongoing pandemic and supply chain challenges.
This was also a beneficial owner whose shares are held in an account at pivotal year for Schlumberger’s commitment to Sustainability. We announced our comprehensive 2050 net-zero commitment inclusive of Scope 3 emissions—a bank or brokerage firm that participates in such a program you may directfirst for the vote of those shares by the internet or telephone by following the instructionsenergy services sector—and we launched our Transition Technology* portfolio to focus on the voting form.decarbonization of oil and gas operations. In addition, Schlumberger earned an upgraded AA rating from MSCI, and won an ESG Top Performer award from Hart Energy, recognizing our sustainability efforts, our enhanced disclosures, and our commitment to apply our technologies and capabilities toward helping the world sustainably meet future energy demand.
All shares entitledIn summary, 2021 was a defining and transformative year for Schlumberger. We continued to votestrengthen our core portfolio, while also enhancing our sustainability leadership, advancing our digital journey, and represented by properly executed proxies received prior to the meeting and not revoked will be voted at the meeting in accordance with your instructions. If you are a stockholder with shares registered in your name with Computershare and you submit a properly executed proxy card but do not direct how to vote on each item, the persons named as proxies will vote as the Board recommends on each proposal.expanding our new energy portfolio.
By providing your voting instructions promptly, you may saveAs we enter 2022, Schlumberger is well prepared to seize the Companymultiyear growth cycle ahead of us. We have entered this cycle in a position of strength, having reset our operating leverage, expanded peer-leading margins across multiple quarters, and aligned our technology and business portfolio with the expensenew industry imperatives. We are truly excited about the outlook for Schlumberger—for continued financial outperformance, technology leadership, and growth opportunities in digital and clean energy innovation—to enable the world to unlock access to energy for the benefit of a second mailing.
Changing Your Vote or Revoking Your Proxy
If you are a stockholder of record, you can change your vote or revoke your proxy at any time by timely delivery of a properly executed, later-dated proxy (including an internet or telephone vote) or by voting by ballot at the meeting. If you hold shares through a broker, bank or other nominee, you must follow the instructions of your broker, bank or other nominee to change or revoke your voting instructions.all.
| (1) | Net income attributable to Schlumberger on a GAAP basis was $1.881 billion. Adjusted EBITDA reflects earnings before interest, taxes, depreciation and amortization, excluding charges and credits. For a reconciliation of adjusted EBITDA to net income attributable to Schlumberger on a GAAP basis, see Appendix A. |
| (2) | Cash flow from operations was $4.651 billion. For a reconciliation of free cash flow to cash flow from operations, see Appendix A. |
| * | Mark of Schlumberger. |
| Schlumberger Limited | |
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Peter Coleman Former Chief Executive Officer | Patrick de La Chevardière Former Chief Financial Officer | Miguel Galuccio Chairman and | Olivier Le Peuch Chief Executive Officer | |||
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Samuel Leupold Former Chief Executive Officer | Tatiana Mitrova Fellow | Maria Moræus Hanssen Former Deputy Chief Executive Officer | Vanitha Narayanan Former Chairman and | |||
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Mark Papa Former Chairman and | Jeff Sheets Former EVP and | Ulrich Spiesshofer Former President and |
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| Schlumberger Limited2022 Proxy Statement | 6 |
Our Board of Directors (the “Board”) is committed to thoughtful board refreshment and ongoing board succession planning. All of our director nominees joined the Board within the last five years, bringing diverse and evolving experience and leadership skills in areas that are strategically important to the Company. The chart below reflects some of the key skills and experience of the non-employee directors who joined the Board over the past three years, offering continuing expertise in our core industry and operations, while enhancing expertise in financial and capital management, sustainability, new energy, and digital technologies and transformation. For further information on each director nominee, see “Election of Directors” beginning on page 11 of this proxy statement.
Global Perspectives. The diversity of our workforce has long been one of Schlumberger’s greatest strengths. Our employees represent more than 160 nationalities and have experience in more than 120 countries. We recognize that diversity and inclusion are not just the right thing to do—they are essential to attracting the best talent from around the world and enabling creativity and innovation to drive business success.
As a global company focused on creating value for our customers, we believe it is critical for our people to communicate with our customers in their native languages and to share the values of the people in the countries where we work. Furthermore, our diverse workforce positions us to effectively deliver services and products that meet the unique expectations and requirements of our stakeholders, including our customers, suppliers and stockholders. We have continued to maintain a workforce nationality mix aligned to the revenue derived from the countries in which we work, as reflected in the charts below.
| Schlumberger Limited2022 Proxy Statement | 7 |
In addition, our geographically diverse Board and 10-member executive team (as of December 31, 2021) collectively represented 15 nationalities across six continents, as reflected on the map below.
Gender. Gender balance is another important pillar of our diversity and inclusion strategy. We are committed to lead our industry in gender diversity and are on track to reach our interim milestone of having women comprise 25% of our salaried employee population by 2025. In 2021, we set our next milestone to continue our progress—for women to comprise 30% of our salaried employee population by 2030. This target includes executive roles and all other salaried positions.
As of December 31, 2021, women made up 30% of our executive team and approximately 22% of management-level roles. Approximately 18% of our total workforce and 23% of our salaried employee population were women at year-end 2021. Women also represented approximately 48% of our 2021 new hires for salaried roles with science, technology, engineering and mathematics (STEM) backgrounds. For the 2022 AGM, women represent 27% of our director nominees.
| 2021 WOMEN IN LEADERSHIP | |
| 27% | 30% |
| Director Nominees | Executive Team |
| 22% | 48% |
| Management-Level Roles | New STEM Hires |
Race and Ethnicity. As a truly global company with a rich legacy of national and cultural diversity, it is important that we do not limit our definitions of racial and ethnic diversity to the common classifications used in the United States, both for our executive team and for the Board. For further discussion regarding the racial and ethnic diversity of our Board, see “Election of Directors—Director Qualifications and Diversity” beginning on page 11 of this proxy statement.
| Schlumberger Limited2022 Proxy Statement | 8 |
As more fully discussed in the “Compensation Discussion and Analysis” section of this proxy statement:
| • | 25% Absolute FCF Margin Performance Share Units (“PSUs”): We replaced our previous free cash flow conversion rate metric, which was measured over a two-year period, with a metric that measures free cash flow margin over a three-year performance period. | |
| • | 25% Relative TSR PSUs: We introduced PSUs based on a three-year relative TSR metric as a new element of our LTI program, and we set the target performance goal above median at the 60th percentile. | |
| • | 25% Relative ROCE PSUs: We increased the rigor of the performance targets for our three-year ROCE (as defined below) metric by removing Weatherford from the ROCE comparator group, as Weatherford had underperformed the rest of the comparator group in recent years. | |
| • | 25% Time-based RSUs: We introduced three-year, time-based restricted stock units (“RSUs”) as a new element of our LTI program, to promote stability and retention of our executive team. |
| • | NEO Cash Compensation Structure Unchanged ─ We held base salaries flat for all NEOs, and we did not increase the target annual cash incentive opportunity, as a percentage of base pay, for any of our NEOs. We also continued to tie 70% of our NEOs’ target annual cash incentive opportunity to full-year adjusted EBITDA and cash flow generation goals to ensure our executives were focused on profitable, sustainable growth. | |
| • | CEO Compensation Program Unchanged ─ The target value of our CEO’s 2021 total direct compensation places him at approximately the 50th percentile among CEOs in our general industry peer group. We did not increase any element of our CEO’s 2021 target total direct compensation as compared to 2020. For details regarding our CEO’s compensation, see “Compensation Discussion and Analysis—CEO Pay Summary” on page 34. | |
| • | ESG Objectives for All NEOs ─ Every NEO had at least one strategic personal objective related to sustainability, new energy, or health, safety and environmental (“HSE”) goals. |
Below is a summary of some of our executive compensation best practices and policies.
| Schlumberger Limited2022 Proxy Statement | 9 |
This proxy statement includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current facts made in this document are forward-looking. We use words such as anticipates, believes, expects, future, intends, and similar expressions to identify forward-looking statements. Forward-looking statements reflect management’s current expectations and are inherently uncertain, and actual results or outcomes could differ materially for a variety of reasons. Risks and uncertainties that could cause our actual results to differ significantly from management’s expectations are described in our 2021 Annual Report on Form 10-K.
Forward-looking and other statements in this proxy statement regarding our environmental, social, governance (“ESG”) and other sustainability plans and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the Securities and Exchange Commission (“SEC”). In addition, historical, current, and forward-looking ESG and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
| Schlumberger Limited2022 Proxy Statement | 10 |
All of our directors are elected annually at our annual general meeting of stockholders. Our stockholders are requested to electWe recommend that you vote “FOR” each of the 11 director nominees, to the Board, eachbe elected to hold officeserve until the next annual general meeting of stockholders andour 2023 AGM (or until a director’s successor is elected and qualified or until a director’stheir death, resignation or removal.removal). Each of the nominees is nowcurrently a director and was previously elected by our stockholders at the 2017 annual general meeting.director.
Having exceeded the normal retirement age of 70 under our Corporate Governance Guidelines, Tore SandvoldHenri Seydoux will not be standingstand for re-election at our annual general meeting of stockholders. Our Board extends gratitude to Mr. SandvoldSeydoux for 14his 13 years of service as a member of the Board.
All of the nominees for election have consented to being named in this proxy statement and to serve if elected. If any nominee is unable or unwilling to serve, the Board may designate a substitute nominee. If the Board designates a substitute nominee, proxies may be voted for that substitute nominee. The Board knows of no reason why any nominee willwould be unable or unwilling to serve if elected.
At the 2022 AGM, votes may not be cast for a greater number of persons than the number of director nominees named in this proxy statement. Shares represented by properly executed proxies will be voted, if authority to do so is not withheld, for the election of each of the 11 nominees named below.
At our 2016 annual general meeting of stockholders, our stockholders voted to fix the number of directors constituting the Board at 12, as is permitted under our Articles of Incorporation. However, as a result of Mr. Sandvold’s retirement, only 11 directors have been nominated for election at the 2018 annual general meeting of stockholders. The Board believes that it is advisable and in the best interest of our stockholders for the authorized number of directors constituting the Board to remain at 12. This will allow the Board the ability to conduct a search for, and add, an additional director during the year, who has not yet been identified at the time of our 2018 annual general meeting.
At this annual general meeting, votes may not be cast for a greater number of persons than the number of director nominees named in this proxy statement.
Required Vote
Each director nominee must receive a majority of the votes cast to be elected.If you hold your shares in “street name,” please be aware that 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.“—Our Director Nominees” below.
 |  | The Board of Directors Recommends a VoteFOR |
The Board believes that each director nominee possesses the qualities and experience that the Nominating and Governance Committee believes that director nominees should possess, as described in detail belowhave the following characteristics:
• be persons of integrity and honesty,
• be able to exercise sound, mature and independent business judgment in the section entitled “Corporate Governance—Director Nominations” beginning on page 16. The Board seeks out, and the Board is comprisedbest interests of individuals whoseour stockholders as a whole,
• be recognized leaders in business or professional activity,
• have background and experience that will complement those of other Board members. Themembers,
• be willing and able to actively participate in Board and committee meetings and related activities,
• be able to work professionally and effectively with other Board members and Schlumberger management,
• be available to remain on the Board long enough to make an effective contribution, and
• have no material relationship with competitors, customers or other third parties that could present realistic possibilities of conflicts of interest or legal issues.
In the judgment of the Board, all director nominees for electionare able to execute their duties as members of the Board and to devote the necessary time and attention to the Board, together with biographical information furnishedCompany, as required by each of them and information regarding each nominee’s director qualifications, are set forth on the following pages.
Thereour Corporate Governance Guidelines. In addition, there are no family relationships among any executive officers and directors of the Company.
Board Diversity Policy
The Nominating and Governance Committee also supports the Company’s diversity ambitions that its Board should reflect the gender, racial and ethnic, cultural and geographical diversity of our global operations. The Board seeks out women and nationally, racially and ethnically diverse candidates to include in the pool of qualified candidates from which potential director nominees are chosen. As reflected in the summary chart on page 13, our 11 director nominees represent ten nationalities across five continents, and three directors are women.
Race and Ethnicity
Given our multinational footprint and culture, we endeavor to have a global perspective on diversity, including racial and ethnic diversity. This perspective includes respecting local legal requirements regarding the tracking and use of personal data pertaining to under-represented populations. Certain countries have data privacy laws prohibiting the collection or disclosure of race and ethnicity classification data, reflecting historical concerns that such data could be used to foster, rather than eliminate, discrimination. In addition, local definitions of race and ethnicity and related classifications, as well as the definition of under-represented groups, vary from country to country.
As a result, U.S.-centric racial and ethnic classifications as used for EEO-1 data collection purposes are applicable only to our three directors who are U.S. citizens. For our U.S. directors, we provide on page 13 race and ethnicity disclosures based on classifications commonly used in the United States. For all other directors, we asked if they wished to voluntarily disclose their ethnic or racial background and, if so, how they self-identify based on the classifications most relevant to their home countries. We provide self-identifications for non-U.S. directors in the summary chart on page 13. In keeping with international data privacy laws, we have not included racial or ethnic information for director nominees who did not authorize disclosure.
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The following are some highlights of our corporate governance practices and policies:
Board Independence; Committees Structure
Majority Voting; Stockholder Authority
Executive Stock Ownership Guidelines
We have executive stock ownership guidelines, which are designed to align executive and stockholder interests. For a description of the guidelines applicable to our executive officers and other senior members of management, see “Compensation Discussion and Analysis— Executive Stock Ownership Guidelines” starting on page 42.
Risk Oversight
No Hedging or Pledging of Schlumberger Stock
Our directors and executive officers are prohibited from hedging their ownership of Schlumberger stock. Furthermore, our directors and executive officers are prohibited from pledging their Schlumberger stock.
Schlumberger is politically neutral, and has a long-standing policy against making financial or in-kind contributions to political parties or candidates, even when permitted by law. This policy, as set forth in Schlumberger’s code of conduct, entitled The Blue Print and The Blue Print in Action (our “Code of Conduct”), prohibits the use of Company funds or assets for political purposes, including for contributions to any political party, candidate or committee, whether federal, state or local. In addition, the Company does not lobby. As a result of the Company’s policy of political neutrality, Schlumberger does not maintain a political action committee, nor does it contribute to any third-party political action committees or other political entities organized under Section 527 of the Internal Revenue Code.
In 2017, the Center for Political Accountability (“CPA”), a non-profit, non-partisan organization, assessed our disclosure for its annual CPA-Zicklin Index of Corporate Political Disclosure and Accountability (“CPA-Zicklin Index”). The CPA-Zicklin Index measures the transparency, policies and practices of the Standard & Poor’s (“S&P”) 500. As a result of our enhanced disclosure on political lobbying and contributions, we achieved a perfect score of 100% in the 2017 CPA-Zicklin Index.
Corporate Governance Guidelines
Schlumberger is committed to adhering to sound principles of corporate governance and has adopted corporate governance guidelines that the Board believes are consistent with Schlumberger’s values, and that promote the effective functioning of the Board, its committees and the Company. Our Board periodically, and at least annually, reviews and revises, as appropriate, our Corporate Governance Guidelines to ensure that they reflect the Board’s corporate governance objectives and commitments. Our Corporate Governance Guidelines are on our website at http://www.slb.com/ about/guiding_principles/corpgovernance/corpgov_guidelines.aspx.
Schlumberger’s Corporate Governance Guidelines provide that at least a majority of the Board must consist of independent directors. This standard reflects the NYSE corporate governance listing standards.
Our Board has adopted director independence standards, which can be found in Attachment A to our Corporate Governance Guidelines, and which meet or exceed the independence requirements in the NYSE listing standards. Based on the review and recommendation by the Nominating and Governance Committee, the Board has determined that each current director and director nominee listed above under “Election of Directors” is “independent” under the listing standards of the NYSE and our director independence standards, except Mr. Kibsgaard, who is our CEO and therefore does not qualify as independent, and Mr. Miguel Galuccio.
In addition to the Board-level standards for director independence, each member of the Audit Committee meets the heightened independence standards required for audit committee members under the NYSE’s listing standards and SEC rules, and each member of the Compensation Committee meets the heightened independence standards for compensation committee members under NYSE listing standards adopted in 2013, which Schlumberger implemented in advance of the required compliance date.
Transactions Considered in Independence Determinations. The Board’s independence determinations included a review of transactions that occurred since the beginning of 2014 with entities associated with our directors or members of their immediate family. In making its independence determinations, the Board considered that Mr. Galuccio, Ms. Kempston Darkes, Mr. Kudryavtsev, Mr. Marks, Ms. Nooyi, Ms. Olayan, Dr. Reif and Mr. Sandvold each have served as directors, executive officers, trustees, outside consultants or advisory board members at companies and universities that have had commercial business relationships with the Company, all of which were ordinary course commercial transactions involving significantly less than 1% of the other entity’s annual revenues. The Board also considered that the Company made charitable contributions in 2017 to The Massachusetts Institute of Technology, of which Dr. Reif is the President, of approximately $997,000, relating to educational grants and sponsored fellowships, for which Dr. Reif received no personal benefit. This amount was significantly less than the greater of $1 million or 2% of the university’s consolidated gross revenues for any of the past three years. The Board also considered that the son of Mr. Galuccio is an employee of the Company, but that he was not an executive officer of the Company and received less than $120,000 in compensation in 2017.
We believe that Board tenure diversity is important and directors with many years of service provide the Board with a deep knowledge of our company, while newer directors lend fresh perspectives. The chart below reflects the Board tenure of our current director nominees.Retirement Age
Under our Corporate Governance Guidelines, non-executivenon-employee directors are eligible to be nominated or renominated to the Board up to their 70thbirthday, and executive directors are eligible to be nominated or renominated up to their 65thbirthday, after which directors may no longer be nominated or renominated to the Board. Our Board may waive this policy on a case-by-case basis on the recommendation of the Nominating and Governance Committee if it deems a waiver to be in the best interestinterests of the Company.
DiversifiedUnder the leadership of Mr. Papa, the Board’s independent Chairman, the Board has undergone significant refreshment and transition over the past several years. As discussed above under “Proxy Executive Summary—Board Refreshment,” five new directors joined the Board in 2020 and 2021, expanding our Board’s overall expertise in the areas of sustainability, new energy, and digital technologies and transformation. In addition, the average tenure of our director nominees is approximately two years. In light of these circumstances, and in order to allow for effective onboarding of the Board’s newest members, the Board waived the retirement age policy for Mr. Papa upon the recommendation of the Nominating and Governance Committee, because the Board believes that having Mr. Papa continue to serve as independent Chairman is in the best interests of our Company and our stockholders.
Summary of Director Nominee TenureSkills and Characteristics
| Schlumberger Limited |
Summary of Director Nominee Skills and Characteristics
 |  |  |  |  |  |  |  |  |  |  | ||
| Substantial Knowledge, Skills and Experience | ||||||||||||
| Current or former chief executive officer |  | | | | | | | |||||
| Energy industry and operations | | | | | | | | | | | ||
| Finance and accounting | | | | | ||||||||
| Science, technology and engineering | | | | | | | | |||||
| Energy transition and sustainability | | | | | | | | | | | ||
| Digital innovation | | | | | ||||||||
| Digital transformation | | | | | ||||||||
| Information security | | |||||||||||
| Strategy development & implementation | | | | | | | | | | | | |
| International business | | | | | | | | | | |||
| Risk management | | | | | | | | | | | | |
| Economic modeling | | | | | | |||||||
| Health, safety and environmental | | | | | | | | |||||
| Mergers and acquisitions | | | | | | | | | ||||
| Academic relations | | | | | ||||||||
| Government, regulatory & public policy | | | | | | | | |||||
| Demographics | ||||||||||||
| Nationality | ||||||||||||
| Argentina | | |||||||||||
| Australia | | |||||||||||
| France | | | ||||||||||
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| Russia | | |||||||||||
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| United Kingdom | | |||||||||||
| United States | | | | |||||||||
| Racial and Ethnicity Characteristics for U.S. Directors | ||||||||||||
| Asian or Indian | | |||||||||||
| Black or African American | ||||||||||||
| Hispanic or Latino | ||||||||||||
| Native American | ||||||||||||
| White or Caucasian | | | ||||||||||
| Non-U.S. Directors Electing to Self-Identify Racial or Ethnicity Characteristics | ||||||||||||
| White or Caucasian | | | | |||||||||
| Two or More Races or Ethnicities | | |||||||||||
| Gender | M | M | M | M | M | F | F | F | M | M | M | |
| Other Attributes | ||||||||||||
| Independence | | | | | | | | | | |||
| Tenure (in ~ years as of 2022 AGM) | <1 | 2 | 5 | 2 | 1 | 3 | 1 | <1 | 3 | 2 | <1 | |
| Schlumberger Limited2022 Proxy Statement | 13 |
The nominees for election to the Board, together with information regarding each nominee’s qualifications, are set forth below.
Peter Coleman,
Independent Director
 | Former CEO and Managing Director, Director since 2021 Age: 61 Other Current Public Boards • None Former Public Directorships • Woodside Petroleum Ltd. | Nationality Australia Board Committees • Nominating and Governance • Finance Other Experience and Education • MBA, Deakin University • Bachelor of Engineering, Monash University • Chair of the Australia-Korea Foundation |
PETER COLEMAN is the former Chief Executive Officer, Executive Director and Managing Director of Woodside Petroleum Ltd., Australia’s largest independent gas producer, having served in that role from 2011 until his retirement in June 2021. Prior to joining Woodside, Mr. Coleman spent 27 years with the ExxonMobil group in a variety of roles, including Vice President Asia Pacific from 2010 to 2011 and Vice President Americas from 2008 to 2010. Since 2012, he has been an adjunct professor of corporate strategy at the University of Western Australia Business School. He has also served as chairman of the board of Infinite Blue Energy, an Australian green hydrogen renewable energy company, since August 2021.
Director NominationsRelevant Skills and Expertise
Mr. Coleman brings to the Board decades of experience in the oil and gas industry, including as the former CEO and Chairman of Australia’s largest independent gas producer. The Board benefits from his expertise in strategic planning, as well as his extensive business experience in Australia and Asia, regions that are strategically important to the Company’s operations.
Patrick de La Chevardière,
Independent Director
 | Former Chief Financial Officer, Director since 2019 Age: 64 Other Current Public Boards • Michelin (Compagnie Générale des Établissements Michelin SCA) Former Public Directorships • None | Nationality France Board Committees • Audit, Chair • Finance Other Experience and Education • Experienced director of several French-based public companies • Diplôme d’Ingénieur, an engineering degree, École Centrale de Paris |
PATRICK DE LA CHEVARDIÈRE is the former Chief Financial Officer of Total S.A., a French multinational integrated oil and gas company. He served as Total’s CFO and as a member of its executive committee from 2008 until his retirement in August 2019. Prior to that, he served in a variety of finance and operational roles with Total over his 37-year career, including as Deputy Chief Financial Officer from 2003 to 2008, Vice President, Asia for Refining & Marketing from 2000 to 2003, and Vice President, Operations and Subsidiaries from 1995 to 2000. Since June 2020, Mr. de La Chevardière has also served as a member and chairman of the audit committee of the supervisory board of Michelin, a French multinational tire manufacturer. He also previously served on the boards of directors of two other French-based public companies, Sanofi-Aventis and Compagnie Générale de Géophysique.
Relevant Skills and Expertise
Mr. de La Chevardière brings to the Board financial and industry experience as a former CFO of a large multinational oil and gas company. The Board benefits from his customer-focused perspective on the oilfield services industry, and from his experience across the entire oil and gas value chain, from exploration, operations, production, trading and marketing to refining and new energies.
| Schlumberger Limited2022 Proxy Statement | 14 |
Miguel Galuccio,
Non-Executive Director
 | Chairman and Chief Executive Officer, Director since 2017 Age: 53 Other Current Public Boards • Vista Oil & Gas Former Public Directorships Held During the Past Five Years • None | Nationality Argentina and United Kingdom Board Committees • Finance, Chair Other Experience and Education • Bachelor of Science in Petroleum Engineering, Instituto Tecnológico de Buenos Aires • Schlumberger training and expertise • Latin America energy policy expertise |
MIGUEL GALUCCIO is the Chairman and Chief Executive Officer of Vista Oil & Gas, an oil and gas company incorporated in Mexico, and has held that position since July 2017. From 2012 to 2016, he was the Chairman and Chief Executive Officer of YPF, Argentina’s national oil company. From 1999 to 2012, he was an employee of Schlumberger and held a number of international positions, his last being President, Schlumberger Production Management. Prior to his employment at Schlumberger, he served in various executive positions at YPF and its subsidiaries from 1994 to 1999, including YPF International.
Relevant Skills and Expertise
Mr. Galuccio brings to the Board leadership and operational expertise from his experience as former chairman and chief executive officer of Argentina’s national oil company, which under his leadership became the world’s largest producer of shale oil outside of North America. He has valuable insight into the domestic and international energy policies of Argentina, Mexico, Venezuela and Ecuador, as well as extensive experience negotiating with Schlumberger customers in Latin America, Russia and China. He also remains active in the oil and gas exploration and production industry as a chief executive officer of an oil and gas company.
Olivier Le Peuch,
Schlumberger Chief Executive Officer
 | Chief Executive Officer, Director since 2019 Age: 58 Other Current Public Boards • None Former Public Directorships • None | Nationality France Board Committees • None Other Experience and Education • Master’s Degree in Microelectronics, Bordeaux University of Science • Schlumberger training and expertise |
OLIVIER LE PEUCH has been the Chief Executive Officer and a director of Schlumberger since August 2019. He was the Company’s Chief Operating Officer from February 2019 to July 2019. Prior to that, he served in a variety of global management positions, including Executive Vice President, Reservoir and Infrastructure from May 2018 to February 2019, President of the Cameron Group from February 2017 to May 2018, President of Schlumberger Completions from 2014 to January 2017, and Vice President of Engineering, Manufacturing and Sustaining from 2010 to 2014. Earlier in his career, Mr. Le Peuch was GeoMarket Manager for the North Sea and President of Software Integrated Solutions. He has been with the Company since 1987 and began his career as an electrical engineer.
Relevant Skills and Expertise
Mr. Le Peuch brings to the Board a unique operational perspective and thorough knowledge of the Company’s operational activities worldwide as a result of his service in various global leadership positions in the Company. The Board believes that Mr. Le Peuch’s service as the Company’s Chief Executive Officer is an important link between management and the Board, enabling the Board to perform its oversight function with the benefit of his perspectives on the Company’s business and operations.
| Schlumberger Limited2022 Proxy Statement | 15 |
Samuel Leupold,
Independent Director
 | Former Chief Executive Officer, Director since 2021 Age: 51 Other Current Public Boards • Enel SpA Former Public Directorships Held During the Past Five Years • None | Nationality Switzerland Board Committees • Audit • Finance • New Energy and Innovation Other Experience and Education • Master’s Degree in Mechanical Engineering, Swiss Federal Institute of Technology (Zurich) • MBA, INSEAD (Fontainebleau) • Energy transition and sustainability expertise |
SAMUEL LEUPOLD is the former chief executive officer of Ørsted Wind Power A/S, the principal subsidiary of Ørsted AS, a Danish renewable energy company, where he led Ørsted Wind Power to become the world’s leading developer, operator and owner of offshore wind assets during his tenure from 2013 to March 2018. Since May 2019, Mr. Leupold has served as an independent senior advisor supporting international clients in the energy and infrastructure sectors through his consultancy firm, Leupold Advisory. In addition, since May 2020, Leupold has been an independent non-executive member of the board at Enel SpA, one of Europe’s largest utilities focused on sustainability and the energy transition.
Relevant Skills and Expertise
Mr. Leupold brings to the Board operational experience as the former chief executive officer of a renewable energy company, as well as significant experience in energy transition and sustainability. The Board benefits from his expertise on these issues as the Company seeks to implement its net-zero ambition and its strategy to deploy sustainable technologies to provide access to energy for the benefit of all.
Tatiana Mitrova,
Independent Director
 | Fellow, Center on Global Energy Policy, Director since 2018 Age: 47 Other Current Public Boards • PAO Novatek Former Public Directorships Held During the Past Five Years • Unipro PJSC | Nationality Russia and Israel Board Committees • Audit • Finance • New Energy and Innovation Other Experience and Education • PhD in Economics, Moscow State University • Senior Visiting Research Fellow at Oxford Institute for Energy Studies |
TATIANA MITROVA has served as a fellow at the Center on Global Energy Policy at the School of International and Public Affairs at Columbia University since May 2016. From February 2017 to December 2020, she served as Executive Director of the Energy Centre of the Moscow School of Management SKOLKOVO, a graduate business school, where she continues to serve as a professor. She has also been the Head of Research in the Oil and Gas Department in the Energy Research Institute of the Russian Academy of Sciences since 2011; a visiting professor at the Paris School of International Affairs, part of the Paris Institute of Political Studies, since 2014; and an assistant professor at the Gubkin Russian State University of Oil and Gas since 2008. Dr. Mitrova was a Visiting Researcher at the King Abdullah Petroleum Studies and Research Center from 2016 to April 2017. Dr. Mitrova has been a member of the board of directors of PAO Novatek, a Russian independent natural gas producer, since April 2020, and is chairman of its strategy committee and a member of its audit and compensation and nomination committees. She was previously a member of the board of directors of Unipro PJSC from 2014 to December 2017.
Relevant Skills and Expertise
Dr. Mitrova brings to the Board valuable expertise regarding energy market dynamics and the various factors affecting supply and demand for Schlumberger’s products and services, as well as expertise relating to sustainability, decarbonization and the new energy economy. The Board values Dr. Mitrova’s knowledge of Russian and Central Asian energy markets, as well as her ties to the academic community. Her global economic perspective provides insight into emerging markets and trends, and is useful for the development of the Company’s global business strategy.
| Schlumberger Limited2022 Proxy Statement | 16 |
Maria Moræus Hanssen,
Independent Director
 | Former Deputy Chief Executive Officer and Chief Operating Officer, Director since 2020 Age: 57 Other Current Public Boards • Alfa Laval AB • Scatec Solar ASA Former Public Directorships Held During the Past Five Years • Yara International ASA | Nationality Norway Board Committees • New Energy and Innovation, Chair • Compensation • Nominating and Governance Other Experience and Education • Former CEO of multiple E&P companies • Master’s Degrees in Petroleum Engineering, Norwegian University of Science and Technology, and Petroleum Economics and Management, IFP School |
MARIA MORÆUS HANSSEN is the former Deputy CEO and Chief Operating Officer of Wintershall Dea GmbH, a German-based oil and gas producer, having served in that role from May 2019 to December 2019 following the merger between DEA Deutsche Erdoel AG (DEA) and Wintershall Holding GmbH. Prior to that, she served as CEO of DEA and chair of its management board from January 2018 until April 2019. Before joining DEA, she served as CEO of ENGIE E&P International SA and Head of the E&P Business Unit for the ENGIE Group in Paris from 2015 to December 2017. Ms. Moræus Hanssen served in various management and operations roles at Aker from 2008 to 2013, Statoil (now Equinor) from 2007 to 2008, and Norsk Hydro from 1992 to 2007. She has served on the boards of Scandinavian public companies Alfa Laval AB since April 2019 and Scatec Solar ASA since April 2020, and also serves in director and chair roles on various private company, municipal and non-profit boards. She previously served as deputy chairman and audit committee chair of Yara International from 2015 to May 2019.
Relevant Skills and Expertise
Ms. Moræus Hanssen brings to the Board leadership and operational expertise as the former CEO of several European E&P companies. The Board values her insight into the domestic and international energy policies of Norway, Germany, France and other countries that are strategically important to Schlumberger, as well as her experience addressing risks related to the energy transition.
Vanitha Narayanan,
Independent Director
 | Former Chairman and Managing Director, IBM India Director since 2021 Age: 62 Other Current Public Boards • ReNew Power • HCL Technologies Former Public Directorships Held • None | Nationality United States of America Board Committees • Compensation • Nominating and Governance Other Experience and Education • MBA, University of Houston • First woman chairperson of American Chamber of Commerce in India (AMCHAM India) |
VANITHA NARAYANAN is the former Chairman and Managing Director of IBM India, a subsidiary of IBM, a multinational technology corporation. Over her career spanning three decades at IBM, she held senior executive positions with responsibility for digital businesses in the United States, Asia-Pacific and India regions, including as Chairman of IBM India from January 2017 to March 2018 and Managing Director from 2013 to 2016. During her tenure, IBM India was one of IBM’s fastest-growing growth markets. Most recently, Ms. Narayanan served as Managing Director for a strategic telecommunications client of IBM’s from April 2018 until her retirement in 2020, leading a strategic 5G business partnership. Since August 2020, she has served as a director of ReNew Power, one of the largest renewable power companies in India, where she serves as a member of the audit committee. She has also been a director of HCL Technologies since July 2021, where she serves as a member of the nominating and remuneration committee.
Relevant Skills and Expertise
Ms. Narayanan brings to the Board a wealth of global leadership and technology experience, particularly in the Asia-Pacific and India geographies. The Board values Ms. Narayanan’s digital expertise leading global technology businesses, as the Company continues to implement its digital strategy.
| Schlumberger Limited2022 Proxy Statement | 17 |
Mark Papa,
Independent Chairman of the Schlumberger Board
 | Former Chairman and CEO, Director since 2018 Age: 75 Other Current Public Boards • None Former Public Directorships Held During the Past Five Years • Centennial Resource Development, Inc. • Oil States International | Nationality United States of America Board Committees • Nominating and Governance, Chair Other Experience and Education • Former chairman and CEO of two public oil and gas companies • MBA, University of Houston • Bachelor of Science in Petroleum Engineering, University of Pittsburgh • North American energy industry pioneer |
MARK PAPA is the former Chief Executive Officer and Chairman of the Board of Centennial Resource Development, Inc., an independent oil and natural gas producer, having served in that role from 2016 until his retirement in March 2020. From 2015 to December 2019, Mr. Papa served as an advisor to Riverstone Holdings, a private equity firm specializing in energy investments. Prior to that, Mr. Papa was Chairman and CEO of EOG Resources, an independent oil and gas company, from 1999 to 2013, and he served as a member of EOG’s board of directors from 1999 until 2014. He worked at EOG for 32 years in various management positions. Mr. Papa also served on the board of Oil States International, an international field services company, from 2001 to August 2018.
Relevant Skills and Expertise
Mr. Papa brings decades of experience in the oil and gas industry and a unique insight into the North American market. He is a pioneer in the U.S. shale oil industry and built EOG Resources into one of the most profitable U.S. shale companies. He provides the Board with key insights on the U.S. shale market and Schlumberger’s customers in North America. He also brings extensive leadership experience to the Board through his experience as CEO and chairman of multiple public companies. Mr. Papa has been involved in succession planning, compensation, employee management and the evaluation of acquisition opportunities, and provides the Board with valuable insight regarding the challenges and opportunities facing Schlumberger in these areas.
Jeff Sheets,
Independent Director
 | Former EVP and Chief Financial Officer, ConocoPhillips Director since 2019 Age: 64 Other Current Public Boards • Enerplus Corporation • Westlake Chemical Corporation Former Public Directorships Held During the Past Five Years • None | Nationality United States of America Board Committees • Compensation, Chair • Audit Other Experience and Education • MBA, University of Houston • Bachelor of Science in Chemical Engineering, Missouri University of Science and Technology |
JEFF SHEETS is the former EVP and Chief Financial Officer of ConocoPhillips Company, a public international oil and gas company, having served in that role from 2010 until his retirement in 2016. Prior to that, Mr. Sheets served at ConocoPhillips and its predecessor companies for more than 36 years in a variety of finance, engineering and strategic planning roles. Since December 2017, Mr. Sheets has served on the board of directors of Enerplus Corporation, a Canadian oil and gas company, where he chairs the audit and risk management committee and is a member of the compensation committee. He also has served since January 2018 on the board of directors of Westlake Chemical Corporation, an international manufacturer and supplier of petrochemicals and related products, where he chairs the nominating and governance committee and is a member of the audit, compensation and corporate risk committees. Mr. Sheets is a member of the Board of Trustees at the Missouri University of Science and Technology.
Relevant Skills and Expertise
Mr. Sheets brings to the Board financial and operational expertise as a former chief financial officer of a large upstream oil and gas company. The Board benefits from Mr. Sheets’ expertise in developing and implementing corporate strategy in the oil and gas industry, as well as his significant finance, capital management and allocation, and mergers and acquisitions experience.
| Schlumberger Limited2022 Proxy Statement | 18 |
Ulrich Spiesshofer,
Independent Director
 | Former President and CEO, Director since 2021 Age: 57 Other Current Public Boards • Infineon Technologies Former Public Directorships Held During the Past Five Years • None | Nationality Switzerland and Germany Board Committees • Compensation • New Energy and Innovation Other Experience and Education • PhD in Economics, Universität Stuttgart • Master’s Degree in Management and Engineering, Universität Stuttgart • Digital transformation, restructuring and portfolio management expertise |
ULRICH SPIESSHOFER is the former president and Chief Executive Officer of ABB Ltd., a multinational technology-focused corporation, having served in that role from 2013 to April 2019 and as an executive committee member of ABB from 2005 to April 2019. Under Dr. Spiesshofer’s leadership, ABB transformed into a global leader in digital industries and a respected technology company at the nexus of industrial products and services, robotics and software. Since June 2020, he has served as a senior advisor at The Blackstone Group L.P. (Blackstone), and in this capacity he has chaired the advisory board of Schenck Process since May 2021, has served as a director of TDI-USA Holdings LLC since December 2021, and has been named chair of the advisory board of Sabre Industries, all Blackstone portfolio companies. He has also served as a director of Infineon Technologies since February 2020, where he chairs the strategy and technology committee.
Relevant Skills and Expertise
Dr. Spiesshofer brings to the Board more than 30 years of global leadership experience in industries ranging from oil and gas to power and electrification to automation and digitalization. The Board values his industrial sector expertise and his business transformation experience leveraging digital technologies, products and services.
| Schlumberger Limited2022 Proxy Statement | 19 |
We are committed to strong corporate governance, which we believe is critical to achieving our performance goals and to maintaining the trust and confidence of our stakeholders. Our governance practices include:
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Our relationship and on-going dialogue with our stockholders are important parts of our Board’s corporate governance commitment. Our investor relations, sustainability, legal and human resources teams engage with stockholders throughout the year to seek their views on key matters, and then inform our Board and management about the issues and emerging governance trends that our stockholders tell us matter most to them. The chairs of our Compensation and Nominating and Governance committees also participate in our engagement efforts when requested. These engagements routinely cover executive compensation, corporate governance, company strategy and performance, sustainability, human rights and other current and emerging issues.
We typically reach out to our largest institutional stockholders at least annually. We then report the feedback we receive to our Board and its relevant committees, allowing the Board to better understand our stockholders’ priorities and perspectives. In addition, we may engage with our large institutional stockholders at other times in the year when we believe that there are appropriate topics to discuss. For detail on our engagement with our stockholders in advance of the 2021 AGM, see “Compensation Discussion and Analysis—Framework for Setting 2021 Executive Compensation—Responsiveness to Stockholder Feedback” beginning on page 36 of this proxy statement.
2021 STOCKHOLDER ENGAGEMENT FACTS • Participated in 17 sell-side investor conferences • Held more than 400 buy-side investor meetings (primarily virtual) across more than 250 investor firms |
One of the Board’s key responsibilities is to evaluate and determine an appropriate board leadership structure to provide for independent oversight of management. The Board believes that there is no single, generally accepted board leadership structure that is appropriate for all companies, and that the right structure may vary for a single company as circumstances change. As a result, our independent directors, upon the recommendation of the Nominating and Governance Committee, believes that director nominees should, inconsider the judgmentBoard’s leadership structure at least annually.
Since 2019, our independent directors have separated the roles of CEO and Chairman of the Board, be persons of integrity and honesty, be able to exercise sound, matureallow our CEO to focus on leading the Company’s complex international business operations, while the Chairman provides the Board experienced and independent business judgment inleadership. Mr. Papa currently serves as independent Chairman of the best interests of our stockholders as a whole, be recognized leaders in business or professional activity, have background and experience that will complement those of other Board members, be able to actively participate in Board, and Committeein that role, sets the agenda for and leads all Board meetings and related activities, be able to work professionally and effectively with other Board members and Schlumberger management, be available to remain onall executive sessions of the non-employee directors.
In considering its leadership structure, the Board long enough to make analso took into account that Schlumberger’s current governance practices provide for strong independent leadership, active participation by our independent directors and independent evaluation of, and communication with, many members of senior management. The Board believes that its risk oversight programs would be effective contributionunder a variety of board leadership frameworks and have no material relationship with competitors, customers or other third parties that could present realistic possibilitiestherefore do not materially affect the Board’s choice of conflictleadership structure.
| Schlumberger Limited2022 Proxy Statement | 20 |
The NominatingBoard and Governance Committee also promotesits committees are actively involved in overseeing risk management for Schlumberger. The full Board routinely assesses the Company’s major risks and options for mitigation, in order to promote our stockholders’ and other stakeholders’ interests in Schlumberger’s diversity policylong-term health, financial strength, and overall success. We believe that our Board composition provides the Company with robust and well-rounded experience to assist in effective oversight of Schlumberger management, as discussed on pages 12-13 of this proxy statement. In addition, the Board should include appropriate expertise and reflectdelegates to its committees responsibility for overseeing certain types of risk, as reflected in the gender, cultural and geographical diversity of the Company. Schlumberger has approximately 100,000 employees worldwide, representing more than 140 nationalities, and values gender, cultural and geographical diversity in its directors as well. We also have a culture of recruiting, hiring and training where we operate, as described in our Code of Conduct, and that influences the composition of our Board. Three of the Company’s 11 director nominees are women. Of the 11 director nominees, four are citizens of the United States of America; two are citizens of Norway; and one each of Argentinachart below, and the United Kingdom, Canada, France, Russia and Saudi Arabia.committees in turn report regularly to the Board on activities in their respective areas of oversight.
Board of Directors • The full Board oversees assessment of major risks facing the Company, determining the extent to which such risks are applicable and, to the extent the Board deems it appropriate, evaluating options for their mitigation. The risks that the Board routinely considers relate to operational, financial, geopolitical, strategic, regulatory, competitive, and climate-related risks. • The full Board oversees risk management by the CEO and our senior management team, by reviewing major financial objectives, critical strategies, and long-term plans, including major allocations of capital, significant proposed business acquisitions and divestitures, operating performance, sustainability, and stockholder returns. | ||||||||||||||||||
Audit • Financial reporting and internal controls • Major financial risk exposures • Cybersecurity risks • Finance-related compliance allegations • Independent audit and internal audit | Compensation • Compensation philosophy and policy, including addressing: • Pay-for-performance linkage and alignment to stockholder interests • Retention risk • Management succession | Nominating and • Ethics and compliance risks, including trade compliance, anti-bribery, anti-money laundering, and human rights, and related allegations • Related person transactions •Board • Sustainability program, including acute and chronic climate risks • Progress toward our net-zero ambition | Finance • Pension liabilities • Currency management, including non-U.S. currency fluctuation • Financial risks related to M&A and strategic transactions • Appropriate leverage and related commitments, including climate-related funding | New Energy and • Risks and opportunities of new energy markets for possible investment | ||||||||||||||
| Senior Management | ||||||||||||||||||
| Day-to-day responsibility for: | ||||||||||||||||||
| • identifying, assessing, monitoring, and managing the major risks to the Company through our enterprise risk management operational process; | • implementing effective risk mitigation measures, response plans and controls; and | • integrating risk analysis into business decisions and performance objectives. | ||||||||||||||||
Our very diversesenior management team has developed a comprehensive strategic planning and enterprise risk management (“ERM”) process for identifying, assessing and managing risk. Through this process, we identify key risks through an annual corporate-level risk mapping exercise, which involves the CEO and other members of senior management, along with a bottom-up operational (field-level) risk assessment by the Company’s various geographies, businesses and functions. In 2021, the process also included a third-party assessment by an internationally recognized accounting firm, external risk surveys, and facilitated workshops with Schlumberger executives. Our executive leadership team and its ERM and Disclosure Committee report directly to our CEO and to the Board, and annually present to the Board a comprehensive report on risk identification, response and mitigation strategies.
| Schlumberger Limited2022 Proxy Statement | 21 |
As a leading energy services company, we are committed to being at the forefront of our industry’s shift toward more sustainable energy production—challenging not only ourselves, but also our customers, suppliers, and peers to partner on delivering measurable social and environmental progress. This translates into making measurable strides to accelerate innovation in energy transition and achieving these goals in a way that contributes to energy access and economic development with both a global and local lens.
As part of this commitment, the Board and its committees oversee the performance and management of various environmental, social and other sustainability issues, including our energy transition strategy, emissions reduction targets, climate change, sustainability reporting, workforce health and safety, human rights, and ethics and compliance. For example:
| • | The Board oversees the Company’s long- and short-term strategy, including the launch of our Transition Technology and emissions monitoring portfolios, which focus on decarbonizing our core businesses, as well as our new energy investments in low-carbon and carbon-neutral energy technologies. In addition, the full Board oversaw the decision to establish our comprehensive 2050 net-zero commitment inclusive of Scope 3 emissions, together with interim Scope 1, 2 and 3 emissions reduction milestones. | |
| • | The Board also oversees the Company’s ERM process, as discussed on the previous page under “—Board Oversight of Risk Management”, and reviews major risks facing the Company, including acute and chronic climate risks and energy transition risks. We take a data-centric, scenario-based approach to managing climate and transition risk, and we use both the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations and Sustainability Accounting Standards Board (SASB) standards as disclosure frameworks and methodology guides. | |
| • | The Nominating and Governance Committee oversees our sustainability programs, initiatives and activities, and receives quarterly updates from senior management on the progress we are making toward a low-carbon future. This committee also monitors and reviews the effectiveness of the Company’s Ethics and Compliance program, including our code of conduct and all significant compliance allegations. | |
| • | The New Energy and Innovation Committee—newly formed in 2021—evaluates our Schlumberger New Energy and Transition Technology investments and the sustainability impacts of growth opportunities. | |
| • | The Board’s other committees oversee sustainability-related topics within their respective areas of responsibility, such as incorporation of sustainability and diversity metrics into our incentive compensation programs (Compensation), the conduct of sustainability-related reviews by our internal audit team (Audit), and the development of our sustainable finance strategy, including financial instruments with rates linked to climate commitments (Finance). |
Our line management is directly responsible for the management and mitigation of the environmental impact of our operations, with our environmental management systems and standards being the responsibility of our Vice President of HSE, and our global sustainability strategy being the responsibility of our Vice President of Sustainability. For details about our environmental management standard and how we manage environmental risk, see our annual Sustainability Report, available at https://www.slb.com/sustainability/reports.html.
Our Corporate Governance Guidelines provide that at least a majority of the Board must consist of independent directors, in accordance with the New York Stock Exchange (“NYSE”) listing standards. In addition, our Board has adopted director independence standards that meet or exceed the independence requirements in the NYSE listing standards, and which can be found in our Corporate Governance Guidelines.
Based on the review and recommendation by the Nominating and Governance Committee, the Board has determined that each director nominee listed above under “Election of Directors—Our Director Nominees” is “independent” under NYSE listing standards and our director independence standards, except for Mr. Le Peuch, who is our CEO and therefore does not qualify as independent, and Mr. Galuccio. The Board has also determined that each member of the Audit Committee meets the heightened independence standards required for audit committee members under NYSE listing standards and the rules of the SEC and that each member of the Compensation Committee meets the heightened independence standards for compensation committee members under NYSE listing standards. Additionally, Mr. Seydoux, who is not standing for reelection, is independent, and former directors Lubna Olayan and Leo Rafael Reif, who served on the board until April 2021, were independent during the period they served on our Board.
Our Board’s independence determinations included a review of transactions that occurred since the beginning of 2019 with entities associated with our directors or members of their immediate family. In making its independence determinations, the Board considered that all our independent directors serve as directors, trustees, outside consultants or advisory board members at companies and universities that have had commercial business relationships with the Company. All such relationships involved ordinary course commercial transactions with the Company that were less than the greater of $1 million or 1% of the other entity’s annual revenues during 2021, 2020 and 2019; except for transactions with Enerplus, where Mr. Sheets serves as a director, which involved ordinary course commercial transactions with the Company that were less than 2% of Enerplus’ annual revenues during those three years.
The Board also evidencesconsidered that the Board’s commitmentCompany made charitable contributions in the form of educational grants and sponsored research to havecertain academic and other institutions with which some of our directors who represent countriesare affiliated. Except for contributions to the Moscow School of Management SKOLKOVO, these charitable contributions were less than $120,000 per year. Our contributions to the Moscow School of Management SKOLKOVO, where Schlumberger operates. In addition,Dr. Mitrova serves as a professor, were $500,000 annually for 2021, 2020 and 2019. No director received any personal benefit from any such charitable contributions.
| Schlumberger Limited2022 Proxy Statement | 22 |
Each year, the exceptionally broadBoard and diverse experienceits committees conduct rigorous self-evaluations in order to assess the overall functioning, performance and effectiveness of the Board, members is in keeping withits committees, and the goal of having directors whose background and experience complement those of otherindividual non-employee directors. The Nominating and Governance Committee’sCommittee oversees this annual evaluation process. From time to time, these evaluations may be conducted using a third-party facilitator.
| Initiate Evaluation Process | Collect Evaluation Data | Discuss Findings | Implement Feedback | |||
Upon the instruction of the Nominating and Governance Committee, self-assessment questionnaires are distributed to the full Board, each committee, and each director individually. The questionnaires seek anonymous, candid feedback from our directors on a variety of topics, including board composition and culture, committee effectiveness, strategic planning, risk management, peer evaluation, and succession planning. | After all directors have completed the written questionnaires, their responses are aggregated into summary reports for the Board, each of its committees, and the chair of the Nominating and Governance Committee. In 2021, all questionnaires were distributed and responses collected through a third-party platform. Periodically, the Nominating and Governance Committee has also used a third-party facilitator to conduct one-on-one interviews with Board members as part of this annual evaluation process. | Each October, findings from the evaluation process are reviewed and discussed in executive session at each quarterly committee meeting and the full Board meeting. Based on these discussions, the directors may recommend improvements to the Board’s structure, processes, policies, or composition, or other changes. In addition, the chair of the Nominating and Governance Committee may provide one-on-one feedback to individual directors as appropriate. | Finally, the Board, its committees, and (where appropriate) management work to implement the feedback from this evaluation process to improve Board performance and effectiveness. Following this process, the Nominating and Governance Committee annually reviews, and makes recommendations to the Board regarding, its process for evaluating the effectiveness of the Board, its committees and each individual director. |
Some examples of feedback implemented based on past Board evaluations processes include:
| • | expanding the Board’s expertise in the areas of financial and capital management, sustainability, new energy, and digital technologies and transformation, as discussed above under “Proxy Executive Summary—Board Refreshment”; | |
| • | retiring our former Science and Technology Committee, and launching our New Energy and Innovation Committee focused on identifying areas for growth in our new energy businesses, our emissions-reducing Transition Technologies portfolio, and our early stage investment and research and development programs; and | |
| • | conducting cybersecurity training for the Audit Committee in January 2022. |
Our director orientation and continuing education programs are designed to support our directors in fulfilling their responsibilities as members of the Board. First, all new directors participate in Schlumberger’s director orientation program, to familiarize themselves with our business and operations, financial and performance strategies, controls and compliance systems, sustainability and HSE commitments, and industry dynamics. New directors also attend trainings with members of senior management focused on financial, industry- and committee-specific topics, as well as facility and well-site visits. For new and incumbent directors, regular continuing education programs help our Board stay current on industry, corporate governance, risk management, cybersecurity, and other developments relevant to their work as directors. These programs may include presentations from Schlumberger management or in-depth trainings developed by outside experts, as appropriate.
The Nominating and Governance Committee assists the Board in identifying qualified individuals to join as new members. The Board seeks out individuals whose background, experience and skills complement those of other Board members. As a result, in evaluating potential nominees, the Committee takes into account theirconsideration the Board’s current composition, the potential nominee’s ability to contribute to the Board’s diversity, the Company’s existing and anticipated business needs, and the general qualifications of the potential nominees, as discussed above under “Election of Directors—Director Qualifications and Diversity.”
The Nominating and Governance Committee annually reviews its effectiveness in balancing these considerations in the context of its consideration of director nominees.
Applying the criteria above, the Nominating and Governance Committeealso recommends to the Board the number and names of persons to be proposed by the Board for election as directors at the annual general meeting of stockholders.our AGM. In obtaining the names of possible director nominees, the Nominating and Governance Committee makes its own inquiries and will receivereceives suggestions from other directors management, stockholders and other sources,management. Consideration of new Board candidates typically involves a series of internal discussions, review of information regarding potential candidates, and its process for evaluating nominees identified in unsolicited recommendations from security holders is the same as its process for recommendations from other sources. interviews with selected candidates.
| Schlumberger Limited2022 Proxy Statement | 23 |
From time to time, the Nominating and Governance Committee retains executive search and board advisory consulting firms to assist in identifying and evaluating potential nominees. To further our diversity policy, we request that any such firms retained by us include women and nationally, racially and ethnically diverse candidates in the proposals they present to us. During 2017,2021, the Nominating and Governance Committee, usedwith the servicesassistance of New York-based Spencer Stuart, a third-partyan executive search firm, for this purpose. Considerationevaluated a number of new Board candidates typically involves a series of internal discussions, review of information concerningpotential candidates and interviews with selected candidates.recommended each of Ms. Narayanan, Messrs. Coleman and Leupold, and Dr. Spiesshofer as Board members typically suggest candidates for nomination to the Board.members.
The Nominating and Governance Committee will also consider nominees recommended by stockholders who meet the eligibility requirements for submitting stockholder proposals for inclusion in the next proxy statement and submit their recommendations in writing to:
Chair, Nominating and Governance Committee,
c/o Secretary, Schlumberger Limited,
5599 San Felipe, 17thFloor,
Houston, Texas 77056.
Such recommendations must be submitted by the deadline for stockholder proposals referred to at the endunder “Other Information—2023 Annual General Meeting of Stockholders” on page 70 of this proxy statement. Unsolicited recommendations must contain all of the information that would be required in a proxy statement soliciting proxies for the election of the candidate as a director, a description of all direct or indirect arrangements or understandings between the recommending security holder and the candidate, all other companies to which the candidate is being recommended as a nominee for director, and a signed consent of the candidate to cooperate with reasonable background checks and personal interviews, and to serve as a member of our Board, if elected.
Although we had not received a stockholder proposal requesting a proxy access bylaw, we proactively adopted proxy access bylaw provisions in January 2017. These provisions permit a stockholder, or a group of up to 20 stockholders, owning at least three percent (3%)The Board has five standing committees: Audit, Compensation, Nominating and Governance, Finance, and New Energy and Innovation. Each member of the Company’s outstanding common stock, for at least three (3) years, to include two (2) director nominees, or 20%Audit, Compensation and Nominating and Governance committees meets the independence and other requirements of the current Board, whicheverNYSE listing standards and SEC rules (including the heightened requirements that apply to audit or compensation committee members, as applicable). In addition, each member of the Audit Committee is greater, in our proxy for the annual general meeting, beginning with our 2018 annual general meetingfinancially literate, and each of stockholders.Messrs. de La Chevardière and Sheets qualifies as an “audit committee financial expert” under applicable SEC rules.
The amendments madeNominating and Governance Committee nominates for Board approval directors to serve on and chair the bylaws also address “advance notice” requirements. These require stockholders to notify us within a certain window each yearBoard’s committees. The following table reflects the membership of any stockholder proposals for any annual general meeting, and to provide additional information. For more information, please review the full textBoard’s standing committees as of our bylaws as filed with the SEC.February 1, 2022.
| Name of Director | Audit Committee | Compensation Committee | Nominating and Governance Committee | Finance Committee | New Energy and Innovation Committee |
| Peter Coleman |  | | |||
| Patrick de La Chevardière | Chair | | |||
| Miguel Galuccio | Chair | ||||
| Samuel Leupold | | | | ||
| Tatiana Mitrova | | | | ||
| Maria Moræus Hanssen | | | Chair | ||
| Vanitha Narayanan | | | |||
| Mark Papa* | Chair | ||||
| Henri Seydoux(1) | | | | ||
| Jeff Sheets | | Chair | |||
| Ulrich Spiesshofer | | |
| * | Independent Chairman of the Board. |
| (1) | Not standing for reelection. |
Each committee operates under a written charter that sets forth the purposes, responsibilities and membership requirements of that committee. Each committee reviews the adequacy of its charter at least annually and recommends changes to the Board for approval. All committees also report regularly to the Board with respect to their activities. Committee charters are available on the Company’s website at https://www.slb.com/who-we-are/corporate-governance/.
| Schlumberger Limited |
During 2021, the Board Leadership Structure
The Board recognizes that oneheld four regular meetings, each including an executive session of its key responsibilities is to evaluate and determine an appropriate board leadership structure to provide for independent oversight of management. The Board believes that there is no single, generally accepted board leadership structure that is appropriate for all companies, and that the right structure may vary for a single company as circumstances change. As such, our independentnon-employee directors considerled by the Board’s leadership structure at least annually, and may modify this structure from time to time to best address the Company’s unique circumstances and advance the best interests of all stockholders, as and when appropriate.
From 2011 to 2015, the Board was led by a non-executive chairman of the Board.independent Chairman. In connection with the chairman’s retirement in 2015, the independent members of the Board gave thoughtful consideration toaddition, the Board’s leadership structure and determined that recombining the Chairman and CEO positions under the leadership of
Mr. Kibsgaard upon the chair’s retirement wascommittees held 23 meetings in the best interests of the Company and its stockholders. This determination was based on the Board’s strong belief that, as the individual with primary responsibility for managing the Company’s day-to-day operations and with extensive knowledge and understanding of the Company, Mr. Kibsgaard is best positioned to chair regular Board meetings as the directors discuss key business and strategic issues and to focus the Board’s attention on the issues of greatest importance to the Company and its stockholders. Furthermore, combining the roles of Chairman and CEO in Mr. Kibsgaard creates a clear line of authority that promotes decisive and effective leadership, both within and outside the Company. In making this judgment, the Board took into account its evaluation of Mr. Kibsgaard’s performance as CEO and as a then-current member of the Board, his positive relationships with the other directors, and the strategic perspective he would bring to the role of Chairman.
In considering its leadership structure, the Board also took into account that Schlumberger’s current governance practices provide for strong independent leadership, active participation by independent directors and independent evaluation of, and communication with, many members of senior management. These governance practices are reflected in our Corporate Governance Guidelines and our various committee charters,2021, which are available on our website. The Board believes that its risk oversight programs, discussed immediately below, are effective under a variety of board leadership frameworks and therefore do not materially affect the Board’s choice of leadership structure.
The Board’s Role in Risk Oversight
As set forth in our Corporate Governance Guidelines, the Board assesses major risks facing the Company and options for their mitigation, in order to promote the Company’s stockholders’ and other stakeholders’ interests in the long-term health and the overall success of the Company and its financial strength.
The full Board is actively involved in overseeing risk management for the Company. It does so in part through its oversight of the Company’s Executive Riskincluded five Audit Committee, (the “ERC”) comprised of more than half a dozen top executives of the Company from various functions, each of whom supervises day-to-day risk management throughout the Company. The ERC is not a committee of the Board. The ERC ensures that the Company identifies all potential material risks facing the Company and implements appropriate mitigation measures. The Company’s risk identification is performed annually at two levels: the ERC performs a corporate-level risk mapping exercise, which involves the CEO and several other members of senior management, and while maintaining oversight, delegates operational (field-level) risk assessment and management to theCompany’s various GeoMarkets, Technologies and Functions and to its Research, Engineering, Manufacturing and Sustaining organization. To the extent that the ERC identifies recurring themes from the operational risk mapping exercises, they are acted on at the corporate level. Members of the ERC meet formally at least once a year, and more frequently on an ad hoc basis, to define and improve the risk mapping process, and to review and monitor the results of those exercises and those that have been delegated. The ERC reports directly to the CEO and to the full Board, and annually presents to the full Board a comprehensive report as to its risk mapping efforts for that year.
In addition, each of our Board committees considers the risks within its areas of responsibility. For example, the Finance Committee considers finance-related risks on a quarterly basis and recommends guidelines to control pension and other investments, banking relationships and currency exposures. Thefour Compensation Committee, reviewssix Nominating and assesses the Company’s overall compensation program and its effectiveness at linking executive pay to performance, aligning the interests of our executives and our stockholders and providing for appropriate incentives. TheGovernance Committee, one Science and Technology Committee, reviewsone New Energy and assesses risks affecting the Company’s technology direction and research and development. The Nominating and Governance Committee oversees governance- and compliance-related risks, related person transactions, and reviews and discusses the Company’s Ethics and Compliance Program’s quarterly statistical report and the various allegations, disciplinary actions and training statistics brought to its attention. The Nominating and Governance Committee also considers corporate social responsibility risks. The Audit Committee reviews and assesses risks related to financial reporting. The Audit Committee also discusses all significant finance-related violations of Company policies brought to its attention from time to time, and annually reviews a summary of all finance-related violations. Additionally, the outcome of the Company’s Audit Risk assessment is presented to the Audit Committee annually; this assessment identifies internal controls risks and drives the internal audit plan for the coming year. All significant violations of the Company’s Code of Conduct and related corporate policies are reported to the Nominating and GovernanceInnovation Committee, and (if finance-related) to the Audit Committee, and, when appropriate, are reported to the full Board. Once a year, the Director of Compliance delivers to the full Board a comprehensive Annual Compliance Report. The risks identified within the Ethics and Compliance Program are incorporated into the ERC’s enterprise risk management program described above.
Meetings of the Board of Directors and its Committees
During 2017, the Board held five meetings. Schlumberger has an Audit, a Compensation, a Nominating and Governance, a Finance, and a Science and Technology Committee. During 2017, the Audit Committee met five times; the Compensation Committee met four times; thesix Finance Committee met four times; the Nominatingmeetings. Officers regularly attend Board meetings to present information on our business and Governance Committee met four times;strategy, and the Science and Technology Committee met two times.
Eachdirectors have worldwide access to our employees outside of our current directors attended at least 75% of the meetings of the Board and the committees on which he or she served in 2017 (held during the period he or she served).
meetings. From time to time between meetings, Board and committee members confer with each other and with management and independent consultants regarding relevant issues, and representatives of management may meet with suchthese consultants on behalf of the relevant committee.
MEMBERS OF THE COMMITTEES OF THE BOARD OF DIRECTORS AS OF FEBRUARY 1, 2018
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Audit Committee
The Audit Committee consists of fiveIn 2021, our directors each of whom meets the independence and other requirementsattended 100% of the NYSE’s listing standards and SEC rules (including the heightened requirements that apply to audit committee members). The Audit Committee assists the Board in its oversightmeetings of the accounting and financial reporting process of the Company, including the audit of the Company’s financial statements and the integrity of the Company’s financial statements, legal and regulatory compliance, the independent registered public accounting firm’s qualifications, independence, performance and related matters, and the performance of the Company’s internal audit function.
The authority and responsibilities of the Audit Committee include the following:
The Company’s independent registered public accounting firm is accountable to the Audit Committee. The Audit Committee pre-approves all engagements, including the fees and terms for the integrated audit of the Company’s consolidated financial statements.
The Board has determined that each Committee member has sufficient knowledge in financial and auditing matters to serve on the Committee. In addition, the Board has determined that Messrs. Lund, Marks and Currie, as well as Mrs. Nooyi, each qualify as an “audit committee financial expert” under applicable SEC rules. The Audit Committee operates pursuant to a written charter, which is available on the Company’s website at http://www.slb.com/about/ guiding_principles/corpgovernance/audit_committee.aspx.
Compensation Committee
The Compensation Committee consists of three directors, each of whom meets the independence requirements of the NYSE’s listing standards (including the heightened requirements that apply to compensation committee members). The purposes of the Compensation Committee are to assist our Board in discharging its responsibilities with regard to executive compensation; periodically review non-executive directors’ compensation; oversee the Company’s general compensation philosophy, policy and programs; serve as the administrative committee under the Company’s stock plans; and prepare the annual Compensation Committee Report required by the rules of the SEC.
The authority and responsibilities of the Compensation Committee include the following:
The Compensation Committee may delegate specific responsibilities to one or more individual committee members to the extent permitted by law, regulation, NYSE listing standards and Schlumberger’s governing documents. The design and day-to-day administration of all compensation and benefits plans and related policies, as applicable to executive officers and other salaried employees, are handled by teams of the Company’s human resources, finance and legal department employees. The Compensation Committee operates pursuant to a written charter, which is available on the Company’s website at http://www.slb.com/about/guiding_principles/ corpgovernance/compensation_committee.aspx.
Nominating and Governance Committee
The Nominating and Governance Committee consists of five directors, each of whom meets the independence requirements of the NYSE’s listing standards.
The authority and responsibilities of the Nominating and Governance Committee include the following:
The Nominating and Governance Committee operates pursuant to a written charter, which is available on the Company’s website at http://www.slb.com/about/guiding_principles/corpgovernance/ nomgov_committee.aspx.
Finance Committee
The Finance Committee consists of seven directors, each of whom, except for Mr. Galuccio, meets the independence requirements of the NYSE’s listing standards. The Finance Committee advises the Board and management of the Companyits committees on various matters, including dividends, financial policies and the investment of funds.
The authority and responsibilities of the Finance Committee include the following:
The Finance Committee operates pursuant to a written charter, which is available on the Company’s website at http://www.slb.com/ about/guiding_principles/corpgovernance/finance_committee.aspx.
Science and Technology Committee
The Science and Technology Committee advises the Board and management on matters involving the Company’s research and development programs.
The authority and responsibilities of the Science and Technology Committee include the following:
The Science and Technology Committee operates pursuant to a written charter, which is available on the Company’s website at http://www.slb.com/about/guiding_principles/corpgovernance/ tech_committee.aspx.
The Board has established a process for all interested parties, including stockholders and other security holders, to send communications, other than sales-related communications, to one or more of its members, including to the independent or non-management directors as a group. Interested parties may contact the Board or any Schlumberger director (including the Chairman of the Board) by writing to them at the following address:
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Director Attendance at 2017 Annual General Meetingthey served.
The Board’s policy regarding director attendance at annual general meetings of stockholdersour AGM is that directors are welcome, but not required, to attend, and that the Company will make all appropriate arrangements for directors who choose to attend. No director attended our annual general meeting of stockholders in 2017.2021 AGM.
We have adopted Corporate Governance Guidelines that our Board believes are consistent with our values, and Procedures for Approvalthat promote the effective functioning of our Board, its committees and the Company. At least annually, our Board reviews and, if appropriate, revises our Corporate Governance Guidelines to reflect the Board’s corporate governance objectives and commitments. Our Corporate Governance Guidelines are available on our website at https://www.slb.com/who-we-are/corporate-governance/guidelines.
We have adopted a code of conduct entitled The Blue Print and The Blue Print in Action (together, our “Code of Conduct”), which applies to all of our directors, officers and employees. Our Code of Conduct is available on our website at https://www.slb.com/who-we-are/guiding-principles/our-code-of-conduct.
In January 2007, theThe Board formally adoptedhas a written policy with respect togoverning the review, approval and ratification of “related person transactions” to document procedures pursuant to which such transactions are reviewed, approved or ratified.transactions.” Under SEC rules, “related persons” include any director, executive officer, director nominee, or greater than 5% stockholder of the Company since the beginning of the previous fiscal year, and their immediate family members. The policy applies to any transaction in which:
| • | the Company is a participant; | |
| • | any related person has a direct or indirect material interest; and | |
| • | the amount involved exceeds |
unless excluded under Item 404(a) of SEC Regulation S-K.
The Nominating and Governance Committee with assistance from the Company’s Secretary and General Counsel, is responsible for reviewing and, where appropriate, approving or ratifying any related person transaction involving Schlumberger or its subsidiaries and any related persons. The Nominating and Governance Committee approves only those related person transactions that are in, or are not inconsistent with, the best interests of the Company and its stockholders.
SinceSchlumberger has an ongoing commercial relationship with Vista Oil and Gas (Vista), where Mr. Galuccio serves as chairman of the beginning of 2017, there were no related person transactions under the relevant standards.board and chief executive officer. In 2021, Schlumberger contracted with Vista to deliver ordinary course oilfield services and products, and Vista paid Schlumberger $133 million.
The Board recommends that stockholders and other interested parties initiate communications with the Board, the Chairman or any Board committee by writing to our Chief Legal Officer and Secretary. This process assists the Board in reviewing and responding to communications by stockholders and other interested parties. The Board has instructed our Chief Legal Officer and Secretary to review correspondence directed to the Board (including to the Chairman and any Board committee) and, at the Secretary’s discretion, to forward those items that she deems appropriate for the Board’s consideration. Communications can be sent to the following address: Schlumberger has adopted a code of conduct entitled The Blue PrintLimited, Attention: Chief Legal Officer and The Blue Print in Action, which applies to all of its directors, officers and employees. Together, these documents describe the purpose, ambition and mindset of the Company and expectations for its employees. Both documents are located at www.slb.com/about/codeofconduct.aspx.Secretary, 5599 San Felipe, 17th Floor, Houston, Texas 77056.
| Schlumberger Limited |
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. Directors who are employees of Schlumberger do not receive compensation for serving on the Board.
Director Pay Components
Cash Compensation
Non-employee directors receive the following cash compensation:
| • | an annual cash retainer of $115,000; | |
| • | an annual fee of $10,000 for each committee membership; | |
| • | if the director is the chair of a committee, an annual fee of $20,000 in lieu of the fee for committee membership; and | |
| • | if the director is the independent Board Chairman, an additional $100,000 annual cash fee. |
Equity Compensation
Schlumberger annually grants shares of our common stock valued at approximately $190,000 for each non-employee director, or $290,000 for the independent Board Chairman. The shares are valued based on our closing stock price on the last business day of April of the grant year.
For 2021, our directors received the following grants of our common stock effective May 3, 2021:
| • | 7,024 shares to each non-employee director serving on that date (except for Mr. Papa); and | |
| • | 10,721 shares to Mr. Papa, our independent Board Chairman. |
The following table provides information on the compensation paid to our non-employee directors in 2021.
| Name | Fees Earned or Paid in Cash ($) | (1) | Stock Awards ($) | (2) | Total ($) | |
| Peter Coleman(3) | 87,842 | 153,756 | 241,598 | |||
| Patrick de La Chevardière | 142,500 | 198,217 | 340,717 | |||
| Miguel Galuccio | 137,500 | 198,217 | 335,717 | |||
| Samuel Leupold(4) | 119,949 | 204,960 | 324,909 | |||
| Tatiana Mitrova | 140,000 | 198,217 | 338,217 | |||
| Maria Moræus Hanssen(5) | 150,000 | 347,802 | 497,802 | |||
| Vanitha Narayanan(6) | 48,914 | 105,197 | 154,111 | |||
| Lubna Olayan(7) | 14,973 | — | 14,973 | |||
| Mark Papa | 237,500 | 302,547 | 540,047 | |||
| Leo Rafael Reif(7) | 16,005 | — | 16,005 | |||
| Henri Seydoux | 142,500 | 198,217 | 340,717 | |||
| Jeff Sheets | 145,000 | 198,217 | 343,217 | |||
| Ulrich Spiesshofer(6) | 48,914 | 105,197 | 154,111 |
| (1) | The amounts reported reflect cash fees actually paid in 2021. |
| (2) | The amounts reported reflect the aggregate grant date fair value of the stock awards computed in accordance with applicable accounting standards, based on the closing stock price on the applicable grant date. Amounts rounded to nearest dollar. |
| (3) | Mr. Coleman was appointed to the Board effective July 7, 2021. Effective August 18, 2021, Mr. Coleman received a grant of 5,735 shares of our common stock, reflecting a prorated amount for his service from July 7, 2021 to April 30, 2022. |
| (4) | Mr. Leupold was appointed to the Board effective April 22, 2021. Effective August 17, 2021, Mr. Leupold received a grant of 248 shares of our common stock, reflecting a prorated amount for his service from April 22, 2021 to April 30, 2021. This grant was in addition to the regular annual stock grant he received effective May 3, 2021, with respect to his service through April 2022. |
| (5) | Ms. Moræus Hanssen was appointed to the Board effective October 15, 2020. Effective January 22, 2021, Ms. Moræus Hanssen received a grant of 6,128 shares of our common stock, reflecting a prorated amount for her service from October 15, 2020 to April 30, 2021. This grant was in addition to the regular annual stock grant she received effective May 3, 2021, with respect to her service through April 2022. |
| (6) | Ms. Narayanan and Dr. Spiesshofer were appointed to the Board effective October 21, 2021. Effective December 20, 2021, each of them received a grant of 3,695 shares of our common stock, reflecting a prorated amount for their service from October 21, 2021 to April 30, 2022. |
| (7) | Did not stand for re-election at our 2021 AGM. |
| Schlumberger Limited2022 Proxy Statement | 26 |
Non-employee directors who begin their Board, Board Chair, committee or committee chair service after the AGM receive a prorated amount of annual compensation. Schlumberger also reimburses non-employee directors for travel and other business expenses incurred in the performance of their services for Schlumberger.
Annual Director Pay Review
Our Compensation Committee annually reviews our non-employee director compensation, and periodically recommends that the Board approve updates to director pay. In 2021, the Committee’s director pay review took into account multiple factors including our director compensation philosophy, changes in market practices, the continued expansion of director and committee chair responsibilities, consultations with the Committee’s independent compensation consultant, Pay Governance, and feedback received during our shareholder engagements. Based on that review, the Committee determined that no changes in non-employee director compensation were necessary for 2021. The Committee has not increased the directors’ annual cash retainer, committee chair or membership fees, or annual stock grant value since 2017 (except in connection with separating the Chairman and CEO roles in 2019).
While the Committee is aware that other jurisdictions may have differing director compensation practices, the Committee believes it is in the best interests of the Company and our stockholders as a whole to align to market practice among NYSE-listed companies and companies with a large U.S. shareholder base. The Committee also believes that the interests of our non-employee directors are most aligned with the interests of our stockholders when a significant portion of director compensation is paid through stock grants.
Director Stock Ownership Guidelines
The Board believes that ownership of Schlumberger stock by our directors aligns their interests with the interests of our stockholders, and as a result, the Board has maintained stock ownership guidelines for its directors. In 2021, upon recommendation of the Nominating and Governance Committee and the Compensation Committee, our Board revised our director stock ownership guidelines to require each non-employee director to hold a minimum dollar value of shares of Schlumberger common stock equal to five times (5x) that director’s annual cash retainer. The director has five years from appointment to meet this holding requirement. As of January 31, 2022, each of our non-employee directors was in compliance with these guidelines.
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, (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.
| Schlumberger Limited2022 Proxy Statement | 27 |
Security Ownership by Management and Our Board
The following table sets forth information known to us with respect to beneficial ownership of our common stock as of January 31, 2022 by (i) each director and director nominee, (ii) each of the named executive officers and (iii) all executive officers (as defined in Rule 3b-7 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and directors as a group (the “D&O Group”).
The number of shares beneficially owned as of January 31, 2022 includes shares of common stock that the individual has the right to acquire within 60 days of January 31, 2022, including exercisable options to purchase common stock, as well as RSUs and PSUs that will vest within 60 days. The table below does not include the number of shares earned but not yet issued under our 2019 ROCE PSUs, because the Company will finally determine the number of shares earned after the applicable comparator companies disclose their full-year audited 2021 results, as described under “Compensation Discussion and Analysis—Elements of 2021 Total Direct Compensation—Long-Term Equity Incentive Awards—Payouts Under Prior LTI Awards—PSUs Vesting in 2022” on page 47 of this proxy statement. These same policies apply to the aggregate calculation for the D&O Group.
| (1) | Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to |
| (2) | Percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the 1,413,019,316 shares of Schlumberger common stock outstanding on January 31, 2022, plus the number of shares of common stock that such person or group had the right to acquire on or within 60 days of January 31, 2022. |
| (3) | Includes options to purchase 308,000 shares. |
| (4) | Includes options to purchase 340,000 shares. |
| (5) | Includes options to purchase 99,000 shares and 1,773 shares beneficially owned by Mr. Biguet’s children. |
| (6) | Includes options to purchase 98,000 shares and 218 shares beneficially owned by Ms. Gharbi’s spouse. |
| (7) | Includes options to purchase 129,000 shares. |
| (8) | Includes options to purchase 1,480,957 shares, all of which are held by our executive officers. |
| Schlumberger Limited2022 Proxy Statement | 28 |
Security Ownership by Certain Beneficial Owners
The following table sets forth information as of December 31, 2021 (except as otherwise noted) with respect to persons known by us to be the beneficial owners of more than 5% of our 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 1,413,019,316 shares of our common stock outstanding on January 31, 2022.
| Beneficial Ownership of Common Stock | ||||||||
| Name and Address | Number of Shares | Percentage of Class | ||||||
| The Vanguard Group(1) | 119,850,812 | 8.5 | % | |||||
| 100 Vanguard Blvd. | ||||||||
| Malvern, PA 19355 | ||||||||
| BlackRock, Inc.(2) | 111,487,119 | 7.9 | % | |||||
| 55 East 52nd Street | ||||||||
| New York, NY 10055 | ||||||||
| State Street Corporation(3) | 92,164,506 | 6.5 | % | |||||
| State Street Financial Center | ||||||||
| One Lincoln Street | ||||||||
| Boston, MA 02111 | ||||||||
| (1) | Based solely on a Statement on Schedule 13G/A filed on February 10, 2022. Such filing indicates that The Vanguard Group has shared voting power with respect to 2,205,290 shares, sole investment power with respect to 114,325,999 shares and shared investment power with respect to 5,524,813 shares. |
| (2) | Based solely on a Statement on Schedule 13G/A filed on February 1, 2022. Such filing indicates that BlackRock, Inc. has sole voting power with respect to 96,704,481 shares and sole investment power with respect to 111,487,119 shares. |
| (3) | Based solely on a Statement on Schedule 13G/A filed on February 14, 2022. Such filing indicates that State Street Corporation has shared voting power with respect to 84,453,128 shares and shared investment power with respect to 91,556,288 shares. |
WeDelinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our 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 two transactions required to be reported under Section 16(a) were not timely reported during the fiscal year ended December 31, 2021. Two Form 4s required to be filed by Mr. Le Peuch in 2021 relating to shares acquired pursuant to a brokerage dividend reinvestment plan were not timely filed, but were filed on January 21, 2022.
| Schlumberger Limited2022 Proxy Statement | 29 |
Our Board is asking our stockholdersyou to approve, on an advisory basis, the Company’s executive compensation of our NEOs as reporteddisclosed in this proxy statement. As described below inThis item, which is provided pursuant to Section 14A of the “Compensation Discussion and Analysis” section of this proxy statement, theExchange Act, is commonly referred to as a “say-on-pay” resolution.
The Compensation Committee has structured our executive compensation program to achieve the following key objectives:
| • | to attract, motivate and retain talented executive officers; |
| • | to motivate |
| • | to align the interests of our executive officers with those of |
We urge stockholders to readas described in the “Compensation Discussion and Analysis” beginning on page 24section of this proxy statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narrative, appearing on pages 45-58, which provide detailed information on the compensation of our named executive officers. Thestatement.
Our Compensation Committee and the Board believe that the policies and procedures articulated in the “Compensation Discussion and Analysis” are effective in achieving our goals, and that the compensation of our named executive officersNEOs as reported in this proxy statement has contributed to the Company’s short-term and long-term success.
In accordance with Section 14A of the Exchange Act, and as a matter of good corporate governance, Therefore, we are asking our stockholders to approve the compensation of our NEOs by voting “FOR” the following resolution on an advisory resolution at the 2018 annual general meeting of stockholders:basis:
RESOLVED, that the stockholders of Schlumberger Limited (the “Company”) approve, on an advisory basis, the compensation ofpaid to the Company’s named executive officers, as disclosed in this proxy statement, including the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables notes and narrative in the Proxy Statement for the Company’s 2018 annual general meeting of stockholders.discussion, is hereby APPROVED on an advisory basis.
This advisory resolution, commonly referred to as a “say-on-pay” resolution,Although this vote is non-binding on our Board. Although non-binding, our Board and the Compensation Committee will review and consider the voting results when making future decisions regarding our executive compensation program.
The Board has adopted a policy providing for anAlthough annual “say-on-pay” advisory vote. Unlessvotes are not required by our bylaws, the Board of Directorscurrently believes that having our stockholders provide annual feedback on our compensation practices provides for effective governance. As a result, the next “say-on-pay” advisory vote will occur in 2023, unless the Board modifies its policy on the frequency of holding “say-on-pay” advisory votes, the next “say-on-pay” advisory vote will occur in 2019.votes.
Required Vote
A majority of the votes cast is required to approve this Item 2.
If you hold your shares in “street name,” please note that 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 2. |
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with the Company’s management. Based on that review and discussion, the Compensation Committee recommended to the 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
| Jeff Sheets, Chair | Maria Moræus Hanssen | Vanitha Narayanan | Henri Seydoux | Ulrich Spiesshofer |
| Schlumberger Limited |
The followingThis Compensation Discussion and Analysis (“CD&A”&A”) describes Schlumberger’sour compensation policies and practices as they relate to our five named executive officers identified in the Summary Compensation Table below (the “named executive officers,(“NEOs” or the “NEOs”). listed below:
| Named Executive Officers | Title |
| Olivier Le Peuch | Chief Executive Officer |
| Stephane Biguet | Executive Vice President and Chief Financial Officer |
| Khaled Al Mogharbel | Executive Vice President, Geographies |
| Hinda Gharbi | Executive Vice President, Services and Equipment |
| Ashok Belani | Executive Vice President, Schlumberger New Energy |
The purpose of the CD&A is to explain what the elements of their compensation are; whyour NEOs’ 2021 compensation; the Compensation Committee selectscriteria for selecting these elements; how the Compensation Committee determines the relative size of each element of compensation; the decisions theour Compensation Committee made with respect to the 20172021 compensation of the NEOs,our NEOs; and the reasons for those decisions.
| Schlumberger Limited2022 Proxy Statement | 31 |
2021 was an exceptional year for Schlumberger, in which we demonstrated the strength and agility of our emergent strategy—rooted in operational execution, superior returns, and capital discipline. After two years of extraordinary industry, market, and social uncertainty, the Schlumberger team delivered a year of remarkable financial results, surpassing all of our 2021 financial targets and closing the year with excellent momentum.
The second halfHighlights of 2017 markedour 2021 financial performance, reflecting the beginningsuccess of an uneven recovery followingour returns-focused strategy and execution, include:
| Adjusted EBITDA(1) $4.925 billion | Free Cash Flow(2) $2.997 billion | Revenue $22.9 billion | ||
| 14% increase over 2020 | 110% increase over 2020 | H2 2021 revenue increased 18% over H2 2020, excluding impact of divestitures | ||
| Adjusted EBITDA Margin 21.5% | Net Debt Reduced by $2.8 billion | Earnings per Share (GAAP) $1.32 | ||
| Expanded 320 basis points year-on-year, achieving highest adjusted EBITDA margin level since 2018 | Net debt to adjusted EBITDA ratio of 2.2x Lowest net debt level since 2016 | Earnings per share, excluding charges and credits, was $1.28, an 88% increase over 2020 | ||
On the longest and deepest industry downturn in 30 years. Although oil and gas prices improved in 2017, their average prices remained far below 2014 levels. However, we capitalized on the difficult industry environmentstrength of these financial results, driven by continuing to strengthen our technology-based service and product lines through strategic acquisitions, organic growth and industry-leading research and engineering. These efforts also enabled us to bolster our market competitiveness in key markets around the world. Asexcellent operational leverage as a result of our Performance Strategy and strong working capital management, we were able to quickly reactivate almost allreduce our pressure pumping fleetsnet debt to meet customer demand whenadjusted EBITDA ratio from 3.2x to 2.2x year-on-year. At the market began to recoversame time, we achieved double-digit pretax operating margins in North America in America—the second half of 2017.highest levels since 2014—and we expanded our international pretax operating margins to the highest levels since 2018.
We exceeded our one- and two-year synergy targetsThe success of $300 million for 2016 and $600 million for 2017, that we set at2021 was built upon the closecontinued growth of our 2016 acquisitionstrategic business pillars—strengthening our core, digital, and new energy—to deliver high performance sustainably.
In our Core business, we fully operationalized our returns-focused strategy through our new Division and Basin organization and high-graded business portfolio, which have significantly increased our operating leverage. As a result of Cameron International Corporation (“Cameron”). Strategic acquisitions like Cameronour differentiated capabilities, exceptional execution, and technology performance, we enhanced our market positions and won significant project awards during the year. With increased operating leverage and our outstanding customer performance, we ended the year marking six consecutive quarters of pretax segment operating margin expansion.
In Digital, we expanded market access and accelerated the adoption of our platform, which brings our customers AI capabilities and powerful digital tools to reduce cycle time, improve performance, and lower carbon intensity. We built partnerships to achieve comprehensive cloud access globally, collaborated with AI innovators to deploy machine-learning and AI solutions, and enabled digital operations through the downturn helped usautomation of key workflows in well construction and production operations.
In Schlumberger New Energy, we continued to increaseadvance the development of clean energy technologies and low-carbon projects. In 2021, we invested in stationary energy storage—expanding our total addressable market by 50%. We also executed three significant Schlumberger Production Management (“SPM”) agreementsmarket—and progressed our ventures in 2017. SPM was an effective countercyclical business development program during the downturn,hydrogen, lithium, geoenergy, and we expect it to mitigate the effectsa suite of CCUS opportunities, including our cyclical industry in the future.BECCS project.
2021 also saw continued excellence in Safety and Service Quality, as we successfully navigated the challenges of the ongoing pandemic to ensure continued execution and performance for our customers. Our total recordable injury frequency showed a 31% improvement since 2019, and we also improved our automotive accident rate by 30% compared to 2019. Furthermore, our service quality performance was the best on record, despite increasing activity coupled with ongoing pandemic and supply chain challenges.
This was also a pivotal year for Schlumberger’s commitment to Sustainability. We announced our comprehensive 2050 net-zero commitment inclusive of Scope 3 emissions—a first for the energy services sector—and we launched our Transition Technology portfolio to focus on the decarbonization of oil and gas operations. In addition, Schlumberger earned an upgraded AA rating from MSCI, and won an ESG Top Performer award from Hart Energy, recognizing our sustainability efforts, our enhanced disclosures, and our commitment to apply our technologies and capabilities toward helping the world sustainably meet future energy demand.
In summary, 2021 was a defining and transformative year for Schlumberger. We continued to expandstrengthen our customercore portfolio, while also enhancing our sustainability leadership, advancing our digital offerings by introducingjourney, and expanding our DELFI* cognitive E&P environment. This new software platform enables customer E&P teams aroundenergy portfolio.
As we enter 2022, Schlumberger is well prepared to seize the multiyear growth cycle ahead of us. We have entered this cycle in a position of strength, having reset our operating leverage, expanded peer-leading margins across multiple quarters, and aligned our technology and business portfolio with the new industry imperatives. We are truly excited about the outlook for Schlumberger—for continued financial outperformance, technology leadership, and growth opportunities in digital and clean energy innovation—to enable the world to securely collaborate in real time, improving operational efficiency while delivering optimized production atunlock access to energy for the lowest cost per barrel. The first workflow to be introduced in the DELFI environment is our DrillPlan* digital well construction planning solution, partbenefit of our fully integrated well construction offering. The DrillPlan solution has already demonstrated the capability to decrease well plan development time by more than half.all.
At the end of 2017, we purchased Weatherford International’s U.S. pressure pumping and perforating assets. This transaction further enables us to execute our strategy of expanding our pressure pumping and pump-down perforating businesses in North America. We also underwent a global corporate restructuring to maximize our operational agility and competitiveness for the long-term.
| (1) | Net income attributable to Schlumberger on a GAAP basis was $1.881 billion. For a reconciliation of adjusted EBITDA to net income attributable to Schlumberger on a GAAP basis, see Appendix A. |
| (2) | Cash flow from operations was $4.651 billion. For a reconciliation of free cash flow to cash flow from operations, see Appendix A. |
| Schlumberger Limited2022 Proxy Statement | 32 |
Our senior management team delivered strong financial and operational results in 2017 despite the industry downturn that began in 2014 and continued into 2017. In this difficult operating environment, themaking decisions regarding 2021 executive compensation, our Compensation Committee continued to focus on strengthening the link between pay and performance; retaining and motivating our top executives; and appropriately compensating them for outperforming our competitors during the downturn and increasing long-term stockholder value.on:
| • | strengthening pay-for-performance alignment; |
| • | motivating and incentivizing outperformance; |
| • | maintaining stability and retaining our top talent through business cycles; and |
| • | appropriately compensating our executives for effectively deploying capital, generating strong cash flow and creating long-term stockholder value. |
In this context, and as more fully discussed elsewhere in this CD&A, below are some key actions that the Compensation Committee approved the following actions in 2017:took with respect to our NEOs’ 2021 compensation.
| • | ||
The 2021 LTI program consisted of four types of grants, equally weighted at target performance:
| • | 25% Absolute FCF Margin PSUs: We replaced our previous free cash flow conversion rate metric, which was measured over a two-year period, with a metric that measures free cash flow margin over a three-year performance |
| • | 25% Relative TSR PSUs: We introduced PSUs based on a three-year relative TSR metric as a new element of our LTI program, to more directly align LTI payouts with stockholder value creation. We set the target performance goal above median at the 60th percentile. |
| • | 25% Relative ROCE PSUs: We increased the rigor of the performance targets for our three-year relative return on capital employed (“ |
| • | 25% Time-based RSUs: We introduced three-year, time-based RSUs as a new element of our LTI program, to promote stability and retention of our executive team. |
As a result of this redesign, we reduced the maximum overall payout opportunity under our 2021 LTI program from 250% to 200%, in line with market practice for a more balanced and diversified LTI grant program.
| • | NEO Cash Compensation Structure Unchanged — We held | |
| • | CEO Compensation Program Unchanged — The target value of our CEO’s 2021 total direct compensation places him at approximately the 50th percentile among CEOs in our general industry peer group. We maintained the target value of our CEO’s 2021 LTI award at $10.5 million, consistent with the target value of the PSU award he received in August 2019 in connection with his promotion to CEO (which was granted in lieu of any 2020 LTI award). For additional details regarding our CEO’s compensation, see “—CEO Pay Summary” on the following page. |
| • | Strategy-Focused Cash Incentive — We continued to tie 70% of our NEOs’ target annual cash incentive opportunity to full-year adjusted EBITDA and cash flow generation goals, to ensure our executives were focused on profitable, sustainable growth. As a result of our performance strategy: |
| • | our 2021 adjusted EBITDA was $4.925 billion, representing a 14% increase over 2020, and resulting in a payout of 89% of the maximum payout opportunity for the adjusted EBITDA component of our 2021 cash incentive plan; and |
| • | our 2021 cash flow generated was $3.000 billion, representing a 12% increase over 2020, and resulting in a payout of 100% of the maximum payout opportunity for the cash flow generation component of our 2021 cash incentive plan. |
| • | ESG Objectives for All NEOs — Every NEO had at least one strategic personal objective related to sustainability, new energy, or HSE goals. |
| • | No Profit-Sharing — Consistent with 2020, our executives did not receive any profit sharing award for the 2021 fiscal year. |
| Schlumberger Limited |
The Board did not increase any element of the 2021 target total direct compensation of Mr. Le Peuch, our CEO, as compared to 2020. However, due to the timing of a 2019 PSU grant (in lieu of a 2020 grant) awarded to Mr. Le Peuch in connection with his CEO appointment, the Summary Compensation Table reflects an increase in his 2021 total reported compensation, as explained in the chart below.
In August 2019, in connection with Mr. Le Peuch’s promotion to CEO, he received a PSU award with a target value of $10.5 million. This award was granted in lieu of a 2020 LTI award, and, as a result, Mr. Le Peuch’s total 2019 compensation, as shown in the Summary Compensation Table, reflects his target 2020 LTI award as well, while his 2020 compensation is unusually low. This is illustrated in the chart at below left entitled “CEO Pay, Reported”.
In order to better reflect our Compensation Committee’s annual compensation mix for our CEO, the chart at below right entitled “CEO Pay, As Adjusted” reflects his three-year total direct compensation, as adjusted to show the 2019 CEO promotion LTI grant subtracted from the 2019 column and added to the 2020 column, because that award was in lieu of his 2020 LTI target award.
CEO Pay, Reported | CEO Pay, As Adjusted | |
|
|
| (1) | “Other” reflects our CEO’s compensation included in the “Change in Pension Value & Nonqualified Deferred Compensation Earnings” and “All Other Compensation” columns in the Summary Compensation Table. |
In setting our executives’ compensation, our Compensation Committee believes that:
| • | the pay of our NEOs and other executives should be strongly linked to performance that is evaluated against financial and strategic personal objectives, and should balance incentivizing outperformance, ensuring retention and maximizing stockholder value; | |
| • | our performance-based LTI and cash incentive awards should utilize clear, quantitative financial metrics that are closely aligned with our corporate strategy and stated external objectives and should be effective through all industry cycles; | |
| • | LTI awards should encourage the creation of long-term stockholder value, align our executives’ compensation with our stockholder returns, and incentivize our executives to achieve difficult but attainable strategic and financial goals that support our long-term performance and our leadership position in our industry; | |
| • | our executive compensation structure should enable us to recruit, develop, motivate and retain top global talent, both in the short-term and long-term; and | |
| • | stock ownership guidelines, which require our executives to hold stock acquired through LTI awards, should further align the interests of our executives with those of our other stockholders. |
| Schlumberger Limited2022 Proxy Statement | 34 |
Our 2021 executive compensation program consisted of three primary elements, comprising our executives’ total direct compensation:
 | LTI equity awards (PSUs and RSUs), |
| Annual (short-term) cash incentive awards, and |
| Base salary. |
Within these elements, 75% of our executives’ 2021 target LTI equity awards and 100% of their annual cash incentive awards were performance-based. These elements have allowed us to remain competitive and attract, retain and motivate top executive talent.
The chart below sets out the primary elements of our NEOs’ 2021 total direct compensation, certain key features of each element, and how each of these compensation elements supports our strategy.
| ELEMENT | KEY FEATURES | HOW THIS ELEMENT SUPPORTS OUR STRATEGY | PERFORMANCE- BASED? | AT RISK? | |
 | Free Cash Flow Margin PSUs (25%) | Absolute performance metric, based on our free cash flow margin over a three-year period | • | • Encourages our NEOs to |
Our Executive Compensation Best Practices
The following is a summary of some of our executive compensation best practices and policies.line with external commitments
 | | ||
|
|
(25%) | ||||||||||||||
 |
| • • | | | ||||||||||
| Relative performance metric, comparing our cumulative TSR over a three-year period to that of eight companies of similar size and footprint in our industry |
• • | | |  |
| |||||||||
| Time-Based RSUs (25%) | “Cliff” vesting after three years, subject to continued employment | | ||||||||||||
 | Annual Cash Incentive Award |
30% based on strategic personal objectives | • |
• • |  | | ||||||||
 |  | Base Salary | Only fixed compensation element | • | ||||||||||
 |
|  | ||||||||||||
| Schlumberger Limited |
Executive Compensation Philosophy and Goals
Our executive compensation program is designed so that the higher an executive’s position in the Company, the greater the percentage of compensation that is “at risk,” that is contingent on our financial performance, long-term stock price performancerisk”. At-risk compensation refers to an executive’s LTI awards and individual performance. Please see “Other Aspects of our Executive Compensation Framework—Relative Size of Direct Compensation Elements” beginning on page 39. The Company believesannual cash incentive opportunity. We believe that having a significant portion of executiveour executives’ compensation at risk more closely aligns their interests with Company interests and with the interests of its executivesour stockholders.
As illustrated below, approximately 90% of our CEO’s 2021 target total direct compensation was at risk, and approximately 83% of our other NEOs’ 2021 target total direct compensation was at risk.
CEO 2021 Target Pay Mix
| Other NEO 2021 Target Pay Mix
|
Our Compensation Committee seeks to achieve an appropriate balance between LTI awards, which emphasize long-term stockholder value creation through efficient conversion of revenue into cash, effective deployment of capital, and total shareholder return, and annual cash rewards, which encourage achievement of near-term financial and non-financial objectives. Based on market data provided by Pay Governance LLC, our Compensation Committee’s independent compensation consultant (“Pay Governance”), the pay mix of our NEOs is well-aligned with that of the long-term interests of Schlumberger and its stockholders.companies in our two main executive compensation peer groups.
In establishingJanuary 2021, our Compensation Committee concluded that, based on the relative size of direct compensation elements of companies in our main executive compensation peer groups—as well as internal factors—the mix of base salary, target annual cash incentive and target LTI was appropriate for each of our NEOs.
Our executive compensation program design in recent years was largely developed and implemented in response to, and as a product of, past discussions with our stockholders. For example, in recent years:
| WHAT WE HEARD | WHAT WE DID | |
| Some stockholders encouraged us to ensure that the performance metrics used for our NEOs’ incentive compensation were closely aligned to our strategy and publicly disclosed financial objectives. |  | In 2021, we redesigned our LTI program to more closely align the performance criteria with our long-term strategy and publicly disclosed free cash flow margin objectives, by replacing our previous two-year free cash flow conversion rate metric with one that measures free cash flow margin over a three-year performance period. |
| Some stockholders encouraged us to incorporate a meaningful total shareholder return metric into our performance-based equity awards. | | In 2019 and 2020, we incorporated a three-year relative TSR modifier into all our PSU awards. Then, in 2021, we built on our progress by introducing PSUs based on a three-year relative TSR metric as a new element of our LTI program, to more directly align LTI payouts with stockholder value creation. We set the target performance goal for the 2021 TSR PSUs above median at the 60th percentile. |
| Some stockholders requested that the performance and vesting periods for all PSUs be at least three years. | | All of our 2021 PSU awards will vest, if at all, only after a three-year performance period. In addition, all PSUs granted in 2020 will vest, if at all, only after a three-year TSR performance period. |
| Most stockholders we spoke with responded positively to our annual cash incentive program structure and financial metrics. | | In setting 2021 compensation, our Compensation Committee sought to maintain the structural elements of our incentive compensation programs that have generated positive stockholder feedback in our recent engagements. |
| Schlumberger Limited2022 Proxy Statement | 36 |
Following these program enhancements and our proactive engagement with stockholders, our executive compensation program received the support of 95% of the votes cast at our 2021 AGM.
Our Board and Compensation Committee recognize that continued, regular engagement with our stockholders is critical to maintaining the substantial support of our executive compensation program demonstrated by our stockholders at our 2021 AGM. In advance of that meeting, we believe that:reached out to stockholders representing more than 50% of our outstanding common stock, to seek their views on our executive compensation program, as well as other corporate governance and sustainability topics. Stockholders representing approximately 11% of our outstanding common stock requested meetings to discuss our executive compensation, and our management team then reported on these discussions to our Compensation Committee. The feedback from these efforts indicated that our overall compensation program design is supported by our stockholders.
| 95% SUPPORT 2021 SAY-ON-PAY VOTE |
Our Compensation Committee used data from several distinct peer groups in evaluating and setting 2021 executive compensation, as summarized in the table below, and as further discussed throughout this CD&A.
| Main Executive Compensation Peer Groups | Peer Groups for LTI Relative Performance Metrics | |||||||
| Oil Industry | General Industry | TSR PSU Awards | ROCE PSU Awards | |||||
| What type of companies are in this peer group? | 10 major oilfield services and E&P companies that are broadly comparable to Schlumberger in terms of revenue and market value. | 23 global advanced extractive, technology-driven manufacturing, and industrial engineering-focused companies with annual revenues, market valuations and global scopes that are similar to Schlumberger’s. | Eight companies of similar size and footprint in our industry, including all four companies in our ROCE comparator group and six of the companies in our oil industry peer group. | Four key oilfield services competitors: • Halliburton • Baker Hughes • TechnipFMC • NOV Inc. | ||||
| What did the Committee use this peer group for? | Annual compensation reviews and peer benchmarking. | 2021 TSR PSU performance goals and measurements. | 2021 ROCE PSU performance goals and measurements. | |||||
| Why do we use this peer group? | The Committee considers formal executive compensation survey data from both these peer groups when it reviews and sets our executive officers’ compensation. The general industry peer group comparisons are particularly relevant for non-operations positions, where skills and experience may be easily transferable to other industries outside oil and gas. | In evaluating our relative TSR performance, the Committee believes the most appropriate comparisons are against companies in the energy sector affected by the same external factors as we are. | In evaluating our relative ROCE performance, the Committee believes the most appropriate comparisons are against our key competitors in our industry. | |||||
| Where to learn more? | For additional details about our main executive compensation peer groups, see “Other Aspects of Our Executive Compensation Program—Our Peer Group Companies” beginning on page 49. | For additional details about our LTI awards, see “Elements of 2021 Total Direct Compensation—Long-Term Equity Incentive Awards” beginning on page 42. | ||||||
| Schlumberger Limited2022 Proxy Statement | 37 |
Base salary is the fixed portion of an executive’s annual compensation, providing some stability of income since the other compensation elements are at risk. Our Compensation Committee annually reviews and approves the base salary levels for our executive officers (other than the CEO) after considering comparable salaries for executives with similar responsibilities in our main executive compensation peer groups, comparisons to internal peer positions, recent Company performance, individual performance, business experience and potential, and the CEO’s recommendations. The Committee annually reviews the base salary of our CEO in executive session and recommends his base salary to the independent members of the Board for approval, based on the criteria described above.
In January 2021, our Compensation Committee reviewed the base salaries of each of our NEOs in line with the factors described above, and determined to maintain the base salaries of all NEOs at their then-current levels for 2021.
| NO CHANGES TO NEO BASE SALARIES |
We pay performance-based annual cash incentives to our executives to foster a results-driven, pay-for-performance culture and to align executives’ interests with those of our stockholders. Annual cash incentive awards are earned according to the achievement of financial and strategic personal objectives. Our Compensation Committee selects performance measures that it believes support our strategy and strike a balance between motivating our executives to increase near-term financial and operating results and driving profitable long-term Company growth and value for stockholders.
For 2021, 70% of our NEOs’ target cash incentive opportunity was based on achieving quantitative Company financial objectives, and 30% was based on pre-established strategic personal objectives, consistent with our 2020 cash incentive plan. As reflected in the following chart, the 70% financial portion of the plan was evenly split between goals relating to adjusted EBITDA and cash flow generation.
2021 Cash Incentive Opportunity Mix
| Weighted Payout Opportunity as a % of Target | |
| Adjusted EBITDA(1) Goals | 0 – 243% |
| Cash Flow Generation(2) Goals | 0 – 243% |
| Strategic Personal Goals | 0 – 100% |
| TOTAL: | 0 – 200% |
| (1) | Adjusted EBITDA reflects earnings before interest, taxes, depreciation and amortization, excluding charges and credits. |
| (2) | The calculation of cash flow generation is provided on page 40 of this proxy statement. |
The Committee determined to give the two financial metrics equal weighting in the 2021 cash incentive plan, by increasing the adjusted EBITDA component to 35% (from 30%) of the target opportunity and decreasing the cash flow generation component to 35% (from 40%) of the target opportunity, in order to balance these two key financial goals as the Company enters a growth cycle.
The total maximum cash incentive payout for 2021 was 200% of target. The 2021 target cash incentive for our CEO was 150% of his base salary and for our other NEOs it was 100% of base salary, consistent with 2020. The weighted payout range for each metric is reflected in the table above.
| Schlumberger Limited2022 Proxy Statement | 38 |
Our Compensation Committee considered the following in selecting adjusted EBITDA and cash flow generation as the absolute measures on which to base the 70% financial portion of our NEOs’ annual cash incentive opportunity:
| ADJUSTED EBITDA | CASH FLOW GENERATION | |||
| WHY THIS METRIC? | • The Committee considers adjusted EBITDA to provide a good indicator of the quality of our earnings. • Investors and market analysts value the Company by reference to a multiple of adjusted EBITDA, so this metric aligns our NEOs’ 2021 compensation to a key market valuation method. • A portion of our line management’s 2021 cash incentive opportunity was tied to EBITDA performance goals, so this metric aligns executive compensation with line management. | • Cash flow generation is critical to achieving the Company’s objective to reduce net debt in line with our external commitments. • Cash flow generation also supports our pursuit of other strategies that enhance stockholder value, such as generating sufficient cash to support our dividend strategy, and making focused investments or acquisitions in the Company’s future growth areas, such as energy transition and digital. • The Committee also considers cash flow generation to be a good indicator of efficient capital management. |
In setting Company financial targets and performance goals, as well as our NEOs’ strategic personal objectives, the Committee believes it is important to establish criteria that are realistic, yet still challenging in an uncertain global economy. In addition, in establishing cash flow generation goals for the 2021 cash incentive plan, the Committee considered that these goals differ substantially from the free cash flow margin 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 we generate over a one-year period, and takes into account, among other things, cash paid for acquisitions and investments, as well as cash proceeds generated from divestitures, none of which are taken into account in the free cash flow margin metric contained in our LTI awards. Our free cash flow margin PSU payout is calculated as free cash flow divided by revenue over a three-year period. Because free cash flow margin measures how efficiently we convert revenue into cash, it is a good indicator of the business’s ability to generate cash over the long term and, therefore, is a complementary metric to the cash flow generation metric in our annual cash incentive program.
In January 2021, upon review of market data indicating that our NEOs’ target annual cash incentive opportunity was competitively positioned, and taking into consideration internal pay equity, our Compensation Committee determined to leave the target annual cash incentive opportunity for all NEOs unchanged from 2020.
Adjusted EBITDA Targets and Results
Consistent with its 2020 process, in January 2021 our Compensation Committee approved an adjusted EBITDA performance matrix informed by market analysts’ consensus estimates of our full-year 2021 adjusted EBITDA as reported on Bloomberg prior to the Committee’s meeting (“EBITDA consensus”). The Committee set the minimum performance goal equal to then-current EBITDA consensus, a target performance goal based on our then-current internal forecast at 6% above EBITDA consensus, and a maximum performance goal at 15% above EBITDA consensus. The Committee believed that setting the target and maximum performance goals above EBITDA consensus would incentivize our executives to outperform market expectations. The following chart reflects our NEOs’ full-year adjusted EBITDA targets and corresponding potential payouts for 2021.
| Performance Targets(1) | Potential Payout as a % of Target Opportunity(1) | Basis for Setting Performance Targets | |||||
| Less than $4.35 billion | 0% | N/A | |||||
| $4.35 billion | Minimum | 50% | Full-year 2021 consensus estimates in January 2021 | ||||
| $4.60 billion | Target | 100% | Internal forecast: 6% above consensus estimates | ||||
| $5.00 billion | Maximum | 243% | Set 9% above target performance goal and 15% above consensus estimates | ||||
| (1) | For adjusted EBITDA results between any two performance targets, payout is prorated. No cash incentive is earned if we do not achieve the minimum adjusted EBITDA target. |
| Schlumberger Limited2022 Proxy Statement | 39 |
Our 2021 adjusted EBITDA was $4.925 billion, representing a 14% increase over 2020 and a 13% increase over full-year EBITDA consensus as of January 2021. Based on these results, and applying the payout matrix on page 39 immediately above, our Compensation Committee approved a payout of 89% of the maximum payout opportunity for the adjusted EBITDA component of our 2021 cash incentive plan.
For a reconciliation of adjusted EBITDA to net income attributable to Schlumberger on a GAAP basis, see Appendix A. In approving the payout for 2021 adjusted EBITDA performance, the Committee reaffirmed its decision to calculate adjusted EBITDA results consistently with the Company’s presentation of adjusted EBITDA results in its 2021 earnings announcements and presentations to investors and with analysts’ calculation of their estimates.
Cash Flow Generation Targets and Results
The process used to set annual cash flow generation targets starts with a review of plans and projections following bottom-up planning from the field. Cash flow generation targets may increase or decrease year-over-year, taking into account, among other things, our operating and non-operating cash requirements, industry cycles, anticipated customer spending, activity growth potential, pricing, the introduction of new technology, strategic M&A activity, and commodity prices.
The following table reflects our NEOs’ full-year cash flow generation targets and corresponding potential payouts for 2021, as approved by our Compensation Committee in January 2021. The Committee believed the minimum performance goal would incentivize management to generate sufficient cash to cover the Company’s various 2021 cash commitments, including the full-year cash dividend payout amount, as well as our planned reduction of net debt. The Committee set the target performance goal using our internal full-year 2021 cash flow generation forecast, which included key investments in new energy and digital. The Committee believed the maximum performance goal—set 22% above the target goal—would incentivize management to generate additional cash to allow us to accelerate our net debt reduction.
| Performance Targets(1) | Potential Payout as a % of Target Opportunity(1) | Basis for Setting Performance Targets | |||||
| Less than $1.80 billion | 0% | N/A | |||||
| $1.80 billion | Minimum | 50% | Intended to cover full-year 2021 cash commitments and planned net debt reduction | ||||
| $2.30 billion | Target | 100% | Internal full-year 2021 cash generation forecast | ||||
| $2.80 billion | Maximum | 243% | Set 22% above target performance goal | ||||
| (1) | For cash flow generation results between any two performance targets, payout is prorated. No cash incentive is earned if we do not achieve the minimum cash flow generation target. |
The Committee recognized that the 2021 target performance goal was set below 2020’s cash flow generation result; however, in setting the performance goals in January 2021, the Committee believed this was appropriate taking into account:
Given the Company’s capital discipline and working capital management performance in 2021, including exceptional cash collections from customers in the fourth quarter, full-year cash flow generation exceeded the maximum performance goal. Our 2021 cash flow generated was $3.000 billion, representing a 12% increase over 2020. As a result, the Company was able to accelerate its deleveraging and reduce net debt by $2.8 billion during 2021. Based on the Company’s 2021 cash flow generation results, and applying the payout matrix above, our Compensation Committee approved a payout of 100% of the maximum payout opportunity for the cash flow generation component of our 2021 cash incentive plan.
In approving cash flow generation as a performance metric, our Compensation Committee believed that it was appropriate to exclude from any cash flow generation calculations acquisitions requiring cash investments and divestitures generating proceeds in excess of $500 million. This is because the Committee considered that such transactions would be enterprise-level transactions that should be evaluated and pursued independently, and should not be tied to annual cash incentive payouts.
Based on the foregoing, and for purposes of the 2021 cash incentive payouts, the Committee approved the following formulation for measuring our cash flow generation: cash flow from operations; less capital expenditures, investments in Asset Performance Solutions (“APS”), and multiclient seismic data costs capitalized; less cash paid for business acquisitions and investments, net of cash acquired, provided that the purchase price for each of the individual transactions is less than $500 million; plus proceeds from the divestiture of businesses or assets, net of cash divested, provided that the proceeds from each of the individual transactions is less than $500 million. For a reconciliation of cash flow generation to cash flow from operations, see Appendix A.
| Schlumberger Limited2022 Proxy Statement | 40 |
Strategic Personal Objectives
As discussed above, 30% of our NEOs’ target 2021 cash incentive opportunity was tied to achieving quantitative and qualitative performance goals specific to their roles with the Company. These may relate to:
| • | financial goals, such as profitability, revenue growth, capital management or cost reduction; | |
| • | performance achievements, such as contract awards or operational reliability or HSE objectives; | |
| • | non-financial, sustainability and ESG-related goals that are important to the Company’s strategy and reputation, such as GHG emissions reduction, people-related objectives including diversity and gender balance, and ethics and compliance; and | |
| • | other business priorities, including energy transition services and technologies. |
For 2021, the strategic personal objectives established for our NEOs, and their achievements against those goals, were as follows:
| CATEGORY | GOAL | ACHIEVEMENT | ||||
| Digital | Achieve a specified percentage of | Mostly achieved. | ||||
| Sustainability | Establish industry-leading emissions reduction targets. Progress deployment of emissions-reduction technologies and achieve certain milestones with respect to | Achieved. | ||||
| New Energy | Accelerate expansion of new energy portfolio, by establishing a specified number of carbon capture and sequestration partnerships and by achieving certain milestones in lithium and hydrogen ventures. | Mostly achieved. | ||||
| Mr. Le Peuch earned 86% of his payout opportunity for his strategic | ||||||
| Stephane Biguet, Executive Vice President and Chief Financial Officer | ||||||
| CATEGORY | GOAL | ACHIEVEMENT | ||||
| Functional Efficiency | Decrease functional structural costs by a pre-established target as compared to 2020. | Achieved. | ||||
| Sustainability | Establish industry-leading emissions reduction targets. Progress deployment of emissions-reduction technologies and achieve certain milestones with respect to sustainability disclosure standards. | Achieved. | ||||
| New Energy | Accelerate expansion of new energy portfolio, by establishing a specified number of carbon capture and sequestration partnerships and by achieving certain milestones in lithium and hydrogen ventures. | Mostly achieved. | ||||
| Investor Relations | Attract increased investments from new investors, existing institutional stockholders, and ESG-focused funds based on pre-established targets to broaden investor base. | Achieved. | ||||
| Mr. Biguet earned 96% of his payout opportunity for his strategic personal objectives under our 2021 cash incentive plan. | ||||||
| Khaled Al Mogharbel, Executive Vice President, Geographies | ||||||
| CATEGORY | GOAL | ACHIEVEMENT | ||||
| Production and Enhanced Recovery | Enter into a minimum number of performance contracts exceeding a specified contract value. | Achieved. | ||||
| Core Growth | Achieve opportunity win volume growth and bookings exceeding a pre-established target. | Achieved. | ||||
| International Growth | Achieve international revenue growth as a percentage exceeding that of specified peer companies. | Achieved. | ||||
| HSE | Achieve total recordable injury frequency and automotive accident rate per million miles below a target threshold. | Achieved. | ||||
| Mr. Al Mogharbel earned 100% of his payout opportunity for his strategic personal objectives under our 2021 cash incentive plan. | ||||||
| Schlumberger Limited2022 Proxy Statement | 41 |
| Hinda Gharbi, Executive Vice President, Services and Equipment | ||||||
| GOAL | ACHIEVEMENT | |||||
| Digital | Achieve a specified percentage of digital revenue growth, and enter into a minimum number of digital contracts exceeding a specified contract value. | Mostly achieved. | ||||
| Production and Enhanced Recovery | Enter into a minimum number of performance contracts exceeding a specified contract value. | Achieved. | ||||
| International Growth | Achieve international revenue growth as a percentage exceeding that of specified peer companies. | Achieved. | ||||
| HSE | Achieve total recordable injury frequency and automotive accident rate per million miles below a target threshold. | Achieved. | ||||
| Ms. Gharbi earned 92% of her payout opportunity for her strategic personal objectives under our 2021 cash incentive plan. | ||||||
| Ashok Belani, Executive Vice President, Schlumberger New Energy | ||||||
| GOAL | ACHIEVEMENT | |||||
| Establish a specified number of carbon capture and sequestration partnerships. | Achieved. | |||||
| New Energy | Achieve certain milestones in lithium and hydrogen ventures. | Partially achieved. | ||||
| Mr. Belani earned 83% of his payout opportunity for his strategic personal objectives under our | ||||||
Promotion from withinEach January, our Compensation Committee reviews and, subject to approval by the Board’s independent directors, approves our CEO’s strategic personal objectives for that year. The Committee also annually assesses our CEO’s performance against his strategic personal objectives established for the prior year, to determine the appropriate payout for the 30% portion of his annual cash incentive opportunity tied to his personal objectives. The CEO reviews and approves the strategic personal objectives of the other NEOs and assesses their performance against their pre-approved objectives in a similar way. The Committee annually approves the aggregate annual cash incentive payouts for all executive officers, including the payout portion related to an executive’s strategic personal objectives.
LTI awards are designed to give NEOs and other high-value employees a long-term stake in the Company, is a key principle at Schlumberger,incentivize the creation of sustained stockholder value, act as long-term retention and allmotivation tools, and align employee and stockholder interests over the long term.
In January 2021, our Compensation Committee approved changes to our LTI award mix. In reviewing the design of the 2021 LTI program for our named executive officers, have reached their current positions through career development withand considering feedback from our stockholders in 2019 and 2020, as well as the Company. Schlumberger sees diversity of its workforce as both a very important part of its cultural philosophy and a business imperative, as it enables the Company to serve clients anywhere in the world. Schlumberger believes that its use of a consistent approach to compensation at all levels irrespective of nationality is a strong factor in achieving a diverse workforce comprising top global talent.
Pay-for-Performance Relative to the Oil Industry Peer Group
As part of the Compensation Committee’s annual review of our executive compensation program, in July 2017previous pay-for-performance assessments, the Committee directed its independent compensation consultant, Pay Governance LLC (“Pay Governance”), to prepare a comparative pay-for-performance assessment against companies in our oil industry peer group as identified indetermined that the section entitled “Other Aspects of our Executive Compensation Framework—Peer Group Companies” beginning on page 36. The comparative assessment examined the degree of alignment between our NEOs’ compensation and our performance relative to these companies as measured by total stockholder return (“TSR”), free cash flow growth, and ROCE. We assessed performance on a five-year basis ending on December 31, 2016. TSR reflects share price appreciation, adjusted for dividends and stock splits.
The Compensation Committee reviewed the total realizable compensation of our CEO against that of other CEOs in our oil industry peer group. It then separately reviewed the total realizable compensation of all NEOs as a group against that of named executive officers at other companies comprising our oil industry peer group. However, information regarding total realizable compensation of the second-through fifth-highest paid officers at non-United States incorporated companies that are included in the oil industry peer group (BP plc, Eni SpA, Royal Dutch Shell and Total) was not available. As a result, our NEOs’ total realizable compensation was compared only against the total realizable compensation of named executive officers at US-incorporated companies in the oil industry peer group (for which data was available).
“Total realizable compensation” for each period consisted of the following:program should:
| • | ||
| • | incorporate an LTI vehicle that promotes stability and retention of our executive team through business cycles; | |
| • | incorporate total shareholder return in a more meaningful way; | |
| • | more closely align PSU performance metrics with our corporate strategy and publicly disclosed financial objectives; and | |
| • | continue to incentivize outperformance relative to other comparable companies in our industry. |
Based on these considerations, in January 2021, the Committee awarded to our executives a mix of LTI grants, with 75% of their target LTI opportunity awarded in the form of PSUs—with payout contingent on achieving absolute and relative Company performance goals over three-year periods—and 25% awarded in the form of three-year, time-based RSUs. The Committee believes this diversified LTI grant program better balances the various compensation objectives set forth in this section.
In considering the reduced risk of time-based RSUs as a new component of our LTI program, the Committee also set the maximum overall payout opportunity under the 2021 LTI program at 200% of target—significantly lower than the 250% maximum under the 2020 LTI program, in line with market practice.
| MAXIMUM LTI PAYOUT OPPORTUNITY REDUCED TO 200% |
| Schlumberger Limited2022 Proxy Statement | 42 |
The 2021 LTI program consisted of four types of grants, equally weighted at target performance:
2021 LTI Program
| 25% TSR PSUs | ||||
| The Committee approved awards of PSUs that will vest, if at all, based on our absolute free cash | The Committee approved awards of PSUs that will vest, if at all, based on our relative TSR percentile rank as compared to the cumulative TSR results achieved by eight companies of similar size and footprint in our industry over a three-year performance period (the “2021 TSR PSUs”). The Committee set the target performance goal above median at the 60th percentile—requiring performance better than five of the eight comparators to achieve target payout. The Committee selected relative TSR as a performance metric for our 2021 LTI program in order to more directly align LTI payouts with stockholder value creation. | |||
| 25% Time-Based RSUs | ||||
| The Committee approved awards of PSUs that will vest, if at all, based on the average annual ROCE we achieve over a three-year performance period as compared to the average annual ROCE of our key oilfield services competitors together over the same period (the “2021 ROCE PSUs”). This PSU metric remains unchanged from the LTI grants awarded to our NEOs in 2020; however, for 2021, the Committee removed Weatherford International (Weatherford) from this PSU comparator group because it had underperformed the rest of the comparator group in recent years. | The Committee approved awards of • aligning pay-for-performance and creating stockholder value; • motivating and incentivizing outperformance; and • maintaining stability and retention through business cycles. | |||
|
How We Determined the Value of 2021 LTI Equity Awards
The value of an executive’s LTI grant increases with the level of responsibility at the Company. For our CEO and the other NEOs, it is the largest element of their compensation. In determining the value of LTI awards granted to our NEOs, our Compensation Committee (in recommending that the Board approve the CEO’s awards) and the CEO (in recommending awards for the other NEOs) first consider market data regarding the LTI value for the most comparable positions in our main executive compensation peer groups, as well as several other factors, such as:
| • | the Company’s financial and operating performance; | |
| • | the executive’s size and mix of total direct compensation; | |
| • | internal pay equity; | |
| • | retention; | |
| • | achievement of non-financial goals; | |
| • | the executive’s contribution to the Company’s success; | |
| • | the level of competition for executives with comparable skills and experience; and | |
| • | the total value and number of equity-based awards granted to the executive over the course of their career, together with the retentive effect of additional equity-based awards. |
In January 2021, our Compensation Committee approved (and in the case of Mr. Le Peuch, the independent members of the Board approved) awards to the NEOs as reflected in the table on the following page. Based on its review of comparator peer group data, the Committee determined to hold annual target LTI grant values flat for Messrs. Le Peuch and Belani. In addition, based on comparator peer group data and internal pay equity considerations, the Committee approved an increase in Mr. Biguet’s annual target LTI dollar value from $2.5 million to $3.2 million. Lastly, based on internal pay equity considerations, as well as adjusted responsibilities following the Company’s 2020 restructuring, the Committee approved a decrease in Mr. Al Mogharbel’s annual target LTI dollar value from $3.72 million to $3.5 million, and an increase in Ms. Gharbi’s annual target LTI dollar value from $3.2 million to $3.5 million.
| Schlumberger Limited |
The following table details the number of PSUs (at target) and RSUs granted to our NEOs in 2021 and the estimated target values of our NEOs’ 2021 and 2020 LTI awards, as well as the year-over-year percentage change between the two amounts.
| Name | Target Number of FCFM PSUs | Target Number of TSR PSUs | (1) | Target Number of ROCE PSUs | Number of RSUs | Target Value for 2021 LTI | (2) | Target Value for 2020 LTI | (3) | % Change | |||||||
| O. Le Peuch | 110,290 | 96,440 | 110,290 | 110,290 | $10,500,000 | $10,500,000 | (4) | 0% | |||||||||
| S. Biguet | 33,610 | 29,390 | 33,610 | 33,610 | $3,200,000 | $2,500,000 | 28% | ||||||||||
| K. Al Mogharbel | 36,760 | 32,150 | 36,760 | 36,760 | $3,500,000 | $3,720,000 | (6)% | ||||||||||
| H. Gharbi | 36,760 | 32,150 | 36,760 | 36,760 | $3,500,000 | $3,200,000 | 9% | ||||||||||
| A. Belani | 37,820 | 33,060 | 37,820 | 37,820 | $3,600,000 | $3,600,000 | 0% |
| (1) | The number of TSR PSUs granted to our NEOs in 2021 was determined using a different grant date fair value than was used for FCF Margin PSUs, ROCE PSUs and RSUs. For additional details, see footnote (3) to the Summary Compensation Table on page 54 of this proxy statement. |
| (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 in 2021 table on page 55 of this proxy statement. |
| (3) | The actual grant date fair value of each grant, computed in accordance with applicable accounting standards, was disclosed in the Grants of Plan-Based Awards for Fiscal Year 2020 table in the proxy statement for our 2021 AGM. |
| (4) | As discussed in “—CEO Pay Summary” on page 34 above, Mr. Le Peuch received an award of PSUs in August 2019 with a target value of $10.5 million in connection with his promotion to CEO, which served as and was granted in lieu of any annual LTI award that he otherwise would have received in 2020. |
2021 Absolute FCF Margin PSUs — Performance Measures and Goals
In January 2021, our Compensation Committee set goals for the new 2021 FCF Margin PSUs based on our absolute free cash flow margin over a three-year performance period (January 1, 2021 to December 31, 2023). At the end of the performance period, the Committee will certify our three-year cumulative absolute free cash flow margin and then determine the percentage of shares earned based on the graph below.
2021 FCF Margin PSU Payout Matrix
The number of 2021 FCF Margin PSUs that will vest and convert to shares as of the vesting date can range from 0% to 250% of target, depending on our absolute free cash flow margin performance, but in no event will payout relating to this metric exceed 250% of target. As illustrated in the graph above, no shares of our common stock will be earned if our free cash flow margin over the three-year performance period is less than 9.0%. In setting this minimum goal, the Committee considered that the Company’s three-year cumulative free cash flow margin, averaged from 2009 to 2020, was 8.6%. Therefore, the Company would need to exceed these historical margin results in order for any 2021 FCF Margin PSUs to vest.
| Schlumberger Limited2022 Proxy Statement | 44 |
Free cash flow margin is calculated as free cash flow divided by revenue. Free cash flow margin measures how efficiently we convert revenue into cash, and is an indicator of capital efficiency. In selecting absolute free cash flow margin as the performance metric for 25% of our NEOs’ 2021 target LTI dollar value, the Committee considered that this metric was aligned with our capital allocation strategy and publicly disclosed financial objective of achieving double-digit free cash flow margin. The Committee also believes that tying a portion of our NEOs’ LTI payout to free cash flow margin encourages our executives to:
| • | generate cash flow to allow for net debt reduction in line with our external commitments, | |
| • | maintain capital discipline, | |
| • | make key investments and capital expenditures in line with our stated strategy, including our energy transition strategy, and | |
| • | increase the liquidity of the Company. |
The Committee also sought to maintain a mix of absolute (free cash flow margin) and relative (ROCE and TSR) metrics in our NEOs’ PSU awards, to effectively manage industry cycles.
For purposes of the 2021 FCF Margin PSUs, free cash flow represents cash flow from operations less capital expenditures, investments in APS projects, and multiclient seismic data costs capitalized. For a reconciliation of free cash flow to cash flow from operations, see Appendix A.
2021 Relative TSR PSUs — Performance Measures and Goals
In January 2021, our Compensation Committee set goals for the new 2021 TSR PSUs based on our relative TSR percentile rank, as compared to the cumulative TSR results achieved by eight companies of similar size and footprint in our industry over a three-year performance period (January 1, 2021 to December 31, 2023) (each, a “TSR comparator company”). At the end of the performance period, our Compensation Committee will certify the three-year, cumulative TSR results for us and for each TSR comparator company, based on the average of the last 20 trading days at the start and end of the performance period. The Committee will then determine our percentile rank relative to the TSR comparator companies, as well as the percentage of shares earned based on the table below.
Earned (Payout %)(1) | ||||||
| 100% | ||||||
| 100th percentile (i.e. higher TSR than all TSR comparator companies) | 200% |
| (1) | Number of shares determined by straight-line interpolation between performance levels. |
The number of 2021 TSR PSUs that will vest and convert to shares as of the vesting date can range from 0% to 200% of target, depending on our relative TSR performance, but in no event will payout relating to this metric exceed 200% of target. In setting the maximum payout opportunity for the 2021 TSR PSUs at 200%, which is below the maximum payout for the 2021 FCF Margin PSUs and 2021 ROCE PSUs, the Committee considered that management’s efforts would more directly affect free cash flow margin and ROCE, whereas management had less control over the Company’s TSR relative to that of the TSR comparator companies, due to external market and economic influences.
As illustrated by the table in this section, the Compensation Committee set the target performance goal above median at the 60th percentile—requiring performance better than five of the eight TSR comparator companies to achieve target payout. No shares of our common stock will be earned if our three-year, cumulative TSR is in the bottom 25th percentile rank as compared to that of the individual TSR comparator companies.
| TARGET SET ABOVE MEDIAN RELATIVE TSR PERFORMANCE |
In selecting the TSR comparator companies for the 2021 TSR PSUs, the Committee focused on companies in the energy sector of generally similar revenue, market capitalization and footprint to Schlumberger. This is because the Committee believes that, in evaluating our relative TSR performance, the most appropriate comparisons are against companies in the energy sector affected by the same external factors as we are. The TSR comparator companies for the 2021 TSR PSUs are: Apache Corporation, Baker Hughes, ConocoPhillips, Halliburton, Hess Corporation, NOV Inc. (NOV), Occidental Petroleum, and TechnipFMC. Four of the TSR comparator companies are included in the ROCE comparator group for the 2021 ROCE PSUs, and six are included in our oil industry peer group, as discussed further under “—Other Aspects of Our Executive Compensation Program—Our Peer Group Companies” beginning on page 49 of this proxy statement. For purposes of calculating the vesting of the 2021 TSR PSUs, any TSR comparator company that is acquired will be removed from the percentile rankings, and any company that files for bankruptcy will be deemed to have achieved the lowest ranking three-year TSR result.
| Schlumberger Limited2022 Proxy Statement | 45 |
2021 Relative ROCE PSUs — Performance Measures and Goals
In January 2021, our Compensation Committee set goals for the 2021 ROCE PSUs based on our average annual ROCE over a three-year performance period (January 1, 2021 to December 31, 2023), as compared to the average annual ROCE of the following oilfield services competitors, taken together over the same period: Halliburton, Baker Hughes, TechnipFMC and NOV (collectively, the “ROCE comparator group”). At the end of the performance period, the Committee will certify our average ROCE and that of the ROCE comparator group as a whole, and then determine the percentage of shares earned based on the graph below.
2021 Relative ROCE PSU Payout Matrix
The number of 2021 ROCE PSUs that will vest and convert to shares as of the vesting date can range from 0% to 250% of target, depending on our relative ROCE performance, but in no event will payout relating to this metric exceed 250% of target. As illustrated in the graph above, consistent with the ROCE PSUs granted in 2020:
| • | If our average annual ROCE over the three-year performance period is four percentage points or more below the average of the ROCE comparator group, then no 2021 ROCE PSUs will vest and no shares will be earned. This is because our Compensation Committee believes our executives should not receive PSU payouts for significantly low relative ROCE performance. | |
| • | If our average annual ROCE over the three-year performance period is equal to that of the average of the ROCE comparator group as a whole, then the 2021 ROCE PSUs will vest at 100% of target. If our average annual ROCE over that period is higher than that of the average of the ROCE comparator group as a whole, then the 2021 ROCE PSUs will vest between 101% and 250% of target, as shown by the solid line in the graph above. | |
| • | In addition, if both (x) our absolute, single-year ROCE is greater than 10% in 2023, and (y) our single-year 2023 ROCE exceeds that of the average of the ROCE comparator group as a whole, then the 2021 ROCE PSUs will vest at an increased rate (up to a maximum of 250%), as shown by the dotted line in the graph above. |
ROCE is a measure of the efficiency of our capital employed, and is a comprehensive indicator of long-term Company and management performance, measured in a way that is tracked and understood by many of our investors. Our Compensation Committee has based a portion of our NEOs’ LTI awards on a relative ROCE metric since 2016, because this metric allows us to directly compare how efficiently we deploy our capital against our key oilfield services competitors. The Committee also believes that tying a portion of our executives’ LTI payout to achieving our capital efficiency goals and comparing these results to our competitors will motivate our executives to focus on performance, and result in increased revenue and improved margins. In selecting ROCE as the performance metric for 25% of our NEOs’ 2021 target LTI dollar value, the Committee also considered that ROCE performance goals align executives’ potential ROCE PSU payouts with the Company’s goal of achieving absolute ROCE above the Company’s weighted average cost of capital.
We calculate ROCE as a ratio, the numerator of which is (a) income from continuing operations, excluding charges and credits plus (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). Our Compensation Committee has discretion to cap payouts on the 2021 ROCE PSUs at 100% of target in the event of material asset impairments attributable to M&A transactions and other management decisions.
| Schlumberger Limited2022 Proxy Statement | 46 |
Payouts Under Prior LTI Awards
Stock Options
Prior to 2017, the Company had granted a significant portion of its LTI compensation to executives in the form of stock options. As of December 31, 2021, all of our executives’ outstanding stock options were “underwater.”
PSUs Vesting in 2021
As previously disclosed in the proxy statement for our 2021 AGM, in January 2021 our Compensation Committee approved the relative ROCE results for the PSUs issued to our NEOs in 2018. The relative ROCE PSUs issued in 2018 were earned at 134% of target, based on our average annual ROCE over the three-year performance period being 173 basis points above the average annual ROCE of five key oilfield services competitors taken together over the same period. These competitors were Halliburton, Baker Hughes, TechnipFMC, Weatherford and NOV (the “prior ROCE comparator companies”). For additional details, see the Option Exercises and Stock Vested in 2021 table on page 58 of this proxy statement.
PSUs Vesting in 2022
In January 2019, our Compensation Committee approved PSU awards to our NEOs as follows, in each case subject to a three-year relative TSR modifier:
| • | With respect to 50% of our NEOs’ 2019 target LTI dollar value, payout was conditioned based on the percentage of our cumulative net income, excluding charges and credits, converted to free cash flow from January 1, 2019 to December 31, 2020 (the “2019 FCF Conversion PSUs”). | |
| • | With respect to 50% of our NEOs’ 2019 target LTI dollar value, payout was conditioned based on our average annual ROCE achieved over a three-year performance period as compared to the average annual ROCE of the prior ROCE comparator companies, taken together over the same period (the “2019 ROCE PSUs”). |
In January 2021, the Committee determined that we achieved a cumulative free cash flow conversion rate of 166% for the two-year performance period applicable to the 2019 FCF Conversion PSUs, representing achievement of 250% of target, based on the Committee’s previously approved performance criteria. At the time, these PSUs remained subject to the TSR modifier, which would have caused payouts to be reduced by 25% if our three-year, cumulative TSR was in the bottom 33rd percentile rank as compared to the individual companies comprising the Philadelphia Oil Services Sector index as of January 2019. In January 2022, the Committee determined that the TSR modifier did not trigger a negative adjustment to the 2019 PSU payouts, because Schlumberger’s TSR ranked at the 89th percentile. As a result, in January 2022, our NEOs earned 250% of target under the 2019 FCF Conversion PSUs.
In January 2022, the Committee also approved the results for the 2019 ROCE PSUs using the Committee’s previously approved performance criteria. Specifically, the Committee determined that the 2019 ROCE PSUs had been earned at 182% of target, based on Schlumberger’s average annual ROCE being 327 basis points above the average of the prior ROCE comparator companies through the third quarter of 2021, which was the then-most recent fiscal period end reported by all the prior ROCE comparator companies. Because not all the prior ROCE comparator companies had reported their 2021 audited results as of January 2022, the Committee approved a preliminary issuance of 90% of the shares earned under the 2019 ROCE PSUs. Any additional shares finally determined to have been earned will be issued after all the prior ROCE comparator companies disclose their full-year 2021 audited results.
Unvested PSU Awards
In January 2020, our Compensation Committee approved PSU awards to our NEOs (other than the CEO), all of which are subject to a three-year relative TSR modifier and therefore remain unvested. At the end of all applicable performance periods, the Committee will determine the number of shares ultimately earned under these PSUs.
Officer Departure Guidelines
In 2020, our Compensation Committee approved guidelines covering, among other things, LTI vesting, salary, benefits and other compensation matters for officers departing the Company, either because they are eligible for retirement, early retirement or special retirement, or because they are involuntarily terminated (if not eligible for retirement). These guidelines are a non-binding framework for management’s reference in its executive succession planning, with flexibility as required by specific situations.
Under the guidelines, we may, at our discretion, enter into agreements with outgoing officers whereby they would remain employed by the Company during the agreement term and would receive annual cash payments that would generally be less than their pre-termination annual base salary. In addition, outgoing officers would receive a prorated cash incentive award payment with respect to the year of their departure. They would also receive benefits such as medical and insurance during the agreement term, and would continue to vest in previously granted LTI awards, but would not receive any new LTI awards during the term. In exchange, the outgoing officers would agree to be available to Schlumberger for 50% of their business time during the term, and agree to non-competition, non-solicitation, and non-disparagement covenants.
| Schlumberger Limited2022 Proxy Statement | 47 |
The Broadly Available Benefit Plans
We seek 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, we generally offer the Schlumberger standard. Our NEOs 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 to obtain additional coverage. There are no special insurance plans for our NEOs.
In line with Schlumberger’s aim to encourage long-term careers with the Company and to promote retention, retirement plans are provided, where possible and according to local market practice, for all employees, including NEOs. For details regarding our pension plans and nonqualified deferred compensation plans, see “Executive Compensation Tables—Pension Benefits,” “—Nonqualified Deferred Compensation,” “—Potential Payments Upon Termination or Change in Control—Retirement Plans,” and “—Retiree Medical” and the accompanying narratives beginning on page 58 of this proxy statement.
Limited Perquisites
We provide only limited perquisites to our NEOs, which are identified in the footnotes to the Summary Compensation Table.
Schlumberger has entered into an agreement with Mr. Belani in connection with his decision to step down as Executive Vice President, Schlumberger New Energy, effective as of April 1, 2022 (the “Belani Agreement”). Under the Belani Agreement, Mr. Belani will serve as Senior Strategic Advisor to our CEO through March 31, 2024, to support certain technology and innovation projects. Mr. Belani has also agreed to certain restrictive covenants under the Belani Agreement, including three-year non-competition and non-solicitation undertakings, as well as confidentiality and non-disparagement undertakings and a waiver and release of claims.
In consideration for his services as Senior Strategic Advisor, the restrictive covenants, and the waiver and release, Mr. Belani will receive, for a two-year period: (1) an annual cash payment equal to his current base salary; (2) continued participation in our health, welfare and insurance plans for which he is eligible as an employee; (3) continued accrual of benefits under our pension and profit-sharing plans; and (4) a cash incentive award for 2022 prorated for the period worked until April 1, 2022, to be paid in early 2023 upon achievement of previously established personal and financial performance targets. In addition, because Mr. Belani is eligible for retirement under the terms of our LTI award agreements, his outstanding LTI awards will continue to vest in accordance with the terms applicable to those grants.
As a high-technology energy services company, we believe that our greatest competitive strengths are our people and our intellectual property. Mr. Belani has led Schlumberger New Energy and its portfolio of businesses in low-carbon and carbon-neutral energy technologies since its launch in 2020, and prior to that, served for over a decade as the Company’s Chief Technology Officer and Executive Vice President, Technology. He has critical knowledge about our technology and innovation strategy, important relationships with Schlumberger New Energy’s strategic partners and joint ventures, and deep ties to the scientific community within Schlumberger and externally. Thus, the Compensation Committee believed it to be in the best interest of the Company and our stockholders to enter into an agreement with Mr. Belani to secure his continued support on key technology and innovation projects where his expertise and significant contacts will benefit the advancement of the Company's strategy. In addition, the Belani Agreement secures his covenant not to compete with us and prohibits him from soliciting key employees for a period of three years. If the undertakings in the Belani Agreement are breached, we may immediately stop payment of all cash amounts that would otherwise be due to Mr. Belani, all outstanding equity awards will be subject to cancellation, and we may require repayment of consideration previously paid or vested under the agreement.
In addition, Schlumberger has entered into an agreement with Ms. Gharbi in connection with her decision to step down as Executive Vice President, Services and Equipment, effective as of May 1, 2022 (the “Gharbi Agreement”). Under the Gharbi Agreement, Ms. Gharbi agreed to certain restrictive covenants, including three-year non-competition and non-solicitation undertakings, as well as confidentiality and non-disparagement undertakings and a waiver and release of claims. Ms. Gharbi has also agreed to provide certain services to the Company during the term of the Gharbi Agreement.
In consideration for the restrictive covenants, the waiver and release, and the provision of certain services, Ms. Gharbi will receive: (1) for a three-year period, continued accrual of benefits under our pension and profit-sharing plans based on her 2022 base salary; and (2) a cash incentive award for 2022 prorated for the period worked until May 1, 2022, to be paid at target. In addition, the PSU and RSU awards previously granted to her in 2020 and 2021 will continue to vest in accordance with the terms applicable to those grants. Under the Gharbi Agreement, the PSU awards that Ms. Gharbi received in January 2022 are scheduled to vest at target in early 2025.
Ms. Gharbi has extensive strategic knowledge about Schlumberger and our industry, as well as strong relationships with key customers and partners. Thus, the Compensation Committee believed it to be in the best interest of the Company and our stockholders to enter into an agreement with Ms. Gharbi to secure her covenant not to compete with us and to prohibit her from soliciting key employees for a period of three years. If the undertakings in the Gharbi Agreement are breached, we may immediately stop payment of all cash amounts that would otherwise be due to Ms. Gharbi, all outstanding equity awards will be subject to cancellation, and we may require repayment of consideration paid or vested under the agreement.
| Schlumberger Limited2022 Proxy Statement | 48 |
A primary consideration of theour Compensation Committee in overseeing our executive compensation program is the need to motivate and retain what it considers to be the best executive talent in the energy industry. We are the world’s largest oilfield services companyleading provider of technology to the global energy industry, and the only such company included in the Standard & Poor’s S&P 100 Index. Our Compensation Committee believes that our success in delivering strongfinancial and operational outperformance and long-term stockholder returns and financial and operational results is a result ofdepends on our ability to attract, develop and retain the best talent globally. A highly competitive compensation package is critical to this objective and, to this end,objective.
In light of the Compensationforegoing, the Committee generally seeks to target total direct compensation for our NEOs between the 50thand 75thpercentiles of the Company’sour two main executive compensation comparator groups.peer groups; however, the Committee may position an NEO who is new to a position at or below the 50th percentile for a period of time. For example, the target value of our CEO’s 2021 total direct compensation places him at approximately the 50th percentile among CEOs in our general industry peer group. An NEO’s target total direct compensation depends on a variety of factors, including tenure in a particular position, and individual and Company performance. For example, the Committee generally seeks to position an executive with a relatively short tenure in a position at the 50thpercentile of the Company’s executive compensation comparator groups.performance, and internal pay equity.
Our CompensationThe Committee believes that the 50thto 75th percentilespercentile range is an appropriate range to target because of Schlumberger’s leading position in the oilfield services industry; because competition for our executive talent in the oil and gas industry is exceptionally fierce; and because our executives are very highly sought after, not onlyboth by our direct oilfield serviceservices competitors but alsoand by other leading oil and gas, advanced extractive, technology-driven manufacturing, and engineering-focused companies.
In approving this target range and when setting compensation in 2017,for 2021, the Compensation Committee considered that many current and former senior executive officersexecutives of leading companies in the energy industryvarious industries have previously served asin senior executivesmanagement at Schlumberger. For example, formerFormer members of senior Schlumberger executivesmanagement have either have been, or are, senior executives at the following competitors, customers and customers:other technology- and engineering-focused companies:
| Baker Hughes* | TechnipFMC* | Weatherford | BAE Systems* | |||
| (past Chairman and CEO, current CHRO and other senior | (current Chairman, and CTO, and past Chairman, CEO and | (past acting CEO and CFO, and | ||||
CFO and CHRO) | ||||||
| Engie | Patterson-UTI Energy | CGG | BG Group | |||
| (current CEO) | (current CEO) | |||||
| (current CEO and | ||||||
(past Chairman and COO) | ||||||
| ConocoPhillips* | YPF | Kuwait Airlines | Technip Energies | |||
| (past | ||||||
(past CEO) | ||||||
(current CEO) | (current CLO) | |||||
| Valaris | NESR | OilSERV | Wood | |||
| (past CEO and CLO) | (current CEO, CFO and COO) | ( | ||||
(current | ||||||
| Nabors | Noble Corporation | NexTier Oilfield Solutions | ||||
| (current CEO, and past CEO and CFO) | �� | (current CFO and other senior executives) | (current CLO) | (current CEO, CFO, COO and other senior executives) | ||
| Rio Tinto* | Flowserve | Borr Drilling | Archer | |||
| (past CHRO) | (current CEO) | (current CEO and past CFO) | (current CEO and past CFO) | |||
| Seadrill |
The Compensation Committee retains the flexibility to set elements of target compensation at higher percentiles based on strong business performance, for retention, for key skills in critical demand, and for positions that are of high internal value. Elements of our executives’ total direct compensation and actual payments may also be below our main comparator groups’ median as a result of our pay-for-performance philosophy, as discussed below.
CEO Realized Pay
In the course of the Compensation Committee’s review of our executive compensation program, the Committee noted that for the past several years, our CEO’s realized pay was, in general, substantially less than his total compensation as reported in our proxy statements (his “reported pay”). We discussed this topic with stockholders during our engagement efforts in 2017. At risk compensation refers to an executive’s LTI awards and the annual cash incentive opportunity.
We calculate “realized pay” for a given year by adding together:
The chart below shows the actual compensation delivered to our CEO from 2013 to 2017, and demonstrates that his realized pay was significantly lower than his reported pay for all but one year during this period. Most of the compensation of our CEO, like that of our other NEOs, was “at risk.” In 2017, 88% of our CEO’s compensation was at risk.
CEO: Reported Pay vs. Realized Pay
As this chart shows, our CEO’s realized pay was 35.4%, 102.3%, 48.6%, 62.3%, and 30.3% of his reported pay for years 2013, 2014, 2015, 2016 and 2017, respectively. Our CEO’s 2014 realized pay was comparable to his 2014 reported pay because he exercised stock options in 2014, some of which were granted as early as 2006, and because one-time transitional PSUs that were awarded in 2013 vested in 2014.
Pay Mix and Internal Pay Equity Review
In January 2017, the Compensation Committee analyzed 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 another 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.
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 compensation of the CEO in relation to the compensation of our other executive officer positions, and our executives’ compensation both in relation to one another and in comparison with the average of the compensation of our other executive officer positions. The Compensation Committee noted that the ratio of target total direct compensation between the CEO and 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.
Elements of Total Direct Compensation; 2017 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. 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 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:
The base salary of the CEO is reviewed by the Compensation Committee in executive session and recommended to the independent 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 2017
The Compensation Committee reviewed the compensation of each of our NEOs in January 2017. Upon review of comparative market data and taking into consideration that all of our NEOs were already positioned competitively, the Compensation Committee determined to maintain base salaries at their current levels for all of our NEOs who held the same position in the prior year.
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’s stockholders.
The Compensation Committee selects performance-based measures that it believes strike a balance between motivating an executive to increase operating and financial results in the near-term and driving profitable long-term Company growth and value for stockholders. Annual cash incentive award payments are made each February according to the achievement of strategic, operational and personal objectives, as described below.
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 recommends to the independent directors of the Board the financial objectives of the CEO and the other NEOs. The Compensation Committee believes that, with regard to financial targets or financial performance goals, it is important to establish criteria that, while very difficult to achieve in an uncertain global economy, are realistic. When considering the Company’s operating results for purposes of the financial portion of the annual cash incentive, the Compensation Committee may take into account unusual or infrequent charges or gains, depending on the nature of the item. The Compensation Committee may make adjustments when it believes that executives and other employees would be inappropriately penalized by, or would inappropriately benefit from, these items.
Personal objectives are established at the start of the fiscal year. The Compensation Committee reviews and approves the personal strategic objectives of the CEO and assesses his performance against those objectives in determining his annual cash incentive award, 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. The CEO reviews and approves the personal strategic objectives of the other NEOs, and assesses each such NEO’s performance against their pre-determined objectives in a similar way. Each NEO’s annual cash incentive opportunity is tied to achievement of quantitative and qualitative objectives that are specific to that NEO’s position, and may relate to:
| (past COO) | |||
Annual Cash Incentive Decisions for 2017
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 of our NEOs were already positioned competitively from a market perspective, the Compensation Committee determined in January 2017 to leave the target annual cash incentive opportunity for all NEOs unchanged from 2016. As a result, the 2017 target annual cash incentive for our CEO was 150% of his base salary, 75% of base salary for Mr. Juden, and 100% of base salary for the other NEOs. The target annual cash incentive for Mr. Le Peuch increased from 60% to 100% in connection with his promotion to President of the Cameron Group.
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 charges 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 Targets
The process used to set annual adjusted EPS targets starts with a review of plans and projections following bottom-up planning from the field. Adjusted EPS targets may increase or decrease year-over-year taking into account:
In response to stockholder feedback during our outreach efforts in the fall of 2016, the Compensation Committee determined at its
January 2017 meeting to set full-year adjusted EPS targets, rather than divide the measurement period into two six-month periods as it had in the prior two years. At that meeting, the Compensation Committee approved the following adjusted EPS targets and corresponding payouts for 2017:
| 2017 EPS Performance Targets | % of EPS Portion of Financial Half (Payout %) | |||||
| Less than | $1.20 | 0% | ||||
| $1.20 | 50% | |||||
| $1.30 | 100% | |||||
| $1.50 | 200% | |||||
| $1.70 | 300% | |||||
For adjusted EPS results between any two targets, the payout would be prorated. No cash incentive would be paid if the minimum adjusted EPS target was not achieved.
The Compensation Committee approved these targets at levels that reflected expected significant improvement from 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 limiting adjusted EPS gains.
2017 Adjusted EPS Results
Schlumberger’s 2017 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 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.
As in prior years, the Compensation Committee evaluated performance based on adjusted EPS, consistent with the manner in which the Company presents adjusted EPS in its earnings announcements and presentations to investors. Furthermore, the Committee believed that the $3.6 billion of charges in 2017 resulted in earnings per share on a GAAP basis that did not reflect Schlumberger’s operating trends and generally arose from actions that management took to proactively address the industry downturn, and expenses related to the Cameron acquisition.
Based on these results, the Compensation Committee approved a payout of 200% of target for 2017 for the adjusted EPS component of the annual cash incentive.
2017 Personal Objectives and Results
CEO = Chief Executive Officer CFO = Chief Financial Officer COO = Chief Operating / Commercial Officer | CTO = Chief Technology Officer CLO = Chief Legal Officer / General Counsel CHRO = Chief Human Resources Officer | * Included in one of |
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 |
Long-Term Equity Incentive Awards
LTI awards are designed to give NEOs and other high-value employees a longer-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 longer term.
In January 2017, the Compensation Committee approved a significant change to our LTI award mix. Taking into account feedback from our stockholders in 2016, the Committee determined that 100% of our executives’ 2017 LTI awards should be in the form 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.
The Compensation Committee also approved the change to the LTI mix based on the following factors:
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 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.
How We Determined the Value of 2017 Long-Term Equity Awards
The value of an executive’s LTI grant increases with the level of an executive’s responsibility at the Company, and for the CEO and our other NEOs is the largest element of their total direct compensation package. 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 considers market data regarding the LTI value for the most comparable positions in the Company’s executive compensation comparator groups, as well as several other factors, which may include:
The Compensation Committee determined the target dollar value of LTI awards for our NEOs in 2017 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, computed 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.
PSU Grants in 2017
The Compensation Committee approved (and in the case of Mr. Kibsgaard, our CEO, the independent members of the Board approved) the following awards for the NEOs in January 2017. The Compensation Committee, based on its review of comparator peer group data, determined to hold annual target LTI 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 grant values of the NEOs’ 2017 annual LTI awards and the year-over-year percentage change between the two amounts. This table does not include the options granted to Mr. Le Peuch before his promotion to 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 PSUs
In January 2015, 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, the Compensation Committee determined the results of the three-year performance period for these PSUs, relative to the performance criteria established at that time.
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.
ROCE PSUs: Performance Measure and Goals
In January 2017, the Compensation Committee set goals for the ROCE PSUs based on our average annual ROCE over a three-year performance period as compared to the average annual ROCE of several oilfield services competitors taken together over the same period. 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. This is also the metric that the Compensation Committee approved for the PSUs issued to our NEOs in 2016.
Our selection of ROCE as the performance metric for the ROCE 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. The Compensation Committee believes that tying a part of our senior executives’ LTI pay to our efficiency goals and comparing them to that of key comparator companies in oilfield services will motivate our executives to continue to be innovative. 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 of the ROCE PSUs is conditioned on 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 case over the three-year performance 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.
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%. The percentage achieved will depend on our performance compared to that of our competitors during the performance period as illustrated in the following table. At the end of the performance period, the Compensation Committee will determine the percentage of shares earned based on the table below.
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 Flow PSUs: Performance Measure and Goals
In January 2017, the Compensation Committee set goals for the FCF PSUs based on our cumulative absolute free cash flow over a two-year performance period as a percentage of our cumulative net income, excluding charges and credits, over the same performance period. 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 net income as the performance metric for the FCF PSUs is also part of our goal to align executive compensation with stockholder return. We present free cash flow to our investors as a measure of our ability to generate cash. 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 pay to our efficiency in converting net income to free cash flow will incentivize our management to seek out appropriate opportunities to increase the liquidity of the Company in accordance with our transformation goals.
Free cash flow represents cash flow from operations less capital expenditures, SPM investments and multiclient seismic data costs capitalized. For the purposes of the FCF PSUs, free cash flow will also exclude the acquisition of baseline production and investments up to first production for SPM projects. Not excluding these payments would create a potential disincentive to invest in the growth of the SPM businesses because such costs would reduce free cash flow. 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.
Vesting of the FCF PSUs is conditioned on the Company’s achievement of a pre-determined threshold of free cash flow conversion of no less than 50% for over performance period. In calculating this achievement, the Committee will certify the cumulative free cash flow and net income generated by the Company over the two-year 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 performance period as illustrated in the following table. At the end of the performance period, the Compensation Committee will determine the number of shares earned based on the table below.
| 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% |
Any FCF PSUs earned will initially be in the form of restricted stock and be subject to a mandatory one-year hold period. The restricted shares will convert to non-restricted shares 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.
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 our 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” companiesand when considering changes to the Company’sour executive compensation program. To prepareThe Committee considers data for itsthe companies comprising our two “main executive compensation analysis,peer groups”: our oil industry peer group and our general industry peer group. The Committee believes these peer groups together provide the Company’srobust market data necessary to assess the talent markets available to our executive compensation department works with Pay Governanceofficers, both in the oil and gas sector and in other global advanced extractive, technology-driven manufacturing, and industrial engineering-focused sectors. General industry peer group comparisons are particularly relevant for non-operations positions, where skills and experience may be easily transferable to match Company positionsother industries. In addition, the evolving energy industry environment creates challenges in maintaining a robust peer group comprising solely oilfield services and responsibilities against survey positionsupstream companies, given decreases in individual company scope, as well as bankruptcies and responsibilities and to compile the annual compensation data for each executive officer.consolidations in recent cycles.
The Company has twoCommittee annually reviews the specific selection criteria for our main executive compensation peer groups, the oil industrysuch as competition for business or executive talent, revenue, market capitalization, and general industry peer groups (our “main comparator groups”). The survey data prepared by Pay Governance summarize the compensation levels and practices of our main comparator groups, as follows:scope
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The Compensation Committee’s selection criteria for companies comprising the main comparator groups include:
The Compensation Committee, with the assistance of international operations. Pay Governance annually reviews specific criteria and recommendations regardingrecommends for the Committee’s review the addition or removal of companies to add to or remove from these peer groups, based on the comparator groups.Committee’s selection criteria. As a general matter, the CompanyCommittee selects suitable comparator companies such that the companies in each of our two main comparatorthese 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 theits 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
In July 2020, our Compensation Committee directed Pay Governance to re-assess the companies appropriatecomprising our main executive compensation peer groups in light of Schlumberger’s evolving business strategy and 2020 corporate reorganization. As a result of this assessment, the Committee reviewed and approved changes to these peer groups that it believes more appropriately reflect our strategy and address current and future executive talent markets. In selecting the companies for inclusion in our two main comparatorexecutive compensation peer groups, the Committee focused on companies in countries with robust pay disclosure.
The companies comprising the oil industry peer group and the general industry peer group effective for 2017 executive2021 compensation decisions was the Company’s relatively high market capitalization, rendering it difficult to position Schlumberger at the median of each group.are set forth below.
The oil industry peer group comprises ten companies in the energy sector, primarily in the oilfield services and equipment and upstream oil and gas industries, with 2019 revenues between $8.5 billion and $44.6 billion. Our Compensation Committee identified these companies as being broadly comparable to Schlumberger in terms of revenue and market value, and also competing with us for business or executive talent. Several members of this peer group frequently seek to recruit Schlumberger executives for their senior executive roles. See “—Competition for Our Executive Talent” on page 49. In July 2020, our Compensation Committee, applying the selection criteria above, approved the removal of seven companies from the oil industry peer group, effective for 2021 compensation decisions: Anadarko Petroleum, Chevron, Devon Energy, Eni SpA, Marathon Petroleum, Phillips 66, and Valero Energy. The purpose of these removals was to enhance the relevance of this peer group for Schlumberger, by eliminating very large integrated oil companies and those with a retail or downstream focus, as well as acquired companies. As a result of the foregoing, Schlumberger was positioned at the 58th percentile of the oil industry peer group in terms of 2019 revenue, and at the 66th percentile of this peer group in terms of market capitalization as of May 2020. | The general industry peer group comprises 23 global advanced extractive, technology-driven manufacturing, and industrial engineering-focused companies with annual revenues, market valuations and global scopes that are similar to Schlumberger’s. The companies in this peer group had 2019 revenues between $14.4 billion and $59.8 billion, non-U.S. annual revenue greater than 20% of consolidated revenue, and market capitalization generally greater than $8 billion. This peer group focuses on Schlumberger’s current and future executive talent markets beyond the oil and gas sector, given the competencies needed for the Company’s future success. It excludes pure technology companies, such as microprocessor manufacturers and software companies. In July 2020, our Compensation Committee, applying the selection criteria above, removed eight pure technology companies from the general industry peer group, effective for 2021 compensation decisions: Accenture, Cisco Systems, Hewlett Packard Enterprise, Intel, Oracle, QUALCOMM, SAP SE, and Texas Instruments. The Committee also removed three other companies that did not meet the revenue criteria above (Raytheon Technologies, Raytheon, and Fluor), and added four new companies, as identified by asterisks below. As a result of the foregoing, Schlumberger was positioned at the 36th percentile of this peer group in terms of both 2019 revenue and May 2020 market capitalization. |
Baker Hughes BHP Group ConocoPhillips EOG Resources Halliburton | Imperial Oil NOV Occidental Petroleum Suncor Energy TechnipFMC | 3M Company ABB Anglo American BAE Systems Caterpillar Compagnie de Saint-Gobain Deere & Company *Dow *DuPont *Eaton Emerson Electric Freeport-McMoRan | General Dynamics Honeywell HP Johnson Controls Koninklijke Philips Lockheed Martin LyondellBasell Rio Tinto Rolls-Royce Holdings Schneider Electric *Trane Technologies (formerly Ingersoll-Rand) |
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Oil Industry Peer Group
The oil industry peer group comprises companies in the oil services industry,Historically, our NEOs have not had ongoing employment or severance agreements during their service with us as well as E&P companiesexecutive officers, and integrated oil and gas companies, all with annual revenues between $6 billion and $123 billion. The broad revenue range is due to the limited number of peer companies in Schlumberger’s immediate revenue range. 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 positionsthey serve at the peer company.
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 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, the Compensation Committee reviewed the companies constituting our two main comparator groups effective for 2017 executive compensation decisions, based on the criteria set forth above. At the time of its review, Schlumberger’s full-year 2016 revenue was forecast to be approximately $30 billion. Applying the selection criteria set forth above, the Compensation Committee approved the removal of Royal Dutch Shell, ExxonMobil, British Petroleum plc and TOTAL from the oil industry 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 evaluationwill of the competitiveness of compensation for our Group Presidents.
As a result of the foregoing, Schlumberger was in the 61stpercentile of the oil industry peer group in terms of revenue, and in the 94thpercentile of the oil industry peer group in terms of market capitalization.
The following companies comprised the oil industry peer group effective for relevant 2017 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 of 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:
In July 2016, the Compensation Committee, applying the selection criteria set forth above, approved the addition of three companies — QUALCOMM, Thermo Fisher Scientific and Texas Instruments — to the general industry peer group, effective for 2017 compensation decisions. Ten companies were removed from this peer group. The Compensation Committee approved the removal of Archer Daniels Midland, Danone, International Paper, FedEx and UPS because these companies did not meet the technology focus criterion above. Amazon, Alstom, Boeing, Microsoft and Siemens were removed because they did not meet the revenue criteria described above.
As a result of the foregoing, Schlumberger was positioned at the 30thpercentile of the general industry peer group in terms of revenue, and the 60thpercentile of that peer group in terms of market capitalization.
The following companies comprised the general industry peer group effective for relevant 2017 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:
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:
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 2017 compensation decisions:
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Relative Size of Direct Compensation Elements
Schlumberger’s executive compensation program consists of three primary elements, comprising our executives’ total direct compensation:
These elements allowBoard. This enables the Company to remain competitiveterminate their employment using judgment as to the terms of any severance arrangement and attract, retainbased on specific circumstances at the time they cease being executive officers. Our NEOs do not have change in control agreements, and motivate topwe do not enter into employment, severance or change-in-control agreements with newly hired executive talentofficers. For details regarding our agreements with current and potential future financial rewards. At the same time, this relatively simple compensation program is applied and communicated consistently to our exempt employeesoutgoing NEOs, see “—Elements of more than 140 nationalities operating in approximately 85 countries.2021 Total Direct Compensation—Agreements with Outgoing NEOs” on page 48.
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
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 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:
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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.
Procedure for Determining Executive Compensation; Role of Management
The Compensation Committee evaluates all elements of executive officer compensation each January, after a review of 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 are appropriate. The CEO does not participate in the Compensation Committee’s deliberations with regard to 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 our Executive Compensation Framework—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 compensation events:
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 Groups 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 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 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 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, 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 sets the equity award grant date as the day of the Board 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
recognize the promotion of an employee, a change in responsibility or a specific achievement. The exercise price for all stock options granted to executive officers and other employees is the average of the high and low trading price 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 managementstrongly believe strongly in linking executive long-term rewards to stockholder value. Our Board, upon recommendation of the Nominating and Governance Committee and the Compensation Committee, adopted revised executive stock ownership guidelines in 2011 applicable to executive officers and other key position holders. Seniorrequire our executives are required to hold the numbersa minimum dollar value of Schlumberger common shares equal to the multiple of base salaryas set forth below.below:
| Title | Stock Ownership Multiple |
| Chief Executive Officer | 6x base salary |
| Executive Vice Presidents | 3x base salary |
| Executive | 2x base salary |
| 1x base salary |
All executives subject to the guidelines must retain 50% of the net shares acquiredthey acquire 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 acquiredthey acquire 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.
Other Executive Benefits and PoliciesAs of January 31, 2022, all of our NEOs were in compliance with our stock ownership guidelines.
No Hedging or Pledging of Schlumberger Stock
Schlumberger’s insider trading policy prohibits executives from speculating in the Company’s stock, which includes, pledging; hedging; short selling; buying or selling publicly-traded options, including writing covered calls; or any other type of derivative arrangement on the Company’s stock that has a similar economic effect.
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-term benefit plans to be an important element of the total compensation package. The pension plans provide for lifetime benefits 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. 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.
Retirement Practices
The Company has a practice of phased retirement, which, at the discretion of the Company, may be offered to executive officers (other than the CEO) who are approaching retirement. This practice involves a transition into retirement 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 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.
Recoupment of Performance-Based Cash and Equity Awards
On the recommendation of the Compensation Committee, our Board in July 2006has adopted a clawback policy on recoupingto recoup performance-based incentive compensation, whether paid in the form of equity or cash, awards in the event of specified restatements of financial results. Under thethis policy, if financial results are significantly restated due to fraud or other intentional misconduct, the Boardour Compensation 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 any actions 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 equityPSU awards and any shares of stock that are issued as a result ofupon the vesting of thesePSU awards are subject to recoupment under the terms of those awards.
Our executive officers and directors are prohibited from using any strategies or products (such as derivative securities or short-selling techniques) to hedge, directly or indirectly, against potential changes in the value of Schlumberger common stock. In addition, our executive officers and directors, as well as certain other key employees, are prohibited from holding Schlumberger securities in a margin account or pledging Schlumberger securities as collateral for a loan. Our insider trading policy strongly discourages, but does not prohibit, other employees from engaging in speculative transactions, including hedging or other financial mechanisms, holding Schlumberger securities in a margin account or pledging Schlumberger securities.
| Schlumberger Limited2022 Proxy Statement | 51 |
Compensation Committee Review
Our Compensation Committee reviews the elements of our NEOs’ total direct compensation throughout the year, to evaluate whether each element remains competitive with the companies in our two main executive compensation peer groups. In making compensation decisions, the Committee relies on its own judgment after reviewing external market data, and also considers the following factors:
| • | the executive’s scope of responsibilities, as well as leadership, management and technical expertise, growth potential, and position in our reporting structure; | |
| • | overall Company and individual performance; | |
| • | retention needs; | |
| • | the recommendations of our CEO (except with respect to his own compensation); and | |
| • | internal pay equity. |
Each January, the Committee evaluates all elements of executive officer compensation, after reviewing the prior year’s results and the achievement of Company financial objectives and each officer’s strategic personal objectives. The purpose of this annual evaluation is to determine whether any changes in an officer’s compensation may be appropriate. The CEO does not participate in the Committee’s deliberations regarding his own compensation. At the Committee’s request, the CEO reviews with the Committee the performance of the other executive officers, but no other NEO has any input in executive compensation decisions. Our 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 Schlumberger. Our Vice President of Human Resources assists the CEO in developing the other executives’ performance reviews and reviewing external market data to determine the CEO’s executive compensation recommendations.
The following table summarizes the approximate timing of significant annual executive compensation events:
| EVENT | TIMING | |
| Establish Company financial objectives and CEO strategic personal objectives | January of each year with respect to the current year | |
| Review and approve the peer group companies used for compensation benchmarking | July of each year for compensation in the following year | |
| Pay Governance provides analysis for our Compensation Committee to evaluate year-to-date compensation decisions in light of year-to-date comparative data, and to prepare for the annual executive officer compensation review in January | October of each year for compensation in the following year | |
| Evaluate Company and executive performance (achievement of objectives established in previous year) and recommend annual cash incentive payout based on those results | Results approved in January of each year for annual cash incentive compensation with respect to the prior year. The annual cash incentive earned for the prior year is paid in February of the current year | |
| Review and recommend executive base salaries and determine equity-based grants | January of each year for base salaries for that year and for equity-based grants |
Equity Grant Practices
Our Compensation Committee is responsible for granting long-term equity-based compensation under our omnibus stock incentive plans. The Committee approves a preliminary budget for equity-based grants for the following year at each October meeting. Awards for the CEO are granted by the Committee following approval by the independent members of the Board. Awards for executive officers other than the CEO are granted by the Committee and discussed with the Board. Management determines the allocation of equity-based grants for other groups within the Company and individual recommendations are made by the heads of the groups and approved by the CEO. In addition to considering the value of each equity-based award, management and the Committee also consider, as an additional factor in approving long-term equity awards, 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.
The regular Board and Compensation Committee meeting schedule is set at least a year in advance, with meetings held quarterly in mid-January, mid-April, mid-July and mid-October. Annual grants of equity-based awards to our NEOs and other executives, as well as to other eligible employees, are made at the Committee’s January meeting. Additionally, specific grants may be made at other Committee meetings to recognize an employee’s promotion, change in responsibility or specific achievement, or to achieve other key compensation objectives, such as retention. Generally, the Committee sets the grant date for equity awards as the Committee meeting date, which is usually two days in advance of the Company’s announcement of earnings. The Company does not time the release of material non-public information for the purpose of affecting the values of equity grants. At the time equity grant decisions are made, our Compensation Committee is aware of the earnings results, but it does not adjust the size or the mix of grants to reflect possible market reaction.
In addition, PSUs and RSUs do not accrue or pay dividends or dividend equivalents prior to vesting.
| Schlumberger Limited2022 Proxy Statement | 52 |
Independent Compensation Consultant
Our Compensation Committee has retained Pay Governance as its independent consultant with respect to executive compensation matters, as well as non-employee director compensation matters. Pay Governance works with Schlumberger’s Human Resources department to compile annual compensation data for each executive officer, and to compare the compensation opportunities of our executive officers with those at comparable roles at companies in our main executive compensation peer groups. Pay Governance also annually prepares an analysis of competitive non-employee director compensation levels and market trends using the same two main peer groups as are used for the annual executive officer compensation review.
Pay Governance reports only to, and acts solely at the direction of, our Compensation Committee. The 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 our Compensation Committee.
Section 162(m) of the Internal Revenue Code limits the amount of compensation that may be deducted per covered employee, including each of our NEOs, 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, the $1 million annual deduction limitation applies to compensation paid to any individual who is 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 there is no longer any exception 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 for binding contracts in effect on November 2, 2017 may allow these awards to qualify for the exemption from the $1 million annual
deduction limitation provided that such grants are not materially modified. For periods after 2017, without the performance-based compensation exception,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. Although the deductibility of compensation is a consideration evaluated by theour Compensation Committee, the Compensation Committee believes that the lost deduction on compensation payable in excess of the $1 million limitation for the named executive officersour NEOs is not material relative to the benefit of being able to attract and retain talented management. Accordingly, the Compensation Committee will continue to retain the discretion to payapprove executive compensation that it believes is notbest for Schlumberger without regard to whether the compensation is fully deductible.
The Compensation Committee has reviewed and discussed with the Company’s management the Compensation Discussion and Analysis included in this proxy statement. Based on that review and discussion, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
| Schlumberger Limited |
2017
The following table sets forth information regarding the total compensation paid by the Companyto our NEOs for fiscal years 2021, 2020 and its subsidiaries for the fiscal year ended December 31, 2017 to the Chief Executive Officer, the Chief Financial Officer and the next three most highly compensated executive officers who were serving as executive officers as of December 31, 2017 (each an “NEO” or a “named executive officer”).2019.
| Name | Year | Salary ($) | 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 ($) | ||||||||||||||||
| Paal Kibsgaard | 2017 | 2,000,000 | N/A | 11,998,506 | 0 | 4,275,000 | 2,344,577 | 141,257 | (6) | 20,759,340 | |||||||||||||||||||||
| Chairman & CEO | 2016 | 2,000,000 | N/A | 6,000,813 | 5,998,080 | 2,775,000 | 1,733,155 | 52,546 | 18,559,594 | ||||||||||||||||||||||
| 2015 | 1,925,000 | N/A | 6,022,706 | 5,995,640 | 3,254,600 | 931,676 | 145,180 | 18,274,802 | |||||||||||||||||||||||
| Simon Ayat | 2017 | 1,000,000 | N/A | 5,206,165 | 0 | 1,401,500 | 745,143 | 105,875 | (7) | 8,458,683 | |||||||||||||||||||||
| EVP & CFO | 2016 | 1,000,000 | N/A | 2,000,271 | 1,999,360 | 925,000 | 539,375 | 84,616 | 6,548,982 | ||||||||||||||||||||||
| 2015 | 1,000,000 | N/A | 2,005,173 | 2,006,060 | 1,115,400 | 388,393 | 130,126 | 6,645,152 | |||||||||||||||||||||||
| Ashok Belani | 2017 | 900,000 | N/A | 4,810,285 | 0 | 1,269,450 | 763,364 | 94,050 | (8) | 7,837,149 | |||||||||||||||||||||
| EVP Technology | 2016 | 900,000 | N/A | 2,907,663 | 1,802,240 | 810,000 | 609,364 | 84,466 | 7,113,733 | ||||||||||||||||||||||
| 2015 | 900,000 | N/A | 1,803,937 | 1,803,200 | 1,015,100 | 348,110 | 116,708 | 5,987,055 | |||||||||||||||||||||||
| Olivier Le Peuch | 2017 | 683,333 | N/A | 4,717,540 | 316,950 | 840,000 | 877,867 | 61,287 | (9) | 7,496,977 | |||||||||||||||||||||
| President, | |||||||||||||||||||||||||||||||
| Cameron Group | |||||||||||||||||||||||||||||||
| Alexander Juden | 2017 | 750,000 | N/A | 4,969,712 | 0 | 787,500 | 541,291 | 69,251 | (10) | 7,117,754 | |||||||||||||||||||||
| Secretary and | 2016 | 750,000 | N/A | 1,350,323 | 1,351,680 | 509,100 | 413,477 | 55,099 | 4,429,679 | ||||||||||||||||||||||
| General Counsel | 2015 | 750,000 | N/A | 1,358,343 | 1,352,400 | 627,450 | 192,315 | 83,178 | 4,363,686 | ||||||||||||||||||||||
| Name | Year | Salary ($) | (2) | Stock Awards ($) | (3) | Non-Equity Incentive Plan Compensation ($) | (4) | Change in Pension Value & Nonqualified Deferred Compensation Earnings ($) | (5) | All Other Compensation ($) | (6) | Total ($) | ||||||||||||||||
| Olivier Le Peuch(1) | 2021 | 1,400,000 | 10,499,803 | 3,916,100 | 802,703 | 176,896 | 16,795,502 | |||||||||||||||||||||
| Chief Executive Officer | 2020 | 1,383,846 | — | 2,251,200 | 1,844,619 | 170,419 | 5,650,084 | |||||||||||||||||||||
| 2019 | 1,147,500 | 14,515,858 | 2,360,250 | 981,058 | 112,504 | 19,117,170 | ||||||||||||||||||||||
| Stephane Biguet | 2021 | 770,000 | 3,199,750 | 1,458,400 | 462,189 | 127,749 | 6,018,088 | |||||||||||||||||||||
| Executive Vice President | 2020 | 755,193 | 2,499,742 | 837,000 | 767,587 | 119,081 | 4,978,603 | |||||||||||||||||||||
| and Chief Financial Officer | ||||||||||||||||||||||||||||
| Khaled Al Mogharbel | 2021 | 900,000 | 3,499,787 | 1,715,850 | (96,053 | ) | 244,569 | 6,264,153 | ||||||||||||||||||||
| Executive Vice President, | 2020 | 889,615 | 3,719,674 | 1,045,800 | 297,898 | 262,956 | 6,215,943 | |||||||||||||||||||||
| Geographies | 2019 | 895,000 | 5,770,142 | 1,423,050 | 327,754 | 211,550 | 8,627,496 | |||||||||||||||||||||
| Hinda Gharbi | 2021 | 850,000 | 3,499,787 | 1,599,300 | 558,053 | 289,299 | 6,796,494 | |||||||||||||||||||||
| Executive Vice President, | 2020 | 808,500 | 3,199,854 | 932,650 | 1,072,011 | 156,943 | 6,169,958 | |||||||||||||||||||||
| Services and Equipment | 2019 | 764,167 | 4,729,651 | 1,176,800 | 623,734 | 186,226 | 7,480,578 | |||||||||||||||||||||
| Ashok Belani | 2021 | 900,000 | 3,600,241 | 1,670,850 | 11,685 | 58,374 | 6,241,150 | |||||||||||||||||||||
| Executive Vice President, | 2020 | 889,615 | 3,599,918 | 1,045,800 | 1,205,590 | 70,968 | 6,811,891 | |||||||||||||||||||||
| Schlumberger New Energy | 2019 | 900,000 | 3,599,568 | 1,476,000 | 968,224 | 37,209 | 6,981,001 | |||||||||||||||||||||
| (1) | Mr. Le Peuch did not receive an LTI award in 2020, because he had received an award of PSUs in August 2019 with a target value of $10.5 million in connection with his promotion to CEO. This award was in lieu of any annual LTI award that he would have otherwise received in 2020. See “Compensation Discussion and Analysis—CEO Pay Summary” on page 34 for additional details. |
| (2) | The |
| Includes the value of PSU | |
| The value of | |
| $7,200,482. The NEOs may never realize any value from these | |
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.
| The changes in pension value reported in this column represent the increase or decrease in the actuarial present value of | |
| All of the perquisites included in the column “All Other Compensation” and described in | |
| The amount disclosed for Mr. | |
| The amount disclosed for Mr. Biguet consists of: (a) unfunded credits to the SLB Restoration Savings Plan ($39,510), (b) contributions to the Schlumberger 401(k) Plan ($8,700), and (c) the following perquisites: vacation travel allowance ($12,179), financial planning services ($13,000) and housing allowance ($54,360). | |
| The amount disclosed for Mr. Al Mogharbel consists of: (a) unfunded credits to the SLB Restoration Savings Plan ($99,348), (b) contributions to the Schlumberger 401(k) Plan ($17,400), and (c) the following perquisites: vacation travel allowance ($36,821), financial planning services ($13,000) and children’s education ($78,000). | |
| The amount disclosed for Ms. Gharbi consists of: (a) unfunded credits to the SLB Restoration Savings Plan ($32,030), (b) contributions to the Schlumberger 401(k) Plan ($8,700), and (c) the following perquisites: vacation travel allowance ($15,687), vacation payout ($40,681), children’s education ($27,329), housing allowance ($47,399), and relocation assistance ($117,473). | |
| The amount disclosed for Mr. Belani consists of: (a) unfunded credits to the SLB Restoration Savings Plan ($49,674), and (b) contributions to the Schlumberger 401(k) Plan ($8,700). |
| 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 Limited |
The following table provides additional information about stockregarding cash incentive and option awardsPSU and equity incentive planRSU awards granted to our named executive officersNEOs in 2017.2021.
| Estimated Possible Payouts | Estimated Possible Payouts | All Other | All Other | ||||||||||||||||||||||||||||||||||||||||
| Under Non-Equity Incentive | Under Equity Incentive | Stock | Option | Full | |||||||||||||||||||||||||||||||||||||||
| Plan Awards(2) | Plan Awards(3) | Awards: | Awards: | Exercise | Grant Date | ||||||||||||||||||||||||||||||||||||||
| Number | Number of | or Base | Fair Value | ||||||||||||||||||||||||||||||||||||||||
| of Shares | Securities | Price of | of Stock and | ||||||||||||||||||||||||||||||||||||||||
| of Stock | Underlying | Option | Option | ||||||||||||||||||||||||||||||||||||||||
| Award | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | or Units | Options | Awards | Awards | ||||||||||||||||||||||||||||||||
| Name | Type(1) | Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) | ($/Sh) | (4) | ($) | ||||||||||||||||||||||||||||||
| P. Kibsgaard | 765,000 | 2,625,000 | 6,000,000 | ||||||||||||||||||||||||||||||||||||||||
| 2-year PSU | 1/19/17 | 71,900 | 179,750 | 5,997,898 | |||||||||||||||||||||||||||||||||||||||
| 3-year PSU | 1/19/17 | 73,600 | 184,000 | 6,000,608 | |||||||||||||||||||||||||||||||||||||||
| S. Ayat | 255,000 | 875,000 | 2,000,000 | ||||||||||||||||||||||||||||||||||||||||
| 2-year PSU | 1/19/17 | 24,000 | 60,000 | 2,002,080 | |||||||||||||||||||||||||||||||||||||||
| 3-year PSU | 1/19/17 | 24,500 | 61,250 | 1,997,458 | |||||||||||||||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||||||||||||||
| Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(2) | Estimated Possible Payouts Under Equity Incentive Plan Awards(3) | All Other Awards | (4) | Grant Date Awards | |||||||||||||||||||
| Name | Award Type | (1) | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | (5) | |||||||||||||
| O. Le Peuch | 741,300 | 1,942,500 | 4,202,100 | ||||||||||||||||||||
| FCFM PSU | 1/20/21 | 55,145 | 110,290 | 275,725 | 2,624,902 | ||||||||||||||||||
| ROCE PSU | 1/20/21 | 1 | 110,290 | 275,725 | 2,627,902 | ||||||||||||||||||
| 3-year RSU | 1/20/21 | 110,290 | 2,624,902 | ||||||||||||||||||||
| TSR PSU | 2/3/21 | 24,110 | 96,440 | 192,880 | 2,625,097 | ||||||||||||||||||
| S. Biguet | 271,810 | 712,250 | 1,627,010 | ||||||||||||||||||||
| FCFM PSU | 1/20/21 | 16,805 | 33,610 | 84,025 | 799,918 | ||||||||||||||||||
| ROCE PSU | 1/20/21 | 1 | 33,610 | 84,025 | 799,918 | ||||||||||||||||||
| 3-year RSU | 1/20/21 | 33,610 | 799,918 | ||||||||||||||||||||
| TSR PSU | 2/3/21 | 7,348 | 29,390 | 58,780 | 799,996 | ||||||||||||||||||
| K. Al Mogharbel | 317,700 | 832,500 | 1,800,900 | ||||||||||||||||||||
| FCFM PSU | 1/20/21 | 18,380 | 36,760 | 91,900 | 874,888 | ||||||||||||||||||
| ROCE PSU | 1/20/21 | 1 | 36,760 | 91,900 | 874,888 | ||||||||||||||||||
| 3-year RSU | 1/20/21 | 36,760 | 874,888 | ||||||||||||||||||||
| TSR PSU | 2/3/21 | 8,038 | 32,150 | 64,300 | 875,123 | ||||||||||||||||||
| H. Gharbi | 300,050 | 786,250 | 1,700,850 | ||||||||||||||||||||
| FCFM PSU | 1/20/21 | 18,380 | 36,760 | 91,900 | 874,888 | ||||||||||||||||||
| ROCE PSU | 1/20/21 | 1 | 36,760 | 91,900 | 874,888 | ||||||||||||||||||
| 3-year RSU | 1/20/21 | 36,760 | 874,888 | ||||||||||||||||||||
| TSR PSU | 2/3/21 | 8,038 | 32,150 | 64,300 | 875,123 | ||||||||||||||||||
| A. Belani | 317,700 | 832,500 | 1,800,900 | ||||||||||||||||||||
| FCFM PSU | 1/20/21 | 18,910 | 37,820 | 94,550 | 900,116 | ||||||||||||||||||
| ROCE PSU | 1/20/21 | 1 | 37,820 | 94,550 | 900,116 | ||||||||||||||||||
| 3-year RSU | 1/20/21 | 37,820 | 900,116 | ||||||||||||||||||||
| TSR PSU | 2/3/21 | 8,265 | 33,060 | 66,120 | 899,893 | ||||||||||||||||||
| (1) | All |
| (2) | These columns show the possible cash incentive payouts for each NEO for fiscal year |
| Actual cash incentive amounts earned for | |
| (3) | Relates to |
| (4) | Relates to RSUs, all of which will vest on January 20, 2024, subject to continued employment with the |
| (5) | With respect to PSU awards, this column reflects the grant date fair value for such PSUs at target. We calculated the grant date fair value of each PSU award by multiplying the number of PSUs at target by the applicable grant date fair values for the PSUs: (i) $23.80 for the Free Cash Flow Margin PSUs and ROCE PSUs issued to our NEOs in January 2021; and (ii) $27.22 for the TSR PSUs issued to our NEOs in February 2021. With respect to RSU awards, we calculated the grant date fair value by multiplying the number of RSUs by the grant date fair value of $23.80. |
| Schlumberger Limited |
The following table provides additional information regarding outstanding and unexercised stock options outstanding and outstanding PSU and RSU awards for each of our NEOs as of December 31, 2017.2021.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
| Name | Option/ PSU/RSU Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | (1) | Number of Securities Underlying Unexercised Option Unexercisable (#) | (1) | Option Exercise Price ($) | 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 Options 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 | 1/19/2012 | 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 | 24,000 | — | 91.740 | 4/16/2025 | ||||||||||||||||||||||||||
| 4/20/2016 | 30,000 | — | 80.525 | 4/20/2026 | ||||||||||||||||||||||||||
| 1/19/2017 | 12,000 | 3,000 | 87.380 | 1/19/2027 | ||||||||||||||||||||||||||
| 1/16/2019 | 89,600 | (3) | 2,683,520 | |||||||||||||||||||||||||||
| 4/17/2019 | 19,540 | (3) | 585,223 | |||||||||||||||||||||||||||
| 8/1/2019 | 309,280 | (3) | 9,262,936 | |||||||||||||||||||||||||||
| 1/20/2021 | 110,290 | (4) | 3,303,186 | |||||||||||||||||||||||||||
| 1/20/2021 | 110,290 | (5) | 3,303,186 | |||||||||||||||||||||||||||
| 1/20/2021 | 110,290 | (6) | 3,303,186 | |||||||||||||||||||||||||||
| 2/3/2021 | 96,440 | (7) | 2,888,378 | |||||||||||||||||||||||||||
| S. Biguet | 1/19/2012 | 15,000 | — | 72.110 | 1/19/2022 | |||||||||||||||||||||||||
| 4/18/2013 | 20,000 | — | 70.925 | 4/18/2023 | ||||||||||||||||||||||||||
| 10/17/2013 | 20,000 | — | 91.280 | 10/17/2023 | ||||||||||||||||||||||||||
| 1/16/2014 | 13,000 | — | 88.765 | 1/16/2024 | ||||||||||||||||||||||||||
| 1/15/2015 | 18,000 | — | 77.795 | 1/15/2025 | ||||||||||||||||||||||||||
| 1/21/2016 | 28,000 | — | 61.920 | 1/21/2026 | ||||||||||||||||||||||||||
| 1/16/2019 | 42,000 | (3) | 1,257,900 | |||||||||||||||||||||||||||
| 1/15/2020 | 75,980 | (8) | 2,275,601 | |||||||||||||||||||||||||||
| 1/20/2021 | 33,610 | (4) | 1,006,620 | |||||||||||||||||||||||||||
| 1/20/2021 | 33,610 | (5) | 1,006,620 | |||||||||||||||||||||||||||
| 1/20/2021 | 33,610 | (6) | 1,006,620 | |||||||||||||||||||||||||||
| 2/3/2021 | 29,390 | (7) | 880,231 | |||||||||||||||||||||||||||
| 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 | 71,000 | — | 77.795 | 1/15/2025 | ||||||||||||||||||||||||||
| 1/21/2016 | 114,000 | — | 61.920 | 1/21/2026 | ||||||||||||||||||||||||||
| 1/16/2019 | 89,600 | (3) | 2,683,520 | |||||||||||||||||||||||||||
| 4/17/2019 | 12,700 | (3) | 380,365 | |||||||||||||||||||||||||||
| 4/17/2019 | 48,840 | (9) | 1,462,758 | |||||||||||||||||||||||||||
| 1/15/2020 | 113,060 | (8) | 3,386,147 | |||||||||||||||||||||||||||
| 1/20/2021 | 36,760 | (4) | 1,100,962 | |||||||||||||||||||||||||||
| 1/20/2021 | 36,760 | (5) | 1,100,962 | |||||||||||||||||||||||||||
| 1/20/2021 | 36,760 | (6) | 1,100,962 | |||||||||||||||||||||||||||
| 2/3/2021 | 32,150 | (7) | 962,893 | |||||||||||||||||||||||||||
| Schlumberger Limited |
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||
| Name | Option/ PSU/RSU Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | (1) | Number of Securities Underlying Unexercised Options 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) | |||||||||||||||||
| H. Gharbi | 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 | 24,000 | — | 91.740 | 4/16/2025 | ||||||||||||||||||||||||||
| 4/20/2016 | 30,000 | — | 80.525 | 4/20/2026 | ||||||||||||||||||||||||||
| 1/19/2017 | 1,500 | (10) | 44,925 | |||||||||||||||||||||||||||
| 1/16/2019 | 89,600 | (3) | 2,683,520 | |||||||||||||||||||||||||||
| 4/17/2019 | 36,630 | (9) | 1,097,069 | |||||||||||||||||||||||||||
| 1/15/2020 | 97,260 | (8) | 2,912,937 | |||||||||||||||||||||||||||
| 1/20/2021 | 36,760 | (4) | 1,100,962 | |||||||||||||||||||||||||||
| 1/20/2021 | 36,760 | (5) | 1,100,962 | |||||||||||||||||||||||||||
| 1/20/2021 | 36,760 | (6) | 1,100,962 | |||||||||||||||||||||||||||
| 2/3/2021 | 32,150 | (7) | 962,893 | |||||||||||||||||||||||||||
| A. Belani | 1/19/2012 | 127,000 | — | 72.110 | 1/19/2022 | |||||||||||||||||||||||||
| 1/17/2013 | 72,000 | — | 73.250 | 1/17/2023 | ||||||||||||||||||||||||||
| 1/16/2014 | 60,000 | — | 88.765 | 1/16/2024 | ||||||||||||||||||||||||||
| 1/15/2015 | 80,000 | — | 77.795 | 1/15/2025 | ||||||||||||||||||||||||||
| 1/21/2016 | 128,000 | — | 61.920 | 1/21/2026 | ||||||||||||||||||||||||||
| 1/16/2019 | 100,800 | (3) | 3,018,960 | |||||||||||||||||||||||||||
| 1/15/2020 | 109,420 | (8) | 3,277,129 | |||||||||||||||||||||||||||
| 1/20/2021 | 37,820 | (4) | 1,132,709 | |||||||||||||||||||||||||||
| 1/20/2021 | 37,820 | (5) | 1,132,709 | |||||||||||||||||||||||||||
| 1/20/2021 | 37,820 | (6) | 1,132,709 | |||||||||||||||||||||||||||
| 2/3/2021 | 33,060 | (7) | 990,147 | |||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||
| (1) | Stock |
| (2) | Market value equal to the product of (x) |
| (3) | |
| (4) | Reflects the target number of |
| (5) | Reflects the target number of |
| (6) | Reflects the number of three-year RSUs that were issued in January 2021 and that will vest on January 20, 2024, subject to continued employment with the Company through that date. |
| (7) | Reflects the target number of |
| Reflects the target number of | |
| (9) | Reflects the number of three-year RSUs that were issued in April |
| (10) | |
| Schlumberger Limited |
The following table sets forth certain information with respect to stock options exercised, and PSUs and RSUs that vested during 2017 for our NEOs.
| 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 ($) (e) | |
| P. Kibsgaard | 0 | 0 | 0 | 0 | |
| S. Ayat | 100,000 | 2,672,000 | 0 | 0 | |
| A. Belani | 0 | 0 | 0 | 0 | |
| O. Le Peuch | 0 | 0 | 12,000 | 807,660 | |
| A. Juden | 0 | 0 | 0 | 0 | |
Stock Awards (Columns (d) and (e))
The following table provides details of theadditional information regarding stock options that were exercised and PSU and RSU awards that vested and value realized in 2017.during 2021 for our NEOs.
| Option Awards | Stock Awards | |||||||||||||
| Name | Grant Date | Release Date | Number of Shares | Stock Price on Release Date | Value Realized on Release ($) | Description | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||
| O. Le Peuch | 10/16/2014 | 10/16/2017 | 12,000 | 67.305 | 807,660 | Shares underlying vested RSUs | — | — | 30,464 | 748,944 | ||||
| S. Biguet | — | — | 14,280 | 351,066 | ||||||||||
| K. Al Mogharbel | — | — | 30,464 | 748,944 | ||||||||||
| H. Gharbi | — | — | 31,964 | 787,209 | ||||||||||
| A. Belani | — | — | 34,272 | 842,561 | ||||||||||
Pension Benefits for Fiscal Year 2017
Schlumberger maintainsWe maintain the following pension plans for its named executive officersour NEOs and other employees whichwho began employment with the Company when new hires were eligible to participate. These plans provide for lifetime pensions upon retirement, based on years of service:
| • | ||
| Schlumberger Technology Corporation Pension Plan (“STC Pension Plan”); | ||
| • | ||
| Schlumberger Technology Corporation Supplementary Benefit Plan (“STC Supplementary Plan”); | ||
| • | Schlumberger Limited Supplementary Benefit Plan (“SLB Supplementary Plan”); | |
| • | Schlumberger | |
| • | Schlumberger International Staff Pension Plan (“ |
The following table and narrative disclosure set forth certainthe discussion below provide information with respect toregarding pension benefits payable to the named executive officers.our NEOs.
| 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 | ||||
| P. Kibsgaard | SLB Pension Plan | 9.75 | 570,569 | 0 | ||||||||||||
| O. Le Peuch | STC Pension Plan | 11.75 | 943,174 | — | ||||||||||||
| STC Pension Plan | 5.00 | 262,041 | 0 | STC Supplementary Plan | 7.25 | 1,429,288 | — | |||||||||
| SLB Supplementary Plan | 9.75 | 7,872,769 | 0 | SLB Supplementary Plan | 3.00 | 2,799,428 | — | |||||||||
| STC Supplementary Plan | 4.25 | 371,531 | 0 | International Staff Pension Plan | 6.50 | 2,749,888 | — | |||||||||
| SLB International Staff Pension Plan | 3.20 | 348,325 | 0 | |||||||||||||
| S. Ayat | SLB Pension Plan | 11.25 | 831,988 | 0 | ||||||||||||
| S. Biguet | STC Pension Plan | 7.41 | 569,844 | — | ||||||||||||
| STC Pension Plan | 0.75 | 73,823 | 0 | SLB Supplementary Plan | 5.00 | 1,650,096 | — | |||||||||
| SLB Supplementary Plan | 11.25 | 4,810,843 | 0 | International Staff Pension Plan | 3.70 | 250,113 | — | |||||||||
| STC Supplementary Plan | 0.50 | 5,340 | 0 | |||||||||||||
| K. Al Mogharbel | International Staff Pension Plan | 16.20 | 1,841,636 | — | ||||||||||||
| H. Gharbi | STC Pension Plan | 5.76 | 450,015 | — | ||||||||||||
| SLB French Supplementary Plan | 0.75 | 186,833 | 0 | SLB Supplementary Plan | 2.50 | 1,231,438 | — | |||||||||
| SLB International Staff Pension Plan | 10.60 | 848,759 | 0 | International Staff Pension Plan | 10.30 | 1,846,298 | — | |||||||||
| A. Belani | SLB Pension Plan | 12.75 | 1,068,453 | 0 | STC Pension Plan | 19.33 | 1,455,742 | — | ||||||||
| STC Pension Plan | 2.58 | 54,300 | 0 | STC Supplementary Plan | 2.58 | 130,062 | — | |||||||||
| SLB Supplementary Plan | 12.75 | 4,564,281 | 0 | SLB Supplementary Plan | 16.75 | 6,543,957 | — | |||||||||
| STC Supplementary Plan | 2.58 | 132,559 | 0 | International Staff Pension Plan | 10.00 | 655,691 | — | |||||||||
| 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) | |
| (2) | The present value of accumulated benefits is calculated using the |
| Schlumberger Limited2022 Proxy Statement | 58 |
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. EmployeesEligible employees may participate in any oneeither of these plans induring the course of their careers with Schlumberger, in which case they become entitled to a pension from each suchthe applicable 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%2.0% of admissible compensation for service after completion of 15 years of active service. Since 2009, the benefit earned underUnder the SLB USAB Pension Plan, the benefit earned in 2009 is 3.2% of admissible compensation, and after 2009 the benefit earned has been equal to 3.5% of admissible compensation for all service.compensation. 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. Biguet and Ms. Gharbi are eligible for early retirement with a reduced pension. Additionally, under the “rule of 85,”85” applicable to the STC Pension Plan, 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. AyatLe Peuch and Belani are eligible for retirement with an unreduced pension under the rule of 85. The benefits are usually paid as a lifetime annuity.
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-hiredNewly hired employees are eligible to participate in an enhanced defined contribution plan, which provides a Company matching contribution depending on an employee’s 401(k) contribution, andas well as a Company discretionary profit sharing contribution based on 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)(1) annual compensation that can be taken into account under qualified plans and (ii)(2) annual benefits that can be provided under qualified plans.
The retirement ageeligibility rules under nonqualified pension plans isare 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.Ayat and Belani are eligible for retirement with an unreduced pension under the rule of 85, described above. Nonqualified planReduced 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. Messrs. Le Peuch and Belani are eligible for retirement with an unreduced pension under the rule of 85, described above. Mr. Biguet and Ms. Gharbi are eligible for early retirement with a reduced pension. 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”).
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.1974.
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 officersNEOs have either been in the SLB International Staff Pension 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, alongtogether 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,year-end 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,With respect to pension rights accrued prior to 2010, Messrs. Le Peuch and Belani and Juden are eligible for normal retirement with no reduction.
reduction, and Messrs. Biguet and Al Mogharbel and Ms. Gharbi 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 with a reduced pension. With respect to pension rights accrued in 2010 or later, Messrs. Biguet and Al Mogharbel and Ms. Gharbi will become eligible for normal retirement upon reaching age 60 and early retirement upon reaching age 55.
| Schlumberger Limited | |
The following table and narrative disclosure set forth certainthe discussion below provide information with respect toregarding nonqualified deferred compensation payable to theour 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 ($) | (3) | |||||||||||||||||
| O. Le Peuch | SLB Supplementary Plan | — | — | 10,347 | — | 116,306 | ||||||||||||||||||||
| Executive | Company | Aggregate | Aggregate | Aggregate | International Staff Profit Sharing Plan | — | — | 184,658 | — | 1,697,145 | ||||||||||||||||
| Contributions | Contributions | Earnings | Withdrawals/ | Balance at | SLB Restoration Savings Plan | 1,008,360 | 100,836 | 203,821 | — | 3,537,186 | ||||||||||||||||
| in Last FY | in Last FY | in Last FY | Distributions | Last FYE | ||||||||||||||||||||||
| Name | Plan Name | ($) | (1) | ($) | (2) | ($) | ($) | ($) | (3) | |||||||||||||||||
| P. Kibsgaard | SLB Supplementary Plan | 0 | 113,975 | 213,944 | 0 | 1,239,900 | ||||||||||||||||||||
| S. Biguet | SLB Supplementary Plan | — | — | 72 | — | 18,423 | ||||||||||||||||||||
| SLB Restoration Savings Plan | 0 | 0 | 1,710 | 0 | 90,350 | International Staff Profit Sharing Plan | — | — | 54,121 | — | 497,414 | |||||||||||||||
| International Staff Plan | 0 | 0 | 19,995 | 0 | 147,226 | SLB Restoration Savings Plan | 368,760 | 39,510 | 164,814 | — | 1,115,086 | |||||||||||||||
| S.Ayat | SLB Supplementary Plan | 0 | 42,725 | 90,920 | 0 | 697,311 | ||||||||||||||||||||
| K. Al Mogharbel | SLB Supplementary Plan | — | — | 22,961 | — | 191,089 | ||||||||||||||||||||
| SLB Restoration Savings Plan | 496,500 | 49,650 | 201,144 | 0 | 2,238,085 | International Staff Profit Sharing Plan | — | — | 92,607 | — | 851,124 | |||||||||||||||
| SLB Restoration Savings Plan | 165,580 | 99,348 | 342,430 | — | 2,724,472 | |||||||||||||||||||||
| H. Gharbi | International Staff Profit Sharing Plan | — | — | 87,572 | — | 804,854 | ||||||||||||||||||||
| International Staff Plan | 0 | 0 | 223,981 | 0 | 1,685,759 | SLB Restoration Savings Plan | 64,059 | 32,030 | 80,988 | — | 392,471 | |||||||||||||||
| A. Belani | SLB Supplementary Plan | 0 | 37,350 | 84,955 | 0 | 625,442 | SLB Supplementary Plan | — | — | 53,725 | — | 838,459 | ||||||||||||||
| SLB Restoration Savings Plan | 216,000 | 43,200 | 91,446 | 0 | 2,722,552 | International Staff Profit Sharing Plan | — | — | 166,381 | — | 1,523,275 | |||||||||||||||
| International Staff Plan | 0 | 0 | 76,909 | 0 | 1,171,934 | SLB Restoration Savings Plan | 99,348 | 49,674 | 63,376 | — | 3,565,424 | |||||||||||||||
| 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) | |
| (2) | |
| (3) |
SLB Supplementary Benefit Plan—Non-QualifiedPlans—Nonqualified Profit Sharing
The SLB Supplementary Plan provides certain non-tax-qualified defined contribution benefits for eligible employees, including named executive officers.our NEOs. 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 samebased on employee investment elections as the qualified plan.elections. An employee forfeits all rights under the non-qualifiednonqualified 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.
SLB International Staff 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 or, upon the employee’s election, may be converted to additional pension rights under the International Staff Pension Plan. 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.
| Schlumberger Limited2022 Proxy Statement | 60 |
Restoration Savings PlanPlans
The SLB Restoration Savings Plan, a non-qualifiednonqualified deferred compensation plan, provides certain defined contribution benefits for the named executive officersour NEOs 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 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 heradmissible 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 contributioncontributions 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.deferrals. For employees who participate in a Schlumberger pension plan, the amount of the matching contribution is equal to one-half50% of the first 6% deferred by the employee in profitable years.employee. 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.based on their investment elections. 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 | 33 |
| 3 years | 66 |
| 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 herthe employee’s 60thbirthday 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 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 estimate of the annual total compensation of our employees as relates to the 2017 total compensation of our CEO. Based on the methodology described below, our CEO’s 2017 total compensation was 234 times that of our median employee.
To identify 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, as of October 1, 2017, we had approximately 99,000 employees working in 140 countries around 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 employees in India, Pakistan, Ukraine, Sudan and Venezuela from the calculation of 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
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 employee was a full-time, salaried employee located in Colombia and working as a Wireline Field Engineer, who is paid a base salary of $38,893. For purposes of this disclosure, we converted all employee compensation to U.S. dollars at a blended exchange rate representing the average exchange rate from January 1, 2017 to October 1, 2017. For the median employee, this resulted in an exchange rate of 2,959 Colombian Pesos to each U.S. dollar.
Once we identified our median employee, we identified and calculated all of the elements of that employee’s compensation 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 between the median employee’s annual base salary and the employee’s annual total compensation represents the cash incentive compensation earned 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 respect to the 2017 total compensation of our CEO, we used the amount reported in the “Total” column (column (j)) of our 2017 Summary Compensation Table included 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.
No Additional Payments Upon Termination or Change in Control
Our named executive officersNEOs generally receive the same benefits as our other employees. As is the case with our other compensation arrangements, any differences are generally due to local (country-specific) requirements. In line with this practice, our namedNEOs historically have not had ongoing employment or severance agreements during their service with us as executive officersofficers. Nor do notour NEOs have employment agreements, “golden parachutes” or change in control agreements.agreements or “golden parachutes”. 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. For details regarding our agreements with outgoing NEOs, see “Compensation Discussion and Analysis—Elements of 2021 Total Direct Compensation—Agreements with Outgoing NEOs” on page 48.
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 RetirementTermination of Employment
Schlumberger has a practicePSUs and RSUs
Under our 2017 Incentive Plan and the Company’s standard form of phased retirement, which may be offeredPSU and RSU award agreements, PSUs and RSUs are treated as follows upon the holder’s termination of employment with the Company prior 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.applicable vesting date:
| • | If the holder’s employment terminates on account of death or disability, the target number of PSUs will immediately vest, and all unvested RSUs will immediately vest in full. | |
| • | If the holder’s employment terminates on account of retirement or, with Compensation Committee approval, early retirement or special retirement, the holder will vest in PSUs on the regularly scheduled vesting dates, with the number of PSUs determined as if the holder’s employment had not been terminated. | |
| • | If the holder’s employment terminates on account of retirement or, with Compensation Committee approval, early retirement, the holder will vest in RSUs on the regularly scheduled vesting dates. | |
| • | If an individual terminates employment for another reason, no additional vesting is provided and the individual will automatically forfeit all outstanding PSUs and RSUs without any additional consideration on the part of the Company. |
| Schlumberger Limited | |
For these purposes, “retirement,” “early retirement,” “special retirement” and “disability” have the meanings assigned to such terms in the applicable award agreements. The applicable date of “retirement,” “early retirement” or “special retirement” takes into consideration the completion of any active employment period, including employment pursuant to the Company’s officer departure guidelines described on page 47 of this proxy statement.
Termination of Employment
Stock Options
This section summarizes the consequences for our 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.
| 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. | ||
| Special Retirement | 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 or Disability | Full immediate vesting | Exercisable at any time during the 60-month period after termination due to death or disability or during the remainder of the option period, whichever is shorter. |
Notwithstanding the vesting and exercisability provisions described above, an option holder may forfeit his or herthe right to exercise stock options, and may have certain prior option exercises rescinded, if he or shethe option holder 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 and 2013 Omnibus Stock Incentive Plan and subject to the Company’s standard form of two-year PSU award or three-year PSU award, as applicable, in the event the PSU holder’s employment terminates.
Three-Year 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).
Three-year PSUs granted after January 1, 2016 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).
Two-Year PSUs
Two-year PSUs 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 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).
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; “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 incapacitates the holder from any gainful employment in any field which the holder is suited by education, training, or experience, as determined by the Compensation Committee.
Change in Control
Stock Options
Pursuant to Schlumberger’sUnder our omnibus incentive plans, and standard form of stock option award agreement (other than awards issued under the 2010 Omnibus Stock Incentive Plan and the 2013 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, 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, 2017 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.
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.
PSUs
Under our 2010 Omnibus Stock Incentive Plan and 2013 Omnibus Stock Incentive Plan, in the event of a merger, consolidation, acquisition of property or stock, separation, spinoff, reorganization or liquidation (each a “Corporate Transaction”), our Board may, in its sole discretion, (1) provide for the accelerationsubstitution of thea new award (or other arrangement) for or assumption of any award, (2) provide for accelerated vesting of any awards, including PSUs, or (2)(3) decide to cancel any awards including PSUs, and deliver cash to the holders cash 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 theour outstanding RSUs, PSUs and stock options currently provides for any definitive special treatment upon such a merger, consolidation, acquisition of property or stock, separation, spinoff, reorganization or liquidation.Corporate Transaction.
The following table sets forth the value of the unvested RSUs and PSUs at target(at target) and the intrinsic value of the unvested stock options held by each NEO atas of December 31, 20172021, that would become vested upon the occurrence of a merger, consolidation, acquisition of property or stock, separation, spinoff, reorganization or liquidationCorporate Transaction, assuming that the Board elects to accelerate the vesting of RSUs, PSUs and stock options 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 time during the year of any such event, the price of Schlumberger common stock and achievement by the Company of theany relevant performance metric.
| Upon Corporate Transaction | ||||||
| Name | PSUs (at Target) ($) | (1) | Intrinsic Value of Unvested Options ($) | (2) | ||
| 25,329,614 | — | |||||
| S. | 7,433,590 | — | ||||
| K. Al Mogharbel | 12,178,569 | — | ||||
| H. Gharbi | 11,004,229 | — | ||||
| A. Belani | 10,684,363 | |||||
| (1) | Calculated |
| (2) | Reflects that the closing price of Schlumberger common stock on December 31, 2021 ($29.95) was lower than the exercise price of all stock options held by our NEOs as of that date. |
| Schlumberger Limited2022 Proxy Statement | 62 |
Retirement Plans
Schlumberger’sThe Company’s pension plans and non-qualifiednonqualified deferred compensation plans include the same terms and conditions for all participating employees in the event of a termination or change in control. The SLB and STC Restoration Savings Plans provide for accelerated payment of vested account balances within 30 days following a change in control as defined under Internal Revenue Code section 409A. Other than the SchlumbergerSLB and STC Restoration Savings Plan,Plans, none of Schlumberger’s non-qualifiedour nonqualified plans provide for the accelerated payment of benefits upon a change in control. For more information on these plans, see the Pension Benefits for Fiscal Year 2017 table and accompanying narrativediscussion beginning on page 58 above and the Nonqualified Deferred Compensation for Fiscal Year 2017 table and accompanying narrativediscussion beginning on page 60 above.
The following table sets forth the amounts as of December 31, 20172021 of benefit payments that would be accelerated under the SchlumbergerSLB Restoration Savings Plan upon a change in control.
| Name | Amount ($) | ||
| O. Le Peuch | |||
| S. Biguet | 1,115,086 | ||
| K. Al Mogharbel | 2,724,472 | ||
| H. Gharbi | 392,471 | ||
| A. |
Retiree Medical
Subject to satisfying certain age, service and contribution requirements, most U.S. employees, including NEOs in the United States, 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 2014,65, 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 coveragethen 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.
Director Compensation in Fiscal Year 2017
Non-employee directors receive an annual cash retainer of $100,000 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, Mr. Currie began receiving an additional $50,000 annually, 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 $115,000 plus the additional fees for membership on, or for chairing, a Board committee. The additional pay for committee service did not change. Directors who are employees of Schlumberger do not receive compensation for serving on the Board. Additionally, Schlumberger’s current practice is to grant each newly-appointed or elected non-employee director (including non-employee directors re-elected at the annual general meeting) shares of Schlumberger common stock each April. Effective May 1, 2017, Schlumberger granted each such non-employee director 2,250 shares of Schlumberger common stock.
Although Schlumberger’s Directors Stock and Deferral Plan provides that annual stock awards to non-employee directors may be in the form of shares of common stock, shares of restricted common stock or restricted stock units, Schlumberger’s practice has been to issue only shares of common stock. Schlumberger directors have never received restricted common stock or restricted stock units as director compensation.
The following table provides information on Schlumberger’s compensation for non-employee directors in 2017.
| Fees Earned or Paid in Cash | (1) | Stock Awards | (2) | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value & Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | (3) | |||||||
| Name | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||
| Peter L.S. Currie | 187,500 | 162,750 | — | — | — | 35,305 | (4) | 435,555 | ||||||||
| Miguel Galuccio | 97,500 | 162,750 | — | — | — | 260,250 | ||||||||||
| V. Maureen Kempston Darkes | 137,500 | 162,750 | — | — | — | — | 300,250 | |||||||||
| Helge Lund | 132,500 | 162,750 | — | — | — | — | 295,250 | |||||||||
| Nikolay Kudryavtsev | 137,500 | 162,750 | — | — | — | — | 300,250 | |||||||||
| Michael E. Marks | 137,500 | 162,750 | — | — | — | 38,539 | (4) | 338,789 | ||||||||
| Indra K. Nooyi | 127,500 | 162,750 | — | — | — | — | 290,250 | |||||||||
| Lubna S. Olayan | 127,500 | 162,750 | — | — | — | — | 290,250 | |||||||||
| Leo Rafael Reif | 147,500 | 162,750 | — | — | — | 25,506 | (4) | 335,756 | ||||||||
| Tore I. Sandvold | 137,500 | 162,750 | — | — | — | — | 300,250 | |||||||||
| Henri Seydoux | 137,500 | 162,750 | — | — | — | — | 300,250 |
Director Stock Ownership Guidelines
The Board believes that ownership of Schlumberger stock by Board members aligns their interests with the interests of the Company’s 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 Schlumberger common shares or restricted stock units. As of December 31, 2017, each of our non-employee director nominees who have been Board members for at least five years is in compliance with these stock ownership guidelines.
The table below sets forth the following information as of December 31, 20172021 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) | 40,372,599 | 69.05 | 62,965,520 | (2) | ||||||||||
| Equity compensation plans not approved by security holders | N/A | N/A | N/A | 1,974,556 | 66.92 | — | |||||||||||||
| TOTAL | 47,210,495 | (2) | 79.13 | 66,283,624 | (3) | 42,347,155 | 68.95 | 62,965,520 | (2) | ||||||||||
| (1) | The weighted average price does not take into account |
| (2) | Includes |
| (3) | Consists solely of options that were assumed in connection with our 2016 acquisition of Cameron International Corporation, none of which are held by our NEOs. |
Equity compensation plans approved by Schlumbergerour stockholders include the Directors Stock Plan, as amended and restated; the 2017 Schlumberger Omnibus Incentive Plan; 2013 Schlumberger Omnibus Incentive Plan; the 20102013 Schlumberger Omnibus Stock Incentive Plan; the French Sub Plan, underas amended and restated; the 2010 Schlumberger Omnibus Stock Incentive Plan, as amended;amended and restated (the “2010 Incentive Plan”); 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 Stockamended and Deferral Plan for Non-Employee Directors;restated; the Schlumberger 2008 Stock Incentive Plan, as amended;amended and restated (the “2008 Incentive Plan”); and the Schlumberger 2005 Stock Incentive Plan, as amended;amended and restated (the “2005 Incentive Plan”). There are no securities issuable under the Schlumberger 2001 Stock Option2010 Incentive Plan, as amended; and the Schlumberger 1998 Stock Option2008 Incentive Plan as amended.or the 2005 Incentive Plan, other than shares of our common stock issuable upon the exercise of stock options currently outstanding.
| Schlumberger Limited |
Based on the methodology described below, our CEO’s 2021 total compensation was 254 times that of our median employee.
For 2021, we used the same median employee that we had identified as of October 2020. There have been no changes in our employee population or our compensation arrangements in 2021 that we believe would result in a material change in our pay ratio disclosure or our median employee. As in 2020, our median employee was a full-time, salaried employee working in Nigeria as a technical sales professional. To calculate that employee’s total compensation, we first calculated all of the elements of the employee’s compensation for 2021, and then converted this total compensation amount to U.S. dollars using a blended exchange rate representing the average exchange rate during 2021 (i.e. 397 Nigerian Naira to one U.S. dollar). The resulting 2021 total compensation of our median employee was $66,138. Our CEO’s total compensation for 2021 was $16,795,502 (as reflected in the Summary Compensation Table).
Our pay ratio is affected by many factors, and may not be comparable to the pay ratios reported by other companies, even in the oilfield services and energy industries. For example, the following factors may affect the comparability of our pay ratio:
| • | our large global workforce, which may have significantly lower wages than U.S.- or European-based wages; | |
| • | varied methodologies for calculating total compensation for both the median employee and our CEO, which may include exclusions that the Company has elected not to make; and | |
| • | varied currency exchange rates. |
| 64 |
Following completion of the audit procedures performed by PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm,PwC, we are submittingasking you to approve the following for approval byfinancial statements that are included in our shareholders, as required by Curaçao law:2021 Annual Report to Stockholders:
| • | our consolidated balance sheet | |
| • | our consolidated statement of income for the year ended December 31, | |
| • | the declarations of dividends by our Board in |
These items are included in our 2017 Annual Report to Stockholders, which is provided concurrently with this proxy statement. Stockholders should refer to these itemsour 2021 Annual Report to Stockholders 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 2017 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 Limited |
PricewaterhouseCoopers LLPPwC 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, 2018.2022. Although ratification is not required by our bylaws or otherwise, as a matter of good corporate governance, we are asking our stockholdersyou to approveratify, on an advisory basis, the appointment of PricewaterhouseCoopers LLPPwC as our independent registered public accounting firm.auditor for the year ending December 31, 2022. 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 LLPPwC is expected to attend our 2018 annual general meeting of stockholders,2022 AGM, and he will be available to respond to appropriate questions.
| The Board of Directors Recommends a Vote FORItem 4. |
Fees Paid to PricewaterhouseCoopers LLPPwC
PricewaterhouseCoopers LLPPwC has billed the Company and its subsidiaries the fees set forth in the table below for:
| • | the audit of the Company’s | |
| • | the other services described below that were billed in |
| Year Ended December 31, | Year Ended December 31, | |||||||||||||||
| (in thousands) | 2017 | 2016 | ||||||||||||||
| (Stated in thousands) | 2021 | 2020 | ||||||||||||||
| Audit Fees(1) | $ | 13,913 | $ | 14,253 | $ | 12,250 | $ | 12,969 | ||||||||
| Audit-Related Fees(2) | 1,153 | 470 | 534 | 495 | ||||||||||||
| Tax Fees(3) | 3,091 | 2,417 | 1,560 | 2,199 | ||||||||||||
| All Other Fees(4) | 77 | 1,099 | — | 43 | ||||||||||||
| TOTAL | $ | 18,234 | $ | 18,239 | $ | 14,344 | $ | 15,706 | ||||||||
| (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 |
| (4) | Consists of fees for |
The Audit Committee considers the provision of services by PricewaterhouseCoopers LLPPwC 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’sPwC’s independence.
Audit Committee’s Pre-Approval Policy and Procedures
The Audit Committee pre-approveshas a policy to pre-approve 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 2017For 2021 and 2016, all2020, audit and non-audit services were pre-approved by the Audit Committee.
Required VoteStockholder Feedback
A majorityAt our 2021 AGM, the proposal to ratify the appointment of PwC as our independent auditor for 2021 received the support of 95% of the votes cast is required to approvecast. In selecting PwC as the Company’s independent auditor for 2022, the Audit Committee considered 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.substantial support of our stockholders, as well as PwC’s substantial experience auditing the Company’s complex global accounts and the regulatory requirement that the PwC lead engagement partner rotate every five years.
| The Board of Directors Recommends a Vote 2021 AUDITOR RATIFICATION VOTE |
| Schlumberger Limited |
During 2017,2021, the Audit Committee periodically reviewed and discussed the Company’s consolidated financial statements with Company management and PricewaterhouseCoopers LLP,PwC, 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”PCAOB”) requirements. The Audit Committee also discussed with Company management and PricewaterhouseCoopers LLPPwC 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 LLPPwC 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 LLPPwC 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’sPwC’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, 2017,2021, as filed with the SEC on January 24, 2018.26, 2022.
SUBMITTED BY THE AUDIT COMMITTEE OF THE SCHLUMBERGER BOARD OF DIRECTORS
| Tatiana Mitrova | |||
| Jeff Sheets |
| Schlumberger Limited |
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 proposalproxy statement is furnished in connection with the solicitation by the Schlumberger Board of Directors of proxies to be voted at Schlumberger’s 2022 AGM, which will not inbe held at the Curaçao Marriott Beach Resort, John F Kennedy Boulevard, 3, Piscadera Bay, Willemstad, Curaçao, on Wednesday, April 6, 2022 beginning at 10:00 a.m., Curaçao time, and at 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.postponement(s) or adjournment(s) thereof.
InTo be admitted to 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 termsmeeting, stockholders of the French Sub Plan as adopted by the Board effective on January 1, 2016record 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 effectivebeneficial owners as of the date that stockholders approve this Item, that is intended to addressclose of business on February 9, 2022 must present a passport or other government-issued identification with a photograph and, for beneficial owners, proof of ownership as of February 9, 2022, such as the conditions for being able to grant Free Share Grants underNotice of Internet Availability (defined below), and/or 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 summarytop half of the French Sub Plan is a summary of the principal features of the French Sub Plan, and does not purportproxy card or voting instruction card that was sent 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 toyou with this proxy statement.
In addition, depending on the level of COVID-19 protocols in effect at the time, your ability to attend the 2022 AGM in person may be restricted or may require additional safeguards, which could include face coverings, proof of vaccination, proof of a negative COVID-19 test result within a specified number of days, and maintaining appropriate social distancing. Please review www.proxydocs.com/SLB for any updates prior to traveling.
The mailing date of this proxy statement is February 24, 2022. The Chairperson of the meeting will determine the procedures for conducting the meeting and will limit the meeting to those matters properly brought by or at the direction of our Board or by a stockholder.
Internet Availability of Proxy Materials
This year we are using the internet as the primary means of furnishing proxy materials to stockholders. We are sending a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) to our stockholders with instructions on how to access the proxy materials online or request a printed copy of the materials. Stockholders may follow the instructions in the Notice of Internet Availability to elect to receive future proxy materials in print by mail or electronically by email. We encourage stockholders to take advantage of the availability of the proxy materials online to help reduce the environmental impact of our AGMs. Our proxy materials are also available at https://investorcenter.slb.com, as well as at www.proxydocs.com/SLB.
Record Date
Each stockholder of record at the close of business on the record date, February 9, 2022, is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on with respect to each share registered in the stockholder’s name. A stockholder of record is a person or entity who held shares on the record date registered in the shareholder’s name on the records of Computershare Trust Company, N.A. (“Computershare”), Schlumberger’s stock transfer agent. On the record date, February 9, 2022, there were 1,413,133,986 shares of Schlumberger common stock outstanding and entitled to vote. Persons who held shares on the record date through a broker, bank, or other nominee are referred to as beneficial owners.
Proxies
Shares cannot be voted at the meeting unless the owner of record is present in person or is represented by proxy. Schlumberger is incorporated in Curaçao and, in accordance with Curaçao law, meetings of stockholders are held in Curaçao. Because many stockholders cannot personally attend the meeting, it is necessary that a large number be represented by proxy.
Quorum
Holders of at least one-half of the outstanding shares entitled to vote at the meeting must be present in person or represented by proxy to constitute a quorum for the taking of any action at the meeting. Abstentions and proxies submitted on your behalf by brokers, banks, or other holders of record that do not indicate a vote because they do not have discretionary voting authority and have not received instructions from the beneficial owner of the shares as to how to vote on a proposal (so-called “broker non-votes”) will be considered as present for quorum purposes. If a quorum is not present at the meeting, the Board may call a second general meeting of stockholders, at which the quorum requirement will not apply.
| Schlumberger Limited |
Votes Required to Adopt Proposals
To be elected, director nominees must receive a majority of the votes cast, which means the number of votes cast “for” a director nominee must exceed the number of votes cast “against” that nominee. Approval of each of the other matters on the agenda also requires the affirmative vote of the majority of the votes cast.
Purpose of the Omnibus PlansImportant Voting Information for Beneficial Owners
The purposeIf your Schlumberger shares are held for you in street name (i.e., you own your shares through a brokerage, bank, or other institutional account), you are considered the beneficial owner of those shares, but not the Omnibus Plansrecord holder. This means that you vote by providing instructions to your broker rather than directly to Schlumberger. Unless you provide specific voting instructions, your broker is not permitted to provide incentivesvote your shares on your behalf, except on Item 3 and Item 4.
Effect of Abstentions and Broker Non-Votes
Brokers holding shares must vote according to our employeesspecific instructions they receive from the beneficial owners of those shares. If brokers do not receive specific instructions, brokers may in order to:some cases vote the shares in their discretion. However, the NYSE precludes brokers from exercising voting discretion on certain proposals without specific instructions from the beneficial owner, as follows:
| • | |||
| • |
Abstentions and broker non-votes will be considered as present for quorum purposes, but they are not considered as votes cast and will not be counted in determining the outcome of the vote on the election of directors or on any of the other proposals.
How to Cast Your Vote
Stockholders with shares registered in their names with Computershare may authorize a proxy:
 | BY INTERNET www.proxypush.com/SLB | ||
 | (866) 240-5191 | ||
 | |||
Sign, date, and |
The Boardinternet and telephone voting facilities for stockholders of Directors recommendsrecord will close at 11:59 p.m. Eastern time on Tuesday, April 5, 2022. The internet and telephone voting procedures have been designed to authenticate stockholders and to allow you to vote your shares and to confirm 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.your instructions have been properly recorded.
TypesMany banks and brokerage firms participate in programs that also permit beneficial owners to direct their vote by the internet or telephone. If you are a beneficial owner whose shares are held in an account at a bank or brokerage firm that participates in such a program, you may direct the vote of Awardsthose shares by the internet or telephone by following the instructions on any voting instruction form or electronic voting instructions that you receive from your bank or brokerage firm.
The Compensation Committee established the French Sub Plan for the purpose of granting awards that qualify for the specific treatment applicableAll shares entitled to French qualified stock options, French qualified restricted share unitsvote 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 andrepresented by properly executed proxies received prior to the extent permitted under the Omnibus Plans. The terms, conditionsmeeting and limitations applicable to awards of restricted stock units and performance stock unitsnot revoked will be determined by our Compensation Committee. Restricted stock units intendedvoted at the meeting in accordance with your instructions. If you are a stockholder with shares registered in your name with Computershare and you submit a properly executed proxy card but do not direct how to qualifyvote on each item, the persons named as Free Share Grantsproxies will be subject to a restriction period under which such shares will not be delivered earlier than two years fromvote as 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.Board recommends on each proposal.
TermChanging Your Vote or Revoking Your Proxy
Awards may be granted (i) under the 2010 Plan onIf you are a stockholder of record, you can change your vote or before April 6, 2020, (ii) under the 2013 Plan onrevoke your proxy at any time by timely delivering a properly executed, later-dated proxy (including an internet or before April 9, 2023 and (iii) under the 2017 Plan on or beforetelephone vote by April 5, 2027. Awards may be granted under2022) or by voting by ballot at the French Sub Plan untilmeeting. If you hold shares through a broker, bank, or other holder of record, you must follow the terminationinstructions of the applicable Omnibus Plan.your broker, bank, or other holder of record to change or revoke your voting instructions.
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| Schlumberger Limited |
2023 Annual General Meeting of Stockholders
Material Tax Consequences
If the French Sub Plan is approved by our stockholdersWe intend to file a proxy statement 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 Vote |
Security Ownership by Certain Beneficial Owners
The following table sets forth information as of December 31, 2017 (except as otherwise noted) with respect to persons known by the Company to be the beneficial owners of more than 5% of the Company’s common stock, based solely on the information reported by such persons in their Schedule 13D and 13G filingsWHITE proxy card with the SEC.
For each entity includedSEC in connection with the table below, percentage ownership is calculated by dividing the numberBoard’s solicitation of shares reportedproxies for our 2023 AGM. Stockholders may obtain a copy of our 2023 proxy statement (and any amendments and supplements thereto) and other documents as beneficially owned by such entity by the 1,386,052,190 shares of common stock outstanding on January 31, 2018.
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 | ||||||||
Security Ownership by Management
The following table sets forth information known to Schlumberger with respect to beneficial ownership of the Company’s common stock as of January 31, 2018 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 inwithout charge from the footnotes to the table below and subject to applicable community property laws, to Schlumberger’s 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, 2018 includes shares of common stock that such person or group has the right to acquire within 60 days of January 31, 2018, including upon the exercise of options to purchase common stock or the vesting of restricted stock units or PSUs. References to options in the footnotes to the table below include only options outstanding as of January 31, 2018 that are currently exercisable or that become exercisable within 60 days of January 31, 2018, and references to any restricted stock, restricted stock units or PSUs (collectively, “restricted stock”) in the footnotes to the table below include only restricted stock outstanding as of January 31, 2018 and that are currently vested or that vest within 60 days of January 31, 2018.
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 1,394,023,450 shares of common stock outstanding on January 31, 2018, plus the number of shares of common stock that such person or group had the right to acquire on or within 60 days after January 31, 2018.
As of January 31, 2018, 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.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires the Company’s 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 reports required to be filed under Section 16(a) of the Exchange Act.
Stockholder Proposals for our 2019 Annual General MeetingSEC’s website at www.sec.gov.
In order for a stockholder proposal to be considered for inclusion in the proxy statement for the 2019 annual general meeting of stockholdersour 2023 AGM 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 27, 2022, and, in the case of a proxy access nomination, no earlier than October 3, 2018.September 27, 2022.
For stockholder proposals to be introduced for consideration at our 2019 annual general meeting of stockholders2023 AGM 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 2019 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 2018 annual general meeting of stockholders.2022 AGM. Accordingly, any such notice must be received no earlier than November 5, 2018,7, 2022, and no later than December 5, 2018,7, 2022, 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 2019 annual general meeting of stockholders2023 AGM if the stockholder making the proposal has not given notice to us by December 5, 2018.7, 2022.
Annual Report
Stockholders may obtain a copy of our most recent Form 10-K filed with the SEC, including financial statements and schedules, without charge by writing to our Investor Relations Department, 5599 San Felipe, 17th Floor, Houston, Texas 77056, or by calling (713) 375-3535.
Proxy Solicitation Costs
The Company will pay the cost of furnishing proxy materials to all stockholders and of soliciting proxies by mail and telephone. We have retained D.F. King & Co., Inc. and its affiliate to assist in the solicitation of proxies for a fee estimated at $20,200 plus reasonable expenses. Directors, officers and employees of the Company may also solicit proxies for no additional compensation. We will reimburse brokerage firms, fiduciaries, and custodians for their reasonable expenses in forwarding the solicitation material to beneficial owners.
Other Matters
Stockholders may obtain a copy of Schlumberger’s most recent Form 10-K filed with the SEC, including financial statements and schedules, without charge by writing to the Company’s 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. 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 employeesAs of the Company may also solicit proxies for no additional compensation. The Company will reimburse brokerage firms, fiduciaries and custodians for their reasonable expenses in forwarding the solicitation material to beneficial owners.
The Board knowsdate of this proxy statement, we know of no other matter tobusiness that will be presented at the meeting.meeting other than the matters described in this proxy statement. If any additional matter ismatters are 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. JudenDianne B. Ralston
Chief Legal Officer and Secretary
Houston, Texas
March 2, 2018February 24, 2022
| Schlumberger Limited |
Reconciliation of Non-GAAP Financial MeasureMeasures
In addition to financial results determined in accordance with US generally accepted accounting principles (“GAAP”), this 2018This proxy statement also includes non-GAAP financial measures, (as defined under the SEC’s Regulation G). Net income, excluding charges and credits, andincluding free cash flow, free cash flow margin, cash flow generation, adjusted EBITDA, earnings per share, excluding charges and credits, and net income, excluding charges and credits. Certain of these measures are non-GAAP financial measures. The followingused by management as performance metrics when determining incentive compensation for our executive officers. Below is a reconciliation of these non-GAAP financial measures to the comparable GAAP measures.
| (Stated in millions) | ||||
| Periods Ended December 31, | Twelve Months 2021 | |||
| Cash flow from operations | $ | 4,651 | ||
| Capital expenditures | (1,141 | ) | ||
| APS investments | (474 | ) | ||
| Multiclient seismic data capitalized | (39 | ) | ||
| Free cash flow | $ | 2,997 | ||
| Business acquisitions and investments, net of cash acquired plus debt assumed | (103 | ) | ||
| Proceeds from sale of Liberty shares | 109 | |||
| Other, net | (3 | ) | ||
| Cash flow generation | $ | 3,000 | ||
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 exclusionCompany 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. Free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations.
| (Stated in millions) | ||||
| Periods Ended December 31, | Twelve Months 2021 | |||
| Net income attributable to Schlumberger | $ | 1,881 | ||
| Net income attributable to noncontrolling interests | 47 | |||
| Tax expense | 446 | |||
| Income before taxes | $ | 2,374 | ||
| Charges and credits: | ||||
| Gain on sale of Liberty shares | (28 | ) | ||
| Early repayment of bonds | 10 | |||
| Unrealized gain on marketable securities | (47 | ) | ||
| Depreciation and amortization | 2,120 | |||
| Interest expense | 529 | |||
| Interest income | (33 | ) | ||
| Adjusted EBITDA | $ | 4,925 | ||
Adjusted EBITDA represents income before taxes excluding charges and credits, from these financial measures enablesdepreciation and amortization, interest expense, and interest income. Management believes that adjusted EBITDA is an important profitability measure for Schlumberger and that it allows investors and management to evaluate more effectivelyefficiently evaluate Schlumberger’s operations period-over-periodperiod 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 measuresmasked. Adjusted EBITDA 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 | ||||||||||
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Independent Chairman of the Board, separate from CEO
Independent Chairman of the Board, separate from CEO
No gross-ups
