UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) 14(A)
OF THE SECURITIES
EXCHANGE ACT OF 1934
(Amendment No. )___)
Filed by the Registrant | Filed by a Party other than the Registrant |
Check the appropriate box: | |
Preliminary Proxy Statement | |
Confidential, for Use of the Commission Only (as permitted by Rule | |
Definitive Proxy Statement | |
Definitive Additional Materials | |
Soliciting Material under §240.14a-12 |
SCHLUMBERGER N.V. (SCHLUMBERGER LIMITED)
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check | ||
No fee | ||
Fee paid previously with preliminary | ||
2023 Highlights |
$33.14 billion total revenue | Safety and Sustainability | ||||||
$2.0 billion returned to shareholders through dividends and share repurchases | |||||||
$4.20 billion net income attributable to SLB | Fatality-Free operations | ||||||
$8.11 billion adjusted EBITDA+ | 15% Scope 1 & 2 emissions intensity reduction* vs 2022 | ||||||
$6.64 billion cash flow from operations | 13% Scope 3 emissions intensity reduction* vs 2022 | ||||||
$4.04 billion free cash flow+ | More than $1 billion of revenue generated by Transition Technologies™ portfolio |
Inclusivity and Culture
40% | 30% | 24.6% | Launched new Code of Conduct | |||||
of Board committees chaired by women | women in executive leadership | women in salaried population | Together with Integrity | |||||
+ See Appendix A for non-GAAP reconciliations | ||||||||
* Excludes acquired Aker Solutions subsea business |
Notice
February 22, 2024
2023 was a remarkable year at SLB—marked by widespread revenue growth, margin expansion, and exceptional cash flow. As a result, we returned $2.0 billion to shareholders in 2023 through dividends and share repurchases. We also recently increased our dividend by 10%, our third increase in the past two years and reflecting a cumulative 120% increase since the beginning of Stockholders2022. Furthermore, we announced plans to increase share repurchases in 2024, as we target to return more than $2.5 billion to shareholders in 2024.
During the year, our Board concluded a multi-year board refreshment exercise by appointing Mr. Jim Hackett as our new independent Board Chair. Mr. Hackett brings extensive knowledge of the global energy industry, both as the former Chairman and CEO of a global energy production and midstream company, and through his extensive governance experience as a board chair and director at numerous public companies serving the energy industry. This appointment demonstrates SLB’s commitment to balanced and ongoing board succession planning, with half of our non-executive director nominees joining the Board since 2021, bringing expertise in areas that are strategic for SLB.
We are actively embedding sustainability in everything we do, redefining the role that a global technology company in energy can play in the transition. In 2023, we reduced our emissions intensity—the amount of carbon emissions produced per dollar of revenue—across Scope 1, 2, and 3, in support of SLB’s 2025 emission reduction commitment. Further, our Transition Technologies™ portfolio generated more than $1 billion of revenue in 2023, as SLB continues to become our customers’ partner of choice for enhancing efficiency and reducing emissions.
Finally, we achieved our lowest recordable injury rate and highest level of operational reliability on record. These accomplishments are driving customer satisfaction and value creation for SLB, our customers, and our shareholders.
Overall, our impressive full-year results showcase SLB’s continued ability to deliver superior earnings, generate exceptional cash flows, and maintain a strong balance sheet. These achievements are a testament to the performance of our teams of dedicated women and men across the globe, the support of our partners, and the loyalty of our customers.
We thank you for your investment in SLB and for the opportunity to serve you and our Company as directors.
Sincerely,
Your Board of Directors
All references in this proxy statement to “SLB,” “the Company,” “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 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, goal, target, ambition, will, 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 include, but are not limited to, changing global economic and geopolitical conditions; changes in exploration and production spending by SLB’s customers and changes in the level of oil and natural gas exploration and development; the results of operations and financial condition of SLB’s customers and suppliers; SLB’s inability to achieve its financial and performance targets and other forecasts and expectations; SLB’s inability to achieve net-zero carbon emissions goals or interim emissions reduction goals; general economic, geopolitical, and business conditions in key regions of the world; the ongoing conflict in Ukraine; foreign currency risk; inflation; changes in monetary policy by governments; pricing pressure; weather and seasonal factors; unfavorable effects of health pandemics; availability and cost of raw materials; operational modifications, delays, or cancellations; challenges in SLB’s supply chain; production declines; the extent of future charges; SLB’s inability to recognize efficiencies and other intended benefits from its business strategies and initiatives, such as digital or new energy, as well as its cost reduction strategies; changes in government regulations and regulatory requirements, including those related to offshore oil and gas exploration, radioactive sources, explosives, chemicals, and climate-related initiatives; the inability of technology to meet new challenges in exploration; the competitiveness of alternative energy sources or product substitutes; and other risks and uncertainties detailed in SLB’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (2023 Annual Report), and other filings that we make with the SEC. If one or more of these or other risks or uncertainties materialize (or the consequences of any such development changes), or should our underlying assumptions prove incorrect, actual results or outcomes may vary materially from those reflected in our forward-looking statements. 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 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.
For definitions of adjusted EBITDA, free cash flow, free cash flow margin, and net debt, as well as reconciliations of these non-GAAP measures to their most comparable GAAP measures, see Appendix A.
Emissions intensity data in this proxy statement do not reflect the impact of the Aker Solutions subsea business, which was acquired in the fourth quarter of 2023.
Notice of 2024 |
ITEMS OF BUSINESS
Items of Business | |||
1. | Election of | ||
2. | |||
3. | |||
4. | Ratification of the appointment of | ||
By order of the |
Such other matters as may properly be brought before the meeting.
By order of the Board of Directors,
| |||
Dianne B. Ralston | |||
Chief Legal Officer and Secretary | |||
February 22, 2024 |
February 25, 2021
Wednesday, April 7, 20213, 2024
10:9:00 a.m. Curaçao time
Johan van Walbeeckplein 11, Curaçao Marriott Beach Resort
John F Kennedy Boulevard, 3, Piscadera Bay
Willemstad, Curaçao
PROXY VOTINGRecord Date
February 7, 2024
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 determine which voting methods are available to you. Shareholders with shares registered in their names with SLB’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 SLB common stock, you should follow any instructions provided by your bank, broker, or other nominee. See “Information About the Meeting” 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 enclosedyour proxy card in the enclosed envelope,by mail, or (ii)alternatively please 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 form provided by your broker. Brokers are not permitted to vote on certain proposals and may elect not to vote on any of the proposals unless you provide voting instructions. Voting your shares will help to ensure that your interests are represented at the meeting.
Brokers cannot vote for Items 1, 2, 5, 6 or 7 without your instructions.
RECORD DATE
February 17, 2021
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:
| ||
| ||
|
If you are a beneficial holder of Schlumberger common stock, you should follow any instructions provided by your bank, broker or other nominee. See “General Information” in this proxy statement.
Important Notice Regarding theof Internet Availability of Proxy Materials
for the Annual General Meeting of StockholdersShareholders to Bebe Held on April 7, 2021.
3, 2024
This Notice, andthe Proxy Statement, the Notice of Internet Availability of Proxy Materials (Notice of Internet Availability), and our 2023 Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and our 2020 Annual Report to Stockholders are each available free of charge on our website at https://investorcenter.slb.com, as well as at and www.proxydocs.com/SLB.
5 |
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read thecarefully review this entire proxy statement carefullyand our 2023 Annual Report before voting. In addition, we are providing our 2020 Annual Report to Stockholders concurrently with this proxy statement. You should refer to its contents in considering agenda Item 3.
All references in this proxy statement to “the Company,” “Schlumberger,” “we” or “our” are to Schlumberger Limited (Schlumberger N.V.) and its subsidiaries.
Schlumberger’s 2021 annual general meetingThe 2024 Annual General Meeting of stockholdersShareholders (the 2024 AGM) will be held at Johan van Walbeeckplein 11, Willemstad, Curaçao, on Wednesday, April 7, 2021 beginning at 10:00 a.m., Curaçao time.at:
Meeting Date: | Wednesday, April 3, 2024 |
Place: | Curaçao Marriott Beach Resort John F Kennedy Boulevard, 3, Piscadera Bay Willemstad, Curaçao |
Time: | 9:00 a.m. Curaçao time |
Record Date: | February 7, 2024 |
Each stockholdershareholder of record at the close of business on February 17, 20217, 2024 (the “record date”record date) 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’sthat shareholder’s name. Stockholders withIf your shares are registered in their namesyour name with Schlumberger’sSLB’s transfer agent, you may vote in person at the 2024 AGM, or you may authorize a proxy:proxy to vote your shares by one of the following methods:
By Internet www.proxypush.com/SLB | ||
(866) 240-5191 | ||
By Mail Sign, date, and mail your proxy card |
Persons whoIf you are a “beneficial” owner of SLB common stock—which means you held your shares on the record date through a broker, bank, or other nominee are referred to as beneficial owners. If you are a beneficial holder of Schlumberger common stock, nominee—you should follow the voting instructions provided by your bank, broker, or other nominee.
If you plan to attend the annual general meeting2024 AGM in person, please refer to “General Information—General”see “Information About the Meeting” beginning on page 8566 for the requirements for admission to the meeting. Whether or not you plan to attend the annual general meeting2024 AGM in person, please (i) sign, date, and promptly return the enclosedyour proxy card in the enclosed envelope,by mail, or (ii)alternatively please grant a proxy and give voting instructions by telephone or internet, so that you may be represented at the meeting.
The mailing date of this
Item | Our Board’s Recommendation | Vote Required for Election / Approval | Refer to Page | |
1 | Election of 11 director nominees to our Board of Directors (the Board). | FOR each nominee | Majority of votes cast for nominee | 12 |
2 | Advisory “say-on-pay” approval of our executive compensation. | FOR | Majority of votes cast | 31 |
3 | Approval of our consolidated balance sheet at December 31, 2023, our consolidated statement of income for the year ended December 31, 2023, and the declarations of dividends by our Board in 2023. | FOR | Majority of votes cast | 63 |
4 | Ratification of the appointment of PricewaterhouseCoopers LLP (PwC) as our independent auditor for 2024. | FOR | Majority of votes cast | 64 |
This proxy statement is first being made available to our shareholders on or about February 25, 2021. Business at the meeting will be conducted in accordance with the procedures determined by the Chairman of the meeting and will be limited to matters properly brought before the meeting by or at the direction of our Board or by a stockholder.
Voting Matters
Item | Our Board’s Recommendation | Page Reference (for more detail) | |||||
1 | Election of the eight director nominees named in this proxy statement. | FOR each nominee | 8 | ||||
2 | Approval of an advisory resolution regarding our executive compensation. | FOR | 27 | ||||
3 | Approval of our consolidated balance sheet as at December 31, 2020, our consolidated statement of income for the year ended December 31, 2020, and the declarations of dividends by our Board in 2020. | FOR | 66 | ||||
4 | Ratification of the appointment of PricewaterhouseCoopers LLP as our independent auditors for 2021. | FOR | 67 | ||||
5 | Approval of an amendment and restatement of the 2017 Schlumberger Omnibus Stock Incentive Plan. | FOR | 69 | ||||
6 | Approval of an amendment and restatement of the Schlumberger Discounted Stock Purchase Plan. | FOR | 77 | ||||
7 | Approval of an amendment and restatement of the 2004 Stock and Deferral Plan for Non-Employee Directors. | FOR | 81 |
22, 2024.
2024 Proxy Statement |
“A remarkable year of broad, resilient, and durable growth.
Our Board Nominees (pages 8-12)performance and returns-focused strategy, combined with
our differentiated market positioning and digital capabilities,
will drive profitable growth and further margin expansion,
building on our strong foundation for long-term growth.”
Below is summary information aboutOlivier Le Peuch, SLB CEO
In 2023, SLB fulfilled the nominees toCompany’s full-year financial targets, surpassing our Board of Directors (the “Board”).revenue target and generating exceptional cash flows.
$33.14 billion | $2.0 billion | |||||
revenue +18% year on year | returned to shareholders through dividends and share repurchases | |||||
net income attributable to SLB +22% year on year | cash flow from operations +78% year on year | |||||
$8.11 billion | ||||||
adjusted EBITDA+ +25% year on year | free cash flow+ +185% year on year | |||||
16% | 1.0X | |||||
return on capital employed highest level since 2014 | ||||||
net-debt-to-adjusted-EBITDA+ ratio lowest level since |
Board Highlights (pages 16-18)2023 financial performance across our Core business, comprising Reservoir Performance, Well Construction, and Production Systems, was fueled by strong growth in the international and offshore markets. SLB continued to benefit from long-cycle developments, capacity expansions, and exploration and appraisal activities, particularly in the Middle East, where revenue reached a record high, and across offshore basins in Brazil, Angola, US Gulf of Mexico, Guyana, and Norway.
Digital continued its strong growth momentum, delivering more than $2 billion in revenue in 2023. Our success in Digital was driven by further adoption of our new digital technology platforms—comprised of cloud, edge, and AI—as more customers embrace the integration of connected and autonomous, data, and AI solutions.
And in New Energy—which offers a significant opportunity to use SLB’s experience and scale to drive innovation for a low-carbon economy beyond oil and gas—we continued building businesses and forging partnerships across industries to focus on five key areas: carbon capture and storage, geothermal and geoenergy, critical minerals, energy storage, and hydrogen.
As we advanced these three engines of growth, we also continued to deliver for our customers and stakeholders by achieving our lowest recordable injury rate and highest level of operational reliability on record. This is also reflected in industry surveys, where we are growing customer satisfaction through performance and value creation.
On our road map to net zero, we reduced emissions intensity—the amount of carbon emissions produced per dollar of revenue—across Scope 1, 2, and 3, in support of SLB’s 2025 emission reduction commitment. And we saw continued adoption by our customers of our Transition Technologies portfolio, which generated more than $1 billion of revenue in 2023.
Finally, we continued to demonstrate our commitment to superior shareholder returns. We returned $2.0 billion to shareholders in 2023 in the form of dividends and share repurchases, and we announced plans to increase share repurchases in 2024, as we target to return more than $2.5 billion to shareholders in 2024.
With momentum across our three engines of growth and our returns-focused strategy in place, we look forward to building on this success and delivering value for our shareholders in the years ahead.
+ See Appendix A for definitions of adjusted EBITDA, free cash flow, and net debt, as well as reconciliations to their most comparable GAAP measures.
7 |
Governance Highlights (pages 13-22)
We are committed to adhering to sound principles of corporate governance and have adopted practices that promote effective functioning of our Board, its committees, and the Company.
Peter Coleman | Patrick de La Chevardière | Miguel Galuccio | Jim Hackett |
Former CEO and | Former Chief Financial Officer | Chairman and CEO | President |
Managing Director | TotalEnergies SE | Vista | Tessellation Services |
Woodside Petroleum Ltd. | |||
Olivier Le Peuch | Samuel Leupold | Tatiana Mitrova | Maria Moræus Hanssen |
Chief Executive Officer | Former Chief Executive Officer | Research Fellow | Former Deputy CEO |
SLB | Ørsted Wind Power A/S | SIPA Center on Global | and COO |
Energy Policy | Wintershall Dea GmbH | ||
Columbia University | |||
Vanitha Narayanan | Jeff Sheets | Ulrich Spiesshofer | |
Former Chairman and | Former EVP and CFO | Former President and CEO | |
Managing Director | ConocoPhillips | ABB Ltd. | |
IBM India |
New Independent
| 40% of Board committees are chaired by female directors Demonstrated commitment to Board refreshment, with half of non-executive director nominees joining since 2021 Non-employee director tenure limits of 75 years of age or 10 years of service—whichever comes first No hedging or pledging of
|
2020 Performance Highlights (page 28)
The unprecedented global health and economic crisis caused by the COVID-19 pandemic in 2020 resulted in the most challenging environment that we and our industry have ever experienced. The profound global economic shock caused by the pandemic resulted in both a swift collapse in oil demand and in oversupply, which together caused a dramatic decline in demand for our services and products.
Against this backdrop, we took swift and decisive actions to execute on our performance strategy, cut operating costs, and reinvent ourselves to adapt to an evolving industry landscape shaped by capital discipline, increased efficiency, operational resilience through industry cycles, sustainability and a reduced carbon footprint.
Highlights of our 2020 financial, strategic and operational performance include:
As a result of our actions in 2020, we increased our earnings power and improved our margin profile, which position us to capitalize on growth drivers for the future of our industry and the next recovery cycle. We came through the turbulence of 2020 with drive and purpose and reinvented ourselves for the future. We believe that we are poised to deliver superior results for our shareholders, informed by our vision of a more efficient, sustainable industry.
2024 Proxy Statement |
2020
As more fully discussed in theBelow is a summary of key elements of our 2023 executive compensation program, as further detailed under “Compensation Discussion and Analysis” section(the CD&A) beginning on page 32 of this proxy statement:statement.
Diversified LTI Program Structure with Rigorous PSU Performance Targets |
In 2023, our NEOs continued to receive a mix of long-term incentive (LTI) grants, with 75% of their target LTI opportunity awarded in the form of performance share units (PSUs), and 25% awarded in the form of three-year, time-based restricted stock units (RSUs). As in 2022, payout under the 2023 PSUs will be contingent on achieving rigorous absolute free cash flow margin (FCF margin), relative return on capital employed (ROCE), and relative total shareholder return (TSR) performance goals over a three-year period.
Strategy-Focused STI Program with Emissions Reduction Objectives for All NEOs |
In 2023, we continued to tie 70% of our NEOs’ target short-term incentive (STI) opportunity to Company financial goals—namely, full-year adjusted EBITDA and free cash flow—to ensure our executives remained focused on profitable, sustainable growth. In addition, we incorporated into our 2023 STI plan a new quantitative component focused on reducing our Scope 3 emissions intensity and improving gender diversity.
Performance-Aligned LTI and STI Payouts
Our NEOs’ LTI award payouts in 2023 were based on SLB’s strong multi-year ROCE results, as well as achieving target under our three-year FCF margin PSUs, partially offset by below-target relative TSR performance. Our NEOs also earned performance-aligned 2023 STI payouts based on SLB’s strong adjusted EBITDA and exceptional free cash flow results, together with key sustainability and workforce diversity achievements during the year.
Long-Term Equity Incentive Results | ||
Total LTI Award Payout — 127% — Our NEOs earned total LTI payouts of 127% of target with respect to their three-year LTI awards (including RSUs vested at 100%) that were granted in 2021 and vested in January 2024. Target FCF Margin PSU Payout — Our NEOs earned 100% of the target shares of SLB stock under the FCF margin PSUs that they received in 2021, because SLB achieved its target three-year, cumulative FCF margin+ of 10.0%. Strong Relative and Absolute ROCE Results — Our NEOs earned 250% of the target shares of SLB stock under the ROCE PSUs they received in 2021, based on SLB’s average annual ROCE for the three-year performance Below-Target TSR Payout — Our NEOs earned 59% of the target shares of SLB stock under the TSR PSUs they received in | Average STI Payout — 151% — Our NEOs earned an average 2023 cash incentive payout of 151% of target. Adjusted EBITDA+ — $8.107 billion — Our 2023 adjusted EBITDA of $8.107 billion represented a 25% increase over 2022, resulting in achievement of 119% of the target payout. Free Cash Flow+ — $4.038 billion — Our 2023 free cash flow Achieved Emissions and Gender Diversity Targets — In 2023, we reduced our Scope 3 emissions intensity by | |
+ | ||
* | ||
For details regarding our 2020 cash incentive program and certain modifications that our Compensation Committee approved in response to the effects of the COVID-19 pandemic, see “Compensation Discussion and Analysis—Elements of Total Direct Compensation; 2020 Decisions—Annual Cash Incentive Awards—Financial Objectives” beginning on page 34.
2020 Sustainability Highlights (pages 15 and 28)
Our vision is to define and drive high performance, sustainably. 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. Highlights of our 2020 sustainability performance include:
Our COVID-19 Response
At Schlumberger, we pride ourselves on being leaders in managing health, safety, and environmental (HSE) risks. Our top priority in 2020 remained the health and safety of our employees, their families, and the communities in which we live and work.
Since January 2020, we have sustained our global COVID-19 crisis management response, using an approach that was independently audited against pandemic preparedness best practices. We promoted a protective mindset, crafted into powerful and simple COVID-19 Life Saving Rules visibly supported by senior management. We continuously review and improve our safety procedures as new scientific evidence becomes available, and communicate any updated procedures across our global operations.
We also used enabling technologies, such as virtual trainings and online modules, in our employee development, recruiting, training, and support activities. These technologies enabled our people to continue their career growth, advance their skills and continuously learn in 2020, which is strategically important to our talent pipeline. We delivered approximately 89,000 training days virtually during 2020.
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, including statements regarding our environmental and other sustainability plans and goals, 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. Actual results 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 2020 Annual Report on Form 10-K. 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.
9 |
As a leading global technology company that operates in more than 100 countries, with a workforce of approximately 111,000 people from diverse backgrounds, cultures, and nationalities, one of SLB’s greatest strengths is the diversity of our people. We believe that our ability to attract, develop, motivate, and retain a highly competent and diverse workforce has been paramount to our success for many decades. We recognize that cultivating diversity and promoting inclusion are essential to attracting the best talent from around the world and enabling creativity and innovation to drive business success.
Our long-standing commitment to national and cultural diversity is reflected in our workforce composition and our philosophy to recruit and develop people from the communities in which we operate. Our workforce nationality mix generally aligns with the revenue derived from the countries in which we work, as reflected in the charts below. This fosters a culture that is global in outlook, yet local in practice. With nearly 200 nationalities represented in SLB, and nine nationalities among our ten-member executive leadership team,our organization is a tapestry of various cultural backgrounds and perspectives.
SLB also recognizes the importance of gender diversity as a source of creativity, innovation, and competitive advantage. We are committed to leading our industry in this area and, in this regard, a number of years ago we established goals of having women represent 25% of our salaried workforce by 2025 and 30% by 2030. Our 2025 and 2030 targets include executive roles and all other salaried positions. Women represented 30% of our executive leadership team and 24.6% of our salaried workforce at year-end 2023.
Finally, as SLB is 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. With respect to our U.S.-based employees and executives, our most recent EEO-1 Report is available on SLB’s website at https://www.slb.com/about/who-we-are/diversity-and-inclusion.
9 nationalities among executive leadership 30% women on SLB executive leadership team 40% of Board committees chaired by female directors |
SLB does not make employment decisions, including decisions regarding hiring, promotion and compensation, on the basis of any legally protected characteristic, including nationality, race, or gender, but is focused on making opportunities to excel accessible to all. We implement this goal by adhering to employment laws in each of the countries in which we operate.
10 | 2024 Proxy Statement |
A key component to the Board’s effective governance is its commitment to provide oversight and perspectives reflecting a diversity of independent views.
The members of SLB’s diverse Board represent ten nationalities spanning five continents. Three SLB directors are women—two of whom hold Board leadership positions chairing its Nominating and Governance and New Energy and Innovation committees. Our directors have an average age of 60 and have served on our Board for an average of four years.
The Nominating and Governance Committee supports SLB’s diversity ambition for its Board to reflect the gender, racial, and ethnic, cultural and geographical diversity of SLB’s global operations. As such, 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.
The following chart summarizes certain demographic characteristics of our director nominees.
Nationality | ||||||||||||||||||||||
Argentina | ||||||||||||||||||||||
Australia | ||||||||||||||||||||||
France | ||||||||||||||||||||||
Germany | ||||||||||||||||||||||
Israel | ||||||||||||||||||||||
Norway | ||||||||||||||||||||||
Russia | ||||||||||||||||||||||
Switzerland | ||||||||||||||||||||||
United Kingdom | ||||||||||||||||||||||
United States | ||||||||||||||||||||||
Racial and Ethnicity Characteristics for U.S. Directors | ||||||||||||||||||||||
East Asian or South Asian | ||||||||||||||||||||||
White or Caucasian | ||||||||||||||||||||||
Declined to Respond | ||||||||||||||||||||||
Non-U.S. Directors Electing to Self-Identify Racial or Ethnicity Characteristics | ||||||||||||||||||||||
Two or More Ethnicities | ||||||||||||||||||||||
White or Caucasian | ||||||||||||||||||||||
Other Demographic Information | ||||||||||||||||||||||
Gender (M – Male, F – Female, or DR – Declined to Respond) | M | M | M | DR | M | DR | F | F | F | M | M | |||||||||||
Age | 63 | 66 | 55 | 70 | 60 | 53 | 49 | 59 | 64 | 66 | 59 |
Given SLB’s multinational footprint and culture, we endeavor to have a global perspective on 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, the chart above includes 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 chart above. In keeping with international data privacy laws, we have not included racial or ethnic information for director nominees who did not authorize disclosure.
2024 Proxy Statement | 11 |
All of ourSLB’s directors are elected annually at our annual general meetingAGM. The Board recommends that you vote FOR the election of stockholders. Our stockholders are requested to elect eighteach of our 11 director nominees to the Board, each to hold officeserve until the next annual general meeting of stockholders andour 2025 AGM (or until a director’s successor is elected and qualified or until a director’stheir earlier death, resignation, or removal. removal).
Each of theour director nominees is now acurrently an SLB director and was previously elected by our stockholdersshareholders at the 2020 annual general meeting of stockholders,our 2023 AGM, except for Maria Moræus Hanssen,our Board’s independent Chair, Mr. Hackett, who was appointed byjoined the Board after the AGM. Mr. Hackett succeeded Mr. Mark Papa, who retired from the Board in July 2023. The Board extends thanks and gratitude to serveMr. Papa for his exceptional leadership and five years of service as a director, effective October 15, 2020, based upon the recommendationincluding four years serving as Chairman of the NominatingBoard. For more information about Mr. Hackett’s appointment and Governance Committeeour 2023 Board Chair succession process, see “Corporate Governance—New Independent Chair” on page 19 of the Board.this proxy statement.
Having exceeded the normal retirement age of 70 under our Corporate Governance Guidelines, Leo Rafael Reif will not stand for re-election at our annual general meeting of stockholders. Lubna S. Olayan also will not stand for re-election at our annual general meeting of stockholders. Our Board extends gratitude to Dr. Reif and Ms. Olayan for 14 years of service and 10 years of service, respectively.
All of the nominees for election have consented to being named in this proxy statement and to serve if elected. If any director nominee is unable or unwilling to serve, the Board may decrease the size of the Board or designate a substitute nominee. If the Board designates a substitute nominee, proxies may be voted for that substitute nominee. TheEach of the director nominees has consented to stand for election and the Board knows of no reason why any nominee would be unable or unwilling to serve if elected.
At this annual general meeting,the 2024 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 and not revoked will be voted if authority to do so is not withheld, forin accordance with the election of each of the eight nominees named below.
In 2016, our stockholders voted to fix the number of directors constituting the Board at 12, as permitted under our Articles of Incorporation. However, only eight directors have been nominated for election at the 2021 annual general meeting of stockholders. The Board believes that it is advisable and in the best interests of our stockholders for the authorized number of directors constituting the Board to remain at 12. This will allow the Board to conduct a search for, and add, up to four additional directors prior to the 2022 annual general meeting.
Required Vote
Each director nominee must receive a majority of the votes cast to be elected.
Brokers do not have discretion to voteinstructions indicated on this proposal without your instruction.those proxy cards. If you dohave properly executed your proxy card and you have not instructgiven specific voting instructions, your broker how to vote on this proposal, your brokershares will deliver a non-vote on this proposal.be voted in accordance with our Board’s recommendations.
The Board of Directors | each director nominee. |
Our Board believes our 11 director nominees provide a well-rounded set of expertise to assist in effective and independent oversight of SLB management. The following chart summarizes key qualifications of our director nominees—including knowledge, skills, experiences and other attributes that the Board believes are relevant to their Board and committee service.
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 | ||||||||||||||||||||||
Other Attributes | ||||||||||||||||||||||
Independence | ||||||||||||||||||||||
SLB Board Chair or Committee Chair | ||||||||||||||||||||||
Tenure | 3 | 5 | 7 | <1 | 5 | 3 | 6 | 4 | 3 | 5 | 3 |
The Board believes that each
12 | 2024 Proxy Statement |
Each director nominee possesses the qualitiesnumerous other skills and experience thatnot identified in the Nominating and Governance Committee has determined that nominees should possess, as described in detail below under “Corporate Governance—Identifying Candidates for Director Nominations” beginningchart on page 17. 12, as further detailed in their biographies below. For additional details on the Board’s process for identifying director nominees, see “Corporate Governance—Director Selection and Qualifications” on page 22 of this proxy statement.
The Board seeks out, andnominees for election to the Board, consists of, individuals whose background, experience and skills complement those of other Board members.together with information regarding each nominee’s qualifications, are set forth below. In the judgment of the Board, eachall director nominee isnominees are able to execute his or hertheir duties as a membermembers of the Board and to devote the necessary time and attention to the Company,SLB, as required by our Corporate Governance Guidelines. ThereIn addition, there are no family relationships among any SLB executive officers and directors of the Company.directors.
The nominees for election to the Board, together with biographical information furnished by each of them and information regarding each nominee’s director qualifications, are set forth on the following pages.Peter Coleman,
Independent Director
Former CEO and Managing Director,
Director since 2021 Other Current Public Boards •Arcadium Lithium plc Former Public Director Roles •Woodside Petroleum Ltd. •Allkem Limited | | SLB 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 served as chair of Arcadium Lithium plc, a leading global lithium chemicals producer, since January 2024, following the merger of Livent Corp. with Allkem Limited, where he had served as a director from October 2022 and as chair from November 2022 through January 2024. He has also served as chairman of the board of Infinite Green Energy, an Australian green hydrogen renewable energy company, since August 2021, as chair of H2EX, an Australian hydrogen exploration start-up, since April 2022, and as chair of DIRECT Infrastructure, an Australian-based offshore wind developer, since June 2022.
Reason for Nomination
Mr. Coleman brings to the Board decades of experience in the energy industry, including as the former CEO and Managing Director 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 SLB’s operations.
2024 Proxy Statement | 13 |
Patrick de La Chevardière,
Independent Director
Former Chief Financial Officer,
Director since 2019
Other Current Public Boards • Michelin (Compagnie Générale des Établissements Michelin SCA)
Former Public • None |
SLB 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 TotalEnergies SE, a French multinational integrated oil and gas company. He served as TotalEnergies’ 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 TotalEnergies 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.
Reason for Nomination
Mr. de La Chevardière brings to the Board financial and industry experience as a former CFO of a large multinational energy company. The Board benefits from his customer-focused perspective on the oilfield services industry, and from his experience across the entire energy value chain, from exploration, operations, production, trading, and marketing to refining and new energies.
Miguel Galuccio,
Non-Executive Director
Chairman and Chief Executive Officer,
Director since 2017
Other Current Public Boards • Vista
Former Public •None |
SLB Board Committees • Finance, Chair
Other Experience and Education •
Bachelor of Science in Petroleum Engineering, Instituto Tecnológico de Buenos Aires •
• Latin America energy policy expertise | |||
|
MIGUEL GALUCCIO founded and is the Chairman and Chief Executive Officer of Vista Energy, S.A.B. de C.V. (Vista), the first listed independent energy company to operate and produce in the Vaca Muerta formation in Argentina, having held that position since 2017. In 2016, he co-founded GRIDX, a science-based incubation fund that creates and invests in biotech startups in Latin America, where he currently acts as chairman. Prior to that, from 2012 to 2016, he served as Chairman and Chief Executive Officer of YPF, Argentina’s largest energy company. From 1999 to 2012, he was an employee of SLB and held several international positions, his last being President, SLB Production Management. Prior to his employment at SLB, he served in various executive positions at YPF and its subsidiaries from 1994 to 1999, including YPF International. Mr. Galuccio is also a director of Nilus, a start-up company that develops technologies to lower the cost of living for low-income individuals.
Reason for Nomination
Mr. Galuccio brings to the Board leadership and operational expertise from his experience as former chairman and chief executive officer of Argentina’s largest energy 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, and he brings a unique perspective of customer and company operations. He also remains active in the oil and gas exploration and production industry as a chief executive officer of an energy company.
2024 Proxy Statement |
Jim Hackett,
Independent Chair of the SLB Board of Directors
President, Director since April 2023 Other Current Public Boards •Enterprise Products Holdings •Fluor Corporation •NuScale Power Corporation Former Public Director Roles •Alta Mesa Resources •NOV Inc. | SLB Board Committees •None Other Experience and Education •MBA, Harvard University Business School •Master of Theological Studies, Harvard Divinity School •Former Chairman of Board of the Federal Reserve Bank of Dallas •Former Chairman of National Petroleum Council (US) •Board service for multiple public companies in the energy services industry, including NOV, Halliburton, and Cameron International |
JIM HACKETT has been the president of Tessellation Services, a privately held consulting services firm, since 2013. He was previously the executive chairman of Alta Mesa Resources, an onshore exploration and production company, from 2018 to March 2020, and was a partner and senior advisor at Riverstone Holdings, a private energy investment firm, from 2013 to March 2020. Prior to that, Hackett served as executive chairman and CEO of Anadarko Petroleum Corporation from 2003 to 2013. Since December 2021, he has been the non-executive chair of NuScale Power Corporation, where he also serves as chair of the organization and compensation committee and as a member of the audit committee. He has also been a director of Enterprise Products Holdings since 2014, where he serves as chair of the governance committee and as a member of the capital projects committee; and a director of Fluor Corporation since 2016, with prior service from 2001 to 2015, where he serves as chair of the organization and compensation committee and as a member of the executive and commercial strategies and operational risk committees. He has also been a faculty member at Rice University and The University of Texas at Austin since 2017, and he serves on the boards of trustees at Rice University and Baylor College of Medicine.
Reason for Nomination
Mr. Hackett brings to the board extensive knowledge of the global energy industry, as the former Chairman and CEO of a global energy production and midstream company, as well as board chair and director service at numerous public companies serving the energy industry, and financial acumen as the former Chairman of the Board of the Federal Reserve Bank of Dallas. The Board benefits from his operational and financial leadership on business strategy as well as his insights into international energy markets.
Olivier Le Peuch,
SLB Chief Executive Officer
Chief Executive Officer, | ||||
Director since 2019
Other Current Public Boards • None
Former Public • None |
SLB Board Committees • None
Other Experience and Education • Master’s Degree in Microelectronics, Bordeaux University of Science •
| |||
|
OLIVIER LE PEUCH has been SLB’s Chief Executive Officer and a member of the Board since August 2019. He was SLB’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 2017 to May 2018, President of SLB Completions from 2014 to 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 Schlumberger Information Solutions. He has been with SLB since 1987 and began his career as an electrical engineer.
Reason for Nomination
Mr. Le Peuch brings to the Board unparalleled knowledge of SLB’s operational activities worldwide and its technology differentiation as a result of his service in various global leadership positions at SLB. The Board believes that Mr. Le Peuch’s service as our CEO is an important link between management and the Board, enabling the Board to perform its oversight function with the benefit of his perspectives on SLB’s business and operations.
2024 Proxy Statement | 15 |
Samuel Leupold,
Independent Director
Former Chief Executive Officer, Director since 2021 Other Current Public Boards •None Former Public Director Roles •Enel SpA | SLB 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. He has also served as chair of Corio Generation, a specialist offshore wind business and Macquarie Green Investment Group portfolio company, since March 2022, and as a director of Axpo Holding AG, Switzerland’s largest producer of renewable energy, since January 2024. Mr. Leupold previously served as a director of Enel SpA from May 2020 to May 2023.
Reason for Nomination
Mr. Leupold brings to the Board operational experience as the former CEO of a renewable energy company, as well as significant energy transition experience focused on the relationship between new energy generation and infrastructure capabilities. The Board benefits from his expertise on these issues as SLB seeks to implement our net-zero ambition and our strategy to deploy sustainable technologies to provide access to energy for the benefit of all.
Tatiana Mitrova,
Independent Director
Director since 2018
Other Current Public Boards •
Former Public •PAO Novatek |
SLB Board Committees • Audit •Finance
Other Experience and Education • PhD in Economics, Moscow State University • Senior Visiting Research Fellow at Oxford Institute for Energy Studies
| |||
|
TATIANA MITROVA has been a research fellow at the Center on Global Energy Policy at the School of International and Public Affairs at Columbia University since 2016. She has also been a visiting professor at the Paris School of International Affairs, part of the Paris Institute of Political Studies, since 2014. From 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 also served as a professor until February 2022. She was also the head of research in the Oil and Gas Department in the Energy Research Institute of the Russian Academy of Sciences from 2011 to February 2022, and an assistant professor at the Gubkin Russian State University of Oil and Gas from 2008 to February 2022. She was previously a director of PAO Novatek from April 2020 to September 2022.
Reason for Nomination
Dr. Mitrova brings to the Board valuable expertise regarding energy market dynamics and the various factors affecting supply and demand for SLB’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 international energy markets and related risks, 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 SLB’s global business strategy.
2024 Proxy Statement |
Maria Moræus Hanssen,
Independent Director
| Former Deputy Chief Executive Officer
Director since 2020
Other Current Public Boards •Kosmos Energy
• Scatec
Former Public •Alfa Laval AB •Yara International ASA |
SLB Board Committees •New Energy and Innovation, Chair •Compensation • Nominating and Governance
Other Experience and Education • Former • 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 energy 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 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 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 Scatec ASA since April 2020, Kosmos Energy since April 2023, and Å Energi since June 2023, and also serves in director and chair roles on various private company and non-profit boards. She previously served as deputy chairman and audit committee chair of Yara International from 2015 to May 2019, and as a director of Alfa Laval AB from May 2019 to May 2023.
Reason for Nomination
Ms. Moræus Hanssen brings to the Board leadership and operational expertise as the former CEO of several European energy 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 SLB, as well as her experience addressing risks related to the energy transition.
Vanitha Narayanan,
Independent Director
Former Chairman and
Director since
Other Current Public Boards •ReNew Energy Global
Former Public •None |
SLB Board Committees •
•
Other Experience and Education •
MBA, University of Houston •
| |||
|
VANITHA NARAYANAN is the former Chairman and Managing Director of IBM India, a subsidiary of IBM, a multinational information 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 markets. Most recently, Ms. Narayanan led a strategic 5G partnership as Managing Director for one of IBM’s telecommunications clients from April 2018 until her retirement in 2020. Since August 2020, she has served as a director of ReNew Energy Global, one of the largest renewable power companies in India, where she chairs the remuneration committee and serves as a member of the audit and finance committees. She has also been a director of HCL Technologies since July 2021, where she chairs the nomination and remuneration committee.
Reason for Nomination
Ms. Narayanan brings to the Board a wealth of global leadership and technology experience, particularly in India and other Asian markets. The Board values Ms. Narayanan’s digital expertise leading global technology businesses as SLB continues to implement its digital and AI strategies.
17 |
Jeff Sheets, | ||
| ||
|
Former EVP and Chief Financial Officer,
Director since 2019
Other Current Public Boards • Enerplus Corporation • Westlake
Former Public • None |
SLB Board Committees •
•
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 energy 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 2017, Mr. Sheets has served as a director of Enerplus Corporation, a Canadian energy 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 as a director of Westlake 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.
Reason for Nomination
Mr. Sheets brings to the Board financial and operational expertise as a former chief financial officer of a major energy company. The Board benefits from Mr. Sheets’ expertise in developing and implementing corporate strategy in the energy industry, as well as his significant finance, capital management and allocation, and mergers and acquisitions experience.
Ulrich Spiesshofer,
Independent Director
Former President and Director since 2021 Other Current Public Boards •Infineon Technologies Former Public Director Roles •None | SLB Board Committees •Compensation •New Energy and Other Experience and Education •PhD in •Master’s Degree in •Digital transformation, restructuring, and | |||
|
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 ABB executive committee member 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 boards of Interplex Ltd since January 2023, Sabre Industries since January 2021, and Schenck Process from May 2021 to September 2023, and he has served as a director of TDI-USA Holdings LLC since December 2021—all Blackstone portfolio companies. He has also served as a director of Infineon Technologies since February 2020, where he is a member of the strategy and technology committee.
Reason for Nomination
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.
2024 Proxy Statement |
We areSLB is committed to adhering to sound principles ofstrong corporate governance, which we believe is critical to achieving our performance goals and have adopted Corporate Governance Guidelines that our Board believes are consistent with our values, and that promoteto retaining the effective functioningtrust of our Board, its committeesstakeholders. This section describes SLB’s corporate governance policies and the Company. At least annually, our Board reviews and, if appropriate, revises our Corporate Governance Guidelines to reflectpractices that foster 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 also adopted a code of conduct entitled The Blue Print and The Blue Print in Action (together, our “Code of Conduct”), which applies to alleffective oversight of our directors, officersbusiness strategies 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.
Our governance practices, as detailed in our Bylaws, Corporate Governance Guidelines, Code of Conduct, policies and other business practices, include:operations.
New Independent |
|
One of the Board’s key responsibilities is to evaluate and determine an appropriate board leadership structure to provide for independent oversight of SLB 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 even vary for a single company as circumstances change.As such,change. As a result, our independent directors, upon the recommendation of the Nominating and Governance Committee, consider the Board’s leadership structure at least annually. The Board welcomes and takes under consideration any input received from our shareholders regarding the Board’s leadership structure, and informs shareholders of any change in the Board’s leadership structure in our current Corporate Governance Guidelines that we publish on our website and describe in our annual proxy statements.
The independent membersSince 2019, our Board has separated the roles of theCEO and Board have determined that the appointment of an independent Chairman of the Board is an appropriate Board leadership structure at this time because it allowsChair, to allow our CEO to focus on leading the Company’sSLB’s complex international business operations, while providingthe Chair provides the Board with experienced and independent leadership. TheMr. Hackett currently serves as independent members of the Board appointed Mark Papa as the Chairman of the BoardChair, and in August 2019. As independent Chairman, Mr. Papathat role, sets the agenda for and leads all Board meetings and all executive sessions of the non-executive directors.
In light of Mr. Papa’s appointment as the independent Chairman ofconsidering its leadership structure, the Board the Board does not currently have a designated lead independent director. The Board may modify this structure to best address the Company’s unique circumstances and advance the best interests of all stockholders, as and when appropriate. In the eventtook into account that the Company modifies this leadership structure in the future and appoints a lead independent director, that director’s responsibilities would be expected to include setting the agenda for all Board meetings (together with the Chairman), setting the agenda for and leading all executive meetings of the non-executive directors, and providing consolidated feedback, as appropriate, from those meetings to the Chairman. It is expected that the lead independent director would also have authority to call meetings of the Board in executive session; facilitate discussions, outside of scheduled Board meetings, among the independent directors on key issues as appropriate; and serve as a non-exclusive liaison with the Chairman and CEO, in consultation with the other independent directors.
Schlumberger’sSLB’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. These governance practices are reflected in our Corporate Governance Guidelines and our committee charters, which are available on our website. The Board believes that its risk oversight programs discussed on the following page, would be effective under a variety of board leadership frameworks and therefore do not materially affect the Board’s choice of leadership structure.
In April 2023, the Board approved and adopted a revised code of conduct titled “Together with Integrity — Our Code of Conduct.” The revised Code of Conduct aligns with the Company’s newly implemented cultural framework, is organized according to Company values and behaviors, and expands and re-emphasizes SLB’s core expectation for our officers, directors, employees, and suppliers to act with integrity in an evolving world. The revisions were designed to enhance the impact and relatability of the Code, providing clarity in an easily digestible style, including the addition of Integrity in Action guidance for practical application. In addition, the revised Code of Conduct emphasizes and reiterates reporting channels to help everyone feel empowered to speak up.
The roll-out of the revised Code of Conduct was a global campaign of engagement across the whole SLB organization. Our CEO and Chief Legal Officer led the management team in launching the Code of Conduct through both interactive virtual and live events, including localized events around the globe designed to engage and spread awareness and training on the values and expectations of the new Code of Conduct.
The revised Code of Conduct is available on SLB’s website at https://www.slb.com/about/who-we-are/our-code-of-conduct.
19 |
As set forth in our Corporate Governance Guidelines, the Board routinely 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, financial strength, and overall success of the Company.
The Board isand its committees are actively involved in overseeing SLB’s risk management for the Company.management. We believe that our Board composition provides the CompanySLB with robust and well-rounded experience to assist in several areaseffective oversight of SLB management, as reflected on the chart on page 12 of this proxy statement.
The full Board routinely assesses SLB’s major risks and mitigation measures, in order to promote our shareholders’ and other stakeholders’ interests in SLB’s business continuity, long-term resilience, financial strength, and overall success. In addition, the Board delegates to its committees responsibility for overseeing certain types of risk, oversight. Several of our Board members, including Dr. Mitrova, Ms. Moræus Hanssen, and Messrs. Galuccio, Le Peuch and Papa, have valuable experience in the regulatory, economic and commodity risks that are specific to the energy industry. Mr. Seydoux has expertise in science and technology issues, and Dr. Mitrova and Ms. Moræus Hanssen have valuable experience addressing risks related to the energy transition and sustainability. In addition, many members of our Board provide expertise in general business governance, capital allocation, management and economic trends relevant to our business.
Each of our Board committees considers the risks within its areas of responsibility. The Board and its committees exercise their risk oversight responsibilities in a variety of ways, including as set forthreflected in the chart below.
For additional details, see “—Board Responsibilities, Committeesbelow, and Attendance” below.
The Board also manages risk,the committees in part, through its oversight of the Company’s Executive Risk Committee (the “ERC”). The ERC is not a committee of the Board; rather, it comprises top Company executives from various functions, each of whom supervises day-to-day risk management throughout the Company. The ERC’s purpose is to identify those risks that have the potential to significantly affect our business over the short-, medium- and long terms — and therefore to impact our strategic objectives — and to implement 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 the Company’s various geographies, businesses and functions. 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 our CEO andturn report regularly to the Board and annually presents to the Board a comprehensive report as to its risk mapping efforts for that year.on activities in their respective areas of oversight.
Board of Directors The full Board oversees the assessment of major risks facing SLB, including determinations of the extent to which such risks are applicable, the potential impact of a risk, and the organization’s maturity in mitigating or managing the risk. The Board oversees risk management by the CEO and our senior management team, by reviewing major financial objectives, critical strategies, and long-term plans, including allocation of capital, significant proposed business acquisitions and divestitures, operating performance, and shareholder returns. See “—Enterprise Risk Management Process” on page 21 of this proxy statement. | ||||||||||||||||||
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 shareholder interests • Retention risk • Management succession | Nominating and • Board refreshment and Board and CEO succession • Ethics and compliance risks, including trade compliance and anti-bribery, and significant allegations • Related person transactions • Effectiveness of sustainability program, including short- and long-term climate risks and progress toward our net zero ambition • Effectiveness of human rights program | Finance • Appropriate leverage and related commitments • Currency management, including non-U.S. currency fluctuation • Financial risks related to M&A and strategic transactions • Pension liabilities | New Energy and • Critical risks and opportunities of: • Targeted new energy sectors • Critical innovation initiatives | ||||||||||||||
SLB Senior Management | ||||||||||||||||||
Day-to-day responsibility for: | ||||||||||||||||||
• Identifying, assessing, monitoring, and managing the major risks to SLB through our risk management process | • Implementing effective risk mitigation measures, response plans, and controls | • Integrating risk analysis into business decisions and performance objectives | ||||||||||||||||
2024 Proxy Statement |
Our Commitmentsenior management team has developed a comprehensive strategic planning and enterprise risk management process for identifying, assessing, and managing risk.
This process begins with risk identification by our business lines and GeoUnits through an operational risk management exercise. Risks with impacts at this initial level are addressed with risk management or mitigation plans. Risks that have a wider potential impact are elevated for consideration at our Basin and Division levels, where the risks are either addressed or elevated for consideration at our executive leadership team level.
In addition, SLB has a team of functional experts and leaders that review inputs from the bottoms-up operational risk management exercise, while also considering key trends and developments in their fields, to Sustainabilityensure that the broadest set of potential risks are identified and assessed for potential impacts to the Company. The analysis of the impact of a potential risk includes assessing the potential financial or reputational impact, the potential impact to SLB’s ability to implement its strategy, the velocity of the risk (how quickly a risk could manifest), and the level of SLB’s existing response preparedness.
Our visionexecutive leadership team has established the Enterprise Risk Management and Disclosure Committee to oversee this risk identification process and to monitor the implementation of mitigation or management processes. This process also includes third-party assessments, external risk surveys, and facilitated workshops with SLB executives to provide opportunities for the Company to adjust with the evolving risk landscape.
Based on these comprehensive risk identification and assessment processes, SLB’s executive leadership team recommends to the Board those enterprise-level risks that should be overseen by the Board. Based on the experience of the Directors, the Board itself may identify additional risks to be included among the Company’s enterprise-level risks. The Board then reviews management’s risk response or mitigation plans. For certain risks, the Board or its committees will have primary risk response or mitigation responsibility. Our executive leadership team updates the Board on the enterprise risk management process at least annually, as risks that could impact the implementation of the Company’s strategy are identified or evolve.
The risks that the Board routinely reviews relate to financial, geopolitical, strategic, regulatory, competitive, governance, reputational, climate-related, and operational risks, including cybersecurity risks and risks relating to operations in regions with elevated geopolitical tensions. For additional information about risks resulting from SLB’s global operations, see “Risk Factors – Business and Operational Risks – Disruptions in the political, regulatory, economic, and social environments of the countries in which we operate could adversely affect our reputation, financial condition, results of operations and cash flows.” in Item 1A. in our 2023 Annual Report.
Today, the world faces the challenge of providing secure and affordable energy to meet growing demand, while decarbonizing for a sustainable future. With nearly a century of market and technology leadership, SLB is to definewell positioned and drive high performance, sustainably. We are committed to being ata leader in providing solutions to address this trilemma. As part of this commitment, the forefrontBoard and its committees oversee the performance and management of various environmental, social, nature, and other sustainability issues, including our energy transition strategy, emissions reduction targets, climate change impact, sustainability reporting, workforce health and safety, human rights, workforce diversity, biodiversity, water resources, and ethics and compliance.
As shown in the chart on page 20, the Board oversees SLB’s long- and short-term strategy, including our roadmap to achieve our 2050 net-zero commitment, and the Board delegates to the Nominating and Governance Committee oversight of our industry’s shift toward more sustainable energy production—challenging not only ourselves, but alsosustainability programs, initiatives, and activities. The Board’s other committees oversee sustainability-related topics within their respective areas of responsibility, such as the incorporation of sustainability and diversity metrics into our customers, suppliers,incentive compensation programs (Compensation); the growth potential, maturity, and peers to partner on delivering measurable social and environmental progress. We are reducing our own environmental footprint, and we believe we are uniquely positioned to help our customers reach their own sustainability goals.
At Schlumberger, responsible environmental and social sustainability is an integral partviability of our culturetargeted New Energy business sectors (New Energy and Innovation); the conduct of sustainability-related reviews by our internal audit team (Audit); operational risks such as cybersecurity (Audit); and the way we operate. Our approach to sustainability, which we refer to as “Global Stewardship,” addresses opportunitiesdisclosure of ESG risks (Audit and risks associated with the energy transitionNominating and climate change; protecting the environment; investing in and engaging with our workforce and the communities where we and our customers live and work; and promoting diversity and inclusion and respect for human rights.
Governance, jointly). For additional details about our sustainability programs and initiatives, see our annual Global Stewardshipmost recent Impact Report, whichavailable on SLB’s website at https://www.slb.com/sustainability/.
Our line management is availabledirectly responsible for the management and mitigation of the environmental impact of our operations. Our Vice President of HSE is responsible for our environmental management systems, and our Vice President of Sustainability is responsible for our global sustainability strategy and programs. For details about our environmental management standard and how we manage environmental risk, see SLB’s health, safety, and environmental (HSE) website at https://www.slb.com/sustainability.about/leadership-and-governance/hse.
The Audit Committee oversees SLB’s cybersecurity risk exposures and the steps taken by management to monitor and mitigate cybersecurity risks. The cybersecurity team briefs the Audit Committee on the effectiveness of SLB’s cyber risk management program, typically on a quarterly basis. In addition, cybersecurity risks are reviewed by the Board, at least annually, as part of the Company’s corporate risk mapping exercise. For additional information about our cybersecurity program, see Item 1C. Cybersecurity in our 2023 Annual Report.
| |
| |
|
|
| |
21 |
Our relationship and on-going dialogue with our stockholdersshareholders are important parts of our Board’s corporate governance commitment. Our investor relations, sustainability, legal, and human resources teams engage with stockholdersshareholders throughout the year to seek their views on key matters, and tothen inform our managementBoard and our Boardmanagement about the issues and emerging governance trends that our stockholdersshareholders tell us matter most to them. The chairs of our Compensation and Nominating and Governance committees have also participateparticipated 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 stockholdersshareholders 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’shareholders’ priorities and perspectives. In addition, we may engage with our large institutional stockholdersshareholders at other times in the year when we believe that there are appropriate topics to discuss. For more detail ondetails about our 2020 engagement with our stockholders,recent shareholder outreach, see “Compensation Discussion and Analysis—Framework for Setting 2023 Executive Compensation in 2020—Stockholder Engagement; 2020 Say-On-Pay Vote”Compensation—Responsiveness to Shareholder Feedback” beginning on page 3335 of this proxy statement.
Our Corporate Governance Guidelines provide that at least a majority of the Board must consist of independent directors. This minimum standard reflects 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,Selection 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” is “independent” under the listing standards of the NYSE and our director independence standards, except for Mr. Le Peuch, who is our CEO and therefore does not qualify as independent, and Mr. Galuccio. Additionally, Ms. Olayan and Dr. Reif are independent, and Peter Currie, Nikolay Kudryavtsev and Indra Nooyi were independent throughout the period in 2020 that each of them served on the Board. In addition to the Board-level standards for director independence, the Board has determined that each current member of the Audit Committee meets the heightened independence standards required for audit committee members under the NYSE’s listing standards and the rules of the Securities and Exchange Commission (“SEC”), and each member of the Compensation Committee meets the heightened independence standards for compensation committee members under NYSE listing standards.
Our Board’s independence determinations included a review of transactions that occurred since the beginning of 2018 with entities associated with our directors or members of their immediate family. In making its independence determinations, the Board considered that Dr. Kudryavtsev, Dr. Mitrova, Ms. Moræus Hanssen, Ms. Nooyi, Ms. Olayan, Mr. Papa, Dr. Reif and Mr. Sheets each serve, or 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 such relationships involved ordinary course commercial transactions involving significantly less than the greater of $1 million or 1% of the other entity’s annual revenues during 2020, 2019 and 2018; except that one entity for which Mr. Sheets currently serves as a director, and one entity for which Mr. Papa previously served as an executive officer, had ordinary course commercial transactions with the Company involving less than 2% of each such entity’s annual revenues during those three years.
The Board also considered that the Company made charitable contributions in the form of educational grants and sponsored research of less than $120,000 per year to certain institutions with which some of the directors are affiliated, as well as the following charitable contributions:
No director received any personal benefit from any such charitable contributions.
We believe that tenure diversity and Board refreshment are important, as directors with many years of service provide the Board with a deep knowledge of our Company, while newer directors lend fresh perspectives. The following charts reflect the balanced tenure and ages of our director nominees.
Under our Corporate Governance Guidelines, non-executive directors are eligible to be nominated or renominated to the Board up to their 70th birthday, and executive directors are eligible to be nominated or renominated up to their 65th birthday, 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 interests of the Company. The Board waived this policy for Mr. Papa upon the recommendation of the Nominating and Governance Committee because it believes that having Mr. Papa serve as the Board’s independent Chairman is in the best interests of our Company and our stockholders.
Identifying Candidates for Director Nominations
The Nominating and Governance Committee believes that director nominees should, in the judgment of the Board, be persons of integrity and honesty, be able to exercise sound, mature and independent business judgment in 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 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 conflict of interest or legal issues.
The Nominating and Governance Committee also promotes our diversity policy that the Board should ensure that qualified candidates reflecting the gender, cultural and geographical diversity of the Company are considered as potential director nominees. With our diverse workforce representing over 160 nationalities, we value gender, cultural and geographical diversity, and our culture of recruiting, hiring and training where we operate influences the composition of our Board.
Directors who are dual citizens are represented by the geographic region in which they currently reside.
Two of our eight director nominees are women. Of our eight director nominees, three are citizens of France, two are citizens of the United States of America, one is a citizen of Norway, one is a dual citizen of both Russia and Israel, and one is a dual citizen of both Argentina and the United Kingdom. Our geographically diverse Board evidences our commitment to have directors who represent countries where we operate. In addition, the exceptionally broad and diverse experience of our Board nominees is in keeping with our goal of having directors whose backgrounds and experience complement those of other directors. The Nominating and Governance Committee’s evaluation of director nominees takes into account their ability to contribute to the Board’s diversity. The Nominating and Governance Committee annually reviews its effectiveness in balancing these considerations in the context of its consideration of director nominees.
Another goal of the Nominating and Governance Committee is to seek out nominees having experience, skills and other attributes that complement the whole Board as a governing body. We believe that our director nominees are able to provide a well-rounded set of expertise that will assist in effective oversight of management at Schlumberger. The matrix below identifies the primary skills, core competencies and other attributes that each director nominee brings to bear in their service to our Board and committees. Each director nominee possesses numerous other skills and competencies not identified below. We believe identifying primary skills is a more meaningful presentation of the key contributions and value that each director nominee brings to their service on the Board and to our stockholders. Further information on each director nominee, including some of their specific experiences, skills and other attributes, is set forth in the biographies beginning on page 9 of this proxy statement.
Applying the criteria above, the Nominating and Governance Committee recommends to the Board the number and names of persons to be proposed by the Board for election as directors at our annualAGMs. The Committee also assists the Board in identifying qualified individuals to join as new Board members. In evaluating potential nominees, the Committee takes into consideration, among other factors:
• | the Board’s current composition, including the skills, experience, and backgrounds of our incumbent directors as reflected in the chart on page 12 of this proxy statement, | |
• | SLB’s existing and anticipated business needs, aligned to our strategic goals and initiatives, | |
• | a potential nominee’s ability to contribute to the Board’s diversity, as discussed under “Leader in Global Diversity—Board Diversity” on page 11 of this proxy statement, and | |
• | the personal characteristics and general qualifications that the Committee believes all nominees should possess, as listed in the chart at right. |
Qualifications of Director Nominees | |
Integrity and honesty | |
Ability to exercise sound, mature, and independent businessjudgment | |
Recognized leaders in business or professional activity | |
Background and experience that will complement theexperience and talents of the other Board members | |
Willingness and availability to actively participate in Board andcommittee meetings and related activities | |
Ability to work professionally and effectively with other Boardmembers and SLB management | |
Availability to remain on the Board and its committees longenough to make an effective contribution | |
No material relationship with competitors or other third partiesthat could present realistic possibilities of conflicts of interest or legal issues |
The general meeting of stockholders. In obtainingmethodology for identifying candidates for nomination to the names of possible nominees,Board is outlined in the diagram below.
First, the Nominating and Governance Committee makesreviews the Board’s current composition, identifying key skills, experience, and backgrounds of potential candidates that would complement those of our other Board members.
Next, the Committee initiates a candidate search, making its own inquiries and receiveswhile also collecting suggestions from other directors and SLB management. Consideration of new Board candidates typically involves a series of internal discussions, review of information concerning candidates, and interviews with selected candidates.
From time to time, the Committee retains executive search and board advisory consulting firms to assist in identifying and evaluating potential nominees. To further our diversity policy,Upon retaining these firms, we request that any such firms retained by usthey include women and nationally, racially, and ethnically diverse candidates in the proposals they present to us. During 2020,
The Nominating and Governance Committee then conducts a thorough evaluation of proposed new Board candidates, typically involving a series of internal discussions, interviews with selected candidates, and reviews of information about the candidates. Following this evaluation, the Committee usedsummarizes its findings and provides to the servicesfull Board its recommendations for nomination to the Board. The Board, upon the recommendation of Spencer Stuart,the Nominating and Governance Committee, selects the director nominees to be elected at our next AGM.
22 | 2024 Proxy Statement |
The Board is committed to thoughtful board refreshment and ongoing board succession planning. Half of SLB’s non-executive directors—including our new independent Chair—joined the Board since 2021, and all directors joined within the last seven years, bringing diverse and evolving experience and leadership skills in areas that are strategically important to SLB. Our directors have an average age of 60 and have served on our Board for an average of four years. Our non-executive directors are eligible to serve on the Board until age 75 or for a third-party executive search firm, for this purpose. Spencer Stuart suggested Ms. Moræus Hanssen as a prospective Board candidate.maximum ten-year term—whichever occurs first—under our Corporate Governance Guidelines.
The Nominating and Governance Committee will also consider nominees recommended by stockholdersshareholders who meet the eligibility requirements for submitting stockholdershareholder proposals for inclusion in theSLB’s next proxy statement and who submit their recommendations in writing to:
Chair, Nominating and Governance Committee
Chair
c/o SLB Chief Legal Officer and Secretary Schlumberger Limited
5599 San Felipe 17th Floor
Houston, Texas 77056.77056
SuchAll recommendations must be submitted by the deadline for stockholdershareholder proposals referred to under “Other Information—Stockholder“Information About the Meeting—Shareholder Proposals for Our 2022 Annual General Meeting”at 2025 AGM” on page 87.68 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.
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 SLB’s director orientation program, to familiarize themselves with our business and operations, financial and performance strategies, controls and compliance systems, sustainability and HSE commitments, industry dynamics, and corporate governance standards. 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, geopolitics, cybersecurity, and other developments relevant to their work as directors. These programs may include presentations from SLB management or in-depth trainings developed by outside experts, as appropriate. SLB encourages directors to attend external trainings related to their Board responsibilities, and provides resources for director education opportunities across a wide range of topics.
23 |
Each year, the Board Responsibilities, Committees and Attendanceits committees conduct rigorous evaluations in order to assess the overall functioning, performance, and effectiveness of the Board, its committees, and the individual directors. The Nominating and Governance Committee oversees this annual evaluation process. From time to time, these evaluations may be conducted using a third-party facilitator. The methodology for conducting Board and Committee evaluations is outlined in the chart below.
Initiate Evaluation Process | Collect Evaluation Data | Discuss Findings | Implement Feedback | |||
Upon the instruction of the Nominating and Governance Committee, written self-assessment questionnaires are distributed to each member of the Board. These 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. | Directors’ responses to the questionnaires are then aggregated into summary reports for the Board, each of its committees, and the chair of the Nominating and Governance Committee. In 2023, 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 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 2023, the Board Chair conducted one-on-one interviews with each director to seek additional insights and to provide feedback. The chair of the Nominating and Governance Committee reviews the Chair’s peer evaluation and provides feedback if 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 individual directors. |
The Board overseeshas five standing committees: Audit, Compensation, Nominating and counsels the Company’s CEOGovernance, Finance, and other membersNew Energy and Innovation. Each member of the senior management team in managing in the long-term interests of the CompanyAudit, Compensation, and our stockholders. The Board’s responsibilities include:
Committees
The following table reflects the membership of the Board’s five standingNominating and Governance committees as of February 1, 2021:
Audit Committee
The Audit Committee consists of three directors, each of whom meets the independence and other requirements of the NYSE’sNew York Stock Exchange (NYSE) listing standards and SEC rules (including the heightened requirements that apply to audit or compensation committee members)members, as applicable). The Audit Committee assists the Board in its oversight of the accounting and financial reporting process of the Company, including: the audit of the Company’s financial statements; the integrity of the Company’s financial statements; legal and regulatory compliance; the independent auditor’s qualifications, independence and performance; and the performance of the Company’s internal audit function.
The authority and responsibilitiesIn addition, each member of the Audit Committee include the following:
The Company’s independent auditor 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 each of Messrs.Mr. de La Chevardière and Mr. Sheets qualifies as an “audit committee financial expert” under applicable SEC rules. The Audit Committee operates pursuant to a written charter, which describes its authority and responsibilities in detail, and is available on the Company’s website at https://www.slb.com/who-we-are/corporate-governance/audit-committee.
Compensation Committee
The Compensation Committee consists of five 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 Compensation Committee assists our Board in discharging its responsibilities with regard to executive compensation; periodically reviews non-executive directors’ compensation; oversees the Company’s general compensation philosophy, policy and programs; serves as the administrative committee under the Company’s stock plans; and prepares 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 the Company’s human resources, finance and legal departments. The Compensation Committee operates pursuant to a written charter, which describes its authority and responsibilities in detail, and is available on the Company’s website at https://www.slb.com/who-we-are/corporate-governance/compensation-committee.
Nominating and Governance Committee
The Nominating and Governance Committee consists of four directors, each of whom meets the independence requirements of the NYSE’s listing standards. The Nominating and Governance Committee assists the Board in identifying qualified individuals to become directors; nominates directors to serve on and chair committees; reviews corporate governance trends; develops and recommends to the Board a set of Corporate Governance Guidelines and any amendments; monitors and reviewsBoard’s committees, for final approval by the effectivenessfull Board. The following table reflects the current membership of the Company’s Ethics and Compliance Program; oversees the Company’s corporate reputation, sustainability and social responsibility strategies; and oversees the Board and its committees’ annual performance review.
The authority and responsibilities of the Nominating and Governance Committee include the following:Board’s standing committees.
Name of Director | Committee | Compensation Committee | Nominating and Governance Committee | Finance Committee | New Energy and Innovation Committee | |||||
Peter Coleman | l | l | ||||||||
Patrick de La Chevardière | Chair | l | ||||||||
Miguel Galuccio | Chair | |||||||||
Jim Hackett(1) | ||||||||||
Samuel Leupold | l | l | ||||||||
Tatiana Mitrova | l | l | l | |||||||
Maria Moræus Hanssen | l | l | Chair | |||||||
Vanitha Narayanan | l | Chair | ||||||||
Jeff Sheets | ||||||||||
Chair | ||||||||||
Ulrich Spiesshofer | ||||||||||
l | ||||||||||
l |
(1) | ||
2024 Proxy Statement |
Each standing 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 SLB’s website at https://www.slb.com/about/leadership-and-governance/corporate-governance.
In 2023, our directors attended an average of 99% of the meetings of the Board and its committees on which they served, and no director attended fewer than 75% of the total number of meetings of the Board and its committees on which they served. Meetings of the Board and its committees were held in 2023 as follows:
# of Meetings | (1) | |||
4 | ||||
Audit Committee | ||||
5 | ||||
Compensation Committee | 4 | |||
Finance Committee | 4 | |||
New Energy and | 3 | |||
Nominating and Governance Committee | 4 |
The Nominating and Governance Committee operates pursuant to a written charter, which describes its authority and responsibilities in detail, and is available on the Company’s website at https://www.slb.com/who-we-are/corporate-governance/nominating-and-governance-committee.
Finance Committee
The Finance Committee consists of four directors. The Finance Committee advises the Board and management of the Company on various capital allocation and capital structure matters, including dividends, stock repurchases, acquisitions and divestitures, financial risk management policies and the investment of funds. The Finance Committee operates pursuant to a written charter, which describes its authority and responsibilities in detail, and is available on the Company’s website at https://www.slb.com/who-we-are/corporate-governance/finance-committee.
Science and Technology Committee
The Science and Technology Committee consists of four directors. The Science and Technology Committee advises the Board and management on matters involving the Company’s research and development programs. The Science and Technology Committee operates pursuant to a written charter, which describes its authority and responsibilities in detail, and is available on the Company’s website at https://www.slb.com/who-we-are/corporate-governance/science-and-technology-committee.
Board Meetings and Attendance
The Board and its committees met throughout 2020 on a set schedule, held special meetings, and acted by written consent from time to time, as appropriate, as reflected in the following table:
Regularly Scheduled Meetings | Special Meetings | |
Board of Directors | 4 | 1 |
Audit Committee | 8 | — |
Compensation Committee | 3 | — |
Nominating and Governance Committee | 4 | 3 |
Finance Committee | 4 | — |
Science and Technology Committee | 1 | — |
(1) | All meetings were regularly scheduled; no special meetings were held in 2023. |
At each 2023 Board meeting, time is reserved for the Board’s independent directors to meet inChair led one or more executive session without the CEO present. Officerssession(s) of non-employee directors. In addition, SLB officers regularly attend Board meetings to present information on our business and strategy, and Board membersdirectors have worldwide access to our employees outside of Board meetings. From time to time between meetings, Board and committee members confer with each other, and with management, and with independent consultants, regarding relevant issues, and representatives of management may meet with suchthese consultants on behalf of the relevant committee.
EachNo director attended our 2023 AGM, in line with our Articles of our current directors attended at least 75% ofIncorporation and with the meetings of the Board and the committees on which he or she served in 2020 (held during the period he or she served).
The Board’s policy regarding director attendance at annual general meetings of stockholders is that directors are welcome, but not required, to attend our AGMs.
Our Corporate Governance Guidelines provide that at least a majority of the Board must consist of independent directors, in accordance with the 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 thatwhich can be found in our Corporate Governance Guidelines.
Based on the Company will make all appropriate arrangements for directors who choose to attend. No director attended our annual general meeting of stockholders in 2020.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 our CEO and Mr. Galuccio. |
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. |
• | Each member of the Compensation Committee meets the heightened independence standards for compensation committee members under NYSE listing standards and the rules of the SEC. |
• | Additionally, our former Board Chair, Mr. Papa, was independent during the period he served on our Board in 2023. |
Our Board’s confirmation of the independence of our independent directors includes a review of transactions that occurred since the beginning of 2021 with entities associated with our directors or members of their immediate family.
In making its independence determinations, the Board considered that our independent directors serve as directors, trustees, outside consultants, or advisory board members at companies and universities that have had commercial business relationships with SLB. These relationships all involved commercial transactions in the ordinary course with SLB, which were less than the greater of $1 million or 1% of the other entity’s annual revenues during 2023, 2022, and 2021; except for transactions with Kosmos Energy (Kosmos), where Ms. Moræus Hanssen serves as a director, which involved commercial transactions in the ordinary course with SLB that were less than 5% of Kosmos’ 2023 and 2021 revenues.
As part of SLB’s ongoing support of STEM research and educational initiatives, for many years SLB has provided charitable contributions to, and has funded research collaborations with, universities and other non-profit organizations around the world. Our Board has voluntarily adopted an additional independence factor assessing charitable relationships in SLB’s Corporate Governance Guidelines. As a result, the Board reviews SLB’s charitable contributions to academic and other non-profit institutions with which our directors are affiliated.
Since the beginning of 2021, these contributions involved less than $120,000 per year, except for contributions to two universities where Mr. Hackett teaches or lectures—the University of Texas at Austin (contributions were less than $500,000 per year) and Rice University (contributions were less than $200,000 per year). Mr. Hackett had no involvement in any contributions made to these universities, most of which pre-dated his membership on the Board. No director received any personal benefit from any SLB charitable contributions.
2024 Proxy Statement | 25 |
Prohibition on Hedging or Pledging of Schlumberger Stock
Our directors and executive officers are prohibited from using any strategies or products (such as derivative securities or short-selling techniques) to hedge, directly or indirectly, against the potential changes in the value of Schlumberger common stock. In addition, our directors and executive officers, and 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.
Policy Against Lobbying and Political Contributions
We have a strong culture of being politically neutral,adopted Corporate Governance Guidelines that our Board believes are consistent with our values, and have a long-standing policy against lobbying or making financial or in-kind contributions to political parties or candidates, even when permitted by law. This policy, as set forth in our Code of Conduct, prohibitsthat promote 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 resulteffective functioning of our policy of political neutrality, Schlumberger does not have a political action committee, nor does it contributeBoard, its committees, and the Company. At least annually, our Board reviews and, if appropriate, revises our Corporate Governance Guidelines to any third-party political action committees or other political entities organized under Section 527 ofreflect the U.S. Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”)Board’s corporate governance objectives and commitments. Our Corporate Governance Guidelines are available on SLB’s website at https://www.slb.com/about/leadership-and-governance/corporate-governance/guidelines.
In 2020, the Center for Political Accountability, a non-profit, non-partisan organization, assessed our disclosure for its annual CPA-Zicklin Index of Corporate Political Disclosure
Proxy Access Bylaw
We proactively adopted proxy access bylaw provisions in 2017. These provisions permit a stockholder, or a group of up to 20 stockholders, owning at least 3% of our outstanding common stock, for at least three years, to include two director nominees, or 20% of the current Board, whichever is greater, in our proxy statement for the annual general meeting.
Policies and Procedures for Approval of Related Person Transactions
The Board has a written policy with respect togoverning the review, approval, and ratification of “related person transactions” to document procedures by which such transactions are reviewed, approved or ratified.transactions.” Under SEC rules, as applied by the Board, “related persons” include any director, executive officer, director nominee, or greater than 5% stockholdershareholder of the CompanySLB since the beginning of the previous fiscal year, and their immediate family members. The policy applies to any transaction in which:which SLB is a participant and any related person has a direct or indirect material interest, where the amount involved exceeds $120,000, unless excluded under Item 404(a) of SEC Regulation S-K.
The Nominating and Governance Committee with assistance from the Company’s Chief Legal Officer, is responsible for reviewing and, where appropriate, approving or ratifying, any related person transaction involving Schlumberger or its subsidiariesSLB 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 CompanySLB and its stockholders.shareholders.
SinceSLB has an ongoing commercial relationship with Vista, where Mr. Galuccio serves as chairman of the beginning of 2020, there were no related personboard and chief executive officer. In 2023, SLB contracted in an arms’ length manner with Vista to deliver oilfield services and products in the ordinary course, for which Vista paid SLB approximately $275 million. These transactions between SLB and Vista render Mr. Galuccio non-independent under the relevant standards.NYSE listing rules and our Corporate Governance Guidelines.
During all of 2023, Mr. Sheets (Chair), Ms. Moræus Hanssen, Ms. Narayanan and Dr. Spiesshofer served on the Compensation Committee. None of the members of the Compensation Committee that served during 2023 is or has been an officer or employee of the Company or had any relationship that is required to be disclosed as a transaction with a related person. In addition, during 2023, none of our executive officers served as a member of the board of directors or compensation committee (or other board committee performing equivalent functions) of an entity that has one or more executive officers serving as members of our Board or our Compensation Committee.
The Board recommends that stockholders
We maintain a process for shareholders and other interested parties initiateothers to direct communications withto the Board, the Chairmanour independent Board Chair, or any Board member or committee by writing to our CorporateChief Legal Officer and Secretary. This process assists the Board in reviewing and responding to communications by stockholdersshareholders and other interested parties. The Board has instructed our CorporateChief Legal Officer and Secretary to review correspondence directed to the Board (including to the ChairmanChair and any Board committee) and, at the Secretary’s discretion, to forward those items that he or she deems appropriate for the Board’s consideration. Communications can be sent to the following address:
SLB Board of Directors
c/o SLB Chief Legal Officer and Secretary
5599 San Felipe
Houston, Texas 77056
|
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.shareholders. Directors who are SLB employees of Schlumberger do not receive compensation for serving on the Board.
Annual payments are made after our non-employee directors are elected by our stockholders. Non-employee directors who begin their Board, Board Chair, committee or committee chair service other than immediately following the annual general meeting of stockholders receive a prorated amount of annual compensation.
Non-employee directors receive an annualthe following cash retainer of $115,000 plus an additional annual fee of $10,000 for each committee membership. The chair of each committee receives an additional annual fee of $20,000 in lieu of the fee for committee membership. Mr. Papa earns an additional $100,000 cash fee annually, reflecting his additional responsibilities as the Board’s independent Chairman.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 Chair, an additional $100,000 annual cash fee. |
In April 2020, in response to the COVID-19 pandemic and global economic downturn, all non-employee directors voluntarily agreed to forgo 100% of their cash compensation for the second quarter of 2020. The
Additionally, Schlumberger’s practice is toWe annually grant to each non-employee director shares of SchlumbergerSLB common stock valued at approximately $190,000 for each non-employee director, or $290,000 for theour independent Chairman of the Board each April afterChair.
For 2023, our annual general meeting. Although the Schlumberger 2004 Stock and Deferral Plan for Non-Employee Directors (the “Directors Stock Plan”) provides that annual stock awards to non-employee directors may be inreceived the formfollowing grants of shares ofSLB common stock shares of restricted stock or restricted stock units (“RSUs”), our practice has been to only issue shares of common stock. Our directors have never received restricted stock or RSUs as director compensation.on May 1, 2023:
• | 6,085 shares to Mr. Hackett, who was our independent Board Chair from July 2023, |
• | 4,188 shares to Mr. Papa, who served as Board Chair until June 2023 and as a director until July 2023, and |
• | 3,850 shares to each other non-employee director. |
The following table provides information on the compensation paid to our non-employee directors in 2020.2023.
Name | Fees Earned or Paid in Cash ($) | (1) | Stock Awards ($) | (2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value & Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | (3) | |||||
Peter L.S. Currie(4) | 16,957 | — | — | — | — | — | 16,957 | ||||||||
Patrick de La Chevardière(5) | 101,250 | 265,904 | — | — | — | — | 367,154 | ||||||||
Miguel Galuccio | 108,750 | 177,912 | — | — | — | — | 286,662 | ||||||||
Nikolay Kudryavtsev(4) | 12,609 | — | — | — | — | — | 12,609 | ||||||||
Tatiana A. Mitrova | 101,250 | 177,912 | — | — | — | — | 279,162 | ||||||||
Maria Moræus Hanssen(6) | 33,633 | — | — | — | — | — | 33,633 | ||||||||
Indra K. Nooyi(4) | 12,609 | — | — | — | — | — | 12,609 | ||||||||
Lubna S. Olayan | 108,750 | 177,912 | — | — | — | — | 286,662 | ||||||||
Mark G. Papa | 156,250 | (7) | 271,546 | — | — | — | — | 427,796 | |||||||
Leo Rafael Reif | 116,250 | 177,912 | — | — | — | — | 294,162 | ||||||||
Henri Seydoux | 108,750 | 177,912 | — | — | — | — | 286,662 | ||||||||
Jeff W. Sheets(5) | 106,250 | 265,904 | — | — | — | — | 372,154 |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | (1) | Total ($) | ||||
Peter Coleman | 135,000 | 189,228 | 324,228 | |||||
Patrick de La Chevardière | 145,000 | 189,228 | 334,228 | |||||
Miguel Galuccio | 135,000 | 189,228 | 324,228 | |||||
Jim Hackett(2) | 167,095 | 299,078 | 466,173 | |||||
Samuel Leupold | 145,000 | 189,228 | 334,228 | |||||
Tatiana Mitrova | 145,000 | 189,228 | 334,228 | |||||
Maria Moræus Hanssen | 155,000 | 189,228 | 344,228 | |||||
Vanitha Narayanan | 137,500 | 189,228 | 326,728 | |||||
Mark Papa(3) | 100,834 | 205,840 | 306,674 | |||||
Jeff Sheets | 145,000 | 189,228 | 334,228 | |||||
Ulrich Spiesshofer | 135,000 | 189,228 | 324,228 |
(1) | |
Non-employee directors who begin their Board, Board Chair, committee, or committee chair service after the AGM receive a prorated amount of annual compensation. SLB also reimburses non-employee directors for travel, external board education opportunities, and other business expenses incurred in the performance of their services for us.
27 |
Our Compensation Committee annually reviews our non-employee director compensation, and periodically recommends that the Board approve updates to director pay. In 2023, 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 2023. 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 Chair and CEO roles in 2019).
While our Compensation Committee is aware that other jurisdictions may have differing director compensation practices, the Committee believes it is in the best interests of SLB and our shareholders as a whole to align to market practice among NYSE-listed companies and companies like SLB 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 shareholders when a significant portion of director compensation is paid through stock grants.
The Board believes that ownership of SchlumbergerSLB stock by Board membersour directors aligns their interests with the interests of our stockholders.shareholders. Accordingly, the Board has established a guideline that each non-employee Board memberdirector must, within five years of joining the Board, own at least 10,000a minimum dollar value of shares of SchlumbergerSLB common stock. As of December 31, 2020, eachstock equal to five times (5x) that director’s annual cash retainer. Each of our non-employee director nomineesdirectors who has been a Board member for at least five years wasis in compliance with these stock ownership guidelines.
Non-employee directors may elect to defer all or a portion of their annual stock or cash awards through the SLB 2004 Stock and Deferral Plan for Non-Employee Directors (the Directors Stock Plan.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) SchlumbergerSLB common stock, (ii)or 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.
|
The following table sets forth information known to us with respect to beneficial ownership of our common stock as of January 31, 20212024 regarding the beneficial ownership of SLB common stock by (i) each director and director nominee, (ii) each of the named executive officersofficer, and (iii) all SLB directors and executive officers as a group.
Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to securities. Except as indicated in the footnotes to the table below and subject to applicable community property laws, to our 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, 2021 includes shares of common stock that such person or group has the right to acquire within 60 days of January 31, 2021, including upon the exercise of options to purchase common stock or the vesting of RSUs or PSUs. References to options in the footnotes to the table below include only options outstanding as of January 31, 2021 that are currently exercisable or that become exercisable within 60 days of January 31, 2021. The table below excludes the number of shares that have been earned under our 2018 ROCE PSUs but not yet finally determined, as described under “Compensation Discussion and Analysis—Payouts Under PSU Awards—2021 Payouts Under 2018 ROCE PSUs,” on page 43.
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 1,398,264,586 shares of common stock outstanding on January 31, 2021, 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, 2021.
As of January 31, 2021, 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, 2021.
Beneficial Ownership of SLB Common Stock | ||||||||
Name | Number of Shares | (1) | Percentage of Class | (2) | ||||
Khaled Al Mogharbel (NEO) | ||||||||
(3) | <1% | |||||||
Stephane Biguet (NEO) | 296,955 | (4) | <1% | |||||
Peter Coleman | 14,456 | <1% | ||||||
Patrick de La Chevardière | 28,810 | <1% | ||||||
38,510 | <1% | |||||||
6,085 | <1% | |||||||
Olivier Le Peuch (NEO) | 1,176,881 | (5) | <1% | |||||
Samuel Leupold | 15,593 | <1% | ||||||
Abdellah Merad (NEO) | 371,507 | (6) | <1% | |||||
Tatiana | 32,994 | <1% | ||||||
Maria Moræus Hanssen | 21,873 | <1% | ||||||
7,545 | <1% | |||||||
Jeff | 29,310 | <1% | ||||||
Ulrich Spiesshofer | 12,416 | <1% | ||||||
All directors and executive officers as a group | 3,738,430 | (7) | <1% |
(1) | The number of shares beneficially owned includes shares of SLB common stock that the individual or group has the right to acquire within 60 days of January 31, 2024, including exercisable options to purchase |
(2) | |
(3) | Includes options to purchase |
(4) | Includes options to purchase |
(5) | Includes options to purchase |
(6) | Includes options to purchase |
(7) | Includes options to purchase |
29 |
The following table sets forth information as of December 31, 2020 (except as otherwise noted)2023 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 1,398,264,5861,432,742,086 shares of our common stock outstanding on January 31, 2021.2024.
Beneficial Ownership of Common Stock | |||
Name and Address | Number of Shares | Percentage of Class | |
The Vanguard Group(1) 100 Vanguard Blvd. Malvern, PA 19355 | 115,343,090 | 8.2% | |
BlackRock, Inc.(2) 55 East 52nd Street New York, NY 10055 | 97,009,046 | 6.9% | |
State Street Corporation(3) State Street Financial Center One Lincoln Street Boston, MA 02111 | 80,793,825 | 5.8% | |
Dodge & Cox(4) 555 California Street, 40th Floor San Francisco, CA 94104 | 76,557,389 | 5.5% |
Beneficial Ownership of SLB Common Stock | ||||
Name and Address | Number of Shares | Percentage of Class | ||
The Vanguard Group(1) 100 Vanguard Blvd. Malvern, PA 19355 | 132,254,196 | 9.2% | ||
BlackRock, Inc.(2) 55 East 52nd Street New York, NY 10055 | 108,344,912 | 7.6% | ||
State Street Corporation(3) State Street Financial Center One Lincoln Street Boston, MA 02111 | 84,804,647 | 5.9% | ||
T. Rowe Price Associates, Inc.(4) 100 E. Pratt Street Baltimore, MD 21202 | 75,431,801 | 5.3% |
(1) | Based solely on a Statement on Schedule 13G/A filed on February |
(2) | Based solely on a Statement on Schedule 13G/A filed on February |
(3) | Based solely on a Statement on Schedule |
(4) | Based solely on a Statement on Schedule 13G filed on February |
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934, as amended (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, 2020 or prior fiscal years. One Form 4 required to be filed in 2017 by Mr. Kevin Fyfe relating to a grant of RSUs was not timely filed, but was filed on October 20, 2020, and one Form 4 required to be filed in 2019 by Mr. Belani relating to tax withholding was not timely filed, but was filed on January 26, 2021.
|
We areOur Board is asking our stockholdersyou to approve, on an advisory basis, the compensation of our executive compensationNEOs 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 the achievement of companywide financial objectives, as well as other strategic objectives, while balancing rewards for short-term and long-term performance, and | |
• | to align the interests of our executive officers with those of our shareholders, |
each as well as other strategic, operational and personal objectives, while balancing rewards for short-term and long-term performance.
We urge stockholders to readdescribed in the “Compensation Discussion and Analysis” beginning on page 28section 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. We also urge stockholders to read the Summary Compensation Table and other related compensation tables and narrative, appearing on pages 52-65, 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’sSLB’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 stockholdersour shareholders to approve the compensation of our NEOs by voting “FOR” the following resolution on an advisory resolution at the 2021 annual general meeting of stockholders:basis:
RESOLVED, that the stockholders ofcompensation paid to Schlumberger Limited (the “Company”) approve, on an advisory basis, the compensation of the Company’sLimited’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 2021 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,vote is non-binding, on our Board. Although non-binding,but 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 forAt our 2023 AGM, our shareholders supported, on an advisory basis, the Board’s proposal that the say-on-pay advisory vote occur on an annual “say-on-pay”basis. Although annual say-on-pay advisory vote. Unlessvotes are not required by our bylaws, the Board modifies its policycurrently believes that having our shareholders provide annual feedback on the frequency of holding “say-on-pay”our compensation practices supports effective governance. As a result, our proxy statement for our 2025 AGM will include a say-on-pay advisory votes, the next “say-on-pay” advisory vote will occur in 2022.
Required Vote
A majority of the votes cast is required to approve this Item 2.
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 |
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with SLB’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 SLB Board of Directors
Jeff Sheets, Chair | Maria Moræus Hanssen | Vanitha Narayanan | Ulrich Spiesshofer |
31 |
This Compensation Discussion and Analysis (“(CD&A”&A) describes our compensation policies and practices as they relate to our sixfive named executive officers (“NEOs”(NEOs) listed below:
identified below. The purpose of the CD&A is to explain the elements of our NEOs’ 2020 compensation;2023 compensation, the criteria for selecting these elements; the relative size of each compensation element;elements, the decisions our Compensation Committee made with respect to the 20202023 compensation of our NEOs;NEOs, and the reasons for those decisions.
The unprecedented global health and economic crisis caused by the COVID-19 pandemic in 2020 resulted in the most challenging environment that we and our industry have ever experienced. For the first time ever, West Texas Intermediate crude oil briefly traded below $0, one of the many devastating effects of COVID-19. The profound global economic shock caused by the pandemic resulted in both a swift collapse in oil demand and in oversupply, which together caused a dramatic decline in demand for our services and products.
Against this historic backdrop, we took swift and decisive actions to execute on our performance strategy, cut operating costs, and reinvent ourselves to adapt to an evolving industry landscape shaped by capital discipline, increased efficiency, operational resilience through industry cycles, sustainability and a reduced carbon footprint.
Highlights of our 2020 financial, strategic and operational performance include:
Olivier Le Peuch | Stephane Biguet | Khaled Al Mogharbel | Abdellah Merad | Dianne Ralston |
Chief Executive Officer | EVP and Financial Officer | EVP, Geographies | EVP, Core Services and Equipment | Chief Legal Officer and Secretary |
CD&A Table of Contents | |
2023 Compensation Decisions and Results |
Highlights of our 2020 sustainability performance include:
As a result of our actions in 2020, we increased our earnings power and improved our margin profile, which position us to capitalize on growth drivers for the future of our industry and the next recovery cycle. We enter 2021 with positive momentum and a clear path to achieving double-digit margins in North America and further improving international margins in 2021. We believe that, given the depth, diversity and executional capability of our international business, we are uniquely positioned to benefit as international spending accelerates in the near- and midterm.
We came through the turbulence of 2020 with drive and purpose and reinvented ourselves for the future. We believe that we are poised to deliver superior results for our shareholders, informed by our vision of a more efficient, sustainable industry.
2024 Proxy Statement |
The 2020In making decisions for 2023 executive compensation, of our named executive officers appropriately reflects and rewards their strong contributions to the Company’s performance as they successfully navigated, and responded to, unprecedented challenges to our industry. Our Compensation Committee also continued to focus on strengthening the link between paypay-for-performance alignment, motivating and performance;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 generating cash flow; motivating our top executives through a year of tremendous worldwide economic volatility and uncertainty; and promotingcreating long-term stockholder value despite challenging industry conditions.shareholder value.
In this context, and as more fully discussed elsewhere in this CD&A, below are some key actionsaddition, the Committee considered that our Compensationexecutive compensation program received the support of nearly 97% of the votes cast at our 2023 AGM. Based on this overwhelming support, as well as direct shareholder feedback, the Committee tookmaintained our executives’ long- and short-term incentive compensation programs largely consistent with respect to our NEOs’ 2020 compensation:2022. Accordingly:
Diversified LTI Program Structure with Rigorous PSU Performance Targets |
Our NEOs continued to receive a mix of LTI grants in 2023, with 75% of their target LTI opportunity awarded in the form of PSUs, and 25% awarded in the form of three-year, time-based RSUs. As in 2022, payout under the 2023 PSUs will be contingent on achieving rigorous absolute FCF margin, relative ROCE, and relative TSR performance goals over a three-year period.
Strategy-Focused STI Program with Emissions Reduction Objectives for All NEOs |
We continued to tie 70% of our NEOs’ target short-term cash incentive opportunity to Company financial goals—namely, full-year adjusted EBITDA and free cash flow—to ensure our executives remained focused on profitable, sustainable growth. In addition, we incorporated into our 2023 STI plan a new quantitative component focused on reducing our Scope 3 emissions intensity and improving gender diversity.
Performance-Aligned LTI and STI Payouts
Our NEOs’ LTI award payouts in 2023 were based on SLB’s strong multi-year ROCE results, as well as achieving target under our three-year FCF margin PSUs, partially offset by below-target relative TSR performance. Our NEOs also earned performance-aligned 2023 STI payouts based on SLB’s strong adjusted EBITDA and exceptional free cash flow results, together with key sustainability and workforce diversity achievements during the year.
Long-Term Equity Incentive Results | ||
Total LTI Award Payout — 127% — Our NEOs earned total LTI payouts of 127% of target with respect to their three-year LTI awards (including RSUs vested at 100%) that were granted in 2021 and vested in January 2024. Target FCF Margin PSU Payout — Our NEOs earned 100% of the Strong Relative and Absolute ROCE Results — Our NEOs earned 250% of the target shares of SLB stock under the ROCE PSUs they received in 2021, based on SLB’s average annual ROCE for the three-year performance period, which was 477 bps above the average ROCE of the comparator group, together with SLB’s absolute 2023 ROCE of 16%. Below-Target TSR Payout — Our NEOs earned 59% of the target shares of SLB stock under the TSR PSUs they received in 2021. This payout was based on SLB’s relative TSR percentile rank of 41% as compared to | Average STI Payout — 151% — Our NEOs earned an average 2023 cash incentive payout of 151% of target. Adjusted EBITDA — $8.107 billion — Our 2023 adjusted EBITDA of $8.107 billion represented a 25% increase over 2022, resulting in achievement of 119% of the target payout. Free Cash Flow — $4.038 billion — Our 2023 free cash flow Achieved Emissions and Gender Diversity Targets — In 2023, we reduced our Scope 3 emissions intensity by | |
For reconciliations of cash flow generated and adjusted EBITDA to their most comparable GAAP measures, see Appendix A.
Some Key Facts About Our 2020 Executive Compensation
33 |
Changes to Our 2021 Long-Term Incentive Program
In response to stockholder feedback and based on a review of peer company practices, our Compensation Committee in January 2021 approved several changes to our LTI program for 2021 executive compensation, as described in the chart below. The full impact of these changes will be reflected in our 2021 executive compensation program, and will be presented more fully in our proxy statement for our 2022 annual general meeting.
|
|
|
Our 20202023 executive compensation program consisted of three primary elements comprising our executives’ total direct compensation: base salary, annualLTI equity incentive awards (PSUs and RSUs), STI (annual) cash incentive awards, andbase salary. Within these elements, 75% of our executives’ 2023 target LTI equity awards.awards and 100% of their STI awards were performance-based. These elements have allowed us to remain competitive and attract, retain, and motivate top executive talent.talent whose interests are aligned with those of our shareholders.
The table below sets out the primary elements of our NEOs’ 20202023 total direct compensation, certain key features of each element, how we determined their respective amounts, and how each of these compensation elements supports our strategy.
Element | How Elements Support Our Strategy | Based? | ||||||||||
Free Cash Flow Margin PSUs | Absolute performance metric, based on our FCF margin over a 3-year period | • Aligns with our financial ambition of achieving double-digit FCF margin • Encourages our NEOs to generate high-quality revenue, which translates into strong free cash flow | ||||||||||
25% Return on Capital Employed PSUs |
|
• |
|
• Motivates and rewards our executives for relative outperformance on a key financial metric
| ||||||||
25% Total Shareholder Return PSUs | Relative performance metric, comparing our cumulative TSR over a 3-year period to TSR of our direct competitors and S&P Global 1200 Energy Index | • • Uses a clear and objective metric to evaluate our performance against our direct competitors and against the
| ||||||||||
25% Time-Based RSUs | • Promotes stability and retention of our executive team through business cycles |
| ||||||||||
70% Quantitative Company Financial Goals | Evenly split between achieving adjusted EBITDA targets and |
• | •
|
| ||||||||
|
| |||||||||||
10% Quantitative ESG Goals | Targets to reduce Scope 3 emissions intensity and increase gender diversity | •
| ||||||||||
20% Individual Goals | Strategic personal objectives |
• | ||||||||||
Base Salary |
|
• |
2024 Proxy Statement |
In setting our executives’ compensation, we believeour 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 objectives, and should balance incentivizing outperformance, ensuring retention, and maximizing shareholder value, | |
• | our performance-based LTI and STI 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 shareholder value, align our executives’ compensation with our shareholder 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, further align the interests of our executives with those of our other shareholders. |
Performance-Weighted
Our executive compensation program is designed so that the higher an executive’s position in the Company, the greater the percentage of his or her compensation that is “at risk” — that is, contingent on our financial performance. At-risk compensation refers to an executive’s LTI and his or her individual performance.STI awards. We believe that having a significant portion of our executives’ compensation at risk more closely aligns their interests with our long-termCompany interests and thosewith the interests of our stockholders.shareholders.
As shown in the charts below, approximatelyApproximately 90% of our CEO’s 20202023 target total direct compensation was at risk, and approximately 83%84% of our other NEOs’ 20202023 target total direct compensation was at risk.risk, as illustrated below.
CEO | Other NEO | |
Our Compensation Committee seeks to achieve an appropriate balance between LTI awards, which emphasize long-term shareholder value creation and which encourage effective deployment of capital and conversion of net income to free cash flow, and annual cash rewards, which encourage achievement of annual 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 generally alignedwell-aligned with that of the companies in our two main executive compensation peer groups. For additional details about our comparative pay-for-performance assessments against our peer companies, seegroups, as described in “Other Aspects of Our Executive Compensation Framework—Pay-for-Performance Relative to Program—Our Peers” beginningPeer Group Companies” on page 44 below.47.
In January 2020, our Compensation2023, the Committee concluded that the mix of base salary, target STI, and target LTI was appropriate for each of our NEOs, based on its reviewthe proportion of the relative size of direct compensation elements ofat 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.factors.
Our Compensation Committee also reviewed internal pay equity at its October 2020 meeting. Because our executive officers operate as a team, our Compensation Committee considers internal pay equity to be an important factor in its executive compensation decisions. Our Compensation Committee noted that the ratio of target total direct compensation between the CEO and the second-highest paid executive officerprogram was largely in line with prior years. Our Compensation Committee also noted that the levels of target total direct compensation for the third- to the fifth-highest paid officers were appropriately clustered together, consistent with their relative positions within the Company. As a result, our Compensation Committee concluded that internal pay equity was appropriate.
Stockholder Engagement; 2020 Say-On-Pay Vote
Our Compensation Committee is committed to seeking and considering stockholder feedback in designing and managing our executive compensation program. We proactively engage with our stockholders regarding executive compensation and other corporate governance matters throughout the year, as discussed further in “Corporate Governance—Stockholder Engagement” on page 16. Our compensation program design for 2020 was largely developeddesigned and implemented in response to, and as a product of, past discussions with our stockholders.shareholders. For example, in response to stockholdershareholder feedback, in recent years we reduced the weighting ofsince 2021 our NEOs’ key personal objectives under our annual cash incentive plan, correspondingly increased the weighting of quantitative Company financial goals under that plan, and incorporated aNEOs have received three-year relative TSR modifierPSUs that directly align a portion of their LTI payouts with shareholder value creation, with target performance goals set above median at the 60th percentile. Since 2022, the comparator group for our TSR PSUs has included the S&P Global 1200 Energy Index, based on feedback that our shareholders evaluate our TSR performance against both our competitors and the broader global energy sector. And for 2023, our Compensation Committee incorporated into our PSU awards. AlsoSTI plan a new quantitative component focused on reducing our Scope 3 emissions intensity and improving gender diversity in responseour workforce, to stockholder feedback, all PSUs issued toalign our executives in 2021 are subject to three-year performance periods.executives’ compensation with SLB’s non-financial strategic objectives.
2024 Proxy Statement | 35 |
In 2020, 87.6% of the votes cast at our annual general meeting of stockholders voted in favor of our executive compensation program. Prior to our 2020 annual meeting,2023, we reached out to 31 of our largest stockholders,contacted shareholders representing 53% of our outstanding common stock, and met with 17 of them, representing 34%more than 50% of our outstanding common stock, to seek their views on our executive compensation program, as well as other governance and sustainability topics. Members of SLB management met with shareholders representing approximately 29% of our outstanding common stock, and received positive feedback on the design of our executive compensation program. Our management team then reported on these discussions toIn addition, our executive compensation program received the support of our shareholders:
• | 97% of the votes cast at our 2023 AGM | |
• | 95% of the votes cast at our 2022 AGM | |
• | 95% of the votes cast at our 2021 AGM |
As a result, our Compensation Committee andbelieves that our Board as appropriate.overall compensation program design is well-supported by our shareholders.
Below is a summary of some of our executive compensation best practices and policies. For additional details, see “Executive Compensation Governance” beginning on page 48 of this proxy statement.
What We Do | What We Don’t Do | |
At Risk Pay — A significant portion of our executives’ compensation is at risk, based on a mix of absolute and relative financial metrics. Performance-Based STI Awards — At least 70% of our executives’ target 2023 STI opportunity is based on achieving rigorous quantitative Company financial goals. Robust Stock Holding Requirements — Our CEO is required to own an amount of SLB shares valued at six times (6x) his annual base salary; our EVPs must own at least three times (3x) their annual base salaries; and all other executive officers must own at least two times (2x) their annual base salaries. Mandatory Retention of Shares — Executives must retain 50% of the net shares they acquire upon the exercise of stock options and the vesting of PSUs and RSUs, until they achieve the required ownership level under our stock ownership guidelines. Annual Peer Compensation Review — We annually review all officer compensation opportunities against our peer groups. | No gross-ups on excise taxes. No repricing or exchanging options without shareholder approval. No hedging or pledging of SLB stock by executive officers or directors. No LTI or STI payouts if we fail to achieve pre-established minimum performance criteria. No excessive perquisites to our executive officers. No executive pension or insurance plans exclusively for executives. No change-in-control agreements, and no automatic acceleration of equity awards upon a change in control. PSUs and RSUs do not accrue or pay dividends or dividend equivalents or have voting rights prior to vesting. We do not dilute our shareholders with excessive employee equity grants. Our 2023 “burn rate,” or stock awards granted as a percentage of common shares outstanding, was only 0.48%. |
Base salary is the only fixed portion of an executive’s annual compensation, which providesproviding some stability of income since the other compensation elements are at risk. On appointment to an executive officer position,Our Compensation Committee annually reviews and approves the base salary is set at a level that is competitive with base salaries inlevels for our executive officers (other than the applicable peer compensation groups for that position, and takes into account other factors described below.
BaseCEO) after considering comparable salaries for each executive officer are compared annuallyexecutives with similar positionsresponsibilities in the applicableour main executive compensation peer groups. Base salary changes for executive officers, exceptgroups, comparisons to internal peer positions, recent Company performance, individual performance, business experience and potential, economic trends, and the CEO, are recommended by the CEO and subject to approval by our CompensationCEO’s recommendations. The Committee taking into account:
Our Compensation Committeeannually reviews the base salary of theour CEO in executive session and recommends his base salary amount to the non-executiveindependent members of ourthe Board for approval, based on the criteria described above.
In addition to periodic reviews based on the factors described above,January 2023, our 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 our Compensation Committee carefully consider these new responsibilities, external pay practices, retention considerations and internal pay equity, as well as past performance and experience. 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 2020
Our Compensation Committee reviewed the compensation of each of our NEOs in January 2020. Upon review of comparative market data (including data of the oil industry peer group, which showed lower base compensation growth) and other relevant factors, our Compensation Committee determined to maintain the base salaries of each of our NEOs, except:
In April 2020, in response to the COVID-19 pandemic and the global economic downturn, all of our current executive officers agreed to a 20% temporary reduction in their base salaries during the second quarter of 2020. These reductions affected all of our NEOs except Mr. Ayat, who was not serving as an executive officer at that time.for 2023.
2024 Proxy Statement |
Annual
We pay annual performance-based short-term (annual) cash incentives to our executives to foster a results-driven, pay-for-performance culture, and to align theirexecutives’ interests with those of our stockholders. Annual cash incentiveshareholders. STI awards are earned according to the achievement of financial, strategic, operational and personal objectives, as described below. Our Compensation Committee reviews and approves the financial and other objectives applicable to our NEOs (and, in the case of our CEO, recommends to the non-executive directors of the Board the objectives applicable to the CEO).
For 2020 compensation, 70% of our NEOs’ annual cash incentive opportunity was based on achievement of quantitative Company financial goals—cash flow generation (40%) and adjusted EBITDA (30%)—with the remaining 30% being based achievement of pre-established key personalnon-financial objectives, as reflected in the following chart:
well as strategic objectives. Our Compensation Committee selects performance-basedperformance measures that it believes support our strategy and strike a balance between motivating an executiveour executives to increase near-term operatingfinancial and financialoperating results and driving profitable long-term Company growth and value for stockholders.shareholders.
For 2023, 70% of our NEOs’ target STI opportunity was based on achieving quantitative Company financial objectives, 10% was based on achieving quantitative Company non-financial objectives, and 20% was based on strategic personal objectives. The financial portion of the target plan was evenly split between adjusted EBITDA and free cash flow performance goals. The total maximum STI payout for 2023 was 200% of target—consistent with 2022—and the weighted payout range for each metric as a percentage of target is reflected by the outer bars in the 2023 STI Opportunity Mix chart below.
In January 2023, our Compensation Committee believesdetermined to leave the target STI opportunity for all NEOs unchanged from 2022, following a review of market data indicating that our NEOs’ target STI opportunity (as a percentage of base salary) was competitively positioned. As a result, the 2023 target STI opportunity for our CEO was 150% of his base salary and for our other NEOs it was 100% of base salary.
The following table reflects our NEOs’ full-year 2023 STI results, together with regardrelevant weightings of the different components and payouts under each component.
SLB Financial Objectives | SLB Non-Financial Objectives | ||||||||||||||||||||
Adjusted EBITDA | Free Cash Flow | Personal Objectives | |||||||||||||||||||
Name | STI Opportunity as % of Base Salary | Weight (%) | Payout Result (%) | Weight (%) | Payout Result (%) | Weight (%) | Payout Result (%) | Weight (%) | Payout Result (%) | Total 2023 STI Paid as % of Target | (1)(2) | ||||||||||
O. Le Peuch | 150% | 35 | 119 | 35 | 243 | 10 | 100 | 20 | 95 | 151 | % | ||||||||||
S. Biguet | 100% | 35 | 119 | 35 | 243 | 10 | 100 | 20 | 96 | 151 | % | ||||||||||
K. Al Mogharbel | 100% | 35 | 119 | 35 | 243 | 10 | 100 | 20 | 96 | 151 | % | ||||||||||
A. Merad | 100% | 35 | 119 | 35 | 243 | 10 | 100 | 20 | 100 | 152 | % | ||||||||||
D. Ralston | 100% | 35 | 119 | 35 | 243 | 10 | 100 | 20 | 100 | 152 | % |
(1) | Equals the sum of the financial, non-financial, and personal portions of the STI achieved, shown as a percentage of base salary. |
(2) | In January 2024, due to factors not contemplated in the 2023 forecast, our Compensation Committee applied a discretionary downward adjustment to reduce all executive payouts by 5% under our 2023 STI plan. |
2024 Proxy Statement | 37 |
In setting quantitative Company financial targets orand performance goals, as well as our NEOs’ key personal objectives,Compensation Committee believes it is important to establish criteria that are realistic, whilerealistically attainable, yet still being challenging to achieve in an uncertain global economy. In selecting the financial performance measures and setting targets for our 2023 STI plan, the Committee considered the factors in the table below.
Adjusted EBITDA | Free Cash Flow | |||
Why did the Committee select this metric? | • The Committee considers adjusted EBITDA to be a good indicator of the quality of our earnings. • Investors and market analysts often value SLB by reference to an EBITDA multiple, so this metric aligns our NEOs’ compensation to a key market valuation method. • A portion of our line management’s 2023 cash incentive opportunity was based on EBITDA performance goals, so this metric aligns executive pay with line management’s. | • Free cash flow is a critical element of a strong balance sheet, and it allows us to sustainably return value to shareholders through dividends and stock repurchases, while making focused investments in future growth opportunities, such as SLB New Energy and digital. • Free cash flow has also allowed us to achieve our net debt reduction goals in recent years. • The Committee also considers free cash flow to be a good indicator of the efficiency of capital management. | ||
What is the Committee’s process for setting performance goals? | The Committee begins with a review of management’s plans and projections following bottom-up planning from the field. Adjusted EBITDA and free cash flow targets may increase or decrease year-on-year, taking into account, among other things, industry cycles, anticipated customer spending, activity growth potential, pricing, the introduction of new technology, strategic M&A activity, and commodity prices. In addition, the Compensation Committee has discretion at the completion of the year to make adjustments to payouts based on conditions not anticipated in management’s plans. |
In establishing cash flow generation goals forJanuary 2023, our executives’ 2020 cash incentive plan, the Compensation Committee considered that theseincreased the minimum, target and maximum performance goals differ substantially fromunder the free cash flow conversion goals contained in the LTIadjusted EBITDA 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,2023 STI opportunity, and takes into account 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 conversion metric contained in our LTI awards). Our free cash flow conversion PSU payout isset target at $8.00 billion based on the percentage of cumulative net income, excluding chargesSLB’s full-year forecast. This target performance goal was 31% higher than our 2022 target and credits, converted into free cash flow over a two-year period. Because this metric measures how much of our earnings we are able to convert into cash, it is a good indicator of the quality of our earnings and, therefore, is a complementary metric to cash flow generated.
Financial Objectives24% higher than SLB’s actual 2022 adjusted EBITDA.
The 70% quantitative financial component offollowing table reflects our NEOs’ 2020 annual cash incentive opportunity comprised two different metrics, with 40% being based on achievement of cash flow generationfull-year adjusted EBITDA targets and 30% on achievement corresponding potential payouts for 2023.
Performance Targets(1) | Potential Payout as a % of Target Opportunity(1) | |
< $7.40 billion | 0% | |
$7.40 billion | Minimum | 50% |
$8.00 billion | Target | 100% |
$8.80 billion | Maximum | 243% |
(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. |
Our 2023 adjusted EBITDA targets. Our Compensation Committee selected cash flow generationwas $8.107 billion, representing a 25% increase over 2022. As a result, and adjusted EBITDA asapplying the two financial metrics for our 2020 cash incentive plan for the reasons detailed in the chart on the following page. In addition, the Committee selected these two metrics as the absolute measures upon which to base the financial portion of our NEOs’ annual cash incentive opportunity because they are key metrics on which we set our performance expectations for the year, and because the Committee believes that consistent cash flow generation and adjusted EBITDA growth lead to long-term stockholder value.
As previously disclosed in July 2020,payout matrix above, our Compensation Committee approved certain modifications toa payout of 119% of target for the adjusted EBITDA component of our 2020 cash incentive plan in response to the effects of the COVID-19 pandemic and other factors that severely and negatively affected our industry, including the precipitous collapse in global oil demand and the resulting decline in demand for our services and products. Put simply, our Compensation Committee determined that the range of Company financial results possible as a result of the pandemic and its effects had changed so dramatically that it was necessary to reassess the 2020 financial performance metrics and targets under our 2020 cash incentive plan that the Committee had approved earlier in the year. Our Compensation Committee believes the changes that it approved, which are described in the chart on the next page, align our executives’ performance and the Company’s strategy with aggressive performance goals and metrics to better drive stockholder value.2023 STI plan.
2024 Proxy Statement |
In January 2023, our Compensation Committee considered SLB’s 2022 free cash flow of $1.418 billion, together with its full-year 2023 cash flow forecast, and the Company’s public commitments to return at least 50% of its free cash flow to shareholders in the form of dividends and share repurchases.
In light of these considerations, and in order to show a clear commitment to the Company’s promise to return value to shareholders, the Committee increased the minimum, target and maximum performance goals under the free cash flow portion of our NEOs’ 2023 STI opportunity—even though our NEOs had received no payout under this component of the 2022 STI plan. The Committee set target at $3.00 billion based on SLB’s full-year forecast. This target performance goal was 13% higher than our 2022 target and more than double SLB’s actual 2022 free cash flow. The Committee set the maximum performance goal 17% higher than target, in order to incentivize management to generate additional cash that would allow us to accelerate returns to shareholders.
The following table reflects our NEOs’ full-year free cash flow targets and corresponding potential payouts for 2023.
Potential Payout as a % of Target Opportunity(1) | ||
0% | ||
$2.50 billion | Minimum | 50% |
$3.00 billion | Target | 100% |
$3.50 billion | Maximum | 243% |
(1) | For free cash flow results between any two performance targets, payout is prorated. No cash incentive is earned if we do not achieve the minimum free cash flow target. |
In 2023, SLB delivered $4.038 billion of free cash flow—a 185% increase over 2022. This exceptional free cash flow result allowed us to return $2.0 billion to shareholders in 2023 through dividends and stock repurchases. We also reduced our gross debt by $261 million and net debt by $1.4 billion, and ended the year with a net-debt-to-adjusted-EBITDA ratio of 1.0x—our lowest level since 2016.
Based on SLB’s 2023 free cash flow, our Compensation Committee approved a payout of 243% of target for the free cash flow component of our 2023 STI plan.
For 2023, our Compensation Committee incorporated into our STI plan a new quantitative component focused on reducing our Scope 3 emissions intensity and improving gender diversity in our workforce, to align our executives’ annual compensation with SLB’s non-financial strategic objectives.
|
| |||
Why this metric? | For 2023, the | SLB recognizes the | ||
2023 objective | Reduce Scope 3 emissions intensity by 7% year on year. | Increase the | ||
2023 achievements and incentive payout | We achieved a 13% year-on-year reduction in
| |||
2023 STI plan. | ||||
|
|
(1) | Emissions intensity data do not reflect the impact of the Aker Solutions subsea business, which was acquired in the fourth quarter of 2023. |
(2) | SLB does not make employment decisions, including decisions regarding hiring, promotion, and compensation, on the basis of any legally protected characteristic, including gender, but is focused on making opportunities to excel accessible to all. We implement this goal by adhering to employment laws in each of the countries in which we operate. |
(3) | Our salaried workforce, salaried population, or salaried roles generally refer to all positions excepts those that are hourly based. |
39 |
Key
As discussed above, 20% of our NEOs’ target 2023 STI opportunity was tied to achieving strategic performance goals specific to their roles within SLB. These may relate to financial goals, such as profitability, revenue growth, capital management, or cost reduction; performance achievements, such as contract awards, operational reliability, or HSE goals; or other non-financial goals that are important to SLB’s strategy and reputation, such as accelerating customer adoption of energy transition services and digital technologies, or ethics and compliance goals.
Early each fiscal year, our Compensation Committee reviews and, approves the key personal objectives of the CEO for that year, subject to approval by the non-executive members of the Board.Board’s independent directors, approves our CEO’s strategic personal objectives for that year. The Committee also annually assesses theour CEO’s performance against his keystrategic personal objectives established for the prior year, to determine a 30% portionthe appropriate payout for the 20% of STI tied to his annual cash incentive opportunity.personal objectives. The CEO reviews and approves the keystrategic personal objectives of the other NEOs and assesses their performance against their pre-approved objectives in a similar way.
Each NEO’s annual cash incentive opportunity is tied to achievement of quantitative and qualitative goals that are specific to that NEO’s position, and may relate to:
2020 Annual Cash Incentive Results
Upon review of market data, and taking into consideration internal pay equity and that the target annual cash incentive opportunity of our NEOs was already competitively positioned from a market perspective, our Compensation Committee determined in January 2020 to leave the target annual cash incentive opportunityaggregate STI payouts for all NEOs unchanged from 2019, except with respect to Mr. Biguet. The Committee had previously approved, in December 2019, an increase to Mr. Biguet’s target annual cash incentive opportunity from 75% to 100% in connection with his promotion in January 2020 to the role of EVP and CFO. As a result, the 2020 target annual cash incentive for our CEO was 150% of his base salary and 100% of base salary for our other NEOs.executive officers.
The following charttable reflects our NEOs’ full-year 2020 annual cash incentive results, together with relevant weightings of the different components2023 strategic personal objectives and payouts under each component.their achievements against those performance goals.
Financial Objectives | Personal Objectives | |||||||||||
Incentive | Cash Flow Generation | Adjusted EBITDA | ||||||||||
Name | Opportunity as % of Base Salary (%) | Weight (%) | Payout Result (%) | Weight (%) | Payout Result (%) | Weight (%) | Payout Result (%) | Total 2020 Incentive Paid as % of Base Salary(1) | ||||
O. Le Peuch | 150 | 40 | 94 | 30 | 162 | 30 | 70.0 | 160.8 | ||||
S. Biguet | 100 | 40 | 94 | 30 | 162 | 30 | 75.0 | 108.7 | ||||
K. Al Mogharbel | 100 | 40 | 94 | 30 | 162 | 30 | 100.0 | 116.2 | ||||
A. Belani | 100 | 40 | 94 | 30 | 162 | 30 | 100.0 | 116.2 | ||||
H. Gharbi | 100 | 40 | 94 | 30 | 162 | 30 | 93.3 | 114.2 | ||||
S. Ayat(2) | N/A | N/A | — | N/A | — | N/A | — | — |
In reviewing our 2020 annual cash incentive results, our Compensation Committee considered the significant efforts of our executive team in delivering strong cash generation and adjusted EBITDA results in a year of unprecedented challenges. In addition, the Committee considered that our stock price increased by more than 34% between the date on which the Committee approved full-year 2020 adjusted EBITDA targets (July 16, 2020) and the date on which the Committee approved 2020 annual cash incentive payouts (January 21, 2021), demonstrating alignment between the Company’s significant above-target adjusted EBITDA performance and stockholder returns. In light of the foregoing considerations, the Committee determined that no downward adjustments to the payouts would be made. Accordingly, our Compensation Committee approved the annual cash incentive payouts for each of our named executive officers as set forth above.
Performance Goal | Achievement | |||||
Enable Performance and Innovation | ||||||
Achieve our We are SLB Safe HSE performance goal of fatality-free operations in 2023. | Achieved | |||||
Oversee the development, approval, and execution of SLB’s New Energy growth strategy inclusive of M&A activities. | Substantially achieved | |||||
Achieve certain milestones to align SLB intellectual property portfolio with our strategic direction and product portfolio. | Achieved | |||||
Outgrow the Market | ||||||
Grow revenue from specified new digital technologies above a pre-established target year on year. | Substantially achieved | |||||
Achieve total opportunity win volume growth and bookings exceeding a pre-established target, in a specified mix of products and services related to production enhancement and recovery. | Achieved | |||||
Grow high-quality revenue by a pre-established target in certain key geographies. | Substantially achieved | |||||
Grow revenue and bookings from key technologies in SLB’s Core divisions above a pre-established target year on year. | Achieved | |||||
Achieve contractual pricing improvements exceeding a pre-established global target. | Achieved | |||||
Drive Efficiency | ||||||
Achieve specified quantitative milestones related to working capital impact, business performance insights, and functions performance efficiency, through digital enablement of SLB’s operating and information technology systems. | Substantially achieved | |||||
Enhance SLB’s digital capabilities to forecast, analyze and validate profitability of specific integrated projects. | Achieved | |||||
Improve contribution margins by a pre-established target year on year, by reducing cost of service delivery and operating costs in the Core divisions. | Achieved | |||||
Streamline employee training programs by meeting a pre-established, quantitative efficiency target, as well as other governance milestones. | Achieved | |||||
% of 2023 payout opportunity earned under strategic personal objectives | 95% | 96% | 96% | 100% | 100% |
2024 Proxy Statement |
2020 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, and commodity prices.
The following chart reflects our NEOs’ full-year 2020 cash flow generation targets, as approved by our Compensation Committee in July 2020, together with comparisons to the 2019 cash flow generation targets.
For cash flow generation results between any two targets, payout is prorated. No cash incentive is earned if we do not achieve the minimum cash flow generation target.
Our 2020 cash flow generated was $2.67 billion. Based on these results, and applying the payout matrix above, our Compensation Committee approved a payout of 94% of target for the cash flow generation component of our NEOs’ annual cash incentive opportunity.
As discussed above under “—Financial Objectives,” our Compensation Committee did not modify the target and maximum performance goals for the cash flow generation portion of our annual cash incentive opportunity. The minimum performance goal that the Committee originally approved in January 2020 was $2.52 billion, and would have resulted in a payout of 74% of target had the goal not been adjusted in July 2020.
In approving cash flow generation as a performance metric, our Compensation Committee believed that it should encourage management to pursue its strategy of divesting certain non-core or low-margin businesses and assets while at the same time holding management accountable for investment and acquisition opportunities that it chose to pursue. The Committee also 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 from our cash flow generation goals. 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 2020 annual cash incentive payouts, the Committee approved the following formulation for measuring our cash flow generation:
For a reconciliation of cash flow generation to cash flow from operations, see Appendix A.
2020 Adjusted EBITDA Targets and Results
As discussed above under “—Financial Objectives,” in July 2020 our Compensation Committee modified the Company’s 2020 cash incentive plan by replacing the previously-approved adjusted EPS performance metric with a 2020 adjusted EBITDA performance metric. The Committee approved a minimum performance goal informed by EBITDA consensus and a target performance goal set 12% above EBITDA consensus based on our then-current internal forecast. The Committee believed that setting the target performance goal above EBITDA consensus would incentivize our executives to outperform market expectations.
The following chart reflects our NEOs’ full-year 2020 adjusted EBITDA targets.
For adjusted EBITDA results between any two targets, payout is prorated. No cash incentive is earned if we do not achieve the minimum adjusted EBITDA target.
Schlumberger’s 2020 adjusted EBITDA was $4.31 billion, while 2020 loss before taxes on a GAAP basis was $11.298 billion. For a reconciliation of adjusted EBITDA to loss before taxes on a GAAP basis, see Appendix A. Based on these adjusted EBITDA results, our Compensation Committee approved a payout of 162% of target for the adjusted EBITDA component of our NEOs’ annual cash incentive opportunity. Had our Compensation Committee not replaced the adjusted EPS performance goals with adjusted performance EBITDA goals, our NEOs would have earned no payout under the adjusted EPS component of their 2020 cash incentive opportunity.
Our Compensation Committee evaluated our performance based on adjusted EBITDA consistent with the manner in which we presented our adjusted EBITDA results in our third- and fourth-quarter 2020 earnings announcements and in presentations to investors. It is also consistent with how analysts calculate their estimates. In approving the payout for 2020 adjusted EBITDA performance, the Committee reaffirmed its decision to exclude the charges and credits set forth in Appendix A from the calculation of adjusted EBITDA, on the grounds that a significant portion of the charges were non-cash in nature, and were also driven primarily by external market conditions and outside of management’s control.
2020 Key Personal Objectives and Results
| ||||||
|
| ||||||
LTI awards are designed to give NEOs and other high-valuekey employees a long-term stake in the Company,SLB, incentivize the creation of sustained stockholdershareholder value, and act as long-term retention and motivation tools, and directly tietools—aligning employee and stockholdershareholder interests over the long term. In January 2020,
Since 2021, our Compensation Committee has awarded to our NEOs and other executives received 100%a diversified mix of LTI grants, with 75% of their target LTI awardsopportunity awarded in the form of PSUs, PSUs—with payoutspayout contingent on achievement of bothachieving absolute and relative Company financial performance goals.
Our Compensationgoals over three-year periods—and 25% awarded in the form of three-year, time-based RSUs. The Committee believes that our current LTI program servesappropriately balances the following Committee objectives:
• | ||
• | ||
• | ||
• | motivating and incentivizing outperformance relative to | |
• | ||
No shares will vestAs in 2022, the 2023 LTI program consisted of four types of grants, equally weighted at target performance:
The maximum overall payout opportunity under the PSUs awarded to our NEOs if we do not achieve pre-established minimum2023 LTI program was 200% of target—consistent with 2022 and in line with market practice. The maximum payout opportunity for each type of LTI award is reflected by the outer bars in the chart above, with overall payout more heavily weighted in favor of Company financial performance levels. No dividends will accrue or be paid on any unvested PSUs during the applicable performance periods.metrics.
In January 2020, our NEOs earned 141% of the target shares of our common stock upon vesting of the three-year PSUs that were granted to our NEOs in 2017, and 250% of the target shares of our common stock upon vesting of the two-year PSUs that were granted in 2018. In January 2021, our NEOs earned 134% of the target shares of our common stock upon vesting of the three-year PSUs that were granted to our NEOs in 2018. See “—Payouts Under PSU Awards” on page 43.
The target value of an executive’s LTI grant increases with thetheir level of an executive’s responsibility at the Company.SLB. For theour CEO and ourthe 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 approval bythat the Board ofapprove 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, which may include:such as:
• | ||
• | the size and mix of the executive’s total | |
• | internal pay | |
• | ||
• | ||
the executive’s contribution to | ||
• | the level of competition for executives with comparable skills and | |
LTI Grants to Our NEOs in 2020
Based on its review of comparator peer group data and the market environment,internal equity factors, our Compensation Committee determined in January 20202023 to maintain the 20202023 grant date target LTI grant values at the same level awarded in 20192022 for all of our NEOs, except that Mr. Biguet’s target LTI grant value was increased in connection with his promotion to EVP and CFO. In addition, our CEO was not granted a 2020 LTI award in light of his August 2019 PSU Awards, as discussed above under “—Overview of Compensation Decisions for 2020.”
Our Compensation Committee approved:NEOs.
A three-year relative TSR modifier applies to all PSUs granted in 2020. As a result, all PSUs granted in 2020 will vest, if at all, only after a three-year TSR performance period.
The following table details the target number of ROCE PSUs and FCF Conversion PSUs granted to our NEOs in 2020 and the estimated target values of our NEOs’ 2020 and 2019 annual LTI awards, as well as the year-over-year percentage change between the two amounts.
Name | Target Number of ROCE PSUs | Target Number of FCF Conversion PSUs | Target Value of 2020 Grants(1) | Target Value of 2019 Grants(2) | % Change |
O. Le Peuch(3) | — | — | — | n/m | n/m |
S. Biguet | 37,990 | 37,990 | $2,500,000 | $1,500,000 | 66.7% |
K. Al Mogharbel | 56,530 | 56,530 | $3,720,000 | $3,720,000 | 0% |
A. Belani | 54,710 | 54,710 | $3,600,000 | $3,600,000 | 0% |
H. Gharbi | 48,630 | 48,630 | $3,200,000 | $3,200,000 | 0% |
S. Ayat | 60,790 | 60,790 | $4,000,000 | $4,000,000 | 0% |
TSR Modifier
We will determine the effect of the TSR modifier on the 2020 PSUs in early 2023. First, we will calculate the three-year, cumulative TSR results for each company that was included in the Philadelphia Oil Services Sector index (the “OSX Index”) as of January 2020. Then, we will rank Schlumberger’s three-year, cumulative TSR against each of those peer companies. Our TSR modifier does not use, and is not affected by, the OSX Index’s internal weighting methodology. If our three-year, cumulative TSR is in the bottom 33rd percentile rank as compared to each of those companies’ individual TSR results, then our TSR modifier will cause the payouts on the 2020 PSUs to be reduced by 25 percentage points (e.g. from 100% of target to 75% of target). This modifier will only reduce the number of shares earned under a PSU award, but will never increase the number of shares earned.
41 |
2020 ROCE PSUs:
In January 2020,2023, our Compensation Committee set goals for the 2020 ROCE2023 FCF Margin PSUs based on our average annual ROCEabsolute FCF margin over a three-year performance period as compared(January 1, 2023 to December 31, 2025). At the average annual ROCEend of the following oilfield services competitors, taken together overperformance period, the same period: Halliburton, Baker Hughes, TechnipFMC, Weatherford InternationalCommittee will certify our three-year cumulative absolute FCF margin and NOV Inc. (formerly National Oilwell Varco) (collectively,then determine the “ROCE comparator group”).percentage of shares earned based on the graph below.
The ROCE performance period for the 2020 ROCE PSUs began on January 1, 2020 and ends on December 31, 2022. These PSUs are also subject to a three-year TSR performance period under the relative TSR modifier, over the same period.2023 FCF Margin PSU Payout Matrix
Vesting of these PSUs will depend on our performance compared to the average ROCE of the ROCE comparator group.
The number of 2023 FCF Margin PSUs that will vest and convert to shares as of the vesting date can range from 0% to 250%, but of target, depending on our absolute FCF margin performance over the three-year period. In setting FCF margin performance goals in no event will payout exceed 250%.January 2023, the Committee determined to keep the minimum, target and maximum goals consistent with 2022. As illustrated in the graph below:above, no SLB shares will be earned if our FCF margin over the three-year performance period is less than the minimum performance goal of 9.0%.
FCF margin is calculated as free cash flow divided by revenue. FCF margin measures how efficiently we convert revenue into free cash flow, and is an indicator of capital efficiency and the quality of revenue. In selecting absolute FCF margin as the performance metric for 25% of our NEOs’ 2023 target LTI grant date fair value, the Committee considered that this metric was aligned with our capital allocation strategy and publicly disclosed financial objective of achieving double-digit FCF margin. The Committee also believes that tying a portion of our NEOs’ LTI payout to FCF margin encourages our executives to:
• | maintain capital discipline, | |
• | generate high quality revenue to allow for increased returns to shareholders and net debt reduction, | |
• | make key investments and capital expenditures in line with our stated growth strategy, including our energy transition strategy, and | |
• | increase SLB’s liquidity. |
The Committee also selected absolute FCF margin as the performance metric for a portion of our NEOs’ 2023 LTI awards because the Committee sought to maintain a mix of absolute (FCF margin) and relative (ROCE and TSR) metrics in the LTI plan, to effectively manage industry cycles.
Free cash flow represents cash flow from operations less capital expenditures, Asset Performance Solutions investments and exploration data costs capitalized.
42 | 2024 Proxy Statement |
In January 2023, our Compensation Committee set goals for the 2023 ROCE PSUs based on our average annual ROCE over a three-year performance period (January 1, 2023 to December 31, 2025), as compared to the average annual ROCE of the direct competitors identified below, taken together over the same period (together the ROCE comparator group). The ROCE comparator group was the same as the group used for ROCE PSU grants made to our NEOs in 2022. 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.
2023 Relative ROCE PSU Payout Matrix | |
The number of 2023 ROCE PSUs that will vest and convert to shares on the vesting date can range from 0% to 250% of target, depending on our relative ROCE performance over the three-year period. As illustrated in the graph above:
• | 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 2023 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 | |
• | ||
At the end of the ROCE and TSR performance periods, our Compensation Committee will certify our average ROCE and that of the ROCE comparator group as a whole. The Committee will then determine the percentage of shares earned based on the graph below, as adjusted for the three-year relative TSR modifier.
2020 ROCE PSU Payout Matrix
ROCE is a measure of the efficiency of our capital employed, and is a comprehensive indicator of long-term Company and management performance. We selected a relative ROCE metric because it allows us to directly compare how we deploy our capital against key comparator companies in oilfield services. Furthermore, ROCE measures performance, measured in a way that is tracked and understood by many of our investors. This is also the metric that ourOur Compensation Committee approved for the PSUs issuedhas 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 NEOs in 2019.
Our selection of ROCE as a performance metric forcapital against our 2020 PSUs isdirect competitors. The Committee also consistent with our strategic priorities. Our Compensation Committee believes that tying a partportion of our executives’ LTI paypayout to achieving our capital efficiency goals and comparing these results to that of our key oilfield services competitors will motivate our executives to continue to innovate. Our Compensationfocus on outperformance, and will result in increased revenue and improved margins. In selecting ROCE as the performance metric for 25% of our NEOs’ 2023 target LTI grant date fair value, the Committee also believesconsidered that improvements in efficiency through innovation will increase revenue and improve margins through our continued focus on pricing andROCE performance goals align executives’ potential ROCE PSU payouts with SLB’s goal of achieving ROCE above its weighted average cost control.of capital.
We calculate ROCE as a ratio, the numerator of which is (a) net 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 may adjusthas discretion to cap payouts on the Company’s income from continuing operations to take into account2023 ROCE PSUs at 100% of target in the effectevent of significant impacts or activities that are not representative of underlying business operations, such as acquisitions, divestitures,material asset impairments and restructurings.impairments.
43 |
2020 FCF Conversion PSUs:
In January 2020,2023, our Compensation Committee set goals for the 2020 FCF Conversion2023 TSR PSUs based on the percentage of our cumulative net income, excluding charges and credits, that we are able to convert to free cash flow over a two-year performance period. Our Compensation Committee set the 2020 target free cash flow conversion goal at 95%, a 36% increase from the 2019 goal, and also increased the 2020 minimum and maximum goalsrelative TSR percentile rank, as compared to 2019. The Committee also loweredthe cumulative TSR results achieved by 50% the payout that our NEOs would receive upon achievement of 100% free cash flow conversion.
Cumulative Net Income Converted to Free Cash Flow | % of Target Shares Earned (Payout %)(1) | Comparison to 2019 Goal | ||
Less than or equal to 75% | 0% | 50% Increase to Minimum Goal | ||
95% | 100% | 36% Increase to Target Goal | ||
100% | 125% | 50% Lower Payout for 100% Conversion | ||
Equal to or greater than 125% | 250% | 25% Increase to Maximum Goal |
The free cash flow conversionfour direct competitors used for the 2023 ROCE PSUs, plus the S&P Global 1200 Energy Index as a fifth comparator (each, a TSR comparator), over a three-year performance period for these PSUs began on January 1, 2020 and ends on December 31, 2021. The Committee believed it was appropriate to set two-year free cash flow conversion performance goals due to the difficulty in setting meaningful cash flow performance targets over longer time periods in our cyclical industry. These PSUs are also subject to a three-year TSR performance period under the relative TSR modifier, from January 1, 2020(January 18, 2023 to December 31, 2022.
Vesting of the 2020 FCF Conversion PSUs requires us to convert at least 75% of our cumulative net income to free cash flow over the two-year performance period. As illustrated in the table above, no shares of our common stock will be earned if our free cash flow conversion percentage is less than or equal to 75%. The number of PSUs that will convert to shares at the end of the three-year TSR performance period can range from 0% to 250%, but in no event will payout exceed 250%2025). At the end of the TSR performance period, our Compensationthe Committee will certify the three-year, cumulative free cash flowTSR results for us and net income generated byfor each TSR comparator, based on the Company overaverage of the two-year free cash flow conversion20 trading days prior to the start and end of the performance period, andperiod. The Committee will then determine our percentile rank relative to the numberfive TSR comparators, as well as the percentage of shares earned based on the table above,graph below.
2023 Relative TSR PSU Payout Matrix | |
As in 2022, the number of 2023 TSR PSUs that will vest and convert to shares as adjustedof the vesting date can range from 0% to 200% of target, depending on our relative TSR performance over the three-year period. In maintaining the maximum payout opportunity for the three-year2023 TSR PSUs at 200%, which is below the maximum payout for the 2023 FCF Margin PSUs and 2023 ROCE PSUs, the Committee considered that management’s efforts would more directly affect FCF margin and ROCE, whereas management had less control over SLB’s TSR relative to that of the TSR modifier.comparator companies, due to external market and economic influences.
Free cash flowAs illustrated by the graph above, our Compensation Committee set the target performance goal above median at the 60th percentile, consistent with 2022. No SLB shares will be earned if our three-year, cumulative TSR is an important liquidity measure forin the Company and is usefulbottom 25th percentile rank as compared to investors and to management as a measurethat of the Company’s profitability and ability to generate cash. Selecting as a performance metric the percentage of cumulative net income converted to free cash flow for these PSUs is also part of our goal to better align executive compensation with stockholder returns and encourage our executivesindividual TSR comparator companies. The Committee determined in 2023 to maintain capital discipline through business cycles. Once business needsthe same TSR comparators as it had selected in 2022, to continue motivating our NEOs to outperform both our direct competitors 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. Our Compensation Committee believes that tying a part of our NEO’s LTI payout to our efficiency in converting cumulative net income to free cash flow incentivizes our executives to increase the liquidity of the Company.
For purposes of the 2020 FCF Conversion PSUs, net income is defined as income from continuing operations before non-controlling interests, excluding charges and credits; and free cash flow represents cash flow from operations, less capital expenditures, investments in APS projects, and multiclient seismic data costs capitalized. See Appendix A for a description of the charges and credits that are excluded from net income. The terms of these PSUs allow for cash payments made in the acquisition of baseline production and investments up to first production for APS projects to be excluded from the calculation of free cash flow. The purpose of these exclusions was to avoid creating a potential disincentive to appropriately invest in the APS business. However, in 2019, as part of our change in corporate strategy, we announced that we would not take equity positions in oil and gas assets or use cash to pay upfront costs of new projects. As a result, we do not anticipate any such exclusions to our free cash flow under our 2020 FCF Conversion PSUs.
Our Compensation Committee has the discretion to adjust the Company’s income from continuing operations before noncontrolling interests 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.broader global energy market.
2024 Proxy Statement |
Payouts Under
PSUPrior LTI Awards
PSUs Vesting in 2023
2020 Payouts Under 2017 ROCE PSUs
InAs previously disclosed in the proxy statement for our 2023 AGM, in January 2017, our Compensation Committee granted PSUs to our NEOs and conditioned payout based on our average annual ROCE achieved over a three-year performance period as compared to the average annual ROCE of the ROCE comparator companies (the “2017 ROCE PSUs”).
In January 2020,2023 our Compensation Committee approved thepayout results for the 2017 ROCE PSUs using the performance criteria that the Committee had previously approved. Specifically, our Compensation Committee determined that, based on the then-available reported results of the ROCE comparator companies, the 2017 ROCE PSUs had been earned at 141% of target, based on Schlumberger’s annual average ROCE of 200 basis points above the average of the ROCE comparator group through September 30, 2019, which was at the time the most recent fiscal period end reported by all of the companies comprising the ROCE comparator group. Because not all ROCE comparator companies had reported their audited 2019 results as of Januaryissued in 2020 our Compensation Committee approved a preliminary issuance of 90% of the shares earned under the 2017 ROCE PSUs. In April 2020, once all ROCE comparator companies had released their 2019 audited financial results, the Company issued the number of additional shares determined to have been earned based on achievement of 141% of target.
2020 Payouts Under 2018 FCF Conversion PSUs
In January 2018, our Compensation Committee granted PSUs to our NEOs and conditioned payout based on the cumulative free cash flow generated from January 1, 2018 to December 31, 2019, as a percentage of cumulative net income generated over that same period, excluding charges and credits (the “2018 FCF Conversion PSUs”).
In January 2020,NEOs—other than our Compensation Committee determined that we achieved cumulative free cash flow conversion of 129% for the two-year performance period, representing achievement of 250% of target, CEO—based on the Committee’s previously-approvedpreviously approved performance criteria. AsOur CEO, Mr. Le Peuch, did not receive an LTI award in 2020 because he had received a result,PSU award in 2019 in connection with his promotion to CEO, in lieu of a 2020 award. Because Mr. Le Peuch did not receive any LTI award in 2020, he did not vest in any stock awards in 2023.
Our NEOs (other than our NEOsCEO) earned 250% of target under the 2018 FCF Conversionfree cash flow conversion PSUs issued in 2020, based on our achievement of a cumulative free cash flow conversion rate of 192% for the two-year performance period applicable to those PSUs. These shares were subject to a mandatory one-year hold period,They also earned 250% of target under the relative ROCE PSUs issued in 2020, based on (i) our absolute 2022 ROCE being 13%, and converted to non-restricted shares in January 2021.
2021 Payouts Under 2018 ROCE PSUs
In January 2018, our Compensation Committee granted PSUs to our NEOs and conditioned payout based on(ii) our average annual ROCE achieved over afor the three-year performance period as compared tobeing 407 basis points above the average annual ROCE of five of our direct competitors, taken together over the ROCE comparator companies (the “2018 ROCE PSUs”).same period. These competitors were Halliburton, Baker Hughes, TechnipFMC, Weatherford International, and NOV. For additional details, see the Option Exercises and Stock Vested in 2023 table on page 53 of this proxy statement.
PSUs and RSUs Vesting in 2024
In January 2021, our Compensation Committee approved the results for the 2018 ROCE PSUs using the performance criteria that the Committee had previously approved. Specifically, our Compensation Committee determined that, based on the then-available reported results of the ROCE comparator companies, the 2018 ROCE PSUs had been earned at 134% of target, based on Schlumberger’s annual average ROCE of 173 basis points above the average of the ROCE comparator group through September 30, 2020, which was at the time the most recent fiscal period end reported by all of the companies comprising the ROCE comparator group. Because not all ROCE comparator companies had reported their audited 2020 results as of January 2021, our Compensation Committee approved a preliminary issuance of 90% of the shares earned under the 2018 ROCE PSUs. Any additional shares finally determined to have been earned will be issued after all of the ROCE comparator companies disclose their full-year 2020 audited results.
Unvested 2019 FCF Conversion PSUs
In January 2019, our Compensation Committee granted PSUsPSU awards to our NEOs and conditioned payout based on the cumulative free cash flow generated from January 1, 2019 to December 31, 2020, as a percentage of cumulative net income generated over that same period, excluding charges and credits (the “2019 FCF Conversion PSUs”). These PSUs remain subject to a three-year TSR performance period ending December 31, 2021, and as such remain unvested. At the end of the TSR performance period, our Compensation Committee will determine the number of shares ultimately earned under the 2019 FCF Conversion PSUs.
Other Aspects of Our Executive Compensation Framework
Best Practices in Executive Compensation Governance
The following is a summary of some of our executive compensation best practices and policies.
|
|
Pay-for-Performance Relative to Our Peers
As part of our Compensation Committee’s annual review of our executive compensation program, in July 2020 the Committee directed Pay Governance to prepare a comparative pay-for-performance assessment against two sets of peer group companies:follows:
• | ||
• | For 25% of our NEOs’ 2021 target LTI opportunity, PSU payouts were conditioned based on our average annual ROCE achieved over a three-year performance period as compared to the average annual ROCE of the direct competitors in our ROCE comparator group, taken together over the same period (the 2021 ROCE PSUs). | |
• | For 25% of our NEOs’ 2021 target LTI opportunity, PSU payouts were conditioned based on our relative TSR percentile rank, as compared to the cumulative TSR results achieved by eight comparator companies in our |
The purposeIn addition, since 2021, 25% of the comparative assessment was to determine the degree of alignment between our NEOs’ realizable total direct compensation and our performance relative to these peer companies as measured by return on capital, free cash flow growth and TSR. We selected these metrics for their effectivenesstarget LTI opportunity has been awarded in assessing long-term Company performance, and because our PSU awards incorporate them as key performance metrics or modifiers. Return on capital and free cash flow growth are key inputs to shareholder value, and TSR is a primary output measurethe form of shareholder value creation.three-year, time-based RSUs. The RSUs granted in January 2021 vested in January 2024.
We assessed performance on a three- and five-year basis ending on December 31, 2019, because our Compensation Committee believes that alignment of pay and performance is more effectively assessed over the mid- and long-term. Our Compensation Committee reviewed the realizable total direct compensation of our CEO against that of other CEOs in our core competitor peer group and in our oil industry peer group. It then separately reviewed the realizable total direct compensation of our NEOs as a group against that of named executive officers at other companies comprising these two peer groups.
As a result of the assessment,In January 2024, the Committee determined thatapproved the realizable total direct compensation of our CEOresults for the 2021 FCF Margin PSUs, 2021 ROCE PSUs, and 2021 TSR PSUs using the other NEOs was generally aligned withCommittee’s previously approved performance relative to our core competitor peer group. Relative to our oil industry peer group, the Committee determined that the realizable total direct compensation of our CEO and the other NEOs was strongly aligned with return on capital performance over the five-year period. It was less aligned with free cash flow growth over the three- and five-year period and return on capital performance over the three-year period. It was also less aligned with TSR, due to the Company’s share price performance over the two periods relative to several of the integrated and E&P companies in our oil industry peer group, because upstream and integrated E&P companies generally outperformed oilfield services companies during those periods.
“Realizable total direct compensation” for each period consisted of the following:criteria.
• | ||
• | ||
2021 ROCE PSUs: The Committee determined that SLB’s average annual ROCE was 477 basis points above the |
ROCE comparator group for the | ||
Our Peer Group Companies
Our Compensation Committee considers formal executive compensation survey data prepared by Pay Governance when it reviews and determines executive compensation. The Committee also reviews information on the executive compensation practices at various peer group companies when considering changes to the Company’s executive compensation program. In addition, the relative performance metrics incorporated in our 2020 PSU awards are based on oilfield services industry-specific peer groups.
Our 2020 executive compensation program used several distinct peer groups, as summarized in the table below.
As shown in the table on the previous page, we have two main executive compensation peer groups: our oil industry peer group and our general industry peer group (our “main executive compensation peer groups”). Our Compensation Committee’s selection criteria for companies comprising the main executive compensation peer groups include:
• | ||
Our Compensation Committee, with the assistance of Pay Governance, annually reviews specific criteria and recommendations regarding companies to add to or remove from these peer groups. As a general matter, our Compensation Committee selects suitable comparator companies such that companies in each of our two main executive compensation peer groups, at the median, approximate Schlumberger’s estimated revenue in the then-current year and its then-current market capitalization. Our Compensation Committee modifies the peer group criteria as appropriate while seeking a satisfactory degree of stability, to provide a consistent basis for comparison.
In July 2019, our Compensation Committee reviewed and approved the companies constituting our two main executive compensation peer groups effective for 2020 executive compensation decisions, based on the criteria set forth in this section. At the time of the Committee’s review, Schlumberger’s full-year 2019 revenue was forecast to be approximately $33.8 billion. The companies comprising the oil industry peer group and the general industry peer group effective for relevant 2020 compensation decisions are set forth below.
Oil Industry Peer Group
The oil industry peer group comprises oil services companies with annual revenues greater than $8.4 billion, as well as upstream E&P companies and integrated oil and gas companies with annual revenues between $10.4 billion and $158.9 billion. The broad revenue range is due to the limited number of peer companies in Schlumberger’s immediate revenue range, and the fact that all other oilfield service companies have lower revenue than Schlumberger. Some members of this peer group frequently seek to recruit Schlumberger executives for their senior executive roles. See “—The Competition for Our Executive Talent” beginning on page 47.
Our 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, our Compensation Committee believed that the addition of E&P companies provided a more appropriate and complete comparator group. In addition, our Compensation Committee believed that the inclusion of E&P companies is appropriate because our executives have been hired by E&P companies in the past, and market consolidation has reduced the number of direct competitors in the oilfield services industry, thus increasing the prominence of E&P companies as competitors for our executive talent.
In July 2019, our Compensation Committee, applying the selection criteria set forth above, approved the removal of Petrofac from the oil industry peer group because it did not meet the revenue criterion described above. As a result of the foregoing, Schlumberger was in the 60th percentile of the oil industry peer group in terms of revenue, and in the 78th percentile of the oil industry peer group in terms of market capitalization.
General Industry Peer Group
The general industry peer group provides data from 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:
Our Compensation Committee considers data from the general industry peer group as it deems necessary or advisable to the extent that data from the oil industry peer group may not exist, or may be insufficient, for some executive officer positions. The general industry peer 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.
In July 2019, our Compensation Committee, applying the selection criteria set forth above, approved the removal of DowDupont from this peer group, because its annual revenue exceeded the criterion described above, as well as the addition of Accenture to this peer group. As a result of the foregoing, Schlumberger was positioned at the 53rd percentile of the general industry peer group in terms of revenue, and the 56th percentile of that peer group in terms of market capitalization.
The Competition for Our Executive Talent
A primary consideration of our 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 products and services company. Our Compensation Committee believes that delivering strong long-term stockholder returns and financial and operational results depends on our ability to attract, develop and retain the best talent globally. A highly competitive compensation package is critical to this objective.
In light of the foregoing, our Compensation Committee generally seeks to target total direct compensation for our NEOs between the 50th and 75th percentiles of our two main executive compensation 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, our CEO and CFO’s 2020 target direct compensation places them at approximately the 50th percentile among CEOs and CFOs, respectively, in our main executive compensation peer groups. An NEO’s target total direct compensation depends on a variety of factors, including tenure in a particular position, individual and Company performance, and internal pay equity.
Our Compensation Committee believes that the 50th to 75th percentile range is appropriate 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 only by our direct oilfield service competitors but by other leading oil and gas and technology- and engineering-focused companies.
In approving this target range and when setting compensation for 2020, the Committee considered that many current and former senior executive officers of leading companies in various industries have previously served as senior executives at Schlumberger.
Process for Determining Executive Compensation
Compensation Committee Evaluation Process; Role of Management
Our Compensation Committee reviews the elements of our NEOs’ total direct compensation throughout the year, to evaluate whether each element of direct compensation remains competitive with the companies in our two main executive compensation peer groups. In making compensation decisions, our Compensation Committee relies on its own judgment after its review of external market data, and also considers the following factors:
Each January, our Compensation Committee evaluates all elements of executive officer compensation, after a review of the prior year’s results and the achievement of Company financial objectives and each officer’s key 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 our Compensation 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 named executive officer 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 the Company. Our Vice President of Human Resources assists the CEO in developing the executive officers’ performance reviews and reviewing market compensation data to determine compensation recommendations for our executives.
The following table summarizes the approximate timing of significant annual executive compensation events:
Our Compensation Committee may, at its discretion, review and adjust officer compensation at other times during the year. For example, as discussed above under “Elements of Total Direct Compensation; 2020 Decisions—Annual Cash Incentive Awards—Financial Objectives,” in July 2020 the Committee approved certain modifications to our 2020 cash incentive plan in response to the effects of the COVID-19 pandemic and other factors that severely and negatively affected our industry, including the precipitous collapse in global oil demand and the resulting decline in demand for our services and products.
Granting Process for Long-Term Equity Awards
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. Management determines the allocation of such grants for groups within the Company and individual recommendations are made by the heads of the groups and approved by the CEO. Awards for executive officers other than the CEO are granted by our 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 our Compensation 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 Board meetings held quarterly, generally in mid-January, April, July and October. The timing of these committee meetings is not determined by any of the Company’s executive officers and is usually two days in advance of the Company’s announcement of earnings. Our Compensation Committee usually sets the equity award grant date as the day of the Compensation Committee meeting. The Company does not time the release of material non-public information for the purpose of affecting the values of executive compensation. At the time equity grant decisions are made, our 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 our NEOs, other senior executive officers and the rest of the Company’s eligible employees are made at the January meeting of our 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, or to achieve other key compensation objectives. Our Board and our Compensation Committee have the discretion to grant equity awards with different vesting schedules as they deem appropriate or necessary.
Role of the Independent Executive Compensation Consultant
Our 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, our Compensation Committee. Pay Governance prepares compensation surveys for review by our 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 Schlumberger’s executive compensation department to compile annual compensation data for each executive officer, and to compare the compensation opportunities of our officers with those at comparable roles at companies in our main executive compensation peer groups. Our 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 are used for the annual executive officer compensation review.
Our 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 our Compensation Committee.
Executive Stock Ownership Guidelines
Our Compensation Committee and management believe strongly in linking executive long-term rewards to stockholder value. In 2019, our Board, upon recommendation of our Nominating and Governance Committee and our Compensation Committee, adopted revised executive stock ownership guidelines applicable to our executive officers and other key position holders.
Senior executives are required to hold the numbers of shares equal to the multiple of base salary set forth below:
All executives subject to the guidelines must retain 50% of the net shares they 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 they 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.
As of December 31, 2020, all of our then-serving NEOs were in compliance with our stock ownership guidelines.
Other Executive Benefits and Policies
No Employment Agreements with Current NEOs
Historically, our named executive officers have not had employment, severance or change-in-control agreements with the Company, and serve at the will of the Board. This enables the Company to terminate their employment using judgment as to the terms of any severance arrangement and based on specific circumstances at the time they cease being executive officers. We do not enter into employment, severance or change-in-control agreements with any newly-hired executive officers.
Officer Departure Guidelines
In January 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.
The purpose of the officer departure framework is to incentivize outgoing Company officers to support their successors for a period of time; to provide for a smooth transition; to provide resources to the Company in particular areas of expertise; and to secure outgoing officers’ covenants not to compete with us and not to solicit key employees to leave us.
Under the guidelines, we may, at our discretion, enter into agreements with officers who are leaving the Company whereby they would receive annual cash payments that would generally be less than their pre-termination annual base salary. In addition, the officer would receive a prorated cash incentive award payment with respect to the year of his or her departure. The outgoing officer would also receive benefits such as medical and insurance during the agreement term, and would continue to vest in previously-granted LTI awards during the term. In exchange, the officer would agree to be available to Schlumberger for 50% of his or her business time during the term, and agree to non-competition, non-solicitation, and non-disparagement covenants.
Agreement with Former CFO
As previously disclosed in our definitive proxy statement for our 2020 annual general meeting of stockholders, Schlumberger and Mr. Ayat, our former CFO, entered into an agreement effective as of January 22, 2020 that provides for, among other things, certain benefits and payments through January 21, 2022, including a cash payment in each year of the term equal to his base salary prior to his retirement as CFO, in exchange for three-year non-competition and non-solicitation covenants on the part of Mr. Ayat. Under the terms of the agreement, Mr. Ayat agreed to devote 50% of his business time to Schlumberger as Senior Strategic Advisor to our CEO for a two-year period. Under the agreement, Mr. Ayat will also continue to participate during the term in Schlumberger’s health, welfare and insurance plans on a basis comparable to that of other U.S. employees. He also was granted a PSU award on January 16, 2020, as set forth in the “Grants of Plan-Based Awards for Fiscal Year 2020” table in this proxy statement.
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. We consider long-term benefit plans to be an important element of the total compensation package. Our pension plans provide for lifetime benefits for certain employees upon retirement after a specified number of years of service and take into account local practice with respect to retirement ages. They are designed to complement, but not be a substitute for, local government plans (which may vary considerably in terms of the replacement income they provide) and other Company-sponsored savings plans. Employees may participate in multiple retirement plans in the course of their Schlumberger careers, in which case they become entitled to a benefit from each plan based upon the benefits they earned during their years of service related to such plan. We fund these qualified plans through cash contributions based on actuarial valuations and/or regulatory requirements.
Some of our 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. 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.
Other Benefits
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 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
We provide only limited perquisites to our named executive officers, which are identified in the narrative notes to the Summary Compensation Table.
Clawback Policy for Performance-Based Cash and Equity Awards
In 2019, our Board, upon the recommendation of our Compensation Committee, adopted a revised policy regarding recoupment of performance-based incentive compensation, whether paid in the form of equity or cash, in the event of specified restatements of financial results. Under the revised policy, if financial results are restated due to fraud or other intentional misconduct, our Compensation Committee will review any performance-based or 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. Based on that review, the Committee will take such actions as it deems appropriate or necessary, including recoupment of any amounts paid in excess of the amounts that would have been paid based on the restated financial results. In addition, our performance-based equity awards and any shares of stock that are issued as a result of vesting of these awards are subject to recoupment under the terms of those awards.
Impact of Tax Treatment
Section 162(m) of the Internal Revenue Code limits the amount of compensation that may be deducted per covered employee, including each of our NEOs, to $1 million per taxable year. Thus, it is expected that compensation deductions for any covered individual will be subject to a $1 million annual deduction limitation. Although the deductibility of compensation is a consideration evaluated by our Compensation Committee, the Committee believes that the lost deduction on compensation payable in excess of the $1 million limitation for our NEOs is not material relative to the benefit of being able to attract and retain talented management. Accordingly, our Compensation Committee will continue to pay compensation that is not deductible.
Our Compensation Committee has reviewed and discussed with the Company’s management the Compensation Discussion and Analysis included in this proxy statement. Based on that review and discussion, our Compensation Committee has recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE SCHLUMBERGER BOARD OF DIRECTORS
Executive Compensation Tables and Accompanying Narrative
2020 Summary Compensation Table
The following table sets forth the compensation paid by the Company and its subsidiaries for the fiscal year ended December 31, 2020 to each of our NEOs.
Name | Year | Salary ($) | (3) | Stock Awards ($) | (4) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | (5) | Change in Pension Value & Nonqualified Deferred Compensation Earnings ($) | (6) | All Other Compensation ($) | (7) | Total ($) | |||||||||||||||
Olivier Le Peuch(1) | 2020 | 1,383,846 | — | — | 2,251,200 | 1,844,619 | 170,419 | (8) | 5,650,084 | |||||||||||||||||||
Chief Executive Officer | 2019 | 1,147,500 | 14,515,858 | — | 2,360,250 | 981,058 | 112,504 | 19,117,170 | ||||||||||||||||||||
2018 | 764,167 | 3,200,205 | — | 266,007 | 288,375 | 119,025 | 4,637,779 | |||||||||||||||||||||
Stephane Biguet | 2020 | 755,193 | 2,499,742 | — | 837,000 | 767,587 | 119,081 | (9) | 4,978,603 | |||||||||||||||||||
Executive Vice President | ||||||||||||||||||||||||||||
and Chief Financial Officer | ||||||||||||||||||||||||||||
Khaled Al Mogharbel | 2020 | 889,615 | 3,719,674 | — | 1,045,800 | 297,898 | 262,956 | (10) | 6,215,943 | |||||||||||||||||||
Executive Vice President, | 2019 | 895,000 | 5,770,142 | — | 1,423,050 | 327,754 | 211,550 | 8,627,496 | ||||||||||||||||||||
Geographies | 2018 | 834,167 | 3,200,205 | — | 315,399 | (116,122 | ) | 284,222 | 4,517,871 | |||||||||||||||||||
Ashok Belani | 2020 | 889,615 | 3,599,918 | — | 1,045,800 | 1,205,590 | 70,968 | (11) | 6,811,891 | |||||||||||||||||||
Executive Vice President, | 2019 | 900,000 | 3,599,568 | — | 1,476,000 | 968,224 | 37,209 | 6,981,001 | ||||||||||||||||||||
Schlumberger New Energy | 2018 | 900,000 | 3,597,486 | — | 340,290 | 124,870 | 65,084 | 5,027,730 | ||||||||||||||||||||
Hinda Gharbi | 2020 | 808,500 | 3,199,854 | — | 932,650 | 1,072,011 | 156,943 | (12) | 6,169,958 | |||||||||||||||||||
Executive Vice President, | 2019 | 764,167 | 4,729,651 | — | 1,176,800 | 623,734 | 186,226 | 7,480,578 | ||||||||||||||||||||
Services and Equipment | ||||||||||||||||||||||||||||
Simon Ayat(2) | 2020 | 1,038,462 | 3,999,982 | — | — | 1,105,073 | 86,171 | (13) | 6,229,688 | |||||||||||||||||||
Senior Advisor to the CEO | 2019 | 1,000,000 | 3,999,520 | — | 1,640,000 | 863,630 | 40,743 | 7,543,893 | ||||||||||||||||||||
Former Executive Vice President and | 2018 | 1,000,000 | 3,994,767 | — | 358,100 | 163,106 | 72,045 | 5,588,018 | ||||||||||||||||||||
Chief Financial Officer |
(8) | The amount disclosed for Mr. Le Peuch consists of the following: | ||||
Unfunded credits to the SLB Restoration Savings Plan | $ | 103,773 | |||
Contributions to Schlumberger 401(k) Plan | 8,550 | ||||
Perquisites: | |||||
Financial Planning Services | 4,345 | ||||
Housing Allowance | 53,751 | ||||
TOTAL | $ | 170,419 | |||
(9) | The amount disclosed for Mr. Biguet consists of the following: | ||||
Unfunded credits to the SLB Restoration Savings Plan | $ | 39,936 | |||
Contributions to Schlumberger 401(k) Plan | 8,550 | ||||
Perquisites: | |||||
Vacation Travel Allowance | 13,532 | ||||
Financial Planning Services | 3,312 | ||||
Housing Allowance | 53,751 | ||||
TOTAL | $ | 119,081 | |||
(10) | The amount disclosed for Mr. Al Mogharbel consists of the following: | ||||
Unfunded credits to the SLB Restoration Savings Plan | $ | 121,660 | |||
Contributions to Schlumberger 401(k) Plan | 17,100 | ||||
Perquisites: | |||||
Vacation Travel Allowance | 30,684 | ||||
Children’s Education | 93,512 | ||||
TOTAL | $ | 262,956 | |||
(11) | The amount disclosed for Mr. Belani consists of the following: | ||||
Unfunded credits to the SLB Restoration Savings Plan | $ | 62,418 | |||
Contributions to Schlumberger 401(k) Plan | 8,550 | ||||
TOTAL | $ | 70,968 | |||
(12) | The amount disclosed for Ms. Gharbi consists of the following: | ||||
Unfunded credits to the SLB Restoration Savings Plan | $ | 51,009 | |||
Contributions to Schlumberger 401(k) Plan | 8,550 | ||||
Perquisites: | |||||
Expatriate Tax Preparation | 2,071 | ||||
Vacation Travel Allowance | 16,437 | ||||
Children’s Education | 78,876 | ||||
TOTAL | $ | 156,943 | |||
(13) | The amount disclosed for Mr. Ayat consists of the following: | ||||
Unfunded credits to the SLB Restoration Savings Plan | $ | 71,804 | |||
Contributions to Schlumberger 401(k) Plan | 8,550 | ||||
Perquisites: | |||||
Vacation Payout | 5,817 | ||||
TOTAL | $ | 86,171 |
Grants of Plan-Based Awards for Fiscal Year 2020
The following table provides additional information about stock awards and other incentive plan awards granted to our NEOs in 2020.
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(2) | Estimated Possible Payouts Under Equity Incentive Plan Awards(3) | All Other Stock Awards: | All Other Option Awards: | Exercise | Full Grant Date Fair Value | ||||||||||||||||||||
Name | Award Type(1) | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Number of Shares of Stock or Units (#) | Number of Securities Underlying Options (#) | or Base Price of Option Awards ($/Sh) | of Stock and Option Awards ($) | (4) | ||||||||||||
O. Le Peuch | 741,300 | 1,942,500 | 4,200,000 | ||||||||||||||||||||||
S. Biguet | 271,810 | 712,250 | 1,540,000 | ||||||||||||||||||||||
FCFC PSU | 1/16/20 | 37,990 | 94,975 | 1,249,871 | |||||||||||||||||||||
ROCE PSU | 1/16/20 | 37,990 | 94,975 | 1,249,871 | |||||||||||||||||||||
K. Al Mogharbel | 317,700 | 832,500 | 1,800,000 | ||||||||||||||||||||||
FCFC PSU | 1/16/20 | 56,530 | 141,325 | 1,859,837 | |||||||||||||||||||||
ROCE PSU | 1/16/20 | 56,530 | 141,325 | 1,859,837 | |||||||||||||||||||||
A. Belani | 317,700 | 832,500 | 1,800,000 | ||||||||||||||||||||||
FCFC PSU | 1/16/20 | 54,710 | 136,775 | 1,799,959 | |||||||||||||||||||||
ROCE PSU | 1/16/20 | 54,710 | 136,775 | 1,799,959 | |||||||||||||||||||||
H. Gharbi | 288,283 | 755,417 | 1,633,334 | ||||||||||||||||||||||
FCFC PSU | 1/16/20 | 48,630 | 121,575 | 1,599,927 | |||||||||||||||||||||
ROCE PSU | 1/16/20 | 48,630 | 121,575 | 1,599,927 | |||||||||||||||||||||
S. Ayat | — | — | — | ||||||||||||||||||||||
FCFC PSU | 1/16/20 | 60,790 | 151,975 | 1,999,991 | |||||||||||||||||||||
ROCE PSU | 1/16/20 | 60,790 | 151,975 | 1,999,991 |
Outstanding Equity Awards at Fiscal Year-End 2020
The following table provides information regarding outstanding and unexercised stock options and other outstanding equity awards for each of our NEOs as of December 31, 2020.
Option Awards | Stock Awards | |||||||||||||||||||||||||||||
Name | Option/ PSU/RSU Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | (1) | Number of Securities Underlying Unexercised Option Unexercisable (#) | (1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | (2) | Equity Incentive Plan Awards Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | (2) | |||||||||||||||||
O. Le Peuch | 1/20/2011 | 27,000 | — | 83.885 | 1/20/2021 | |||||||||||||||||||||||||
1/19/2012 | 30,000 | — | 72.110 | 1/19/2022 | ||||||||||||||||||||||||||
4/18/2013 | 30,000 | — | 70.925 | 4/18/2023 | ||||||||||||||||||||||||||
4/16/2014 | 30,000 | — | 100.555 | 4/16/2024 | ||||||||||||||||||||||||||
4/16/2015 | 24,000 | — | 91.740 | 4/16/2025 | ||||||||||||||||||||||||||
4/20/2016 | 24,000 | 6,000 | 80.525 | 4/20/2026 | ||||||||||||||||||||||||||
1/19/2017 | 9,000 | 6,000 | 87.380 | 1/19/2027 | ||||||||||||||||||||||||||
1/17/2018 | 22,400 | (3) | 488,992 | |||||||||||||||||||||||||||
1/16/2019 | 44,800 | (4) | 977,984 | |||||||||||||||||||||||||||
1/16/2019 | 44,800 | (5) | 977,984 | |||||||||||||||||||||||||||
4/17/2019 | 9,770 | (4) | 213,279 | |||||||||||||||||||||||||||
4/17/2019 | 9,770 | (5) | 213,279 | |||||||||||||||||||||||||||
8/1/2019 | 154,640 | (4) | 3,375,791 | |||||||||||||||||||||||||||
8/1/2019 | 154,640 | (5) | 3,375,791 | |||||||||||||||||||||||||||
S. Biguet | 1/20/2011 | 20,000 | — | 83.885 | 1/20/2021 | |||||||||||||||||||||||||
7/21/2011 | 10,000 | — | 89.995 | 7/21/2021 | ||||||||||||||||||||||||||
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 | 22,400 | 5,600 | 61.920 | 1/21/2026 | ||||||||||||||||||||||||||
1/17/2018 | 10,500 | (3) | 229,215 | |||||||||||||||||||||||||||
1/16/2019 | 21,000 | (4) | 458,430 | |||||||||||||||||||||||||||
1/16/2019 | 21,000 | (5) | 458,430 | |||||||||||||||||||||||||||
1/15/2020 | 37,990 | (6) | 829,322 | |||||||||||||||||||||||||||
1/15/2020 | 37,990 | (7) | 829,322 | |||||||||||||||||||||||||||
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 | 91,200 | 22,800 | 61.920 | 1/21/2026 | ||||||||||||||||||||||||||
1/17/2018 | 22,400 | (3) | 488,992 | |||||||||||||||||||||||||||
1/16/2019 | 44,800 | (4) | 977,984 | |||||||||||||||||||||||||||
1/16/2019 | 44,800 | (5) | 977,984 | |||||||||||||||||||||||||||
4/17/2019 | 6,350 | (4) | 138,621 | |||||||||||||||||||||||||||
4/17/2019 | 6,350 | (5) | 138,621 | |||||||||||||||||||||||||||
4/17/2019 | 48,840 | (8) | 1,066,177 | |||||||||||||||||||||||||||
1/15/2020 | 56,530 | (6) | 1,234,050 | |||||||||||||||||||||||||||
1/15/2020 | 56,530 | (7) | 1,234,050 |
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) | |||||||||||||||||
A. Belani | 1/20/2011 | 51,600 | — | 83.885 | 1/20/2021 | |||||||||||||||||||||||||
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 | 102,400 | 25,600 | 61.920 | 1/21/2026 | ||||||||||||||||||||||||||
1/17/2018 | 25,200 | (3) | 550,116 | |||||||||||||||||||||||||||
1/16/2019 | 50,400 | (4) | 1,100,232 | |||||||||||||||||||||||||||
1/16/2019 | 50,400 | (5) | 1,100,232 | |||||||||||||||||||||||||||
1/15/2020 | 54,710 | (6) | 1,194,319 | |||||||||||||||||||||||||||
1/15/2020 | 54,710 | (7) | 1,194,319 | |||||||||||||||||||||||||||
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 | 24,000 | 6,000 | 80.525 | 4/20/2026 | ||||||||||||||||||||||||||
1/19/2017 | 3,000 | (9) | 65,490 | |||||||||||||||||||||||||||
1/17/2018 | 22,400 | (3) | 488,992 | |||||||||||||||||||||||||||
1/16/2019 | 44,800 | (4) | 977,984 | |||||||||||||||||||||||||||
1/16/2019 | 44,800 | (5) | 977,984 | |||||||||||||||||||||||||||
4/17/2019 | 36,630 | (8) | 799,633 | |||||||||||||||||||||||||||
1/15/2020 | 48,630 | (6) | 1,061,593 | |||||||||||||||||||||||||||
1/15/2020 | 48,630 | (7) | 1,061,593 | |||||||||||||||||||||||||||
S. Ayat | 1/20/2011 | 188,000 | — | 83.885 | 1/20/2021 | |||||||||||||||||||||||||
1/19/2012 | 137,000 | — | 72.110 | 1/19/2022 | ||||||||||||||||||||||||||
1/17/2013 | 80,000 | — | 73.250 | 1/17/2023 | ||||||||||||||||||||||||||
1/16/2014 | 66,000 | — | 88.765 | 1/16/2024 | ||||||||||||||||||||||||||
1/15/2015 | 89,000 | — | 77.795 | 1/15/2025 | ||||||||||||||||||||||||||
1/21/2016 | 113,600 | 28,400 | 61.920 | 1/21/2026 | ||||||||||||||||||||||||||
1/17/2018 | 28,000 | (3) | 611,240 | |||||||||||||||||||||||||||
1/16/2019 | 56,000 | (4) | 1,222,480 | |||||||||||||||||||||||||||
1/16/2019 | 56,000 | (5) | 1,222,480 | |||||||||||||||||||||||||||
1/15/2020 | 60,790 | (6) | 1,327,046 | |||||||||||||||||||||||||||
1/15/2020 | 60,790 | (7) | 1,327,046 |
Option Exercises and Stock Vested for Fiscal Year 2020
The following table sets forth certain information with respect to stock options exercised and PSUs and RSUs that vested during 2020 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 ($) (e) | ||||
O. Le Peuch | — | — | 110,134 | 3,754,999 | ||||
S. Biguet | — | — | 42,409 | 1,404,986 | ||||
K. Al Mogharbel | — | — | 102,386 | 3,462,051 | ||||
A. Belani | — | — | 112,661 | 3,854,787 | ||||
H. Gharbi | — | — | 115,628 | 3,957,732 | ||||
S. Ayat | — | — | 122,795 | 4,242,362 |
Stock Awards (Columns (d) and (e))
The following table provides details of the stock awards vested and value realized in 2020.
Name | Grant Date | Release Date | Number of Shares | Stock Price on Release Date ($) | Value Realized on Release ($) | Description | ||||||
O. Le Peuch | 1/19/2017 | 1/17/2020 | 3,800 | 39.075 | 148,485 | Shares underlying vested RSUs | ||||||
4/20/2017 | 1/17/2020 | 28,426 | 39.075 | 1,110,746 | Shares underlying vested PSUs | |||||||
4/20/2017 | 4/3/2020 | 3,158 | 14.190 | 44,812 | Shares underlying vested PSUs | |||||||
10/18/2017 | 10/16/2020 | 20,000 | 15.580 | 311,600 | Shares underlying vested RSUs | |||||||
1/17/2018 | 1/17/2020 | 54,750 | 39.075 | 2,139,356 | Shares underlying vested PSUs | |||||||
S. Biguet | 1/19/2017 | 1/17/2020 | 6,218 | 39.075 | 242,968 | Shares underlying vested PSUs | ||||||
1/19/2017 | 4/3/2020 | 691 | 14.190 | 9,805 | Shares underlying vested PSUs | |||||||
10/18/2017 | 10/16/2020 | 10,000 | 15.580 | 155,800 | Shares underlying vested RSUs | |||||||
1/17/2018 | 1/17/2020 | 25,500 | 39.075 | 996,413 | Shares underlying vested PSUs | |||||||
K. Al Mogharbel | 1/19/2017 | 1/17/2020 | 24,872 | 39.075 | 971,873 | Shares underlying vested PSUs | ||||||
1/19/2017 | 4/3/2020 | 2,764 | 14.190 | 39,221 | Shares underlying vested PSUs | |||||||
10/18/2017 | 10/16/2020 | 20,000 | 15.580 | 311,600 | Shares underlying vested RSUs | |||||||
1/17/2018 | 1/17/2020 | 54,750 | 39.075 | 2,139,356 | Shares underlying vested PSUs | |||||||
A. Belani | 1/19/2017 | 1/17/2020 | 28,045 | 39.075 | 1,095,858 | Shares underlying vested PSUs | ||||||
1/19/2017 | 4/3/2020 | 3,116 | 14.190 | 44,216 | Shares underlying vested PSUs | |||||||
10/18/2017 | 10/16/2020 | 20,000 | 15.580 | 311,600 | Shares underlying vested RSUs | |||||||
1/17/2018 | 1/17/2020 | 61,500 | 39.075 | 2,403,113 | Shares underlying vested PSUs | |||||||
H. Gharbi | 1/19/2017 | 1/17/2020 | 4,500 | 39.075 | 175,838 | Shares underlying vested RSUs | ||||||
7/19/2017 | 1/17/2020 | 32,740 | 39.075 | 1,279,316 | Shares underlying vested PSUs | |||||||
7/19/2017 | 4/3/2020 | 3,638 | 14.190 | 51,623 | Shares underlying vested PSUs | |||||||
10/18/2017 | 10/16/2020 | 20,000 | 15.580 | 311,600 | Shares underlying vested RSUs | |||||||
1/17/2018 | 1/17/2020 | 54,750 | 39.075 | 2,139,356 | Shares underlying vested PSUs | |||||||
S. Ayat | 1/19/2017 | 1/17/2020 | 31,091 | 39.075 | 1,214,881 | Shares underlying vested PSUs | ||||||
1/19/2017 | 4/3/2020 | 3,454 | 14.190 | 49,012 | Shares underlying vested PSUs | |||||||
10/18/2017 | 10/16/2020 | 20,000 | 15.580 | 311,600 | Shares underlying vested RSUs | |||||||
1/17/2018 | 1/17/2020 | 68,250 | 39.075 | 2,666,869 | Shares underlying vested PSUs |
Pension Benefits for Fiscal Year 2020
We maintain the following pension plans for our named executive officers and other employees, which provide for lifetime pensions upon retirement, based on years of service:
The following table and narrative disclosure set forth certain information with respect to pension benefits payable to our named executive officers.
Name | Plan Name | Number of Years of Credited Service (#) | (1) | Present Value of Accumulated Benefits ($) | (2) | Payments During Last Fiscal Year | ||||
O. Le Peuch | STC Pension Plan | 10.75 | 904,529 | — | ||||||
STC Supplementary Plan | 7.25 | 1,537,466 | — | |||||||
SLB Supplementary Plan | 2.00 | 1,736,013 | — | |||||||
SLB International Staff Pension Plan | 6.50 | 2,941,068 | — | |||||||
S. Biguet | STC Pension Plan | 6.41 | 491,600 | — | ||||||
SLB Supplementary Plan | 4.00 | 1,255,222 | — | |||||||
SLB International Staff Pension Plan | 3.70 | 261,041 | — | |||||||
K. Al Mogharbel | SLB International Staff Pension Plan | 16.20 | 1,937,688 | — | ||||||
A. Belani | STC Pension Plan | 18.33 | 1,464,621 | — | ||||||
STC Supplementary Plan | 2.58 | 139,568 | — | |||||||
SLB Supplementary Plan | 15.75 | 6,465,427 | — | |||||||
SLB International Staff Pension Plan | 10.00 | 704,150 | — | |||||||
H. Gharbi | STC Pension Plan | 5.26 | 364,284 | — | ||||||
SLB Supplementary Plan | 2.00 | 895,121 | — | |||||||
SLB International Staff Pension Plan | 9.80 | 1,710,289 | — | |||||||
S. Ayat | STC Pension Plan | 15.00 | 1,183,802 | — | ||||||
STC Supplementary Plan | 0.50 | 5,500 | — | |||||||
SLB Supplementary Plan | 14.25 | 6,626,792 | — | |||||||
SLB International Staff Pension Plan | 10.60 | 893,590 | — |
Tax-Qualified Pension Plans
The STC Pension Plan and the SLB USAB Pension Plan are U.S. tax-qualified pension plans. Employees may participate in any one of these plans during the course of their careers with Schlumberger, in which case they become entitled to a pension from each such plan based upon the benefits accrued during the years of service related to such plan. These plans are funded through cash contributions made by the Company and its subsidiaries based on actuarial valuations and regulatory requirements. Benefits under these plans are based on an employee’s admissible compensation (generally base salary and cash incentive) for each year in which an employee participates in the plan, and the employee’s length of service with Schlumberger.
Since 1989, the benefit earned under the STC Pension Plan has been 1.5% of admissible compensation for service prior to the employee’s completion of 15 years of active service and 2% of admissible compensation for service after completion of 15 years of active service. Since 2009, the benefit earned under the SLB USAB Pension Plan has been 3.5% of admissible compensation for all service. Normal retirement under these plans is at age 65; however, early retirement with a reduced benefit is possible at age 55 or as early as age 50 with 20 years of service. Mr. Ayat is eligible for normal retirement, and Mr. Biguet and Ms. Gharbi are eligible for early retirement with a reduced pension. Additionally, under the “rule of 85,” an employee or executive officer who terminates employment after age 55 and whose combined age and service is 85 or more, is eligible for retirement with an unreduced pension. Messrs. Le 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 STC Pension Plan to generally provide that employees hired on or after October 1, 2004 would not be eligible to participate. Newly-hired employees are eligible to participate in an enhanced defined contribution plan, which provides a Company contribution, depending on an employee’s 401(k) contribution and the profitability of the Company in a given year.
Schlumberger Supplementary Benefit Plans—Nonqualified Pension
The SLB Supplementary Plan and the STC Supplementary Plan each provide non-tax-qualified pension benefits. Each of these plans, which have substantially identical terms, provides an eligible employee with benefits equal to the benefits that the employee is unable to receive under the applicable qualified pension plan due to the Internal Revenue Code limits on (i) annual compensation that can be taken into account under qualified plans and (ii) annual benefits that can be provided under qualified plans.
The retirement age under nonqualified pension plans is the same as under the tax-qualified pension plans. These benefits are subject to forfeiture if the employee leaves the Company or its subsidiaries before the age of 50 with five years of service, engages in certain dishonest acts or has violated a confidentiality arrangement involving the Company or its affiliates. Nonqualified plan reduced benefits are paid to an employee upon separation from service, provided the employee has attained the age of 55, or if earlier, the age of 50 with 20 years of service. Messrs. Le Peuch and Belani are eligible for retirement with an unreduced pension under the rule of 85, described above. Mr. Ayat is eligible for normal retirement, and 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).
International Staff Pension Plan
Recognizing the need to maintain a high degree of mobility for certain of the Company’s employees who otherwise would be unable to accumulate any meaningful pension because they are required to work in many different countries, the Company maintains the SLB International Staff Pension Plan for such employees. All of the Company’s named executive officers have either been in the SLB International Staff 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, along with mandatory contributions by employees.
Prior to 2010, benefits under this plan were based on a participant’s admissible compensation (base salary, geographical or rotational coefficient, as applicable, and cash incentive) for each year in which the employee participated in the plan and the employee’s length of service.
The benefit earned up to December 31, 2009 is 2.4% of admissible compensation prior to completion of 15 years of service, and 3.2% of admissible compensation for each year of service after 15 years. Following the completion of 20 years of service, the benefit earned with respect to the first 15 years of service is increased to 3.2%. Benefits are payable upon normal retirement age, at or after age 55, or upon early retirement with a reduction, at or after age 50 with 20 years of service. With respect to pension rights accrued prior to 2010, Messrs. Le Peuch, Belani and Ayat are eligible for normal retirement with no 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 at or after age 55 with a reduced pension. None of our NEOs are currently eligible for normal or early retirement with respect to pension rights accrued since 2010.
Nonqualified Deferred Compensation for Fiscal Year 2020
The following table and narrative disclosure set forth certain information with respect to nonqualified deferred compensation payable to the NEOs.
Name | Plan Name | Executive Contributions in Last FY ($) | (1) | Company Contributions in Last FY ($) | (2) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) | (3) | ||||||
O. Le Peuch | SLB Supplementary Plan | — | — | 11,674 | — | 105,960 | |||||||||
SLB Restoration Savings Plan | 1,037,729 | 103,773 | 166,688 | — | 2,325,005 | ||||||||||
International Staff Plan | — | — | 205,947 | — | 1,512,487 | ||||||||||
S. Biguet | SLB Supplementary Plan | — | — | 608 | — | 18,352 | |||||||||
SLB Restoration Savings Plan | 199,679 | 39.936 | 111,016 | — | 581,512 | ||||||||||
International Staff Plan | — | — | 60,361 | — | 443,293 | ||||||||||
K. Al Mogharbel | SLB Supplementary Plan | — | — | 19,695 | — | 168,128 | |||||||||
SLB Restoration Savings Plan | 405,533 | 121,660 | 246,804 | — | 2,216,463 | ||||||||||
International Staff Plan | — | — | 103,283 | — | 758,518 | ||||||||||
A. Belani | SLB Supplementary Plan | — | — | 80,214 | — | 784,734 | |||||||||
SLB Restoration Savings Plan | 124,837 | 62,418 | 172,802 | — | 3,402,700 | ||||||||||
International Staff Plan | — | — | 112,539 | — | 1,356,894 | ||||||||||
H. Gharbi | SLB Restoration Savings Plan | 102,018 | 51,009 | 77,697 | — | 247,424 | |||||||||
International Staff Plan | — | — | 97,668 | — | 717,282 | ||||||||||
S. Ayat | SLB Supplementary Plan | — | — | 89,550 | — | 874,447 | |||||||||
SLB Restoration Savings Plan | 718,038 | 71,804 | 557,604 | — | 4,881,749 | ||||||||||
International Staff Plan | — | — | 302,701 | — | 2,256,122 |
Supplementary Benefit Plans—Non-Qualified Profit Sharing
The SLB Supplementary Plan provides certain non-tax-qualified defined contribution benefits for eligible employees, including named executive officers. Schlumberger Technology Corporation, an indirect wholly-owned subsidiary of Schlumberger Limited, maintains the STC Supplementary Plan with substantially identical terms.
The SLB Supplementary Plan and the STC Supplementary Plan provide an eligible employee with discretionary Company profit sharing contributions that are not permissible under the applicable tax-qualified plan due to Internal Revenue Code limits on (1) annual compensation that can be taken into account under the qualified plan and (2) annual benefits that can be provided under the qualified plan. These nonqualified plan benefits are credited with earnings and losses as if they were invested in the qualified plan, with the same employee investment elections as the qualified plan. An employee forfeits all rights under the non-qualified plans if the employee terminates employment before completing four years of service, engages in certain dishonest acts or has violated a confidentiality arrangement involving the Company or its affiliates. These nonqualified plan benefits are paid in a lump-sum payment following the end of the year in which the employee terminates active service, or the employee can elect to receive payment in installments of five or ten years following the termination of service. If the employee dies before full payment of these benefits, the unpaid benefits are paid in a lump sum to the beneficiaries designated under the applicable qualified plan. Payment to key employees is delayed six months following separation from service.
Restoration Savings Plans
The SLB Restoration Savings Plan, a non-qualified deferred compensation plan, provides certain defined contribution benefits for our named executive officers and other eligible employees. The SLB Restoration Savings Plan allows an eligible employee to defer compensation (and receive an associated employer match) that the employee cannot defer under the applicable tax-qualified plan because of Internal Revenue Code limits on the amount of compensation that can be taken into account. Schlumberger Technology Corporation maintains the STC Restoration Savings Plan with substantially identical terms (the SLB Restoration Savings Plan and the STC Restoration Savings Plan together are referred to herein as the Schlumberger Restoration Savings Plans).
An eligible employee may elect in advance to defer a percentage (from 1% to 50%) of his or her compensation (generally base salary and cash incentive) over the Internal Revenue Code annual compensation limits. The election cannot be changed during the year. The Company makes matching contributions with respect to each employee’s deferrals. For employees who participate in a Schlumberger pension plan, the amount of the matching contribution is equal to one-half of the first 6% deferred by the employee. For employees who do not participate in a Schlumberger pension plan, the matching contribution is 100% of the first 6% deferred by the employee. The match is made each payroll period and is not contingent on profitability of the Company. Employees’ accounts are credited with earnings, calculated to mirror the earnings of the relevant funds under the Schlumberger Master Profit Sharing Trust as chosen by the employee. If the employee is eligible for the SLB Savings and Profit Sharing Plan, matching contributions and related earnings vest based on the employee’s years of service, as follows:
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:
An employee’s account fully vests on his or her death, his or her 60th birthday or plan termination. An employee’s vested account balance is paid in a single lump sum (subject to tax withholding) following the participant’s death, qualifying disability, retirement or other qualifying termination of employment or, subject to certain limitations, the employee can elect to receive payment in installments of five or ten years 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 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. 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
Based on the methodology described below, our CEO’s 2020 total compensation was 93 times that of our median employee based on his compensation actually received in 2020, and 267 times that of our median employee after including the LTI grant that he received in 2019 upon his appointment as CEO.
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, as an international company, we operate our business with large employee populations in many different countries, including countries with significantly lower employee wages than in the United States. Companies with primarily U.S.- or European-based workforces, in general, have a higher-paid median employee and lower reported pay ratio than companies with significant international operations and a meaningful employee base in lower wage countries. In addition, factors such as different exchange rates can affect a company’s pay ratio.
The pay ratio set forth above is a reasonable estimate of the annual total compensation of our median employee as compared to the 2020 total compensation of our CEO, calculated in a manner consistent with SEC rules based on our human resources systems of record and the methodology described in this section. The SEC rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices; as a result, and as discussed above, the pay ratio reported by other companies may not be comparable to the pay ratio that we report, as other companies may have different employment and compensation practices, different types of workforce, and operate in different countries, and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
How We Identified Our Median Employee
We determined that, as of October 2, 2020, we had 82,376 employees working in 98 countries. This is the number of all employees on our different payroll systems as of that date, other than those employees of joint ventures whose salaries and compensation we do not set or control. In line with our global operations, we follow local market practices regarding pay levels and pay elements. In some cases, these local practices include paying relatively lower base salaries (upon conversion to U.S. dollars), plus additional compensation elements such as coefficients, housing, schooling, utilities and other standard payments. We have excluded from our calculation of our median employee all employees located in the following countries, where either we have very few employees or where local pay practices diverge significantly from U.S. and European practices (all excluded employees collectively representing less than 5% of our total employees in 2020): Argentina, Bangladesh, Cameroon, Georgia, Hungary, Ivory Coast, Jordan, Kazakhstan, Libya, Mozambique, Pakistan, Papua New Guinea, Philippines, Senegal, South Sudan, Suriname, Tanzania, Tunisia, Uganda, Uruguay, Uzbekistan and Venezuela. After excluding these employees and for purposes of determining our median employee, we had 78,279 employees working in 76 countries. We did not make any cost-of-living adjustments when identifying our median employee.
A variety of pay elements comprise our employees’ total compensation, including base salary, field bonuses, annual performance-based cash incentives, commissions, and other benefits. The incentive awards an employee is eligible for are based on his or her pay grade and reporting level, and are consistently applied across the Company. Cash incentives, rather than equity, are the primary vehicle of incentive compensation for most of our employees. While all employees earn an annual base salary, not all receive cash incentive payments. Furthermore, fewer than three percent 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. We used the annual base salary of our employees as reflected in our human resources systems on October 2, 2020, excluding that of our CEO, in preparing our data set.
Using this methodology, we determined that our median employee was a full-time, salaried employee working in Nigeria as a technical sales professional, whose 2020 total compensation was $60,444. To calculate that employee’s total compensation, we first calculated all of the elements of his or her compensation for 2020 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. We then converted his or her total compensation to U.S. dollars, using a blended exchange rate representing the average exchange rate during 2020, resulting in an exchange rate of 353 Nigerian Naira to each U.S. dollar.
How We Calculated Our CEO’s Total Compensation
We used both of the approaches below to calculate the 2020 total compensation of our CEO:
Potential Payments Upon Termination or Change in Control for Fiscal Year 2020
No Additional Payments Upon Termination or Change in Control
Our named executive officers generally receive the same benefits as our other employees. As is the case with other compensation arrangements, any differences are generally due to local (country-specific) requirements. In line with this practice, our currently serving named executive officers do not have employment agreements, “golden parachutes” or change in control agreements. The Company’s executive officers serve at the will of the Board, which enables the Company to terminate their employment using judgment as to the terms of any severance arrangement and based on specific circumstances at the time they cease being executive officers.
All employees who receive equity awards, including our NEOs, are subject to the same terms and conditions in the event of a termination or change in control, except for certain stock options that were assumed in connection with our acquisition of Cameron, none of which are held by the NEOs.
Termination of Employment
Stock Options
Prior to 2017, SLB granted a significant portion of its LTI compensation to executives in the form of stock options. Beginning in 2017, SLB ended its practice of granting stock options to executive officers. As of December 31, 2023, all of our NEOs’ outstanding stock options were “underwater.”
Our Compensation Committee has approved guidelines covering, among other things, LTI vesting, salary, benefits, and other compensation matters for officers departing SLB, 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 referenced by management 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 SLB during the agreement term and receive annual cash payments that would generally be less than their pre-termination annual base salary. In addition, outgoing officers would receive a prorated STI award payment with respect to the year of their departure. They would also receive benefits such as medical coverage and life and disability 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 agreement term. In exchange, the outgoing officers must agree to non-competition, non-solicitation, and non-disparagement covenants, and generally would agree to be available to SLB for a portion of their business time during the term.
2024 Proxy Statement | 45 |
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 SLB minimum standard, we generally enhance the local plans to meet the SLB standard plan. 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 our aim to encourage long-term careers with SLB 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 54 of this proxy statement.
We provide only limited perquisites to our NEOs, which are identified in the footnotes to the Summary Compensation Table.
A primary consideration of our Compensation Committee in overseeing our executive compensation program is the need to motivate and retain what it believes is the best executive talent in our industry. We are a global technology company, driving energy innovation for a balanced planet, and the Committee believes that delivering financial and operational outperformance and long-term shareholder returns depends on our ability to attract, develop, and retain the best talent globally. A highly competitive compensation package is critical to this objective.
As a result, the Committee generally seeks to target total compensation for our NEOs between the 50th and 75th percentiles of our two main executive compensation peer groups. The Committee may also position an NEO who is new to a position at or below the 50th percentile for a period of time. An NEO’s target total compensation depends on a variety of factors, including tenure in a particular position, individual and Company performance, and internal pay equity.
Competition for executive talent in our industry is exceptionally fierce. The Committee believes that the 50th to 75th percentile range is appropriate for us to target in light of SLB’s leading position in our industry, and because our executives are very highly sought after, both by our direct competitors and by other leading oil and gas, advanced extractive, technology-driven manufacturing, and engineering-focused companies, including companies focused on the new energy economy.
In approving this target range and when setting compensation for 2023, the Committee considered that many current and former senior executives of leading companies in various industries have previously served in senior management at SLB. Former members of senior SLB management have either been, or are, senior executives at the competitors, customers, and other technology- and engineering-focused companies listed in the table below.
Engie (current CEO) | BAE Systems* (current CEO, CFO & CHRO) | Bureau Veritas (current CEO) | TechnipFMC* (current CEO and CTO) | |||
Baker Hughes* (current CHRO, and past CLO) | Patterson-UTI Energy (current CEO) | CGG (current CEO and past CFO) | Amazon Web Services (current senior executive) | |||
Nabors (current CFO) | NESR (current CEO, CFO and COO) | Jacobs (current CFO) | Technip Energies (current CLO) | |||
Lufkin Industries (current CEO) | Borr Drilling (current CEO) | ADM (current CLO) | Air Liquide (current CHRO) | |||
ConocoPhillips* (past CTO) | Expro (current CEO) | Flowserve (current CEO) | Archer (current CEO) | |||
TotalEnergies (past CHRO) | YPF (past CEO) | Weatherford (past acting CEO and CFO) | Kuwait Airways (past CEO) |
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 our main executive compensation peer groups |
46 | 2024 Proxy Statement |
Our Compensation Committee considers formal executive compensation survey data prepared by Pay Governance when it reviews and determines executive compensation, and when considering changes to our executive compensation program. The Committee considers data for the companies comprising our two main executive compensation peer groups—our core industry peer group and our general industry peer group. The Committee believes these peer groups together provide the robust market data necessary to assess the current and future talent markets available to our executive officers, both in the oil and gas sector and in other 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 other industries. In addition, the evolving energy industry environment creates challenges in maintaining a robust peer group comprising solely oilfield services and upstream companies following consolidations and bankruptcies, as well as diversification into new energy investments.
The Committee annually reviews the specific selection criteria for our main executive compensation peer groups, such as competition for business or executive talent, revenue, market capitalization, and scope of international operations. Pay Governance annually recommends for the Committee’s review the addition or removal of companies from these peer groups, based on the Committee’s selection criteria. As a general matter, the Committee selects suitable comparator companies such that the companies in these peer groups, at the median, approximate SLB’s estimated revenue in the then-current year and its then-current market capitalization. The Committee modifies its peer group criteria as appropriate while seeking a satisfactory degree of stability, to provide a consistent basis for comparison.
In July 2022, our Compensation Committee reviewed and approved the companies listed below to comprise our two main executive compensation peer groups, effective for 2023 executive compensation decisions.
Core Industry Peer Group | |
This peer group comprises ten companies in the energy sector, primarily in the oilfield services and equipment and upstream oil and gas industries, with 2022 estimated revenues (as of July 2022) between $6.7 billion and $73.7 billion. The Committee identified the companies in this peer group as being broadly comparable to SLB in terms of revenue and market value, and also competing with us for business and executive talent. Several members of this peer group frequently seek to recruit SLB executives for their senior executive roles. See “—Competition for Our Executive Talent” on page 46. In July 2022, applying the selection criteria above, our Compensation Committee removed Imperial Oil from this peer group and added Enbridge, after considering Enbridge’s growing renewable energy segment. As a result, SLB was positioned at the 47th percentile of this peer group in terms of estimated 2022 revenue as of July 2022, and at the 59th percentile of this peer group in terms of market capitalization as of April 2022. | Baker Hughes BHP Group ConocoPhillips Enbridge EOG Resources Halliburton NOV Occidental Petroleum Suncor Energy TechnipFMC |
General Industry Peer Group | ||
This peer group comprises 27 mature, advanced extractive, technology-driven manufacturing, and industrial engineering-focused companies, including companies focused on the new energy economy, that have annual revenues, market valuations, and global scopes that are similar to SLB’s. The companies in this peer group had 2022 estimated revenues (as of July 2022) between $12.1 billion and $60.1 billion and average non-U.S. revenue of 61%. This peer group focuses on SLB’s current and future executive talent markets beyond the oil and gas sector, and ensures that competitors for technology and digital talent are represented for executive peer benchmarking purposes. In July 2022, applying the selection criteria above, our Compensation Committee added Oracle and Siemens Energy to this peer group, in light of SLB’s digital and renewable energy strategies, respectively. As a result, SLB was positioned at the 37th percentile of this peer group in terms of estimated 2022 revenue as of July 2022, and at the 58th percentile of this peer group in terms of market capitalization as of April 2022. | 3M Company ABB Air Products and Chemicals Anglo American BAE Systems Carrier Global Caterpillar Compagnie de Saint-Gobain Corning Deere & Company Dow DuPont de Nemours Eaton Emerson Electric | Freeport-McMoRan General Dynamics Honeywell International Johnson Controls International Koninklijke Philips Linde LyondellBasell Industries Oracle Rio Tinto Rolls-Royce Holdings Schneider Electric Siemens Energy Trane Technologies |
2024 Proxy Statement | 47 |
Our NEOs do not have employment, severance or change-in-control agreements with SLB, and they serve at the will of the Board. This sectionenables SLB to terminate their employment using judgment as to the necessity or terms of any severance arrangement and based on specific circumstances at the time they cease being executive officers.
Our Board and Compensation Committee strongly believe in linking executive long-term rewards to shareholder value. Our executive stock ownership guidelines require our executives to hold a minimum dollar value of SLB shares based on the table below.
Title | Stock Ownership Multiple |
Chief Executive Officer | 6x base salary |
Executive Vice Presidents | 3x base salary |
Executive officers (non-EVP) | 2x base salary |
Other EVP direct reports and Presidents | 1x base salary |
Our executive officers must retain 50% of the net shares they 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.
Under the guidelines, our 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 they acquire upon stock option exercises and any vesting of PSUs and RSUs until they achieve their required ownership level. Stock ownership for the purpose of these guidelines does not include shares underlying vested or unvested stock options, unvested RSUs, or unvested PSUs.
As of January 31, 2024, all of our NEOs were in compliance with our stock ownership guidelines.
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 SLB shares. In addition, our executive officers and directors, as well as certain other key employees, are prohibited from holding SLB securities in a margin account or pledging SLB 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 SLB securities in a margin account or pledging SLB securities.
Our Compensation Committee reviews the elements of our NEOs’ total 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, including analyses prepared by Pay Governance, and also considers the following factors:
• | each 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 and risks, | |
• | 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 SLB. Our Chief People Officer assists the CEO in developing the other executives’ performance reviews and reviewing external market data to determine the CEO’s executive compensation recommendations. Our Chief People Officer also meets with the Compensation Committee on a quarterly basis.
48 | 2024 Proxy Statement |
The table below summarizes the consequencesapproximate timing of significant annual executive compensation events.
Event | Timing | |
Establish Company financial objectives and CEO strategic personal objectives | Early 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 market data and analysis that our Compensation Committee uses 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 STI payout based on those results | Results approved in January of each year for STI award with respect to the prior year. The STI award 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 |
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 shareholder dilution impact and burn rate, which is the rate at which awards are granted as a percentage of SLB 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.
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 SLB’s Total Rewards team 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.
In 2023, our Board adopted a new clawback policy requiring the recovery of performance-based equity and cash incentive compensation from our executive officers under certain circumstances. A copy of this policy is filed as Exhibit 97 to our 2023 Annual Report and is incorporated into this CD&A by reference.
2024 Proxy Statement | 49 |
The following table sets forth information regarding the total compensation paid to our NEOs for fiscal years 2023, 2022 and 2021.
Name | Year | Salary ($) | Stock Awards ($) | (1) | Non-Equity Incentive Plan Compensation ($) | (2) | Change in Pension Value & Nonqualified Deferred Compensation Earnings ($) | (3) | All Other Compensation ($) | (4) | Total ($) | |||
Olivier Le Peuch Chief Executive Officer | 2023 | 1,550,000 | 12,000,045 | 3,502,150 | 1,022,545 | 174,845 | 18,249,585 | |||||||
2022 | 1,550,000 | 11,999,949 | 1,929,750 | — | 234,058 | 15,713,757 | ||||||||
2021 | 1,400,000 | 10,499,803 | 3,916,100 | 802,703 | 176,896 | 16,795,502 | ||||||||
Stephane Biguet Executive Vice President and Chief Financial Officer | 2023 | 850,000 | 3,500,022 | 1,283,100 | 620,773 | 116,672 | 6,370,567 | |||||||
2022 | 850,000 | 3,499,993 | 690,650 | — | 139,327 | 5,179,970 | ||||||||
2021 | 770,000 | 3,199,750 | 1,458,400 | 462,189 | 127,749 | 6,018,088 | ||||||||
Khaled Al Mogharbel Executive Vice President, Geographies | 2023 | 900,000 | 3,500,022 | 1,357,650 | 116,813 | 118,275 | 5,992,760 | |||||||
2022 | 900,000 | 3,499,993 | 731,250 | — | 169,951 | 5,301,194 | ||||||||
2021 | 900,000 | 3,499,787 | 1,715,850 | — | 244,569 | 6,360,206 | ||||||||
Abdellah Merad Executive Vice President, Core Services and Equipment | 2023 | 800,000 | 3,500,022 | 1,213,600 | 80,154 | 235,407 | 5,829,183 | |||||||
2022 | 787,500 | 3,499,995 | 620,150 | — | 290,716 | 5,198,361 | ||||||||
Dianne Ralston Chief Legal Officer and Secretary | 2023 | 750,022 | 3,199,909 | 1,137,750 | 270,729 | 78,435 | 5,436,845 | |||||||
2022 | 750,022 | 3,199,948 | 581,250 | 361,028 | 94,160 | 4,986,408 | ||||||||
(1) | Includes the value of PSU and RSU awards. For 2023, each amount reflected in the “Stock Awards” column is the aggregate grant date fair value of (x) the 2023 FCF Margin PSUs, 2023 ROCE PSUs and 2023 TSR PSUs at target level performance, and (y) the 2023 RSUs that were granted to our NEOs. Each amount reflects an accounting expense and does not correspond to actual value that may be realized by an NEO in the future. The number of equity awards granted in 2023 to each NEO is provided in the Grants of Plan-Based Awards in 2023 table on page 51. PSUs and RSUs do not pay dividends or dividend equivalents or have voting rights prior to vesting. Accordingly, the fair value of the 2023 FCF Margin PSUs, 2023 ROCE PSUs and 2023 RSUs was the quoted market price of our common stock on the grant date less the present value of the expected dividends not received prior to vesting. The fair value of the 2023 TSR PSUs was determined based on a Monte Carlo simulation. Amounts may not add to the values shown in Grants of Plan-Based Awards in 2023 table due to rounding. Additional assumptions that we use in calculating these amounts are incorporated herein by reference to Note 12, “Stock-based Compensation Plans” to the Consolidated Financial Statements contained in our 2023 Annual Report. |
The value of each NEO’s 2023 LTI grants at the grant date, assuming achievement of the maximum performance level for all PSUs, would be: Mr. Le Peuch — $24,000,091; Mr. Biguet — $7,000,044; Mr. Al Mogharbel — $7,000,044; Mr. Merad — $7,000,044; and Ms. Ralston — $6,399,819. | |
The NEOs may never realize any value from these LTI grants and, to the extent that they do, the amounts realized may have no correlation to the amounts reported above. | |
(2) | STI awards to our NEOs are reflected in the “Non-Equity Incentive Plan Compensation” column; as a result, we have excluded the “Bonus” column. |
(3) | The changes in pension value reported in this column represent the increase in the actuarial present value of an NEO’s accumulated benefit under all benefit and actuarial pension plans in which the NEO participates. This change in present value is not a current cash payment. It represents the change in the value of the NEO’s pensions, which are only paid after retirement. There are no nonqualified deferred compensation earnings reflected in this column because no NEO received above-market or preferential earnings on such compensation during 2023, 2022 or 2021. |
(4) | Relocation assistance is provided to all employees on a company-wide basis. The amount disclosed for Mr. Le Peuch consists of unfunded credits to the Restoration Savings Plan ($94,493), employer contributions to the SLB 401(k) Plan ($16,500), financial planning services ($13,800), and housing allowance ($50,052). The amount disclosed for Mr. Biguet consists of unfunded credits to the Restoration Savings Plan ($36,320), employer contributions to the SLB 401(k) Plan ($16,500), financial planning services ($13,800), and housing allowance ($50,052). The amount disclosed for Mr. Al Mogharbel consists of unfunded credits to the Restoration Savings Plan ($78,075), employer contributions to the SLB 401(k) Plan ($26,400), and financial planning services ($13,800). The amount disclosed for Mr. Merad consists of unfunded credits to the Restoration Savings Plan ($65,409), employer contributions to the SLB 401(k) Plan ($26,400), financial planning services ($13,800), vacation travel allowance ($22,856), and children’s education ($106,942). The amount disclosed for Ms. Ralston consists of unfunded credits to the Restoration Savings Plan ($30,038), employer contributions to the SLB 401(k) Plan ($26,400), financial planning services ($13,800), and club membership ($8,197). |
50 | 2024 Proxy Statement |
The following table provides additional information regarding cash incentive and PSU and RSU awards granted to our NEOs in 2023.
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(2) | Estimated Possible Payouts Under Equity Incentive Plan Awards(3) | All Other Stock | Grant Date Fair Value of Stock | ||||||||||||||||||||
Name | Award Type | (1) | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Awards (#) | (4) | Awards ($) | (5) | ||||||||||
O. Le Peuch | 818,400 | 2,092,500 | 4,652,325 | ||||||||||||||||||||
FCFM PSU | 1/18/23 | 27,052 | 54,103 | 135,258 | 3,000,011 | ||||||||||||||||||
ROCE PSU | 1/18/23 | 1 | 54,103 | 135,258 | 3,000,011 | ||||||||||||||||||
TSR PSU | 1/18/23 | 12,014 | 48,054 | 96,108 | 3,000,011 | ||||||||||||||||||
3-year RSU | 1/18/23 | 54,103 | 3,000,011 | ||||||||||||||||||||
S. Biguet | 297,500 | 765,000 | 1,700,850 | ||||||||||||||||||||
FCFM PSU | 1/18/23 | 7,890 | 15,780 | 39,450 | 875,001 | ||||||||||||||||||
ROCE PSU | 1/18/23 | 1 | 15,780 | 39,450 | 875,001 | ||||||||||||||||||
TSR PSU | 1/18/23 | 3,504 | 14,016 | 28,032 | 875,019 | ||||||||||||||||||
3-year RSU | 1/18/23 | 15,780 | 875,001 | ||||||||||||||||||||
K. Al Mogharbel | 315,000 | 810,000 | 1,800,900 | ||||||||||||||||||||
FCFM PSU | 1/18/23 | 7,890 | 15,780 | 39,450 | 875,001 | ||||||||||||||||||
ROCE PSU | 1/18/23 | 1 | 15,780 | 39,450 | 875,001 | ||||||||||||||||||
TSR PSU | 1/18/23 | 3,504 | 14,016 | 28,032 | 875,019 | ||||||||||||||||||
3-year RSU | 1/18/23 | 15,780 | 875,001 | ||||||||||||||||||||
A. Merad | 280,000 | 720,000 | 1,600,800 | ||||||||||||||||||||
FCFM PSU | 1/18/23 | 7,890 | 15,780 | 39,450 | 875,001 | ||||||||||||||||||
ROCE PSU | 1/18/23 | 1 | 15,780 | 39,450 | 875,001 | ||||||||||||||||||
TSR PSU | 1/18/23 | 3,504 | 14,016 | 28,032 | 875,019 | ||||||||||||||||||
3-year RSU | 1/18/23 | 15,780 | 875,001 | ||||||||||||||||||||
D. Ralston | 262,508 | 675,020 | 1,500,794 | ||||||||||||||||||||
FCFM PSU | 1/18/23 | 7,214 | 14,427 | 36,068 | 799,977 | ||||||||||||||||||
ROCE PSU | 1/18/23 | 1 | 14,427 | 36,068 | 799,977 | ||||||||||||||||||
TSR PSU | 1/18/23 | 3,204 | 12,814 | 25,628 | 799,978 | ||||||||||||||||||
3-year RSU | 1/18/23 | 14,427 | 799,977 |
(1) | All equity grants were awarded under the 2017 SLB Omnibus Stock Incentive Plan (as amended and restated, the 2017 Incentive Plan). |
(2) | These columns show the possible cash incentive payouts for each NEO for fiscal year 2023 based on performance goals set for the year. Threshold, target, and maximum possible payouts are based on the STI range established for each NEO, which is expressed as a percentage of base salary for the year. Actual cash incentive amounts earned for 2023 are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. For information about the 2023 STI awards paid to our NEOs, see “Compensation Discussion and Analysis—Elements of 2023 Total Compensation—Short-Term Cash Incentive Awards” beginning on page 37. |
(3) | Relates to PSUs, all of which are subject to a three-year performance period. See “Compensation Discussion and Analysis—Elements of 2023 Total Compensation—Long-Term Equity Incentive Awards” beginning on page 41 for a detailed description of our PSUs, including the criteria to be applied in determining vesting of PSUs. “Threshold” represents the number of shares deliverable on achievement of the applicable threshold performance goal under each PSU grant. The PSU award agreements provide that no PSUs will vest unless a specified threshold level of performance is achieved. “Target” represents the number of shares deliverable on achievement of target performance under each PSU grant, and “Maximum” reflects the highest possible payout (250% of target for the 2023 FCF Margin PSUs and 2023 ROCE PSUs, and 200% of target for the 2023 TSR PSUs). PSUs do not accrue or pay dividends or dividend equivalents prior to vesting. Vested PSUs are paid in shares of our common stock. |
(4) | Relates to RSUs, all of which will vest on the third anniversary of the grant date, subject to continued employment with SLB. RSUs do not accrue or pay dividends or dividend equivalents prior to vesting. Vested RSUs are paid in shares of our common stock. |
(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) $55.45 for the 2023 FCF Margin PSUs and 2023 ROCE PSUs; and (ii) $62.43 for the 2023 TSR PSUs. 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 $55.45. |
2024 Proxy Statement | 51 |
The following table provides additional information regarding outstanding and unexercised stock options and outstanding PSU and RSU awards for each of our NEOs as of December 31, 2023.
Option Awards | Stock Awards | |||||||||||||||||||||||||
Name | Option/ PSU/RSU Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($) | (1) | |||||||||||||||
O. Le Peuch | 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 | 15,000 | — | 87.380 | 1/19/2027 | ||||||||||||||||||||||
1/20/2021 | 220,580 | (2) | 11,478,983 | |||||||||||||||||||||||
1/20/2021 | 110,290 | (3) | 5,739,492 | |||||||||||||||||||||||
2/3/2021 | 96,440 | (4) | 5,018,738 | |||||||||||||||||||||||
1/19/2022 | 242,204 | (5) | 12,604,296 | |||||||||||||||||||||||
1/19/2022 | 83,705 | (6) | 4,356,008 | |||||||||||||||||||||||
1/18/2023 | 156,260 | (7) | 8,131,770 | |||||||||||||||||||||||
1/18/2023 | 54,103 | (8) | 2,815,520 | |||||||||||||||||||||||
S. Biguet | 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 | ||||||||||||||||||||||
1/20/2021 | 67,220 | (2) | 3,498,129 | |||||||||||||||||||||||
1/20/2021 | 33,610 | (3) | 1,749,064 | |||||||||||||||||||||||
2/3/2021 | 29,390 | (4) | 1,529,456 | |||||||||||||||||||||||
1/19/2022 | 70,643 | (5) | 3,676,262 | |||||||||||||||||||||||
1/19/2022 | 24,414 | (6) | 1,270,505 | |||||||||||||||||||||||
1/18/2023 | 45,576 | (7) | 2,371,775 | |||||||||||||||||||||||
1/18/2023 | 15,780 | (8) | 821,191 | |||||||||||||||||||||||
K. Al Mogharbel | 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 | ||||||||||||||||||||||
1/20/2021 | 73,520 | (2) | 3,825,981 | |||||||||||||||||||||||
1/20/2021 | 36,760 | (3) | 1,912,990 | |||||||||||||||||||||||
2/3/2021 | 32,150 | (4) | 1,673,086 | |||||||||||||||||||||||
1/19/2022 | 70,643 | (5) | 3,676,262 | |||||||||||||||||||||||
1/19/2022 | 24,414 | (6) | 1,270,505 | |||||||||||||||||||||||
1/18/2023 | 45,576 | (7) | 2,371,775 | |||||||||||||||||||||||
1/18/2023 | 15,780 | (8) | 821,191 | |||||||||||||||||||||||
A. Merad | 4/16/2014 | 20,000 | — | 100.555 | 4/16/2024 | |||||||||||||||||||||
4/16/2015 | 20,000 | — | 91.740 | 4/16/2025 | ||||||||||||||||||||||
4/20/2016 | 20,000 | — | 80.525 | 4/20/2026 | ||||||||||||||||||||||
1/20/2021 | 67,220 | (2) | 3,498,129 | |||||||||||||||||||||||
1/20/2021 | 33,610 | (3) | 1,749,064 | |||||||||||||||||||||||
2/3/2021 | 29,390 | (4) | 1,529,456 | |||||||||||||||||||||||
1/19/2022 | 64,587 | (5) | 3,361,107 | |||||||||||||||||||||||
1/19/2022 | 22,321 | (6) | 1,161,585 | |||||||||||||||||||||||
4/19/2022 | 5,604 | (5) | 291,632 | |||||||||||||||||||||||
4/19/2022 | 1,799 | (9) | 93,620 | |||||||||||||||||||||||
1/18/2023 | 45,576 | (7) | 2,371,775 | |||||||||||||||||||||||
1/18/2023 | 15,780 | (8) | 821,191 |
52 | 2024 Proxy Statement |
Option Awards | Stock Awards | |||||||||||||||||||||||||
Name | Option/ PSU/RSU Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | (1) | 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 ($) | (1) | |||||||||||||||
D. Ralston | 1/20/2021 | 67,220 | (2) | 3,498,129 | ||||||||||||||||||||||
1/20/2021 | 33,610 | (3) | 1,749,064 | |||||||||||||||||||||||
2/3/2021 | 29,390 | (4) | 1,529,456 | |||||||||||||||||||||||
1/19/2022 | 64,587 | (5) | 3,361,107 | |||||||||||||||||||||||
1/19/2022 | 22,321 | (6) | 1,161,585 | |||||||||||||||||||||||
1/18/2023 | 41,668 | (7) | 2,168,403 | |||||||||||||||||||||||
1/18/2023 | 14,427 | (8) | 750,781 |
(1) | Market value is based on $52.04, the December 29, 2023 closing price of shares of our common stock, multiplied by the number of unvested PSUs or RSUs reflected in the previous column. |
(2) | Reflects the target number of FCF Margin PSUs and ROCE PSUs that were issued in January 2021 and that were scheduled to vest in January 2024, subject to the achievement of performance conditions. The combined number of FCF Margin PSUs and ROCE PSUs that actually vested in January 2024 for each NEO was as follows: Mr. Le Peuch — 330,870; Mr. Biguet — 100,830; Mr. Al Mogharbel — 110,280; Mr. Merad — 100,830; and Ms. Ralston — 100,830. |
(3) | Reflects the number of three-year RSUs that were issued in January 2021 and that vested on January 20, 2024. |
(4) | Reflects the target number of TSR PSUs that were issued in February 2021 and that were scheduled to vest in January 2024, subject to the achievement of performance conditions. The number of TSR PSUs that actually vested in January 2024 for each NEO was as follows: Mr. Le Peuch — 56,900; Mr. Biguet — 17,340; Mr. Al Mogharbel — 18,969; Mr. Merad — 17,340; and Ms. Ralston — 17,340. |
(5) | Reflects the target number of FCF Margin PSUs, ROCE PSUs, and TSR PSUs that were issued in January 2022 and, solely to Mr. Merad, April 2022, and that will vest, if at all, in January 2025, subject to the achievement of performance conditions. |
(6) | Reflects the number of three-year RSUs that were issued in January 2022 and that will vest on January 19, 2025, subject to continued employment with SLB through that date. |
(7) | Reflects the target number of FCF Margin PSUs, ROCE PSUs, and TSR PSUs that were issued in January 2023 and that will vest, if at all, in January 2026, subject to the achievement of performance conditions. |
(8) | Reflects the number of three-year RSUs that were issued in January 2023 and that will vest on January 18, 2026, subject to continued employment with SLB through that date. |
(9) | Reflects the number of three-year RSUs that were issued to Mr. Merad in April 2022 and that will vest on April 19, 2025, subject to his continued employment with SLB through that date. |
The following table provides additional information regarding stock options that were exercised and PSU and RSU awards that vested during 2023 for our NEOs.
Option Awards | Stock Awards | ||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | |||||
O. Le Peuch | — | — | — | (1) | — | ||||
S. Biguet | — | — | 189,950 | 10,896,672 | |||||
K. Al Mogharbel | — | — | 282,650 | 16,214,500 | |||||
A. Merad | — | — | 243,150 | 13,948,543 | |||||
D. Ralston | — | — | 146,504 | 8,232,851 |
(1) | Because Mr. Le Peuch did not receive any LTI award in 2020, he did not vest in any PSUs or RSUs in 2023. |
2024 Proxy Statement | 53 |
We maintain the following pension plans for our NEOs and other employees who began employment with SLB at times when new hires were eligible to participate. These plans provide for lifetime pensions upon retirement, based on years of service:
• | Schlumberger Technology Corporation Pension Plan (STC Pension Plan), | |
• | Schlumberger Technology Corporation Supplementary Benefit Plan (STC Supplementary Plan), | |
• | Schlumberger Limited Supplementary Benefit Plan (SLB Supplementary Plan), and | |
• | Schlumberger International Staff Pension Plan (International Staff Pension Plan). |
The following table and the discussion below provide information regarding pension benefits payable to our NEOs.
Name | Plan Name | Number of Years of Credited Service (#) | (1) | Present Value of Accumulated Benefits ($) | (2) | Payments During Last Fiscal Year | ||
O. Le Peuch | STC Pension Plan | 13.75 | 881,478 | — | ||||
STC Supplementary Plan | 7.25 | 1,079,455 | — | |||||
SLB Supplementary Plan | 5.00 | 4,328,150 | — | |||||
International Staff Pension Plan | 6.50 | 2,060,130 | — | |||||
S. Biguet | STC Pension Plan | 9.41 | 625,992 | — | ||||
SLB Supplementary Plan | 7.00 | 2,183,929 | — | |||||
International Staff Pension Plan | 3.70 | 197,307 | — | |||||
K. Al Mogharbel | International Staff Pension Plan | 16.20 | 1,390,336 | — | ||||
A. Merad | International Staff Pension Plan | 14.90 | 884,608 | — | ||||
D. Ralston | SLB Supplementary Plan | 8.50 | 766,141 | — |
(1) | The “Number of Years of Credited Service” column reflects each NEO’s actual years of service as a participant in each plan. |
(2) | The present value of accumulated benefits is calculated using the Pri-2012 healthy retiree amount-weighted table for participants and the contingent survivor amount-weighted table for spouses, both with generational projection using SSA-2023, and a discount rate of 5.25% at December 31, 2023. Retirement in each case is assumed to be the earlier of normal retirement age or December 31, 2023 if the NEO is employed after normal retirement age, or, as to our U.S. plans, the date that the sum of the NEO’s age plus years of service has reached, or is expected to reach, 85, but not before the NEO reaches age 55. Additional assumptions that we use in calculating the present value of accumulated benefits are incorporated herein by reference to Note 17, “Pension and Other Postretirement Benefit Plans” to the Consolidated Financial Statements contained in our 2023 Annual Report. |
The STC Pension Plan is a U.S. tax-qualified pension plan, funded through cash contributions made by SLB based on actuarial valuations and regulatory requirements. Benefits under our omnibus incentivethe STC Pension Plan 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 SLB.
Since 1989, the benefit earned under 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 2.0% of admissible compensation for service after completion of 15 years of active service. Normal retirement under the plan 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 is eligible for early retirement with a reduced pension. Additionally, under the “rule of 85”, an employee or executive officer who terminates employment after age 55 and whose combined age and service is 85 or more, is eligible for retirement with an unreduced pension. Mr. Le Peuch is 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 STC Pension Plan to generally provide that employees hired on or after October 1, 2004, would not be eligible to participate in the STC Pension Plan, and would instead receive an enhanced match in the SLB 401(k) Plan equal to 100% of up to 6% of admissible compensation. Participants actively accruing a benefit in the STC Pension Plan, including the pension-eligible NEOs, were able to participate in the SLB 401(k) Plan at a reduced match equal to 50% of up to 6% of admissible compensation. In 2023, the SLB 401(k) Plan was amended to provide to all participants, regardless of pension eligibility, with: (1) an additional enhanced match equal to 50% of deferrals between 6% and 10% of admissible compensation, and (2) a non-elective Company contribution of 2% of admissible compensation. The match is made each payroll period and the non-elective Company contribution is made on an annual basis.
The SLB Supplementary Plan and STC Supplementary Plan (collectively, the Supplementary Plans) provide non-tax-qualified pension benefits. These plans, which have substantially identical terms, provide an eligible employee with benefits equal to the benefits that the employee is unable to receive under a qualified pension plan due to the Internal Revenue Code limits on (1) annual compensation that can be taken into account under qualified plans and standard form(2) annual benefits that can be provided under qualified plans.
54 | 2024 Proxy Statement |
The retirement eligibility rules under SLB’s nonqualified pension plans are the same as those under the STC Pension Plan. These benefits are subject to forfeiture if the employee leaves SLB before the age of stock option award agreement50 with five years of service, engages in certain dishonest acts, or has violated a confidentiality arrangement with us. Reduced benefits are paid to an employee upon separation from service, provided the employee has attained the age of 55, or if earlier, age 50 with 20 years of service. Mr. Le Peuch is eligible for retirement with an unreduced pension under the rule of 85, described above. Mr. Biguet and Ms. Ralston are eligible for early retirement with a reduced pension. These nonqualified plan benefits are payable in cash from SLB’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.
We maintain the International Staff Pension Plan for certain employees who work in many different countries over the course of their careers, and who otherwise would be unable to accumulate any meaningful pension. Most of the NEOs have either been in the 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 SLB together with mandatory contributions by employees.
Prior to 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 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. 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.
With respect to pension rights accrued prior to 2010, Mr. Le Peuch and Mr. Biguet are eligible for normal retirement with no reduction, and Mr. Al Mogharbel and Mr. Merad are eligible for early retirement with a reduced pension. Since 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 at or after age 55 with a reduced pension. With respect to pension rights accrued in 2010 or later, Mr. Le Peuch is eligible for normal retirement with no reduction; Mr. Al Mogharbel, Mr. Biguet, and Mr. Merad will become eligible for normal retirement upon reaching age 60; Mr. Biguet is eligible for early retirement with a reduced pension, and Mr. Al Mogharbel and Mr. Merad will become eligible for early retirement upon reaching age 55.
The following table and the discussion below provide information regarding nonqualified deferred compensation payable to our 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 | — | — | 13,158 | — | 113,084 | |||||||
International Staff Profit Sharing Plan | — | — | 228,442 | — | 1,664,541 | ||||||||
Restoration Savings Plan | 944,925 | 94,492 | 1,041,535 | — | 7,544,417 | ||||||||
S. Biguet | SLB Supplementary Plan | — | — | 1,012 | — | 18,911 | |||||||
International Staff Profit Sharing Plan | — | — | 71,254 | — | 495,624 | ||||||||
Restoration Savings Plan | 302,663 | 36,320 | 374,591 | — | 2,177,790 | ||||||||
K. Al Mogharbel | SLB Supplementary Plan | — | — | 26,378 | — | 188,588 | |||||||
International Staff Profit Sharing Plan | — | — | 114,564 | — | 834,773 | ||||||||
Restoration Savings Plan | 130,125 | 78,075 | 518,802 | — | 3,332,332 | ||||||||
A. Merad | SLB Supplementary Plan | — | — | 482 | — | 3,447 | |||||||
International Staff Profit Sharing Plan | — | — | 84,621 | — | 616,593 | ||||||||
Restoration Savings Plan | 65,409 | 65,409 | 180,738 | — | 889,724 | ||||||||
D. Ralston | Restoration Savings Plan | 100,127 | 30,038 | 111,517 | — | 493,269 |
(1) | Represents an NEO’s elective contributions to the Restoration Savings Plan of a portion of base salary and non-equity incentive plan compensation. |
(2) | Represents SLB’s contributions to each NEO’s SLB Supplementary Plan, International Staff Profit Sharing Plan, and Restoration Savings Plan accounts, as applicable, which amounts are also reported as 2023 “All Other Compensation” in the Summary Compensation Table. |
(3) | Represents each NEO’s account balances for the SLB Supplementary Plan, International Staff Profit Sharing Plan, and Restoration Savings Plan, as applicable. |
2024 Proxy Statement | 55 |
The Supplementary Plans provide eligible employees, including our NEOs, with certain non-tax-qualified defined contribution benefits that are not permissible under a 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 based on employee investment elections. An employee forfeits rights under the nonqualified plans if the employee terminates employment before completing four years of service, engages in certain dishonest acts, or has violated a confidentiality arrangement with us. 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.
SLB maintains the International Staff Profit Sharing Plan which, through year-end 2023, provided 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. Effective January 1, 2024, SLB ceased to provide employer contributions to the International Staff Profit Sharing Plan. Benefits earned under the International Staff Profit Sharing Plan will be forfeited upon a determination by the International Staff Profit Sharing Plan’s administrator that the employee’s separation from service was due to circumstances of fraud or misconduct detrimental to us or any customer.
The Restoration Savings Plan, a nonqualified deferred compensation plan, provides certain defined contribution benefits for our NEOs and other eligible employees. The Restoration Savings Plan allows an eligible employee to defer compensation (and receive an associated employer match) that the employee cannot otherwise defer under a tax-qualified plan because of Internal Revenue Code limits on the amount of compensation that can be taken into account. STC maintains the STC Restoration Savings Plan with substantially identical terms as the Restoration Savings Plan.
An eligible employee may elect in advance to defer a percentage (from 1% to 50%) of admissible compensation (generally base salary and cash incentive) over the Internal Revenue Code annual compensation limits. We make matching contributions with respect to each employee’s deferrals. For employees who participate in any SLB tax-qualified pension plan, the amount of the matching contribution equaled 50% of the first 6% deferred by the employee in 2023. For employees who do not participate in any SLB tax-qualified pension plan, the matching contribution was 100% of the first 6% deferred by the employee in 2023. Effective January 1, 2024, SLB added for all Restoration Savings Plan participants: (1) an additional matching contribution equal to 50% of deferrals exceeding 6% up to 10%, and (2) a non-elective Company contribution of 2% of admissible compensation over the IRS limit. The match is made each payroll period and the non-elective Company contribution is made on an annual basis. Neither the match nor the non-elective Company contribution is contingent on SLB’s profitability. Employees’ accounts are credited with earnings based on their investment elections. All NEOs are 100% vested in their Restoration Savings Plan matching contributions and related earnings.
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 following the termination of employment. However, employees forfeit all benefits under the plan if a determination is made that they have engaged in certain dishonest acts or violated a confidentiality arrangement with us. Payment to key employees is delayed six months following separation from service.
56 | 2024 Proxy Statement |
Our NEOs 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 NEOs do not have employment agreements, severance agreements, “golden parachutes,” or change in control agreements. Our NEOs serve at the will of the Board, which enables SLB to terminate their employment using judgment as to the necessity or terms of any severance arrangement and based on specific circumstances at the time they cease being executive officers.
All employees who receive equity awards, including our NEOs, are subject to the same terms and conditions in the event of a termination or change in control, except for certain stock options that were assumed in connection with our acquisition of Cameron International Corporation (Cameron), none of which are held by our NEOs.
If an option holder’sNEO’s employment terminates.with SLB terminates prior to an applicable vesting date, that NEO’s PSUs and RSUs will be treated as follows:
Reason for Termination of Employment | Vesting | |
Death or Disability | Full, immediate vesting of target number of PSUs and all unvested RSUs | |
Retirement or, with Compensation Committee approval, Early Retirement | Continued vesting of PSUs and RSUs on the regularly scheduled vesting dates, with the number of PSUs determined as if the holder’s employment had not been terminated | |
With Compensation Committee approval, Special Retirement | Continued vesting of PSUs on the regularly scheduled vesting dates, with the number of PSUs determined as if the holder’s employment had not been terminated; and no additional vesting of RSUs | |
Any other reason | No additional vesting; all outstanding PSUs and RSUs forfeited |
For these purposes, “retirement,” “early retirement,” “special retirement,” and “disability” have the meanings assigned to those terms in the applicable PSU and RSU 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 our officer departure guidelines described on page 45.
If an NEO’s employment with SLB terminates, that NEO’s outstanding options—all of which are vested—will be treated as follows:
Reason for Termination of Employment | Post-Employment Exercise Period | |||
Voluntary termination with SLB consent | Exercisable (to the extent exercisable at termination) at any time within three months after | |||
Termination by | Vested and unvested options forfeited | |||
Retirement | ||||
Special Retirement | 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 | |||
Death or Disability | 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 |
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).
PSUs
Under our 2017 Schlumberger Omnibus Stock Incentive Plan and subject to the Company’s standard form of PSU awards, PSUs are treated as follows upon the holder’s termination of employment with the Company and its subsidiaries prior to the vesting date (i.e., the third anniversary of the grant date):
For these purposes, “retirement,” “early retirement,” “special retirement” and “disability” have the meanings assigned to such terms in the applicable award agreements.
57 |
Under our 2010 Omnibus Stock Incentive Plan (with respect to stock options), and our 2013 Omnibus Stock Incentive Plan and 2017 Omnibus Stock Incentive Plan (with respect to stock options, PSUs and RSUs),omnibus incentive plans, in the event of a merger, consolidation, acquisition of property or stock, separation, spinoff, reorganization, or liquidation (each a “Corporate Transaction”Corporate Transaction), our Board may, in its sole discretion, (1)(i) provide for the substitution of a new award (or other arrangement) for or assumption of any award, (2)(ii) provide for the acceleration ofaccelerated vesting of any awards, or (3)(iii) decide to cancel any awards and deliver 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 our outstanding stock options,RSUs, PSUs, and RSUsstock options currently provides for any definitive special treatment upon such a Corporate Transaction.
The following table sets forth the value of the unvested RSUs and PSUs (at target) and the intrinsic value of the unvested stock options and the value of the unvested PSUs at target and RSUs held by each NEO as of December 31, 2020,2023, that would become vested upon the occurrence of a Corporate Transaction, assuming that the Board elects to accelerate the vesting of stock options,RSUs, PSUs, and RSUsstock 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 SchlumbergerSLB common stock, and SLB’s achievement by the Company of any relevant performance metric.
Upon Corporate Transaction | ||||||||||
Name | Value of Unvested RSUs and PSUs (at Target) ($) | (1) | Intrinsic Value of Unvested Options ($) | (2) | ||||||
O. Le Peuch | ||||||||||
S. Biguet | ||||||||||
K. Al Mogharbel | ||||||||||
— | ||||||||||
A. Merad | ||||||||||
— | ||||||||||
(1) | Calculated by multiplying the December 29, 2023 closing price of our common stock ($52.04) by the number of outstanding, unvested RSUs and PSUs (at target) held by the executive as of that date. |
(2) | Reflects that the December 29, 2023 closing price of |
Schlumberger’sOur pension plans and non-qualifiednonqualified deferred compensation plans include the same terms and conditions for all participating employees in the event of a termination or change in control. The Restoration Savings Plan provides for accelerated payment of vested account balances within 30 days following a change in control as defined under Internal Revenue Code section 409A. Other than the Schlumberger Restoration Savings Plans,Plan, none of Schlumberger’s non-qualifiedour nonqualified plans provide for the accelerated payment of benefits upon a change in control. For more information on these plans, see the Pension Benefits for Fiscal Year 2020 table and accompanying narrativediscussion beginning on page 54 above and the Nonqualified Deferred Compensation for Fiscal Year 2020 table and accompanying narrativediscussion beginning on page 55 above.
The following table sets forth the amounts as of December 31, 20202023 of benefit payments that would be accelerated under the SLB Restoration Savings Plan upon a change in control.
Name | Amount | ($) | |
O. Le Peuch | 7,544,417 | ||
S. Biguet | 2,177,790 | ||
K. Al Mogharbel | 3,332,332 | ||
A. | 889,724 | ||
493,269 |
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, and excluding those employees who became Schlumberger employees as a result of the Smith acquisition, retiree medical benefits continue beyond age 65, at which time Medicare becomes primary and the Schlumberger plan becomes secondary, paying eligible charges after Medicare has paid. However, effective April 1, 2015, participants who reach age 65 no longer continue in Schlumberger medical coverage after reaching age 65, but instead receive anThe program also provides annual contributioncontributions to a health reimbursement arrangement that can be used to purchase medical coverage or Medicare supplemental coverage and pay other tax-deductible expenses.
Agreement with Former CFO
See “Compensation Discussion and Analysis—Agreement with Former CFO” on page 50 for details regarding our agreement with Mr. Ayat.
2024 Proxy Statement |
The following table sets forth information as of December 31, 2023 for all equity compensation plans approved and not approved by our shareholders.
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)) | ||||
Equity compensation plans approved by security holders | 26,994,176 | 72.55 | 32,190,471 | (2) | ||||
Equity compensation plans not approved by security holders(3) | 1,056,419 | 66.91 | — | |||||
Total | 28,050,595 | 72.33 | 32,190,471 | (2) |
(1) | The weighted average price does not take into account shares issuable upon the vesting of outstanding PSUs or RSUs, which have no exercise price. |
(2) | Includes 526,050 shares of common stock issuable under the Directors Stock Plan at December 31, 2023. |
(3) | Consists solely of options that were assumed in connection with our 2016 acquisition of Cameron, none of which are held by our NEOs. |
Equity compensation plans approved by our shareholders include the Directors Stock Plan, as amended and restated; the 2017 Incentive Plan; the 2013 SLB Omnibus Stock Incentive Plan, as amended and restated (the 2013 Incentive Plan); the 2010 SLB Omnibus Stock Incentive Plan, as amended and restated (the 2010 Incentive Plan); the French Sub Plan under the 2010, 2013 and 2017 SLB Omnibus Stock Incentive Plans, as amended and restated; the SLB Discounted Stock Purchase Plan, as amended and restated; the SLB 2008 Stock Incentive Plan, as amended and restated (the 2008 Incentive Plan); and the SLB 2005 Stock Incentive Plan, as amended and restated (the 2005 Incentive Plan). There are no securities issuable under the 2013 Incentive Plan, the 2010 Incentive Plan, the 2008 Incentive Plan or the 2005 Incentive Plan, other than shares of our common stock issuable upon the exercise of stock options currently outstanding.
Based on the methodology described below, our CEO’s 2023 total compensation was 154 times that of our median employee.
Our pay ratio is affected by many factors, and may not be comparable to the pay ratios reported by other companies, even in the technology and energy services 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 a predominantly U.S.- or European-based workforce, | |
• | varied methodologies for calculating total compensation for both the median employee and the CEO, which may include exclusions that SLB has elected not to make, and | |
• | varied currency exchange rates. |
To identify our median employee, we determined that, as of October 1, 2023, we had 97,051 employees working in 100 countries. This is the number of all employees on our different payroll systems as of that date, other than those employees of joint ventures whose salaries and compensation we do not set or control. In line with our global operations, we follow local market practices regarding pay levels and pay elements. In some cases, these local practices include paying relatively lower base salaries (upon conversion to U.S. dollars), plus additional compensation elements such as coefficients, housing, schooling, utilities, and other standard payments. We have excluded from our calculation of our median employee all employees located in the following countries, where either we have very few employees or where local pay practices diverge significantly from U.S. and European practices (all excluded employees collectively representing less than 5% of our total employees in 2023): Algeria, Bangladesh, Cameroon, Chile, Georgia, Indonesia, Libya, Myanmar, Pakistan, Philippines, South Sudan, Tanzania, Tunisia, Ukraine, Uruguay, Uzbekistan, Venezuela, and Yemen. After excluding these employees and for purposes of determining our median employee, we had 92,385 employees working in 82 countries. We did not make any cost-of-living adjustments when identifying our median employee.
A variety of pay elements comprise our employees’ total compensation, including base salary, field bonuses, annual performance-based cash incentives, commissions, and other benefits. The incentive awards an employee is eligible for are based on his or her pay grade and reporting level, and are consistently applied across the company. Cash incentives, rather than equity, are the primary vehicle of incentive compensation for most of our employees. While all employees earn an annual base salary, not all receive cash incentive payments. Furthermore, fewer than 3% of our employees receive equity awards. Consequently, for purposes of applying a consistent compensation metric for determining our median employee, we selected annual base salary as the sole, and most appropriate, compensation element. We used the annual base salary of our employees as reflected in our human resources systems on October 1, 2023, excluding that of our CEO, in preparing our data set.
Using this methodology, we determined that our median employee was a full-time, salaried employee working in Saudi Arabia as a field services specialist, whose 2023 total compensation was $118,141. Our CEO’s total compensation for 2023 was $18,249,585 (as reflected in the Summary Compensation Table).
2024 Proxy Statement | 59 |
As discussed in the CD&A above, our Compensation Committee has implemented an executive compensation program designed to link a substantial portion of our NEOs’ realized compensation to the achievement of SLB’s financial, operational, and strategic objectives, and to align our executive pay with changes in the value of our shareholders’ investments. The following table sets forth additional compensation information for our NEOs, calculated in accordance with SEC regulations, for fiscal years 2023, 2022, 2021 and 2020.
Year | Summary Compensation Table Total for CEO ($) | Compensation Actually Paid to CEO ($) | Average Summary Compensation Table Total for Non-CEO NEOs ($) | Average Compensation Actually Paid to Non-CEO NEOs ($) | Value of Initial Fixed $100 Investment Based on: | (Stated in millions) | |||||||||||
(1) | (2) | (3) | (2)(3) | Total Shareholder Return | Peer Group Total Shareholder Return | (4) | Net Income (Loss) ($) | Adjusted EBITDA ($) | (5) | ||||||||
2023 | 18,249,585 | 26,165,195 | (6) | 5,907,339 | 9,304,743 | (7) | $140.98 | $134.09 | 4,275 | 8,107 | |||||||
2022 | 15,713,757 | 39,478,899 | 5,087,891 | 17,341,223 | $142.09 | $146.82 | 3,492 | 6,462 | |||||||||
2021 | 16,795,502 | 32,392,156 | 6,353,971 | 13,116,171 | $78.43 | $82.83 | 1,928 | 4,925 | |||||||||
2020 | 5,650,084 | (10,610,514 | ) | 6,081,217 | 2,190,708 | $56.19 | $63.45 | (10,486 | ) | 4,313 |
(1) | The dollar amounts reported are the amounts of total compensation reported for our CEO, Mr. Le Peuch, in the Summary Compensation Table for fiscal years 2023, 2022, 2021, and 2020. Mr. Le Peuch served as CEO for each of the years presented. |
(2) | The dollar amounts reported represent the amount of “compensation actually paid”, as computed in accordance with SEC rules. The dollar amounts do not reflect the actual amounts of compensation paid to our CEO or other NEOs during the applicable year, but also include (i) the year-end value of equity awards granted during the reported year, (ii) the change in the value of equity awards that were unvested at the end of the prior year, measured through the date the awards vested or were forfeited, or through the end of the reported fiscal year, and (iii) certain pension-related costs. For reconciliations of the “compensation actually paid” in 2023 to the “Total” compensation amounts for 2023 reported in the Summary Compensation Table (SCT) on page 50 of this proxy statement, see footnotes (6) and (7) below. |
(3) | For 2023, reflects average compensation information for our NEOs, other than our CEO, as described in the CD&A of this proxy statement. For 2022, reflects average compensation information for Mr. Al Mogharbel, Mr. Biguet, Mr. Merad, and Ms. Ralston, as well as Ashok Belani, SLB’s former EVP, New Energy. For 2021, reflects average compensation information for Mr. Al Mogharbel and Mr. Biguet, as well as Mr. Belani and Hinda Gharbi, SLB’s former EVP, Services and Equipment. For 2020, reflects average compensation information for Mr. Al Mogharbel and Mr. Biguet, as well as Mr. Belani, Ms. Gharbi, and Simon Ayat, SLB’s former EVP and Chief Financial Officer. |
(4) | Reflects cumulative total shareholder return of the Philadelphia Oil Services Sector (OSX) index, as of December 31, 2023, weighted according to the constituent companies’ market capitalization at the beginning of each period for which a return is indicated. The OSX is the peer group used by SLB for purposes of Item 201(e) of Regulation S-K under the Exchange Act in our 2023 Annual Report. |
(5) | Adjusted EBITDA represents income before taxes, excluding charges and credits, depreciation and amortization, interest expense, and interest income. Adjusted EBITDA is a non-GAAP measure. See Appendix A for reconciliations of non-GAAP measures to their most comparable GAAP measures. |
(6) | To calculate the amount of “compensation actually paid” to our CEO for 2023, the following amounts were deducted from and added to (as applicable) our CEO’s “Total” compensation as reported in the SCT: |
(7) | To calculate the amount of average “compensation actually paid” to our NEOs other than our CEO for 2023, the following amounts were deducted from and added to (as applicable) the average of the “Total” compensation of our non-CEO NEOs as reported in the SCT: |
(1) | The dollar amounts reported are the amounts of total compensation reported for our CEO, Mr. Le Peuch, in the Summary Compensation Table for fiscal years 2023, 2022, 2021, and 2020. Mr. Le Peuch served as CEO for each of the years presented. |
(2) | The dollar amounts reported represent the amount of “compensation actually paid”, as computed in accordance with SEC rules. The dollar amounts do not reflect the actual amounts of compensation paid to our CEO or other NEOs during the applicable year, but also include (i) the year-end value of equity awards granted during the reported year, (ii) the change in the value of equity awards that were unvested at the end of the prior year, measured through the date the awards vested or were forfeited, or through the end of the reported fiscal year, and (iii) certain pension-related costs. For reconciliations of the “compensation actually paid” in 2023 to the “Total” compensation amounts for 2023 reported in the Summary Compensation Table (SCT) on page 50 of this proxy statement, see footnotes (6) and (7) below. |
(3) | For 2023, reflects average compensation information for our NEOs, other than our CEO, as described in the CD&A of this proxy statement. For 2022, reflects average compensation information for Mr. Al Mogharbel, Mr. Biguet, Mr. Merad, and Ms. Ralston, as well as Ashok Belani, SLB’s former EVP, New Energy. For 2021, reflects average compensation information for Mr. Al Mogharbel and Mr. Biguet, as well as Mr. Belani and Hinda Gharbi, SLB’s former EVP, Services and Equipment. For 2020, reflects average compensation information for Mr. Al Mogharbel and Mr. Biguet, as well as Mr. Belani, Ms. Gharbi, and Simon Ayat, SLB’s former EVP and Chief Financial Officer. |
(4) | Reflects cumulative total shareholder return of the Philadelphia Oil Services Sector (OSX) index, as of December 31, 2023, weighted according to the constituent companies’ market capitalization at the beginning of each period for which a return is indicated. The OSX is the peer group used by SLB for purposes of Item 201(e) of Regulation S-K under the Exchange Act in our 2023 Annual Report. |
(5) | Adjusted EBITDA represents income before taxes, excluding charges and credits, depreciation and amortization, interest expense, and interest income. Adjusted EBITDA is a non-GAAP measure. See Appendix A for reconciliations of non-GAAP measures to their most comparable GAAP measures. |
(6) | To calculate the amount of “compensation actually paid” to our CEO for 2023, the following amounts were deducted from and added to (as applicable) our CEO’s “Total” compensation as reported in the SCT: |
Year | Summary Compensation Table Total for CEO ($) | Reported Value of Equity Awards for CEO ($) | (a) | Equity Award Adjustments for CEO ($) | (b) | Reported Change in the Actuarial Present Value of Pension Benefits for CEO ($) | (c) | Pension Benefit Adjustments for CEO ($) | (d) | Compensation Actually Paid to CEO ($) | |||
2023 | 18,249,585 | (12,000,045) | 20,767,832 | (1,022,545) | 170,368 | 26,165,195 |
(a) | Represents the grant date fair value of the equity awards to our CEO in 2023, as reported in the “Stock Awards” column in the SCT. | |
(b) | Represents the year-over-year change in the fair value of equity awards to our CEO, as itemized in the table below. No awards vested in the year they were granted. |
(c) | Represents the change in 2023 in the actuarial present value of our CEO’s accumulated benefit under all benefit and actuarial pension plans in which he participates, as reported in the “Change in Pension Value & Nonqualified Deferred Compensation Earnings” column in the SCT. | |
(d) | Represents the actuarially determined service cost for services rendered in 2023 under all benefit and actuarial pension plans in which our CEO participates. |
Fair Value of Equity Awards for CEO | ($) | ||
As of year-end for awards granted during 2023 | 18,520,456 | ||
Year-over-year increase of unvested awards granted in prior years | 2,247,375 | ||
Increase from prior fiscal year-end for awards that vested during 2023 | — | ||
Total Equity Award Adjustments | 20,767,832 |
(c) | Represents the change in 2023 in the actuarial present value of our CEO’s accumulated benefit under all benefit and actuarial pension plans in which he participates, as reported in the “Change in Pension Value & Nonqualified Deferred Compensation Earnings” column in the SCT. | |
(d) | Represents the actuarially determined service cost for services rendered in 2023 under all benefit and actuarial pension plans in which our CEO participates. |
60 | 2024 Proxy Statement |
Year | Average Summary Compensation Table Total for Non-CEO NEOs ($) | Average Reported Value of Equity Awards for Non-CEO NEOs ($) | (w) | Average Equity Award Adjustments for Non-CEO NEOs ($) | (x) | Average Reported Change in the Actuarial Present Value of Pension Benefits for Non- CEO NEOs ($) | (y) | Average Pension Benefit Adjustments for Non-CEO NEOs ($) | (z) | Average Compensation Actually Paid to Non-CEO NEOs ($) | |||
2023 | 5,907,339 | (3,424,994) | 7,053,306 | (272,117) | 41,210 | 9,304,743 |
(w) | Represents the average of the grant date fair value of the equity awards to our non-CEO NEOs in 2023, as reported in the “Stock Awards” column in the SCT. | |
(x) | Represents the average of the year-over-year change in the fair value of equity awards to our non-CEO NEOs, as itemized in the table below. No awards vested in the year they were granted. |
(y) | Represents the average change in 2023 in the actuarial present value of the accumulated benefits to our non-CEO NEOs under all benefit and actuarial pension plans in which they participate, as reported in the “Change in Pension Value & Nonqualified Deferred Compensation Earnings” column in the SCT. | |
(z) | Represents the actuarially determined service cost for services rendered in 2023 under all benefit and actuarial pension plans in which our non-CEO NEOs participate. |
Fair Value of Equity Awards for Non-CEO NEOs | ($) | ||
As of year-end for awards granted during 2023 | 5,286,005 | ||
Year-over-year increase of unvested awards granted in prior years | 831,292 | ||
Increase from prior fiscal year-end for awards that vested during 2023 | 936,009 | ||
Total Equity Award Adjustments | 7,053,306 |
(y) | Represents the average change in 2023 in the actuarial present value of the accumulated benefits to our non-CEO NEOs under all benefit and actuarial pension plans in which they participate, as reported in the “Change in Pension Value & Nonqualified Deferred Compensation Earnings” column in the SCT. | |
(z) | Represents the actuarially determined service cost for services rendered in 2023 under all benefit and actuarial pension plans in which our non-CEO NEOs participate. |
The following table identifies the five most important financial performance measures used by our Compensation Committee to link the “compensation actually paid” (CAP) to our CEO and other NEOs in 2023, calculated in accordance with SEC regulations, to company performance. The role of each of these performance measures on our NEOs’ compensation is discussed in the CD&A above.
Financial Performance Measures |
Adjusted EBITDA |
Free Cash Flow |
Free Cash Flow Margin |
Return on Capital Employed |
Total Shareholder Return |
The charts on the following page reflect that the CAP over the four-year period ended December 31, 2023 generally aligns to trends in SLB’s TSR, net income, and adjusted EBITDA results over the same period. In addition, the chart titled “CAP vs. Total Shareholder Return (SLB and OSX)” reflects that SLB’s TSR over this four-year period aligns closely to OSX TSR over the same period. In 2020, the negative CAP for Mr. Le Peuch resulted primarily because he was not granted an LTI award in 2020, and was also impacted by stock price depreciation. In 2021, CAP for our CEO and other NEOs was primarily impacted by SLB’s share price appreciation of
. In 2022, CAP for our CEO and other NEOs was primarily impacted by SLB’s share price appreciation of , partially offset by performance of unvested PSUs. For 2023, CAP for our CEO declined primarily because Mr. Le Peuch did not have any stock awards vest in 2023, and CAP for our other NEOs declined primarily as a result of SLB’s share price performance as compared to prior year.2024 Proxy Statement | 61 |
CAP vs. Net Income
CAP vs. Adjusted EBITDA
62 | 2024 Proxy Statement |
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 stockholders, as required by Curaçao law:2023 Annual Report:
• | 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 2020 Annual Report to Stockholders, which is provided concurrently with this proxy statement. StockholdersYou should refer to these itemsour 2023 Annual Report 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 2020 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 |
63 |
PricewaterhouseCoopers LLPPwC has been selected by theour Audit Committee as the independent registered public accounting firm to audit theSLB’s annual financial statements of the Company for the year ending December 31, 2021.2024. Although ratification is not required by our bylaws or otherwise, as a matter of good corporate governance, we are asking our stockholdersyou to ratify, on an advisory basis, the appointment of PricewaterhouseCoopers LLPPwC as our independent auditor for the year ending December 31, 2021.2024. If the appointment is not 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 2021 annual general meeting of stockholders,2024 AGM, and will be available to respond to appropriate questions.
The Board of Directors recommends a vote FOR this Item 4. |
PricewaterhouseCoopers LLPPwC has billed the Company and its subsidiariesSLB the fees set forth in the table below for:for
• | the audit of | |
• | ||
the other services described below that were billed in |
Year Ended December 31, | Year Ended December 31, | |||||||||||||||
(Stated in thousands) | 2020 | 2019 | 2023 | 2022 | ||||||||||||
Audit Fees(1) | $ | 12,851 | $ | 14,276 | $ | 15,501 | $ | 13,909 | ||||||||
Audit-Related Fees(2) | 418 | 469 | 951 | 634 | ||||||||||||
Tax Fees(3) | 2,199 | 2,701 | 3,648 | 2,993 | ||||||||||||
All Other Fees(4) | 32 | 51 | — | 44 | ||||||||||||
TOTAL | $ | 15,500 | $ | 17,497 | ||||||||||||
Total | $ | 20,099 | $ | 17,580 |
(1) | Includes fees for integrated and statutory audits. | |
(2) | Consists of fees for employee benefit plan audits and other audit-related items. | |
(3) | Consists of fees for tax compliance, tax planning, and other permitted tax services. | |
(4) | Consists of fees for permitted advisory services. |
TheWhen evaluating PwC’s independence, the Audit Committee considers thePwC’s provision of all services by PricewaterhouseCoopers LLP not related to the audit of the Company’sour annual financial statements and reviews of the Company’sour interim financial statements when evaluating PricewaterhouseCoopers LLP’s independence.statements.
The Audit Committee pre-approveshas a policy to pre-approve all services provided to the CompanySchlumberger Limited and its subsidiaries by Schlumberger’sSLB’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)Audit Committee) will consider any proposed services not approved as part of this annual process. During 2020For 2023 and 2019,2022, all audit and non-audit services were pre-approved by the Audit Committee.
Required Vote
A majorityAt our 2023 AGM, the proposal to ratify the appointment of PwC as our independent auditor for 2023 received the support of 93% of the votes cast is required to approvecast. In selecting PwC as SLB’s independent auditor for 2024, the Audit Committee considered this Item 4.substantial support of our shareholders, as well as PwC’s substantial experience auditing SLB’s complex global accounts and the regulatory requirement that the PwC lead engagement partner rotate every five years.
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.
|
During 2020,2023, the Audit Committee periodically reviewed and discussed the Company’sSLB’s consolidated financial statements with Company management and PricewaterhouseCoopers LLP, the Company’sPwC, SLB’s independent registered public accounting firm, including matters raised by the independent registered public accounting firmPwC 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’sSLB’s reporting and internal controls undertaken in connection with certifications made by the Company’sSLB’s Chief Executive Officer and Chief Financial Officer in the Company’sSLB’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’sSLB’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 requirements of the 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 Audit 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’sSLB’s Annual Report on Form 10-K for the year ended December 31, 2020,2023, as filed with the SEC on January 27, 2021.24, 2024.
SUBMITTED BY THE AUDIT COMMITTEE OF THE SCHLUMBERGER BOARD OF DIRECTORSSubmitted by the Audit Committee of the SLB Board of Directors
Patrick de La Chevardière, Chair | Samuel Leupold | Tatiana | Jeff Sheets |
65 |
Proposal
We are requesting that our stockholders vote in favor of approving an amendment and restatement of
Meeting Date: | ||
Place: | Curaçao Marriott Beach Resort John F Kennedy Boulevard, 3, Piscadera Bay Willemstad, Curaçao | |
Time: | ||
Record Date: | ||
Our Board approved the proposed amendment and restatement of the 2017 Incentive Plan effective as of January 21, 2021, subject to stockholder approval. No other substantive changes are being made to the 2017 Incentive Plan.
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. For Item 5, abstentions are counted in the denominator for determining the total votes cast.
Summary of the Amended and Restated 2017 Incentive Plan
The following summary of the material features of the Amended and Restated 2017 Incentive Plan is subject to the specific provisions contained in the full text of the Amended and Restated 2017 Incentive Plan set forth as Appendix B. The specific amendments proposed to be made to the 2017 Incentive Plan are marked within Appendix B.
History of the 2017 Incentive Plan
Our Board and our stockholders originally approved the 2017 Incentive Plan in January 2017. In July 2017, we amended and restated the 2017 Incentive Plan to allow participants to pay the purchase price upon exercise of a stock option by authorizing Schlumberger to withhold such number of shares of common stock with a fair market value at the time of exercise equal to the number of shares otherwise deliverable on the exercise of the option.
Purpose of the 2017 Incentive Plan
The purpose of the 2017 Incentive Plan is to:
|
Key Terms
The following is a summary of the key provisions of the Amended and Restated 2017 Incentive Plan.
| ||
| ||
| ||
|
|
Stock Options
Vesting
The Compensation Committee will determine at the time of grant when each stock option will vest. The Compensation Committee’s recent practice has been to grant options that vest in five equal annual installments beginning on the first anniversary of the grant date.
Exercise Price
The exercise price of stock options granted under the Amended and Restated 2017 Incentive Plan may not be less than the fair market value (the mean between the high and low sales prices on the New York Stock Exchange on the grant date) of the common stock on the date of grant. As of February 1, 2021, the mean between the high and low sales prices of Schlumberger common stock on the New York Stock Exchange was $22.19 per share.
Option Term
The option term may not be longer than 10 years.
Payment of Purchase Price
The purchase price to be paid upon exercise of a stock option may be paid, subject to the rules established by the Compensation Committee, as follows:
Stock options also may be exercised through “cashless exercise” procedures approved by the Compensation Committee involving a broker or dealer approved by the Compensation Committee. Schlumberger may require, prior to issuing common stock under the Amended and Restated 2017 Incentive Plan, that the participant remit an amount in cash, or authorize withholding of common stock in connection with the option exercise, sufficient to satisfy tax withholding requirements.
Termination of Employment
The Amended and Restated 2017 Incentive Plan grants the Compensation Committee broad discretion to designate the treatment of stock options following an option holder’s termination of employment with Schlumberger or any of its subsidiaries. See “Executive Compensation Tables and Accompanying Narrative—Potential Payments Upon Termination or Change in Control for Fiscal Year 2020—Termination of Employment” on page 63, for a description of current terms and conditions provided on termination of employment.
Stock Appreciation Rights
Awards may also be in the form of rights to receive a payment, in cash or common stock, equal to the fair market value or other specified value of a number of shares of common stock on the rights exercise date over a specified strike price (“stock appreciation rights”). All stock appreciation rights granted under the Amended and Restated 2017 Incentive Plan must have a grant price per share that is not less than the fair market value of a share of common stock on the date of grant and a term of no more than 10 years.
Stock Awards
The terms, conditions and limitations applicable to grants of restricted stock and restricted stock units are determined by our Compensation Committee.
Cash Awards
Awards may also be in the form of grants denominated in cash. The terms, conditions and limitations applicable to any cash awards granted pursuant to the Amended and Restated 2017 Incentive Plan are determined by the Compensation Committee.
Performance Awards
At the discretion of the Compensation Committee, any of the above-described employee awards may be made in the form of a performance award. A performance award is an award that is subject to the attainment of one or more performance goals. The terms, conditions and limitations applicable to any performance award are determined by the Compensation Committee.
The Amended and Restated 2017 Incentive Plan permits, but does not require, the Compensation Committee to structure any performance award made to a named executive officer as performance-based compensation. In making qualified performance awards, the Compensation Committee may base a performance goal on one or more business criteria selected by the Compensation Committee that may be applied to the participant, one or more business units, divisions or sectors of Schlumberger, or Schlumberger as a whole, or by comparison with a peer group of companies.
Performance goals need not be based upon an increase or positive result under a particular business criterion and could include, for example, maintaining the status quo or limiting economic losses.
Minimum Vesting Period
Any award under the Amended and Restated 2017 Incentive Plan will have a minimum vesting period of one year from the date of grant, provided that up to 5% of the total shares of reserved under the Amended and Restated 2017 Incentive Plan may be issued without regard to minimum vesting provisions.
Clawback
The award agreement may provide that an employee granted an award may forfeit his or her right to such award or be required to return common stock or cash received as a result of the exercise or vesting of an award if such holder engages in “detrimental activity” (as defined by the Compensation Committee in the award agreement under the Amended and Restated 2017 Incentive Plan) during or following termination of employment. Under our current standard terms for stock options grants, an option holder may forfeit his or her right to exercise stock options, and may have certain prior option exercises rescinded, if he or she engages in “detrimental activity” within one year after termination of employment (or five years after termination of employment in the event of retirement or disability).
In addition, in January 2019, our Board, upon the recommendation of the Compensation Committee, adopted a revised policy regarding recoupment of performance-based incentive compensation, whether paid in the form of equity or cash, in the event of specified restatements of financial results. See “Compensation Discussion and Analysis—Other Executive Benefits and Policies—Clawback Policy for Performance-Based Cash and Equity Awards” on page 51.
Transferability
Unless otherwise determined by the Compensation Committee in an award agreement, no award will be assignable or otherwise transferable. Any attempted assignment of an award will be void.
Administration
The Compensation Committee administers the 2017 Incentive Plan. The Compensation Committee has full power and authority to:
The Compensation Committee may correct any defect or supply any omission or reconcile any inconsistency in the 2017 Incentive Plan or in any award in the manner and to the extent the Compensation Committee deems necessary or desirable to further the purposes of the 2017 Incentive Plan or to avoid unanticipated consequences or address unanticipated events (including any temporary closure of a stock exchange on which the Schlumberger’s common stock is traded, disruption of communications or natural catastrophe) deemed by the Compensation Committee to be inconsistent with the purposes of the 2017 Incentive Plan or any award agreement, provided that no such action will be taken absent stockholder approval to the extent required by the 2017 Incentive Plan. 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, modified option exercise procedures and other terms and procedures.
The Compensation Committee may delegate to the Chief Executive Officer and to other senior officers of Schlumberger or to such other committee of the Board of Directors its duties under the 2017 Incentive Plan pursuant to such conditions or limitations as the Compensation Committee may establish.
Amendment or Termination
The Board of Directors or the Compensation Committee may amend, modify, suspend or terminate the Amended and Restated 2017 Incentive Plan for the purpose of addressing any changes in legal requirements or for any other lawful purpose, except that:
Additionally, no stock option or stock appreciation right may be repriced, replaced, regranted through cancellation or modified without stockholder approval (except in connection with a change in Schlumberger’s capitalization) if the effect would be to reduce the exercise price for the shares underlying such stock option or stock appreciation right.
Adjustments
In the event of any subdivision or consolidation of shares or other capital readjustment, or the payment of a stock dividend or other increase or reduction of the number of shares of our common stock outstanding without compensation therefor in money, services or property, then the number of shares subject to the 2017 Incentive Plan will be proportionally adjusted and the number of shares of common stock with respect to which outstanding awards or other property subject to an outstanding award granted under the Incentive Plan will:
In the event of any corporate merger, consolidation, acquisition of property or stock, separation, spinoff, reorganization or liquidation, the Board of Directors may make certain adjustments to awards as it deems equitable, including: (i) providing for the substitution of a new award (or other arrangement) or the assumption of the award; (ii) prior to the transaction, providing for the acceleration of the vesting and exercisability of or the lapse of restrictions with respect to the award; and (iii) cancelling any outstanding award in exchange for cash in an amount deemed by the Board to be equal to the fair market value of the award.
Consistent with past practice, we currently expect that any award agreement documenting an award under the Amended and Restated 2017 Incentive Plan will not contain a contractual right to an automatic acceleration upon a change in control. Rather, we expect that any acceleration of vesting of an award in connection with a transaction would be made only where (i) a transaction results in a change in control of Schlumberger and (ii) in connection with such transaction the outstanding awards are not assumed by Schlumberger’s successor.
U.S. Federal Income Tax Consequences
The following discussion of tax consequences relates only to U.S. federal income tax matters. The tax consequences of participating in the 2017 Incentive Plan may vary according to country of participation. Also, the tax consequences of participating in the 2017 Incentive 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.
Stock Options and Stock Appreciation Rights
Some of the options issued under the 2017 Incentive Plan are intended to constitute “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code, while other options granted under the 2017 Incentive Plan are non-qualified stock options. The Internal Revenue Code provides for tax treatment of stock options qualifying as incentive stock options that may be more favorable to employees than the tax treatment accorded non-qualified stock options. Generally, upon the exercise of an incentive stock option, the optionee will recognize no income for U.S. federal income tax purposes, although the optionee may subsequently recognize income if the shares are disposed of prior to the holding period described below. The difference between the exercise price of the incentive stock option and the fair market value of the stock at the time of purchase is an item of tax preference that may require payment of an alternative minimum tax.
On the sale of shares acquired by exercise of an incentive stock option (assuming that the sale does not occur within two years following the date of grant of the option or within one year following the date of exercise), any gain will be taxed to the optionee as long-term capital gain. Except with respect to death or permanent and total disability (in which case the optionee has one year to exercise and obtain incentive stock option treatment), an optionee has three months after termination of employment in which to exercise an incentive stock option and retain incentive stock option tax treatment at exercise. An option exercised more than three months after an optionee’s termination of employment, including termination due to retirement, cannot qualify for the tax treatment accorded incentive stock options. Such option would be treated as a non-qualified stock option instead.
In contrast, upon the exercise of a non-qualified option, the optionee recognizes taxable income (subject to withholding) in an amount equal to the difference between the fair market value of the shares on the date of exercise and the exercise price. Upon any sale of such shares by the optionee, any difference between the sale price and the fair market value of the shares on the date of exercise of the non-qualified option will be treated generally as capital gain or loss.
Participants will not realize taxable income upon the grant of a stock appreciation right. Upon the exercise of a stock appreciation right, the participant will recognize ordinary income (subject to withholding by Schlumberger) in an amount equal to the cash or fair market value of the shares of stock received on the date of exercise of the stock appreciation right. The participant will generally have a tax basis in any shares of stock received on the exercise of a stock appreciation right that equals the fair market value of such shares on the date of exercise. Subject to the limitations discussed below, Schlumberger will be entitled to a deduction for U.S. federal income tax purposes that corresponds as to timing and amount with the compensation income recognized by the participant under the foregoing rules.
Subject to the discussion below under “Certain Tax Code Limitations on Deductibility,” under rules applicable to U.S. corporations, no deduction is available to the employer corporation upon the grant or exercise of an incentive stock option (although a deduction may be available if the employee sells the shares so purchased before the applicable holding period expires), whereas, upon exercise of a non-qualified stock option or stock appreciation right, the employer corporation is entitled to a deduction in an amount equal to the income recognized by the employee. A non-U.S. corporation, such as Schlumberger, is entitled to deductions only to the extent allocable to “effectively connected income” which is subject to U.S. federal income tax.
Stock Awards
A participant generally will not have taxable income upon the grant of stock awards, such as restricted stock or restricted stock units. Instead, he or she will recognize ordinary compensation income in the first taxable year in which his or her interest in the stock underlying the award becomes either (i) freely transferable or (ii) no longer subject to substantial risk of forfeiture. In general, a participant will recognize ordinary compensation income in an amount equal to the fair market value of the stock when it first becomes transferable or is no longer subject to a substantial risk of forfeiture, unless the participant makes an election to be taxed on the fair market value of the stock underlying the award when it is received.
An employee will be subject to withholding for federal, and generally for state and local, income taxes at the time the employee recognizes income under the rules described above with respect to an award of restricted stock or restricted stock units. The tax basis of a participant in the stock received will equal the amount recognized by the employee as compensation income under the rules described in the preceding paragraph, and the employee’s holding period in such shares will commence on the date income is so recognized. Upon later disposition of stock received that has been held for the requisite holding period, the employee will generally recognize capital gain or loss equal to the difference between the amount received in the disposition and the amount previously recognized as compensation income.
Subject to the limits discussed below under “Certain Tax Code Limitations on Deductibility,” Schlumberger will be entitled to a deduction for U.S. federal income tax purposes that corresponds as to timing and amount with the compensation income recognized by the participant under the foregoing rules to the extent the deduction is allocable to “effectively connected income” which is subject to U.S. federal income tax.
Certain Tax Code Limitations on Deductibility
Section 162(m) of the Internal Revenue Code provides that certain compensation received in any year by a “covered employee” in excess of $1 million is non-deductible by Schlumberger for federal income tax purposes. Prior to the enactment of the Tax Cut and Jobs Act, Section 162(m) included a performance-based compensation exemption to the $1 million deductibility limit, whereby compensation that was subject to the performance-based compensation exemption was deductible by the Company. The performance-based compensation exemption included many requirements otherwise included in equity plan documents. The Tax Cuts and Jobs Act amended Section 162(m) to remove the performance-based compensation exemption. Based on this removal, there is no longer an exemption to the $1 million deductibility limit, and plans are no longer required to follow the Section 162(m) performance based compensation exemption requirements. As a result, the Company proposes to remove certain references to Section 162(m) in the 2017 Incentive Plan, as reflected in further detail in Appendix B.
Although the deductibility of compensation is a consideration evaluated by the Compensation Committee, the Committee believes that the lost deduction on compensation payable in excess of the $1 million limitation for the NEOs is not material relative to the benefit of being able to attract and retain talented management. Accordingly, the Compensation Committee will continue to pay compensation that is not deductible, including performance-based compensation.
Code Section 409A
Section 409A of the Internal Revenue Code generally provides that any deferred compensation arrangement must satisfy specific requirements, both in operation and in form, regarding (1) the timing of payment, (2) the advance election of deferrals, and (3) restrictions on the acceleration of payment. Failure to comply with Section 409A may result in the early taxation (plus interest) to the participant of deferred compensation and the imposition of a 20% penalty on the participant on such deferred amounts included in the participant’s income. Schlumberger intends to structure awards under the 2017 Incentive Plan in a manner that is designed to be exempt from or comply with Section 409A.
Code Section 457A
Section 457A of the Internal Revenue Code sets forth the rules applicable to deferred compensation paid to U.S. persons by certain foreign corporations and other entities. We expect that stock options, stock-settled stock appreciation rights, restricted stock and restricted stock units granted under the 2017 Incentive Plan will be exempt from Section 457A. However, stock appreciation rights that may be settled in cash may be subject to Section 457A, as well as cash awards or stock units that are not paid within one year after vesting.
Section 457A requires that any compensation paid under a deferred compensation plan of a nonqualified entity must be included in the participant’s income at the time such amounts are no longer subject to a substantial risk of forfeiture. Therefore, stock appreciation rights that may be settled in cash as well as cash awards or stock units that are not paid within one year after vesting may result in income inclusion upon vesting, even though the participant has not exercised the stock appreciation right or received delivery of cash or shares of stock at that time. Schlumberger currently intends to grant awards that are exempt from Section 457A.
Plan Benefits
None of the awards made under the 2017 Incentive Plan prior to the date of the 2021 annual general meeting were granted subject to shareholder approval. The number and types of awards that will be granted under the Amended and Restated 2017 Incentive Plan in the future are not determinable, as the Compensation Committee will make these determinations in its sole discretion. The following table sets forth the aggregate number of PSUs (at target), RSUs and stock options that have been granted to date under the 2017 Incentive Plan to our named executive officers and the specified groups set forth below (whether or not outstanding, vested, or forfeited, as applicable).
Grants Under 2017 Incentive Plan | ||||||||||||
Name | PSUs | (1) | RSUs | Stock Options | ||||||||
Olivier Le Peuch Chief Executive Officer | 780,240 | 110,290 | — | |||||||||
Stephane Biguet Executive Vice President and Chief Financial Officer | 229,990 | 33,610 | — | |||||||||
Khaled Al Mogharbel Executive Vice President, Geographies | 449,530 | 85,600 | — | |||||||||
Ashok Belani Executive Vice President, Schlumberger New Energy | 444,820 | 37,820 | — | |||||||||
Hinda Gharbi Executive Vice President, Services and Equipment | 292,530 | 73,390 | — | |||||||||
Simon Ayat Senior Advisor to the CEO; Former EVP and CFO | 373,480 | — | — | |||||||||
All executive officers as a group (16 persons) | 3,636,670 | 563,520 | — | |||||||||
All non-employee directors and director nominees as a group (9 persons) | — | — | — | |||||||||
Each associate of the above-mentioned executive officers, directors and director nominees | — | — | — | |||||||||
Each other person who received or is to receive 5% of such options, warrants or rights | — | — | — | |||||||||
All employees as a group, excluding executive officers | 2,862,910 | 18,119,960 | — |
Equity Compensation Plan Information
The table below sets forth the following information as of December 31, 2020 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)) | ||||||||
Equity compensation plans approved by security holders | 46,055,657 | (2) | 70.59 | 20,467,626 | (2) | |||||||
Equity compensation plans not approved by security holders(3) | 2,216,371 | 65.76 | — | |||||||||
TOTAL | 48,272,028 | (2) | 70.37 | 20,467,626 | (2) |
Equity compensation plans approved by our stockholders include the Directors Stock Plan, as amended and restated to date; the 2017 Incentive Plan, as amended and restated to date; the 2013 Schlumberger Omnibus Stock Incentive Plan, as amended and restated; the 2010 Schlumberger Omnibus Stock Incentive Plan, as 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 and restated to date; the Schlumberger 2008 Stock Incentive Plan, as amended and restated (the “2008 Incentive Plan”); and the Schlumberger 2005 Stock Incentive Plan, as amended and restated (the “2005 Incentive Plan”). There are no securities issuable under the 2010 Incentive Plan, the 2008 Incentive Plan or the 2005 Incentive Plan, other than shares of our common stock issuable upon the exercise of stock options currently outstanding.
Proposal
We are requesting that our stockholders vote in favor of approving an amendment and restatement of the Schlumberger Discounted Stock Purchase Plan (as amended and restated to date, the “DSPP”), which would increase the number of shares available for purchase under the DSPP by 20 million shares.
Our Board approved the proposed amendment and restatement of the DSPP effective as of January 21, 2021, subject to stockholder approval. No other substantive changes are being made to the DSPP.
Required Vote
A majority of the votes cast is required to approve this Item 6.
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. For Item 6, abstentions are counted in the denominator for determining the total votes cast.
Summary of the Amended and Restated DSPP
The following summary of the material features of the Amended and Restated DSPP is subject to the specific provisions contained in the full text of the Amended and Restated DSPP set forth as Appendix C. The specific amendments proposed to be made to the DSPP are marked within Appendix C.
Plan History
Our Board and our stockholders originally approved the DSPP in 1988. In 1998, 2010, 2013 and 2017, we amended and restated the DSPP with the approval of our stockholders. The DSPP was amended and restated in 2017 only to increase the number of shares authorized for issuance under the DSPP by 18,000,000. The DSPP was further amended in 2018 in connection with our transition to a new plan administrator.
Purpose of the DSPP
The DSPP is designed to encourage and assist all employees of Schlumberger and its subsidiaries to acquire an equity interest in Schlumberger through the purchase of our common stock. The DSPP is intended to constitute an “employee stock purchase plan” under Section 423 of the Internal Revenue Code.
|
Administration
The DSPP is administered by a committee of at least three persons appointed by the Board (the “DSPP Committee”). The DSPP Committee has the full power and authority to:
Key Terms
The following is a summary of the key provisions of the Amended and Restated DSPP.
| ||
| ||
| ||
|
U.S. Federal Income Tax Consequences to Schlumberger and to Participants
The following discussion of tax consequences relates only to U.S. federal income tax matters. The tax consequences of participating in the DSPP may vary according to country of participation. Also, the tax consequences of participating in the DSPP 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.
The DSPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. Amounts withheld from pay under the DSPP are taxable income to participants in the year in which the amounts otherwise would have been received, but the participants will not be required to recognize additional income for federal income tax purposes either at the time the employee is deemed to have been granted a right to purchase common stock (on the first day of a purchase period) or when the right to purchase common stock is exercised (on the last day of the purchase period).
If the participant holds the common stock purchased under the DSPP for at least two years after the first day of the purchase period in which the common stock was acquired (the “Enrollment Date”) and for at least one year after the date that the common stock is purchased (the “Exercise Date”), when the participant disposes of the common stock he or she will recognize as ordinary income an amount equal to the lesser of:
If the participant disposes of the common stock within two years after the Enrollment Date or within one year after the Exercise Date, he or she will recognize ordinary income equal to the fair market value of the Common Stock on the Exercise Date in which the common stock was acquired less the amount paid for the common stock. The ordinary income recognition pertains to any disposition of common stock acquired under the DSPP (such as by sale, exchange or gift).
Upon disposition of the common stock acquired under the DSPP, any gain realized in excess of the amount reported as ordinary income will be reportable by the participant as a capital gain, and any loss will be reportable as a capital loss. Capital gain or loss will be long-term if the employee has satisfied the holding periods requirement described above or, in any event, if the employee has held the common stock for at least one year. Otherwise, the capital gain or loss will be short-term. If the participant satisfies the statutory holding periods, described above, for common stock purchased under the DSPP, we will not receive any deduction for federal income tax purposes. If the participant does not satisfy the holding periods, we will be entitled to a deduction in an amount equal to the amount that is considered ordinary income taxable to the participant. We are entitled to a compensation expense deduction under Section 162 of the Internal Revenue Code only to the extent that ordinary income is realized by the participant as a result of a disqualifying disposition.
Plan Benefits
Because participation in the DSPP is voluntary and we are unable to predict the future value of our common stock, we cannot currently determine the benefits or amounts that will be received in the future by any person or group under the DSPP. The following table sets forth the number of shares purchased under the DSPP from 2017 (the year in which the DSPP was last approved by our stockholders) through 2020 by our named executive officers and the specified groups set forth below.
Purchases Under DSPP 2017 through 2020 | ||||||||
Name | Dollar Value ($) | Number of Shares | ||||||
Olivier Le Peuch Chief Executive Officer | 38,691 | 722 | ||||||
Stephane Biguet Executive Vice President and Chief Financial Officer | — | — | ||||||
Khaled Al Mogharbel Executive Vice President, Geographies | 39,783 | 1,648 | ||||||
Ashok Belani Executive Vice President, Schlumberger New Energy | 39,783 | 1,648 | ||||||
Hinda Gharbi Executive Vice President, Services and Equipment | 28,113 | 737 | ||||||
Simon Ayat Senior Advisor to the CEO; Former EVP and CFO | 77,899 | 2,353 | ||||||
All executive officers as a group (16 persons) | 787,279 | 24,174 | ||||||
All non-employee directors and director nominees as a group (9 persons) | — | — | ||||||
Each associate of the above-mentioned executive officers, directors and director nominees | — | — | ||||||
Each other person who received or is to receive 5% of such options, warrants or rights | — | — | ||||||
All employees as a group, excluding executive officers | 751,934,034 | 21,138,867 |
Proposal
We are requesting that our stockholders vote in favor of approving an amendment and restatement of the Schlumberger Limited 2004 Stock and Deferral Plan for Non-Employee Directors (the “Directors Stock Plan”), which would increase the number of shares available for stock awards under the Directors Stock Plan by 600,000 shares.
Our Board approved the proposed amendment and restatement of the Directors Stock Plan on January 21, 2021, subject to stockholder approval. No other substantive changes are being made to the Directors Stock Plan.
Required Vote
A majority of the votes cast is required to approve this Item 7.
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. For Item 7, abstentions are counted in the denominator for determining the total votes cast.
Summary of the Amended and Restated Directors Stock Plan
The following summary of the material features of the Amended and Restated Directors Stock Plan is subject to the specific provisions contained in the full text of the Amended and Restated Directors Stock Plan set forth as Appendix D. The specific amendments proposed to be made to the Directors Stock Plan are marked within Appendix D.
Plan History
Our Board and our stockholders originally approved the Directors Stock Plan in 2004. In 2007, we amended and restated the Directors Stock Plan to allow non-employee directors to defer the receipt of cash compensation, and to make other administrative changes. The Directors Stock Plan was further amended in 2009 to make further administrative and compliance changes. In each of 2012 and 2019, we amended and restated the Directors Stock Plan to increase the number of shares available under the plan and to increase the limit on annual awards that may be granted to individual directors.
Purpose of the Directors Stock Plan
The Directors Stock Plan is intended to:
|
Administration
The Directors Stock Plan is administered by the Compensation Committee (the “Committee”), as designated by our Board. The Committee has full and exclusive power and authority to:
The Committee may delegate duties under the Directors Stock Plan to the Chief Executive Officer and other senior officers of Schlumberger, other than its granting authority.
Key Terms
The following is a summary of the key provisions of the Amended and Restated Directors Stock Plan.
| ||
Material Tax Consequences
The following discussion describes the material U.S. federal income tax consequences to non-employee directors with respect to awards granted under the Directors Stock Plan. This summary is based on statutory provisions, U.S. Treasury regulations, judicial decisions and rulings of the Internal Revenue Service in effect on the date of this proxy statement. This summary does not describe any state, local or non-U.S. tax consequences.
In general, a non-employee director will recognize ordinary compensation income as a result of the receipt of common stock pursuant to a stock award in an amount equal to the fair market value of the common stock when such stock is received. Upon the disposition of the common stock acquired pursuant to a stock award, the non-employee director will recognize a capital gain or loss in an amount equal to the difference between the sale price of the common stock and the non-employee director’s tax basis in the common stock. This capital gain or loss will be a long-term capital gain or loss if the shares are held for more than one year. For this purpose, the holding period begins on the day after the shares of common stock are received by the non-employee director.
A non-employee director will not have U.S. taxable income upon the grant of a stock award in the form of units denominated in common stock but rather will generally recognize ordinary compensation income at the time the non-employee director receives shares of common stock or cash in satisfaction of such stock unit award in an amount equal to the fair market value of the common stock or cash received.
For compensation attributable to services, Section 457A of the Internal Revenue Code requires that any compensation paid under a deferred compensation plan of a nonqualified entity must be included in the service provider’s income at the time such amounts are no longer subject to a substantial risk of forfeiture. Accordingly, because non-employee directors are always vested in the amounts deferred under the Directors Stock Plan, if Schlumberger is a nonqualified entity and the compensation is not otherwise excludible from Section 457A, stock or cash compensation deferred by non-employee directors who are U.S. citizens or residents in accordance with the procedures established under the Directors Stock Plan will be included in U.S. income by the non-employee director in the year for which the compensation is earned despite a timely election to defer receipt of such compensation.
Dividends paid on shares of outstanding common stock held by a non-employee director will be taxed as dividend income. Cash payments of dividend equivalents with respect to stock units under the Directors Stock Plan will be subject to taxation as ordinary compensation income when received by the non-employee director.
To the extent allowable by relevant laws and regulations, we may be entitled to a deduction for U.S. federal income tax purposes that corresponds as to timing and amount with the compensation income recognized by the participant under the foregoing rules. No deduction will be available on any dividends which are paid on outstanding shares of stock and taxable as dividend income to the recipient.
Unless otherwise required by applicable laws or regulations, Schlumberger will not withhold or otherwise pay on behalf of any non-employee director any taxes arising in connection with an award under the Directors Stock Plan. The payment of any such taxes will be the sole responsibility of each non-employee director. We, however, have the authority to satisfy any withholding obligations from funds or shares of common stock deliverable pursuant to the Directors Stock Plan or other cash compensation due a participant, if applicable.
Plan Benefits
None of the awards made under the Directors Stock Plan prior to the date of the 2021 annual general meeting were granted subject to shareholder approval. If the amendment and restatement of the Directors Stock Plan is approved, we expect to continue to make annual grants of awards to non-employee directors as described above under “Director Compensation in Fiscal Year 2020” beginning on page 23, subject to the limitations set forth in the Directors Stock Plan and to periodic adjustments based on the Committee’s review of director compensation from time to time in its discretion.
The following table sets forth the aggregate number of shares of our common stock that have been granted to our non-employee directors under the Directors Stock Plan since its inception.
No stock options or other warrants or rights have been granted to any director under the Directors Stock Plan; and no awards have been granted under the Directors Stock Plan to any of our executive officers, including our NEOs, other employees, or an associate of any of our directors, executive officers, or director nominees. Further, no other person received 5% or more of the total stock options granted under the Directors Stock Plan since its inception.
General
This proxy statement is first being made available to our shareholders on or about February 22, 2024. It is furnished in connection with the solicitation of proxies by the SchlumbergerSLB Board of Directors of proxies to be voted at Schlumberger’s 2021 annual general meeting of stockholders, which will be held at Johan van Walbeeckplein 11, Willemstad, Curaçao, on Wednesday, April 7, 2021 beginning at 10:00 a.m., Curaçao time,during the 2024 AGM and at any postponement(s)postponement or adjournment(s) thereof.adjournment of the 2024 AGM.
To be admitted to the meeting, stockholdersshareholders of record and beneficial owners as of the close of business on the record date for the meeting, February 17, 2021,7, 2024 must present a passport or other government-issued identification bearingwith a photograph and, for beneficial owners, proof of ownership as of the record date,February 7, 2024, such as the Notice of Internet Availability, (defined below),and/or the top half of the proxy card or voting instruction card that was sent to you with this proxy statement.
Please note, that in lightThe Chairperson of the ongoing COVID-19 pandemic, there may be further restrictions on travel to, or otherwise in-person attendance at, the annual general meeting that may impact your ability to attend the annual general meeting. Also, in order to comply with COVID-19 social distancing guidelines, we may be required to limit the number of stockholders who may attend the meeting in person, and we will require compliance with any applicable governmental requirements or recommendations or facility requirements, such as requiring the use of face coverings and maintaining appropriate social distancing.
The mailing date of this proxy statement is February 25, 2021. Business at the meeting will be conducted in accordance withdetermine the procedures determined by the Chairman offor conducting the meeting and will be limitedlimit the meeting to those matters properly brought before the meeting by or at the direction of our Board or properly presented by a stockholder.shareholder.
This year weWe are using an SEC rule that allows us to use the internet as the primary means of furnishing proxy materials to stockholders. We are sendingour shareholders primarily via the Internet instead of mailing printed copies of those materials to each shareholder. By doing so, we save costs and reduce the environmental impact of our 2024 AGM. On February 22, 2024, we mailed a Notice of Internet Availability to certain of Proxy Materials (the “Notice of Internet Availability”) to our stockholdersshareholders with instructions on how to access the proxy materials online and vote online or requestby telephone. If you would like to receive a printedpaper copy of the materials. Stockholders mayour proxy materials, please follow the instructions included in the Notice of Internet Availability to electAvailability. If you previously chose to receive futureour proxy materials in print by mail or electronically, by email. We encourage stockholdersyou will continue to take advantage of the availability of the proxyreceive access to these materials online to help reduce the environmental impact of our annual general meetings. Our proxy materials are also available at https://investorcenter.slb.com, as well as at www.proxydocs.com/SLB.via email unless you elect otherwise.
Shares cannot be voted at the meeting unless the owner of record is present in person or is represented by proxy. SLB is incorporated in Curaçao and, in accordance with Curaçao law, meetings of shareholders are held in Curaçao. Because many shareholders cannot personally attend the meeting, it is necessary that a large number be represented by proxy.
Each stockholdershareholder of record at the close of business on the record date, February 17, 2021,7, 2024, 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’sthat shareholder’s name. A stockholdershareholder of record is a person or entity who held shares on thatthe record date registered in itsthat shareholder’s name on the records of Computershare Trust Company, N.A. (“Computershare”(Computershare), Schlumberger’sSLB’s stock transfer agent. On the record date, February 7, 2024, there were 1,432,365,447 shares of SLB 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.
On the record date, February 17, 2021, there were 1,398,269,188 shares of Schlumberger common stock outstanding and entitled to vote.
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, as required by 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.
Holders of at least one-half of the outstanding shares entitling the holders thereofentitled to vote at the meeting2024 AGM must be present in person or represented by proxy to constitute a quorum for the taking ofto take 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”)broker non-votes will be considered as present for quorum purposes.purposes, as discussed under “—Effect of Broker Non-Votes and Abstentions.” If a quorum is not present at the meeting, the Board may call a second general meeting of stockholders,shareholders, at which the quorum requirement will not apply.
|
To be elected, director nominees must receive a majority of the votes cast, which means the number of votes cast “for”FOR a director nominee must exceed the number of votes cast “against”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.cast (excluding any abstentions).
If your SchlumbergerSLB shares are held for you in street name (i.e. “street name”—which means you own your shares through a brokerage, bank, or other institutional account),account—then 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. UnlessSLB. If you do not provide specific voting instructions, your broker isshares may not permitted to vote your shares on your behalf, except on Item 3be represented or voted at the meeting, as discussed under “—Effect of Broker Non-Votes and Item 4.Abstentions.”
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 casesroutine matters vote the shares in their discretion. However,discretion (such as Items 3 and 4 in this proxy statement), but they are not permitted to vote on the NYSE precludes brokersother, non-routine matters unless you provide voting instructions, resulting in a “broker non-vote” for the matters on which a broker does not vote. Abstentions occur when you abstain or instruct your broker to abstain from exercising voting discretion on other proposals without specific instructions froma particular matter instead of voting for or against the beneficial owner, as follows:
matter. 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 except that for purposes of satisfying NYSE rules, abstentions are counted in the denominator for determining the total votes cast on Item 5, Item 6 and Item 7.non-routine matters.
StockholdersShareholders with shares registered in their names with Computershare may authorize a proxy:
By Internet www.proxypush.com/SLB | ||
By Telephone (866) 240-5191 | ||
By Mail Sign, date, and mail your proxy card |
The internet and telephone voting facilities for stockholdersshareholders of record will close at 11:59 p.m. Eastern time on Tuesday, April 6, 2021.2, 2024. The internet and telephone voting procedures have been designed to authenticate stockholdersshareholders and to allow you to vote your SLB shares and to confirm that your instructions have been properly recorded.
A number ofMany banks, and brokerage firms, and other nominees participate in programs that also permit beneficial stockholdersowners 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, or other nominee that participates in such a program, you may direct the vote of those shares by the internet or telephone by following the instructions on theany voting form.instruction form or electronic voting instructions that you receive from your bank, brokerage firm or other nominee.
All shares entitled to vote at the 2024 AGM and represented at the meeting by properly executed, unrevoked proxies received prior to the meeting and not revoked will be voted at the meeting in accordance with your instructions. If you are a stockholdershareholder with shares registered in your name with Computershare and you submit a properly executed proxy card or indicate your voting preference via phone or internet but do not direct how to vote on each item,certain items, the persons named as proxies will vote as the Board recommends on each such proposal.
If you are a stockholdershareholder of record, you can change your vote or revoke your proxy at any time by timely delivering a properly executed, later-dated proxy (including an internet or telephone vote)vote by April 2, 2024) or by voting by ballot at the meeting.2024 AGM. If you hold shares through a bank, broker, bank or other holder of record,nominee, you must follow the instructions of your bank, broker, bank or other holder of recordnominee to change or revoke your voting instructions.
SLB will pay the cost of furnishing proxy materials to all shareholders and of soliciting proxies. We have retained D.F. King & Co., Inc. to assist in the solicitation of proxies for a fee estimated at $17,050 plus reasonable expenses. SLB directors, officers, and employees 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.
67 |
When a shareholder owns shares in more than one account, or when shareholders live at the same address, duplicate mailings may result. If you receive duplicate reports, you can help support SLB’s sustainability goals and eliminate added expense by requesting that only one copy be sent. To eliminate duplicate mailings, contact Computershare at the following address:
StockholderComputershare Trust Company, N.A.
P.O. Box 43006
Providence, RI 02940-3006
+ 1 (877) 745-9341
+ 1 (781) 575-2707
We will promptly deliver, upon written or oral request to the address or telephone number above by shareholders at a shared address to which a single copy of the documents was delivered, a separate copy of this proxy statement and the 2023 Annual Report.
In order for a stockholdershareholder proposal to be considered for inclusion in the proxy statement for our 2022 annual general meeting of stockholders2025 AGM pursuant to Rule 14a-8 of the Securities Exchange Act Rule 14a-8,of 1934, as amended (the Exchange Act), or for director nominations to be included pursuant to the Company’sSLB’s proxy access bylaw provisions, such proposals or notice of nominations must be received by the Secretary of the Company, 5599 San Felipe, 17th Floor, Houston, Texas 77056, no later than October 28, 2021,25, 2024, and, in the case of a proxy access nomination, no earlier than September 28, 2021.25, 2024.
For stockholdershareholder proposals to be introduced for consideration at our 2022 annual general meeting of stockholders2025 AGM other than pursuant to Rule 14a-8 and for stockholdershareholder candidates to be nominated for election as directors other than pursuant to our proxy access bylaw provisions, notice generally (unless the date of our 2022 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 12090 days nor earlier than 150120 days before the first anniversary of the date of the 2021 annual general meeting of stockholders.2024 AGM. Accordingly, any such notice must be received no earlier than November 8, 2021,December 4, 2024, and no later than December 8, 2021,January 3, 2025, 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 properly presented by a stockholdershareholder in person at the 2022 annual general meeting of stockholders2025 AGM if the stockholdershareholder making the proposal has not given noticefails to us by December 8, 2021.meet these deadlines and fails to satisfy the requirements of Rule 14a-4 under the Exchange Act.
Annual Report
Stockholders may obtain a copy of our most recent Form 10-K filedFurther, to comply with the SEC,SEC’s universal proxy rules, if a shareholder intends to solicit proxies in support of director nominees submitted under these advance notice provisions, then we must receive proper written notice including financial statements and schedules, without chargeall information required by writingRule 14a-19 under the Exchange Act, delivered 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 material 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 $20,300 plus reasonable expenses. Directors, officers and employeesSecretary of the Company may also solicit proxiesat our executive offices in Houston, Texas, by February 2, 2025 (or, if the 2025 AGM is called for no additional compensation. We will reimburse brokerage firms, fiduciaries and custodians for their reasonable expensesa date that is more than 30 days before or more than 30 days after such anniversary date, then notice must be provided not later than the close of business on the later of the 60th day prior to the 2025 AGM or the 10th day following the date on which public announcement of the 2025 AGM is made). The notice requirement under Rule 14a-19 is in forwardingaddition to the solicitation material to beneficial owners.applicable advance notice requirements under our bylaws.
As of the date of this proxy statement,February 22, 2024, we know of no other business that will be presented at the meeting2024 AGM other than the matters described in this proxy statement. If any additional matters 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,
Dianne B. Ralston |
Houston, Texas February 22, 2024
|
|
Reconciliation of
Our 2021This proxy statement includes non-GAAP financial measures. Freemeasures, including free cash flow, free cash flow generation,margin, adjusted EBITDA, and net income, excluding charges and credits, aredebt. Certain of these non-GAAP financial measures. These measures are used by SLB management as performance metrics when determining certain incentive compensation.
The following is a reconciliationcompensation for our executive officers. Below are reconciliations of these non-GAAP financial measures to the comparable GAAP measures.
Adjusted EBITDA represents income before taxes, excluding charges and credits, depreciation and amortization, interest expense, and interest income. Management believes that the exclusion of chargesadjusted EBITDA is an important profitability measure for SLB and credits from certainthat it provides useful perspective on SLB’s underlying business results and operating trends, and a means to evaluate SLB’s operations period over period. Adjusted EBITDA is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, other measures enables it to evaluate more effectively Schlumberger’s operations period-over-period and to identify operating trends that could otherwise be masked by the excluded items.of financial performance prepared in accordance with GAAP.
(Stated in millions) | ||||
Periods Ended December 31, | Twelve Months 2020 | |||
Cash flow from operations | $ | 2,944 | ||
Capital expenditures | (1,116 | ) | ||
APS investments | (303 | ) | ||
Multiclient seismic data capitalized | (101 | ) | ||
Free cash flow | $ | 1,424 | ||
Business acquisitions and investments | (33 | ) | ||
Net proceeds from divestitures | 434 | |||
Cash paid for severance | 843 | |||
Cash flow generation | $ | 2,668 |
(Stated in millions) | ||||||||||||||||
Year Ended | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||||||||||||
Net income (loss) attributable to SLB | $ | 4,203 | $ | 3,441 | $ | 1,881 | $ | (10,518 | ) | |||||||
Net income attributable to noncontrolling interests | 72 | 51 | 47 | 32 | ||||||||||||
Tax expense (benefit) | 1,007 | 779 | 446 | (812 | ) | |||||||||||
Income (loss) before taxes | $ | 5,282 | $ | 4,271 | $ | 2,374 | $ | (11,298 | ) | |||||||
Charges & credits (details below) | 110 | (347 | ) | (65 | ) | 12,515 | ||||||||||
Depreciation and amortization | 2,312 | 2,147 | 2,120 | 2,566 | ||||||||||||
Interest expense | 503 | 490 | 529 | 563 | ||||||||||||
Interest income | (100 | ) | (99 | ) | (33 | ) | (33 | ) | ||||||||
Adjusted EBITDA | $ | 8,107 | $ | 6,462 | $ | 4,925 | $ | 4,313 |
(Stated in millions) | ||||||||||||||||
Year Ended | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||||||||||||
Merger & integration | $ | 56 | $ | — | $ | — | $ | — | ||||||||
Argentina devaluation | 90 | — | — | — | ||||||||||||
Gain on sale of Liberty shares | (36 | ) | (325 | ) | (28 | ) | — | |||||||||
Gain on Arabian Drilling Company equity investment | — | (107 | ) | — | — | |||||||||||
Repurchase of bonds | — | (11 | ) | — | 40 | |||||||||||
Loss on Blue Chip Swap transactions | — | 139 | — | — | ||||||||||||
Gain on sale of real estate | — | (43 | ) | — | — | |||||||||||
Early repayment of bonds | — | — | 10 | — | ||||||||||||
Unrealized gain on marketable securities | — | — | (47 | ) | (39 | ) | ||||||||||
Goodwill | — | — | — | 3,070 | ||||||||||||
Intangible assets | — | — | — | 3,321 | ||||||||||||
APS investments | — | — | — | 1,994 | ||||||||||||
North America pressure pumping | — | — | — | 587 | ||||||||||||
Workforce reductions | — | — | — | 1,286 | ||||||||||||
Fixed asset impairments | — | — | — | 666 | ||||||||||||
Inventory write-downs | — | — | — | 603 | ||||||||||||
Right-of-use asset impairments | — | — | — | 311 | ||||||||||||
Costs associated with exiting certain activities | — | — | — | 205 | ||||||||||||
Multiclient seismic data impairment | — | — | — | 156 | ||||||||||||
Postretirement benefits curtailment gain | — | — | — | (69 | ) | |||||||||||
Facility exit charges | — | — | — | 254 | ||||||||||||
Gain on sale of OneStim | — | — | — | (104 | ) | |||||||||||
Other | — | — | — | 234 | ||||||||||||
Total Charges & (Credits) | $ | 110 | $ | (347 | ) | $ | (65 | ) | $ | 12,515 |
2024 Proxy Statement | A-1 |
Free cash flow represents cash flow from operations less capital expenditures, Asset Performance Solutions (APS) investments, and multiclient seismicexploration data costs capitalized. Management believes that free cash flow is an important liquidity measure for the Company and that it is useful to investors and management as a measure of Schlumberger’sSLB’s 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 shareholders through dividend payments or share repurchases. 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 2020 | |||
Net loss attributable to Schlumberger | $ | (10,518 | ) | |
Net income attributable to noncontrolling interests | 32 | |||
Tax benefit | (812 | ) | ||
Loss before taxes | $ | (11,298 | ) | |
Charges & credits (details below under “Charges & Credits”) | 12,515 | |||
Depreciation and amortization | 2,566 | |||
Interest expense | 563 | |||
Interest income | (33 | ) | ||
Adjusted EBITDA | $ | 4,313 |
(Stated in millions) | ||||||||||||
Year Ended | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |||||||||
Cash flow from operations | $ | 6,637 | $ | 3,720 | $ | 4,651 | ||||||
Capital expenditures | (1,939 | ) | (1,618 | ) | (1,141 | ) | ||||||
APS investments | (507 | ) | (587 | ) | (474 | ) | ||||||
Exploration data capitalized | (153 | ) | (97 | ) | (39 | ) | ||||||
Free cash flow | $ | 4,038 | $ | 1,418 | $ | 2,997 |
Adjusted EBITDAFree cash flow margin is calculated as free cash flow divided by revenue. Free cash flow margin measures how efficiently SLB converts revenue into free cash flow, and is an indicator of capital efficiency. For the three-year period from January 1, 2021 through December 31, 2023, free cash flow margin of 10.0% was calculated based on SLB’s cumulative, three-year free cash flow of $8.453 billion (reflected in the table above), divided by SLB’s cumulative, three-year revenue of $84.155 billion (comprising $33.135 billion for 2023, $28.091 billion for 2022, and $22.929 billion for 2021).
Net debt represents income (loss) before taxes excluding charges & credits, depreciationgross debt less cash and amortization, interest expense, and interest income.short-term investments. Management believes that adjusted EBITDA is an important profitability measure for Schlumbergernet debt provides useful information regarding the level of SLB’s indebtedness by reflecting cash and that it allows investors and management to more efficiently evaluate Schlumberger’s operations period over period and to identify operating trendsinvestments that could otherwise be masked. Adjusted EBITDAused to repay debt. Net debt is also used by management as a performancenon-GAAP financial measure in determining certain incentive compensation. Adjusted EBITDAthat should be considered in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP.total debt.
(Stated in millions) | ||||||||
Dec. 31, 2023 | Dec. 31, 2022 | |||||||
Cash | $ | 2,900 | $ | 1,655 | ||||
Short-term investments | 1,089 | 1,239 | ||||||
Short-term borrowings and current portion of long-term debt | (1,123 | ) | (1,632 | ) | ||||
Long-term debt | (10,842 | ) | (10,594 | ) | ||||
Net debt | $ | (7,976 | ) | $ | (9,332 | ) |
2024 Proxy Statement |
Charges & Credits
(Stated in millions) | ||||||||||||||||
Twelve Months 2020 | ||||||||||||||||
Pretax | Tax | Noncont. Interests | Net | |||||||||||||
Schlumberger net loss (GAAP basis) | $ | (11,298 | ) | $ | (812 | ) | $ | 32 | $ | (10,518 | ) | |||||
Fourth Quarter | ||||||||||||||||
Gain on sale of OneStim | (104 | ) | (11 | ) | — | (93 | ) | |||||||||
Unrealized gain on marketable securities | (39 | ) | (9 | ) | — | (30 | ) | |||||||||
Other | 62 | 4 | — | 58 | ||||||||||||
Third Quarter | ||||||||||||||||
Facility exit charges | 254 | 39 | — | 215 | ||||||||||||
Workforce reductions | 63 | — | — | 63 | ||||||||||||
Other | 33 | 1 | — | 32 | ||||||||||||
Second Quarter | ||||||||||||||||
Workforce reductions | 1,021 | 71 | — | 950 | ||||||||||||
APS investments | 730 | 15 | — | 715 | ||||||||||||
Fixed asset impairments | 666 | 52 | — | 614 | ||||||||||||
Inventory write-downs | 603 | 49 | — | 554 | ||||||||||||
Right-of-use asset impairments | 311 | 67 | — | 244 | ||||||||||||
Costs associated with exiting certain activities | 205 | (25 | ) | — | 230 | |||||||||||
Multiclient seismic data impairment | 156 | 2 | — | 154 | ||||||||||||
Repurchase of bonds | 40 | 2 | — | 38 | ||||||||||||
Postretirement benefits curtailment gain | (69 | ) | (16 | ) | — | (53 | ) | |||||||||
Other | 60 | 4 | — | 56 | ||||||||||||
First Quarter | ||||||||||||||||
Goodwill | 3,070 | — | — | 3,070 | ||||||||||||
Intangible assets | 3,321 | 815 | — | 2,506 | ||||||||||||
APS investments | 1,264 | (4 | ) | — | 1,268 | |||||||||||
North America pressure pumping | 587 | 133 | — | 454 | ||||||||||||
Workforce reductions | 202 | 7 | — | 195 | ||||||||||||
Other | 79 | 9 | — | 70 | ||||||||||||
Valuation allowance | — | (164 | ) | — | 164 | |||||||||||
Schlumberger net income, excluding charges and credits | $ | 1,217 | $ | $229 | $ | 32 | $ | 956 |
[As proposed to be amended April 7, 2021. Deletions are marked as stricken text and additions are marked with a double underline]
Schlumberger 2017 Omnibus Stock Incentive Plan
(AsAmendedamended andRestatedrestated effectiveas of July 19, 2017January 21, 2021)
| |
| |
| |
“Restricted Stock” means any Common Stock that is restricted or subject to forfeiture provisions.
“Restricted Stock Unit” means a unit evidencing the right to receive one share of Common Stock or equivalent value (as determined by the Committee) that is restricted or subject to forfeiture provisions.
“Restriction Period” means a period of time beginning as of the date upon which an Award of Restricted Stock or Restricted Stock Units is made pursuant to this Plan and ending as of the date upon which the Common Stock subject to such Award is issued (if not previously issued) no longer restricted or subject to forfeiture provisions.
“Section 162(m)” means Section 162(m) of the Code and any Treasury Regulations and guidance promulgated thereunder.
“Section 409A” means Section 409A of the Code and any Treasury Regulations and guidance promulgated thereunder.
“Stock Appreciation Right” or “SAR” means a right to receive a payment, in cash or Common Stock, equal to the excess of the Fair Market Value or other specified valuation of a specified number of shares of Common Stock on the date the right is exercised over a specified strike price, in each case, as determined by the Committee.
“Stock Award” means an award in the form of shares of Common Stock or units denominated in shares of Common Stock, including Restricted Stock or Restricted Stock Units, and which may be structured in the form of a Performance Award. For the avoidance of doubt, a Stock Award does not include an Option or SAR.
“Subsidiary” means (i) in the case of a corporation, a “subsidiary corporation” of the Company as defined in Section 424(f) of the Code and (ii) in the case of a partnership or other business entity not organized as a corporation, any such business entity of which the Company directly or indirectly owns 50% or more of the voting, capital or profits interests (whether in the form of partnership interests, membership interests or otherwise).
Consistent with the requirements specified above in this paragraph 4, the Committee may from time to time adopt and observe such procedures concerning the counting of shares against this Plan maximum as it may deem appropriate, including rules more restrictive than those set forth above to the extent necessary to satisfy the requirements of any national securities exchange on which the Common Stock is listed or any applicable regulatory requirement. The Committee and the appropriate officers of the Companyshall beare authorized to, from time to time, take all such actions as any of them may determine are necessary or appropriate to file any documents with governmental authorities, stock exchanges and transaction reporting systems as may be required to ensure that shares of Common Stock are available for issuance pursuant to Awards.
The Committee may correct any defect or supply any omission or reconcile any inconsistency in this Plan or in any Award in the manner and to the extent the Committee deems necessary or desirable to further Plan purposes or so as to avoid unanticipated consequences or address unanticipated events (including any temporary closure of a stock exchange on which the Common Stock is traded, disruption of communications or natural catastrophe) deemed by the Committee to be inconsistent with the purposes of the Plan or any Award Agreement, provided that no such actionshallwill be taken absent stockholder approval to the extent required under Section 11. Any decision of the Committee in the interpretation and administration of this Planshallwill lie within its sole discretion andshallwill be final, conclusive and binding on all parties concerned. All decisions and selections made by the Committee pursuant to the provisions of the Planshallwill be made by a majority of its members unless subject to the Committee’s delegation of authority pursuant to paragraph 6 herein.
Unless otherwise stated, such a Performance Goal need not be based upon an increase or positive result under a particular business criterion and could include, for example, maintaining the status quo, performance relative to a peer group determined by the Committee or limiting economic losses (measured, in each case, by reference to specific business criteria). In interpreting Plan provisions applicable to Performance Goals and qualified Performance Awards, it is the intent of this Plan to conform with Section 162(m), including, without limitation, Treasury Regulation §1.162-27(e)(2)(i), as to grants pursuant to this subsection and the Committee in establishing such goals and interpreting the Plan shall be guided by such provisions. Prior to the payment of any compensation based on the achievement of Performance Goals applicable to qualified Performance Awards, the Committee must certify in writing that applicable Performance Goals and any of the material terms thereof were, in fact, satisfied. Subject to the foregoing provisions, the terms, conditions and limitations applicable to any qualified Performance Awards made pursuant to this Plan shall be determined by the Committee to the extent permitted by Section 162(m).
[As proposed to be amended April 7, 2021. Deletions are marked as stricken text and additions are marked with a double underline]
Schlumberger Discounted Stock Purchase Plan
(As amended and restated effective as ofJuly 1, 2018January 21, 2021)
The Schlumberger Discounted Stock Purchase Plan (the “Plan”) is designed to encourage and assist all employees of Schlumberger Limited, a Curaçao corporation, and its Subsidiaries (as defined in Section 4 hereof, and together with Schlumberger Limited, the “Company”), where permitted by applicable laws and regulations, to acquire an equity interest in Schlumberger Limited through the purchase of shares of common stock, par value $0.01 per share, of Schlumberger Limited (the “Common Stock”). It is intended that the Plan constitute an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”).
The Plan shall be administered by a Stock Purchase Plan Committee (the “Committee”) appointed by the Board of Directors of Schlumberger Limited (the “Board”), which consists of at least three (3) persons. The Committee shall supervise the administration and enforcement of the Plan according to its terms and provisions, and will have all powers necessary to accomplish these purposes and discharge its duties hereunder including, but not by way of limitation, the power to (a) employ and compensate agents of the Committee for the purpose of administering the accounts of participating employees; (b) construe or interpret the Plan; (c) determine all questions of eligibility; (d) compute the amount and determine the manner and time of payment of all benefits according to the Plan hereunder; and (e) amend the Plan as necessary to comply with the Code or make any other changes to the Plan that do not result in any (i) significant increase in the cost of maintaining the Plan or (ii) significant reduction in the overall benefits provided to employees under the Plan.
The Committee shall act by unanimous decision of its members at a regular or special meeting of the Committee, or by unanimous decision reduced to writing and signed by all members of the Committee without holding a formal meeting. Vacancies in the membership of the Committee arising from death, resignation or other inability to serve shall be filled by appointment of the Board.
The Common Stock subject to issuance under the terms of the Plan will be shares of Schlumberger Limited’s authorized but unissued shares or previously issued shares reacquired and held by Schlumberger Limited. Except as provided in Section 20 hereof, effective from and after January19, 201721, 2021, the aggregate number of shares of Common Stock that may be issued under, and that is authorized by, this Plan shall not exceed25,222,64124,059,600, being equal to the sum of (a) the7,222,6414,059,600 shares of Common Stock available for issuance under the Plan on January 1,20172021 after the issuance of any such shares of Common Stock attributable to the Purchase Periodendingended December 31,20162020, and (b) the18,000,00020,000,000 shares of Common Stock authorized as of January19, 201721, 2021. All shares of Common Stock purchased under the Plan, regardless of source, will be counted against this share limitation.
Each “Employee” (as defined below in this Section 4), except as described in the next paragraph, will become eligible to participate in the Plan in accordance with Section 5 hereof on the first “Enrollment Date” (as defined in Section 5 hereof) coincident with or next following employment with the Company. Participation in the Plan is voluntary.
The following Employees are not eligible to participate in the Plan:
Each eligible Employee as ofJuly 1, 2018January 1, 2021 (the “Restatement Date” herein) who is already enrolled in the Plan may enroll in the Plan as ofJanuary 1, 2019July 1, 2021. Each other eligible Employee who thereafter becomes eligible to participate may enroll in the Plan on the first July 1 or January 1 following the date he or she first meets the eligibility requirements of Section 4 hereof. Any eligible Employee not enrolling in the Plan when first eligible may enroll in the Plan on the first day of July or January of any subsequent calendar year. Any eligible Employee may enroll or re-enroll in the Plan on the dates hereinabove prescribed, or such other specific dates established by the Committee from time to time (“Enrollment Dates”).
In order to enroll, an eligible Employee must complete an enrollment application through the process designated by the Company, unless applicable law requires a paper enrollment form, in which case the form should be signed and submitted to the Stock Department.
Payment for shares of Common Stock is to be made as of the applicable “Purchase Date” (as defined in Section 9 hereof) through payroll deductions (with no right of prepayment) over the Plan’s designated purchase period (the “Purchase Period”), with the first such deduction commencing with the payroll period ending after the Enrollment Date. Each Purchase Period under the Plan shall be a period of six (6) calendar months beginning on July 1 and ending on December 31 of the same calendar year, and beginning on January 1 and ending on June 30 of the same calendar year, or such other period as the Committee may prescribe. Each participating Employee (hereinafter referred to as a “Participant”) will be deemed, by virtue of enrolling in the Plan during a Purchase Period, to authorize such deductions from his or her pay for each month during such Purchase Period, and such amounts will be deducted in conformity with his or her employer’s payroll deduction schedule.
Each Participant may elect to make contributions each pay period in amounts not less than one percent (1%) and not more than ten percent (10%), or such other percentages as the Committee may establish from time to time before an Enrollment Date for all purchases to occur during the relevant Purchase Period, of his or her base earnings or salary, geographical coefficient, overtime pay, shift premiums and commissions from the Company (excluding long-term disability or workers compensation payments and similar amounts, but including elective qualified contributions by the Participant to employee benefit plans maintained by the Company) during such pay period. The rate of contribution shall be designated by the Participant in the enrollment process. Bonuses will be included in determining the amount of the Participant’s contribution.
A Participant may elect to increase or decrease the rate of contribution effective as of the next pay period or the first day of any calendar month by using the process as determined by the Company from time to time. A Participant may suspend payroll deductions at any time during the Purchase Period, by using the process as determined by the Company from time to time. In such case, the Participant’s account will continue to accrue interest determined in accordance with Section 7 hereof, if applicable, and will be used to purchase stock at the end of the Purchase Period. A Participant may also elect to withdraw contributions at any time by using the process as determined by the Company from time to time. Any Participant who withdraws his or her contributions will receive his or her entire account balance, including interest, if any, plus the number of shares of Common Stock held by the Participant under the Plan as soon as administratively feasible. Any Participant who suspends payroll deductions or withdraws contributions during any Purchase Period cannot resume payroll deductions during such Purchase Period, and must re-enroll in the Plan in order to participate in the next Purchase Period.
No more than the maximum contribution permitted any Participant under Section 9 hereof can be accumulated over the Purchase Period, including interest, if applicable. Except in case of cancellation of election to purchase, death, resignation or other terminating event, the amount in a Participant’s account at the end of the Purchase Period will be applied to the purchase of shares of Common Stock.
Contributions will be credited to a Participant’s account as soon as administratively feasible after payroll withholding. Unless otherwise prohibited by laws or regulations, the Committee may determine in its discretion that Participant contributions will receive interest at a rate realized for the investment vehicle or vehicles designated by the Committee for purposes of the Plan. Interest may, in the Committee’s discretion, be credited to a Participant’s account, if the Participant remains in the Plan at the end of the Purchase Period. Any such contributions and interest will be deposited in or held by a bank or financial institution designated by the Committee for this purpose (any such bank or financial institution so designated by the Committee for this or any other purpose hereunder, a “Custodian”).
Enrollment in the Plan by an Employee on an Enrollment Date will constitute the grant by the Company to the Participant of the right to purchase shares of Common Stock under the Plan. Re-enrollment by a Participant in the Plan (but not merely an increase or decrease in the rate of contributions) will constitute a grant by the Company to the Participant of a new opportunity to purchase shares of Common Stock on the Enrollment Date on which such re-enrollment occurs. A Participant who has not terminated employment and has not withdrawn his or her contributions from the Plan will have shares of Common Stock purchased for him or her on the applicable Purchase Date, and he or she will automatically be re-enrolled in the Plan on the Enrollment Date immediately following the Purchase Date on which such purchase has occurred, unless such participant cancels his participation through the process as determined by the Company from time to time confirming that he or she elects not to re-enroll. A Participant who has suspended payroll deductions or withdrawn contributions during any Purchase Period must re-enroll to participate in the Plan in the next Purchase Period.
Each right to purchase shares of Common Stock under the Plan during a Purchase Period will have the following terms:
The right of a Participant to purchase shares of Common Stock granted by the Company under the Plan is for the term of a Purchase Period. The fair market value of the Common Stuck to be purchased during such Purchase Period will be determined by averaging the highest and lowest composite sale prices per share of the Common Stock on the New York Stock Exchange (“Fair Market Value”) on the first trading day of each Purchase Period or such other trading date designated by the Committee (the “Grant Date”). The Fair Market Value of the Common Stock will again be determined in the same manner on the last trading day of the Purchase Period or such other trading date designated by the Committee (the “Purchase Date”). These dates constitute the date of grant and the date of exercise for valuation purposes of Section 423 of the Code.
As of the Purchase Date, the Committee shall apply the funds then credited to each Participant’s account to the purchase of whole shares of Common Stock. The cost to the Participant for the shares of Common Stock purchased during a Purchase Period will be 92.5% of the lower of:
The Company shall, as soon as administratively feasible after the Purchase Date, deliver to the Custodian book entries or entries into each Participant’s account evidencing shares of Common Stock purchased, but Participants shall be treated as the record owners of their purchased shares of Common Stock effective as of the Purchase Date. Shares of Common Stock that are held by the Custodian shall be held in book entry form. Any cash equal to less than the price of a whole share of Common Stock shall be credited to a Participant’s account on the Purchase Date and carried forward in his or her account for application during the next Purchase Period. Any Participant who purchases stock at the end of a Purchase Period and is not re-enrolled in the Plan for the next Purchase Period will receive the number of shares of Common Stock held in his or her account as of the most recent Purchase Date and any cash or interest, if any, remaining in his or her account. Any Participant who terminates employment or withdraws his or her contributions from the Plan prior to the next Purchase Date, will receive the number of shares of Common Stock held in his or her account and a cash refund attributable to amounts equal to less than the price of a whole share of Common Stock, and any accumulated contributions and interest determined in accordance with Section 7 hereof, if any. If for any reason a Participant’s allocations to the Plan exceed $11,562.50 during a
Purchase Period or if the purchase of shares of Common Stock with such allocations would exceed the Maximum Share Limitation, such excess amounts shall be refunded to the Participant as soon as administratively feasible after such excess has been determined to exist.
If as of any Purchase Date the shares of Common Stock authorized for purchase under the Plan are exceeded, enrollments shall be reduced proportionately to eliminate the excess. The Company shall refund to Participants, as soon as administratively feasible, any funds that cannot be applied to the purchase of shares of Common Stock due to excess enrollment, including interest, if any, determined in accordance with Section 7 hereof. The Committee in its discretion may also provide that amounts representing a fractional share of Common Stock that were withheld but not applied toward the purchase of shares of Common Stock in a Purchase Period may be carried over to the next Purchase Period under this Plan or any successor plan according to the regulations as set forth under Section 423 of the Code.
A Participant may elect to withdraw shares of Common Stock held in his or her account at any time (without withdrawing from the Plan) by making an election using a process designated by the Company. Upon receipt of such election, the Custodian will arrange for the issuance and delivery of all shares of Common Stock held in the Participant’s account as soon as administratively feasible.
The right to participate in the Plan terminates immediately when a Participant ceases to be employed by the Company for any reason whatsoever (including death, unpaid disability or when the Participant’s employer ceases to be a Subsidiary) or the Participant otherwise becomes ineligible to participate in the Plan. Participation also terminates immediately when the Participant voluntarily withdraws his or her contributions from the Plan. Participation terminates immediately after the Purchase Date if the Participant is not re-enrolled in the Plan for the next Purchase Period or if the Participant has suspended payroll deductions during any Purchase Period and has not re-enrolled in the Plan for the next Purchase Period. Following termination of participation, the Participant may request that the Committee cause to be paid to the Participant or his or her beneficiary or legal representative all amounts credited to his or her account, including interest, if applicable, determined in accordance with Section 7 hereof, and cause an electronic transmission for the number of shares of Common Stock held in his or her account to be delivered to the Participant or to his or her beneficiary or legal representative.
Unless a Participant has voluntarily withdrawn his or her contributions from the Plan, shares of Common Stock will be purchased for his or her account on the Purchase Date next following commencement of an unpaid leave of absence by such Participant, provided such leave does not constitute a termination of employment. The number of shares of Common Stock to be purchased will be determined by applying to the purchase the amount of the Participant’s contributions made up to the commencement of such unpaid leave of absence plus interest on such contributions, if applicable, determined in accordance with Section 7 hereof. Participation in the Plan will terminate immediately after the purchase of shares of Common Stock on such Purchase Date, unless the Participant has resumed eligible employment prior to the Purchase Date, in which case the Participant may resume payroll deductions immediately.
Each Participant may designate one or more beneficiaries in the event of death and may, in his or her sole discretion, change such designation at any time. Any such designation shall be effective upon receipt by the Company and shall control over any disposition by will or otherwise.
As soon as administratively feasible after the death of a Participant, amounts credited to his or her account, including interest, if applicable, determined in accordance with Section 7 hereof, shall be paid in cash by the Company, and an electronic transmission for any shares of Common Stock shall be delivered to the Participant’s designated beneficiaries or, in the absence of such designation, to the executor, administrator or other legal representative of the Participant’s estate. Such payment shall relieve the Company of further liability to the deceased Participant with respect to the Plan. If more than one beneficiary is designated, each beneficiary shall receive an equal portion of the account, unless the Participant has given express contrary instructions.
The rights of a Participant under the Plan will not be assignable or otherwise transferable by the Participant except by will or the laws of descent and distribution. No purported assignment or transfer of such rights of a Participant under the Plan, whether voluntary or involuntary, by operation of law or otherwise, will vest in the purported assignee or transferee any interest or right therein whatsoever but immediately upon such assignment or transfer, or any attempt to make the same, such rights shall terminate and become of no further effect. If this provision is violated, the Participant’s election to purchase Common Stock shall terminate and the only obligation of the Company remaining under the Plan will be to pay to the person entitled thereto the amount then credited to the Participant’s account.
No Participant may create a lien on any funds, securities, rights or other property held for the account of the Participant under the Plan, except to the extent that there has been a designation of beneficiaries in accordance with the Plan, and except to the extent permitted by will or the laws of descent and distribution if beneficiaries have not been designated. A Participant’s right to purchase shares of Common Stock under the Plan shall be exercisable only during the Participant’s lifetime and only by him or her.
Participants who are paid in foreign currency and who contribute foreign currency to the Plan through payroll deductions, will have such contributions converted to U.S. dollars on a monthly basis. The exchange rate for such conversion will be the rate quoted by a major financial institution selected by the Committee in its sole discretion. If the exchange rate for certain countries cannot be quoted in this manner, the conversion rate shall be determined as prescribed by the Committee. In no event will any procedure implemented for dealing with exchange rate fluctuations that may occur during the Purchase Period result in a purchase price below the price determined pursuant to Section 9 hereof.
All costs and expenses incurred in administering this Plan shall be paid by the Company. Any brokerage fees for the sale of shares of Common Stock purchased under the Plan shall be paid by each Participant.
Annually, the Company shall provide or cause to be provided to each Participant a report of his or her contributions and the shares of Common Stock purchased with such contributions by that Participant on each Purchase Date.
All eligible Employees will have equal rights and privileges with respect to the Plan so that the Plan qualifies as an “employee stock purchase plan” within the meaning of Section 423 or any successor provision of the Code and related regulations. Any provision of the Plan that is inconsistent with Section 423 or any successor provision of the Code will, without further act or amendment by the Company, be reformed to comply with the requirements of Section 423. This Section 18 supersedes all other provisions in the Plan.
A Participant will have no rights as a stockholder under any election to purchase Common Stock until he or she becomes a stockholder of Schlumberger Limited as herein provided. A Participant will become a stockholder with respect to shares of Common Stock for which payment has been completed as provided in Section 9 hereof at the close of business on the last business day of the Purchase Period.
Except as provided in Section 20 hereof, the Board may amend or terminate the Plan at any time; provided, however, that the Committee has the authority to amend the Plan as provided in Section 2 hereof. No amendment will be effective unless, within one year after it is adopted by the Board or effected by the Committee pursuant to Section 2 hereof, it is approved by the holders of a majority of the shares of outstanding Common Stock at a meeting of its stockholders if such amendment would cause the rights granted under the Plan to purchase shares of Common Stock to fail to meet the requirements of Section 423 of the Code (or any successor provision).
In the event the Plan is terminated, the Committee may elect to terminate all outstanding rights to purchase shares of Common Stock under the Plan either immediately or upon completion of the purchase of shares of Common Stock on the next Purchase Date, unless the Committee has designated that the right to make all such purchases shall expire on some other designated date occurring prior to the next Purchase Date. If the rights to purchase shares of Common Stock under the Plan are terminated prior to expiration, all funds contributed to the Plan that have not been used to purchase shares of Common Stock shall be returned to the Participants as soon as administratively feasible, including interest, if applicable, determined in accordance with Section 7 hereof.
The Plan was originally approved by the Board on January 28, 1988, and was amended and restated by the Board on January 21, 1992, January 21, 1998, January 21, 2010and, January 17, 2013, January 19, 2017 and April 18, 2018. The Plan was approved by the holders of a majority of the shares of outstanding Common Stock on April 15, 1992. The January 21, 2010 amendment and restatement of the Plan was similarly approved on April 7, 2010; the January 1, 2013 amendment and restatement of the Plan was similarly approved on April 10, 2013; and the January 19, 2017 amendment and restatement of the Plan was similarly approved on April 5, 2017. This amendment and restatement, which was approved by the Board onApril 18, 2018January 21, 2021, shall become effective as ofJuly 1, 2018January 1, 2021; provided, however, that the changes contained in Section 3 herein related to the increase in the number of shares which may be issued under the Plan will not be effective unless approved by the holders of a majority of the votes cast at a meeting within the 12-month period ending January 21, 2022 (12 months after the date such increase in the number of shares which may be issued under the Plan is approved by the Board).
ThisThe Plan and any offering or sale made to Employees under it are subject to any governmental approvals or consents that may be or become applicable in connection therewith. Subject to the provisions of Section 21 hereof, the Board or the Committee may make such changes in the Plan and include such terms in any offering under the Plan as may be desirable to comply with the rules or regulations of any governmental authority.
The agreements to purchase shares of Common Stock under the Plan will contain such other provisions as the Committee and the Board deem advisable, provided, that no such provision shall in any way be in conflict with the terms of the Plan.
[As proposed to be amended April 7, 2021. Deletions are marked as stricken text and additions are marked with a double underline]
Schlumberger Limited 2004 Stock and Deferral Plan for Non-Employee Directors
(As amended and restated effective January1721,20192021)
Article I: Purposes of Plan and Definitions
“Annual Director Award Date” means the last day of the calendar month in which occurs the first Board meeting following the regular annual general meeting of the stockholders of the Company, or, if the last day of the calendar month is not a business day, then the next business day, or such other date as may be selected by the Committee from time to time.
“Board of Directors” or “Board” means the Board of Directors of the Company.
“Cash Compensation” means the total cash compensation that is paid to Eligible Directors for services rendered, including any annual retainer fees and any annual fees related to committee membership or services as a committee chair.
“Committee” means such committee as is designated by the Board from time to time to administer the Plan in accordance with Article II, or if no such committee is designated, the Board.
“Common Stock” means the common stock, par value $0.01 per share, of the Company.
“Deferral Election” is defined in Section 4.1.
“Deferred Compensation Account” is defined in Section 4.3.
“Determination Date” means the date on which delivery of a Participant’s deferred Stock Awards or Cash Compensation is made or commences, as determined in accordance with Section 5.1.
“Director” means an individual who is serving as a member of the Board.
“Eligible Director” means each Director who is not an employee of the Company or of any of its subsidiaries.
“Fair Market Value” means, as of any date, the value of the Common Stock as determined by computing the average of the high and low composite sales prices per share of Common Stock, as reported on the consolidated transaction reporting system for the New York Stock Exchange for that date, or, if there were no reported prices for that date, the average of the reported high and low prices on the last preceding date on which composite sales were effected on the New York Stock Exchange.
“Money Market Equivalents” means a phantom investment benchmark that is used to measure the return credited to a Participant’s Deferred Compensation Account. To the extent Money Market Equivalents are elected, interest equivalents will be credited to the Participant’s Deferred Compensation Account as of the last day of each calendar month based upon the average daily balance in the account for the month and the IMONEY NET First Tier Institutional Index benchmark return for the month as determined from Northern Trust or a similar or equivalent index of money fund assets to be determined by the Committee to be in effect from time to time.
“Participant” means an Eligible Director who is granted Stock Awards pursuant to Article III.
“Stock Award” means an award of shares of Common Stock, restricted Common Stock or restricted Stock Units pursuant to Article III.
“Stock Unit” means a unit that represents the right to receive one share of Common Stock under such terms and conditions as may be prescribed by the Committee and the Plan.
“S&P 500 Equivalents” means a phantom investment benchmark that is used to measure the return credited to a Participant’s Deferred Compensation Account. To the extent S&P 500 Equivalents are elected, the earnings (or loss) equivalents will be credited (or debited) to a Participant’s Deferred Compensation Account as of the last day of each calendar month based upon the balance in the account as of the last day of the month and the returns realized by the Standard & Poor’s 500 Index for the month.
Article II: Administration of the Plan
Article III: Stock Awards
Article IV: Deferral Election and Accounts
Article V: Delivery of Deferred Shares or Cash
Article VI: Miscellaneous