HESS CORPORATION (NYSE:HES) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

HESS CORPORATION (NYSE:HES) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Annual Cash Incentive Plan

On March6, 2018, the Compensation and Management Development Committee (the “Committee”) of the Board approved annual incentive targets under the Company’s Annual Cash Incentive Plan (the “Plan”) for all of the Company’s full-time employees worldwide, including the Company’s chief executive officer, chief financial officer and three other most highly compensated executive officers (the “Named Executive Officers”). The Plan is intended to promote alignment of pay and performance and an enhanced focus on creating long-term stockholder value.

Payout on awards is determined based on attainment of pre-established enterprise level metrics and individual performance objectives. There are six enterprise metrics, each with pre-established threshold, target and maximum performance goals:

Environment, health and safety;
Exploration resource additions;
Controllable operated cash costs;
E&P capital and exploratory spend; and

The Committee establishes annual incentive targets for each Named Executive Officer based upon position, responsibilities and competitive practice.

Payout for the Named Executive Officers range from 0% to 175% of target based on attainment of the pre-established enterprise metrics. A multiplier may be applied to adjust the bonus down to 0% or up by an additional 25% (capped at 200%) of target based on individual performance compared with individual goals pre-established at the beginning of the fiscal year.

Long-Term Incentive Program

On March6, 2018, the Committee approved the value of awards to the Named Executive Officers under the Company’s long-term incentive program for 2018. The long-term incentive mix for Mr.Hess for 2018 consists of performance share units (PSU), which account for 60% of the target value of his award under the program, and stock options, which account for the remaining 40% of the target value of his award under the program for 2018. As a result, 50% of the target value of Mr.Hess’ awards under the program will be performance-contingent. For the Company’s other Named Executive Officers, 80% of the target value of awards under the program for 2018 will be performance-contingent, with 60% in the form of PSUs, 20% in the form of stock options and the remaining 20% in the form of restricted stock. The Committee believes this mix of awards encourages sustained long-term performance and further supports alignment of the interests of senior management and stockholders.

Restricted stock and stock option awards vest in equal installments over a three-year period beginning on the first anniversary of the grant date. Payouts on the PSUs awarded in 2018 will be determined based on the Company’s total shareholder return (“TSR”) for the three-year performance period ending December31, 2020 compared to the TSR of 12 peer companies over the same period. The 12 peer companies are: Anadarko Petroleum Corporation, Apache Corporation, Chesapeake Energy Corporation, ConocoPhillips, Devon Energy Corporation, EOG Resources, Inc., Marathon Oil Corporation, Murphy Oil Corporation, Noble Energy, Inc., Occidental Petroleum Corporation, Pioneer National Resources Co. and Continental Resources, Inc. Potential payouts range from 0% to 200% of the target award based on the schedule below:

TSR Ranking

PercentageofPerformanceShares

Earned

1st

%

2nd

%

3rd

%

4th

%

5th

%

6th

%

7th

%

8th

%

9th

%

10th

%

11th

%

12th

%

13th

%

If the Company’s total shareholder return for the performance period is negative, the percentage of PSUs earned may not exceed 50% of target.


About HESS CORPORATION (NYSE:HES)

Hess Corporation is an exploration and production (E&P) company. The Company is engaged in exploration, development, production, transportation, purchase and sale of crude oil, natural gas liquids, and natural gas. Its segments include E&P, which is engaged in the sale of crude oil, natural gas liquids and natural gas, and Bakken Midstream, which provides services, including crude oil and natural gas gathering, processing of natural gas and the fractionation of natural gas liquids, transportation of crude oil by rail car, terminaling and loading crude oil and natural gas liquids, and the storage and terminaling of propane, located in the Bakken shale play of North Dakota. Its Bakken Midstream assets include Tioga gas plant, Tioga gas plant, Crude oil train units, Ramberg truck facility, Gathering pipelines and Gathering pipelines. It has production operations located in the United States, Denmark, Equatorial Guinea, the Joint Development Area of Malaysia/Thailand, Malaysia and Norway.

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