01—Abstract
Summary
Summary of the 8-K filed January 12, 2024. Cited figures are marked; the original filing is the authoritative source.
APA Corporation filed a Form 8-K on January 12, 2024 under Item 5.02 (Compensatory Arrangements of Certain Officers) to disclose a new form of Performance Share Program Agreement.
The Management Development and Compensation Committee of the Board approved the 2024 Performance Share Program Agreement on January 8, 2024. Performance Shares will be awarded to the Company's executive officers under the 2016 Omnibus Compensation Plan, as amended. The new agreement mirrors the prior form of performance share program agreement, with several changes to how awards vest.
Vesting is based on three individually weighted measures: Relative Total Shareholder Return (40%a), Cash Return on Invested Capital (CROIC) (40%), and reduction in global methane intensity (20%). The methane measure is tied to the three-year reduction against a previous baseline year, using calculation standards applicable to each country of operations. A notable structural change is that the CROIC measure is based on a fixed cash target amount, subject to adjustment based on performance-period results, and is not adjusted for the Company's common stock price.
The TSR and methane measures remain subject to adjustment for both performance results and the stock price. The full agreement is filed as Exhibit 10.1, a Form of 2024 Performance Share Program Agreement dated January 8, 2024.
02—Key points
Key Highlights
- Board committee approved a new 2024 Performance Share Program Agreement on January 8, 2024, under the 2016 Omnibus Compensation Plan, as amended.
- Performance Shares will be awarded to APA Corporation's executive officers.
- Vesting weights: Relative Total Shareholder Return 40%, Cash Return on Invested Capital 40%, and reduction in global methane intensity 20%.
- The methane measure is based on a three-year reduction in methane intensity versus a previous baseline year, using country-specific calculation standards.
- CROIC target is a fixed cash amount that is not adjusted for the common stock price, while TSR and methane remain subject to stock price adjustment.
- The new agreement otherwise mirrors the company's previous form of performance share program agreement.
- Full terms are filed as Exhibit 10.1 (Form of 2024 Performance Share Program Agreement, dated January 8, 2024).
03—Questions
Frequently Asked Questions
What is the purpose of this 8-K filing?
The filing discloses a change in executive compensation arrangements under Item 5.02. It reports that the Compensation Committee approved a new form of Performance Share Program Agreement for executive officers.
How will the performance shares vest?
Vesting is based on three weighted measures: Relative Total Shareholder Return (40%), Cash Return on Invested Capital (40%), and reduction in global methane intensity (20%).
What changed compared with the prior performance share agreement?
The filing states the new agreement mirrors the previous form except for the performance measures. The CROIC measure uses a fixed cash target that is not adjusted for the stock price, while the TSR and methane measures remain subject to stock price adjustment.
How is the methane performance measured?
Methane performance is measured against the percentage reduction from a previous baseline year, delivering a three-year reduction in methane intensity. The calculation follows the standards applicable to each country of operations.
Where can investors find the full terms?
The complete terms are in the Form of 2024 Performance Share Program Agreement, filed as Exhibit 10.1 and incorporated by reference. The 8-K summary is stated to be qualified in its entirety by that document.
04—Continue