Summary
Baker Hughes Company (BKR) announced on December 17, 2020, the Compensation Committee's approval of "Transformation Incentive Awards" for its Chief Executive Officer, Chief Financial Officer, and other named executive officers. These awards, effective from January 1, 2021, to December 31, 2023, are designed to align, focus, and retain senior leadership critical to executing the company's "transformative commitments" during a pivotal three-year period. The awards consist entirely of at-risk performance units, with payouts contingent on achieving key financial and strategic metrics aimed at positioning Baker Hughes within the evolving energy transition landscape.
Key Highlights
- 1Baker Hughes' executive leadership (CEO, CFO, and other named officers) received new "Transformation Incentive Awards" effective January 1, 2021.
- 2These awards are 100% at-risk performance units, meaning payout is entirely dependent on achieving specific goals.
- 3The performance period for these awards is three years, from January 1, 2021, to December 31, 2023.
- 4Payouts are tied to achieving key financial and strategic metrics focused on the energy transition and adapting to the changing energy landscape.
- 5Potential payouts can range from 0% to 200% of the target award value, based on company performance relative to peers and strategic objectives.
- 6Awards will be paid in cash in early 2024, after the performance period concludes.
- 7Specific target award values were disclosed for key executives: Lorenzo Simonelli ($3,000,000), Brian Worrell ($1,500,000), Maria Claudia Borras ($1,500,000), and Roderick Christie ($1,500,000).
Frequently Asked Questions
The primary purpose is to align, focus, and retain senior leadership who are critical to executing the company's transformative commitments over the next three years. The awards are intended to incentivize executives to achieve key financial and strategic metrics related to the energy transition and the company's evolution in a changing energy landscape.
No, these awards are 100% at-risk performance units. Payouts are fully contingent upon the company achieving specific predetermined financial and strategic goals over the three-year performance period (January 1, 2021 - December 31, 2023). The payout can range from zero to 200% of the target value.
If an executive voluntarily terminates their employment before the end of the three-year performance period, the Transformation Incentive Award will be forfeited. However, under certain involuntary termination scenarios, the service condition will be satisfied. In the event of a change in control of the company, the performance condition for the award will be satisfied at the target level.
The awards, if earned, will be paid in cash in early 2024, following the conclusion of the three-year performance cycle which ends on December 31, 2023.