Lee M. Tillman, President and CEO, talking

Governance

Marathon Oil believes it is our obligation to do business with ethics and integrity, strong corporate governance, and open and transparent communications.  

Management Approach

The Marathon Oil board of directors oversees our business and assesses risk to ensure high levels of governance, social, workplace and environmental performance for the benefit of our shareholders. Our Corporate Governance Principles describe the roles, responsibilities and functions of the board.

For proper oversight and effective corporate governance, Marathon Oil maintains an independent board in accordance with our principles and New York Stock Exchange rules. Directors are elected annually for a one-year term, with a majority of votes cast required for election. Our Corporate Governance Principles require that the board make an annual determination of each director’s independence. In 2017, all of our board members except the CEO qualified as independent, and no former Marathon Oil CEOs served on our board.

The Corporate Governance and Nominating Committee of our board of directors, with input from the board chairman and CEO, is responsible for recommending new directors for shareholder election and filling director vacancies until shareholders vote on them. The chair and secretary of this committee, the secretary of the Compensation Committee and the CEO should work with a third-party professional search firm to review director candidates and their credentials before making a recommendation to the board. At least one member of the Corporate Governance and Nominating Committee, the Chairman of the Board and CEO should meet with the potential director candidate.

Marathon Oil board of directors

We seek board members with the background, experience and demonstrated capabilities to provide critical analysis and opinions in the best interest of Marathon Oil and our shareholders. In 2017, our board included two members from under-represented minorities, one of whom was also a woman. This represents 25 percent and 12 percent of our board, respectively. Directors cannot serve on our board beyond the last day of the board election term during which they reach 72 years of age. In 2017, our board members ranged in age from 56 to 71 years.

The Marathon Oil board met 12 times in 2017, with approximately 96 percent attendance for board and committee meetings, and non-employee directors held seven executive sessions at regularly scheduled board meetings.


Executive Compensation

Compensation of the Marathon Oil CEO and other executive officers is based on the Company’s financial performance and operational results, and recommended by the board’s Compensation Committee. The primary objectives of our executive compensation program are to pay for performance, encourage creation of long-term stockholder value and pay competitively. By design, a significant portion of our executive officers’ overall compensation, including annual cash bonuses and long-term incentive awards, is “performance-based,” and the opportunity to earn value is largely dependent on Company and individual performance.  

In 2017, our Compensation Committee demonstrated its continued commitment to corporate governance and sound compensation practices, further aligning the interests of executive officers with the long-term interests of stockholders. Based on the committee’s review of our practices and on shareholder feedback, executive compensation in 2018 will include enhanced financial metrics for cash return on invested capital (CROIC) and cash flow per debt adjusted share (CFPDAS), double-trigger equity vesting and peer group refinements. For detailed information on how 2017 executive compensation was determined and our overall compensation practices, please see our 2018 Proxy Statement.

Performance

As a responsible operator, Marathon Oil continued to strengthen the systems, policies and ethical practices that guide our business and relationships.

  • Completed Responsible Operations Management System (ROMS) implementation and standards at the corporate level, added regional vice presidents to the ROMS steering committee, and rolled out ROMS resources that helped to stand up our new Permian Basin asset more efficiently.
  • Continued aligning our ethics and integrity efforts to address current risks and our increased operational focus on the U.S. This included updating our Code of Business Conduct, an Anti-Corruption Compliance Policy and Receiving Hospitalities from Third Parties Policy. 
  • Held a workshop and added a web-based computer access program to continuously improve business continuity plans across the Company.
Lee M. Tillman, President and CEO

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