A Message from Our Board
Our stakeholders have come to expect the company’s measured, fact-based approach to drive results. And, early in 2021, Marathon Oil did just that by setting an aggressive goal to meaningfully reduce our GHG emissions intensity by 2025. This medium-term emissions reduction goal ensures that accountability sits with the current leadership team, and we complemented it with a short-term GHG emissions intensity reduction target that directly impacts executive compensation.
This helps position the company for success in a lower-carbon future, and also directly closes one of our gaps with regard to the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations.
We know that aligning incentives to objectives is a powerful and effective way to achieve results, so we made meaningful changes to our executive compensation. These modifications incentivize achievement of our core strategic objectives and encourage the behaviors the company believes are most likely to maximize long-term shareholder value.
We reduced CEO and board total compensation and simplified our short-term incentive scorecard to focus on Marathon Oil’s core financial and ESG objectives. Our long-term incentive structure was redesigned to mitigate overreliance on relative total shareholder return against direct E&P peers, and instead promotes improved performance compared to the broader market. In addition, we introduced a new long-term incentive award that incentivizes sustainable free cash flow generation.
In 2020, we made progress on our ESG performance despite the unprecedented challenges related to the COVID-19 pandemic. We demonstrated nimbleness by acting quickly to protect the health of our employees and communities, including implementing strict COVID-19 protocols and work-from-home options, while also remaining financially disciplined and taking action to protect the enterprise.
One of the things the board is most proud of is our second straight year of best-ever safety performance. This is an excellent example of how Marathon Oil’s core value of “taking ownership” translates into results.
Over the last year, the company grew more resilient as we responded to the market impacts created by the pandemic. Our financial and non-financial performance during such a generational crisis is a testament to our employees and their commitment to our core values. Our focus moving forward will be providing low-cost and reliable energy that supports a strong economy and our quality of life, while also innovating to address the risks of climate change. Marathon Oil is up to the challenge.
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