Sm Energy Company · NYSE:SM
Sm Energy — Proxy Contest (May 2018)
10 slides from Sm Energy's proxy contest presentation, May 14, 2018
Slide 1: Forward-looking statements
2 Please read this presentation makes reference to: Forward-looking statements This presentation contains forward-looking statements within the meaning of securities laws. The words “anticipate,” “assume,” “believe,” “pending,” “budget,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “plan,
Slide 2: Business Overview
3 $2.7B Market Cap1 $792MM 2018 Non-core asset sales3 $1.6B Liquidity4 48% Raised cash operating margin2 Midland Basin ~88,000 net acres(5) 9 Rigs / 5 Frac Crews Eagle Ford ~165,000 net acres 2 Rigs / 1 Frac Crew #1 Operator in the Midland Basin SM Energy is an independent exploration and production
Slide 3: Implementing strategic transformation for growth going forward
Implementing strategic transformation for growth going forward 4 Strategic Initiatives Accomplishments Growth Going Forward Divested Williston Basin assets(1) Divested third-party operated Eagle Ford Shale assets Divested Powder River Basin Assets Raised $2.2B from divestitures Acquired additional M
Slide 4: Aligned our incentive programs to the Company's strategic transformation
5 Aligned our incentive programs to the Company’s Strategic transformation After initiating our strategic transformation in 2016, our Compensation Committee wanted to align our strategic initiatives with compensation to continue our success Refining LTIP Performance Share Unit (PSU) Metrics for 2018
Slide 5: Reflecting the commodities market environment in our incentive program
6 Reflecting the Commodities Market Environment in our incentive program 2015 – 2017 Incentive Program Targets and Outcomes 2015 Commodity Downturn 2016 Commodity Downturn 2017 Commodity Recovery NEO LTIP opportunity reduced to 75% of target NEO LTIP opportunity reduced to 65% of target NEO LTIP opp
Slide 6: Compensation program overview
Element Form of Delivery Perf. Period FY 2017 CEO Performance Measures Base Salary Cash Annual Individual Goals Short-Term Incentive Plan (STIP) Cash Annual Corporate Performance STIP only implemented if cash flow metric has been met Quantitative Metrics (equally weighted): Production Volume Proved
Slide 7: Highly skilled and experienced Board
Highly Skilled and experienced Board 9 Our director nominees provide an effective balance of fresh perspective and Company experience 7 out of 8 Directors Independent Diversity in professional experience, race, gender, perspectives, backgrounds and national origin Experience in high-level business p
Slide 8: We ask for your support at the Annual Meeting
We ASK FOR YOUR SUPPORT AT THE ANNUAL MEETING 10 Our Board of Directors unanimously recommends a vote “For” all proposals on the proxy ballot for our 2018 Annual Stockholder Meeting FOR election of our eight director nominees FOR ratification of the appointment of our independent auditors FOR annual
Slide 9: Appendix: Definitions of non-GAAP, forward looking metrics
11 Appendix: Definitions of non-gaap, forward looking metrics The following metrics are forward-looking non-GAAP financial measures. The Company believes these measures are commonly used in the E&P industry, and other industries, by shareholders, professional research analysts and others in valuatio
Slide 10: Appendix: Definitions of non-GAAP, forward looking metrics
APPENDIX: DEFINITIONS OF NON-GAAP, FORWARD LOOKING METRICS The following metrics are forward-looking non-GAAP financial measures. The Company believes these measures are commonly used in the E&P industry, and other industries, by shareholders, professional research analysts and others in valuation,