PROXY STATEMENT
2020 ANNUAL MEETING OF STOCKHOLDERS

              The Board of Directors (the "Board") of Bonanza Creek Energy, Inc. ("we," "us," "our," "Bonanza Creek," or the "Company") requests your proxy for the Annual Meeting of Stockholders (the "Annual Meeting"), which will be held on Wednesday, June 3, 2020, at 12:00 noon (MDT), as a virtual meeting. Distribution of these proxy solicitation materials is scheduled to begin on or about April 24, 2020. By granting the proxy, you authorize the persons named in the proxy to represent you and vote your shares at the Annual Meeting. Those persons will also be authorized to vote your shares to adjourn the Annual Meeting from time-to-time and to vote your shares at any adjournments or postponements of the Annual Meeting. If any other business properly comes before the stockholders for a vote at the Annual Meeting, your shares will be voted in accordance with the discretion of the holders of the proxy.

GENERAL INFORMATION

              This year's Annual Meeting will be held entirely online, which will be conducted through an audio webcast. You must be a Bonanza Creek stockholder as of the close of business on April 15, 2020 in order to participate in the Annual Meeting. Stockholders will be able to attend, vote their shares, and submit questions during the Annual Meeting via a live audio webcast available by visiting the following website, www.virtualshareholdermeeting.com/BCEI2020. To join-in the Annual Meeting, you will need the 16-digit Control Number included on your proxy card or on the instructions that accompanied your proxy materials. Shares held in your name as the stockholder of record may be voted electronically during the Annual Meeting. Shares for which you are the beneficial owner but not the stockholder of record may also be voted electronically during the Annual Meeting.

              Our stockholder question and answer session will include questions submitted live during the Annual Meeting. Questions may be submitted during the Annual Meeting through www.virtualshareholdermeeting.com/BCEI2020.

              The Annual Meeting will begin promptly at 12:00 noon (MDT). Online check-in will begin at 11:50 a.m. MDT, and you should allow ample time for the online check-in procedures.

              If you are a stockholder of record you may revoke your proxy at any time before it is voted at the Annual Meeting. To do this, you must: (i) grant a new proxy bearing a later date (which automatically revokes your earlier proxy), (ii) provide written notice of the revocation to our Company's Secretary at our principal office, which written notice must be received prior to the Annual Meeting, (iii) submit your vote electronically through the Internet before it is voted at the Annual Meeting, (iv) call by telephone to the number provided in your proxy card after the grant of the proxy, or (v) attend the virtual Annual Meeting online and vote using your 16-digit control number. For shares you hold beneficially in the name of a broker, trustee, or other nominee, you may change your vote by submitting new voting instructions to your broker, trustee, or nominee, or by participating in the meeting and electronically voting your shares during the meeting.

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        1

Table of Contents

              Most of the Company's stockholders hold their shares through a broker, bank, or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.

              Stockholders of Record.    If your shares are registered directly in your name with the Company's transfer agent, you are considered the stockholder of record with respect to those shares, and proxy materials are being sent by our transfer agent directly to you. As a stockholder of record, you have the right to vote by proxy or to vote your shares during the Annual Meeting. The proxy materials include a proxy card for the Annual Meeting.

              Beneficial Owners.    If your shares are held in a brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in "street name," and proxy materials will be forwarded to you by your broker or nominee. The broker or nominee is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker how to vote. The proxy materials should include a proxy card or a voting instruction card for the Annual Meeting.

              Voting Stock.    The Company's common stock, par value $0.01 per share, is the only class of securities that entitles holders to vote generally at meetings of the Company's stockholders. Each share of common stock outstanding on the record date is entitled to one vote.

              Record Date.    The record date for stockholders entitled to notice of and to vote at the Annual Meeting was the close of business on April 15, 2020. As of the record date, 20,699,111 shares of the Company's common stock were outstanding and are entitled to be voted at the Annual Meeting.

              Quorum and Adjournments.    The presence, in person or by proxy, of the holders of a majority of the outstanding shares entitled to vote at the Annual Meeting is necessary to constitute a quorum at the Annual Meeting.

              If a quorum is not present, the chair of the meeting or a majority of the stockholders entitled to vote who are present in person or by proxy at the Annual Meeting have the power to adjourn the Annual Meeting from time to time, without notice other than an announcement at the Annual Meeting, until a quorum is present. At any adjourned Annual Meeting at which a quorum is present, any business may be transacted that might have been transacted at the Annual Meeting as originally notified.

              Vote Required.    The directors will be elected by a plurality of the votes of the shares present, in person or by proxy, and entitled to vote on the election of the directors. The (i) ratification of the selection of the Company's independent registered public accountants for 2020 and (ii) approval, on an advisory basis, of the compensation of the Company's named executive officers, will require the affirmative vote of the holders of a majority of the shares present and entitled to vote with respect to these matters. An automated system will tabulate the votes cast by proxy for the Annual Meeting, and the inspector of elections will tabulate votes cast in person at the Annual Meeting. Brokers who hold shares in street name for customers are required to vote shares in accordance with instructions received from the beneficial owners. Brokers are permitted to vote on discretionary items if they have not received instructions from the beneficial owners, but they are not permitted to vote on non-discretionary items absent instructions from the beneficial owner (a "broker non-vote").

              Non-discretionary items include the election of directors and approval, on an advisory basis, of the compensation of the Company's named executive officers. For ratification of the selection of the Company's

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        2

Table of Contents

independent registered public accountant, brokers will have discretionary authority in the absence of timely instructions from their customers. Abstentions and broker non-votes will count in determining whether a quorum is present at the Annual Meeting. Neither abstentions nor broker non-votes will have any effect on the outcome of voting on the director election or on the advisory vote on compensation of our named executive officers. For purposes of voting on the ratification of the selection of the Company's independent registered public accountant for 2020, abstentions will be included in the number of shares voting and will have the effect of a vote against the proposal.

              Default Voting.    A proxy that is properly completed and submitted will be voted at the Annual Meeting in accordance with the instructions on the proxy. If you properly complete and submit a proxy, but do not indicate any contrary voting instructions, your shares will be voted as follows:

•

FOR the election of the nominees for director;



•

FOR the ratification of the selection of Deloitte & Touche LLP ("Deloitte") as the Company's independent registered public accountant; and



•

FOR the advisory vote to approve the compensation of our named executive officers.

              If any other business properly comes before the stockholders for a vote at the meeting, your shares will be voted in accordance with the discretion of the holders of the proxy. The Board knows of no matters, other than those previously stated, to be presented for consideration at the Annual Meeting.

              The members of the Board shall serve one-year terms. The Company's bylaws provide that the directors shall be elected at the annual meeting of stockholders, and each director shall hold office until such director's successor is elected and qualified or until the director's earlier death, resignation or removal. The current terms of the directors will expire at the Annual Meeting.

              Set forth below is biographical information about the Company's nominees for director and the Company's executive officers.

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        3

Table of Contents

              Brian Steck joined our Board in April 2017. Mr. Steck has served as a Partner, Senior Analyst at Mangrove Partners, an investment management firm, where he has worked since 2011. Through early 2011, Mr. Steck managed The Laurel Capital Group, LLC, the general partner of a hedge fund he founded in 2009. From 2006 until 2008, Mr. Steck was Head of US Equities at Tisbury Capital where he built and managed a team focused on event- and fundamentally-driven investment opportunities. From 2000 until 2005, Mr. Steck was a partner at K Capital where he focused on European and U.S. opportunities that included special situations, merger arbitrage, deep value and shareholder activism. Prior to K Capital, Mr. Steck spent 10 years at UBS and its predecessors Swiss Bank Corporation and O'Connor & Associates, where he focused on equity derivative trading and risk management, built equity derivative and event-driven client businesses and was Global Co-Head of Equity Hedge Fund Coverage. Mr. Steck serves on the board of directors of Penn Virginia Corporation. Mr. Steck received a Bachelor's of Science, with highest honors, from University of Illinois at Urbana Champaign. Mr. Steck's extensive experience as a financial analyst has led the Board to conclude that he has the expertise necessary to serve as a director of the Company.

              Carrie L. Hudak joined our Board in October 2019. Ms. Hudak served as Vice President of DJ Basin Development for Anadarko Petroleum Corporation, an oil and natural gas exploration and production ("E&P") company, from May 2017 to September 2019. Prior to that, Ms. Hudak served in various management positions at Anadarko, including General Manager of DJ Basin Development and Execution from March 2016 to May 2017, and Director, Rockies Business Development from November 2014 to March 2016. Ms. Hudak previously served the non-profit organization, Coloradoans for Responsible Energy Development, as its Chairperson from 2018 to 2019, and as a Board Member from 2017 to 2018. Ms. Hudak also served as Treasurer and Executive Board Member for the Colorado Oil and Gas Association from 2017 to 2019. Ms. Hudak received her Master's Degree in Geology from Duke University and her Bachelor's Degree in Geology from Miami University. Ms. Hudak's extensive experience in the oil and gas industry, and particularly her work in the DJ Basin, has led the Board to conclude that she has the expertise necessary to serve as a director of the Company.

              Paul Keglevic joined our Board in April 2017. Mr. Keglevic served as the Chief Executive Officer of Energy Future Holdings Corp. ("EFH"), an electric utility company, from October 2016 until his retirement in March 2018. Previously, Mr. Keglevic served as Executive Vice President and Chief Financial Officer for EFH from June 2008 until October 2016. Mr. Keglevic also served as the Chief Restructuring Officer for EFH beginning in April 2014. Mr. Keglevic was a partner at PricewaterhouseCoopers ("PWC"), where he worked from July 2002 to July 2008. At PWC he was a member of the US leadership team. Prior to PWC, Mr. Keglevic served on the US leadership team for Arthur Andersen, where he was a partner for 15 years. Mr. Keglevic serves on the board of directors of Stellus Capital Investment Corp., Frontier Communications Corporation, and Ascena Retail Group, Inc. He previously served as a member of the board of directors of Philadelphia Energy Solutions LLC, Cobalt International Energy, Inc., Clear Channel Outdoor Holdings, Inc., PetSmart, and several subsidiaries of EFH. He has also been on the boards of the Dallas and State of California Chambers of Commerce and several other charitable and advisory boards. Mr. Keglevic received his B.S. in accounting from Northern Illinois University and is a certified public accountant. Mr. Keglevic's extensive experience with public companies and knowledge of accounting and regulatory issues has led the Board to conclude that he has the expertise necessary to serve as a director of the Company.

              Jack E. Vaughn joined our Board in April 2017. Mr. Vaughn has served as the Chairman and Chief Executive Officer of Peak Exploration and Production, LLC, an oil and natural gas E&P company, since March 2011, where he is responsible for executive management of all operational activity, including drilling, completion, and facility construction in all operating areas, as well as all gas and crude oil transportation and marketing, regulatory and environmental compliance activities. Mr. Vaughn serves on the Board of Directors of Saddle Butte Pipeline II, LLC and was the co-founder and a member of the Board of Directors of Momentum Midstream, LLC from 2007 to 2011. In addition, Mr. Vaughn has held several senior management positions at energy companies in the United States, including Peak Energy Resources, Inc., EnerVest Management Partners, LP and Emerald Gas Operating Company. Mr. Vaughn received his B.S. in Petroleum Engineering from the University of Texas at

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        4

Table of Contents

Austin. Mr. Vaughn's extensive upstream and midstream operational and executive management experience has led the Board to conclude that he has the expertise necessary to serve as a director of the Company.

              Scott D. Vogel joined our Board in April 2017. Mr. Vogel has served as the Managing Member at Vogel Partners LLC, a private investment and advisory firm, since July 2016, after serving as Managing Director at Davidson Kempner Capital Management investing in distressed debt securities from 2002 to July 2016. Previously, he worked at MFP Investors, investing in special situations and turnaround opportunities for the private investment firm of Michael F. Price, and at Chase Securities in its investment banking group. Mr. Vogel has served on numerous boards during his career, including Arch Coal, Inc. from October 2016 to May 2019; Key Energy Services, Inc. from December 2016 to April 2019; and Seadrill from July 2018 to February 2020. He currently serves as a member of the board of Contura Energy and Avaya, and several private companies. Mr. Vogel is a member of the Olin Alumni Board of Washington University and a member of the Advisory Board of Grameen America. Mr. Vogel received his M.B.A. from The Wharton School at the University of Pennsylvania and his B.S.B.A. from Washington University. Mr. Vogel's mix of experience with executive management oversight, finance and capital markets, human resources and compensation, and strategic planning has led the Board to conclude that he has the expertise necessary to serve as a director of the Company.

              Jeff E. Wojahn joined our Board in November 2014. Mr. Wojahn served as Executive Vice President of Encana Corporation, an oil and natural gas E&P company, from 2003 to 2013, and was President of Encana Oil & Gas (USA) Inc. from 2006 to 2013. Beginning in 1985, Mr. Wojahn held senior management and operational positions in Canada and the United States and has extensive experience in unconventional resource play development. He has served as the Executive Chairman of MiddleFork Energy Partners since March 2017 and served as a Strategic Advisory Board member for Morgan Stanley Energy Partners from October 2014 until April 2017. Mr. Wojahn serves on the board of directors of Penn Virginia Corporation. He received his B.S. in Geophysics from the University of Calgary in 1985. Mr. Wojahn's extensive experience of over 30 years in the oil and gas industry and his significant operational and development experience as an executive of other oil and gas companies has led the Board to conclude that he has the expertise necessary to serve as a director of the Company.

              Eric T. Greager, joined Bonanza Creek in April 2018 as President, CEO and member of the Board of Directors. Mr. Greager has 20 years of management experience in the oil and gas industry and previously served as a Vice-President and General Manager at Encana Oil & Gas (USA) Inc. until his departure in 2018. Mr. Greager joined Encana, an oil and natural gas E&P company, in 2006 and served in various management and executive positions, including leading engineering, geoscience and A&D functions, as well as field operations teams from D&C through production. Most recently, Mr. Greager led Encana's Western Operating Area, which includes Eagle Ford, San Juan and Wind River assets and served as a member of the boards of directors of Encana Procurement Inc. and Encana Oil & Gas (USA) Inc. In addition, Mr. Greager previously served on the board of directors of Western Energy Alliance, the board of trustees of the Texas Parks and Wildlife Foundation, and the board of managers of Hunter Ridge Energy Services. Mr. Greager received his Master's Degree in Economics from the University of Oklahoma and his Bachelor's Degree in Engineering from the Colorado School of Mines. He is a licensed Professional Engineer. Mr. Greager's 20 years of management experience, exposure to both the operating and technical aspects of the oil and gas industry and day-to-day leadership of the Company as President and Chief Executive Officer has led the Board to conclude that he has the expertise necessary to serve as a director of the Company.

              Brant H. DeMuth was named Executive Vice President and Chief Financial Officer effective November 14, 2018. Mr. DeMuth previously served as Vice President of Finance and Treasurer at SRC Energy Inc., an oil and natural gas E&P company, from October 2014 until November 2018. Prior to joining SRC Energy, Mr. DeMuth served as Interim Chief Financial Officer of DJ Resources, LLC from August 2013 to September 2014 and as Executive Vice President of Strategy and Corporate Development of Gevo, Inc. from June 2011 to May 2013. Mr. DeMuth currently serves on the University of Northern Colorado's Monfort College of

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        5

Table of Contents

Business Dean's Leadership Council. Mr. DeMuth is a Chartered Financial Analyst and received his M.B.A. in Oil and Gas Finance from the University of Denver and his B.S. in Business Administration from Colorado State University.

              Cyrus "Skip" Marter was named Executive Vice President, General Counsel and Secretary on November 14, 2018. He joined Bonanza Creek in October 2016, as Senior Vice President, General Counsel and Secretary. During the six months leading up to that time, he assisted Bonanza Creek on a seconded basis while with the Denver law firm of Davis Graham & Stubbs LLP. Mr. Marter previously served as Forest Oil Corporation's General Counsel for nine years and led the U.S. legal group at Encana Oil & Gas (USA) Inc. He began his legal career in 1990 at the Houston law firm of Susman Godfrey LLP and was a partner at the firm from 1996 to 2002. Mr. Marter holds a B.S. in Petroleum Engineering from Texas A&M University and a law degree from the University of Texas School of Law.

              Dean Tinsley was named Senior Vice President, Operations in November 2017. He joined the Company in April 2013 as Production Engineering Manager and was named Vice President—Rocky Mountain Asset Management in May 2015 and Vice President, Operations and Engineering in September 2016. Mr. Tinsley is responsible for all operations for the Company, including drilling, completions, production, infrastructure and environmental, health, safety & regulatory compliance ("EHS&RC"). He has more than 25 years of progressive experience in exploration and production management, operations and engineering. From 2005 to 2013, Mr. Tinsley held positions as Asset Director for the Piceance Basin and Director of Operations for the Marcellus Region, respectively, with WPX Energy. Prior to this, he held operational, technical and supervisory roles in three additional basins for Amoco, Barrett Resources and Williams Production Company. Mr. Tinsley holds a B.S. in Engineering from Colorado School of Mines and an M.B.A. from Colorado State University.

              Sandra K. Garbiso was named the Company's Vice President and Chief Accounting Officer as well as principal accounting officer in November 2017. She joined the Company in January 2014 as Manager, Financial Reporting and was named Director, Financial Accounting in March 2015 and Controller in June 2016. Ms. Garbiso is a certified public accountant with over 15 years of accounting and financial management experience. Prior to joining Bonanza Creek, Ms. Garbiso served as the Controller at Republic Financial Corporation from January 2013 to January 2014, and was the Financial Reporting Manager at SM Energy Company from December 2007 to December 2012. Ms. Garbiso has an accounting degree from the University of Northern Colorado.

CORPORATE GOVERNANCE

              Bonanza Creek Energy, Inc. is an independent Denver-based energy company engaged in the acquisition, exploration, development and production of onshore oil and associated liquids-rich natural gas in the United States. Our oil and liquids-weighted assets and operations are concentrated in the rural portions of the Wattenberg Field in Colorado, which we have designated the Rocky Mountain region. The Wattenberg Field is one of the premier oil and natural gas resource plays in the United States, benefiting from a low cost structure, mature infrastructure, strong production efficiencies, multiple producing horizons, multiple service providers, established reserves, and prospective drilling opportunities, which helps facilitate predictable production and reserve growth.

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        6

Table of Contents

              The Board believes that sound governance practices and policies provide an important framework to assist it in fulfilling its duty to stockholders. The Company's Corporate Governance Guidelines cover the following principal subjects:

•

Process for Director Selections;



•

Qualifications and Responsibilities of Directors;



•

Committees of the Board;



•

Director Access to Management and Independent Advisors;



•

Director Compensation;



•

Director Orientation and Continuing Education;



•

Chief Executive Officer Evaluation and Management Succession;



•

Annual Performance Evaluations;



•

The Company's Code of Business Conduct and Ethics;



•

Term Limits for Directors; and



•

Changed Circumstances of the Company's Directors.

              Our Corporate Governance Guidelines, including a copy of the current "Code of Business Conduct and Ethics," are posted on our website at www.bonanzacrk.com. Our Corporate Governance Guidelines are reviewed annually and as necessary by our Nominating and Corporate Governance Committee, and any proposed additions to or amendments of the Corporate Governance Guidelines are presented to the Board for its approval.

              The New York Stock Exchange (the "NYSE") has adopted rules that require listed companies to adopt governance guidelines covering certain matters. The Company believes our Corporate Governance Guidelines comply with the NYSE rules.

              Our Board has separated the Chairman and Chief Executive Officer roles. This leadership structure permits the Chief Executive Officer to focus his attention on managing our business and allows the Chairman to function as an important liaison between management and the Board, enhancing the ability of the Board to provide oversight of the Company's management and affairs. Our Chairman provides input to our Chief Executive Officer and is responsible for presiding over the meetings of the Board and executive sessions of the independent directors, which we expect will be held at every regularly scheduled Board meeting in 2020. Our Chief Executive Officer is responsible for setting the Company's strategic direction and for the day-to-day leadership performance of the Company. Based on current circumstances, the direction of the Company, and the experienced membership of our Board, our Board believes that separate roles for our Chairman and our Chief Executive Officer, coupled with a majority of independent directors and strong corporate governance guidelines, is the most appropriate leadership structure for our Company and its stockholders at this time.

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        7

Table of Contents

              Stockholders or other interested parties can contact any director (including the Chairman of the Board), any committee of the Board, or our independent directors as a group, by writing to them at 410 – 17^th Street, Suite 1400, Denver, Colorado 80202, Attention: Secretary. All such communications will be forwarded to the appropriate member(s) of the Board. Comments or concerns relating to the Company's accounting, internal accounting controls, or auditing matters will be referred to members of the Audit Committee.

              The Company's standards for determining director independence require the assessment of our directors' independence each year and periodically as circumstances change. A director cannot be considered independent unless the Board affirmatively determines that such director does not have any material relationship with the Company, including any of the relationships that would disqualify the director from being independent under the rules of the NYSE. The Board assesses the independence of each independent director and each independent nominee for director under the Company's Corporate Governance Guidelines and the independence standards of the NYSE, and has determined that Ms. Hudak and Messrs. Keglevic, Steck, Vaughn, Vogel, and Wojahn are independent. As the Company's President and Chief Executive Officer, Mr. Greager is not considered an independent director. All members of the Company's Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are considered independent, thus satisfying NYSE listing standards.

              Our Board believes that individuals who serve as directors should have demonstrated notable or significant achievements in business, education, or public service; should possess the requisite intelligence, education, and experience to make a significant contribution to the Board and bring a range of skills, diverse perspectives, and backgrounds to its deliberations; and should have the highest ethical standards, a strong sense of professionalism, and intense dedication to serving the interests of the Company's stockholders. Our Corporate Governance Guidelines limit the number of boards on which a director may sit to no more than four other public company boards in the absence of obtaining the Board's prior approval. The following are qualifications, experience, and skills for Board members, which are important to the Company's business and its future:

•

Leadership Experience—The Company seeks directors who demonstrate extraordinary leadership qualities. Strong leaders bring vision, strategic agility, diverse and global perspectives, and broad business insight to the Company. The directors should demonstrate practical management experience, skills for managing change and deep knowledge of industries, geographies and risk management strategies relevant to the Company. They should have experience in identifying and developing the Company's current and future leaders. The relevant leadership experience the Company seeks includes a past or current leadership role in a major public company or recognized privately held entity; a past or current leadership role at a prominent educational institution or senior faculty position in an area of study important or relevant to the Company; a past elected or appointed senior government position; or a past or current senior managerial or advisory position with a highly visible nonprofit organization.



•

Finance Experience—The Company believes that all directors should possess an understanding of finance and related reporting processes. The Company also seeks directors who qualify as an "audit committee financial expert" as defined in the SEC's rules.



•

Industry Experience—The Company seeks directors who have relevant oil and gas industry experience.

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        8

Table of Contents

•

Diversity of Backgrounds—Although the Board has not established any formal diversity policy to be used to identify director nominees, it is committed to actively seeking women and minority candidates as well as individuals with diverse backgrounds, skills, and experiences. When assessing a Board candidate's background, skills, and experiences, the Nominating and Corporate Governance Committee takes into consideration a broad range of relevant factors, including a candidate's ethnic status, gender, professional, cultural, political, and geographic background.

              Our Board has adopted stock ownership guidelines for our independent directors to further align the interests of our independent directors with the interests of our stockholders. In the interest of adhering to best governance practice, independent directors must hold shares with a fair market value equal to five times such independent director's annual cash retainer. Independent directors will have five years to comply with the ownership requirement starting from the later of (i) the date on which such independent director was appointed or elected and (ii) April 28, 2017. Upon reaching the required ownership level based on the then-current closing price of our common stock, independent directors are not required to accumulate any shares in excess of shares held as of the determination date, regardless of changes in the price of our common stock.

              Our Insider Trading Policy prohibits all directors, officers of the level of Vice President and above, and certain key employees in accounting, legal, and other departments (collectively, "Insiders") from engaging in short-term trading involving Company stock in the absence of the Company's advance approval. Our Insider Trading Policy further prohibits options trading, short sales, trading on margin, hedging, and the buy or sell of puts or calls with respect to the Company's securities, without advance approval.

              Our Stock Ownership Policy prohibits the Company's executive officers, as such term is defined in Rule 3b-7 of the Securities Exchange Act of 1934, as amended (collectively, the "Executive Officers") and independent members of the Board (collectively, the "Independent Directors" and, together with the Executive Officers, the "Covered Persons" and each a "Covered Person"), from pledging as collateral for a loan any of the Company's common stock that they own or have a right to receive.

              While the Board oversees our risk management processes, with particular focus on the most significant risks we face, management is responsible for day-to-day risk management. We believe this division of responsibilities is the most effective approach for addressing the risks we face. We also believe that the current Board leadership structure, with Mr. Steck serving as our Chairman of the Board and Mr. Greager serving as our President and Chief Executive Officer, supports this approach by facilitating communication between management and the Board regarding risk management issues. We also believe that this design places the Board in a better position to evaluate the performance of management, more efficiently facilitates communication of the views of the independent directors, and contributes to effective corporate governance. The Board realizes, however, that it is not possible or desirable to eliminate all risk and that appropriate risk-taking is essential in order to achieve the Company's objectives.

              Except as discussed below, the Board as a whole oversees the Company's assessment of major risks and the measures taken to manage such risks. For example, the Board:

•

provides governance and oversight for the financial and commodity risks assumed by the Company and approves the policies and periodically reviews and discusses with the members of management the

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        9

Table of Contents

procedures and systems in place to identify, review, and mitigate the Company's exposure to such risks;

•

along with the Company's Audit Committee, reviews the Company's commodity price risk and hedging strategy with executive management at least quarterly and provides oversight of the Company's hedging policy; and



•

reviews management's capital spending plans, approves the Company's capital budget and requires that management present for Board-review significant departures from those plans.

              The Company's Audit Committee is responsible for overseeing the Company's assessment and management of financial reporting and internal control risks, as well as other financial risks, such as commodity price risk and the credit risks associated with counterparty exposure. Management and the Company's independent registered public accountants report regularly to the Audit Committee on those subjects.

              The Company's Compensation Committee periodically reviews our compensation programs to ensure that they do not encourage excessive risk-taking and reports its significant findings to the full Board.

              The Company's bylaws provide for the election of directors by a plurality of the votes cast. This means that the seven individuals nominated for election to the Board who receive the most "FOR" votes (among votes properly cast in person, electronically or by proxy) will be elected.

              On November 12, 2018, the Board adopted a Director Resignation Policy (the "Resignation Policy"). The Resignation Policy provides that each nominee to the Board shall submit a contingent resignation to the chairman of the Nominating and Corporate Governance Committee that will become effective only if (i) such director-nominee receives a greater number of "withhold" votes than votes "for" his or her election (a "Majority Withheld Vote") and (ii) the Board accepts the resignation.

              The Nominating and Corporate Governance Committee shall promptly consider the resignation offer and make a recommendation to the Board as to whether the resignation should be accepted. In making this recommendation, the Nominating and Corporate Governance Committee will consider all factors deemed relevant by its members including, without limitation, (1) the stated reasons for the Majority Withheld Vote; (2) the qualifications of the director; (3) the overall composition of the Board and whether accepting the resignation would cause the Company to violate any applicable rule or regulation; and (4) whether accepting the resignation would be in the best interests of the Company and its stockholders. The Board will act on the Nominating and Corporate Governance Committee's recommendation no later than 90 days following the date of the stockholders' meeting at which the election occurred. Following the Board's decision, the Company will promptly publicly disclose its decision whether to accept or reject such tendered resignation in a periodic or current report filed or furnished in accordance with SEC rules.

              Any director who changes his or her employer or otherwise has a significant change in job responsibilities shall give written notice to the Nominating and Corporate Governance Committee, specifying the details, as soon as feasible. Any director who changes his or her employer or otherwise has a significant change in job responsibilities shall also proffer his or her resignation to the Board. The Board, through the Nominating and Corporate Governance Committee, shall review the matter in order to evaluate the continued appropriateness of such director's membership on the Board and each applicable Board committee under these circumstances, taking into account all relevant factors and may accept or reject a proffered resignation. Following the Board's decision, the Company will promptly publicly disclose its decision whether to accept or reject such tendered resignation in a periodic or current report filed or furnished in accordance with SEC rules.

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        10

Table of Contents

              While this summary reflects the current terms of the Resignation Policy, the Board retains the power to amend and administer the policy as the Board, in its sole discretion, determines is appropriate. The Resignation Policy is published on our website, www.bonanzacrk.com, under "Corporate Governance", and is also available by written request to Bonanza Creek Energy, Inc., Investor Relations, 410 - 17th Street, Suite 1400, Denver, Colorado 80202.

              During 2019, the Board held thirteen (13) meetings, including regularly scheduled and special meetings. Our independent directors routinely meet in executive session immediately before or after each meeting of the Board. During 2019, each of our directors attended at least 85% of the aggregate of all meetings of the Board and the standing committees of the Board on which they serve.

              The following table identifies the current members of each committee (or members of such committee at its time of dissolution) and sets forth the number of meetings held in 2019:

Name of Director		Audit Committee		Compensation Committee		Nominating & Corporate Governance Committee		EHS&RC and Reserves Committee		Executive Committee(1)		Management Succession Committee(2)
Independent Directors
Carrie L. Hudak
Paul Keglevic
Brian Steck
Jack E. Vaughn
Scott D. Vogel
Jeff E. Wojahn
Inside Director
Eric T. Greager
Number of Meetings in 2019		5		6		4		2		0		1

 

Legend
Chairman of the Board
Chairperson
Member
Financial Expert

---

(1)

Dissolved April 4, 2019.

(2)

Dissolved June 5, 2019. Its responsibilities were assigned to the Compensation Committee.

              In April 2019 the Board adopted resolutions reflecting the following changes to certain chairmanships and committee memberships, which were effective upon each director's re-election to the Board by stockholders at its 2019 Annual Meeting of Stockholders: (i) Mr. Brian Steck was elected to replace Jack Vaughn as Chairman of the Board; (ii) Paul Keglevic was appointed as Chairman of the Nominating and Corporate Governance Committee to replace Brian Steck as Chairman, and with Brian Steck continuing to serve as a member of the Nominating and Corporate Governance Committee; and (iii) Jack Vaughn was appointed as a member of the EHS&RC and Reserves Committee, replacing Brian Steck as a member. In January 2020, the Board adopted resolutions

​

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        11

​

---

Table of Contents

appointing Carrie L. Hudak as a member of the EHS&RC and Reserves Committee. Effective as of March 4, 2020, Ms. Hudak was appointed as a member of the Audit Committee replacing Mr. Tyree, who contemporaneously resigned from the Board, Audit Committee, and Compensation Committee.

              Each standing committee has adopted a formal charter detailing such committee's duties, functions and responsibilities. The charters for the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are posted on the Company's website, www.bonanzacrk.com, and such charters are drafted in a manner consistent with the regulations of the SEC and standards of the NYSE. The information on our website is not, and shall not be deemed to be, a part of this proxy statement or incorporated herein or into any of our other filings with the SEC.

Audit Committee

              The members of the Audit Committee are Mr. Keglevic, Chairman; Ms. Hudak; and Mr. Vogel. The Audit Committee met five times in 2019.

              Our Board has determined all three members of the Audit Committee to be financially literate under the standards of the NYSE and SEC regulations and has also determined that Mr. Keglevic qualifies as an "audit committee financial expert" as defined in SEC regulations. The Audit Committee oversees, reviews, acts on, and reports on various auditing and accounting matters to our Board, including: the scope of our annual audits, fees to be paid to our independent accountants, the performance of our independent accountants, and our accounting and reporting practices and processes. The Board has delegated to the Audit Committee all authority of the Board as may be required or advisable to fulfill the purposes of the Audit Committee as set forth in the Audit Committee's charter. The Audit Committee may delegate any responsibilities of the Audit Committee to individual members of the Audit Committee. In addition, the Audit Committee oversees our compliance programs relating to legal and regulatory requirements and the Company's assessment and management of financial reporting and internal control risks. Additional information regarding the functions performed by the Audit Committee is set forth in the "Audit Committee Report" included herein.

Compensation Committee

              The members of the Compensation Committee are Mr. Vogel, Chairman; and Mr. Wojahn. The Compensation Committee met six times in 2019.

              The Compensation Committee recommends to the independent directors of the Board for their approval the total compensation of the Chief Executive Officer based on the Compensation Committee's evaluation of the Chief Executive Officer's performance in light of goals and objectives set and approved by the Compensation Committee, the Nominating and Corporate Governance Committee, and the full Board. The Chief Executive Officer makes compensation recommendations to the Compensation Committee for all other executive officers, including salary and annual cash and equity compensation. The Compensation Committee then reviews such recommendations and determines whether to approve them. The Compensation Committee also oversees our compensation and benefit plans; stockholder proposals relating to executive compensation; our human resources strategies and initiatives; the implementation of our Recoupment Policy; and reviews and considers the results of our Say on Pay Votes, and recommends related responses, if any, to the Board. The Board has delegated to the Compensation Committee all authority of the Board as may be required or advisable to fulfill the purposes of the Compensation Committee as set forth in the Compensation Committee's charter. The Compensation Committee may form and delegate authority to subcommittees comprised of members of the Compensation Committee. The Compensation Committee has sole authority to retain and dismiss compensation consultants and other advisors that provide objective advice, information and analysis regarding executive and director compensation. These consultants report directly to and may meet separately with the Compensation Committee and may consult with

​

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        12

​

---

Table of Contents

the Compensation Committee Chairman between meetings. Meetings may, at the discretion of the Compensation Committee, include members of the Company's management, other members of the Board, consultants or advisors, and such other persons as the Compensation Committee or its Chairman may determine. On June 5, 2019, the Board determined to dissolve the Management Succession Committee and assigned responsibility for the oversight of the Company's management succession planning to the Compensation Committee. Additional information regarding the functions performed by the Compensation Committee is set forth in the "Compensation Discussion and Analysis" section and the "Compensation Committee Report" included herein.

Nominating and Corporate Governance Committee

              The members of the Nominating and Corporate Governance Committee are Mr. Keglevic, Chairman; Mr. Steck; and Mr. Vaughn. The Nominating and Corporate Governance Committee met four times in 2019.

              The Nominating and Corporate Governance Committee identifies, evaluates, and recommends qualified nominees to serve on our Board and develops and oversees our internal corporate governance processes. Our Board, through the Nominating and Corporate Governance Committee, evaluates itself annually. The Nominating and Corporate Governance Committee endeavors to achieve an overall balance of diversity of experiences, skills, attributes, and viewpoints among our directors. It does not discriminate based upon race, religion, sex, national origin, age, disability, citizenship, or any other legally protected status. The Nominating and Corporate Governance Committee is also primarily responsible for reviewing and approving the goals and objectives relevant to the Company's Chief Executive Officer's performance and coordinating the annual evaluation of the Chief Executive Officer's performance based on such goals and objectives. The Board has delegated to the Nominating and Corporate Governance Committee all authority of the Board as may be required or advisable to fulfill the purposes of the Nominating and Corporate Governance Committee as set forth in the Nominating and Corporate Governance Committee's charter. The Nominating and Corporate Governance Committee may form and delegate authority to subcommittees comprised of members of the Nominating and Corporate Governance Committee. Additional information regarding the functions performed by the Nominating and Corporate Governance Committee is set forth in the "Other Matters—Stockholder Proposals; Identification of Director Candidates" section included herein.

EHS&RC and Reserves Committee

              The members of the EHS&RC and Reserves Committee are Mr. Wojahn, Chairman; Mr. Greager; Ms. Hudak; and Mr. Vaughn. The EHS&RC and Reserves Committee met two times in 2019.

              The EHS&RC and Reserves Committee assists our Board in fulfilling our responsibilities to provide global oversight and support of the Company's environmental, health, safety, and regulatory compliance policies, programs and initiatives. In carrying out its responsibilities, the Committee reviews the status of our health, safety, and environmental performance, including processes monitoring and reporting on compliance with internal policies and goals and applicable laws and regulations. In addition, our Committee oversees, reviews, acts on, and reports to the Board on matters regarding our reserve engineering reports and reserve engineers. Our Committee oversees (i) the integrity of our reserve reports, (ii) determinations regarding the qualifications and independence of our independent reserve engineers, (iii) the performance of our independent reserve engineers, and (iv) our compliance with certain legal and regulatory requirements relating to reserve reporting.

Executive Committee

              The Executive Committee had the authority of the Board during the periods of time between meeting sessions of the Board, except to the extent such authority was limited by its Charter or by any resolution of the

​

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        13

​

---

Table of Contents

Board addressing the Executive Committee's authority. The Executive Committee consisted of Mr. Vaughn, Chairman; Mr. Greager; and Mr. Steck. The Executive Committee did not meet in 2019.

              The Executive Committee was established in large part to facilitate the transition of Mr. Greager as the Company's new Chief Executive Officer. Because the Executive Committee has fulfilled its primary purpose, the Board determined in April 2019 to dissolve the Executive Committee.

Management Succession Committee

              In August 2018, the Board approved the removal from the responsibilities and duties of the Nominating and Corporate Governance Committee responsibility for establishing and maintaining a management succession plan. The Board concurrently approved amendments to the Company's Corporate Governance Guidelines to provide that (i) a body comprised of the CEO, the Chairman of the Board, the Chairman of the Compensation Committee, and the Chairman of the Nominating and Corporate Governance Committee was charged with establishing and monitoring a process that ensured that an approved management continuity plan is in place and reviewed at least annually with the Board, and (ii) the plan was to include policies and principles to select the CEO as well as policies regarding succession in the event of an emergency or retirement of the CEO. The Management Succession Committee consisted of Messrs. Steck, Vaughn, Vogel, and Greager. The Management Succession Committee met one time in 2019. On June 5, 2019, the Board determined to dissolve the Management Succession Committee and assign responsibility for the oversight of the Company's management succession planning to the Compensation Committee of the Board.

Attendance at Annual Meetings

              The Board encourages all directors to attend all annual meetings of stockholders, if practicable. All of our directors, with the exception of Mr. Vogel, attended the 2019 Annual Meeting of Stockholders. We anticipate that all of our directors will attend the 2020 Annual Meeting.

COMPENSATION DISCUSSION AND ANALYSIS

              This compensation discussion and analysis ("CD&A") provides a general description of our executive compensation program and information about its various components. This CD&A is intended to place in perspective the information contained in the executive compensation tables that follow this discussion.

Executive Summary

              The following individuals are referred to as the "named executive officers" for fiscal year 2019 and are included in the Summary Compensation Table:

Named Executive Officers as of December 31, 2019

•

Eric Greager, President and Chief Executive Officer



•

Brant DeMuth, Executive Vice President and Chief Financial Officer (principal financial officer)



•

Cyrus "Skip" Marter, Executive Vice President, General Counsel and Secretary



•

Dean Tinsley, Senior Vice President, Operations



•

Sandi Garbiso, Vice President and Chief Accounting Officer

​

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        14

​

---

Table of Contents

Introduction

              The information presented in this CD&A focuses on our fiscal year 2019; however, we also describe compensation actions taken before or after fiscal year 2019 to the extent such discussion enhances the understanding of our executive compensation disclosure.

              2019 Financial and Operational Results

              Our 2019 financial and operational results include:

•

Lease operating expense decreased by $9.6 million or $2.48 per barrel of oil equivalent ("Boe") for the year ended December 31, 2019 when compared to the same period in 2018;



•

General and administrative expense per Boe decreased 30% for the year ended December 31, 2019 when compared to the same period in 2018;



•

Crude oil equivalent sales volumes increased 33% for the year ended December 31, 2019 when compared to the same period in 2018;



•

Total liquidity of $281.0 million at December 31, 2019, consisting of cash on hand plus funds available under the Company's credit facility;



•

Cash flows provided by operating activities for the year ended December 31, 2019 was $224.6 million, as compared to cash flows provided by operating activities of $116.6 million during the year ended December 31, 2018;



•

Proved reserves of 121.9 MMBoe as of December 31, 2019 increased 4% when compared to proved reserves as of December 31, 2018;



•

Incurred capital expenditures, inclusive of accruals, of $222.2 million during the year ended December 31, 2019, which was below guidance;



•

Operations of the Company's new oil gathering line to Riverside Terminal commenced in July 2019, resulting in a corresponding $1.50 per barrel reduction to our oil differentials for barrels transported on such gathering line.

              When considering these comparisons of financial and operations results, note that the results for the year ended December 31, 2018 include results of operation of our Mid-Continent assets prior to their sale on August 6, 2018.

              Business Strategies and 2020 Outlook

              The Company's primary objective is to maximize shareholder returns by responsibly developing our oil and gas resources. We seek to accomplish this through development of existing inventory and value-accretive acquisition and divestiture activity. We seek to balance production growth with maintaining a conservative balance sheet. Key aspects of our strategy include:

•

Multi-well pad development across our leasehold.  We believe horizontal development is the most efficient and economical way to recover the hydrocarbons located within our leasehold.

​

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        15

---

Table of Contents

•

Enhanced completions.  We continuously evaluate completion designs to increase well productivity and apply a multivariate regression analysis with the objective of optimizing economic returns. Petrophysical, geological, and geophysical analysis is used in conjunction with spacing evaluations and individualized well designs to increase value of each spacing unit.



•

Continuous safety improvement and strict adherence to health and safety regulations.  Our goal is to utilize industry best practices to meet or exceed regulatory requirements and consistently engage stakeholders in our development planning. We strive to maintain a safe workplace for our employees and contractors at all times.



•

Environmental stewardship.  We constantly strive to control and reduce emissions and seek to comply with all applicable air quality and other environmental rules and regulations. We employ best practices including pipeline gathering and takeaway as well as vapor recovery and leak detection equipment. Additionally, we work closely with our service providers to help ensure they stay in compliance with environmental regulations when operating on our behalf.



•

Disciplined approach to acquisitions and divestitures.  Opportunities are evaluated in the context of maintaining development flexibility and a healthy balance sheet. We pursue value-accretive acquisitions and strive to maximize scale and minimize financial and operational risk.



•

Prudent risk management.  The Company believes a healthy balance sheet, focus on cost control, and minimizing long-term commitments are critical to controlling risk. A low debt profile and judicious use of hedging practices help reduce cash flow volatility. Continually striving to be a cost-efficient operator and maintaining a flexible capital spending program enable us to respond to changing market conditions.

              The Company's initial 2020 capital budget of $215.0 million to $235.0 million assumed the continuation of a one-rig operated program in the Company's legacy acreage and the startup of a one-rig non-operated program in the Company's French Lake area in late 2020. However, due to the unprecedented drop in commodity prices that commenced in early March 2020, the Company updated its 2020 operating plan to reflect an anticipated 2020 capital budget of $80.0 million to $100.0 million. The Company's reduced planned development activity included limited drilling and completion activity that concluded in March 2020. Should commodity prices recover, and the economic returns justify resuming limited development activity, the Company will do so. Actual capital expenditures could vary significantly based on, among other things, changes in the operator's development pace in French Lake, market conditions, commodity prices, drilling and completion costs, well results, and changes in the borrowing base under our credit facility.

              In further response to the recent drop in commodity prices, both our named executive officers and our independent directors have voluntarily reduced their compensation. As described in detail below, effective in early April 2020, our Chief Executive Officer's salary was reduced by 12.5%, the other named executive officers' salaries were each reduced by 10%, and our independent directors' base annual cash retainers were reduced by 15%.

              Features of Our Compensation Program in 2019

              We strive to create a compensation program that encourages long-term value creation by tying individual compensation to the attainment of our annual performance targets and the long-term performance of our stock

​

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        16

​

---

Table of Contents

while acknowledging and fostering the unique qualifications, skills, experience, and responsibilities of each individual. Key features include:

Practices that We Engaged in or Allowed in 2019

		ü		Pay for Performance—Total compensation of our named executive officers was substantially weighted toward performance-based pay. Our short-term cash incentive awards, which were fully at-risk, were based on performance against pre-set key financial, operational and strategic execution performance indicators. Further, the majority of our long-term incentive awards granted to our named executive officers in 2019 are tied to three-year absolute and relative total shareholder return and three-year return on capital employed, and are fully at-risk.
		ü		External Benchmarking—Our Compensation Committee reviews competitive compensation data based on an appropriate group of exploration and production peer companies prior to making annual compensation decisions.
		ü		Mitigation of Undue Risk—We conduct a risk assessment annually to carefully consider the degree to which compensation plans and decisions affect risk-taking. We do not believe that any of the compensation arrangements in place are reasonably likely to have a material adverse impact on the Company.
		ü		Robust Stock Ownership—We have adopted robust stock ownership guidelines for our named executive officers and directors that prohibit executive officers and directors from pledging or hedging Company common stock.
		ü		Minimum Vesting—Our annual equity awards provided for full vesting to occur over a minimum period of three years, except in limited circumstances involving certain terminations of employment.
		ü		Double-Trigger Equity Acceleration upon a Change in Control—Under our Executive Change in Control and Severance Plan (the "Severance Plan"), vesting acceleration of equity incentives following a change in control only occurs if the executive is terminated without cause or resigns for good reason within 12 months following a change in control. As disclosed in the past, the Board amended the Severance Plan during 2017 in a manner that reduced the severance benefits owed to each of the executive categories and better aligned the Severance Plan with the interests of our stockholders.
		ü		Independent Compensation Consultant—We have engaged an independent executive compensation advisor who reports directly to the Compensation Committee and provides no other services to the Company.
		ü		Focus on Total Compensation—Our Compensation Committee conducts a detailed analysis of total compensation prior to making annual executive compensation decisions.
		ü		Consistently Timed Awards—Awards are not timed for recipients to benefit from the release of material, non-public information.
		ü		Recoupment Policy—We have adopted a recoupment policy requiring the recoupment of certain incentive compensation paid to officers of the Company when their conduct constitutes "Detrimental Conduct" under the policy, which helps to ensure that officers act in the best interests of the Company, its parents and subsidiaries, and its stakeholders at all times.

​

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        17

​

---

Table of Contents

Practices that We Did Not Engage in or Allow in 2019

				No Excise Tax Gross-Ups—Neither our Severance Plan nor our employment agreements provide for excise tax gross-ups.
				No Repricing or Backdating—Our long-term incentive program ("LTIP") prohibits the repricing, backdating, or buyouts of stock options or stock appreciation rights.
				No Hedging or Derivative Transactions in Company Stock—We prohibit our executives from engaging in any short-term trading, short sales, option trading, or hedging transactions related to our common stock. We also prohibit our executives from purchasing our common stock on margin.
				Minimal Perquisites—We offer minimal perquisites to the Company's executives, few of which are not offered to all of the Company's employees. The Company believes executive salary and short-term incentive program ("STIP") payments, as well as LTIP grants, fully compensate our executives.

              Compensation Committee Consideration of 2019 Stockholder Advisory Vote on Our Compensation Program.    Our Compensation Committee is continuously mindful of our stockholders' views on executive compensation. At our 2019 Annual Meeting of Stockholders, approximately seventy-three percent (73%) of the advisory votes cast voted to approve our named executive officer compensation. The Compensation Committee considered the vote to be responsive to certain issues raised by a proxy advisory firm and its "Against" recommendation on the Company's advisory vote. Specifically, the issues raised concerned (i) inducement awards granted to our Chief Executive Officer and Chief Financial Officer and (ii) severance benefits provided to certain former officers of the Company, in all instances during 2018. The Compensation Committee believed, and continues to believe, that the inducement awards and the severance benefits were appropriate and in the interests of the Company and its stockholders. However, the Company did not grant or pay any inducement awards or severance benefits to any of its named executive officers during 2019 and the Compensation Committee believes that the Company has addressed concerns regarding those items such that they are no longer applicable.

              Additionally, during the first quarter of 2020, the Company conducted a broad stockholder outreach regarding the Company's compensation program and practices. The Company's top 25 stockholders, representing almost 80% of the Company's stock ownership, were contacted and invited to participate in teleconferences with representatives of the Company. Senior management of the Company, as well as Mr. Vogel, Chairman of the Compensation Committee, conducted teleconferences with those stockholders who elected to participate. Valuable stockholder feedback was gathered, and it confirmed the Compensation Committee's belief that (i) the inducement awards and severance benefits provided during 2018 were the greatest concerns that stockholders had with respect to the advisory vote on our 2018 compensation program and (ii) stockholders would likely vote favorably with respect to the Company's advisory vote on its 2019 compensation programs if such issues have not recurred. The stockholders also expressed a desire that the Company continue to emphasize a pay-for-performance approach and avoid, for example, excessive use of time-based LTIP awards. In response, the Compensation Committee intends to continue weighting LTIP awards to the named executive officers so that at least 60% of such awards are in the form of performance stock units ("PSUs") and no more than 40% are in the form of time-based restricted stock units ("RSUs").

​

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        18

​

---

Table of Contents

              Highlights of Compensation Actions.    The table below summarizes key actions taken in 2019:

Element		Action
Flat Base Salaries		Our Board and Compensation Committee elected not to increase the base salary for most named executive officers in 2019. Further, one of our named executive officers voluntarily elected to reduce his base salary in December 2019 and all named executive officers voluntarily elected to reduce their base salaries in March 2020.
STIP Metrics		As we described in last year's Compensation Discussion and Analysis, the Compensation Committee implemented changes in 2018 to both our STIP and LTIP structure to place greater emphasis on capital efficiency and returns on capital. The Compensation Committee adopted two new key performance indicator ("KPI") metrics: a Wells Returns Ratio and a Production Efficiency Ratio, both of which are described in detail below. These new KPIs remained in the 2019 STIP.
LTIP Awards		The Compensation Committee implemented changes in 2018 to the Company's LTIP structure that continued for 2019 awards. Sixty percent of the awards to the named executive officers (measured by grant date fair value) were in the form of new PSUs. Half of these PSUs vest and payout based on the Company's absolute and relative total shareholder return over a three-year performance period. The other half of the PSUs vest and payout based on the Company's return on capital employed over the same three-year performance period. The remaining forty percent of the LTIP awards to the named executive officers were in the form of time-based RSUs. This structure was used again in 2019.

              2020 Compensation Program.    Our Board and Compensation Committee remain focused on structuring our compensation program to ensure proper alignment of pay with performance. Prior to the recent dramatic disruptions in the capital markets and the unprecedented drop in commodity prices, we had expected our STIP structure, as applied in 2018 and 2019, to be followed again in 2020.

              As an initial step, we announced on March 30, 2020 that, upon the voluntary recommendation of our named executive officers, we have reduced the base salary for each of them.

              Our Compensation Committee is currently assessing how to adjust our 2020 STIP to account for, e.g., the Company's decision to cease all drilling and completion activities in March 2020, the critical need for cost-saving efforts, a desire to protect the Company's balance sheet, and the potential for advantageous strategic steps during the remainder of 2020, among other considerations.

              We also expect to make changes to our LTIP program. The Compensation Committee believes that grant-date values for LTIP awards made in 2020 will be materially less than such values for 2019 awards, due in part to the need to preserve the remaining shares available for grants under our LTIP. The Compensation Committee also plans to make certain changes to the PSU portion of our LTIP program. Anticipated payouts for PSUs awarded to the named executive officers in 2018 and 2019 remain at zero. In order to ensure that our LTIP program retains the desired level of incentive and retentive effect, we plan to adjust the return-on-capital-employed and total-shareholder-return performance levels in the 2020 PSU awards in order to make them more reasonably achievable.

​

BONANZA CREEK ENERGY, INC. 2020 Proxy Statement        19

​

---

Table of Contents

Compensation Philosophy and Objectives

              At Bonanza Creek, we view our employees as an investment for the future. We invest in our people to grow our business and deliver more value to our stockholders. The objectives of our compensation program are:

•

to attract, retain and motivate the most qualified individuals in the oil and gas industry whom we can identify and recruit;



•

to provide total compensation that aligns compensation levels with performance and that is flexible enough to respond to changing market conditions; and



•

to align the interests of our named executive officers with our stockholders' interests.

              We design our compensation program to reward named executive officers for performance that creates stockholder value, in that incentive compensation is only earned by successfully implementing our long-term strategy or by achieving our short-term goals. Our compensation program, including benefits and perquisites, is reviewed by our Compensation Committee annually.