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Form 20-F
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☐
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Form 40-F
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☒
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Exhibit Number
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Description
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99.1
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Canadian Natural Resources Limited Notice of Annual Meeting and Management Information Circular to Shareholders dated March 17, 2021
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Canadian Natural Resources Limited
(Registrant)
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Date: March 24, 2021
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By:
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/s/ PAUL M. MENDES
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Paul M. Mendes
VP, Legal, General Counsel & Corporate Secretary
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1.
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To receive the Annual Report of the Corporation to the Shareholders, the Consolidated Financial Statements, and the report of the Auditors, for the fiscal year ended December 31, 2020;
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2.
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To elect Directors for the ensuing year;
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3.
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To appoint Auditors for the ensuing year and to authorize the Audit Committee of the Corporation’s Board of Directors to fix their remuneration;
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4.
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To consider, and if deemed appropriate, to pass an ordinary resolution, on an advisory basis, on the Corporation’s approach to executive compensation as described in the Information Circular accompanying this Notice of Meeting; and
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5.
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To transact such other business as may properly be brought before the Meeting or any adjournments thereof.
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Page
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•
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Registered shareholders and duly appointed proxyholders who participate by attending online will be able to listen to the proceedings of the Meeting, ask questions and vote during the specified times, provided they remain connected to the internet and follow the instructions below under the heading Who Can Vote at the Meeting and Voting as a Registered Shareholder.
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If you are a non-registered (beneficial) shareholder and wish to vote your Common Shares online during the Meeting, you must follow the instructions below under Who Can Vote at the Meeting and Voting as a Beneficial Shareholder. Non-registered (beneficial) shareholders who have not duly appointed themselves as proxyholders may still attend the Meeting as guests, but will not be able to vote.
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•
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Guests, including non-registered (beneficial) shareholders who have not duly appointed themselves as proxyholder, will be able to login and listen to the proceedings of the Meeting but will not be able to vote.
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Attendees can login to the Meeting by following the instructions below:
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Login online at: https://web.lumiagm.com/406535259. The Corporation recommends that you log in at least one hour before the Meeting starts.
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Click “Login” and then enter your Control Number (see below) and Password: “cnr2021” (case sensitive).
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Click “Guest” and then complete the online form to access the Meeting.
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Canadian Natural Resources Limited
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1
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2021 Management Information Circular
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Canadian Natural Resources Limited
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2
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2021 Management Information Circular
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Canadian Natural Resources Limited
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3
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2021 Management Information Circular
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Capital Research Global Investors,
333 South Hope Street, 55th Floor,
Los Angeles, CA 90071
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137,922,320 Common Shares(1)
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11.6%
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(1)
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Information as at December 31, 2020 based on the most recent Schedule 13G filed by Capital Research Global Investors on February 16, 2021.
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(1)
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Receiving the Annual Report of the Corporation which includes the Consolidated Financial Statements and the report of the Auditors for the fiscal year ended December 31, 2020.
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(2)
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Electing the directors of the Corporation to serve until the next Annual General Meeting of shareholders.
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(3)
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Appointing the Auditors of the Corporation to serve until the next Annual General Meeting of shareholders and authorizing the Audit Committee of the Board of Directors to set the Auditors’ remuneration.
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(4)
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Conducting an advisory vote on the Corporation’s approach to executive compensation.
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Canadian Natural Resources Limited
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4
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2021 Management Information Circular
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Canadian Natural Resources Limited
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5
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2021 Management Information Circular
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Catherine M. Best,
FCA, ICD.D
(age 67)
Calgary, Alberta
Canada
Director since
November 2003
Independent
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Ms. C.M. Best is a corporate director. Until May 2009, she served as Interim Chief Financial Officer of Alberta Health Services. Prior to that she was Executive Vice-President, Risk Management and Chief Financial Officer of Calgary Health Region from 2000. Prior to 2000, she was with Ernst & Young, a firm of chartered accountants where she served as a staff member and manager from 1980 to 1991, and was Corporate Audit Partner from 1991 to 2000. She holds a Bachelor of Interior Design degree from the University of Manitoba. Ms. C.M. Best is a Chartered Accountant, was awarded her FCA designation in 2005 and her ICD.D in 2009 and is a member of the Board of the Alberta Children’s Hospital Foundation, The Wawanesa Mutual Insurance Company and the Calgary Stampede Foundation.
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Voting Results at 2020 Annual Meeting
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For: 87.73%
Withheld: 12.27%
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Other Public Company Board Memberships
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Superior Plus Corporation
Badger Daylighting Ltd.
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Board and Committee Participation – 100%
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Holdings – Ms. Best exceeds her Ownership Requirements with holdings having an aggregate value of $2,034,123.
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Meetings
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Attendance
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Securities Held
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Value
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Required Ownership
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Board of Directors
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5 of 5
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51,838 Common Shares
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$ 2,034,123
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$440,899
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Audit (Chair)
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5 of 5
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Compensation
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6 of 6
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Canadian Natural Resources Limited
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6
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2021 Management Information Circular
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Dr. M. Elizabeth Cannon, O.C.
(age 58)
Calgary, Alberta
Canada
Director since
November 2019
Independent
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Dr. M.E. Cannon is a corporate director. Dr. Cannon is currently President Emerita at the University of Calgary, having previously served at the University of Calgary as Dean of the Schulich School of Engineering from 2006-2010, as well as President and Vice Chancellor from 2010 to 2018. Dr. Cannon is a fellow of the Royal Society of Canada and the Canadian Academy of Engineering, an associate of the National Academy of Engineering (US) and a corresponding member of the Mexican Academy of Engineering. Dr. Cannon holds a Bachelor of Applied Sciences (Mathematics) from Acadia University as well as Bachelor of Science, a Master of Science and a PhD in Geomatics Engineering, all from the University of Calgary. Dr. Cannon is a professional engineer and a member of the Association of Professional Engineers and Geoscientists of Alberta (“APEGA”). She also holds Honorary Doctorates from 3 universities as well as an Honorary Bachelor of Business Administration from the Southern Alberta Institute of Technology. Dr. Cannon was a recipient of the Order of Canada in 2019.
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Voting Results at 2020 Annual Meeting
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For: 99.40%
Withheld: 0.60%
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Other Public Company Board Memberships
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Sundial Inc.
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Board and Committee Participation – 100%
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Holdings – Dr. Cannon exceeds her Ownership Requirements with holdings having an aggregate value of $459,657.
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Meetings
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Attendance
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Securities Held
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Value
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Required Ownership
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Board of Directors Nominating,
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5 of 5
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10,364 Common Shares
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$ 406,683
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N/A(1)
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Governance and Risk(2)
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2 of 2
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1,350 DSUs
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$52,974
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Health, Safety, Asset
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3 of 3
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Integrity and Environmental(2)
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Reserves(2)
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2 of 2
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(1)
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Dr. Cannon has 5 years from her appointment to achieve the required ownership threshold for Directors.
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(2)
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Dr. Cannon was appointed to each of the Nominating, Governance and Risk Committee; the Health, Safety, Asset Integrity and Environmental Committee; and the Reserves Committee on March 4, 2020.
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N. Murray Edwards, O.C.
(age 61)
St. Moritz, Switzerland
Executive Chair
Director since
September 1988
Non-independent
(Management)
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Mr. N.M. Edwards is an investor and corporate director. Prior to December 2015, he was President, Edco Financial Holdings Ltd., a private management and consulting company. He has been a major contributor to the success and growth of the Corporation since becoming a Director and significant shareholder in 1988. Prior thereto, he was a partner of the law firm Burnet, Duckworth and Palmer in Calgary. He holds a Bachelor of Commerce degree (Great Distinction) from the University of Saskatchewan and a Bachelor of Laws degree (Honours) from the University of Toronto and is a recipient of the Order of Canada.
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Voting Results at 2020 Annual Meeting
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For: 97.18%
Withheld: 2.82%
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Other Public Company Board Memberships
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Ensign Energy Services Inc.
Magellan Aerospace Corporation
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Board and Committee Participation – 100%
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Holdings – Mr. Edwards exceeds his Ownership Requirements
with holdings having an aggregate value of $860,893,776.
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Meetings
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Attendance
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Securities Held
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Value
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Required Ownership
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Board of Directors
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5 of 5
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21,939,189 Common Shares
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$ 860,893,776
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$ 2,079,760
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1,975,000 Stock Options
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856,625 PSUs
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Canadian Natural Resources Limited
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7
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2021 Management Information Circular
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Christopher L. Fong
(age 71)
Calgary, Alberta
Canada
Director since
November 2010
Independent
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Mr. C.L. Fong is a corporate director. Until his retirement in May 2009, he was Global Head, Corporate Banking, Energy with RBC Capital Markets. Prior thereto, between 1974 and September 1980, Mr. C.L. Fong worked as a petroleum engineer and as a corporate planning analyst in the oil and gas industry. He has served as Chair of EducationMatters, Calgary’s Public Education Trust, as a governor of Honen’s, an International Piano Competition, past Chair of UNICEF Canada and has served on the Petroleum Advisory Committee of the Alberta Securities Commission. Mr. C.L. Fong graduated from McGill University with a Bachelor of Chemical Engineering degree and has post graduate courses in Finance, Economics and Accounting from McGill University and the University of Calgary.
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Voting Results at 2020
Annual Meeting
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For: 99.02%
Withheld: 0.98%
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Other Public Company
Board Memberships
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Computer Modelling Group Ltd.
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Board and Committee Participation – 100%
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Holdings – Mr. Fong exceeds his Ownership Requirements with holdings having an aggregate value of $1,925,389.
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Meetings
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Attendance
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Securities Held
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Value
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Required Ownership
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Board of Directors
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5 of 5
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34,722 Common Shares
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$ 1,362,491
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$ 440,899
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Health, Safety, Asset Integrity and Environmental (Chair)
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4 of 4
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14,345 DSUs
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$562,898
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Reserves
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3 of 3
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Ambassador Gordon D. Giffin
(age 71)
Atlanta, Georgia
U.S.A.
Director since May 2002 and
Lead Independent Director
since May 2012
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Ambassador G.D. Giffin is a partner and Global Vice-Chair at Dentons US LLP, in their Washington, D.C. and Atlanta, Georgia offices, and was a Senior Partner with McKenna Long & Aldridge LLP, a law firm based in Washington, D.C. and Atlanta, Georgia from 2001 to 2015 when they merged with Dentons. Prior thereto, he was the United States Ambassador to Canada from 1997 to 2001 after a career spanning 30 years engaged in the private practice of business and regulatory law. He holds a Bachelor of Arts degree from Duke University and a J.D. from Emory University School of Law. Ambassador Giffin also serves on the Board of Trustees of the Carter Presidential Center and is a member of both the Council on Foreign Relations and the Trilateral Commission.
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Voting Results at 2020 Annual Meeting
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For: 96.17%
Withheld: 3.83%
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Other Public Company Board Memberships
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Canadian National Railway Company
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Board and Committee Participation – 100%
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Holdings – Ambassador Giffin exceeds his Ownership Requirements with holdings having an aggregate value of $3,953,901.
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Meetings
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Attendance
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Securities Held
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Value
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Required Ownership
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Board of Directors
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5 of 5
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100,762 Common Shares
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$ 3,953,901
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$440,899
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Audit
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5 of 5
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Nominating, Governance and Risk (Chair)
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3 of 3
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Canadian Natural Resources Limited
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8
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2021 Management Information Circular
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Wilfred A. Gobert
(age 73)
Calgary, Alberta
Canada
Director since
November 2010
Independent
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Mr. W.A. Gobert is an independent businessman. Until his retirement in 2006, he was Vice-Chair of Peters & Co. Limited, a position he held since 2002, and was a member of its Board of Directors and its Executive Committee. He joined Peters & Co. Limited in 1979 as Managing Director, Research and throughout his career at the firm his responsibilities included the research and analysis of integrated oil companies and oil and gas producers. Mr. W.A. Gobert received an MBA (Finance) degree from McMaster University as well as a Bachelor of Science (Honours) degree from the University of Windsor and holds a Chartered Financial Analyst (CFA) designation. He is Senior Fellow, Energy Studies, Centre for Energy Policy Studies with The Fraser Institute.
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Voting Results at 2020 Annual Meeting
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For: 97.33%
Withheld: 2.67%
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Other Public Company Board Memberships
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Paramount Resources Ltd.
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Board and Committee Participation – 100%
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Holdings – Mr. Gobert exceeds his Ownership Requirements with holdings having an aggregate value of $2,823,161.
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Meetings
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Attendance
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Securities Held
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Value
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Required Ownership
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Board of Directors
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5 of 5
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71,946 Common Shares
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$ 2,823,161
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$440,899
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Audit
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5 of 5
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Compensation
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6 of 6
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Nominating, Governance and Risk
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3 of 3
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Steve W. Laut(1)
(age 63)
Calgary, Alberta
Canada
Executive Vice-Chairman
Director since August 2006
Non-independent
(Former Management)
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Mr. S.W. Laut retired from the Corporation effective May 5, 2020 and is a corporate director and businessman. Until his retirement, he was the Executive Vice-Chairman of the Corporation from March 1, 2018. Mr. Laut joined the Corporation as Senior Exploitation Engineer in 1991 and was appointed to positions of increasing responsibility as Vice-President, Operations in 1996; Executive Vice-President, Operations in 2001; Chief Operating Officer in 2003; and, President in 2005. He has been instrumental in contributing to the Corporation’s growth and success during his tenure. Mr. S.W. Laut holds a Bachelor of Science degree in Mechanical Engineering from the University of Calgary and is an APEGA member.
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Voting Results at 2020 Annual Meeting
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For: 96.78%
Withheld: 3.22%
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Other Public Company Board Memberships
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None
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Board and Committee Participation – 100%
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Holdings – Mr. Laut exceeds his Ownership Requirements with holdings having an aggregate value of $92,218,395.
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Meetings
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Attendance
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Securities Held
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Value
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Required Ownership
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Board of Directors
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5 of 5
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2,350,112 Common Shares
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$ 92,218,395
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$440,899
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Reserves
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3 of 3
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238,882 PSUs(1)
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(1)
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Under the Corporation’s PSU Plan, Mr. Laut retains 76% of his unvested PSUs having retired at age 62. See page 20 for more details.
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Canadian Natural Resources Limited
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9
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2021 Management Information Circular
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Tim S. McKay
(age 59)
Calgary, Alberta
Canada
President
Director since February 2018
Non-independent
(Management)
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Mr. T.S. McKay became President of the Corporation on March 1, 2018. Prior thereto, he joined the Corporation as Production Engineer in 1990 and was appointed to positions of increasing responsibility as Vice-President, Production in 1996, Senior Vice-President, Production in 2001, Senior Vice-President, Operations in 2002 and Chief Operating Officer since 2010. He has played a significant role in the Corporation’s evolution throughout his tenure. Mr. T.S. McKay holds a Bachelor of Science in Petroleum Engineering from the University of Alberta. Mr. McKay is also a member of APEGA.
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Voting Results at 2020 Annual Meeting
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For: 98.95%
Withheld: 1.05%
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Other Public Company Board Memberships
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None
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Board and Committee Participation – 100%
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Holdings – Mr. McKay exceeds his Ownership Requirements with holdings having an aggregate value of $46,143,807.
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Meetings
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Attendance
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Securities Held
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Value
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Required Ownership
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Board of Directors
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5 of 5
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1,175,938 Common Shares
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$ 46,143,807
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$2,079,760
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Health, Safety, Asset
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1,490,000 Stock Options
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Integrity and Environmental
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4 of 4
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402,553 PSUs
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Honourable Frank J. McKenna,
P.C., O.C., O.N.B., Q.C.
(age 73)
Cap Pelé, New Brunswick
Canada
Director since August 2006
Independent
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Mr. F.J. McKenna has been the Deputy Chair of TD Bank Group since May 2006. Prior to this, he served as Canadian Ambassador to the United States from 2005 to 2006. From 1998 to 2005, he acted as Counsel to the Atlantic Canada law firm McInnes Cooper, while serving on numerous boards, and he was Premier of New Brunswick from 1987 to 1997. He holds a Bachelor of Arts degree from St. Francis Xavier University, postgraduate studies in political science at Queen’s University, and a Bachelor of Laws degree from the University of New Brunswick. He received the Order of Canada in 2008.
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Voting Results at 2020 Annual Meeting
|
| |
For: 94.77%
Withheld: 5.23%
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Other Public Company Board Memberships
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Brookfield Asset Management Inc.
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Board and Committee Participation – 100%
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Holdings – Mr. McKenna exceeds his Ownership Requirements with holdings having an aggregate value of $2,912,981.
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Meetings
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Attendance
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Securities Held
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Value
|
| |
Required Ownership
|
|
|
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| |
|
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|
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Board of Directors
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5 of 5
|
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17,064 Common Shares
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$ 669,591
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$440,899
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Compensation (Chair)
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6 of 6
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57,171 DSUs
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$ 2,243,390
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Nominating, Governance and Risk
|
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3 of 3
|
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Canadian Natural Resources Limited
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| |
10
|
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2021 Management Information Circular
|
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David A. Tuer
(age 71)
Calgary, Alberta
Canada
Director since May 2002
Independent
|
| |
Mr. D.A. Tuer is a corporate director. Prior thereto, Mr. Tuer was Executive Chairman of Optiom Inc., a private insurance company. Prior thereto, from 2010 to 2015, he was Vice-Chairman and Chief Executive Officer of Teine Energy Ltd., a private oil and gas exploration company. He served as Vice-Chairman and Chief Executive Officer of Marble Point Energy Ltd. the predecessor to Teine Energy Ltd., also a private oil and gas exploration company from 2008 until 2010. He was Chairman of the Calgary Health Region, a position he held from 2001 to 2008 when the Alberta government consolidated all of the provincial health regions under one authority, Alberta Health Services. Mr. D.A. Tuer also served as Executive Vice-Chairman, BA Energy Inc. from 2005 until 2008, when it was acquired by its parent company Value Creation Inc. through a Plan of Arrangement and which was engaged in the potential development, building and operations of a merchant heavy oil upgrader in Northern Alberta for the purpose of upgrading bitumen and heavy oil feedstock into high-quality crude oils. Prior thereto, he was President and Chief Executive Officer of PanCanadian Petroleum Inc. from 1994 to 2001 and President, Chief Executive Officer and a director of Hawker Resources Inc. from 2003 to 2005. Mr. D.A. Tuer holds a Bachelor of Science degree in Mechanical Engineering from the University of Calgary. He is Chairman of the board of directors of Altalink Management LLP, a private limited partnership.
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|
Voting Results at 2020 Annual Meeting
|
| |
For: 96.33%
Withheld: 3.67%
|
| |||||||||
|
Other Public Company Board Memberships
|
| |
None
|
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Board and Committee Participation – 100%
|
| |
Holdings – Mr. Tuer exceeds his Ownership Requirements with holdings having an aggregate value of $3,602,742.
|
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Meetings
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Attendance
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| |
Securities Held
|
| |
Value
|
| |
Required Ownership
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Board of Directors
|
| |
5 of 5
|
| |
91,813 Common Shares
|
| |
$ 3,602,742
|
| |
$440,899
|
|
|
Audit
|
| |
5 of 5
|
| |
|
| |
|
| |
|
|
|
Reserves (Chair)
|
| |
3 of 3
|
| |
|
| |
|
| |
|
|
|
Annette M. Verschuren,
O.C.
(age 64)
Toronto, Ontario
Canada
Director since
November 2014
Independent
|
| |
Ms. A.M. Verschuren is the Chair and Chief Executive Officer of NRStor Inc., an energy storage project developer of energy storage technologies. She was President of The Home Depot Canada from 1996 to 2011. Prior to joining The Home Depot, she was President and co-owner of Michaels of Canada, a chain of arts and crafts stores. Previously, she was the Vice President, Corporate Development of Imasco Ltd. and Executive Vice President of Canada Development Investment Corporation. She currently serves as Chancellor of Cape Breton University and as a director of Liberty Mutual Insurance Group. She is also the Chair of the MaRS Discovery District and, since June 2019, the Sustainable Development Technology Centre and also serves as a board member of the CAMH Foundation. Ms. A.M. Verschuren is an Officer of the Order of Canada and holds honorary doctorate degrees from ten universities including St. Francis Xavier University, where she also earned a Bachelor of Business degree.
|
| |||||||||
|
Voting Results at 2020
Annual Meeting
|
| |
For: 98.28%
Withheld: 1.72%
|
| |||||||||
|
Other Public Company Board Memberships
|
| |
Air Canada Saputo Inc.
|
| |||||||||
|
Board and Committee Participation – 100%
|
| |
Holdings – Ms. Verschuren exceeds her Ownership Requirements with holdings having an aggregate value of $1,518,824.
|
| |||||||||
|
Meetings
|
| |
Attendance
|
| |
Securities Held
|
| |
Market Value
|
| |
Required Ownership
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Board of Directors
|
| |
5 of 5
|
| |
24,361 Common Shares
|
| |
$ 955,926
|
| |
$440.899
|
|
|
Compensation
|
| |
5 of 6
|
| |
14,345 DSUs
|
| |
$ 562,898
|
| |
|
|
|
Health, Safety, Asset
Integrity and Environmental
|
| |
4 of 4
|
| |
|
| |
|
| |
|
|
Canadian Natural Resources Limited
|
| |
11
|
| |
2021 Management Information Circular
|
|
Annual Retainer Fees
|
| |||
|
Board Member Cash Retainer
|
| |
$42,500
|
|
|
Equity Retainer(1)
|
| |
$175,000(2)
|
|
|
Committee Member
|
| |
$5,000
|
|
|
Committee Chair
|
| |
$10,000
|
|
|
Audit Committee Chair
|
| |
$25,000
|
|
|
Compensation Committee Chair
|
| |
$20,000
|
|
|
Health, Safety, Asset Integrity & Environmental Committee Chair
|
| |
$15,000
|
|
|
Lead Independent Director
|
| |
$25,000
|
|
|
Time and travel fee for a director whose principal residence is out of the Province of Alberta and attends meetings in person.
|
| |
$2,500 per round trip
|
|
(1)
|
The equity portion of retainer fees can be taken as DSUs, which are redeemed for cash after the director leaves the Board. Messrs. T. W. Faithfull, F. J. McKenna, C.L. Fong and Ms. A.M. Verschuren were participants in the DSU plan in 2020. Effective January 1, 2021, Dr. M.E. Cannon elected to participate in the DSU Plan.
|
(2)
|
Shares are purchased through the facilities of the Toronto Stock Exchange (“TSX”).
|
Canadian Natural Resources Limited
|
| |
12
|
| |
2021 Management Information Circular
|
|
Name
|
| |
Fees
Earned
|
| |
Share
Based
Awards
|
| |
Option
Based
Awards
|
| |
Common
Share
Retainer(1)(2)
|
| |
Pension
Value
|
| |
All Other
Compensation(4)
|
| |
Total
|
|
|
C.M. Best
|
| |
$ 96,500
|
| |
$ —
|
| |
$ —
|
| |
$ 104,466
|
| |
$ —
|
| |
$—
|
| |
$ 200,966
|
|
|
M.E. Cannon
|
| |
75,500
|
| |
—
|
| |
—
|
| |
90,620
|
| |
—
|
| |
—
|
| |
166,120
|
|
|
T.W. Faithfull(3)
|
| |
29,250
|
| |
—
|
| |
—
|
| |
75,725
|
| |
—
|
| |
|
| |
104,975
|
|
|
C.L. Fong
|
| |
75,500
|
| |
—
|
| |
—
|
| |
104,466
|
| |
—
|
| |
—
|
| |
179,966
|
|
|
G.D. Giffin
|
| |
102,000
|
| |
—
|
| |
—
|
| |
104,466
|
| |
—
|
| |
4,000
|
| |
210,466
|
|
|
W.A. Gobert
|
| |
86,000
|
| |
—
|
| |
—
|
| |
104,666
|
| |
—
|
| |
—
|
| |
190,466
|
|
|
F.J. McKenna
|
| |
83,500
|
| |
—
|
| |
—
|
| |
104,466
|
| |
—
|
| |
4,000
|
| |
191,966
|
|
|
D.A. Tuer
|
| |
77,000
|
| |
—
|
| |
—
|
| |
104,466
|
| |
—
|
| |
—
|
| |
181,466
|
|
|
A.M. Verschuren
|
| |
$73,500
|
| |
$ —
|
| |
$ —
|
| |
$ 104,466
|
| |
$ —
|
| |
$ 4,000
|
| |
$ 181,966
|
|
(1)
|
The amount shown represents the cost of Common Shares purchased on the TSX as the equity portion of the 2020 fees paid to directors.
|
(2)
|
Messrs. T.W. Faithfull, F.J. McKenna, C.L. Fong and Ms. A.M. Verschuren participate in the DSU Plan and receive the equivalent number of DSUs in lieu of Common Shares for the equity portion of directors’ fees, which are given the same value as the Common Shares purchased for the other directors. Effective January 1, 2021, Dr. M.E. Cannon elected to participate in the DSU Plan.
|
(3)
|
Mr. T.W. Faithfull did not seek re-election, having reached the retirement age of 75, and ceased to be a director of the Corporation effective May 7, 2020.
|
(4)
|
The amount shown was paid to a director whose principal place of residence is outside the Province of Alberta and who attended meetings in person in 2020. Due to various travel restrictions imposed in Canada and elsewhere, all meetings of the Board held after March 4, 2020 were held by virtual online video conference.
|
|
Services
|
| |
Fiscal 2020
|
| |
Fiscal 2019
|
|
|
Audit
|
| |
$ 2,207,000
|
| |
$ 2,580,000
|
|
|
Audit Related
|
| |
412,000
|
| |
536,000
|
|
|
Tax Related
|
| |
258,000
|
| |
426,000
|
|
|
Other
|
| |
12,000
|
| |
32,000
|
|
|
Total Accrued Fees
|
| |
$ 2,889,000
|
| |
$ 3,574,000
|
|
Canadian Natural Resources Limited
|
| |
13
|
| |
2021 Management Information Circular
|
•
|
Reward the creation of long-term shareholder value.
|
•
|
Reflect short-, mid- and long-term corporate performance.
|
•
|
Maintain an appropriate balance between base salary and short-term and long-term incentive opportunities, with a distinct emphasis on compensation that is “at risk”.
|
•
|
Be competitive, so as to attract and retain talented individuals.
|
•
|
Encourage Common Share ownership by employees.
|
•
|
Align the pay-for-performance approach to executive compensation to the long-term interests of the shareholders.
|
|
“BE IT RESOLVED, AS AN ORDINARY RESOLUTION OF THE SHAREHOLDERS OF THE CORPORATION, THAT:
|
|
1. On an advisory basis and not to diminish the role and responsibilities of the Board of Directors of Canadian Natural Resources Limited (the “Corporation”) or that of the Compensation Committee of the Corporation, the shareholders accept the approach to executive compensation as described in the “Compensation Discussion and Analysis” section of the Information Circular of the Corporation dated March 17, 2021 and delivered in advance of the 2021 Annual Meeting of Shareholders.”
|
Canadian Natural Resources Limited
|
| |
14
|
| |
2021 Management Information Circular
|
•
|
Financial: The Corporation leveraged the flexibility of its assets, achieving record production, while maintaining a disciplined capital budget.
|
•
|
Strategic Capital Allocation: The Corporation executed its capital allocation strategy:
|
○
|
The Corporation deleveraged its balance sheet by approximately $79 million before acquisition costs and successfully managed through the mandatory Government of Alberta curtailment program.
|
○
|
The Corporation added accretive natural gas and natural gas liquids assets to its portfolio, with the closing of the $508 million corporate acquisition of Painted Pony in the fourth quarter of 2020.
|
○
|
Additionally, the Corporation delivered returns to Shareholders through our 20th consecutive increase to quarterly dividends, further augmented by share repurchases, resulting in approximately $2.2 billion returned to Shareholders in 2020.
|
•
|
Operations: Despite the challenges faced due to COVID-19 and through the mandatory Government of Alberta curtailment program, the Corporation was able to maintain production within its originally targeted guidance range and achieved record annual production of 1,164 MBOE/d. Additionally, the Corporation continued to maximize value for Shareholders through its effective and efficient operations, reducing operating costs by $2.10/bbl and $1.20/bbl in its Oil Sands Mining and Upgrading and its North America Exploration and Production liquids segments, respectively.
|
Canadian Natural Resources Limited
|
| |
15
|
| |
2021 Management Information Circular
|
•
|
Safety, asset integrity and environmental: The Corporation remained focused on delivering top tier safety, asset integrity and environmental performance in 2020. The Corporation improved its performance, outperforming targets for recordable injuries, loss time incidents and continued to reduce corporate GHG emission intensity from 2019 levels.
|
Canadian Natural Resources Limited
|
| |
16
|
| |
2021 Management Information Circular
|
•
|
Total compensation is targeted at the median of Canadian oil and gas companies (US peer company pay data is used as a reference only) with base salaries and bonuses that are below the 25th percentile. As Canadian Natural targets a median pay position, but provides low base salaries, the proportion of Canadian Natural’s variable pay and pay at risk is high relative to peers.
|
•
|
The Corporation maintains a Common Share savings plan for all its employees, through which Common Shares are purchased – our culture of Common Share ownership is demonstrated by the high participation rate in the plan (approximately 98% employee participation). The Corporation does not have a pension plan for its NEOs.
|
•
|
Canadian Natural does not provide employment agreements to its NEOs and therefore they do not benefit from pre-determined compensation awards in the event of a change of control and/or loss of position. Commencing in 2016, vesting provisions for equity based compensation granted to the Corporation’s Management Committee contain a “double trigger” whereby, in the event of a change in control, an individual must also be terminated without cause as a result of the change of control, or within 24 months thereof, in order for such compensation to vest.
|
•
|
The Corporation establishes its performance goals prior to the beginning of the fiscal year to ensure that achieving such goals is based upon an objective measure and, as the goals are being set, there is sufficient uncertainty to effectively motivate performance.
|
Canadian Natural Resources Limited
|
| |
17
|
| |
2021 Management Information Circular
|
•
|
Compensation Risk – The Committee assists the Board in monitoring the risks associated with the Corporation’s compensation program and practices on an ongoing basis. The Committee, in reviewing the Corporation’s compensation program, considers such risks before approving the program. Compensation practices do not vary between business units or executives, except for the level and mix of pay that is commensurate with the responsibilities of the position. The compensation program of the Corporation consists of (i) a fixed annual base salary; (ii) a cash bonus, with capped payout, based on the overall performance of the Corporation in meeting specific goals set by the Corporation and the Board; (iii) a PSU plan with a capped award multiplier that, for employees other than Management Committee members, vests annually over a 3 year period and, for members of the Corporation’s Management Committee, vests 3 years from the grant date; and (iv) Common Share stock options which have five year vesting provisions with the first 20% not vesting until the first anniversary of the grant date and the final 20% having only one month to be exercised before expiry following vesting on the 5th anniversary of grant date. The Committee has concluded that the Corporation’s compensation policies do not create an environment where an executive or any individual is encouraged to take excessive risk but rather encourages and rewards prudent business judgment and appropriate risk assessment over the short and long-term without creating an exposure that is reasonably likely to have a material adverse impact on the Corporation.
|
•
|
Corporate Risk – The Board has overall responsibility for risk oversight with a focus on the most significant risk areas facing the Corporation, including strategic, financial, operational, environmental, cyber and reputational risks. The Board’s risk oversight process builds upon management’s risk identification assessment and mitigation processes, which include reviews of long-term strategic and operational planning; executive development and evaluation; code of conduct compliance; regulatory compliance; safety and environmental compliance; financial reporting and controllership; and information technology and security. Management is responsible for the identification of key business risks and the potential impact of those risks on the Corporation, providing for appropriate ongoing oversight of these risks throughout the Corporation and the effective enforcement of appropriate mitigation through policies and procedures, all of which is coordinated through the Corporation’s Enterprise Risk Management framework. The Nominating, Governance and Risk Committee assists the Board by reviewing significant enterprise risk exposure not delegated to other Board committees and the steps management has taken to monitor, mitigate, control and report such exposures.
|
•
|
Clawback Policy – The Corporation’s clawback policy provides the Committee with the authority to seek re-imbursement of all or any portion of performance based compensation (cash bonus, PSUs and stock options) from any NEO who, in the Committee’s determination, is responsible for a material misrepresentation or misconduct resulting in a restatement of the financial results of the Corporation and was improperly paid such performance based compensation in the year in which the financial misstatement occurred.
|
•
|
Stock Ownership Guidelines and Common Shares Held by Named Executive Officers – The Board has adopted Common Share ownership guidelines for directors and officers of the Corporation. Non-management directors are required to acquire and hold, within five (5) years from the date of their appointment to the Board, Common Shares and/or DSUs having a minimum aggregate value equal to three times the annual retainer fee paid to directors in the year. Under the guidelines, an officer has three (3) years from their date of hire, appointment or promotion to their position to acquire and hold the required level of ownership. For officers, Common Share ownership includes Common Shares purchased and held within the Corporation’s stock savings plan and any other personal holdings. With the adoption of PSUs for members of the
|
Canadian Natural Resources Limited
|
| |
18
|
| |
2021 Management Information Circular
|
|
Name
|
| |
Number of
Common
Shares Held
|
| |
Value of
Common
Shares Held(1)
|
| |
Ownership
Requirements
(multiple of
base salary)
|
| |
Value of
Share Ownership
Requirements
To Be Met
|
| |
Meets
Share
Ownership
Requirements
|
|
|
N. Murray Edwards(2)
|
| |
21,939,189
|
| |
$ 671,119,792
|
| |
4 times
|
| |
$ 2,079,760
|
| |
Yes
|
|
|
Tim S. McKay
|
| |
1,175,938
|
| |
$35,971,943
|
| |
4 times
|
| |
$2,079,760
|
| |
Yes
|
|
|
Scott G. Stauth
|
| |
164,859
|
| |
$5,043,037
|
| |
4 times
|
| |
$1,493,076
|
| |
Yes
|
|
|
Darren M. Fichter
|
| |
67,949
|
| |
$2,078,560
|
| |
4 times
|
| |
$1,333,228
|
| |
Yes
|
|
|
Mark A. Stainthorpe(3)
|
| |
29,978
|
| |
$917,027
|
| |
4 times
|
| |
$989,768
|
| |
Yes
|
|
(1)
|
The closing price of the Common Shares on the TSX on December 31, 2020 was $30.59 and on March 17, 2021 was $39.24. All of the NEOs meet the threshold requirements using either price.
|
(2)
|
As Mr. N.M. Edwards’ annual salary is $1, his mandatory, required holdings in 2020 was the same as Mr. T.S. McKay, being four times Mr. McKay’s annual salary.
|
(3)
|
In accordance with the Corporation’s ownership guidelines for officers, Mr. M.A. Stainthorpe has until March 2022 to meet his new ownership requirement. Mr. Stainthorpe satisfies his share ownership requirements for 2020.
|
•
|
Succession Planning – The Corporation does not have a chief executive officer but has a Management Committee comprised of eighteen members of the management group including the Executive Chair, the President, the Chief Operating Officers and the Chief Financial Officer and Senior Vice-President, Finance. The Management Committee structure is an effective leadership and accountability driven organizational structure and has kept pace with the expansion and increased complexity of the Corporation’s operations. This management structure: (i) limits the ability of any one individual to unduly influence the direction of the Corporation as consensus of other members of the Management Committee must be achieved; (ii) enables the continuation of the strong leadership of the Corporation should any one member of the management team leave the Corporation; and (iii) enhances management development in learning key decision making strategy, skills and leadership and secures management succession.
|
Canadian Natural Resources Limited
|
| |
19
|
| |
2021 Management Information Circular
|
|
Age at Retirement
|
| |
Entitlement
|
|
|
<60 years old
|
| |
Only entitled to vested amounts; no incremental entitlement to unvested amounts
|
|
|
|
| |
|
|
|
60 years old and <5 years of service
|
| |
Entitled to vested amounts and 30% of any unvested amounts, as they vest on their regular vesting date
|
|
|
|
| |
|
|
|
60 years old and 5 years of service
|
| |
Entitled to vested amounts and 60% of any unvested amounts, as they vest on their regular vesting date
|
|
|
|
| |
|
|
|
For each year over 60 years old
|
| |
Entitled to the foregoing, as applicable, and to an incremental 8% of any unvested amounts as they vest on their regular vesting date for each year of age up to 65
|
|
•
|
Independent Advice – The Committee has engaged the independent consulting firm Hugessen Consulting Inc. (“Hugessen”) since 2013. Hugessen’s mandate is to support the Committee, developing principles related to disclosure and shareholder engagement, and to advise the Committee on the structure of the Corporation’s executive compensation and management’s compensation recommendations. In carrying out their mandate, Hugessen has had direct access to the Chair of the Committee, the other Committee members and with management, as required.
|
|
|
| |
2020
|
| |
2019
|
|
|
Executive Compensation Related Fees
|
| |
$146,048
|
| |
$27,435
|
|
|
All Other Fees
|
| |
–
|
| |
–
|
|
|
Total Fees
|
| |
$146,048
|
| |
$27,435
|
|
Canadian Natural Resources Limited
|
| |
20
|
| |
2021 Management Information Circular
|
|
|
| |
FY 2020
Net Revenue
(C$B)
|
| |
Total
Enterprise
Value (C$B)
Dec. 31, 2020
|
| |
Production
FY 2020
(MBOE/d)
|
|
|
Canadian Natural Resources Limited
|
| |
$17
|
| |
$59
|
| |
1,164
|
|
|
Primary Group (production before royalties)
|
| |
|
| |
|
| |
|
|
|
Cenovus Energy Inc.
|
| |
$13
|
| |
$18
|
| |
472
|
|
|
Crescent Point Energy Corp.
|
| |
1
|
| |
4
|
| |
122
|
|
|
Enbridge Inc.
|
| |
39
|
| |
160
|
| |
N/A
|
|
|
Husky Energy Inc.
|
| |
13
|
| |
14
|
| |
272
|
|
|
Suncor Energy Inc.
|
| |
25
|
| |
52
|
| |
695
|
|
|
TC Energy Corporation
|
| |
13
|
| |
103
|
| |
N/A
|
|
|
Average of Primary Group
|
| |
$17
|
| |
$59
|
| |
390
|
|
|
Secondary Reference Group (production after royalties)
|
| |
|
| |
|
| |
|
|
|
Apache Corp.
|
| |
5
|
| |
20
|
| |
440
|
|
|
Devon Energy Corporation
|
| |
6
|
| |
11
|
| |
333
|
|
|
EOG Resources, Inc.
|
| |
15
|
| |
41
|
| |
754
|
|
|
Marathon Oil Corporation
|
| |
4
|
| |
13
|
| |
383
|
|
|
Ovintiv Inc.
|
| |
7
|
| |
15
|
| |
544
|
|
|
Average of Secondary Group
|
| |
$7
|
| |
$20
|
| |
491
|
|
Canadian Natural Resources Limited
|
| |
21
|
| |
2021 Management Information Circular
|
|
Total Shareholder Return
|
| |
|
| |
|
| |
|
|
|
|
| |
1Y TSR - CAD
|
| |
3Y TSR - CAD
|
| |
5Y TSR - CAD
|
|
|
Canadian Natural Resources Limited
|
| |
-21%
|
| |
-20%
|
| |
27%
|
|
|
Primary Group
|
| |
|
| |
|
| |
|
|
|
Cenovus Energy Inc.
|
| |
-40%
|
| |
-29%
|
| |
-52%
|
|
|
Crescent Point Energy Corp.
|
| |
-48%
|
| |
-67%
|
| |
-79%
|
|
|
Enbridge Inc.
|
| |
-15%
|
| |
1%
|
| |
18%
|
|
|
Husky Energy Inc.
|
| |
-36%
|
| |
-60%
|
| |
-50%
|
|
|
Suncor Energy Inc.
|
| |
-48%
|
| |
-48%
|
| |
-29%
|
|
|
TC Energy Corporation
|
| |
-21%
|
| |
-1%
|
| |
45%
|
|
|
Secondary Group
|
| |
|
| |
|
| |
|
|
|
Apache Corp.
|
| |
-45%
|
| |
-63%
|
| |
-67%
|
|
|
Devon Energy Corporation
|
| |
-36%
|
| |
-58%
|
| |
-49%
|
|
|
EOG Resources Inc.
|
| |
-40%
|
| |
-51%
|
| |
-31%
|
|
|
Marathon Oil Corporation
|
| |
-51%
|
| |
-58%
|
| |
-48%
|
|
|
Ovintiv Inc.
|
| |
-36%
|
| |
-76%
|
| |
-43%
|
|
|
Summary Statistics
|
| |
|
| |
|
| |
|
|
|
P75
|
| |
-36%
|
| |
-39%
|
| |
-30%
|
|
|
Median
|
| |
-40%
|
| |
-58%
|
| |
-48%
|
|
|
P25
|
| |
-46%
|
| |
-62%
|
| |
-51%
|
|
|
S&P TSX Oil and Gas Exploration & Production Index
|
| |
-25%
|
| |
-46%
|
| |
-27%
|
|
|
Reserves Growth Per Share
|
| |
|
| |
|
| |
|
|
|
|
| |
1Y Reserves per
Share Growth
|
| |
3Y Reserves per
Share Growth
|
| |
5Y Reserves per
Share Growth
|
|
|
Canadian Natural Resources Limited
|
| |
21%
|
| |
41%
|
| |
109%
|
|
|
Primary Group
|
| |
|
| |
|
| |
|
|
|
Cenovus Energy Inc.
|
| |
10%
|
| |
-9%
|
| |
32%
|
|
|
Crescent Point Energy Corp.
|
| |
-38%
|
| |
-51%
|
| |
-51%
|
|
|
Husky Energy Inc.
|
| |
-51%
|
| |
-48%
|
| |
-21%
|
|
|
Suncor Energy Inc.
|
| |
-65%
|
| |
-65%
|
| |
-55%
|
|
|
Secondary Group
|
| |
|
| |
|
| |
|
|
|
Apache Corp.
|
| |
-14%
|
| |
-25%
|
| |
-44%
|
|
|
Devon Energy Corporation
|
| |
6%
|
| |
-52%
|
| |
-63%
|
|
|
EOG Resources Inc.
|
| |
-3%
|
| |
27%
|
| |
43%
|
|
|
Marathon Oil Corporation
|
| |
-18%
|
| |
-28%
|
| |
-62%
|
|
|
Ovintiv Inc.
|
| |
-8%
|
| |
88%
|
| |
58%
|
|
|
Summary Statistics
|
| |
|
| |
|
| |
|
|
|
P75
|
| |
-3%
|
| |
-9%
|
| |
32%
|
|
|
Median
|
| |
-14%
|
| |
-28%
|
| |
-44%
|
|
|
P25
|
| |
-38%
|
| |
-51%
|
| |
-55%
|
|
Canadian Natural Resources Limited
|
| |
22
|
| |
2021 Management Information Circular
|
Canadian Natural Resources Limited
|
| |
23
|
| |
2021 Management Information Circular
|
|
Performance Measure
|
| |
2020 Metrics Included:
|
| |
Weighting
|
|
|
Financial
|
| |
Balance sheet strength, capital expenditures, ROE, ROACE, cash flow
|
| |
30%
|
|
|
Strategic
|
| |
Allocation of cash flow, mid and long-term projects, dividend and share purchases
|
| |
30%
|
|
|
Operational
|
| |
Production, operating costs
|
| |
30%
|
|
|
Safety, Asset Integrity and Environmental
|
| |
Recordable injury frequency, lost time injury frequency, greenhouse gas emissions, pipeline leaks
|
| |
10%
|
|
Canadian Natural Resources Limited
|
| |
24
|
| |
2021 Management Information Circular
|
Canadian Natural Resources Limited
|
| |
25
|
| |
2021 Management Information Circular
|
|
Component of
performance measurement
|
| |
Component
Weighting
|
| |
Component
Performance
Assumptions
(% of target)
|
| |
Weighted
Performance
|
|
|
Financial
|
| |
30.0%
|
| |
125.0%
|
| |
37.5%
|
|
|
Strategic
|
| |
30.0%
|
| |
100.0%
|
| |
30.0%
|
|
|
Operational
|
| |
30.0%
|
| |
95.0%
|
| |
28.5%
|
|
|
Safety, Asset Integrity and Environmental
|
| |
10.0%
|
| |
100.0%
|
| |
10.0%
|
|
|
Total
|
| |
100.0%
|
| |
|
| |
106.0%
|
|
Canadian Natural Resources Limited
|
| |
26
|
| |
2021 Management Information Circular
|
|
Who Participates
|
| |
All employees and officers of the Corporation, including Senior Management. Directors are not eligible to receive PSUs unless they provide ongoing day-to-day management services to the Corporation.
|
| |||
|
Form of award
|
| |
For employees and officers, other than Senior Management, Common Shares are acquired through purchases on the TSX. For Senior Management, a cash award is converted into PSUs using the Fair Market Value of the Common Shares as at December 31 of the most recently completed financial year end.
|
| |||
|
Target Award Amount
|
| |
For Named Executive Officers, the awards vary from 3.0 to 4.0 times the STIP award.
|
| |||
|
Performance Measures to Determine Award Size
|
| |
The size of the award varies depending upon the corporate performance for the most recent year as measured by the performance scorecard used to determine the STIP payout. Awards may be nil when corporate performance in a given year is below a threshold level. This establishes a direct link between Corporate performance and grant size. Future realized values at the time of vesting will reflect the then current stock price and the reinvestment of amounts calculated as dividends and attributed to the PSUs over the vesting period.
|
| |||
|
Dividends
|
| |
For employees and officers, other than Senior Management, dividends are paid on outstanding, unvested, Common Shares. For Senior Management, amounts calculated as dividends payable on Common Shares are attributed to the PSUs, which are then reinvested into additional PSUs. These additional PSUs vest on the same date as the underlying PSU grant to which the dividends are attributed.
|
| |||
|
Performance Measures To Determine Vesting
|
| |
For employees and officers, other than Senior Management, awards vest equally over a three year period and have a value based upon the then current value of such Common Shares. If the employee leaves the employment of the Corporation for any reason other than retirement at Normal Retirement Age, the unvested Common Shares are forfeited by the employee. For Senior Management, PSUs will vest after three years based on a weighted average of the Corporation’s performance on its relative reserves growth per share (1/3) and its relative total shareholder return (2/3) over the three year period, both of which are compared against the identified industry peers, as set out on page 22. If an individual leaves the employment of the Corporation for any reason other than retirement at Normal Retirement Age, the unvested PSUs are forfeited by the individual.
|
| |||
|
Payout
|
| |
For employees and officers, other than Senior Management, payout is in Common Shares of the Corporation. The Common Shares purchased under the PSU Plan are restricted shares, as they can only be paid out in kind at vesting. For Senior Management, PSUs will be paid out in cash. A multiplier of 0% to 200% will be applied to the value of the PSUs at the time of vesting based on the Corporation’s performance against the indicated measures over the three calendar years prior to the vest date. The value of the PSUs is determined by multiplying the number of PSUs vesting by the Fair Market Value as of the Valuation Date. The payout table is set out below.
|
| |||
|
|
| |
|
| |||
|
|
| |
Relative Performance Percentile
|
| |
Payout Multiple
|
|
|
|
| |
<20%
|
| |
0
|
|
|
|
| |
20-39.9%
|
| |
50%
|
|
|
|
| |
40-49.9%
|
| |
75%
|
|
|
|
| |
50-59.9%
|
| |
100%
|
|
|
|
| |
60-79.9%
|
| |
150%
|
|
|
|
| |
80-100%
|
| |
200%
|
|
|
|
| |
|
| |
|
|
Canadian Natural Resources Limited
|
| |
27
|
| |
2021 Management Information Circular
|
|
Form of Award
|
| |
Option on Common Shares of the Corporation
|
|
|
Participants
|
| |
Employees and officers of the Corporation. Directors are not eligible to receive stock options unless they provide ongoing day-to-day management services to the Corporation.
|
|
|
Exercise Price
|
| |
The exercise price cannot be lower than market value at the time of granting the stock options.
|
|
|
Vesting
|
| |
Annually at 20% per annum over five years commencing one year (for options granted on the basis of prior year performance) or two years (for options granted to new employees) after granting.
|
|
|
Term
|
| |
For annual prior year based options, 5 years with expiry date being 30 days after last vesting.
|
|
|
Payout
|
| |
The option plan facilitates holders of stock options to receive on exercise of the stock options one Common Share for each stock option exercised. The holder of stock options may elect to receive a cash payment of the difference between the market price of the Common Shares on the TSX and the exercise price of the options in lieu of Common Shares. This reduces the amount of dilution in the Corporation as no additional Common Shares are issued if the cash election is made by the option holder. The Corporation reports as an expense the cost associated with granting stock options.
|
|
|
Termination
|
| |
For all employees including NEOs, unvested stock options are forfeited at the date of resignation, retirement, termination without cause, or termination with cause. Upon death, unvested options are cancelled, subject to the Compensation Committee’s direction to accelerate vesting. Vested options outstanding as at resignation, retirement, termination without cause or termination with cause must be exercised within 30 days from effective date or notice date. Vested options outstanding as at date of death must be exercised within three to twelve months from date of death.
|
|
|
|
| |
|
|
|
|
| |
In the event of a change of control, if an NEO is terminated without cause as a result of the change of control event or within 24 months thereof, any unvested options would vest and be exercised within 30 days of such termination.
|
|
|
Restrictions
|
| |
No one person can hold stock options pursuant to the option plan of more than 5% of the outstanding Common Shares nor is it possible for directors and officers, as a group to hold options amounting to 10% of the outstanding Common Shares.
|
|
|
Re-Pricing Policy
|
| |
The Corporation has a policy not to re-price options.
|
|
Canadian Natural Resources Limited
|
| |
28
|
| |
2021 Management Information Circular
|
•
|
For employees with less than five years of continuous participation in the plan, over a two-year period.
|
•
|
For employees who have five years of continuous participation in the plan, on January 1 of each year.
|
•
|
Upon retirement, if Normal Retirement Age (as defined at page 20) is reached.
|
(i)
|
processes used to develop executive compensation industry surveys to yield meaningful analysis of compensation practices;
|
(ii)
|
compensation trends within the Corporation’s geographic area;
|
(iii)
|
common practices used by companies to compensate employees;
|
(iv)
|
other trends in compensation practices for incentivizing and compensating employees; and
|
(v)
|
other emerging corporate governance practices in executive compensation.
|
Canadian Natural Resources Limited
|
| |
29
|
| |
2021 Management Information Circular
|
|
|
| |
Executive Chairman
N.M. Edwards
|
| |
President
and CEO
T.S. McKay
|
| |
COO,
Oil Sands
S.G. Stauth
|
| |
COO,
E&P
D.M. Fichter
|
| |
CFO and SVP,
Finance
M.A. Stainthorpe
|
|
|
Annual Base salary(1)
|
| |
$1
|
| |
$519,940
|
| |
$373,269
|
| |
$333,307
|
| |
$247,442
|
|
|
Target STIP Cash Bonus (% of based salary)
|
| |
–(2)
|
| |
120%
|
| |
70%
|
| |
70%
|
| |
70%
|
|
|
Target STIP Cash Bonus
|
| |
$1,134,000
|
| |
$623,928
|
| |
$261,288
|
| |
$233,315
|
| |
$173,209
|
|
|
Target Total Cash Compensation
|
| |
$1,134,001
|
| |
$1,143,868
|
| |
$634,557
|
| |
$566,622
|
| |
$402,651
|
|
|
Performance Share Unit
(% of bonus)
|
| |
400%
|
| |
333%
|
| |
300%
|
| |
300%
|
| |
300%
|
|
|
Option-based LTIP
(% of salary)
|
| |
–(2)
|
| |
525%
|
| |
300%
|
| |
300%
|
| |
300%
|
|
|
Target Total Direct Compensation
|
| |
$10,631,251
|
| |
$5,951,233
|
| |
$2,538,228
|
| |
$2,266,488
|
| |
$1,664,604
|
|
(1)
|
These amounts reflect actual 2020 base salary.
|
(2)
|
Executive Chair STIP cash bonus and option based LTIP awards are based upon 135% of the STIP cash bonus and option based LTIP awards calculated on the basis of a notional base salary for the President’s role. See above for more information.
|
Canadian Natural Resources Limited
|
| |
30
|
| |
2021 Management Information Circular
|
•
|
The Corporation delivered strong performance and demonstrated the flexibility and strength of its assets, achieving record production with a disciplined capital program of $2.7 billion, reduced in response to the decrease in demand for hydrocarbons due to the COVID-19 pandemic and the resulting decrease in commodity prices.
|
•
|
The Corporation generated returns to shareholders of approximately $2.2 billion, supported by its 20th consecutive year of dividend increases with a quarterly declared dividend of $0.425 per Common Share and executed purchases of Common Shares under its normal course issuer bid program in the first quarter of 2020, having an aggregate value of $271 million in the year.
|
•
|
The Corporation’s balance sheet strength remained a focus in 2020, with debt reduction before acquisition costs of $79 million from 2019 levels.
|
•
|
The Corporation executed on an opportunistic acquisition of natural gas and NGL assets, with the closing of the Painted Pony acquisition in the fourth quarter of 2020. The acquisition brings additional high value opportunities to the Corporation’s portfolio in the liquids rich Townsend area of the Montney formation.
|
•
|
The Corporation successfully optimized its production and managed through the Government of Alberta’s mandatory curtailment program, supporting record production of 1,164 MBOE/d.
|
•
|
Effective and efficient operations resulted in significant operating cost reductions in the Corporation’s Oil Sands Mining and Upgrading segment of $2.10/bbl and, in its North America Exploration and Production liquids segment, of $1.20/bbl from 2019 levels.
|
•
|
The Corporation continued its focus on its core value of safety, outperforming targets for recordable injury frequency and lost time incidents and the Corporation leveraged its continuous improvement culture to drive continued reductions in GHG emissions intensity over 2019 levels.
|
Canadian Natural Resources Limited
|
| |
31
|
| |
2021 Management Information Circular
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
Performance Metrics
|
| |
2019
Actual(1)
|
| |
2020
Target(2)
|
| |
2020
Result
|
| |
Assessment of
Performance
|
| |
Performance
Bonus
Allocation
|
|
|
Financial
(30%)
|
| |
Balance Sheet Strength:
|
| |
|
| |
|
| |
|
| |
|
| |
20%
|
|
|
– Debt to Book
|
| |
39%
|
| |
25% - 45%
|
| |
40%
|
| |
Performed
|
| ||||||
|
– Debt/EBITDA
|
| |
2.0x
|
| |
1.4x - 1.8x
|
| |
3.6x
|
| |
Underperformed
|
| ||||||
|
|
| |
|
| |
|
| |
|
| |
|
| ||||||
|
Capital Expenditures ($MM)(3)
|
| |
$3,779
|
| |
$3,850 – 4,250
|
| |
$2,678
|
| |
Outperformed(4)
|
| ||||||
|
|
| |
|
| |
|
| |
|
| |
|
| ||||||
|
Returns:
|
| |
|
| |
|
| |
|
| |
|
| ||||||
|
– on equity
|
| |
16.1%
|
| |
Improve over 2019
|
| |
(1.3%)
|
| |
Underperformed
|
| ||||||
|
– on average capital employed
|
| |
10.9%
|
| |
Improve over 2019
|
| |
0.2%
|
| |
Underperformed
|
| ||||||
|
|
| |
|
| |
|
| |
|
| |
|
| ||||||
|
Funds flow:
|
| |
|
| |
|
| |
|
| |
|
| ||||||
|
– Adjusted funds flow ($MM)
|
| |
$10,267
|
| |
$10,240 – 10,765
|
| |
$5,200
|
| |
Underperformed
|
| ||||||
|
– per Common Share ($)
|
| |
$8.62
|
| |
$8.63 – 9.07
|
| |
$4.40
|
| |
Underperformed
|
| ||||||
|
|
| |
|
| |
|
| |
|
| |
|
| ||||||
|
Strategic
Capital
Allocation
(30%)
|
| |
Deleverage Balance Sheet ($MM)(5)
|
| |
~$2,350
retired
|
| |
Execute
|
| |
~$79
|
| |
Outperformed
|
| |
55%
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| ||||||
|
Curtailment Management
|
| |
|
| |
Execute
|
| |
Strategic
Production
Management
|
| |
Outperformed
|
| ||||||
|
Opportunistic Acq/(Disp) ($MM net)
|
| |
Devon
Canada
$3,217
|
| |
Execute
|
| |
Painted Pony
$508
|
| |
Outperformed
|
| ||||||
|
Returns to Shareholders
|
| |
|
| |
|
| |
|
| |
|
| ||||||
|
– Dividends ($MM)
|
| |
$1,743
|
| |
Increase
|
| |
$1,950
|
| |
Outperformed
|
| ||||||
|
– Dividends per common share(6)
|
| |
$1.50
|
| |
Increase
|
| |
$1.70
|
| |
Outperformed
|
| ||||||
|
– Common Share Purchases ($MM)
|
| |
$941
|
| |
Execute
|
| |
$271
|
| |
Performed
|
| ||||||
|
|
| |
|
| |
|
| |
|
| |
|
| ||||||
|
Operations
(30%)
|
| |
Total BOE Production (MBOE/d)(7)
|
| |
1,038
|
| |
1,137 – 1,207
|
| |
1,153
|
| |
Performed
|
| |
33%(9)
|
|
|
Total BOE Operating Cost ($/BOE)(8)
|
| |
$13.62
|
| |
$11.75 – 14.25
|
| |
$11.81
|
| |
Performed
|
| ||||||
|
|
| |
|
| |
|
| |
|
| |
|
| ||||||
|
Safety, Asset
Integrity and
Environmental
(10%)(10)
|
| |
Recordable Injury Frequency
(per 200,000 hours worked)
|
| |
0.28
|
| |
0.25 – 0.31
|
| |
0.21
|
| |
Outperformed
|
| |
15%
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| ||||||
|
Total LTI frequency
(per 200,000 hours worked)
|
| |
0.044
|
| |
0.040 – 0.048
|
| |
0.027
|
| |
Outperformed
|
| ||||||
|
|
| |
|
| |
|
| |
|
| |
|
| ||||||
|
GHG emissions intensity (tonnes/BOE)
|
| |
0.051
|
| |
0.046 – 0.056
|
| |
0.050
|
| |
Performed
|
| ||||||
|
|
| |
|
| |
|
| |
|
| |
|
| ||||||
|
Pipeline Leaks (number of leaks/1,000KM of pipeline)
|
| |
1.20
|
| |
1.08 – 1.32
|
| |
1.23
|
| |
Performed
|
| ||||||
|
|
| |
|
| |
|
| |
|
| |
|
| ||||||
|
Total Corporate Performance Score
|
| |
123%
|
|
(1)
|
2019 actual amounts exclude the amounts relating to the acquired Devon Canada assets.
|
(2)
|
Notwithstanding 2019 results, the targets established for 2020 reflect the then current market conditions.
|
(3)
|
Capital expenditures are before net acquisition costs. 2020 capital expenditures excludes operating capital of approximately $23 million spent on the acquired Painted Pony assets in the fourth quarter of 2020.
|
(4)
|
Strategic decision to reduce capital expenditures.
|
(5)
|
2020 debt reduction from 2019 levels before total net acquisition costs of $505 million.
|
(6)
|
Dividends declared.
|
(7)
|
Total BOE Production excludes production from the acquired Painted Pony assets.
|
(8)
|
Total BOE Operating costs exclude energy costs in order to reduce the impacts of abnormally high or low energy input costs on assessed performance. In addition, 2020 Operating Costs exclude the impact of the acquired Painted Pony assets.
|
(9)
|
Although the Operations rating was in the “Performed” range across the Corporation, the operational performance of different business units varied and resulted in a score above “Performed”.
|
(10)
|
Targeted ranges reflect +/- 10% of the prior period metric.
|
Canadian Natural Resources Limited
|
| |
32
|
| |
2021 Management Information Circular
|
|
Name
|
| |
Base Salary(1)
|
| |
Target
Incentive
(% of base
salary)
|
| |
STIP
Performance
Multiplier
(% of target)
|
| |
Calculated 2020
STIP Cash Bonus
Award
|
|
|
N. Murray Edwards
|
| |
$1
|
| |
–(2)
|
| |
157.5%
|
| |
$1,786,050
|
|
|
Tim S. McKay
|
| |
519,940
|
| |
120%
|
| |
157.5%
|
| |
982,686
|
|
|
Scott G. Stauth
|
| |
373,269
|
| |
70%
|
| |
157.5%
|
| |
411,529
|
|
|
Darren M. Fichter
|
| |
333,307
|
| |
70%
|
| |
157.5%
|
| |
367,471
|
|
|
Mark A. Stainthorpe
|
| |
$247,442
|
| |
70%
|
| |
157.5%
|
| |
$272,805
|
|
(1)
|
Base salary reflects the actual 2020 base salary earned by each of the NEOs.
|
(2)
|
Mr. N.M. Edwards’ STIP cash bonus is equal to 135% of the STIP cash bonus calculated based upon a notional base salary for the President’s role. See page 30 for more information.
|
Canadian Natural Resources Limited
|
| |
33
|
| |
2021 Management Information Circular
|
|
Name
|
| |
Base Salary(1)
|
| |
Target
STIP Cash
Bonus (% of
base
salary)
|
| |
STIP
Performance
Multiplier
(% of target)
|
| |
PSU as a
Multiple of
STIP Cash
Bonus
|
| |
Calculated
2020 PSU
Award
|
|
|
N. Murray Edwards
|
| |
$1
|
| |
–(2)
|
| |
157.5%
|
| |
4.00x
|
| |
$7,144,200
|
|
|
Tim S. McKay
|
| |
519,940
|
| |
120%
|
| |
157.5%
|
| |
3.33x
|
| |
3,272,344
|
|
|
Scott G. Stauth
|
| |
373,269
|
| |
70%
|
| |
157.5%
|
| |
3.00x
|
| |
1,234,587
|
|
|
Darren M. Fichter
|
| |
333,307
|
| |
70%
|
| |
157.5%
|
| |
3.00x
|
| |
1,102,413
|
|
|
Mark A. Stainthorpe
|
| |
$247,442
|
| |
70%
|
| |
157.5%
|
| |
3.00x
|
| |
$818,415
|
|
(1)
|
Reflects the actual 2020 base salary earned by each of the NEOs.
|
(2)
|
Mr. N.M. Edwards’ STIP cash bonus is equal to 135% of the STIP cash bonus calculated based upon a notional base salary for the President’s role. See page 30 for more information.
|
|
Year
|
| |
Stock
Price
|
| |
Option
Value
|
| |
Expected
Life
(years)
|
| |
Dividend
Yield
|
| |
Forfeiture
Rate
|
| |
Volatility
|
| |
Risk Free
Rate
|
|
|
2020
|
| |
$40.12
|
| |
$6.84
|
| |
4.3
|
| |
4.7%
|
| |
4.7%
|
| |
33.0%
|
| |
0.8%
|
|
|
|
| |
$29.60
|
| |
$4.75
|
| |
4.3
|
| |
5.7%
|
| |
4.7%
|
| |
33.0%
|
| |
0.3%
|
|
|
2019
|
| |
$20.76
|
| |
$1.57
|
| |
4.4
|
| |
8.2%
|
| |
0.0%
|
| |
26.5%
|
| |
0.6%
|
|
|
|
| |
$38.71
|
| |
$6.10
|
| |
4.4
|
| |
3.9%
|
| |
0.0%
|
| |
26.4%
|
| |
1.4%
|
|
|
2018
|
| |
$37.09
|
| |
$6.03
|
| |
4.4
|
| |
4.0%
|
| |
0.0%
|
| |
28.3%
|
| |
1.7%
|
|
|
|
| |
$35.27
|
| |
$5.90
|
| |
4.4
|
| |
3.8%
|
| |
0.0%
|
| |
28.1%
|
| |
1.9%
|
|
Canadian Natural Resources Limited
|
| |
34
|
| |
2021 Management Information Circular
|
|
Name
|
| |
Base
Salary
|
| |
Target
Incentive
(% of base
salary)
|
| |
Target 2020
Stock Option/
Share
Election
Award Value
|
| |
Actual
Allocated
Option
Award Value
|
| |
Actual Award
Value Elected
to be Taken in
Common
Shares
(see 2020
LTIP Share
Election
Above)
|
| |
Total Actual
Aggregate
Stock Option/
Share
Election
Award Value
|
| |
2020
Number of
Stock
Options
|
| |
2020
Number
of
Common
Shares
Elected
to
Receive
|
|
|
N. Murray Edwards
|
| |
$1
|
| |
–(1)
|
| |
$ 4,961,250
|
| |
$ 3,800,000
|
| |
–
|
| |
$ 4,636,000
|
| |
800,000
|
| |
–
|
|
|
Tim S. McKay
|
| |
519,940
|
| |
525%
|
| |
2,729,685
|
| |
2,375,000
|
| |
–
|
| |
2,897,500
|
| |
500,000
|
| |
–
|
|
|
Scott G. Stauth
|
| |
373,269
|
| |
300%
|
| |
1,119,807
|
| |
831,250
|
| |
–
|
| |
1,014,125
|
| |
175,000
|
| |
–
|
|
|
Darren M. Fichter
|
| |
333,307
|
| |
300%
|
| |
999,921
|
| |
831,250
|
| |
–
|
| |
1,014,125
|
| |
175,000
|
| |
–
|
|
|
Mark A. Stainthorpe
|
| |
$ 247,442
|
| |
300%
|
| |
$742,326
|
| |
$831,250
|
| |
$–
|
| |
$1,014,125
|
| |
175,000
|
| |
–
|
|
(1)
|
Mr. N.M. Edwards’ Target Stock Option Award is equal to 135% of the Target Stock Option Award calculated based upon a notional base salary for the President’s role. See page 30 for more information.
|
|
|
| |
Executive
Chairman
N.M. Edwards
|
| |
President
and CEO
T.S. McKay
|
| |
COO,
Oil Sands
S.G. Stauth
|
| |
COO,
E&P
D.M. Fichter
|
| |
CFO and SVP,
Finance
M.A. Stainthorpe
|
|
|
Base salary
|
| |
$1
|
| |
$519,940
|
| |
$373,269
|
| |
$333,307
|
| |
$247,412
|
|
|
STIP Cash Bonus (% of salary)
|
| |
–(1)
|
| |
189%
|
| |
110%
|
| |
110%
|
| |
121%
|
|
|
STIP Cash Bonus ($)
|
| |
$1,786,050
|
| |
$982,686
|
| |
$412,000
|
| |
$367,000
|
| |
$300,000
|
|
|
Total Cash Compensation
|
| |
$1,786,051
|
| |
$1,502,626
|
| |
$785,269
|
| |
$700,307
|
| |
$547,412
|
|
|
Performance Share Unit (% of bonus)
|
| |
400%
|
| |
333%
|
| |
300%
|
| |
300%
|
| |
300%
|
|
|
Performance Share Units ($)
|
| |
$7,144,200
|
| |
$3,272,344
|
| |
$1,236,000
|
| |
$1,101,000
|
| |
$900,000
|
|
|
Option/Election- based LTIP (% of salary)
|
| |
–(1)
|
| |
557%
|
| |
272%
|
| |
304%
|
| |
410%
|
|
|
Option/Election- based LTIP ($)
|
| |
$4,636,000
|
| |
$2,897,500
|
| |
$1,014,125
|
| |
$1,014,425
|
| |
$1,014,125
|
|
|
Total Direct Compensation
|
| |
$13,566,251
|
| |
$7,672,470
|
| |
$3,035,394
|
| |
$2,815,432
|
| |
$2,461,537
|
|
|
All other compensation
|
| |
$–
|
| |
$105,749
|
| |
$78,443
|
| |
$70,841
|
| |
$54,345
|
|
|
Total Compensation
|
| |
$13,566,251
|
| |
$7,778,219
|
| |
$3,113,837
|
| |
$2,886,273
|
| |
$2,515,882
|
|
(1)
|
Mr. N.M. Edwards’ STIP cash bonus is equal to 135% of the STIP cash bonus calculated based upon the notional base salary for the President’s role. Mr. Edwards’ Option/Election LTIP award is calculated based upon the notional base salary for the President’s role. See page 30 for more information.
|
Canadian Natural Resources Limited
|
| |
35
|
| |
2021 Management Information Circular
|
|
|
| |
Executive
Chairman
N.M. Edwards
|
| |
President
and CEO
T.S. McKay
|
| |
COO,
Oil Sands
S.G. Stauth
|
| |
COO,
E&P
D.M. Fichter
|
| |
CFO and SVP,
Finance
M.A. Stainthorpe
|
|
|
Base salary
|
| |
–%
|
| |
7%
|
| |
12%
|
| |
12%
|
| |
10%
|
|
|
STIP Cash Bonus
|
| |
13%
|
| |
13%
|
| |
14%
|
| |
13%
|
| |
12%
|
|
|
Performance Share Unit
|
| |
53%
|
| |
43%
|
| |
41%
|
| |
39%
|
| |
37%
|
|
|
Option-based LTIP
|
| |
34%
|
| |
37%
|
| |
33%
|
| |
36%
|
| |
41%
|
|
•
|
the value of awarded compensation (i.e., base salary, STIP awards, PSUs that have vested and paid out, and exercised option gains); and
|
•
|
realizable compensation (i.e., the in-the-money value of vested and unvested PSUs and stock options that have not yet paid out or been exercised).
|
•
|
the grant date value of total direct compensation awarded to the President relative to the actual value received from his compensation commencing in 2015; and
|
•
|
the value of $100 compensation awarded in relation to the value of $100 invested in the Common Share at the beginning of the periods indicated.
|
Canadian Natural Resources Limited
|
| |
36
|
| |
2021 Management Information Circular
|
|
|
| |
Total Direct
Compensation
|
| |
Actual
Total Direct
Compensation
Value at
|
| |
Value of $100
|
|
|
Year
|
| |
Awarded(1)
|
| |
Dec 31, 2020
|
| |
Period
|
| |
President’s Pay(2)
|
| |
Shareholder(3)
|
|
|
2015
|
| |
$5,052,397
|
| |
$5,804,753
|
| |
12/31/2015 to 12/31/2020
|
| |
$115
|
| |
$127
|
|
|
2016
|
| |
8,131,656
|
| |
5,731,767
|
| |
12/31/2016 to 12/31/2020
|
| |
70
|
| |
86
|
|
|
2017
|
| |
8,806,884
|
| |
6,668,873
|
| |
12/31/2017 to 12/31/2020
|
| |
76
|
| |
80
|
|
|
2018
|
| |
7,139,388
|
| |
4,617,296
|
| |
12/31/2018 to 12/31/2020
|
| |
65
|
| |
105
|
|
|
2019
|
| |
$8,058,763
|
| |
$7,691,140
|
| |
12/31/2019 to 12/31/2020
|
| |
$95
|
| |
$79
|
|
(1)
|
Includes base salary, STIP, and grant date value of PSUs and stock options awarded at year end based on performance during the year.
|
(2)
|
Represents the actual value for each $100 awarded to Mr. S.W. Laut during 2015-2017 and amount awarded to T.S. McKay for 2018-2019.
|
(3)
|
Represents the cumulative value of a $100 investment in Common Shares made on the first trading day of the period indicated, assuming dividend reinvestment.
|
Canadian Natural Resources Limited
|
| |
37
|
| |
2021 Management Information Circular
|
|
December 31, 2020
|
| |
2015
|
| |
2016
|
| |
2017
|
| |
2018
|
| |
2019
|
| |
2020
|
|
|
Canadian Natural Resources Limited
|
| |
$100
|
| |
$147
|
| |
$158
|
| |
$120
|
| |
$160
|
| |
$127
|
|
|
S&P/TSX Composite Index
|
| |
$100
|
| |
$121
|
| |
$132
|
| |
$120
|
| |
$148
|
| |
$156
|
|
|
S&P/TSX Oil & Gas Exploration & Production Index
|
| |
$100
|
| |
$156
|
| |
$135
|
| |
$89
|
| |
$98
|
| |
$73
|
|
Canadian Natural Resources Limited
|
| |
38
|
| |
2021 Management Information Circular
|
|
|
| |
|
| |
|
| |
|
| |
Non-Equity
Incentive Plan
Compensation
|
| |
|
| |
|
| |||
|
Name and
Principal
Position
|
| |
Year
|
| |
Salary
|
| |
Option
Based
Awards(1)
|
| |
Annual
Incentive
Plans(2)
|
| |
Long-term
Incentive
Plans(3)
|
| |
All Other
Compensation(4)
|
| |
Total
Compensation
|
|
|
N. Murray
Edwards Executive
Chair
Age 61
Years of service
32
|
| |
2020
|
| |
$1
|
| |
$4,636,000
|
| |
$1,786,050
|
| |
$7,144,200
|
| |
$—
|
| |
$13,566,251
|
|
|
2019
|
| |
$1
|
| |
$2,047,500
|
| |
$2,154,600
|
| |
$8,618,400
|
| |
$—
|
| |
$12,819,901
|
| |||
|
2018
|
| |
$1
|
| |
$2,684,250
|
| |
$1,615,950
|
| |
$6,463,800
|
| |
$—
|
| |
$10,764,001
|
| |||
|
Tim S. McKay President and CEO
Age 59
Years of service
30
|
| |
2020
|
| |
$519,940
|
| |
$2,897,500
|
| |
$982,686
|
| |
$3,272,344
|
| |
$105,749
|
| |
$7,778,219
|
|
|
2019
|
| |
$608,940
|
| |
$1,438,125
|
| |
$1,388,383
|
| |
$4,623,315
|
| |
$116,204
|
| |
$8,174,967
|
| |||
|
2018
|
| |
$583,334
|
| |
$2,236,875
|
| |
$997,501
|
| |
$3,321,678
|
| |
$78,820
|
| |
$7,218,208
|
| |||
|
Scott G. Stauth
Chief Operating Officer, Oil Sands
Age 55
Years of Service
24
|
| |
2020
|
| |
$373,269
|
| |
$1,014,125
|
| |
$412,000
|
| |
$1,236,000
|
| |
$78,443
|
| |
$3,113,837
|
|
|
2019
|
| |
$419,220
|
| |
$517,725
|
| |
$555,000
|
| |
$1,526,250
|
| |
$82,862
|
| |
$3,101,057
|
| |||
|
2018
|
| |
$410,721
|
| |
$805,275
|
| |
$409,000
|
| |
$1,124,750
|
| |
$58,140
|
| |
$2,807,636
|
| |||
|
Darren M. Fichter Chief Operating Officer, E&P
Age 50
Years of Service 25
|
| |
2020
|
| |
$333,307
|
| |
$1,014,125
|
| |
$367,000
|
| |
$1,101,000
|
| |
$70,841
|
| |
$2,886,273
|
|
|
2019
|
| |
$374,340
|
| |
$517,725
|
| |
$500,000
|
| |
$1,375,000
|
| |
$53,227
|
| |
$2,820,292
|
| |||
|
2018
|
| |
$367,222
|
| |
$600,750
|
| |
$366,000
|
| |
$1,006,500
|
| |
$60,193
|
| |
$2,400,665
|
| |||
|
Mark A. Stainthorpe(5) Chief Financial
Officer and
Senior
Vice-President,
Finance
Age 43
Years of service 18
|
| |
2020
|
| |
$247,442
|
| |
$1,014,125
|
| |
$300,000
|
| |
$900,000
|
| |
$54,345
|
| |
$2,515,912
|
|
|
2019
|
| |
$235,231
|
| |
$517,725
|
| |
$300,000
|
| |
$825,000
|
| |
$49,639
|
| |
$1,927,595
|
| |||
|
2018
|
| |
$172,010
|
| |
$178,950
|
| |
$70,000
|
| |
$157,500
|
| |
$29,311
|
| |
$607,771
|
| |||
|
Steve W. Laut(6)
Former Executive
Vice-Chair
Age 63
Years of service 30
|
| |
2020
|
| |
$170,836
|
| |
$—
|
| |
$—
|
| |
$—
|
| |
$ 102,684
|
| |
$273,520
|
|
|
2019
|
| |
$498,372
|
| |
$1,365,000
|
| |
$ 1,136,288
|
| |
$3,783,839
|
| |
$96,773
|
| |
$6,880,272
|
| |||
|
2018
|
| |
$503,012
|
| |
$1,335,000
|
| |
$860,151
|
| |
$2,864,302
|
| |
$69,179
|
| |
$5,631,644
|
| |||
|
Total Aggregate NEO Compensation
|
| |
2020
|
| |
$ 1,644,795
|
| |
$ 10,575,875
|
| |
$ 3,847,736
|
| |
$13,653,544
|
| |
$ 412,062
|
| |
$ 30,033,982
|
|
|
2019
|
| |
$ 2,136,104
|
| |
$6,403,800
|
| |
$ 6,034,271
|
| |
$ 20,751,804
|
| |
$ 398,705
|
| |
$ 35,724,084
|
| |||
|
2018
|
| |
$ 2,036,300
|
| |
$5,841,100
|
| |
$ 4,318,602
|
| |
$ 14,938,530
|
| |
$ 295,643
|
| |
$ 29,429,925
|
|
(1)
|
The grant date fair value is determined using Black-Scholes- Merton pricing model of options granted in the year. The Corporation chose this methodology because it is recognized as the most common methodology used for valuing options and performing value comparisons. The options on date of grant have no intrinsic value as the strike price is the closing price of the Common Shares on the TSX on the day preceding the grant. The NEOs do not receive any value for these options until options are vested and exercised under the terms of the stock option plan, provided the price of the Common Shares on the TSX is higher than the strike price of the options at time of exercise. The Black-Scholes-Merton assumptions used by the Corporation are reported on page 34. If the NEO elected to receive 50% of their stock option award as Common Shares, the dollar value equal to the price of the Common Shares purchased on the TSX is included.
|
(2)
|
The amount shown as Annual Incentive Plans is the cash bonus award to each of the NEOs for personal and corporate performance during the year.
|
Canadian Natural Resources Limited
|
| |
39
|
| |
2021 Management Information Circular
|
(3)
|
PSU Plan awards are in the form of a cash payment calculated as a multiple of the cash bonus for the purpose of purchasing PSUs that mirror the Common Shares on behalf of the NEO. The PSUs vest approximately three years from the date of grant and any dividends declared payable on the Common Shares are also calculated on the same basis for PSUs and are attributed to the unvested PSUs and reinvested in additional PSUs, which vest on the same date as the underlying grant. If the NEO leaves the employment of the Corporation for any reason before Normal Retirement Age, the unvested PSUs are forfeited by the NEO under the terms of the plan.
|
(4)
|
All Other Compensation (for all NEOs except Mr. S.W. Laut) is comprised of the aggregate value of perquisites and benefits and the unvested portion in each year of the Corporation’s contribution to the Corporation’s Employee Stock Savings Plan for each NEO who is a participant in the plan. The Corporation’s contribution to the Corporation’s stock savings plan for each NEO who is a participant in the plan vests on January 1 each year. The unvested portion of the Corporation’s contribution as at December 31, 2020 for each NEO who is a participant in the plan and which vested January 1, 2021 is as follows: T.S. McKay, $96,564; S.G. Stauth, $69,345; D.M. Fichter, $61,921, and M.A. Stainthorpe, $46,001. The value in aggregate of perquisites and benefits which is comprised only of health, life insurance premiums and parking for each NEO is less than $50,000 and is less or worth less than 10% of total salary for 2020.
|
(5)
|
For 2018, Mr. M.A. Stainthorpe received a share bonus instead of PSUs as he was not a member of the Corporation’s Management Committee at that time. The share bonus represents restricted Common Shares that vest equally over a three year period and have a value based upon the then current value of such Common Shares.
|
(6)
|
Mr. S.W. Laut retired as an executive of the Corporation on May 5, 2020 at the age of 62 and has continued as a non-independent director after being elected at the Annual Meeting of Shareholders held on May 7, 2020. All Other Compensation for Mr. S.W. Laut includes: (i) the aggregate value of perquisites and benefits, being $15,649; (ii) the unvested portion in 2020 of the Corporation’s contribution to the Corporation’s Employee Stock Savings Plan on his behalf as a participant in the plan, being $24,893; (iii) cash retainer fees earned after May 5, 2020 as a director of the Corporation, being $25,594; and (iv) the equity value of Common Shares of the Corporation earned after May 5, 2020 and purchased on his behalf as a director of the Corporation, being $36,548.
|
|
Named Executive Officer
|
| |
PSUs granted for 2020
Performance at a Price of $31.23
|
| |
PSUs granted for 2019
Performance at a
Price of $39.43
|
| |
PSUs granted for 2018
Performance at a
Price of $37.36
|
|
|
N. Murray Edwards
|
| |
228,797
|
| |
218,583
|
| |
173,025
|
|
|
Tim S. McKay
|
| |
104,799
|
| |
117,258
|
| |
88,916
|
|
|
Scott G. Stauth
|
| |
39,584
|
| |
38,709
|
| |
30,108
|
|
|
Darren M. Fichter
|
| |
35,260
|
| |
34,872
|
| |
26,941
|
|
|
Mark A. Stainthorpe(1)
|
| |
28,823
|
| |
20,924
|
| |
4,216
|
|
|
Steve W. Laut(2)
|
| |
0
|
| |
95,967
|
| |
76,673
|
|
|
Total PSUs Granted to NEOs
|
| |
437,263
|
| |
526,313
|
| |
399,879
|
|
(1)
|
For 2018, Mr. M.A. Stainthorpe received share bonuses instead of PSUs as he was not a member of the Corporation’s Management Committee at that time. The share bonus represents restricted Common Shares that vest equally over a three year period and have a value based upon the then current value of such Common Shares. Such Common Shares were purchased at the same price as the PSUs in the respective year.
|
(2)
|
Effective May 5, 2020, Mr. S.W. Laut had the number of PSUs he elected to receive in lieu of his PSU grant in previous years reduced to reflect his retirement at the age of 62, resulting in 72,615 PSUs being cancelled.
|
|
Named Executive Officer
|
| |
Value of 2020
Share Election
|
| |
Shares Purchased for 2019
Share Election at an Average
Purchase Price of $15.50
|
| |
Shares Purchased for 2018
Share Election at an Average
Purchase Price of $39.36
|
|
|
N. Murray Edwards
|
| |
—
|
| |
43,549
|
| |
—
|
|
|
Darren M. Fichter
|
| |
—
|
| |
—
|
| |
5,421
|
|
|
Steve W. Laut(1)
|
| |
N/A
|
| |
29,033
|
| |
12,045
|
|
(1)
|
Effective May 5, 2020, Mr. S.W. Laut had the number of Common Shares he elected to receive in lieu of his stock option award in previous years reduced to reflect his retirement at the age of 62, resulting in 8,896 Common Shares being forfeited.
|
Canadian Natural Resources Limited
|
| |
40
|
| |
2021 Management Information Circular
|
|
|
| |
Option Based Awards
|
| |
Share-based Awards
|
| |||||||||||||||
|
Name
|
| |
Number of
Securities
Underlying
Unexercised
Options
|
| |
Option
Exercise
Price($)
|
| |
Option
Expiration
Date
|
| |
Value of
Unexercised
In-the-money
Options($)(1)
|
| |
Number of
PSUs that
have not
Vested(2)
|
| |
Vesting
Date
|
| |
Value of Unvested
PSUs($)(1)(3)(4)
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
225,000
|
| |
43.99
|
| |
January 7, 2022
|
| |
–
|
| |
211,926
|
| |
April 1, 2021
|
| |
12,965,633
|
|
|
N. Murray Edwards
|
| |
225,000
|
| |
42.14
|
| |
January 7, 2022
|
| |
–
|
| |
189,414
|
| |
April 1, 2022
|
| |
5,794,174
|
|
|
|
| |
225,000
|
| |
44.16
|
| |
January 6, 2023
|
| |
–
|
| |
227,075
|
| |
April 1, 2023
|
| |
6,946,224
|
|
|
|
| |
225,000
|
| |
45.05
|
| |
January 6, 2023
|
| |
–
|
| |
228,797
|
| |
April 1, 2024
|
| |
6,998,900
|
|
|
|
| |
225,000
|
| |
35.27
|
| |
March 1, 2024
|
| |
–
|
| |
|
| |
|
| |
|
|
|
|
| |
225,000
|
| |
37.09
|
| |
March 1, 2024
|
| |
–
|
| |
|
| |
|
| |
|
|
|
|
| |
225,000
|
| |
38.71
|
| |
February 28, 2025
|
| |
–
|
| |
|
| |
|
| |
|
|
|
|
| |
400,000
|
| |
29.32
|
| |
February 27, 2026
|
| |
508,000
|
| |
|
| |
|
| |
|
|
|
|
| |
400,000
|
| |
40.12
|
| |
February 27, 2026
|
| |
—
|
| |
|
| |
|
| |
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
95,000
|
| |
43.99
|
| |
January 7, 2022
|
| |
–
|
| |
78,882
|
| |
April 1, 2021
|
| |
4,826,000
|
|
|
Tim S. McKay
|
| |
95,000
|
| |
42.14
|
| |
January 7, 2022
|
| |
–
|
| |
97,338
|
| |
April 1, 2022
|
| |
2,977,569
|
|
|
|
| |
95,000
|
| |
44.16
|
| |
January 6, 2023
|
| |
–
|
| |
121,813
|
| |
April 1, 2023
|
| |
3,726,260
|
|
|
|
| |
95,000
|
| |
45.05
|
| |
January 6, 2023
|
| |
–
|
| |
104,799
|
| |
April 1, 2024
|
| |
3,205,801
|
|
|
|
| |
110,000
|
| |
39.29
|
| |
March 7, 2024
|
| |
–
|
| |
|
| |
|
| |
|
|
|
|
| |
187,500
|
| |
35.27
|
| |
March 1, 2024
|
| |
–
|
| |
|
| |
|
| |
|
|
|
|
| |
187,500
|
| |
37.09
|
| |
March 1, 2024
|
| |
–
|
| |
|
| |
|
| |
|
|
|
|
| |
187,500
|
| |
38.71
|
| |
February 28, 2025
|
| |
–
|
| |
|
| |
|
| |
|
|
|
|
| |
187,500
|
| |
20.76
|
| |
February 28, 2025
|
| |
1,843,125
|
| |
|
| |
|
| |
|
|
|
|
| |
250,000
|
| |
29.32
|
| |
February 27, 2026
|
| |
317,500
|
| |
|
| |
|
| |
|
|
|
|
| |
250,000
|
| |
40.12
|
| |
February 27, 2026
|
| |
—
|
| |
|
| |
|
| |
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
47,500
|
| |
43.99
|
| |
January 7, 2022
|
| |
–
|
| |
23,665
|
| |
April 1, 2021
|
| |
1,447,825
|
|
|
Scott G. Stauth
|
| |
47,500
|
| |
42.14
|
| |
January 7, 2022
|
| |
–
|
| |
32,959
|
| |
April 1, 2022
|
| |
1,008,216
|
|
|
|
| |
47,500
|
| |
44.16
|
| |
January 6, 2023
|
| |
–
|
| |
40,213
|
| |
April 1, 2023
|
| |
1,230,116
|
|
|
|
| |
47,500
|
| |
45.05
|
| |
January 6, 2023
|
| |
–
|
| |
39,584
|
| |
April 1, 2024
|
| |
1,210,875
|
|
|
|
| |
67,500
|
| |
35.27
|
| |
March 1, 2024
|
| |
–
|
| |
|
| |
|
| |
|
|
|
|
| |
67,500
|
| |
37.09
|
| |
March 1, 2024
|
| |
–
|
| |
|
| |
|
| |
|
|
|
|
| |
67,500
|
| |
38.71
|
| |
February 28, 2025
|
| |
–
|
| |
|
| |
|
| |
|
|
|
|
| |
67,500
|
| |
20.76
|
| |
February 28, 2025
|
| |
663,525
|
| |
|
| |
|
| |
|
|
|
|
| |
87,500
|
| |
29.32
|
| |
February 27, 2026
|
| |
111,125
|
| |
|
| |
|
| |
|
|
|
|
| |
87,500
|
| |
40.12
|
| |
February 27,2026
|
| |
—
|
| |
|
| |
|
| |
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
47,500
|
| |
43.99
|
| |
January 7, 2022
|
| |
–
|
| |
18,932
|
| |
April 1, 2021
|
| |
1,158,260
|
|
|
Darren M. Fichter
|
| |
47,500
|
| |
42.14
|
| |
January 7, 2022
|
| |
–
|
| |
29,494
|
| |
April 1, 2022
|
| |
902,221
|
|
|
|
| |
47,500
|
| |
44.16
|
| |
January 6, 2023
|
| |
–
|
| |
36,228
|
| |
April 1, 2023
|
| |
1,108,215
|
|
|
|
| |
47,500
|
| |
45.05
|
| |
January 6, 2023
|
| |
–
|
| |
35,260
|
| |
April 1, 2024
|
| |
1,078,603
|
|
|
|
| |
67,500
|
| |
35.27
|
| |
March 1, 2024
|
| |
–
|
| |
|
| |
|
| |
|
|
|
|
| |
67,500
|
| |
38.71
|
| |
February 28, 2025
|
| |
–
|
| |
|
| |
|
| |
|
|
|
|
| |
67,500
|
| |
20.76
|
| |
February 28, 2025
|
| |
663,525
|
| |
|
| |
|
| |
|
|
|
|
| |
87,500
|
| |
29.32
|
| |
February 27, 2026
|
| |
111,125
|
| |
|
| |
|
| |
|
|
|
|
| |
87,500
|
| |
40.12
|
| |
February 27, 2026
|
| |
—
|
| |
|
| |
|
| |
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
5,650
|
| |
43.99
|
| |
January 7, 2022
|
| |
–
|
| |
21,737
|
| |
April 1, 2023
|
| |
664,935
|
|
|
Mark A. Stainthorpe(5)
|
| |
5,650
|
| |
42.14
|
| |
January 7, 2022
|
| |
–
|
| |
28,823
|
| |
April 1, 2024
|
| |
881,696
|
|
|
|
| |
5,875
|
| |
44.16
|
| |
January 6, 2023
|
| |
–
|
| |
|
| |
|
| |
|
|
|
|
| |
5,875
|
| |
45.05
|
| |
January 6, 2023
|
| |
–
|
| |
|
| |
|
| |
|
|
|
|
| |
15,000
|
| |
35.27
|
| |
March 1, 2024
|
| |
–
|
| |
|
| |
|
| |
|
|
|
|
| |
15,000
|
| |
37.09
|
| |
March 1, 2024
|
| |
–
|
| |
|
| |
|
| |
|
|
|
|
| |
67,500
|
| |
38.71
|
| |
February 28, 2025
|
| |
–
|
| |
|
| |
|
| |
|
|
|
|
| |
67,500
|
| |
20.76
|
| |
February 28, 2025
|
| |
663,525
|
| |
|
| |
|
| |
|
|
|
|
| |
87,500
|
| |
29.32
|
| |
February 27, 2026
|
| |
111,125
|
| |
|
| |
|
| |
|
|
|
|
| |
87,500
|
| |
40.12
|
| |
February 27, 2026
|
| |
—
|
| |
|
| |
|
| |
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Canadian Natural Resources Limited
|
| |
41
|
| |
2021 Management Information Circular
|
|
|
| |
Option Based Awards
|
| |
Share-based Awards
|
| |||||||||||||||
|
Name
|
| |
Number of
Securities
Underlying
Unexercised
Options
|
| |
Option
Exercise
Price($)
|
| |
Option
Expiration
Date
|
| |
Value of
Unexercised
In-the-money
Options($)(1)
|
| |
Number of
PSUs that
have not
Vested(2)
|
| |
Vesting
Date
|
| |
Value of Unvested
PSUs($)(1)(3)(4)
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
99,323
|
| |
April 1, 2021
|
| |
6,076,581
|
|
|
Steve W. Laut(6)
|
| |
N/A
|
| |
|
| |
|
| |
|
| |
63,791
|
| |
April 1, 2022
|
| |
1,951,367
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
75,768
|
| |
April 1, 2023
|
| |
2,317,743
|
|
(1)
|
The closing price of the Common Shares on the TSX on December 31, 2020 was $30.59.
|
(2)
|
The number of PSUs includes PSUs accumulated since the date of grant through the reinvestment into PSUs of amounts calculated as dividends payable on Common Shares, which are then attributed to the PSUs. These additional PSUs vest on the same date as the underlying PSU grant.
|
(3)
|
The value of the PSUs vesting on April 1, 2021 is calculated as at December 31, 2020 based upon a performance payout multiple of 2.00, meaning that the Corporation’s actual performance exceeded its peer group and was in the top range of peer performance over the 3 year performance period prior to vesting (see page 36 for details).
|
(4)
|
The value of the PSUs vesting on April 1, 2022, April 1, 2023 and April 1, 2024 are calculated as at December 31, 2020 based upon a performance payout multiple of 1.00, meaning that the Corporation’s performance matched that of its peer group over the 3 year performance period prior to vesting. The Corporation’s actual performance cannot be determined as the comparative performance period for each grant has not ended. The information on page 22 provides comparative peer performance over 1, 3 and 5 year periods for both TSR and reserves per share growth and is indicative of better than average performance.
|
(5)
|
For 2018, Mr. M.A. Stainthorpe received share bonus instead of PSUs as he was not a member of the Corporation’s Management Committee at that time. As a result, Mr. Stainthorpe does not have any granted share based awards prior to 2019.
|
(6)
|
Mr. S.W. Laut retired as an executive of the Corporation on May 5, 2020 and any unvested stock options were forfeited at that time. Effective May 5, 2020, Mr. S.W. Laut had (i) any unexercised stock options cancelled 30 days following his retirement; and (ii) the number of granted but unvested PSUs reduced to reflect his retirement.
|
|
Name
|
| |
Option
based Awards – Value
vested during the year(1)
|
| |
Share-based
Awards – Value vested
during the year(2)
|
| |
Non-equity incentive plan
compensation – Value
earned during the year(3)
|
|
|
N. Murray Edwards
|
| |
$ 241,350
|
| |
$11,999,067
|
| |
$344,457
|
|
|
Tim S. McKay
|
| |
153,625
|
| |
5,136,587
|
| |
2,706
|
|
|
Scott G. Stauth
|
| |
64,265
|
| |
1,104,366
|
| |
1,896
|
|
|
Darren M. Fichter
|
| |
64,265
|
| |
934,513
|
| |
45,926
|
|
|
Mark A. Stainthorpe(4)
|
| |
15,630
|
| |
–
|
| |
56,983
|
|
|
Steve W. Laut(5)
|
| |
$58,500
|
| |
$7,395,508
|
| |
$363,675
|
|
(1)
|
This is the aggregate net benefit the NEO would have received before tax had the NEO exercised the option on date of vesting based on the closing price of the Common Shares on the TSX on the day prior to vesting.
|
(2)
|
The Corporation does not have a treasury based Common Share award program. PSU awards only vest 3 years following the date of grant such that PSU awards made in respect of 2016 performance vested on April 1, 2020 using a performance factor of 1.83 and a price of $39.43, and, as a result, these values are included.
|
(3)
|
If a NEO elected to receive 50% of their stock option award as Common Shares in previous years, the Common Shares purchased vest equally over three years and the dollar value of the Common Shares that vested during the year is included. The aggregate benefit to the NEO is based on the closing price of the Common Shares on the TSX the day prior to vesting.
|
(4)
|
PSU awards made to Mr. M.A. Stainthorpe prior to March 29, 2019 are in the form of a cash payment deposited into the Employee Stock Savings Plan for the purpose of purchasing Common Shares on the TSX, on behalf of the NEO, which vest over a three year period pursuant to the Employee Share Bonus program. The Common Shares purchased vest equally over three years and the dollar value of the Common Shares that vested during the year is included. The aggregate benefit to Mr. Stainthorpe is based on the closing price of the Common Shares on the TSX on the day prior to vesting.
|
(5)
|
Mr. S.W. Laut retired as an executive of the Corporation on May 5, 2020 and any unvested stock options were forfeited at that time. Effective May 5, 2020, Mr. S.W. Laut had (i) any unexercised stock options cancelled 30 days following his retirement; (ii) the number of granted but unvested PSUs reduced to reflect his retirement; and (iii) the number of Common Shares reduced to reflect his retirement.
|
Canadian Natural Resources Limited
|
| |
42
|
| |
2021 Management Information Circular
|
Resignation
|
| |
–
|
| |
All salary and benefit programs cease as at effective date of resignation.
|
|
–
|
| |
Annual cash and PSUs are no longer paid.
|
||
|
–
|
| |
Unvested options outstanding as at effective date of resignation are forfeited.
|
||
|
–
|
| |
Vested options outstanding as at effective date of resignation must be exercised within 30 days from effective date of resignation.
|
||
|
–
|
| |
Unvested portion of Common Shares in the savings plan and PSUs as at effective date of resignation is forfeited.
|
||
|
–
|
| |
Unvested portion of Common Shares in the savings plan purchased through the Common Share election is forfeited unless Normal Retirement Age is reached.
|
||
Retirement
|
| |
–
|
| |
All salary and benefit programs cease as at effective date of retirement.
|
|
–
|
| |
Annual cash and PSUs are no longer paid.
|
||
|
–
|
| |
Unvested options outstanding as at effective date of retirement are forfeited.
|
||
|
–
|
| |
Vested options outstanding as at effective date of retirement must be exercised within 30 days from effective date of retirement.
|
||
|
–
|
| |
Unvested portion of Common Shares in the savings plan and PSUs vest if Normal Retirement Age (as described in the matrix set out on page 20) is reached or are otherwise forfeited.
|
||
|
–
|
| |
Unvested portion of Common Shares in the savings plan purchased through the Common Share election is forfeited.
|
||
Death
|
| |
–
|
| |
All salary and benefit programs cease as at date of death except for payout of any applicable insurance benefits.
|
|
–
|
| |
Annual cash and PSUs are not paid.
|
||
|
–
|
| |
Unvested options outstanding at date of death are cancelled unless vesting is accelerated pursuant to the terms of the option plan.
|
||
|
–
|
| |
Vested options outstanding as at date of death must be exercised within three to twelve months from date of death.
|
||
|
–
|
| |
Unvested portion of Common Shares in savings plan and PSUs vest at date of death except for those Common Shares purchased through the Common Share election, which are forfeited.
|
||
Termination without cause
|
| |
–
|
| |
All salary and benefit programs cease on effective date of termination.
|
|
–
|
| |
Annual cash and PSUs are no longer paid.
|
||
|
–
|
| |
Unvested options outstanding on Notice Date of termination are forfeited.
|
||
|
–
|
| |
Vested options outstanding on Notice Date of termination must be exercised within 30 days from Notice Date as defined in the stock option plan.
|
||
|
–
|
| |
Unvested portion of Common Shares in savings plan and PSUs are forfeited unless individual reaches Normal Retirement Age (as described in the matrix set out on page 20).
|
||
|
–
|
| |
Severance provided on an individual basis reflecting service, experience and salary level.
|
||
|
–
|
| |
Unvested portion of Common Shares in the savings plan purchased through the Common Share election is forfeited.
|
||
|
–
|
| |
Upon a change of control event, all unvested stock options, unvested savings plan Common Shares and unvested PSUs, vest immediately provided that the individual is terminated without cause as a result of the change of control or within a 24 month period from the change of control event.
|
||
Termination for cause
|
| |
–
|
| |
All salary and benefit programs cease on effective date of termination.
|
|
–
|
| |
Annual cash and PSUs are no longer paid.
|
||
|
–
|
| |
Unvested options outstanding as at Notice Date of termination are forfeited.
|
||
|
–
|
| |
Vested options outstanding as at Notice Date of termination must be exercised within 30 days from effective date of Notice Date.
|
||
|
–
|
| |
Unvested portion of shares in savings plan and PSUs are forfeited unless individual reaches Normal Retirement Age (as described in the matrix set out on page 20).
|
||
|
–
|
| |
Unvested portion of Common Shares in the savings plan purchased through the Common Share election is forfeited.
|
Canadian Natural Resources Limited
|
| |
43
|
| |
2021 Management Information Circular
|
|
Name
|
| |
Base
Salary(1)
|
| |
Cash
Bonus(1)
|
| |
Performance
Share Unit(2)
|
| |
Accelerated
Option Vesting(3)
|
| |
Accelerated
PSU Vesting(3)(4)
|
| |
Share Election
Accelerated
Vesting(3)(5)
|
|
|
N. Murray Edwards
|
| |
$–
|
| |
$–
|
| |
$ 7,144,200
|
| |
$ 508,000
|
| |
$ 25,706,031
|
| |
$ 888,558
|
|
|
Tim S. McKay
|
| |
–
|
| |
–
|
| |
3,272,344
|
| |
2,160,625
|
| |
11,529,829
|
| |
–
|
|
|
Scott G. Stauth
|
| |
–
|
| |
–
|
| |
1,236,000
|
| |
774,850
|
| |
3,686,157
|
| |
–
|
|
|
Darren M. Fichter
|
| |
–
|
| |
–
|
| |
1,101,000
|
| |
774,850
|
| |
3,168,696
|
| |
55,383
|
|
|
Mark A. Stainthorpe(6)
|
| |
–
|
| |
–
|
| |
900,000
|
| |
774,850
|
| |
664,935
|
| |
43,075
|
|
|
Steve W. Laut(7)
|
| |
$ –
|
| |
$ –
|
| |
$–
|
| |
$–
|
| |
$10,345,691
|
| |
$543,738
|
|
(1)
|
Severance provided on an individual basis reflecting service, experience and salary level.
|
(2)
|
This is the actual dollar value of the PSU awards for 2020 performance.
|
(3)
|
The closing price of the Corporation’s Common Shares on the TSX on December 31, 2020 was $30.59.
|
(4)
|
This reflects the dollar value of the PSUs granted for 2017, 2018 and 2019 performance plus any dividends attributed thereto as at December 31, 2020, assuming a 2.00 performance payout multiple for the 2017 performance grant and a 1.00 performance payout multiple for 2018 and 2019 performance grants (see payout matrix on page 27) for the PSUs.
|
(5)
|
For Common Shares, this is the dollar value of the unvested Common Shares as received in lieu of stock options under the option election program at December 31, 2020. For those individuals who elected to receive Common Shares in lieu of stock options in 2020, this amount includes the dollar value of that election. The Common Shares in respect of the 2020 election have not been acquired as of March 17, 2021.
|
(6)
|
For 2018, Mr. M.A. Stainthorpe received share bonuses instead of PSUs as he was not a member of the Corporation’s Management Committee at that time. The share bonus represents restricted Common Shares that vest equally over a three year period and have a value based upon the then current value of such Common Shares.
|
(7)
|
Mr. S.W. Laut retired as an executive of the Corporation on May 5, 2020 and any unvested stock options were forfeited at that time. Effective May 5, 2020, Mr. S.W. Laut had (i) any unexercised stock options cancelled 30 days following his retirement; (ii) the number of granted but unvested PSUs reduced to reflect his retirement; and (iii) the number of Common Shares reduced to reflect his retirement.
|
Canadian Natural Resources Limited
|
| |
44
|
| |
2021 Management Information Circular
|
Canadian Natural Resources Limited
|
| |
45
|
| |
2021 Management Information Circular
|
|
Plan Category
|
| |
Number of
Securities to be Issued
Upon Exercise of
Outstanding Options
at December 31, 2020
|
| |
Weighted-average
Exercise Price of
Outstanding
Options
at December 31, 2020
|
| |
Securities Remaining
available
For Future Issuance
Under Equity
Compensation Plans
at December 31, 2020
|
| |
Total Number of
Securities Issuable
Upon Exercise
of Options
at December 31, 2020
|
|
|
Equity compensation plans approved by security holders
|
| |
48,656,269
|
| |
$37.53
|
| |
34,214,371
|
| |
82,870,640
|
|
|
Equity compensation plans not approved by security holders
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Total
|
| |
48,656,269
|
| |
$37.53
|
| |
34,514,371
|
| |
82,870,640
|
|
|
Percent of Outstanding Shares
|
| |
4.1%
|
| |
|
| |
2.9%
|
| |
7.0%
|
|
|
|
| |
Number of
Securities
|
| |
Percent of
Outstanding
Common Shares
|
|
|
To be issued upon exercise of outstanding options
|
| |
56,595,043
|
| |
4.8%
|
|
|
Available for future issuance
|
| |
26,442,047
|
| |
2.2%
|
|
|
Total number of securities issuable
|
| |
83,037,090
|
| |
7.0%
|
|
Canadian Natural Resources Limited
|
| |
46
|
| |
2021 Management Information Circular
|
Canadian Natural Resources Limited
|
| |
47
|
| |
2021 Management Information Circular
|
Canadian Natural Resources Limited
|
| |
A-1
|
| |
2021 Management Information Circular
|
|
|
| |
Independent
No Material
Relationship
|
| |
Non-
Independent
|
| |
Management
|
| |
Reason for
Non-independent Status
|
|
|
Catherine M. Best
|
| |
X
|
| |
|
| |
|
| |
|
|
|
M. Elizabeth Cannon
|
| |
X
|
| |
|
| |
|
| |
|
|
|
N. Murray Edwards
|
| |
|
| |
|
| |
X
|
| |
Member of Corporate Management Committee
|
|
|
Christopher L. Fong
|
| |
X
|
| |
|
| |
|
| |
|
|
|
Ambassador Gordon D. Giffin (Lead Independent Director)
|
| |
X
|
| |
|
| |
|
| |
|
|
|
Wilfred A. Gobert
|
| |
X
|
| |
|
| |
|
| |
|
|
|
Steve W. Laut
|
| |
|
| |
X
|
| |
|
| |
Former Member of Corporate Management Committee (within 3 years)
|
|
|
Tim S. McKay
|
| |
|
| |
|
| |
X
|
| |
Member of Corporate Management Committee
|
|
|
Honourable Frank J. McKenna
|
| |
X
|
| |
|
| |
|
| |
|
|
|
David A. Tuer
|
| |
X
|
| |
|
| |
|
| |
|
|
|
Annette M. Verschuren
|
| |
X
|
| |
|
| |
|
| |
|
|
Canadian Natural Resources Limited
|
| |
A-2
|
| |
2021 Management Information Circular
|
a)
|
ensure that the Corporation’s management has implemented a system of internal controls over financial reporting and monitors its effectiveness;
|
b)
|
monitor and oversee the integrity of the Corporation’s financial statements, financial reporting processes and systems of internal controls regarding financial, accounting and compliance with regulatory and statutory requirements as they relate to financial statements, taxation matters and disclosure of material facts;
|
c)
|
review the Corporation’s financial statements, management discussion and analysis and annual and interim earnings before the release of this information by press release or distribution to the shareholders;
|
d)
|
select and recommend to the Board for appointment by the shareholders, the Corporation’s independent auditors, pre-approve all audit and non-audit services to be provided to the Corporation or its subsidiary entities by the Corporation’s independent auditors consistent with all applicable laws, and establish the fees and other compensation to be paid to the independent auditors and oversee the work of the independent auditor, including resolution of disagreements with management;
|
e)
|
monitor the independence, qualifications and performance of the Corporation’s independent auditors;
|
f)
|
oversee the audit of the Corporation’s financial statements;
|
g)
|
monitor the performance of the internal audit function;
|
h)
|
establish procedures for the receipt, retention, response to and treatment of complaints, including confidential, anonymous submissions by the Corporation’s employees, regarding accounting, internal controls or auditing matters;
|
i)
|
provide an avenue of communication among the independent auditors, management, the internal audit function and the Board; and
|
j)
|
review and approve the Corporation’s hiring policies regarding partners, employees and former partners and employees of present and former external auditors.
|
Canadian Natural Resources Limited
|
| |
A-3
|
| |
2021 Management Information Circular
|
•
|
the expertise and experience of the individual;
|
•
|
the overall performance of the Corporation; and
|
•
|
an evaluation of peer-company market data.
|
(i)
|
processes used to develop executive compensation industry surveys to yield meaningful analysis of compensation practices;
|
(ii)
|
compensation trends within the Corporation’s geographic area;
|
(iii)
|
common practices used by companies to compensate employees;
|
(iv)
|
other trends in compensation practices for incentivizing and compensating employees; and
|
(v)
|
other emerging “best practices” in executive compensation.
|
a)
|
review and approve the Corporation’s compensation philosophy and programs for executive officers and employees of the Corporation that (i) supports the Corporation’s overall business strategy and objectives; (ii) attracts and retains key executives and employees; (iii) links compensation with business objectives, organizational performance and long-term shareholder interest; and (iv) provides competitive compensation opportunities;
|
b)
|
selection and retention of compensation consultants and approval of their fees and services to be provided;
|
c)
|
consider the implications of the risks associated with the Corporation’s compensation policies and practices as they relate to executive compensation;
|
d)
|
approve and evaluate all compensation of executive officers including salaries, bonuses, and equity compensation plans;
|
e)
|
review the Corporation’s senior management and the steps being taken to assure the succession of qualified senior management at the Corporation through monitoring the Corporation’s management resources, structure, succession planning, development and selection process as well as the performance of key executives;
|
f)
|
review the Corporation’s Amended, Compiled and Restated Employee Stock Option Plan, the Employee Stock Purchase Plan under which Common Shares may be acquired by directors, executive officers and employees of the Corporation, and the Corporation’s pension plan, which was acquired at the time of the acquisition of Anadarko Canada Corporation and whose only members are former employees of Anadarko Canada Corporation and its predecessor companies. The Compensation Committee will also review the administration of all equity plans the Corporation may establish;
|
g)
|
review management’s Compensation Discussion and Analysis of executive compensation for inclusion in the Information Circular of the Corporation; and
|
h)
|
periodically review and recommend to the Board appropriate compensation for the Lead Independent Director of the Board.
|
Canadian Natural Resources Limited
|
| |
A-4
|
| |
2021 Management Information Circular
|
a)
|
generally ensure that the management of the Corporation has designed and implemented effective health and safety, asset integrity and environmental (which, for greater clarity, includes greenhouse gas emissions) risk programs, controls and reporting systems and reporting to the Board in respect thereof;
|
b)
|
generally ensure that the management of the Corporation has designed and implemented an effective voluntary employee wellness program that is available to all employees and which promotes and encourages healthy living choices by employees;
|
c)
|
monitor the Corporation’s performance in the areas of health and safety, asset integrity and environmental stewardship and its compliance with the regulatory requirements in the jurisdictions in which it operates;
|
d)
|
review quarterly the key performance indicators for health and safety, asset integrity and environmental performance against goals, objectives and targets in those areas and on a periodic basis, actions and initiatives undertaken to mitigate related risk;
|
e)
|
assess the impact of proposed or enacted laws and regulations related to health and safety, asset integrity and environment in those jurisdictions where the Corporation operates; and
|
f)
|
review management’s commitment, overall plans and strategies in the areas of corporate citizenship, ethics, social responsibility (including climate change) and community affairs to ensure they are in line with the Corporation’s goals and image.
|
Canadian Natural Resources Limited
|
| |
A-5
|
| |
2021 Management Information Circular
|
a)
|
provide assistance to the Board and the Chair of the Board in the area of review and consideration of developments in corporate governance practices;
|
b)
|
recommend to the Board a set of corporate governance principles and procedures applicable to and employed by the Corporation;
|
c)
|
provide assistance to the Board and the Chair of the Board in the area of Nominating, Governance and Risk Committee selection and rotation practices;
|
d)
|
provide assistance to the Board and the Chair of the Board in the area of evaluation of the overall effectiveness of the Board and management;
|
e)
|
annually evaluate the performance of each Director;
|
f)
|
identify individuals qualified to become Board members with the Chair of the Board and recommend to the Board, director nominees for the next Annual General Meeting of shareholders;
|
Canadian Natural Resources Limited
|
| |
A-6
|
| |
2021 Management Information Circular
|
g)
|
review and recommend periodically to the Board, the Corporation’s compensation for directors of the Corporation;
|
h)
|
ensures the Corporation’s management has implemented and maintains an effective enterprise risk management program;
|
i)
|
review significant enterprise risk exposures not delegated to other Board committees and steps management has taken to monitor, control and report such exposures;
|
j)
|
review annually the Corporation’s Code of Integrity, Business Ethics and Conduct policy; and
|
k)
|
review annually the Corporation’s Board of Directors Corporate Governance Guidelines.
|
a)
|
generally assume responsibility for assisting the Board in respect of annual independent and/or internal review of the Corporation’s petroleum and natural gas reserves;
|
b)
|
appoint the independent qualified evaluating engineers and approve their remuneration;
|
c)
|
report to the Board on the Corporation’s petroleum and natural gas reserves; and
|
d)
|
if appropriate, recommend to the Board for acceptance and inclusion of the contents of the annual independent report on the Corporation’s petroleum and natural gas reserves and the filing of same with the regulatory authorities.
|
Canadian Natural Resources Limited
|
| |
A-7
|
| |
2021 Management Information Circular
|
Canadian Natural Resources Limited
|
| |
A-8
|
| |
2021 Management Information Circular
|
Canadian Natural Resources Limited
|
| |
A-9
|
| |
2021 Management Information Circular
|
1.
|
monitor the effectiveness of management policies and decisions including the creation and execution of its strategies;
|
2.
|
review, and, where appropriate, approve the Corporation’s major financial objectives, plans and actions;
|
3.
|
with the assistance of its standing committees, the identification of the principal risks of the Corporation’s business and ensuring the implementation of appropriate policies and systems to manage these risks;
|
4.
|
succession planning; including appointing, training and monitoring senior management;
|
5.
|
a communication and disclosure policy for the Corporation; and
|
6.
|
the integrity of the Corporation’s internal control and management information systems.
|
Canadian Natural Resources Limited
|
| |
B-1
|
| |
2021 Management Information Circular
|
Canadian Natural Resources Limited
|
| |
B-2
|
| |
2021 Management Information Circular
|
1.
|
Audit Committee;
|
2.
|
Compensation Committee;
|
3.
|
Nominating, Governance and Risk Committee;
|
4.
|
Reserves Committee; and
|
5.
|
Health, Safety, Asset Integrity and Environmental Committee.
|
Canadian Natural Resources Limited
|
| |
B-3
|
| |
2021 Management Information Circular
|
Canadian Natural Resources Limited
|
| |
B-4
|
| |
2021 Management Information Circular
|
Canadian Natural Resources Limited
|
| |
B-5
|
| |
2021 Management Information Circular
|