2022 Proxy Statement    7

Election of Directors

(Proposal 1)

Currently, the Board consists of twelve directors. Each of the Company’s directors stands for election each year at the annual meeting. In accordance with the Company’s director retirement policy, which provides that the Nominating, Governance and Social Responsibility Committee will not recommend to the Board the nomination of any director or nominee who has attained or will attain the age of 75 prior to the annual meeting of stockholders, Mr. Michael E. Rose will not stand for re-election at the Annual Meeting. Following the Annual Meeting, the size of the Board will be reduced from twelve to eleven directors.

Each director nominee identified below currently serves on the Board and all were elected at the 2021 Annual Meeting of Stockholders, except for Messrs. Matthews and Szydlowski who were nominated and appointed to the Board on March 15, 2022 as designees of Sinclair pursuant to that certain Stockholders Agreement by and among HF Sinclair, Sinclair and the stockholders of Sinclair entered into in connection with the closing of the Sinclair Transactions (the “Stockholders Agreement”). Upon the recommendation of our Nominating, Governance and Social Responsibility Committee, our Board has nominated the eleven individuals identified below to serve as directors. The director nominees, if elected, will serve until the 2023 annual meeting of stockholders, or until their earlier resignation or removal. Each director nominee has indicated a willingness to serve if elected.

For each of the eleven director nominees standing for election, the following pages set forth certain biographical information, including a description of their principal occupation, business experience, and the primary qualifications that the Nominating, Governance and Social Responsibility Committee considered in recommending them as director nominees, as well as the Board committees on which each director nominee will serve as of the Annual Meeting.

Required Vote and Recommendation

In uncontested elections, the election of directors requires the approval of a majority of the votes cast for each director.

 

				THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES LISTED BELOW.

 

 

8    HF Sinclair Corporation

 

 

2022 Proxy Statement    9

 

 

10    HF Sinclair Corporation

Franklin Myers
Director Since: 2011   Age: 69   Committees: •  Executive Committee, Chairperson •  Compensation Committee •  Nominating, Governance and Social Responsibility Committee		Principal Occupation: Senior Advisor of Quantum Energy Partners and Chairperson of the Board   Business Experience: Mr. Myers has served as the Chairperson of the Board of the Company since February 2019. Mr. Myers has served as a senior advisor of Quantum Energy Partners, a private equity firm, since February 2013. Mr. Myers served as an operating advisor to Paine & Partners, LLC, a private equity firm, from 2009 through 2012 and as Senior Advisor to Cameron International Corporation, a publicly traded provider of flow equipment products, from 2008 until 2009. He served Cameron in various other capacities, including as Senior Vice President and Chief Financial Officer from 2003 through 2008, President of Cameron’s compression business from 1998 through 2001 and Senior Vice President and General Counsel from 1995 through 1999. In addition, Mr. Myers served as Senior Vice President and General Counsel of Baker Hughes Incorporated from 1988 through 1995 and as an associate and then a partner at Fulbright & Jaworski (now Norton Rose Fulbright) from 1978 through 1988.   Additional Directorships: Mr. Myers served as a director of Frontier Oil Corporation (“Frontier”) from 2009 until the merger in July 2011, as a director of Forum Energy Technologies, Inc. from September 2010 until March 2018, as a director of ION Geophysical Corporation from 2001 to June 2019, and as a director of NCS Multistage Holdings, Inc. from February 2017 to June 2020. He currently serves as a director of Comfort Systems USA, Inc. Mr. Myers also serves as a director of WireCo WorldGroup Inc., which ceased to have a class of securities registered pursuant to Section 12 of the Exchange Act at the end of September 2016.   Qualifications: Mr. Myers’ experience in senior finance and legal positions at publicly traded energy companies provides him with significant insight into operations, management and finance. In addition, Mr. Myers brings to the Board a broad range of experiences and skills as a result of his service as a director of other public and private companies.

 

 

2022 Proxy Statement    11

Michael C. Jennings
Director Since: 2011   Age: 56   Committees: •  Environmental, Health, Safety, and Public Policy Committee •  Executive Committee		Principal Occupation: Chief Executive Officer of the Company and Chief Executive Officer of Holly Logistic Services, L.L.C. (“HLS”)   Business Experience: Mr. Jennings has served as Chief Executive Officer of the Company since January 2020. He also served as President of the Company from January 2020 to November 2021, as Executive Vice President of the Company from November 2019 to December 2019, as Executive Chairperson of the Company from January 2016 to January 2017 and as Chief Executive Officer and President of the Company from the merger of Holly Corporation (“Holly”) and Frontier in July 2011 to January 2016. He served as Chairperson of the Board of the Company from January 2017 to February 2019 and January 2013 to January 2016. Mr. Jennings has served as Chief Executive Officer of HLS since January 2020. He previously served as Chief Executive Officer of HLS from January 2014 to November 2016 and as President of HLS from October 2015 to February 2016. Mr. Jennings served as President and Chief Executive Officer of Frontier from 2009 until the merger of Holly and Frontier in July 2011 and as the Executive Vice President and Chief Financial Officer of Frontier from 2005 to 2009.   Additional Directorships: Mr. Jennings currently serves as a director and Chairperson of the Board of HLS, the general partner of the general partner of Holly Energy Partners, L.P. (“HEP”). Mr. Jennings served as a director of FTS International, Inc. from January 2019 to November 2020, as a director and Chairperson of the Board of Montage Resources and its predecessor entities from May 2016 to November 2019, and as a director of ION Geophysical Corporation from December 2010 to February 2019. He served as Chairperson of the board of directors of Frontier from 2010 until the merger in July 2011 and served as a director of Frontier from 2008 to July 2011.   Qualifications: Mr. Jennings brings to the Board extensive industry experience and familiarity with the day-to-day operations of the Company. He provides a significant resource for the Board and facilitates communication between management and the Board.

 

 

12    HF Sinclair Corporation

Anne-Marie N. Ainsworth
Director Since: 2017   Age: 65   Committees: •  Environmental, Health, Safety, and Public Policy Committee, Chairperson •  Finance Committee		Principal Occupation: Former President and Chief Executive Officer of the general partner of Oiltanking Partners, L.P. and of Oiltanking Holding Americas, Inc.   Business Experience: Ms. Ainsworth served as President and Chief Executive Officer of the general partner of Oiltanking Partners, L.P. and of Oiltanking Holding Americas, Inc., companies engaged in the terminaling, storage and transportation by pipeline of crude oil, refined petroleum products and liquefied petroleum gas, from 2012 until her retirement in 2014, Senior Vice President, Manufacturing of Sunoco Inc. from 2009 to 2012, and General Manager of the Motiva Enterprises, LLC Norco, Louisiana Refinery from 2006 to 2009. Prior to joining Motiva, Ms. Ainsworth served in various capacities at Royal Dutch Shell. Ms. Ainsworth is a graduate of the Institute of Corporate Directors Education Program (Rotman School of Management, University of Toronto and Haskayne School of Business, University of Calgary) and holds the ICD.D. designation.   Additional Directorships: Ms. Ainsworth currently serves as a director of Pembina Pipeline Corporation, Archrock, Inc. and Kirby Corporation. She previously served as a director of Seventy Seven Energy Inc. until 2015.   Qualifications: Ms. Ainsworth brings to the Board extensive experience in the oil and gas industry and strong business, operational and financial acumen from her leadership roles at other public companies.

 

Anna C. Catalano
Director Since: 2017   Age: 62   Committees: •  Compensation Committee •  Nominating, Governance and Social Responsibility Committee		Principal Occupation: Former Group Vice President, Marketing, for BP plc   Business Experience: Ms. Catalano served in various capacities for BP plc, and its predecessor Amoco Corporation, from 1979 until her retirement in 2003, including serving as Group Vice President, Marketing, for BP plc from 2000 to 2003.   Additional Directorships: Ms. Catalano currently serves as a director of Frontdoor, Inc. and Willis Towers Watson plc (having previously served as a director of Willis Group until the merger of Willis Group and Towers Watson & Co.). She previously served on the boards of directors of Mead Johnson Nutrition Company until May 2017, Chemtura Corporation until June 2017 and Kraton Corporation until March 2022.   Qualifications: Ms. Catalano brings to the Board significant corporate and international business and marketing experience.

 

 

2022 Proxy Statement    13

Leldon E. Echols
Director Since: 2009   Age: 66   Committees: •  Compensation Committee, Chairperson •  Audit Committee •  Executive Committee		Principal Occupation: Former Executive Vice President and Chief Financial Officer of Centex Corporation   Business Experience: Mr. Echols served as Executive Vice President and Chief Financial Officer of Centex Corporation from 2000 until his retirement in 2006. Before joining Centex, Mr. Echols held various positions, including managing partner, at Arthur Andersen LLP from 1978 until 2000.   Additional Directorships: Mr. Echols currently is a member of the boards of directors of Trinity Industries, Inc. and EnLink Midstream Manager, LLC, the managing member of EnLink Midstream, LLC. Prior to the closing of the business combination among Devon Energy Corporation, Crosstex Energy, Inc. and Crosstex Energy, L.P. in March 2014, Mr. Echols served on the boards of directors of Crosstex Energy, L.P. and Crosstex Energy, Inc. Prior to the closing of the January 2019 simplification transaction between EnLink Midstream Partners, LP (formerly known as Crosstex Energy, L.P.), Mr. Echols served on the board of EnLink Midstream GP, LLC, the general partner of EnLink Midstream Partners, LP.   Qualifications: Mr. Echols brings to the Board executive management and board experience with other public companies. Mr. Echols has extensive financial and management experience as well as financial reporting expertise and a level of financial sophistication that qualifies him as an audit committee financial expert.

 

Manuel J. Fernandez
Director Since: 2020   Age: 60   Committees: •  Audit Committee, Chairperson •  Environmental, Health, Safety, and Public Policy Committee		Principal Occupation: Former Managing Partner of the Dallas office and Market Leader for the Southwest Region of KPMG   Business Experience: Mr. Fernandez joined KPMG LLP in 1984 and served in a number of leadership positions until his retirement in September 2020, including most recently as Managing Partner of the Dallas office and market leader for KPMG’s Southwest region across audit, tax and consulting services from October 2009 to September 2020. During his career at KPMG, he also served as National Managing Partner for Talent Acquisition, member of the National Inclusion and Diversity Board, and as Co-Chair of the National Hispanic/Latino employee resource group.   Additional Directorships: Mr. Fernandez currently serves as a director of Jacobs Engineering Group Inc.   Qualifications: Mr. Fernandez brings to the Board extensive financial and management experience as well as financial reporting expertise and a level of financial sophistication that qualifies him as an audit committee financial expert.

 

 

14    HF Sinclair Corporation

R. Craig Knocke
Director Since: 2019   Age: 52   Committees: •  Finance Committee •  Nominating, Governance and Social Responsibility Committee		Principal Occupation: Director of Turtle Creek Trust Company, Chief Investment Manager and Portfolio Manager of Turtle Creek Management, LLC, Principal and a non-controlling manager and member of TCTC Holdings, LLC   Business Experience: Mr. Knocke is a co-founder and has served a Director of Turtle Creek Trust Company, a private trust and investment management firm, since 2009. He currently serves as the Chief Investment Officer and has served as a Portfolio Manager at Turtle Creek Management, LLC, a registered investment advisory firm based in Dallas, Texas, since 2007. Since 2009, Mr. Knocke has served as a Principal and a non-controlling manager and member of TCTC Holdings, LLC (“TCTC”), a bank holding company that is a banking, securities, and investment management firm. He previously held positions as Vice President and Portfolio Manager at Brown Brothers Harriman & Co., and served in various positions at Salomon Brothers and Texas Instruments.   Qualifications: Mr. Knocke brings to the Board executive and general management experience as well as significant financial expertise.

 

Robert J. Kostelnik
Director Since: 2011   Age: 70   Committees: •  Nominating, Governance and Social Responsibility Committee, Chairperson •  Environmental, Health, Safety, and Public Policy Committee		Principal Occupation: Principal at Glenrock Recovery Partners, LLC   Business Experience: Mr. Kostelnik has served as a principal of Glenrock Recovery Partners since January 2012. Glenrock Recovery Partners assists energy, pipeline and terminal companies with maximizing the value of non-fungible liquid hydrocarbons and provides health, safety and environmental compliance and project management consulting services. Mr. Kostelnik served as the President and Chief Executive Officer of Cinatra Clean Technologies, Inc. from 2008 to 2011. Cinatra provides tank cleaning systems to refining pipelines and terminals. Prior to his retirement in 2007, Mr. Kostelnik served in a number of senior positions during his 16 years with CITGO Petroleum Corporation, including as Vice President of Refining. During that time, Mr. Kostelnik was responsible for, among other things, the creation and implementation of the Health, Safety & Environmental Management System as well as environmental compliance & improvement. CITGO is engaged in the refining and marketing of petro-chemical products.   Additional Directorships: Mr. Kostelnik served as a director of Frontier from 2010 until the merger in July 2011. He currently serves as a director of Methanex Corporation.   Qualifications: Mr. Kostelnik brings to the Board significant experience and insight into the Company’s industry through his extensive experience in the refining industry.

 

 

2022 Proxy Statement    15

James H. Lee
Director Since: 2011   Age: 73   Committees: •  Finance Committee, Chairperson •  Audit Committee		Principal Occupation: Managing General Partner and Principal Owner of Lee, Hite & Wisda Ltd.   Business Experience: Mr. Lee has served as the Managing General Partner of Lee, Hite & Wisda Ltd., a private company with investments in oil and gas working, royalty and mineral interests, since founding the firm in 1984.   Additional Directorships: Mr. Lee served as a director of Frontier from 2000 until the merger in July 2011. He currently serves as a director of HLS, the general partner of the general partner of HEP.   Qualifications: Mr. Lee brings to the Board his extensive experience as a consultant and investor in the oil and gas industry, which provides him with significant insights into relevant industry issues.

 

Ross B. Matthews
Director Since: 2022   Age: 67		Principal Occupation: Chief Operating Officer of REH Company (formerly known as The Sinclair Companies)   Business Experience: Mr. Matthews currently serves as Chief Operating Officer of REH Company and served as the Chairman and Chief Executive Officer of Sinclair Oil, which was comprised of the refining, marketing and renewables business the Company acquired from Sinclair, from October 2009 until March 2022. Mr. Matthews joined Sinclair Oil in June 2000, initially serving as Vice President of Exploration and Production.   Additional Directorships: Mr. Matthews served as a Director of Sinclair Oil from January 2006 until March 2022.   Qualifications: Mr. Matthews brings to the Board significant experience and insight into the development of energy infrastructure through his extensive experience in the oil and gas industry.

 

 

16    HF Sinclair Corporation

Norman J. Szydlowski
Director Since: 2022   Age: 70		Principal Occupation: Former President, CEO and Director of SemGroup Corporation   Business Experience: Mr. Szydlowski served as President and Chief Executive Officer and Director of SemGroup Corporation from November 2009 until his retirement in June 2014. He also previously served as Chief Executive Officer for Rose Rock Midstream and Colonial Pipeline Company. From 2004 to 2005, Mr. Szydlowski served as the Senior Consultant to the Iraqi Ministry of Oil in Baghdad on behalf of the U.S. Department of Defense (OSD, CPA) and Department of State (Embassy Baghdad). He was a Commissioner on the National Commission on Energy Policy and chaired the Task Force on Biofuels Infrastructure. Mr. Szydlowski co-chaired the Task Force on Ensuring Stable Natural Gas Prices for the Bipartisan Policy Center and was a member of the Working Group, Bipartisan Policy Center Response to The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling Request. From 2002 until 2004, he was Vice President of Refining for Chevron Corporation and he first joined Chevron in 1981.   Additional Directorships: Mr. Szydlowski currently serves as a director of Equitrans Midstream Corporation (“Equitrans”) and he served as a Director of Sinclair Oil, which was comprised of the refining, marketing and renewables business the Company acquired from Sinclair, from April 2017 until March 2022. Mr. Szydlowski served as a Director of EQT Corporation (“EQT”) from November 2017 until the separation of EQT and Equitrans in November 2018. He served as a Director of the general partner of 8point3 Energy Partners, LP from June 2015 until its acquisition by Capital Dynamics, Inc. in June 2018. Mr. Szydlowski also served as a Director of the general partner of JP Energy Partners LP from July 2014 through March 2017.   Qualifications: Mr. Szydlowski brings to the Board extensive experience in the oil and gas industry and executive management and board experience with other public companies.

None of our director nominees reported any litigation for the period from 2012-2022 that is required to be reported in this proxy statement. There are no family relationships among any of our directors or executive officers.

 

 

2022 Proxy Statement    17

Corporate Governance

The Board and senior management believe that one of their primary responsibilities is to promote a corporate culture of accountability, responsibility and ethical conduct throughout the Company. The Company is committed to maintaining the highest standard of business conduct and corporate governance, which we believe is essential to operating our business efficiently, maintaining our integrity in the marketplace and serving our stockholders.

Consistent with these principles, the Company has adopted a Code of Business Conduct and Ethics and Corporate Governance Guidelines. These documents, together with our amended and restated certificate of incorporation (the “Certificate of Incorporation”), amended and restated by-laws (the “By-laws”) and the Board committee charters, form the framework for our governance. Copies of the Code of Business Conduct and Ethics, Corporate Governance Guidelines, Certificate of Incorporation, By-laws, Audit Committee Charter, Compensation Committee Charter, Environmental, Health, Safety, and Public Policy Committee Charter, Finance Committee Charter and Nominating, Governance and Social Responsibility Committee Charter are publicly available on our website at www.hfsinclair.com and may also be obtained free of charge upon written request to HF Sinclair Corporation, 2828 North Harwood, Suite 1300, Dallas, Texas 75201, Attention: Vice President, Investor Relations.

Board Leadership Structure

 

In accordance with our Corporate Governance Guidelines, our Board is responsible for selecting the Board leadership structure that is in the best interests of the Company. Our Board, at this time, has determined that a leadership structure consisting of separate Chief Executive Officer and Chairperson of the Board roles is appropriate for the Company. Currently, Mr. Myers serves as our independent Chairperson of the Board, and Mr. Jennings serves as our Chief Executive Officer.

Given the complexity of the Company’s business model, the Board believes that at this time the separation of these positions enhances both the oversight of management by the Board and the Company’s overall leadership structure. As a result of his experience at publicly traded energy companies, Mr. Myers has industry-specific experience and expertise and as Chairperson of the Board can identify strategic priorities, lead the discussion and execution of strategy and facilitate the flow of information between management and the Board.

The Company’s Corporate Governance Guidelines provide for the appointment of a lead director in the event the roles of Chairperson of the Board and Chief Executive Officer are combined. The lead director’s responsibilities are set forth in the Company’s Corporate Governance Guidelines and include:

 

•

presiding over executive sessions of the Board’s independent directors and at all meetings of the Board at which the Chairperson of the Board is not present;

 

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communicating matters discussed at the executive session to the Chairperson of the Board and Chief Executive Officer, as appropriate;

 

•

calling meetings of independent directors as desirable or necessary;

 

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serving as a liaison between the Chief Executive Officer, the Chairperson of the Board and the independent directors;

 

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advising and consulting with the Chairperson of the Board, the Chief Executive Officer and the chairperson of each committee regarding Board and committee meetings, as necessary, desirable or appropriate;

 

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maintaining regular contact with the Chairperson of the Board and Chief Executive Officer to provide access for any issue that may arise and assist in communication, if appropriate, and to ensure that there is a steady, relevant, meaningful and effective information flow from management to the Board;

 

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approving in advance, in consultation with the Chairperson of the Board and Chief Executive Officer, agendas, schedules and related information for all meetings of the Board; and

 

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advising and consulting with the Chairperson of the Board and Chief Executive Officer as to the quality, quantity and timeliness of the information submitted by the Company’s management to, and other communications with, the independent directors.

 

 

18    HF Sinclair Corporation

Since the positions of Chairperson of the Board and Chief Executive Officer are separate, the Board has not appointed a separate lead director. The Chairperson of the Board fulfills the above-noted responsibilities of the independent lead director to serve as a liaison between the Chief Executive Officer and the independent directors.

The Board has established a policy that its non-management directors regularly meet in executive session, without members of management present. The Chairperson of the Board, or the lead director if the Chairperson of the Board is a member of management, presides at meetings of the non-management directors. In the event the Chairperson of the Board is a member of management and, if there is no lead director or the lead director is unable to attend, the non-management directors will designate an independent director to preside at the meeting. In the event the Company’s non-management directors include directors who are not independent under the NYSE listing requirements, then an executive session including only the independent directors will be held at least once per year. We believe that the foregoing structure, policies and practices, when combined with the Company’s other governance policies and procedures, provide appropriate opportunities for oversight, discussion and evaluation of decisions and direction from the Board, and are in the best interest of our stockholders.

Board and Committee Evaluations

 

The Board, acting through the Nominating, Governance and Social Responsibility Committee, conducts a self-evaluation at least annually to determine whether it is functioning effectively. The evaluation includes periodically considering the mix of skills and experience that directors bring to the Board to assess whether the Board has the necessary tools and background to perform its oversight function effectively.

The Nominating, Governance and Social Responsibility Committee has undertaken an effort to identify critical attributes, experiences, qualifications, and skills required of members of the Board to deliver long-term value to the stockholders of the Company. From that list, the Board developed a skills matrix to ensure each of the identified critical attributes, experiences, qualifications and skills are adequately represented among the Company’s Directors. See the “Director Skills, Experience and Diversity Matrix” on page 9. The Nominating, Governance and Social Responsibility Committee and the Board reviews the skills matrix on an annual basis to confirm that it appropriately supports the Company’s long-term strategy.

Each committee of the Board also conducts a self-evaluation at least annually and reports the results to the Board.

Board Oversight of Risk Management

 

The Board oversees management of risk and receives a report from management on at least a quarterly basis. The Board regularly reviews information regarding the Company’s credit, liquidity, business, operations and cybersecurity, including the key risks associated with each of the foregoing. As described below, consistent with SEC regulations and NYSE requirements, the Board committees are also engaged in overseeing risk associated with the Company.

 

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The Audit Committee oversees management of exposure to financial reporting and control risks.

 

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The Compensation Committee oversees the management of risks relating to the Company’s human capital management, executive compensation plans and incentive structure.

 

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The Environmental, Health, Safety, and Public Policy Committee oversees the management of risks associated with the environment, health, safety and public policy.

 

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The Finance Committee oversees the management of risks relating to the Company’s capital investment strategies.

 

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The Nominating, Governance and Social Responsibility Committee oversees the Company’s governance, ethics and compliance programs and the management of risks relating to the Company’s policies and practices regarding human rights in its operations and supply chain, environmentally sustainable practices and strategy, and strategy and performance in assessing and responding to climate-related risks and opportunities.

While each committee is responsible for evaluating certain risks and overseeing the management of those risks, the full Board is ultimately responsible for overseeing the Company’s risk exposures and management thereof, and the Board is regularly informed on these matters through committee and senior management presentations.

 

 

2022 Proxy Statement    19

The Board also receives input from the Company’s Risk Management Oversight Committee on management’s views of the risks facing the Company. This committee is made up of management personnel and monitors the risk environment for the Company as a whole. This committee also supports the efforts of the Board and the Board committees to monitor and evaluate guidelines and policies governing the Company’s risk assessment and management.

Director Independence

 

Board of Directors. NYSE listing requirements and our Corporate Governance Guidelines require that at least a majority of the Board meet the NYSE criteria for independence. The Board has determined that each of Mses. Ainsworth and Catalano and Messrs. Echols, Fernandez, Knocke, Kostelnik, Lee, Myers, Rose and Szydlowski is “independent” under the NYSE independence standards. Mr. Jennings is not independent because he is an employee of the Company. Mr. Matthews is not independent due to his continued service as Chief Operating Officer of REH Company (formerly known as The Sinclair Companies) following the closing of the Sinclair Transactions and the fact that members of his immediate family control REH Company, which received more than five percent of HF Sinclair’s common stock as purchase consideration at the closing of the Sinclair Transactions. Please see “Certain Relationships and Related Person Transactions” on pages 76-77 for a more detailed description of the ongoing relationship between the Company and REH Company in which Mr. Matthews may have a material interest.

Audit Committee. The Board has determined each member of the Audit Committee is “independent” as defined by the NYSE listing standards and Rule 10A-3 of the Securities Exchange Act of 1934 (the “Exchange Act”).

Compensation Committee. The Board has determined each member of the Compensation Committee is “independent” as defined by the NYSE listing standards. For each member of the Compensation Committee, the Board considered all factors specifically relevant to determining whether a director has a relationship to the Company that is material to that director’s ability to be independent from management in connection with the duties of a Compensation Committee member, including the sources of such director’s compensation, such as any consulting, advisory or other compensatory fees paid by the Company, and whether the director has an affiliate relationship with the Company, a subsidiary of the Company or an affiliate of a subsidiary of the Company.

Nominating, Governance and Social Responsibility Committee. The Board has determined each member of the Nominating, Governance and Social Responsibility Committee is “independent” as defined by the NYSE listing standards.

Environmental, Health, Safety, and Public Policy Committee. The Board has determined each member of the Environmental, Health, Safety, and Public Policy Committee, other than Mr. Jennings, is “independent” as defined by the NYSE listing standards.

Finance Committee. The Board has determined each member of the Finance Committee is “independent” as defined by the NYSE listing standards.

Independence Determination. In making its independence determinations, the Board considered certain transactions, relationships and arrangements. In determining Mr. Knocke’s independence, the Board considered that Mr. Knocke is a non-controlling manager and member of TCTC, and Mr. Knocke is also a Principal of TCTC (which may be deemed to beneficially own 5.63% of the Company’s common stock) and holds various other positions with TCTC’s subsidiaries. The Board determined that this relationship does not impair the independence of Mr. Knocke.

Director Nominations

 

Qualifications

The Nominating, Governance and Social Responsibility Committee may engage a search firm to assist with identifying qualified nominees for the Board. In considering nominees for election as director, the Nominating, Governance and Social Responsibility Committee considers a number of factors, with an objective of having a board with diverse backgrounds and experiences. The Nominating, Governance and Social Responsibility Committee is also responsible for recommending the nomination of incumbent directors it deems appropriate for re-election to the Board and, if

 

 

20    HF Sinclair Corporation

applicable, reappointment to any committees of the Board on which such director serves. Pursuant to our Corporate Governance Guidelines, the Nominating, Governance and Social Responsibility Committee will not recommend to the Board the nomination of any director or nominee who has attained or will attain the age of 75 prior to the annual meeting at which he or she would be elected or re-elected. The Board may approve an exception to this policy on a case-by-case basis.

Characteristics expected of all directors include integrity, exceptional talent and judgment, and the ability and willingness to commit adequate time to the Board. In evaluating the suitability of individual board members, the committee takes into account many factors, including the candidate’s independence, the skills enumerated in the Director Skills, Experience and Diversity Matrix, knowledge of the communities in which the Company does business, the Company’s industry, or other industries relevant to the Company’s business or other organizations of comparable size; and personal qualities, such as background and reputation. The Board also considers the diversity of race, gender, age, sexual orientation, ethnicity, knowledge, experience, viewpoints and geography when evaluating candidates and is committed to actively seeking highly qualified diverse candidates, including women and individuals from minority groups, to be included in the pool of candidates from which Board nominees may be chosen.

Pursuant to the Stockholders Agreement, REH Company and the stockholders of REH Company (collectively, the “REH Parties”) were granted the right to nominate (i) two persons (the “Designees”) to the Board at the closing of the Sinclair Transactions and for so long as the REH Parties beneficially own common stock constituting not less than 15% of all outstanding HF Sinclair common stock and (ii) one person to the Board for so long as the REH Parties beneficially own less than 15% but more than or equal to 5% of all outstanding HF Sinclair common stock. All Designees must possess the director characteristics and qualifications contained in the By-laws and Corporate Governance Guidelines and expected of all other directors of the Board, as described in the immediately preceding paragraph above. In addition, at all times at least one Designee, if there is any, shall possess significant management experience in the refining industry, as determined by the Board in its reasonable discretion.

Stockholder Director Nominations to be Presented at the Annual Meeting

The Nominating, Governance and Social Responsibility Committee will consider recommendations of potential director candidates from stockholders based on the same criteria as a candidate identified by the Nominating, Governance and Social Responsibility Committee. Stockholders may submit such a recommendation by sending a letter to the Secretary of the Company at the Company’s principal executive offices. The mailing envelope must contain a clear notation indicating that the enclosed letter is a “Director Nominee Recommendation.”

To be considered, recommendations must be submitted in writing no less than 90 days and no more than 120 days prior to the anniversary date of the immediately preceding annual meeting of stockholders in compliance with the notice procedures and informational requirements set forth in Article III, Section 12 of the Company’s By-Laws. A stockholder’s notice must include the following:

 

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the name of the stockholder recommending the director candidate and the class and number of shares of common stock which are beneficially owned by the stockholder;

 

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a written statement by the director candidate agreeing to being named in the Company’s proxy materials and to serve as a member of the Board if nominated and elected;

 

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a description of all direct and indirect compensation and other material agreements, arrangements or understandings during the past three (3) years and any other material relationships, between and among the nominating stockholder and the director candidate and his or her respective affiliates and associates; and

 

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all other information relating to the nominating stockholder or director candidate that would be required to be disclosed in a proxy statement relating to an election of directors, or that is otherwise required by Regulation 14A under the Exchange Act or Article III, Section 12 of the Company’s By-Laws.

Director Nominations to be Included in the Proxy Statement (Proxy Access)

The Company’s By-Laws provide for proxy access whereby a stockholder (or a group of up to 20 stockholders) who has held at least 3% of our stock for three years or more may nominate up to the greater of two individuals or 20% of the Board and have the nominee(s) included in our proxy materials, provided that the stockholder and nominee(s)

 

 

2022 Proxy Statement    21

satisfy the requirements set forth in the Company’s By-laws. Any stockholder who intends to use these procedures to nominate a candidate for election to the Board for inclusion in our 2023 proxy statement must satisfy the requirements set forth in the Company’s By-Laws and must provide notice to our Corporate Secretary, which must be received not less than 120 calendar days in advance of the first anniversary of the date the Corporation’s proxy statement was released to stockholders for the preceding year’s annual meeting, and in the case of the 2023 proxy statement, no later than December 26, 2022. The notice of proxy access must include information specified in Article II, Section 2(d) and Article III, Section 12 of the Company’s By-laws, including information concerning the nominee and information about the stockholder’s ownership of and agreements related to our stock.

For more information, see “Additional Information—Stockholder Proposals.”

Communications with the Board

 

Any stockholder or other interested party may communicate with the non-management directors by e-mailing the Chairperson of the Board at board@hfsinclair.com or writing to: Chairperson of the Board, c/o Secretary, HF Sinclair Corporation, 2828 N. Harwood, Suite 1300, Dallas, Texas 75201. Communications to the Board generally may be sent certified mail to HF Sinclair Corporation, 2828 N. Harwood, Suite 1300, Dallas, Texas 75201, Attention: Secretary. The Secretary will forward all communications received by mail to the appropriate director or directors, other than those communications that are merely solicitations for products or services or relate to matters that are of a type that are clearly improper or irrelevant to the functioning of the Board or the business and affairs of the Company.

Code of Conduct

 

The Company has adopted a Code of Business Conduct and Ethics applicable to all directors, officers and employees. The purpose of this Code is to, among other things, affirm the Company’s commitment to the highest standards of business conduct and ethics, integrity and compliance reporting in accordance with all applicable laws. The Code sets forth a common set of values and standards to which all of the Company’s directors, officers and employees must adhere. The Company will post information regarding any amendment to, or waiver from, its Code of Business Conduct and Ethics on its website under the Corporate Governance Documents sub-heading, under the Investor Relations tab.

 

 

22    HF Sinclair Corporation

The Board, Its Committees and Its Compensation

The Board

 

Under the Company’s Corporate Governance Guidelines, Board members are expected to devote the time reasonably necessary to discharge their responsibilities and to prepare for and, to the extent reasonably practicable, attend and participate in all meetings of the Board and Board committees on which they serve. The Board meets at least quarterly. During 2021, the Board held eleven meetings. Each then-current director attended at least 75% of the total number of meetings of the Board and committees on which he or she served during the period he or she was a director.

All directors are strongly encouraged to attend the Company’s annual meeting of stockholders. Nine out of ten of our then-current directors attended the 2021 annual meeting of stockholders. Mr. Douglas Bech did not attend since he was not standing for re-election.

Board Committees

 

The Company currently has six standing committees:

 

•

Audit Committee;

 

•

Compensation Committee;

 

•

Nominating, Governance and Social Responsibility Committee;

 

•

Environmental, Health, Safety, and Public Policy Committee;

 

•

Finance Committee; and

 

•

Executive Committee.

Other than the Executive Committee, each of these committees operates under a written charter adopted by the Board. Upon the Nominating, Governance and Social Responsibility Committee’s recommendations, the Board elects committee members annually. The Executive Committee operates pursuant to the authority that is specifically delegated to it by the Board, and such delegated authority may be revoked at any time.

The table below sets forth the number of meetings held by each committee in 2021:

 

Board Committee		Number of Meetings in 2021
Audit Committee		8
Compensation Committee		5
Nominating, Governance and Social Responsibility Committee		4
Environmental, Health, Safety, and Public Policy Committee		4
Finance Committee		4
Executive Committee		1

All directors, whether members of a committee or not, are invited to make suggestions to a committee chair for additions to the agenda of his or her committee or to request that an item from a committee agenda be considered by the Board. Each committee chair gives a report concerning his or her committee’s activities to the Board.

Audit Committee

The Audit Committee oversees our accounting and financial reporting processes and the audits of the Company’s financial statements. In addition, the Audit Committee oversees management of exposure to financial risks. The functions and responsibilities of the Audit Committee pursuant to its charter include:

 

•

appointing, compensating, retaining and overseeing the Company’s independent registered public accounting firm and conducting an annual review of the independence of that firm;

 

 

2022 Proxy Statement    23

•

pre-approving all audit and permitted non-audit services to be performed by the Company’s independent registered public accounting firm;

 

•

at least annually, reviewing the independence and quality-control procedures of the independent registered public accounting firm and the experience and qualifications of the independent registered public accounting firm’s senior personnel that are providing audit services to the Company;

 

•

confirming with the independent registered public accounting firm its compliance with the partner rotation requirements established by the SEC;

 

•

reviewing and evaluating the performance of the lead partner of the independent registered public accounting firm;

 

•

reviewing the findings and recommendations of the independent registered public accounting firm;

 

•

reviewing the scope and the planning of the annual audit with management, the independent registered public accounting firm and the internal auditor;

 

•

reviewing the annual audited financial statements and quarterly financial statements with management and the independent registered public accounting firm;

 

•

overseeing the internal audit function, and at least annually, reviewing the responsibilities, budget and staffing of the Company’s internal audit function, approving the internal audit plan, reviewing the internal audit charter and considering whether any changes are needed in how the internal audit function is implemented;

 

•

reviewing and approving the appointment and removal of, and, on an annual basis, the performance and compensation of, the Vice President, Internal Audit;

 

•

reviewing and discussing with the internal auditor any significant reports to management prepared by the internal auditor and any responses from management;

 

•

reviewing and discussing the Company’s internal controls over financial reporting with management and the independent registered public accounting firm;

 

•

establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or accounting matters;

 

•

establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding potential violations of applicable laws, rules and regulations or of the Company’s codes, policies and procedures;

 

•

establishing procedures for the confidential and anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters or questionable compliance matters;

 

•

reviewing and assessing the adequacy and effectiveness of the Company’s disclosure controls and procedures;

 

•

reviewing and, if appropriate, approving transactions involving conflicts of interest, including related person transactions, consistent with the Code of Business Conduct and Ethics and Related Party Transaction Policy;

 

•

reviewing the Company’s Related Party Transaction Policy on an annual basis;

 

•

reviewing and approving the Audit Committee Report to be included in the annual proxy statement; and

 

•

reviewing the adequacy of the Audit Committee charter on an annual basis.

Our independent registered public accounting firm reports directly to the Audit Committee. Each member of the Audit Committee has the ability to read and understand fundamental financial statements, and Mr. Echols, Mr. Fernandez and Mr. Rose each meets the requirements of an “audit committee financial expert” as defined by the rules of the SEC.

Compensation Committee

The Compensation Committee establishes and administers the Company’s policies, programs and procedures for compensating executive officers and the Board and oversees the management of risks relating to the Company’s executive compensation plans and arrangements. The functions and responsibilities of the Compensation Committee pursuant to its charter include:

 

•

overseeing and reviewing the Company’s strategies, policies and practices related to human capital management, including with respect to the promotion of diversity, equity and inclusion, talent and performance management, pay equity and employee engagement;

 

 

24    HF Sinclair Corporation

•

making recommendations to the Board on how frequently the Company shall submit to stockholders an advisory vote on executive compensation and reviewing the results of the advisory vote;

 

•

evaluating the performance and approving the compensation of the Chief Executive Officer and, in consultation with the Chief Executive Officer, the Company’s other executive officers;

 

•

reviewing and approving the Company’s executive compensation programs and corporate goals and objectives relative to the compensation of the Company’s executive officers;

 

•

reviewing the Company’s compensation practices, policies and programs for executive officers and other employees to ensure that such practices, policies and programs do not encourage unnecessary or excessive risk taking and annually assessing whether any risks arising from such practices, policies and programs are reasonably likely to have a material adverse effect on the Company;

 

•

reviewing director compensation and making recommendations to the Board regarding the same;

 

•

administering and making recommendations to the Board with respect to the Company’s equity incentive plans;

 

•

reviewing succession planning for Company management and making recommendations to the Board regarding the same;

 

•

overseeing the preparation of the Compensation Discussion and Analysis to be included in the annual proxy statement;

 

•

preparing the Compensation Committee Report to be included in the annual proxy statement;

 

•

reviewing the adequacy of the Compensation Committee charter on an annual basis;

 

•

establishing the Company’s stock ownership policy and reviewing executive officer and director compliance with the policy on an annual basis; and

 

•

monitoring applicable rules and regulations, including the rules and regulations of the SEC and the NYSE listing standards, regarding clawback of executive compensation and reviewing and making recommendations to the Board of any changes to the Company’s Clawback Policy (as defined below) as may be required by such rules and regulations.

The Compensation Committee may form and delegate some or all of its authority to subcommittees as it deems appropriate. The Compensation Committee also has the authority to retain, compensate, direct, oversee and terminate outside counsel, compensation consultants and other advisors hired to assist the Compensation Committee.

In December 2017, the Compensation Committee engaged Meridian Compensation Partners, LLC (“Meridian”) as the independent compensation consultant to the Compensation Committee, to provide advice relating to executive compensation matters. In selecting Meridian as its independent compensation consultant, and in the first quarter of each year following engagement, the Compensation Committee assessed the independence of Meridian pursuant to SEC rules and considered, among other things, whether Meridian provides any other services to us, the fees paid by us to Meridian as a percentage of Meridian’s total revenues, the policies of Meridian that are designed to prevent any conflict of interest between Meridian, the Compensation Committee and us, any personal or business relationship between Meridian and a member of the Compensation Committee or one of our executive officers and whether Meridian owned any shares of our common stock. In addition to the foregoing, the Compensation Committee annually receives an independence letter from Meridian, as well as other documentation addressing the firm’s independence. Meridian reports exclusively to the Compensation Committee and does not provide any additional services to us. The Compensation Committee has discussed these considerations and concluded that Meridian is independent and that we do not have any conflicts of interest with Meridian. The Compensation Committee is aware that Meridian is also providing similar services to the compensation committee at HLS, but our Compensation Committee manages its relationship with Meridian independently of the relationship that Meridian has with the HLS compensation committee. The aggregate amount of fees HLS paid to Meridian for the services it engaged Meridian to perform during the 2021 fiscal year was approximately $19,907. The aggregate amount of fees the Company paid to Meridian for the services it engaged Meridian to perform during the 2021 fiscal year was approximately $263,000.

 

 

2022 Proxy Statement    25

Nominating, Governance and Social Responsibility Committee

The Nominating, Governance and Social Responsibility Committee assists the Board in overseeing that the Company is governed in a manner consistent with the best interests of the Company and its stockholders. In addition, the Nominating, Governance and Social Responsibility Committee oversees the Company’s ethics and compliance programs, policies and practices regarding human rights in the Company’s operations and supply chain, policies, practices and procedures regarding environmentally sustainable practices, and strategy and performance in assessing and responding to climate-related risks and opportunities. The functions and responsibilities of the Nominating, Governance and Social Responsibility Committee pursuant to its charter include:

 

•

developing, reviewing and assessing the adequacy of the Company’s Corporate Governance Guidelines, Insider Trading Policy and Code of Business Conduct and Ethics;

 

•

identifying and recommending individuals qualified to be directors;

 

•

evaluating and determining whether directors are independent and whether the Audit Committee has an “audit committee financial expert” as defined by the rules of the SEC;

 

•

developing and maintaining an onboarding program for new directors and a continuing education program for current directors;

 

•

recommending committee composition and chairpersons;

 

•

reviewing and making recommendations to the Board on succession planning for the Board;

 

•

reviewing and approving, prior to acceptance, the Chief Executive Officer’s service on any other public company board;

 

•

monitoring the Company’s charitable contributions and political spending insofar as such activities exceed or can be expected to exceed 0.5% of the pre-tax income of the Company;

 

•

overseeing the Company’s ethics and compliance programs;

 

•

overseeing the Company’s policies and practices regarding human rights in its operations and supply chain;

 

•

overseeing the Company’s policies, practices and procedures with respect to environmentally sustainable practices and strategy and performance in assessing and responding to climate-related risks and opportunities; and

 

•

reviewing the adequacy of the Nominating, Governance and Social Responsibility Committee charter on an annual basis.

Environmental, Health, Safety, and Public Policy Committee

The Environmental, Health, Safety, and Public Policy Committee oversees the Company’s environmental, health, safety and public policy matters. In addition, the Environmental, Health, Safety, and Public Policy Committee oversees the management of risks associated with such matters. The functions and responsibilities of the Environmental, Health, Safety, and Public Policy Committee pursuant to its charter include:

 

•

reviewing reports and other information provided by management and consultants regarding material regulatory compliance and public policy matters arising out of issues related to process safety, worker safety, health, environmental, physical security, and/or legislative developments related to the refining industry;

 

•

reporting material issues or compliance concerns included in those reports to the Board; and

 

•

reviewing the adequacy of the Environmental, Health, Safety, and Public Policy Committee charter on an annual basis.

Finance Committee

The Finance Committee oversees the Company’s cash flow, uses of cash, capital investment strategies, including implementation and cost of capital. The functions and responsibilities of the Finance Committee include:

 

•

reviewing the Company’s cash flow forecasts, minimum cash requirements and liquidity targets;

 

•

reviewing the Company’s annual capital budget, capital strategy and significant capital expenditures and determining whether to recommend to the Board that such items be approved;

 

 

26    HF Sinclair Corporation

•

reviewing and making recommendations to the Board with respect to new capital projects;

 

•

periodically evaluating the performance of and returns on approved capital projects and other capital expenditures and reviewing significant cost variances; and

 

•

reviewing the adequacy of the Finance Committee charter on an annual basis.

Executive Committee

The Executive Committee has such authority as the Board shall delegate to the committee from time to time.

Director Compensation

 

The Compensation Committee annually evaluates the compensation program for members of the Board who are not our officers or employees (“non-management directors”). In making its recommendation to the Board for non-management director compensation, the Compensation Committee reviews the form and amount of compensation paid to directors by the Company’s compensation peer group and benchmark market data provided by the compensation consultant. The director compensation peer group is the same as the compensation peer group considered by the Compensation Committee in setting executive compensation for 2021 and consisted of 17 companies as described in detail below under “Compensation Discussion and Analysis—Market Review.” Based on recommendations from the Compensation Committee, the Board approved the components of non-management director compensation as set forth below.

Cash Retainers

Cash retainers are paid to the non-management directors on a quarterly basis during their respective time serving as a director or committee member. Members of the Board who also serve as our officers or employees do not receive additional compensation in their capacity as directors.

We also reimburse directors for all reasonable expenses incurred in attending Board meetings, Board committee meetings and director continuing education sessions upon submission of appropriate documentation. Meeting fees are not paid for attendance at Board meetings or Board committee meetings.

In June 2020, in light of the challenging economic conditions resulting from the COVID-19 pandemic and the other expense reduction measures undertaken by the Company, the Board approved a 10% reduction in all Board and committee cash retainers effective July 1, 2020. In November 2020, the Board approved the continuation of the 10% reduction in cash retainers for the 2021 fiscal year.

Equity Awards

Non-management directors receive an annual equity award grant in the form of restricted stock units having a fair market value of approximately the dollar amount of the equity award approved by the Board on the date of grant. These annual grants are made in the fourth quarter of the year preceding the year to which the award relates in order to align the timing of the equity award grants with the timing of the other compensation decisions made for non-management directors and with the timing of long-term equity incentive award grants for our executive officers.

Continued service on the Board through the stated vesting date for the restricted stock units, which is in most cases approximately one year following the date of grant, is required in order for the restricted stock units to become vested. The restricted stock units granted in November 2020 for the 2021 fiscal year vested on December 1, 2021. The restricted stock units granted in November 2021 for the 2022 fiscal year will vest on December 1, 2022. Accelerated vesting of outstanding restricted stock units will occur upon a change in control (subject to the director serving as a member of the Board immediately prior to the change in control) or the director’s death, disability or retirement. Settlement of the restricted stock units in shares of our common stock occurs within 30 days of the event that caused the restricted stock units to vest. Directors do not have the rights of a stockholder with respect to the shares underlying the restricted stock units until the award vests and is settled in shares. However, directors are entitled to the payment of dividend equivalents on outstanding restricted stock units in the form of cash in an amount equal to the dividends that would have been paid with respect to the underlying shares. These dividend equivalents are not subject to forfeiture.

 

 

2022 Proxy Statement    27

For 2021, annual compensation for non-management directors consisted of the following components:

 

		Compensation Effective January 1, 2021 (1)				Compensation Effective January 1, 2022 (2)
Board Service:
Annual Restricted Stock Units Award (3)			$140,000				$140,000
Chairperson of the Board Retainer			180,000				200,000
Annual Cash Retainer			108,000				120,000
Lead Director Cash Retainer (4)			27,000				n/a
Board Committee Service:
Audit Committee Annual Cash Retainer
Chairperson			24,750				27,500
Member			15,750				17,500
Compensation Committee Annual Cash Retainer
Chairperson			18,000				20,000
Member			12,600				14,000
Nominating, Governance and Social Responsibility Committee Annual Cash Retainer
Chairperson			18,000				20,000
Member			12,600				14,000
Environmental, Health, Safety, and Public Policy Committee Annual Cash Retainer
Chairperson			18,000				20,000
Member			12,600				14,000
Finance Committee Annual Cash Retainer
Chairperson			18,000				20,000
Member			12,600				14,000
Other:
Stipend for Operations-Related Consultation at Request of Management (On-Site)			2,400/day				2,400/day
Stipend for Operations-Related Consultation at Request of Management (Overnight)			3,600/day				3,600/day

 

(1)

Reflects the 10% reduction in Board and committee cash retainers originally approved by the Board in light of the challenging economic conditions resulting from the COVID-19 pandemic and the other expense reduction measures undertaken by the Company. This reduction was originally approved by the Board in June 2020 to be effective July 1, 2020. In November 2020, the Board approved the continuation of the 10% reduction in cash retainers for the 2021 fiscal year.

 

(2)

In November 2021, the Board set director compensation for the 2022 fiscal year and reinstated the 10% reduction taken on July 1, 2020 in light of the challenging economic conditions resulting from the COVID-19 pandemic. No further increases were made for non-management director compensation for the 2022 fiscal year.

 

(3)

The annual award is comprised of a number of restricted stock units equal to the dollar amount of the award divided by the market closing price of a share of our common stock on the date of grant, with the number of restricted stock units rounded up in the case of fractional shares. The annual award is made in the fourth quarter of the year preceding the year to which the award relates.

 

(4)	Since the positions of Chairperson of the Board and Chief Executive Officer are separate, the Board did not appoint a lead director following the 2021 annual meeting of stockholders and as a result a lead director cash retainer was not approved for the 2022 fiscal year.

 

 

28    HF Sinclair Corporation

Nonqualified Deferred Compensation

For 2021, our non-management directors are eligible to participate in the HollyFrontier Corporation Executive Nonqualified Deferred Compensation Plan, which is not tax-qualified under Section 401 of the Internal Revenue Code and allows participants to defer receipt of certain compensation (the “NQDC Plan”).

The NQDC Plan allows non-management directors the ability to defer up to 100% of their cash retainers for a calendar year. Participating directors have full discretion over how their contributions to the NQDC Plan are invested among the offered investment options, and earnings on amounts contributed to the NQDC Plan are calculated in the same manner and at the same rate as earnings on actual investments. We do not subsidize a participant’s earnings under the NQDC Plan. Messrs. Myers, Knocke and Fernandez participated in the NQDC Plan in 2021 and elected to defer all of their cash retainers for fiscal year 2021.

Effective as of the closing of the Sinclair Transactions, the NQDC Plan was assumed by HF Sinclair and the plan name was changed to the HF Sinclair Corporation Executive Nonqualified Deferred Compensation Plan. For additional information on the NQDC Plan, see “Compensation Discussion and Analysis—Components of our Executive Compensation Program During 2021—Retirement Benefits and Perquisites—Retirement Plans—Deferred Compensation Plan” and “Executive Compensation—Nonqualified Deferred Compensation.”

In May 2021, the Compensation Committee recommended to the Board, and the Board adopted, the HollyFrontier Corporation Directors’ Stock Compensation Deferral Plan (the “Director Stock Deferral Plan”) effective October 1, 2021. Effective as of the closing of the Sinclair Transactions, HF Sinclair assumed the Director Stock Deferral Plan and the plan name was changed to the HF Sinclair Corporation Directors’ Stock Compensation Deferral Plan. The Director Stock Deferral Plan is a nonqualified plan (i.e., not tax-qualified under Section 401 of the Code) that allows Participant directors to defer receipt of current compensation in order to provide retirement and other benefits on behalf of the Participant directors. Beginning with the restricted stock unit awards granted to the non-management directors for the 2022 fiscal year (granted in 2021), the Director Stock Deferral Plan allows non-management directors to defer up to 100% of their restricted stock unit award. Messrs. Fernandez, Knocke and Kostelnik participated in the Director Stock Deferral Plan in 2021 and each elected to defer his 2022 restricted stock unit award.

Participant directors are not eligible to receive a matching contribution with respect to their elective deferrals. While deferred, a participant director’s account will continue to track the value of our common stock. A participant director’s deferred compensation account will be distributed in a lump sum in the form of unrestricted common stock upon the earliest to occur of a separation from service, disability, or death.

Stock Ownership and Retention Policy for Non-Management Directors

Non-management directors are expected to acquire and hold during their service on the Board shares of our common stock equal in value to at least five times the annual Board cash retainer paid to our non-management directors (excluding any retainer paid for service on a Board committee). Directors have five years from their initial election to the Board to meet the target stock ownership requirements.

Directors are required to continuously own sufficient shares to meet the stock ownership requirements once attained. Until the directors attain compliance with the stock ownership policy, the directors will be required to hold 50% of the shares of common stock received from any equity award. If a director attains compliance with the stock ownership policy and subsequently falls below the requirement because of a decrease in the price of our common stock, the director will be deemed in compliance provided that the director retains the shares then held.

As of December 31, 2021, all of our then-current non-management directors were in compliance with the stock ownership policy or were within the five-year grace period provided under the stock ownership policy.

Anti-Hedging and Anti-Pledging Policy

All of our directors are subject to our Insider Trading Policy which, among other things, prohibits directors from entering into short sales or hedging or pledging shares of our common stock. The anti-hedging policy contained in our Insider Trading Policy specifically prohibits directors and their designees from purchasing financial instruments or otherwise engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the

 

 

2022 Proxy Statement    29

market value of Company securities (or derivatives thereof), including through, among other mechanisms, the purchase of financial instruments (such as prepaid variable forward contracts, equity swaps, collars, and exchange funds) or other transactions that are designed to hedge or offset any decrease in the market value of shares of our common stock, regardless of how the securities (or derivatives thereof) were acquired. Additionally, all employees, including our named executive officers, are prohibited from holding shares of our common stock in a margin account or otherwise pledging shares of our common stock as collateral for a loan.

Director Compensation Table

 

The table below sets forth the compensation earned by each of our non-management directors in 2021.

 

Name(1)(2)		Fees Earned or Paid in Cash(3)				Stock Awards(4)				Total
Anne-Marie N. Ainsworth			$146,700				$140,030				$286,730
Anna C. Catalano			$133,200				$140,030				$273,230
Leldon E. Echols			$156,575				$140,030				$296,605
Manuel J. Fernandez			$154,913				$140,030				$294,943
R. Craig Knocke			$133,988				$140,030				$274,018
Robert J. Kostelnik			$151,200				$140,030				$291,230
James H. Lee			$154,350				$140,030				$294,380
Franklin Myers			$317,700				$140,030				$457,730
Michael E. Rose			$140,850				$140,030				$280,880

 

(1)	Mr. Jennings is not included in this table because he received no additional compensation for his service as a director. The compensation earned by Mr. Jennings in 2021 is shown under “Executive Compensation—Summary Compensation Table.”

 

(2)	Messrs. Matthews and Szydlowski are not included in this table because they did not serve on the Board in 2021. They were each appointed to the Board effective March 15, 2022 in connection with the closing of the Sinclair Transactions.

 

(3)	Certain amounts reported as earned or paid in this column for Messrs. Myers, Fernandez and Knocke were deferred into our NQDC Plan.

 

(4)

Represents the aggregate grant date fair value of 4,180 restricted stock units granted to each non-management director on November 10, 2021 for the 2022 fiscal year (the “2022 Director Awards”), determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Compensation—Stock Compensation, excluding the effect of estimated forfeitures. See Note 8 to our consolidated financial statements included in HollyFrontier’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, for a discussion of the assumptions used in determining the FASB ASC Topic 718 grant date fair value of these awards.

 

Because the 2022 Director Awards were granted during 2021, they are reported in the “Stock Awards” column of the Director Compensation Table for 2021 rather than 2022 in accordance with SEC rules. The annual restricted stock unit awards for the 2021 fiscal year were granted on November 13, 2020 and were reported in the “Stock Awards” column of the Director Compensation Table for 2020 rather than 2021 in accordance with SEC rules. For additional information regarding the annual restricted stock unit awards and grant process for non-management directors, please see “—Equity Awards” above.

 

The 2022 Director Awards will vest on December 1, 2022, subject to continued service on the Board. As of December 31, 2021, the 2022 Director Awards were the only outstanding equity awards held by our non-management directors. As noted above, Messrs. Fernandez, Knocke and Kostelnik each deferred their entire restricted stock unit award granted to them in 2021.

 

 

30    HF Sinclair Corporation

Advisory Vote on the Compensation of Our Named Executive Officers

(Proposal 2)

Section 14A(a)(1) of the Exchange Act requires that we provide our stockholders with the opportunity to vote to approve, on an advisory (non-binding) basis, the compensation of our named executive officers as disclosed pursuant to the compensation disclosure rules of the SEC, including the compensation discussion and analysis, the compensation tables and any related material contained in this proxy statement.

In accordance with the preference expressed by our stockholders at our annual meeting in 2017, the Board determined that we would provide this opportunity annually until the next non-binding stockholder advisory vote on the frequency of future advisory votes on executive compensation at the 2023 Annual Meeting of Stockholders. As described in detail under the heading “Compensation Discussion and Analysis,” our executive compensation programs are primarily designed to (i) attract, motivate and retain our named executive officers, who are critical to our success, (ii) provide incentives for our named executive officers to achieve and exceed our operational, financial and strategic goals and (iii) align the interests of our named executive officers with those of our stockholders. Under these programs, compensation for our named executive officers is tied to performance, including our financial results and stockholder returns. Please read the information under “Compensation Discussion and Analysis,” and review the compensation tables and narratives that follow, for additional details about our executive compensation programs, including information about the compensation of our named executive officers in 2021.

This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the compensatory philosophy, policies and practices described in this proxy statement. Because your vote is advisory, it will not be binding on the Compensation Committee, the Board or the Company. However, the Board and the Compensation Committee will review the voting results and take those results into consideration when making future decisions regarding executive compensation.

Required Vote and Recommendation

The advisory vote on the compensation of named executive officers requires the approval of a majority of the votes cast on the proposal.

 

				THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SEC, INCLUDING AS DISCLOSED IN THE “COMPENSATION DISCUSSION AND ANALYSIS” SECTION, THE ACCOMPANYING COMPENSATION TABLES AND ANY RELATED MATERIAL CONTAINED IN THIS PROXY STATEMENT.

 

 

2022 Proxy Statement    31

Executive Officers

The following sets forth information regarding the executive officers of the Company as of April 14, 2022:

 

Name		Age		Position
Michael C. Jennings		56		Chief Executive Officer
Richard L. Voliva III		45		Executive Vice President and Chief Financial Officer
Timothy Go		55		President and Chief Operating Officer
Thomas G. Creery		64		President, Renewables
Vaishali S. Bhatia		39		Senior Vice President, General Counsel and Secretary
Bruce A. Lerner		55		President, Lubricants & Specialties

Information regarding Mr. Jennings is included above under “Election of Directors.”

 

		Richard L. Voliva III has served as Executive Vice President and Chief Financial Officer of the Company since March 2017. He previously served as Senior Vice President, Strategy of the Company from June 2016 to March 2017. Mr. Voliva has served as President of HLS since January 2020. He previously served as Executive Vice President and Chief Financial Officer of HLS from March 2017 to January 2020, Senior Vice President and Chief Financial Officer of HLS from July 2016 to March 2017, Vice President and Chief Financial Officer of HLS from October 2015 to July 2016, Vice President, Corporate Development of HLS from February 2015 to October 2015 and Senior Director, Business Development of HLS from April 2014 to February 2015. Prior to joining HLS, Mr. Voliva was an analyst at Millennium Management LLC, an institutional asset manager, from April 2011 to April 2014, an analyst at Partner Fund Management, L.P., a hedge fund, from March 2008 to March 2011 and Vice President, Equity Research at Deutsche Bank from June 2005 to March 2008. Mr. Voliva is a CFA Charterholder.
		Timothy Go has served as President and Chief Operating Officer of the Company since November 2021. He served as Executive Vice President and Chief Operating Officer of the Company from June 2020 to November 2021. Prior to joining the Company, Mr. Go served as Chief Executive Officer of the general partner of Calumet Specialty Products Partners, L.P., an independent producer of specialty hydrocarbon products, from January 2016 to April 2020 and retired from Calumet in June 2020. Prior to joining Calumet, Mr. Go served as Vice President, Operations of Flint Hills Resources, LP, a wholly-owned subsidiary of Koch Industries, Inc., from July 2012 to September 2015 and as Vice President, Operations Excellence of Flint Hills Resources, LP from June 2011 to July 2013. Mr. Go served as Managing Director, Operations Excellence of Koch Industries, Inc. from August 2008 to 2011. Prior to joining Koch Industries, Mr. Go held various roles of increasing responsibility in downstream operations during his 18 years at ExxonMobil Corporation.
		Thomas G. Creery has served as President, Renewables since June 2020 and President of HollyFrontier Refining & Marketing LLC since February 2017. He previously served as Senior Vice President, Commercial of the Company from January 2016 to March 2021, Vice President, Crude Supply from October 2008 to January 2016 and Vice President, Crude Supply and Planning from January 2006 to October 2008. Prior to joining the Company, Mr. Creery held various roles at Unocal Corporation for 25 years in a number of locations, including Calgary, Los Angeles, Singapore and Houston.

 

 

32    HF Sinclair Corporation

		Vaishali S. Bhatia has served as Senior Vice President and General Counsel of the Company since November 2019 and Secretary of the Company since August 2019. She previously served as Chief Compliance Officer of the Company from August 2019 to January 2020, Acting General Counsel of the Company from August 2019 to November 2019, Assistant General Counsel of the Company from May 2017 to August 2019, Assistant Secretary of the Company from May 2012 to August 2019 and Counsel of the Company from October 2011 to May 2017. Ms. Bhatia has also served as Senior Vice President and General Counsel of HLS since November 2019 and Secretary of HLS since August 2019. She served as Chief Compliance Officer of HLS from August 2019 to January 2020, Acting General Counsel of HLS from August 2019 to November 2019, Assistant General Counsel of HLS from May 2017 to August 2019, Assistant Secretary of HLS from January 2013 to August 2019 and Counsel of HLS from October 2011 to May 2017. Prior to joining the Company, Ms. Bhatia was an associate at Jones Day.

 

		Bruce A. Lerner has served as President, Lubricants & Specialties since June 2020. Prior to joining the Company, Mr. Lerner served as President and Chief Executive Officer of PeroxyChem, LLC, a manufacturer of persulfates, remediation technologies and adjacent chemistries, from March 2014 to February 2020 and Vice President & Global Business Director, FMC Peroxygens of FMC Corporation from February 2007 to February 2014 when the business unit was divested to become PeroxyChem. Prior to then, Mr. Lerner held various roles at Engelhard Corp. and BASF Corp. Mr. Lerner currently serves on the board of directors of Vishay Precision Group, Inc.

 

 

2022 Proxy Statement    33

Compensation Discussion and Analysis

Executive Summary

 

This compensation discussion and analysis provides information about our compensation objectives and policies, as determined by the Compensation Committee. In addition, the compensation discussion and analysis is intended to place in perspective the information contained in the executive compensation tables that follow this discussion.

Overview

We hold our executive officers accountable for our performance and for maintaining a culture of safety, integrity, teamwork and ownership. For 2021, our “named executive officers” or “NEOs” were:

 

Name		Position as of December 31, 2021
Michael C. Jennings		Chief Executive Officer
Richard L. Voliva III		Executive Vice President and Chief Financial Officer
Timothy Go		President and Chief Operating Officer
Thomas G. Creery		President, Renewables
Vaishali S. Bhatia		Senior Vice President, General Counsel and Secretary

The titles listed above for each of our NEOs were current as of December 31, 2021. Certain of the officers served in other positions throughout the 2021 year. Mr. Go was promoted to President and Chief Operating Officer effective November 10, 2021, from the position of Executive Vice President and Chief Operating Officer. In connection with Mr. Go’s promotion, Mr. Jennings, who previously served as both the President and Chief Executive Officer of the Company, began to serve solely in the role of Chief Executive Officer. Mr. Creery was previously our Senior Vice President, Commercial, but effective March 29, 2021, we announced that his role would change to focus solely on the Renewables business as the President, Renewables.

The compensation of our named executive officers is also presented in the tables and related information provided under “Executive Compensation” below.

Certain of our named executive officers also provide services to our wholly-owned subsidiaries, HLS, and HEP. HLS is the general partner of HEP Logistics Holdings, L.P., which is the general partner of HEP. We own a 47% limited partner interest and a non-economic general partner interest in HEP. During 2021, Mr. Jennings, Mr. Voliva and Ms. Bhatia also served as executive officers of HLS and split their professional time between HEP and us. Mr. Jennings, Mr. Voliva and Ms. Bhatia did not receive any compensation from HLS or HEP during 2021.

In accordance with SEC rules, a portion of the compensation paid by us to them for 2021 was allocated to the services Messrs. Jennings and Voliva and Ms. Bhatia each performed for HLS and HEP during 2021 and was included in the Compensation Discussion and Analysis and the accompanying narratives and tables contained in HEP’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “HEP Form 10-K”). The total compensation paid and other benefits made available to Mr. Jennings, Mr. Voliva and Ms. Bhatia in 2021 by us, including amounts disclosed in HEP’s Form 10-K for the year ended December 31, 2021, are disclosed below.

2021 Business Highlights

 

•

Reported net income attributable to HollyFrontier stockholders of $558 million or $3.39 per diluted share and adjusted net income of $250 million or $1.52 per diluted share for the year

 

•

Reported realized gross refining margins of $10.89 per produced barrel sold

 

•

Reported operating cash flow of $407 million

 

•

Completed acquisition of the Puget Sound refinery, a 149,000 barrel per day facility in Anacortes, Washington, that provides the Company with access to the premium Northwest region and advantaged Canadian crude

 

 

34    HF Sinclair Corporation

•

Announced the strategic acquisition of Sinclair’s branded marketing, renewable diesel, refining and midstream businesses to support diversification and scaling of our asset base, which closed on March 14, 2022

These results were taken into account in awarding 2021 annual incentive bonuses to our named executive officers. We believe the total compensation received by our named executive officers for 2021 was reflective of Company and individual performance for the year.

Say-on-Pay Vote

At our 2021 annual meeting of stockholders, our stockholders had an opportunity to cast an advisory vote on executive compensation. At that meeting, over 94% of the votes cast by our stockholders were voted in support of our executive pay program. The Compensation Committee believes this affirms our stockholders’ support of our approach to executive compensation, and the Compensation Committee did not make any material changes to its executive compensation program in 2021 based on the results of the advisory vote. The Compensation Committee will continue to consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for the named executive officers.

 

 

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Stockholder-Friendly Features of Our Executive Compensation Program

The following are highlights of our compensation programs, which continue to contain stockholder-friendly features:

 

 

 

36    HF Sinclair Corporation

 

 

2022 Proxy Statement    37

 

 

38    HF Sinclair Corporation

Each of the components of the compensation program for our named executive officers is described in further detail in the narrative that follows. Specific information regarding 2021 compensation is included below in the section titled “2021 Executive Compensation Decisions.”

Base Salary

Base salaries provide named executive officers with a predictable level of income. The Compensation Committee reviews base salaries annually and determines base salaries on the basis of market practices and each executive’s position, level of responsibility, individual performance and position relative to other executives and other compensation elements. The Compensation Committee also reviews competitive market data relevant to each position provided by the independent compensation consultant.

Annual Incentive Cash Compensation

Under our annual incentive cash compensation program, named executive officers are eligible for cash bonuses that are designed to attract and retain senior leadership, reward achievement of financial and business goals and align executives’ interests with stockholders. Annual incentive cash opportunities for our named executive officers are reviewed annually.

Long-Term Equity Incentive Compensation

The Compensation Committee oversees the administration of the equity plan and grants equity incentive awards to qualifying employees at its discretion. Annual awards are typically made during the fourth quarter of the year preceding the year to which the awards relate.

We view long-term equity incentive compensation as the cornerstone of the executive compensation program because we believe:

 

•

equity incentives and the related vesting periods help attract and retain executives capable of executing our business strategies;

 

•

the value received by the recipient of equity incentives is aligned with long-term value creation for our stockholders; and

 

•

equity incentives provide the closest link between our performance and the executives’ compensation.

In determining the appropriate amount and type of long-term equity incentive awards to be made, the Compensation Committee considers a named executive officer’s position, scope of responsibility, base salary, performance and market compensation information for executives in similar positions in similar companies and prior awards. In addition, the Compensation Committee has historically considered the recommendations of our Chief Executive Officer, except in regard to his own equity awards.

Change in Control and Severance Benefits

Severance and change in control protections are provided to our named executive officers pursuant to the terms of outstanding awards granted under the equity plan and pursuant to change in control severance agreements. The award agreements related to outstanding restricted stock units and performance share units granted to our named executive officers include accelerated vesting provisions in the event of certain terminations of employment, including in connection with a change in control. For additional information about these provisions, see “Executive Compensation—Potential Payments Upon Termination or Change in Control.” In addition, we have entered into change in control severance agreements with each of our named executive officers, as described below. These agreements are designed to provide benefits only in the event of a qualifying termination of employment following a change in control transaction, and do not provide any benefits without a termination of employment. None of the change in control severance agreements we have with our named executive officers contain any tax reimbursement provisions in the event a named executive officer receives potential parachute payments under Section 280G of the Code. For additional information about the severance benefits provided under the change in control agreements, see “Executive Compensation—Potential Payments Upon Termination or Change in Control.”

 

 

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Retirement Benefits and Perquisites

Retirement Plans

Defined Contribution Plan. For 2021, our named executive officers were able to participate in the HollyFrontier Corporation 401(k) Retirement Savings Plan (now known as the HF Sinclair Corporation 401(k) Retirement Savings Plan), which is a tax-qualified defined contribution plan (the “401(k) Plan”). Employees who are not eligible to participate in the NQDC Plan may contribute amounts between 0% and 75% of their eligible compensation to the 401(k) Plan, while employees who are eligible to participate in the NQDC Plan may contribute amounts between 0% and 50% of their eligible compensation to the 401(k) Plan. Employee contributions that were made on a tax-deferred basis were generally limited to $19,500 for 2021, with employees 50 years of age or over able to make additional tax-deferred contributions of $6,500.

For 2021, we made a retirement contribution of 3% to 8% of the participating employee’s eligible compensation under the 401(k) Plan, subject to applicable limitations under the Code, based on years of service, as follows:

 

Years of Service		Retirement Contribution (as percentage of eligible compensation)
Less than 5 years		3%
5 to 10 years		4%
10 to 15 years		5.25%
15 to 20 years		6.5%
20 years and over		8%

In addition to the retirement contribution, in 2021, we made matching contributions to the 401(k) Plan equal to 100% of the first 6% of each participating employee’s eligible compensation up to compensation limits. In 2021, all of our named executive officers participated in the 401(k) Plan and received matching contributions and the retirement contribution. Matching contributions vest immediately and retirement contributions are subject to a three-year cliff-vesting period.

Effective as of the closing of the Sinclair Transactions, the 401(k) Plan was assumed by HF Sinclair Corporation and the plan name was changed to the HF Sinclair Corporation 401(k) Retirement Savings Plan.

Deferred Compensation Plan. Certain of our employees, including our named executive officers, were also eligible to participate in the NQDC Plan in 2021. The NQDC Plan provides certain members of management and other highly compensated employees an opportunity to defer compensation in excess of qualified retirement plan limitations on a pre-tax basis and accumulate tax-deferred earnings to achieve their financial goals.

Participants in the NQDC Plan can contribute between 1% and 50% of their eligible earnings, which includes base salary and bonuses, to the NQDC Plan. Participants in the NQDC Plan are also eligible to receive certain employer-provided contributions, including but not limited to matching contributions, retirement contributions and nonqualified non-elective contributions. Matching contributions and retirement contributions represent contribution amounts that could not be made under the 401(k) Plan due to limitations on tax-qualified plans under the Code. We do not provide any subsidized returns or guarantee of returns on compensation deferred by our named executive officers or other participants in the NQDC Plan, nor do we require the participants to meet the 401(k) Plan contribution limits prior to deferring contributions into the NQDC Plan. For more information regarding this plan, see “Executive Compensation—Nonqualified Deferred Compensation.”

Other Benefits and Perquisites

All of our executive officers are eligible to participate in the same benefit plans available generally to our salaried employees, such as medical, dental, vision, long-term and short-term disability and life insurance. We do not maintain separate “executive” plans for any of these benefits. We also make relocation benefits available to our salaried employees, including our named executive officers.

 

 

40    HF Sinclair Corporation

During 2021, Mr. Jennings and Mr. Voliva were permitted to use the company aircraft for personal travel, subject to a requirement that they reimburse us for all aggregate incremental costs associated with their personal use, including fuel costs, landing fees, catering charges, pilot overnight expenses and other similar charges incurred by us. In addition, we permit a named executive officer’s family member to accompany the executive on a flight when the executive is traveling for business. No additional direct operating cost is incurred by us in such situations, but to the extent that Internal Revenue Service guidelines cause us to impute income to the named executive officer for such family member travel, and that travel is not business-related, the associated tax liability is the responsibility of the executive.

During 2021, we also reimbursed monthly club dues for Messrs. Jennings, Voliva, and Go. The Compensation Committee believes that a club membership assists these named executive officers in performing their responsibilities by providing a means for business entertainment and networking. In addition, we may reimburse our executive officers for limited entertainment expenses that we deem to serve a business purpose and provide personal benefits to our executive officers in limited circumstances associated with executive team-building and strategy planning events. We also provide reserved parking spaces for our executive officers.

Role of Compensation Committee in Establishing Compensation

 

The Compensation Committee administers our executive compensation programs. The role of the Compensation Committee is to review and approve the compensation to be paid to executive officers, including the named executive officers, and to review the compensation policies and practices for all of our employees to verify that they do not create unreasonable risks for us or our stockholders.

In setting compensation for executive officers, the Compensation Committee considers, among other things, recommendations by its independent compensation consultant and management and the compensation of similarly situated executives in comparable businesses. In addition, the Compensation Committee annually reviews total compensation paid to the named executive officers for the prior year and, with the assistance of management, proposes long-term incentive compensation awards.

Role of Executive Officers in Establishing Compensation

 

Our Chief Executive Officer makes compensation recommendations to the Compensation Committee for the executive officers, including the named executive officers (except with respect to his own compensation). Management provides financial and compensation data to the Compensation Committee for its review in setting compensation and gives guidance as to how the data impacts performance goals set by the Compensation Committee. This data includes:

 

•

our financial performance for the current year compared to the preceding year;

 

•

performance evaluations of the named executive officers (other than for the Chief Executive Officer, who is evaluated by the Compensation Committee); and

 

•

compensation provided to the named executive officers in previous years.

Given the day-to-day familiarity that the Chief Executive Officer has with the work performed by the other named executive officers, the Compensation Committee values his recommendations. However, the Compensation Committee makes all final decisions as to the compensation of the named executive officers.

Role of Compensation Committee Consultant in Establishing Compensation

 

In December 2017, the Compensation Committee engaged Meridian as the independent compensation consultant to the Compensation Committee, to provide advice relating to executive compensation matters. In 2020, the Compensation Committee received competitive market data and related observations and advice from Meridian with respect to the development and structure of our executive compensation program for 2021. As discussed above under “The Board, its Committees and its Compensation—Board Committees—Compensation Committee,” the Compensation Committee has concluded that we do not have any conflicts of interest with Meridian.

 

 

2022 Proxy Statement    41

Market Review

 

We regularly compare our executive compensation program with market information regarding salary levels and incentive awards and programs. The purpose of this analysis is to provide a frame of reference in evaluating the reasonableness and competitiveness of our executive compensation as compared to that of companies within the energy industry that are generally comparable in size and scope of operations to us. As detailed below, our compensation peer group includes refining companies as well as companies that are in comparable chemical and processing-oriented industries due to the limited number of comparably-sized refiners.

Market pay levels for named executive officers are obtained from the SEC filings of the companies in our compensation peer group. We supplement this data with, and obtain data for our named executive officers from, various sources, including published compensation surveys, which cover our industry sector and labor market. As a component of setting 2021 compensation, the Compensation Committee reviewed a study of compensation paid to our named executive officers prepared by Meridian.

The following companies comprised the 2021 compensation peer group reviewed and approved by the Compensation Committee:

 

 

Based on recommendations by Meridian, the 2021 compensation peer group is comprised of the same companies which were used as the 2020 compensation peer group. The 2021 compensation peer group is different than the 2021 Incentive Peer Group (defined below), which is used as a market comparison when determining payouts of certain performance-based incentive awards granted to named executive officers. See “—2021 Executive Compensation Decisions—Annual Incentive Cash Compensation” for a further discussion of the 2021 Incentive Peer Group and the reasons for the differences from the 2021 compensation peer group.

2021 Executive Compensation Decisions

 

The Compensation Committee generally established 2021 total direct compensation, including base salary, annual incentive cash compensation and long-term equity incentive compensation awards, for our named executive officers at pay levels in a range around the market median, however, executives may be positioned above or below this range for various reasons such as experience, tenure or performance. In the fourth quarter of 2020, the Compensation Committee utilized the market data provided by Meridian and internal evaluations of Messrs. Jennings, Voliva, Go, Creery and Ms. Bhatia to establish total compensation opportunities for Messrs. Jennings, Voliva, Go, Creery and Ms. Bhatia that were consistent with this objective.

Based on the 2021 annual review of compensation, the Compensation Committee believes that 2021 compensation for the named executive officers reflects appropriate allocation of compensation between salary, bonuses and equity compensation, with a majority of the compensation being performance-based, at-risk pay in the form of both short-term and long-term incentives.

 

 

42    HF Sinclair Corporation

Base Salary

The Compensation Committee establishes base salaries that are competitive with the market to provide our named executive officers with compensation consistent with their responsibilities, experience, and individual performance, as well as with our peers. In the fourth quarter of 2020, the Compensation Committee conducted its annual review of base salaries and market survey data for our named executive officers and determined that increases in the base salaries for the named executive officers were warranted based on factors such as our financial performance, market levels of compensation for comparable positions and internal pay equity.

The following table sets forth the base salaries for 2020 and 2021 of our named executive officers:

 

Name and Title		2020 Base Salary				2021 Base Salary(1)				Percentage Change
Michael C. Jennings(2) Chief Executive Officer		$	1,140,000			$	1,080,000				(5.3)%
Richard L. Voliva III Executive Vice President and Chief Financial Officer		$	675,000			$	695,000				3.0%
Timothy Go President and Chief Operating Officer		$	750,000			$	770,000				2.7%
Thomas G. Creery President, Renewables		$	525,000			$	540,000				2.9%
Vaishali Bhatia Senior Vice President, General Counsel and Secretary			N/A			$	475,000				N/A

 

(1)	Represents the base salaries effective January 1, 2021. For the actual base salaries paid to our named executive officers during 2021, please see the “Summary Compensation Table” below. As this is Ms. Bhatia’s first year as an NEO, her salary for the 2020 year is not reflected.

 

(2)

Effective upon his appointment as Chief Executive Officer and President of the Company on January 1, 2020, Mr. Jennings’ base salary was set at $1,200,000. In June 2020, in light of economic conditions and other expense reduction actions being taken by the Company, Mr. Jennings proposed a mid-year reduction of 10% to his base salary that was approved by the Compensation Committee and reduced his salary to $1,080,000 effective July 1, 2020. The base salary shown in the table above for 2020 reflects the average of Mr. Jennings’ base salary during 2020 and therefore will not be identical to the amounts reflected in the “Summary Compensation Table” below for 2020. There was no increase to Mr. Jennings’ base salary for 2021. The percentage change for Mr. Jennings represents the different between the average of Mr. Jennings’ base salary during 2020 and his base salary during 2021.

Annual Incentive Cash Compensation

In the fourth quarter of 2020, the Compensation Committee approved target award levels as well as all other terms of the annual incentive cash compensation awards granted to our named executive officers for 2021. The Compensation Committee made no changes from the prior year to the annual incentive cash compensation target percentages for 2021 for the named executive officers. In addition, annual incentive cash awards are capped to avoid encouraging an excessive short-term focus, potentially at the expense of long-term performance.

The annual incentive cash compensation awards are subject to the performance measures set forth in the table below. In September 2021, the Compensation Committee reassessed Mr. Jennings’ potential award and made the decision to eliminate the subjective criteria within his strategic and individual measures. The Compensation Committee determined that it would be appropriate for our Chief Executive Officer’s annual incentive award to be more formulaic, objective, and 100% tied to our performance (which is also more closely aligned with our stockholders interests).

Beginning with the 2021 annual incentive cash compensation awards, awards are subject to a bonus hurdle that may limit the named executive officers’ target bonus to 50% of the individual’s target bonus if the Company does not achieve positive adjusted operating income for the applicable fiscal year. Adjusted operating income of the Company means earnings before interest and taxes as reported in the Company’s audited consolidated financial statements and is calculated as net income (loss) attributable to HF Sinclair stockholders plus (i) interest expense, net of interest income, and (ii) income tax expense plus adjustments for extraordinary items, other unusual or non-recurring items, each as determined in accordance with generally accepted accounting principles and identified in the financial

 

 

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