UNITED STATES
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FORM
CURRENT REPORT
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Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e)
On July 22, 2020, the Compensation Committee (the “Committee”) of the Board of Directors of Schlumberger Limited (the “Company”) approved certain modifications to the Company’s 2020 annual cash incentive plan (the “Plan”) for the Company’s executive officers (the “officers”), in response to the effects of the COVID-19 pandemic and other factors negatively impacting the Company’s industry, and in order to motivate the officers to achieve aggressive performance targets in the second half of 2020.
For 2019 compensation, as disclosed in the Company’s proxy statement for its 2020 annual general meeting of stockholders, 40% of the officers’ target annual cash incentive opportunity was based on achievement of cash flow generation targets, 30% was based on achievement of adjusted EPS targets, and 30% was based achievement of pre-established key personal objectives.
For 2020, the Committee determined that it was appropriate to replace the adjusted EPS performance metric that it had approved earlier in the year with a 2020 adjusted EBITDA metric. The Committee considered a number of factors when determining to approve the use of adjusted EBITDA. The Committee believes that given the current operating environment and market conditions, adjusted EBITDA is a better indicator of the quality of the Company’s earnings, and is a better metric to value the Company. The Committee also considered that the use of adjusted EBITDA aligns the officers’ cash incentive opportunity with that established for the rest of the Company’s employees for the second half of 2020.
The Committee also modified the minimum threshold cash flow generation target that it had previously approved as part of the Plan, to align with the Company’s new cash dividend and its revised 2020 outlook, as well as market expectations for cash flow generation. The Committee did not modify the target and maximum performance goals under the cash flow generation metric that it had approved earlier in the year.
As a result of these changes, for 2020 officer compensation, 40% of the officers’ target annual cash incentive opportunity will be based on achievement of cash flow generation targets and 30% will be based on achievement of adjusted EBITDA targets. The 30% target annual cash incentive opportunity based on achievement of pre-established key personal objectives as set earlier in the year remains unchanged.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SCHLUMBERGER LIMITED |
| /s/ Saul R. Laureles |
| Saul R. Laureles |
| Assistant Secretary |
| Date: July 24, 2020 |