GHG Emissions, Industrial - March 30, 2021
Callon Petroleum plots GHG reduction targets, ties financials to exec pay
A new executive compensation program is in place at Callon Petroleum with updated environmental, social, and governance ESG) initiatives. These changes were made to align with investor priorities and new commitments to quantitative GHG emissions reduction targets.
Targets set for 2025 include a 40%-50% reduction in GHG emissions intensity vs. pro forma 2019 results and the reduction of flared gas to less than 2% of gas produced, and (3) the elimination of all routine field gas flaring.
In a statement, the company notes that in the first quarter of 2021, it adopted a compensation program to incentivize sustainable results aligned with investor priorities. The program includes reductions to target pay levels for executives and directors. The new program will focus on pay-for-performance by maintaining 80% weighting on quantitative metrics. According to the statement, the company will “demonstrate our ESG value proposition by introducing a quantitative ESG category (weighted 15%) focused on flaring, safety and spills, plus a qualitative assessment tied to sustained progress towards the greenhouse gas reduction targets.”
"The board of directors and leadership team at Callon has been focused on implementing changes to the business, both functionally and strategically, that support a sustainable, returns-driven entity that creates shareholder value. As part of our focus on strong governance, we have thoughtfully developed a new executive compensation program that aligns management incentives with investor priorities for our industry and Callon. Our corporate goals of meaningful free cash flow generation, absolute debt reduction, and returns on capital are reflected in the compensation criteria and provide a direct link between pay and financial performance that will contribute to improving investor returns," said Richard Flury, Chairman of the Board of Directors.
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