UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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NOBLE CORPORATION plc
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Noble Corporation plc
Compensation Overview
April 7, 2016 |
2015
Financial and Operational Highlights
2 Transforming our fleet into one of the most modern in the industry Lowering the average age of fleet from 25 years in 2013 to 10 years in February 2016 Strengthening our position to weather current market challenges Securing contract backlog of $6.9 billion at 12/31/15 Achieving financial success and returning value 2015 Adjusted EPS from continuing operations rose 17% to $2.59* Debt to total capitalization ratio declined from 40% to 38% during 2015 Operating costs declined 18% during 2015 Paid 2015 dividends of $316m Operating at a high level of safety/efficiency *See last slide for non-GAAP adjustments |
The
Current Environment 3
Market Realities:
Crude oil price decline of more than 66% from 3Q 2014
to 1Q 2016 Oversupply of drilling rigs during period of slackening demand Noble Reality: Created modern, high-specification fleet with a commercial competitive advantage Secured large backlog with $2.2b coverage for 2016 and significant contract coverage in 2017 and beyond Reduced operating costs through strict cost control efforts and lower capital expense costs as newbuild program is completed and rigs are deployed |
Current Noble Position among
Offshore Drillers
4 Noble now positioned to: Weather current market challenges Exploit commercial advantage from our technically advanced and young fleet Reap benefits of advantageous capital position and backlog compared to peer companies Take advantage of opportunities during down cycle We dont control oil price but have strategically controlled our position in industry |
Our
Compensation Program and 2015 Highlights, cont.
5 Noble pays for performance Competitive base salary Held 2015 and 2016 base salary at 2014 levels for all named executives Reduced the 2015 total reported compensation to CEO by 19% between 2015 and 2014 Short-term incentive plan (STIP) tied to annual operating and safety performance vs. defined goals Cut STIP award by 25% from the level available for award in 2015 CEO 2015 STIP award 34% less than 2014 award Appropriately focused achievement goals |
Our
Compensation Program and 2015 Highlights
Long-term equity awards at risk and tied to
relative total shareholder returns (TSR)
Reduced the grant value of 2015 and 2016 CEO/CFO long-
term incentive awards by 10% from 2013 value
Properly aligned results: officers forfeited 43.67% of 2013-
2015 performance cycle LTI awards and 100% and 54.66%,
respectively, of LTI awards in previous two performance cycles
Other Compensation Issues
Ended the payment of expatriate benefits for all NEOs in 3Q
2015 --
reduction of $1m to CEO on an annualized basis
Noble is committed to maintaining best
governance practices
6 |
Proxy
Advisory Considerations 7
Split in proxy advisor recommendations:
Glass Lewis FOR
ISS Against
Principal ISS Objection
Negative TSR Cyclical commodity based business experiencing precipitous drop in oil price Noble management has put company in very strong position relative to peers during current downturn Noble TSR is strong compared to drilling company peers Compensation Committee believes that long-term executive incentives important in cyclical downturns Compensation Committee is addressing scale and absolute level of compensation in downturn |
Increase in number of shares
in 2015 Incentive Plan
8 Noble is seeking an increase of 9.5m shares for the 2015 Incentive Plan Shares depleted sooner than anticipated because of decline in share price closely correlated to decline in oil price Plan has state-of-the-art governance best practices and approval was recommended by ISS and Glass Lewis in 2015 when originally adopted We have highly disciplined grant practices Three year burn rate falls between 1.06% and 2.17%, well below ISS cap of 3.12% New shares would represent 3.91% of outstanding Since spin-off in 2014, negative dilution of 4.35% Half of equity awards at risk and meaningful holding rule |
Increase in number of shares
in 2015 Incentive Plan
At current share price, the requested number
of shares would likely be sufficient to allow us
to make two years of equity awards
If the increase is not approved, we will
effectively be unable to provide equity
compensation in the next annual granting
cycle in 2017 and beyond
If equity compensation is not available, we
could lose high performing employees or be
forced to use cash-based long-term incentives
9 |
Non-GAAP Adjustment
Non-GAAP Adjustments from Slide 2
EPS as shown excludes the impact of impairment charge in 2015
and 2014 and a 2015 gain from a contract cancellation and
arbitration settlement (2015 EPS including such impairment and
gains --
$2.06 and 2014 EPS including such impairment
a loss of $0.60). EPS excluding the impact of impairment charge and the gain from a contract cancellation and arbitration settlement is a non-GAAP financial measure. A reconciliation to the most comparative GAAP
measure is set forth on the Companys website at
www.noblecorp.com
in the Investor Relations section under 2016 proxy statement. 10 |
11 |