SCHEDULE 14A

(Rule 14a-101)

Information Required in Proxy Statement

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant  ☒                        Filed by a Party other than the Registrant  ☐

Check the appropriate box:

Hess Corporation

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

HESS CORPORATION

April 23, 2021

Dear Stockholder:

Our company’s strategy has been – and continues to be – to grow our resource base, have a low cost of supply and sustain cash flow growth. By investing only in high return, low cost opportunities, we have built a differentiated portfolio that is balanced between short cycle and long cycle assets, with Guyana as our growth engine and the Bakken, Gulf of Mexico and Southeast Asia as our cash engines. Guyana will become a significant cash engine as multiple phases of low cost oil developments come online, which we believe will drive our company’s breakeven price below $40 per barrel Brent and provide industry leading cash flow growth over the course of the decade.

Throughout the pandemic, our company has maintained a constant focus on the safety of our workforce and the communities where we operate. In response to the pandemic’s severe impact on oil prices, our priorities have been to preserve cash, preserve our operating capability and preserve the long term value of our assets. In terms of preserving cash, we came into 2020 with approximately 80% of our oil production hedged with put options for 130,000 barrels per day at $55 per barrel West Texas Intermediate (“WTI”) and 20,000 barrels per day at $60 per barrel Brent. For 2021, we have hedged 120,000 barrels per day with $55 per barrel WTI put options and 30,000 barrels per day with $60 per barrel Brent put options.

To enhance cash flow and maximize the value of our production, in March and April of 2020 when U.S. oil storage was near capacity, we chartered three very large crude carriers to store and transport more than 6 million barrels of Bakken crude oil to high value markets in Asia; all three cargoes were sold at a premium to Brent.

We reduced our 2020 capital and exploratory budget from $3 billion down to $1.8 billion, primarily by dropping from six Bakken rigs to one. We also reduced our 2020 cash operating costs by $275 million. We further strengthened our cash and liquidity position in 2020 through a $1.0 billion, three year term loan agreement. During the fourth quarter, we closed on the sale of our 28% interest in the Shenzi Field in the Gulf of Mexico for a total consideration of $505 million.

In terms of preserving capability, a key for us was continuing to operate one rig in the Bakken in 2020. Our Bakken team has made great progress over the past 10 years in Lean manufacturing capabilities and innovative practices, which have delivered significant cost efficiencies and productivity improvements that we want to preserve for the future.

To preserve the long term value of our assets, we allocated more than 80% of our 2021 capital and exploratory budget of $1.9 billion to Guyana, where our three sanctioned oil developments have a Brent breakeven oil price of between $25 and $35 per barrel, and to the Bakken, where we have a large inventory of future drilling locations that can generate attractive financial returns at $50 per barrel WTI.

On the Stabroek Block in Guyana, where Hess has a 30% interest and ExxonMobil is the operator, 2020 was another outstanding year. Three oil discoveries during the year brought total discoveries on the block to 18, and we continue to see multibillion barrels of future exploration potential remaining.

Production from Liza Phase 1 reached its nameplate capacity of 120,000 gross barrels of oil per day in December 2020, and the Liza Phase 2 development, with a capacity of 220,000 gross barrels of oil per day, is on track to achieve first oil in early 2022. In September 2020, we sanctioned our third oil development on the Stabroek Block at the Payara Field, which will have a capacity of 220,000 gross barrels of oil per day and is expected to achieve first oil in 2024.

In the Bakken, our 2020 net production came in well above our original guidance for the year and 27% above that of 2019. As WTI oil prices moved above $50 per barrel, in February 2021 we added a second rig, which will allow us to maintain net production in the range of 175,000 barrels of oil equivalent per day and sustain long term cash flow generation from our largest operated asset.

Proved reserves at the end of 2020 stood at 1.17 billion barrels of oil equivalent. Net proved reserve additions and revisions in 2020 totaled 117 million barrels of oil equivalent, including negative net price revisions of 79 million barrels of oil equivalent, replacing 95% of 2020 production.

Sustainability

As we execute our company’s strategy, we will continue to be guided by our longstanding commitment to sustainability. In keeping with our Hess values, we strive to help address societal inequities by fostering a diverse and inclusive work environment and creating opportunities in the communities where we operate. Our board of directors is climate change literate and actively engaged in overseeing Hess’ sustainability practices. We are committed to transparency – our strategy and reporting are closely aligned with the recommendations of the Task Force on Climate-Related Financial Disclosures (“TCFD”). We are proud to have been recognized throughout 2020 by a number of third party organizations as an industry leader in our environmental, social and governance performance and disclosure.

We recognize that climate change is one of the greatest scientific challenges of the 21st century that must be addressed while at the same time providing the safe, affordable and reliable energy that is fundamental to human prosperity and world economic growth. We support the aim of the Paris Agreement and a global ambition to achieve net zero emissions by 2050. Our business planning includes actions we will undertake to continue reducing our carbon footprint in keeping with the findings of the U.N. Intergovernmental Panel on Climate Change.

Our board and senior leadership have set aggressive targets for greenhouse gas (“GHG”) emissions reduction. In 2020, we significantly surpassed our five year targets to reduce Scope 1 and 2 GHG emissions intensity by 25% and flaring intensity by 50% from our operated assets – reducing GHG emissions intensity and flaring intensity by approximately 40% and 60%, respectively, compared with 2014 levels. We recently announced our new five year GHG reduction targets for 2025, which are to reduce operated Scope 1 and 2 GHG emissions intensity by approximately 44% and methane emissions intensity by approximately 50% from 2017.

In addition, we are investing in technological and scientific advances designed to reduce, capture and store carbon emissions, including groundbreaking work being conducted by the Salk Institute to develop plants with larger root systems that according to the Salk Institute are capable of absorbing and storing potentially billions of tons of carbon per year from the atmosphere.

We have tested the resilience of Hess’ portfolio under the supply and demand scenarios from the International Energy Agency (“IEA”). The IEA’s Sustainable Development Scenario, which assumes all the pledges of the Paris Climate Agreement are met, projects oil and gas will still be 46% of the global energy mix in 2040. Our current asset portfolio is robust, and our pipeline of forward investments is projected to provide strong financial returns under the Sustainable Development Scenario.

Commitment to Shareholders

We will continue to execute our strategy that has positioned our company to deliver industry leading cash flow growth and financial returns over the course of the decade. We are proud of our employees for their many accomplishments and grateful for the counsel and guidance of our directors. Thank you, our shareholders, for your continued support and interest in our company.

You are cordially invited to participate in our annual meeting of stockholders, which will be held as a virtual meeting, on Wednesday, June 2, 2021 at 9:00 a.m., Central Time. We look forward to sharing more about our company at our annual meeting.

Sincerely,

TABLE OF CONTENTS

Cautionary Note Regarding Forward-Looking Statements

This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as “anticipate,” “estimate,” “expect,” “forecast,” “guidance,” “could,” “may,” “should,” “would,” “believe,” “intend,” “project,” “plan,” “predict,” “will,” “target” and similar expressions identify forward-looking statements, which are not historical in nature. Our forward-looking statements may include, without limitation: our future financial and operational results; our business strategy; estimates of our crude oil and natural gas reserves and levels of production; benchmark prices of crude oil, natural gas liquids and natural gas and our associated realized price differentials; our projected budget and capital and exploratory expenditures; expected timing and completion of our development projects; information about sustainability goals and targets and planned social, safety and environmental policies, programs and initiatives; and future economic and market conditions in the oil and gas industry.

Forward-looking statements are based on our current understanding, assessments, estimates and projections of relevant factors and reasonable assumptions about the future. Forward-looking statements are subject to certain known and unknown risks and uncertainties that could cause actual results to differ materially from our historical experience and our current projections or expectations of future results expressed or implied by these forward-looking statements. The following important factors could cause actual results to differ materially from those in our forward-looking statements:

As and when made, we believe that our forward-looking statements are reasonable. However, given these risks and uncertainties, caution should be taken not to place undue reliance on any such forward-looking statements since such statements speak only as of the date when made and there can be no assurance that such forward-looking statements will occur and actual results may differ materially from those contained in any forward-looking statement we make. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.

HESS CORPORATION

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Wednesday, June 2, 2021, at 9:00 a.m.

To the Stockholders:

The annual meeting of stockholders of Hess Corporation will be held on Wednesday, June 2, 2021, at 9:00 a.m., Central Time, for the following purposes:

Due to the ongoing health impact of COVID-19 and in order to protect our stockholders, employees and others and align with relevant gathering and travel restrictions, the annual meeting will be held as a virtual only meeting of stockholders. If you are a stockholder of record at the close of business on April 12, 2021, the record date for the annual meeting, you will be able to attend the annual meeting as well as submit questions and vote during the live webcast of the meeting by visiting www.virtualshareholdermeeting.com/HES2021. You will not be able to attend the annual meeting in person. Additional information on how to participate in the virtual annual meeting can be found on page 62. This does not represent a change in our stockholder engagement philosophy, and we intend to return to an in-person meeting next year.

By order of the board of directors,

Timothy B. Goodell

Secretary

April 23, 2021

YOUR VOTE IS IMPORTANT

PROXY SUMMARY

The following section is only a summary of key elements of the proxy statement. This summary is intended to assist you in reviewing the proxy statement in advance of the annual meeting of stockholders. It does not contain all of the information you should consider, and we encourage you to read this entire proxy statement before submitting your vote.

2021 Annual Meeting Information

Voting Matters

Your vote is important to us. Please exercise your right to vote.

How to Vote

		Over the Internet								By Telephone
		Visit the website listed on your Notice of Internet Availability of Proxy Materials or proxy card or voting instruction form.								Call the toll-free telephone number listed on your proxy card or voting instruction form.
		By Mail								At the Annual Meeting
		Follow the instructions on your proxy card or voting instruction form.								Stockholders are invited to attend the virtual annual meeting and vote electronically. To participate, you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials or on your proxy card (or on your voting instruction form or as provided by your bank, broker or other nominee in the case of beneficial holders). See page 64 for more information.

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Our Purpose: To Be the World’s Most Trusted Energy Partner

Hess Corporation is a global Exploration and Production (“E&P”) company engaged in the exploration, development, production, transportation, purchase and sale of crude oil, natural gas liquids, and natural gas.

As a leading independent energy company, our purpose is to be the world’s most trusted energy partner through our strong company values and focus on long-term strategy. We are committed to developing oil and gas resources in an environmentally responsible and sustainable manner. We are focused on building a company that makes a positive impact for all stakeholders: our investors, employees, partners and the communities in which we do business.

Hess Values

Our company values set the framework and establish the ethical standards by which we conduct our business.

		•  INTEGRITY: We are committed to the highest level of integrity in all our relationships.   •  PEOPLE: We are committed to attracting, retaining and energizing the best people by investing in their professional development and providing them with challenging and rewarding opportunities for personal growth.   •  PERFORMANCE: We are committed to a culture of performance that demands and rewards outstanding results throughout our business.   •  VALUE CREATION: We are committed to creating stockholder value based on sustained financial performance and long-term profitable growth.   •  SOCIAL RESPONSIBILITY: We are committed to meeting the highest standards of corporate citizenship by protecting the health and safety of our employees, safeguarding the environment and creating a long-lasting, positive impact on the communities where we do business.   •  INDEPENDENT SPIRIT: We are committed to preserving the special qualities and unique personality that have made us a successful independent enterprise.

Corporate Culture and Human Capital Management

Our workplace culture is guided by the Hess values and reinforced by developing quality leadership, fostering diversity, equity and inclusion, emphasizing continuous learning, creating opportunities for engagement, driving innovation and embracing Lean processes. We are pursuing a Life at Hess initiative to optimize the work experience for our multigenerational workforce and unlock the discretionary effort that is required to perform at a high level on a sustained basis. The Life at Hess framework encompasses programs, policies and practices, and a listening system that draws on in-person dialogues, pulse polls and data analytics to help leaders understand employees’ issues and perspectives and to ensure the health of our company culture and alignment with our values and strategic business priorities. During 2020, due to COVID-19, we adapted our Life at Hess initiative for a work experience that was largely away from the office and with stringent health and safety protocols throughout our operations. We offered supplemental medical resources, mental wellness programs and access to third-party medical experts, at no cost to employees. Employee turnover, diversity, equity and inclusion and leadership development metrics, along with qualitative data are considered by our Diversity, Equity and Inclusion Council and at the executive level. They are also discussed at the compensation and management development committee regularly throughout the year and shared with the full board of directors. Directors have opportunities throughout the year to meet with employees, including virtually due to COVID-19.

Strategy of Value Creation

Our strategy is to grow our resource base, have a low cost of supply and sustain cash flow growth – investing in high return, low cost projects to move down the cost curve and be profitable in a lower price environment with increasing cash generation and returns to stockholders. Consistent with this strategy, we have built a differentiated portfolio that is balanced between short cycle and long cycle assets, with Guyana as our growth engine and the Bakken, Gulf of Mexico and Southeast Asia as our cash engines. We are confident in our company’s strategy, positioning us to manage through a low price environment to deliver long-term value to our stockholders.

Corporate Performance Highlights

In 2020, we built upon our strong performance in 2018 and 2019 to achieve a number of important milestones in Guyana and the Bakken, while substantially reducing cash costs and capital and exploratory expenditures in response to the sharp decline in oil prices due to COVID-19.

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Commitment to Sustainability

Hess is committed to helping meet the world’s growing energy needs in a safe, environmentally responsible, socially sensitive and profitable way. Our purpose is to be the world’s most trusted energy partner and sustainability is fundamental to our long-term strategy. We believe our focus on sustainability creates value for our stockholders and helps position us to continuously improve business performance. We recently completed a review and update of our environment, health, safety and social responsibility (“EHS & SR”) strategy, beginning with a materiality assessment to prioritize our strategic actions through 2025, which will be discussed more fully in our 2020 sustainability report.

Climate Change Strategy

Hess has established a climate change strategy that is closely aligned with the recommendations of the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures (“TCFD”) to guide our initiatives to support the transition to a low carbon economy, reduce greenhouse gas emissions and invest in carbon-efficient technologies and innovations. Our climate change strategy ties to our broader business strategy, strategic planning and capital allocation decisions, including applying a theoretical price of carbon in our economic evaluations for significant new projects and conducting annual scenario planning exercises which incorporate the International Energy Agency’s (“IEA”) scenarios for future energy demand and carbon pricing. We understand that a substantive climate strategy requires companies to look beyond a five year timeframe and have established an executive-led taskforce to consider our medium and longer term climate strategy. These efforts help position Hess for the long term as a low-cost producer providing the energy necessary to ensure human welfare and global economic development, even in a low-carbon future.

Sustainability Focus Across Our Company

Board Oversight of Sustainability Practices

The board is actively engaged in overseeing Hess’ sustainability practices and works alongside senior management to evaluate sustainability risks and global scenarios in making strategic decisions, including those related to climate change. Furthermore, our independent board chairman periodically accompanies our chief executive officer and other members of senior management to meet with investors to solicit shareholder views on EHS & SR topics.

The environmental, health and safety (“EHS”) committee has specific oversight responsibility and makes recommendations to the full board of directors so that sustainability risks and opportunities are taken into account when making strategic decisions. The EHS committee assists the board in identifying, evaluating and monitoring EHS & SR strategies and material risks with the potential to affect the people, environment or communities where we operate or our company’s business activities, performance and reputation. The EHS committee makes recommendations to the full board on policies, programs and practices to address such strategies and risks and monitors the company’s performance against these policies, programs and practices. The EHS committee reviews emergency response preparedness and planning and EHS & SR legal and regulatory matters that could affect the company’s business and operations, including the company’s ongoing response to COVID-19. The EHS committee also advises the board’s compensation and management development committee regarding executive compensation measures to advance the EHS & SR goals of the company.

Board Climate Literacy

Our board is climate change literate, and these and other environmental issues are discussed at the board level and taken into account in strategic decisions. Each member of the EHS committee is independent and qualified under the standards established by applicable law, New York Stock Exchange (“NYSE”) listing standards and our Corporate Governance Guidelines. EHS committee members have extensive oil and gas industry experience, including operational, regulatory and financial expertise. To supplement the expertise of EHS committee members and the full board of directors, we bring in outside subject matter experts to brief members on current and developing issues relevant to our business, such as climate change. Board members, together with our executive leadership, also participate in field visits to Hess operated and non-operated assets to better understand our key EHS & SR strategies and risks. During these visits, the EHS committee engages with the Hess workforce and observes how Hess is managing EHS & SR risks and opportunities, such as leveraging Lean and technology-focused initiatives in the field.

Environmental, Social and Governance Disclosure and Transparency

Hess is committed to transparency. The company’s disclosures, including our annual sustainability report, are aligned with the TCFD and informed by the oil and gas industry metrics published by the Sustainability Accounting Standards Board (“SASB”). Our website www.hess.com contains information on our environmental and social policies and programs. Hess is recognized as an industry leader in environmental, social and governance disclosure and transparency:

12 consecutive years Leadership status		11 consecutive years on North America Index		10 consecutive years with AA ESG Rating		8 consecutive years on U.S. Index
No. 1 oil & gas company No. 9 overall company 13 consecutive years on list		Only U.S. oil & gas producer		No. 1 oil & gas producer		Only U.S. oil & gas company at 4-Star level

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Director Nominees

Independent Director Nominee Characteristics

When evaluating nominees for our board of directors, the corporate governance and nominating committee considers diversity of viewpoints, backgrounds and experience, including diversity of race, gender, ethnicity, age, national origin and cultural background to ensure effective oversight of our strategy and culture and effective representation of the interests of all stockholders.

Executive Compensation Tied to Company Performance

Compensation Objective

We strive to attract and retain talented executives and motivate them to achieve our business goals through a combination of cash and stock-based compensation, which includes a base salary, annual incentive, and long-term incentives. The board oversees our compensation program and ensures that we implement our objectives by setting short-term targets that lead to long-term success and long-term targets based on total shareholder return (“TSR”). We engage with our stockholders on a regular basis to ensure we fully understand the factors they consider to be most important when evaluating our company, including compensation.

Key Compensation Actions

In early March 2020, the compensation and management development committee (the “committee”) approved 2020 compensation decisions for our named executive officers (“NEOs”), including title and salary updates and establishing 2020 annual incentive plan (“AIP”) targets and long term incentive plan (“LTI”) targets, including performance share units (“PSUs”). Payouts under the AIP and PSU programs are determined based on attainment of pre-established metrics and are highly sensitive to shareholder returns and our operational performance. Shortly thereafter, COVID-19, in conjunction with global oil market disruptions, severely impacted demand for oil. In response, the company implemented a number of cost-saving measures, including reducing its E&P capital and exploratory spend, ending the year at $1.8 billion, representing a 40% reduction from the original budget of $3.0 billion. The committee observed that global economic conditions warranted changes to the previously approved 2020 AIP. When assessing possible changes, the committee focused on (i) finding opportunities to reduce the company’s cash expense in-line with the company’s other cost saving measures, and (ii) ensuring that the AIP continued to serve as a performance driver, with rigorous but attainable goals.

In support of these objectives, in June 2020, the committee determined to reduce the maximum payout under the AIP from 200% to 50% of target. The committee believed that limiting the AIP payout for 2020 to 50% of target ensured that management shared in the necessary sacrifices to achieve our critical strategic initiative of preserving cash while also maintaining salaries and benefits for employees across the company. In addition, the committee approved adjustments to weightings and targets for certain annual enterprise-level metrics to reflect the company’s shift in priorities given the dramatically changed economic and oil price environment. Revised AIP targets were intended to preserve the rigor of initial 2020 incentive targets in this context to continue incentivizing management to make positive progress during a year of significant market uncertainty.

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TSR Performance

Our PSUs are tied to relative TSR to effectively measure our performance compared to peers. Our 3-year TSR as of December 31, 2020 was ranked first among peers and we were the only company with a positive TSR over this period. Our ability to navigate COVID-19 in 2020 and the low oil price environment during the last several years has resulted in our TSR far exceeding our peer companies, as indicated by our 3-year TSR performance as of December 31, 2020.

Strong Governance Practices Promote Alignment with Stockholder Interests

Risk Oversight

The board of directors has oversight of the company’s risk management policies with an emphasis on understanding the key enterprise risks affecting the company’s business and the ways in which the company attempts to prudently mitigate such risks, to the extent reasonably practicable and consistent with the company’s long-term strategies. The audit committee of the board has been delegated primary responsibility for oversight of the company’s risk management practices, and the chief risk officer periodically presents to the audit committee a comprehensive review of the company’s enterprise levels risks, the status of the enterprise risk program and risk management strategies utilized by the company under its corporate risk policy. The audit committee and the board will also receive updates at meetings during the year on any particular matters relating to specific risks that management believes needs to be brought to the attention of the committee or the board. Additionally, each of the board’s committees is assigned with overseeing risk management specific to their scope of responsibilities.

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PROXY STATEMENT

The enclosed proxy is solicited by the board of directors of Hess Corporation for use at the annual meeting of stockholders to be held on Wednesday, June 2, 2021, at 9:00 a.m. Central Time virtually, via live webcast. You will be able to attend the annual meeting as well as submit questions and vote during the live webcast of the meeting by visiting www.virtualshareholdermeeting.com/HES2021.

On or about April 23, 2021, we commenced mailing this proxy statement, the notice of annual meeting and the proxy card to stockholders. Holders of record of common stock of the company at the close of business on April 12, 2021 will be entitled to vote at the annual meeting. Each share of common stock will be entitled to one vote. As of April 12, 2021, there were 308,421,378 shares of common stock outstanding and entitled to vote at the annual meeting. There are no other voting securities of the company outstanding. A majority of the outstanding shares of common stock, present in person or represented by proxy, will constitute a quorum at the annual meeting. Abstentions and broker non-votes will be counted as shares present for purposes of determining the presence of a quorum for the transaction of business.

In accordance with Securities and Exchange Commission (“SEC”) rules, we are making our proxy materials available to stockholders over the internet. On or about April 23, 2021, we mailed the Notice of Internet Availability of Proxy Materials to our stockholders (the “Notice”). The Notice contains instructions on how to access this proxy statement and our annual report and submit a proxy over the internet. If you received the Notice by mail, you will not receive a paper copy of the proxy materials unless you request such materials by following the instructions contained in the Notice.

If at the close of business on April 12, 2021 your shares were held in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and the proxy materials, as applicable, are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the annual meeting. As a beneficial owner, you have the right to direct that organization on how to vote the shares in your account. If that organization is not given specific direction, shares held in the name of that organization may not be voted and will not be considered as present and entitled to vote on any matter to be considered at the annual meeting, except with respect to the ratification of the company’s independent auditors. Brokers are not permitted to vote your shares with respect to Proposal 1, the election of directors, Proposal 2, the advisory vote on executive compensation, or Proposal 4, approval of amendment no. 1 to our 2017 long term incentive plan, without your instructions as to how to vote. Please instruct your broker how to vote your shares using the voting instruction form provided by your broker so that your vote can be counted.

If you are a stockholder of record, you can vote by using the internet or by calling a toll-free telephone number. Internet and telephone voting information is provided on the proxy card or the Notice. A control number, located on the instruction sheet attached to the proxy card or the Notice, is designated to verify your identity and allow you to vote your shares and confirm that your voting instructions have been recorded properly. If you vote via the internet or by telephone, there is no need to return a signed proxy card. However, you may still vote by proxy by using the proxy card.

Proxies will be voted at the annual meeting in accordance with the specifications you make on the proxy. If you sign the proxy card or submit a proxy by telephone or over the internet and do not specify how your shares are to be voted, your shares will be voted in accordance with the recommendations of the board of directors. For more information, see “Questions and Answers About the Annual Meeting and Voting” beginning on page 62.

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PROPOSAL 1: ELECTION OF DIRECTORS

Majority Voting Standard

It is intended that proxies will be voted for the nominees set forth below. The company’s by-laws provide for majority voting in uncontested elections of directors, which is the case for the election of directors at the annual meeting. To be elected as a director of the company at the annual meeting, nominees must receive a majority of the votes cast. A majority of votes cast means that the number of shares voted “for” a director’s election exceeds 50% of the number of votes cast with respect to that director’s election. Abstentions and broker non-votes are not counted as votes cast.

If a director is not elected at the annual meeting and no successor has been elected at the annual meeting, the director is required to promptly tender his or her resignation to the board. The corporate governance and nominating committee is then required to make a recommendation to the board as to whether to accept or reject the tendered resignation, or whether other action should be taken. The board will act on the tendered resignation and will publicly disclose its decision and rationale within 90 days following certification of the election results. These procedures are described in full in our by-laws, which may be found on the company’s website at www.hess.com.

It is expected that all candidates will be able to serve. However, if before the annual meeting any nominee in this proxy statement is unable to serve, or for good cause will not serve as a director, the proxy holders will vote the proxies for the remaining nominees and for substitute nominees chosen by the board of directors to fill the vacancy unless the board reduces the number of directors to be elected at the annual meeting.

Nominees for Director

The following table presents information as of January 25, 2021 about the nominees for election as directors of the company at the annual meeting, including the specific experience, qualifications, attributes and skills that led the board to conclude that such person should serve as a director. All of the directors on the board are elected for a one-year term expiring in 2022.

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Director Nominations

The corporate governance and nominating committee is responsible for recommending to the board qualified candidates for election as directors. In advance of each annual meeting, the committee meets to recommend nominees for election at the annual meeting. From time to time throughout the year, the committee reviews the mix of skills, qualifications and experience of the directors currently on the board and seeks to identify individuals whose skills, qualifications and experience will supplement and contribute to the effectiveness of the board. Members of the committee may from time to time meet with potential candidates.

The corporate governance and nominating committee and the board believe that the board collectively should encompass a broad range of skills, expertise, general industry knowledge and diversity of opinion. New perspectives and ideas are essential to the proper functioning of the board as is the experience and institutional knowledge of longer-tenured directors. The board has undergone significant refreshment over the last several years, replacing over 80% of the board since 2013. Ms. Karyn F. Ovelmen, a financial and accounting expert with significant experience in the energy industry, was appointed to the board in November 2020. The corporate governance and nominating committee continues to evaluate potential future candidates to support ongoing refreshment, prioritizing sourcing diverse director candidates with key skills that are important to our strategy.

As noted above, among the criteria used to evaluate nominees for the board is diversity of viewpoints, background and experience, including diversity of race, gender, ethnicity, age, national origin and cultural background. The board believes that such diversity provides varied perspectives which promote active and constructive dialogue among board members and between the board and management, resulting in more effective oversight. The board believes this diversity is demonstrated in the varied backgrounds, experience, qualifications and skills of the current members of the board. In the board’s executive sessions and in annual performance evaluations conducted by the board and its committees, the board from time to time considers whether the members of the board reflect such diversity and whether such diversity contributes to a constructive and collegial environment.

The corporate governance and nominating committee has retained Russell Reynolds Associates, a director and executive search and recruiting firm, to identify and review potential independent director candidates and assist the committee and the board in assessing their qualifications and promoting the consideration of diverse candidates. The committee has not paid fees to any other third parties to assist in identifying or evaluating potential nominees. Each of the nominees for election at the 2021 annual meeting were recommended by the non-management directors of the corporate governance and nominating committee, with the input of senior management, the committee’s consultants and advisors.

In addition, the company has adopted a director retirement policy, which provides that no person may be nominated to stand for election or re-election to the board of directors as a non-management director if the election would take place after such person has attained the age of 75, unless otherwise approved by the board. Upon the recommendation of the corporate governance and nominating committee, the board determined to nominate Mr. Checki to stand for re-election at the 2021 annual meeting. In reaching this decision, the corporate governance and nominating committee and the board considered Mr. Checki’s leadership of the audit committee and the desire for continuity given changes to the composition of the audit committee during 2020 as well as Mr. Checki’s extensive experience in government and public policy, including managing financial and market risks during his tenure at the Federal Reserve Bank of New York.

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2021 PROXY STATEMENT

Proposal 1: Election of Directors + Director Nominations

Stockholder Recommendations and Proxy Access

Stockholders may suggest candidates by writing to the corporate governance and nominating committee, in care of the corporate secretary of the company at the address set forth on page 67. Stockholder suggestions should include a summary of the candidate’s qualifications, the information required by SEC rules for director nominees and contact information for the candidate. Stockholder suggestions should be submitted no later than December 1 for consideration as nominees for election at the next annual meeting and otherwise in accordance with the company’s policy and by-laws. The committee follows the same process of identifying and evaluating nominees recommended by stockholders as that for candidates recommended by any other source.

In 2015, our board adopted a proxy access by-law that permits a stockholder, or group of up to 20 stockholders, owning at least 3% of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials up to the greater of two directors or 20% of our board of directors. Stockholders and nominees must satisfy the requirements set forth in the by-laws in connection with such nominations. We believe that this by-law provision provides meaningful and effective proxy access rights to our stockholders, and balances those benefits against the risk of misuse by stockholders with interests that are not shared by a significant percentage of our stockholders.

Board Evaluation

Our board is committed to continuous improvement and recognizes the importance of a rigorous evaluation process to enhance board performance and effectiveness. Our corporate governance and nominating committee oversees the annual performance evaluation of the board and ensures that each of the board’s committees conducts an annual self-evaluation. The chair of the corporate governance and nominating committee also oversees the evaluation of our board chairman.

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Proposal 1: Election of Directors + Board Leadership Structure / Independent Chairman

Board Leadership Structure / Independent Chairman

Our by-laws provide separate positions for the chairman of the board and chief executive officer. Mr. Quigley serves as the independent chairman of the board and Mr. Hess serves as CEO and a director of the board.

The board currently believes that having a separate chairman and chief executive officer allows for better alignment of corporate governance with stockholder interests and aids in the board’s oversight of management and the board’s ability to carry out its roles and responsibilities on behalf of the stockholders. The board also believes that the separation of the roles of chairman and chief executive officer allows the chief executive officer to focus more of his time and energy on operating and managing the company and leverages the chairman’s leadership and financial, governance and regulatory experience.

The chairman, an independent member of the board who has not previously served as an executive officer of the company, is appointed by the board annually.

Director and Nominee Independence

The board of directors has affirmatively determined that all of the current directors on the board, other than Mr. Hess, and that ten of the eleven nominees for election at the annual meeting, namely, Mr. Checki, Mr. Coleman, Mr. Duato, Ms. Holiday, Mr. Lipschultz, Mr. McManus, Dr. Meyers, Ms. Ovelmen, Mr. Quigley, and Mr. Schrader, are independent within the meaning of the rules and standards of the NYSE. The board determined that these directors and nominees not only met all “bright-line” criteria under these rules, but also that, based on all known relevant facts and circumstances, there did not exist any relationship that would compromise the independence of these directors.

Meeting Attendance

The board of directors met ten times in 2020, including two special meetings. Each director attended at least 75% of the aggregate of all board of directors meetings and all meetings of the committees of the board of directors on which he or she served during 2020.

Non-management directors meet without members of management present after each regularly scheduled board meeting. The chairman of the board of directors presides at these meetings.

All of the current directors who were serving as a director at the time of last year’s annual meeting attended that meeting.

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Corporate Governance Guidelines

The board has approved a set of corporate governance guidelines in accordance with the rules of the NYSE. These guidelines set forth the key policies relating to corporate governance, including director qualification standards, director responsibilities and director compensation. The board has also approved a code of business conduct and ethics in accordance with rules of the NYSE and the SEC applicable to all directors, officers and employees, including the chief executive officer, the principal financial and accounting officer and other senior financial officers. The code is intended to provide guidance to directors and management to assure compliance with law and promote ethical behavior. Copies of the company’s corporate governance guidelines and its code of business conduct and ethics may be found on the company’s website at www.hess.com and are also available without charge upon request to the company’s corporate secretary at the address set forth on page 67.

Stockholder and Interested Party Communications

Any stockholder or interested party who wishes to communicate or request a meeting with members of the board of directors or with only non-management directors or any specified individual director may do so by writing to them in care of the chairman of the board of directors, Hess Corporation, at the address set forth on page 67. Stockholders may also communicate directly to the chairman by e-mail to BoardChairman@hess.com. Communications sent by mail or e-mail will be reviewed by the chairman and will be referred for resolution and response as deemed appropriate by the chairman. If a stockholder requests a meeting, the corporate governance and nominating committee will decide whether the subject matter is a proper one to be addressed by the board and, if so, whether a meeting is warranted. The corporate governance and nominating committee will meet periodically to review all stockholder communications received.

Related Party Transactions

The company expects all directors and executive officers to bring to the company’s attention any related party transactions, including transactions which may be required to be disclosed under Item 404 of Regulation S-K promulgated by the SEC. The company’s policies provide that if any company representative, including a director or officer, considers conducting any transaction that reasonably would be expected to give rise to a conflict of interest between the representative and the company, such representative must disclose such transaction in advance to the company’s legal department for review. In addition, the company annually sends each director and executive officer a questionnaire requiring such person to describe any transaction contemplated under Item 404 or in the case of independent directors, any transaction that might compromise their independence. The company also annually conducts a review of its accounting records to determine whether any such related party transaction occurred in the prior fiscal year. If any proposed or existing related party transaction is identified, the transaction is brought to the general counsel for review. If the general counsel determines the transaction poses a conflict of interest, or would compromise the independence of a non-management director, the general counsel will advise the audit committee of the transaction and the disinterested members of the audit committee will determine whether the transaction serves the best interest of the company and its stockholders and whether if proposed, it may proceed and if existing, it may continue to exist. The general counsel and the disinterested members of the audit committee will determine the appropriate scope of, and process for, the review of any such transaction based on the then existing facts and circumstances of the transaction in view of applicable listing standards of the NYSE.

In June 2020, Mr. Hess purchased certain pieces of art owned by the company for a total of approximately $844,000 in cash. The company obtained an independent appraisal, and Mr. Hess purchased the artwork at the highest appraised value. The transaction was reviewed and approved by the audit committee in accordance with the company’s policies.

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Committees of the Board

The board has four standing committees: the compensation and management development committee, the corporate governance and nominating committee, the audit committee and the environmental, health and safety committee. Each committee’s written charter is available on our website at www.hess.com and also available without charge upon request to the company’s corporate secretary at the address set forth on page 67. The board receives regular reports from each committee and discusses matters of particular concern or importance.

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Report of the Audit Committee

The audit committee of the board of directors oversees the company’s financial reporting on behalf of the board. Management is responsible for the system of internal controls and for preparing financial statements. Ernst & Young LLP, the company’s independent registered public accountants, are responsible for expressing an opinion on the effectiveness of internal controls over financial reporting and the fair presentation of the financial statements in conformity with generally accepted accounting principles. The audit committee is composed of independent directors and operates in accordance with a charter approved by the board of directors, which is available at www.hess.com. The charter sets forth the audit committee’s responsibilities, which are summarized under “Committees of the Board” on page 11. The committee reviews its charter annually and, when appropriate, makes recommendations for changes to the board.

2020 Actions of the Audit Committee

The audit committee met six times during 2020 and met in executive session after each of those meetings. Additionally, the audit committee met three times to review quarterly financial results, with one quarterly review occurring during a regular meeting in 2020.

During 2020, the audit committee met with management, Ernst & Young LLP and internal auditors and among other things:

The audit committee also met separately with Ernst & Young LLP and the internal auditors without management present.

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Assessment of Independent Registered Public Accountants

The audit committee reviews the scope of and overall plans for the annual audit and negotiates fees and approves the other terms of Ernst & Young LLP’s engagement letter. The audit committee also oversees the periodic required rotation of the lead audit partner, as required by SEC rules, and is directly involved in the selection of such partner.

The audit committee discussed with Ernst & Young LLP their independence from management and the company and considered the compatibility of all non-audit services with the auditors’ independence. The audit committee also assessed the qualifications and performance of Ernst & Young LLP in determining whether to retain them. In conducting this assessment, the audit committee considered, among other things: information relating to audit effectiveness, including the results of PCAOB inspection reports; the depth and expertise of the audit team, including their demonstrated understanding of the company’s businesses, significant accounting practices, and system of internal control over financial reporting; the quality and candor of Ernst & Young LLP’s communications with the audit committee and management; the accessibility, responsiveness, technical competence, and professionalism of the lead audit partner and other members of the audit team assigned to our account; the impact to the company of changing auditors; the appropriateness of Ernst & Young LLP’s fees; and Ernst & Young LLP’s ability to employ professional skepticism, objectivity, integrity, and trustworthiness.

The audit committee reviewed the audited December 31, 2020 financial statements of the company with management and the independent registered public accountants. Management represented to the committee that the financial statements were prepared in accordance with generally accepted accounting principles. In reliance on the reviews and discussions with management and the independent registered public accountants, the audit committee recommended to the board of directors, and the board approved, the inclusion of the audited financial statements in the annual report on Form 10-K for the year ended December 31, 2020 filed with the SEC. Based on its assessment and review as described in this report, the audit committee has determined that selecting Ernst & Young LLP as independent registered public accountants for 2021 is in the best interest of the company and its stockholders. The board has unanimously proposed that the stockholders ratify this selection at the annual meeting.

Committee Members:

Terrence J. Checki, Chair

Kevin O. Meyers

Karyn F. Ovelmen

James H. Quigley

William G. Schrader

The Report of the Audit Committee does not constitute soliciting material, and shall not be deemed to be filed or incorporated by reference into any other company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except to the extent that the company specifically incorporates the Report of the Audit Committee by reference therein.

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Stockholder Engagement

We engage with our stockholders on a regular basis to ensure we fully understand the factors they consider to be most important when evaluating our company. The purpose of our stockholder engagement program is to discuss and solicit stockholder views on our strategy, business plan, EHS & SR matters, human capital management, diversity, corporate governance and other matters of concern, including executive compensation.

During 2020, our CEO and other members of senior management, at times accompanied by our independent chairman, conducted a broad outreach effort to investors representing, in the aggregate, approximately 70% of our outstanding shares. In light of the ongoing health and safety concerns and in order to protect our stockholders, employees and others and align with relevant gathering and travel restrictions, meetings were held virtually after mid-March 2020.

Robust stockholder engagement program throughout the year

Risk Oversight

The board of directors has oversight of the company’s risk management policies with an emphasis on understanding the key enterprise risks affecting the company’s business and the ways in which the company attempts to prudently mitigate such risks, to the extent reasonably practicable and consistent with the company’s long-term strategies. Additionally, each of the board’s committees is assigned with overseeing risk management specific to their scope of responsibilities, as illustrated below. Management applies a comprehensive, standardized approach to identifying and managing risks of all types across our operations. Our enterprise risk management process is used to develop a holistic risk profile for each asset and major project, drawing input from subject matter experts, performance data, incident investigations, lessons learned and recent internal audits. In these risk assessments, we identify each risk and assess its likelihood and potential impact to people, the environment, our reputation and our business, as well as other risks as appropriate.

Periodically, the chief risk officer presents a comprehensive review of the company’s enterprise levels risks, the status of the enterprise risk program and risk management strategies utilized by the company under its corporate risk policy to the audit committee, which has been delegated primary responsibility for oversight of the company’s risk management practices. The audit committee and the board will also receive updates at meetings during the year on any particular matters relating to specific risks that management believes needs to be brought to the attention of the committee or the board. In addition, the company conducts an annual risk assessment to determine the extent, if any, to which the company’s compensation programs and practices may create incentives for excessive risk-taking. For a discussion of this assessment, see “Compensation and Risk” on pages 47-48.

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Cyber-security is an integral part of risk management at Hess. The board appreciates the rapidly evolving nature of threats presented by cyber-security incidents and is committed to the prevention, timely detection, and mitigation of the effects of any such incidents on the company. The audit committee receives an annual report and quarterly updates from management regarding cyber-security, including the nature of threats, defense and detection capabilities, incident response plans and employee training activities. The company has not experienced a material cyber-security breach within the past three years. The company has an ongoing information security training and compliance program that occurs quarterly and is mandatory for all employees, maintains property and casualty insurance that may cover damages caused as a result of a cyber-security event, and is externally audited based on corporate standards aligned to the NIST Cybersecurity Framework.

Board Oversight of Corporate Culture and Human Capital Management

We are committed to having an engaged, diverse and inclusive workplace that fosters learning, development and innovation. The board is actively engaged in overseeing our values and its connection to our long-term strategy. Directors have the opportunity to participate in our culture first-hand through interactions with employees and visits to our assets and offices. Through the compensation and management development committee, the board meets with management to understand and monitor company culture and its alignment with our values and strategic business priorities. Employee turnover, diversity, equity and inclusion and leadership development metrics, along with qualitative data are considered by our Diversity, Equity and Inclusion Council at the executive level and are also discussed at the compensation and management development committee regularly throughout the year and shared with our board of directors. The entire board attends the compensation and management development committee meetings that involve reviews and discussions of CEO performance objectives, evaluations, management succession and compensation.

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Ownership of Voting Securities by Certain Beneficial Owners

The following table sets forth, as of April 12, 2021 for Messrs. Hess, Brady, Kean and Goodwillie and as of December 31, 2020 for the other beneficial owners identified in the table, information as to the ownership of more than 5% of any class of the company’s voting securities by beneficial owners known by the company to hold more than 5% of any such class:

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Ownership of Equity Securities by Management

The table below sets forth as to each director, nominee and named executive officer, and all directors, nominees and executive officers as a group, information regarding their ownership of equity securities of the company on April 12, 2021. The persons listed below have sole voting and investment power as to all shares indicated except as set forth in the footnotes to the table. Where no information appears in the column “Percent of outstanding shares of common stock owned,” the securities held represent less than 1% of the common stock outstanding.

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Director Compensation

The following table shows compensation for services rendered by our non-employee directors during 2020.

Each director who was not an employee of the company or any of its subsidiaries receives an annual cash retainer of $110,000 for membership on the board of directors and the independent chairman of the board receives an additional annual cash retainer of $185,000. Directors receive an additional annual cash fee of $25,000 for service on the audit committee, $5,000 for service on the EHS committee and $10,000 for service on each of the other committees of the board of directors on which such director serves. The chairperson of the audit committee receives an annual cash fee of $30,000, the chairperson of the EHS committee receives an annual cash fee of $10,000 and the chairperson of each of the other board committees receives an annual cash fee of $15,000. In addition, each non-employee director receives shares of fully vested common stock constituting approximately $175,000 in value on the date of award. These awards are made from shares purchased by the company in the open market. For 2020, Mr. Chase and Mses. Lavizzo-Mourey and Ovelmen received a pro-rated retainer based on their length of service on the board in 2020.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) explains the key elements of our executive compensation program and 2020 compensation decisions for our named executive officers (“NEOs”). The compensation and management development committee of our board of directors (the “compensation committee” or the “committee”), with input from its independent compensation consultant, oversees these programs and determines compensation for our NEOs.

For fiscal year 2020, our NEOs were:

A Special Note Regarding COVID-19

This CD&A describes our executive compensation programs including pay and performance outcomes for 2020. In early March 2020, the committee approved 2020 compensation decisions for our NEOs, including title and salary updates and establishing 2020 AIP targets and LTI targets, as described below. Payouts under the AIP and PSU programs are determined based on attainment of pre-established metrics and are highly sensitive to shareholder returns and our operational performance. Shortly thereafter, COVID-19, in conjunction with global oil market disruptions, severely impacted demand for oil. In response, the company implemented a number of cost-saving measures, including reducing its E&P capital and exploratory spend, ending the year at $1.8 billion, representing a 40% reduction from the original budget of $3.0 billion. The committee observed that global economic conditions warranted changes to the previously approved 2020 AIP. When assessing possible changes, the committee focused on (i) finding opportunities to reduce the company’s cash expense in-line with the company’s other cost saving measures, and (ii) ensuring that the AIP continued to serve as a performance driver, with rigorous but attainable goals.

In support of these objectives, in June 2020, the committee determined to reduce the maximum payout under the AIP from 200% to 50% of target. The committee believed that limiting the AIP payout for 2020 to 50% of target ensured that management shared in the necessary sacrifices to achieve our critical strategic initiative of preserving cash while also maintaining salaries and benefits for employees across the company. In addition, the committee approved adjustments to weightings and targets for certain annual enterprise-level metrics to reflect the company’s shift in priorities given the dramatically changed economic and oil price environment. Revised AIP targets were intended to preserve the rigor of initial 2020 incentive targets in this context to continue incentivizing management to make positive progress during a year of significant market uncertainty.

CD&A Table of Contents

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Executive Compensation + Compensation Discussion and Analysis

Executive Summary

Our compensation program is focused on building long-term value in an industry where oil and gas reserves are depleted annually and investments require significant capital and generally take several years before yielding returns. It is critical we maintain and grow our resource base in a capital disciplined manner while ensuring our cost of production is sufficiently low to generate returns for our stockholders in a low oil price environment. The board believes that our compensation program should set short-term targets that lead to long-term success and long-term targets based on shareholder returns, which we believe is the most effective measure of long-term value creation currently available. As a result, our annual incentive plan is designed to maintain an annual focus on management’s day-to-day efforts on outcomes largely within its control, with a strong emphasis on formulaic, metrics-driven enterprise results. Our long-term incentive plan focuses on longer term objectives, including stockholder value creation and alignment of management’s interests with those of our stockholders.

Summary of Business and Strategy. Hess Corporation is a global Exploration and Production (“E&P”) company engaged in the exploration, development, production, transportation, purchase and sale of crude oil, natural gas liquids, and natural gas. Our strategy is to grow our resource base, have a low cost of supply and sustain cash flow growth – investing in high return, low cost projects to move down the cost curve and be profitable in a lower price environment with increasing cash generation and returns to stockholders. Consistent with this strategy, we have built a differentiated portfolio that is balanced between short cycle and long cycle assets, with Guyana as our growth engine and the Bakken, Gulf of Mexico and Southeast Asia as our cash engines. We are confident in our company’s strategy, positioning us to manage through a low price environment to deliver long-term value to our stockholders.

Compensation Actions as a Result of Proactive Stockholder Engagement. Over the last several years, the committee has implemented a number of changes to our compensation program to align with a low oil price environment, our portfolio changes and feedback we received from shareholders, which include increasing the performance contingent component of our NEO’s LTI awards from 50% to 80%, eliminating restricted stock from the CEO’s LTI mix, and adding returns and cash flow metrics to AIP awards, among other changes. In early 2020, COVID-19, along with its economic and oil price impact, led to significant declines in the market value of our stock and that of our peers in the oil and gas sector and presented a challenging business environment.

The committee took the following compensation actions in 2020 and determined 2020 payout results:

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Executive Compensation + Compensation Discussion and Analysis

The committee follows a rigorous target setting process each year to ensure the enterprise performance metrics of our AIP include challenging, yet attainable, targets for executives designed to align our executives’ interests with those of our stockholders. The committee also considers a number of factors when determining appropriate individual AIP target percentages, including the executive’s position within the company, his or her corresponding responsibilities, and the competitive annual incentive opportunity for similar positions in other companies in our industry. The committee will also assess the outcomes of the prior year in making its decision on the targets for the current year. For 2020, the committee approved adjustments to weightings and targets for certain annual enterprise-level metrics to reflect the company’s shift in priorities given the economic crisis. The revised AIP targets preserved the rigor of the initial 2020 incentive targets while responding decisively to the disruptions in the global oil markets.

Compensation Actions in 2021. The committee approved the addition of two additional peer companies, Cabot Oil & Gas Corporation and EQT Corporation, to diversify the 2021 peer group in light of the consolidation of the company’s existing peers. Additionally, in March 2021, the committee approved changes to the 2021 AIP performance metrics to include a Bakken flaring reduction target, further emphasizing the importance of greenhouse gas emissions reduction and its integration into the company’s strategy and operations.

Corporate Performance. We built upon our strong performance in 2018 and 2019 to achieve a number of important milestones in Guyana and the Bakken, while substantially reducing cash costs and capital and exploratory expenditures in response to the sharp decline in oil prices due to COVID-19. In the first quarter of 2020, we reduced our E&P capital and exploratory budget for 2020 to $1.9 billion, and we ended the year with capital and exploratory expenditures of $1.8 billion, representing a 40% reduction from the original budget of $3.0 billion. This reduction was achieved primarily by shifting from a six rig program to one rig in the Bakken, which was accomplished in May, deferral of some 2020 development activities on the Stabroek Block, offshore Guyana, and deferral of discretionary spending across the portfolio. We also reduced cash operating costs by $275 million from our original 2020 budget. In March 2020, Hess entered into a $1.0 billion three year term loan agreement, and in November 2020, we sold our 28% working interest in the Shenzi Field for a total consideration of $505 million, before closing adjustments.

The enterprise performance metrics of our annual incentive program are designed to reward management for progress made against challenging, measurable goals that align with our overall company strategy that incentivize strong near- and long-term performance, without promoting excessive risk-taking. In 2020, the committee considered the progress made against each of these metrics in determining executive compensation payouts under the annual incentive program:

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Executive Compensation + Compensation Discussion and Analysis

We are focused on building long-term value in an industry where investments require significant capital and generally take several years before generating returns. The board believes that total shareholder returns are the most effective measure of long-term value creation currently available. Accordingly, vesting and payouts under our PSUs are tied to relative TSR to effectively measure our performance compared to peers. As we were transitioning our long-term strategy to a pure-play E&P company, our 3-year relative TSR was not as strong as some of our peers and our PSUs paid out at 75%, 63% and 67% of target for the 2016-2018, 2015-2017 and 2014-2016 performance cycles, respectively. For the 2017-2019 and 2018-2020 performance cycles, our 3-year TSR was second and first among peers, respectively, resulting in a PSU payout at 200% of target. Our ability to navigate the low oil price environment and COVID-19 has resulted in our TSR far exceeding our peer companies, as indicated by our 3-year TSR performance as of December 31, 2020.