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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
 
 
Filed by the Registrant 
Filed by a Party other than the Registrant 
Check the appropriate box:
 
   Preliminary Proxy Statement
  
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
   Definitive Proxy Statement
   Definitive Additional Materials
   Soliciting Material Pursuant to
§240.14a-12
NATIONAL FUEL GAS COMPANY
(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):
 
  
No fee required.
  
Fee paid previously with preliminary materials.
  
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
14a6(i)(1)0-11.
 
 
 


Table of Contents
 

 

LOGO

 

2025

Proxy

Statement

 

 
 

 

and Notice of Annual Meeting of Stockholders

to be held on March 13, 2025

 

 

 

 

 

 
 

            

 

 

 

 

 


Table of Contents

National Fuel Gas Company

6363 MAIN STREET

WILLIAMSVILLE, NEW YORK 14221

January 24, 2025

Dear Stockholders of National Fuel Gas Company:

Each year, our proxy statement provides you with a brief summary of the Company’s recent operations and detailed information relating to the items on the agenda for you to vote on at the Annual Meeting of Stockholders. As we did last year, our Board of Directors has determined to hold the 2025 Annual Meeting virtually, via a live webcast. The electronic webcast meeting will afford stockholders the same rights and access as if the meeting were held in person, including the ability to vote shares electronically during the meeting.

The meeting will be held at 10:00 a.m. Eastern Time on March 13, 2025, conducted via live webcast at www.virtualshareholdermeeting.com/NFG2025. The matters on the agenda for the meeting are outlined in the enclosed Notice of Annual Meeting and Proxy Statement.

At the meeting, you will be asked to consider and vote on three proposals, all as explained in more detail in the proxy statement: (1) the election of eleven directors; (2) advisory approval of named executive officer compensation; and (3) ratification of the appointment of the Company’s independent public accounting firm. Your Board of Directors unanimously recommends that you vote FOR each of the director nominees and FOR proposals 2 and 3.

So that you may elect Company directors and secure the representation of your interests at the Annual Meeting, we urge you to vote your shares. The preferred methods of voting are by telephone, by Quick Response Code (“QR Code”) or by Internet as described on the proxy card. These methods are both convenient for you and reduce the expense of soliciting proxies for the Company. If you prefer not to vote by telephone, QR Code or the Internet, please complete, sign and date your proxy card and return it by mail. The Proxies are committed by law to vote your shares as you instruct on the proxy card, by telephone, by QR Code or by Internet.

Your vote is always important. Stockholder voting is the primary means by which stockholders can influence a company’s operations and its corporate governance. In fact, stockholders who do vote can influence the outcome of proposals in greater proportion than their percentage share ownership.

Please make your voice heard by voting your shares.

Even if you plan to attend the Annual Meeting virtually, we encourage you to promptly vote your shares in advance of the meeting, by telephone, by QR Code or by Internet, or to complete, sign, date and return your proxy card. If you later wish to vote at the Annual Meeting, you can revoke your proxy by giving written notice to the Secretary of the Annual Meeting and/or the Trustee (as described in the proxy statement), and/or by casting your ballot at the Annual Meeting.

Please review the proxy statement and take advantage of your right to vote.

Sincerely yours,

David P. Bauer

President and Chief Executive Officer


Table of Contents

Notice of Annual Meeting of Stockholders

to be held on March 13, 2025

To the Stockholders of National Fuel Gas Company:

Notice is hereby given that the Annual Meeting of Stockholders of National Fuel Gas Company (the “Company”) will be held at 10:00 a.m. Eastern Time on March 13, 2025, conducted via live webcast at www.virtualshareholdermeeting.com/NFG2025. At the meeting, action will be taken with respect to:

 

  (1)

The election of eleven directors to hold office for one-year terms, as provided in the attached proxy statement and until their respective successors have been elected and qualified;

 

  (2)

Advisory approval of named executive officer compensation;

 

  (3)

Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal 2025;

and such other business as may properly come before the meeting or any adjournment or postponement thereof.

Stockholders of record at the close of business on January 13, 2025, will be entitled to vote at the meeting.

BY ORDER OF THE BOARD OF DIRECTORS

Michael W. Reville

General Counsel and Secretary

January 24, 2025

Attending the Annual Meeting

 

 

National Fuel Gas Company is holding the Annual Meeting in a virtual meeting format only, conducted via live webcast. Stockholders will not be able to attend the meeting in person.

 

Please visit www.virtualshareholdermeeting.com/NFG2025 in order to attend and to participate in the virtual meeting, where you will be prompted to enter the 16-digit control number found on your proxy card or your voting instruction form provided by your broker, bank, or other nominee.

If you receive your Annual Meeting materials electronically and wish to attend the virtual meeting, please follow the instructions provided online for attendance. Once you have joined the virtual meeting, you may vote your shares electronically during the meeting by following the instructions available on the meeting website, although we encourage you to vote in advance of the meeting. Only stockholders or their valid proxy holders may participate in the meeting. If you plan on attending the virtual meeting, we encourage you to allow ample time to log in online and recommend that you do so fifteen minutes before the meeting start time to ensure that you are logged in when the meeting begins.


Table of Contents

 

 

Your Vote is Important

Please vote by telephone, by QR Code or by Internet.

Whether or not you plan to attend the meeting, and whatever the number of shares you own, please vote your shares by telephone, by QR Code or by Internet as described in the proxy/voting instruction card and reduce National Fuel Gas Company’s expense in soliciting proxies. Alternatively, you may complete, sign, date and promptly return the proxy/voting instruction card by mail.

Why Your Vote is Important

 

 

Q: Who is asking for my vote and why am I receiving this document?

A: The Board of Directors asks that you vote on the matters listed in the Notice of Annual Meeting, which are more fully described in this proxy statement. This proxy statement is a document that Securities and Exchange Commission regulations require we give you when we ask you to sign a proxy designating individuals to vote on your behalf. A proxy, if duly executed and not revoked, will be voted and, if it contains any specific instructions, will be voted in accordance with those instructions.

Q: How many shares are not voted at the Annual Meeting on non-routine matters (proposals other than the ratification of accountant)?

A: At recent Annual Meetings, approximately 10% to 20% of our shares have not been voted on non-routine matters. IF YOU HOLD YOUR SHARES AT A BROKERAGE FIRM, YOU MUST TELL YOUR BROKER HOW TO VOTE YOUR SHARES. Since 2010, brokers have not been able to vote customer shares on non-routine matters. Stockholder voting is the primary means by which stockholders can influence a company’s operations and its corporate governance, so your vote is important.

Q: How can I vote?

A: To reduce costs and conserve resources, we send some of our stockholders a notice advising them that our materials for this meeting are available on the Internet. The notice contains instructions to (i) electronically access the materials; (ii) vote via the Internet; and (iii) request a paper copy of the materials by mail, if desired. Other stockholders have received our proxy materials by U.S. mail. In either case, there are four ways to vote by proxy:

 

   

Vote by Phone by calling 1-800-690-6903: You will need information from your proxy card to vote; have it available and follow the instructions provided.

 

   

Vote by scanning the Quick Response Code  LOGO (“QR Code”) on the proxy card: By accessing the QR site through the proxy card you can vote your shares.

 

   

Vote by Internet by going to www.proxyvote.com: You will need information from your proxy card to vote; have it available and follow the instructions provided.

 

   

Vote by Mail: Complete and return the proxy card in the prepaid and addressed envelope.

You may also vote at the Annual Meeting. However, if you are the beneficial owner of the shares, you must obtain a legal proxy from the stockholder of record, usually your bank or broker. A legal proxy identifies you, states the number of shares you own, and gives you the right to vote those shares. Without a legal proxy we cannot identify you as the owner and will not know how many shares you have to vote.

 

To attend and vote at the Annual Meeting, you will need the 16-digit control number found on your proxy card or your voting instruction form provided by your broker, bank, or other nominee.

Please visit www.virtualshareholdermeeting.com/NFG2025 on the date and at the time specified in the Notice of Annual Meeting of Stockholders. You will be prompted to enter your 16-digit control number to attend the meeting.

 

 


Table of Contents

Table of Contents

 

Proxy Statement Overview and
Fiscal 2024 Summary
    1  
General Information     11  
PROPOSAL 1. Election of Directors     14  

Nominees for Election as Directors at the
2025 Annual Meeting of Stockholders

    15  
Corporate Governance     27  

Diversity

    27  

Director Independence

    27  

Board Leadership Structure

    27  

Annual Meeting Attendance

    28  

Meetings of the Board of Directors
and Standing Committees

    28  

Method of Evaluating Board and Committee Effectiveness

    30  

Process for Nominating Directors

    30  

Charitable Contributions by Company

    30  

Compensation Committee Interlocks
and Insider Participation

    31  

Risk Oversight

    31  

Related Person Transactions

    31  

Code of Ethics

    32  
Director Compensation     33  
Director Compensation Table —
Fiscal 2024
    34  
Audit Fees     35  
Audit Committee Report     36  
Security Ownership of Certain
Beneficial Owners and Management
    38  
Equity Compensation Plan
Information
    40  
Executive Compensation     41  

Compensation Committee Report

    41  

Compensation Discussion and Analysis

    41  

Fiscal 2024 Summary Compensation Table

    61  

Grants of Plan-Based Awards in Fiscal 2024

    63  

Outstanding Equity Awards at Fiscal 2024 Year-End

    65  

Option Exercises and Stock Vested in Fiscal 2024

    67  

Fiscal 2024 Pension Benefits

    68  

Fiscal 2024 Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans

    69  

Fiscal 2024 Potential Payments Upon Termination or Change in Control

    71  

CEO Pay Ratio

    76  

Pay Versus Performance

    77  

Executive Officer and Director Hedging

    81  
PROPOSAL 2. Advisory Approval of
Named Executive Officer Compensation
    82  
PROPOSAL 3. Ratification of
Appointment of Independent
Registered Public Accounting Firm
    83  
Important Notice Regarding
Delivery of Stockholder Documents
    84  
Proposals of Security Holders
for the 2026 Annual Meeting
    85  
Other Business     86  
Where You Can Find Additional Information     87  

 

 

 

Your Vote is Important!

 

Please vote by phone, by QR Code or by

Internet, or complete, sign, date and

return your proxy card.

 

 

 

 

LOGO

     National Fuel Gas Company |2025 PROXY STATEMENT   i


Table of Contents
 

Proxy Summary

    LOGO  

 

This proxy statement contains certain “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements should be read with the cautionary statements and important factors included under the heading “Safe Harbor for Forward-Looking Statements” in National Fuel Gas Company’s (“National Fuel” or the “Company”) Form 10-K at Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and with the information included in the Company’s Form 10-K at Item 1A “Risk Factors”. Forward-looking statements are all statements other than statements of historical fact, including, without limitation, statements regarding future prospects, plans, objectives, goals, projections, estimates of oil and gas quantities, emissions reduction targets, strategies, future events or performance and underlying assumptions, capital structure, anticipated capital expenditures, completion of construction projects, projections for pension and other post-retirement benefit obligations, impacts of the adoption of new authoritative accounting and reporting guidance, and possible outcomes of litigation or regulatory proceedings, as well as statements that are identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may” and similar expressions.

Proxy Statement Overview and Fiscal 2024 Summary

This overview and summary highlights information contained elsewhere in this proxy statement and also includes certain additional information regarding business performance and corporate responsibility, including environmental, social and governance (“ESG”) matters. This overview and summary does not contain all of the information that you should consider, and you should read the Company’s 2024 Annual Report and this entire proxy statement carefully before voting.

Annual Meeting Voting Matters

 

 

The table below summarizes the matters that will be subject to the vote of stockholders at the 2025 Annual Meeting of Stockholders of National Fuel Gas Company:

 

PROPOSALS

  

BOARD VOTE

RECOMMENDATION

  

PAGE NUMBER

(for additional details)

1. Election of Directors

   FOR ALL NOMINEES    Page 14

2. Advisory Approval of Named Executive Officer Compensation

   FOR    Page 82

3. Ratification of Appointment of Independent Registered Public Accounting Firm

   FOR    Page 83

 

 

LOGO

     National Fuel Gas Company |2025 PROXY STATEMENT   1


Table of Contents

Proxy Summary

 

Annual Meeting of Stockholders

 

 

 

 

LOGO

DATE AND TIME

March 13, 2025 at

10:00 a.m. Eastern Time

 

   

 

LOGO

WEBSITE

www.virtualshareholdermeeting.com/NFG2025

   

 

LOGO

RECORD DATE

January 13, 2025

Voting Details

Stockholders as of the record date are entitled to one vote for each share of common stock for each director nominee and each other proposal to be voted.

Voting Deadline

Votes must be received by March 12, 2025 (unless attending virtually). For stock that is held in employee benefit plans votes must be received by noon on March 11, 2025.

Attending the Virtual Meeting

National Fuel stockholders as of the record date are entitled to attend the annual meeting virtually. To participate in the meeting, please visit www.virtualshareholdermeeting.com/NFG2025, where you will be prompted to enter the 16-digit control number found on your proxy card or your voting instruction form provided by your broker, bank, or other nominee. Please see “Attending the Meeting” on page 12.

National Fuel Gas Company Fiscal 2024 Summary

 

 

Fiscal 2024 continued National Fuel’s positive momentum with strong execution across each of our segments. Within our Pipeline and Storage segment, National Fuel Gas Supply Corporation (“Supply”) concluded its rate proceeding at the Federal Energy Regulatory Commission (“FERC”), with increased rates effective February 2024. These new rates are expected to add $56 million in annualized revenue and contributed to the 9% revenue growth in this segment during the year.

In our Utility segment, earnings increased by approximately 18% over the prior year, driven by National Fuel Gas Distribution Corporation’s (“Distribution”) settlement of a rate proceeding in its Pennsylvania jurisdiction, effective August 2023. Furthermore, in December 2024, the New York Public Service Commission approved a three-year settlement of Distribution’s rate proceeding in its New York jurisdiction, which is expected to add $57 million to annual base rates in fiscal 2025, effective January 2025.

Turning to our Appalachian natural gas development program, in fiscal 2024, Seneca and National Fuel Gas Midstream Company, LLC (“Midstream”), our gathering business, completed their transition to a development plan substantially focused on the Company’s Eastern Development Area (“EDA”) acreage in Pennsylvania. Since commencing this transition in mid calendar year 2023, Seneca has achieved continued strong well results, driving record production and gathering throughput, and a meaningful improvement in capital efficiency.

Further, in 2024 National Fuel maintained and enhanced its long-standing commitment to returning cash to shareholders by announcing its 54th consecutive dividend increase, to an annual rate of $2.06 per share, and a new $200 million share repurchase program. This combination of meaningful growth potential and commitment to shareholder returns puts National Fuel in a position to deliver meaningful shareholder value over the years to come.

 

 

LOGO

2    National Fuel Gas Company |2025 PROXY STATEMENT    


Table of Contents

Proxy Summary

 

2024 Financial and Operating Highlights

 

 

Increased Dividend for 54th Consecutive Year

In June, the Board of Directors increased the Company’s annual dividend rate by 4% to $2.06 per share, continuing our long track record of consecutive dividend increases and our 122nd year of uninterrupted dividend payments.

Authorized $200M Share Repurchase Program

In March, the Board of Directors authorized a $200 million share repurchase program, and the Company repurchased $65 million of common stock during fiscal 2024. The Company views the share buyback program as an opportunistic way to enhance shareholder returns.

Record Natural Gas Production and Gathering Throughput

Seneca’s net production increased to 392 billion cubic feet equivalent (“Bcfe”), up 5% from the prior year, driving a corresponding 6% increase in Gathering segment throughput and revenue.

Increasing Capital Efficiency

Seneca improved its capital efficiency in fiscal 2024, as it increased production while meaningfully reducing capital expenditures. This increased capital efficiency, a trend expected to continue in the years to come, is a testament to our dedicated employees and high-quality acreage in the EDA.

Strong Regulated Business Results Driven by Recent Ratemaking Activity

Pipeline and Storage segment revenues increased $33.2 million, or 9%, from the prior year, primarily due to the settlement of the Supply rate case, which led to increased rates effective February 2024.

Utility segment net income increased $8.7 million, or 18%, compared to the prior year, largely attributable to the continued impact of a rate settlement in Distribution’s Pennsylvania service territory, effective August 2023. Also, in December 2024, Distribution received approval of a three-year settlement of a rate proceeding in its New York jurisdiction. This settlement includes an $86 million annual revenue requirement increase over three years, with the first-year impact of $57 million in fiscal 2025 and the remainder in fiscal 2026 and 2027.

Gathering Assets Re-verified Under Equitable Origin Standard and Seneca Achieved Re-certification Under MiQ

In October, the Company announced that 100% of Midstream’s assets, which gather approximately 1.2 Bcfe of natural gas daily, achieved re-verification under Equitable Origin’s EO100TM Standard for Responsible Energy Development. Seneca also announced it had been re-certified by MiQ and was awarded an “A” grade (the highest certification level available) for 100% of its Appalachian natural gas production assets, which produce over 1 billion cubic feet of gross production per day.

 

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Proxy Summary

 

Our Commitment to Corporate Responsibility

 

 

Publication of Annual Corporate Responsibility Report

In September, National Fuel issued its annual Corporate Responsibility Report, which highlights the Company’s ongoing initiatives to support the long-term sustainability of its integrated natural gas business, including its emissions reduction metrics. The Company’s Corporate Responsibility disclosures are aligned with the Sustainability Accounting Standards Board (SASB) framework for each of the Company’s principal business segments, as well as the Task Force on Climate-Related Financial Disclosures (TCFD).

 

Governance    Sustainability    Human Capital    Community

  Board Oversight: Corporate Responsibility and Sustainability oversight via Nominating/Corporate Governance Committee

 

  Regular Board-Level Discussion: Board receives quarterly reports from management regarding corporate responsibility and sustainability

 

  Establishment of Management-Level Committees: Corporate Responsibility Executive and Management Committees devoted to corporate responsibility initiatives and disclosures

 

  Short-term Executive Compensation Metrics: Executive compensation tied to safety, environmental stewardship and human capital

 

  Long-term Executive Compensation Metrics: Executive compensation tied to GHG and methane intensity emissions reduction targets

  

  Progress Towards Emissions Reduction Goals: Disclosed ongoing sustainability initiatives driving progress towards significant methane intensity reduction targets for each business, as well as an absolute GHG emissions target for the consolidated Company

 

  Third Party Emissions Verification: Independent third-party verification of Scope 1 and 2 emissions

 

  Evaluating Energy Transition Opportunities: Specialized teams focused on Hydrogen; Carbon Capture, Utilization and Storage; Renewable Natural Gas; and Geothermal, with executive oversight by the Company’s Energy Transition Steering Committee

 

  Focused on Biodiversity: Procedures in place for each segment to protect the environment and mitigate biodiversity impacts

 

  Waste Management Disclosure: Quantitative disclosures surrounding waste management, reduction/prevention, and recycling

  

  Safety is a Core Value: Continuing to build a culture focused on safety and inclusion for our ~2,300 employees

 

  Disclosure of Key Diversity Metrics: Disclosure of workforce demographic data, including gender and racial/ethnic minority diversity and retention data (by EEO-1 job category)

 

  Career Development and Succession Planning: Professional development opportunities and continuous talent review and succession planning

 

  Fostering an Inclusive Workplace: Continued employee engagement, inclusive onboarding experience and benefits, and voluntary employee-led Employee Resource Groups create an inclusive work environment that is reinforced through policies and employee trainings

  

  Prioritizing Service Affordability and Reliability: Customers continue to benefit from regional natural gas shale development and Company investments in the safety, reliability and integrity of our system and assets

 

  Support of Local Vendors: Approximately $996 million paid to local vendors and contractors in New York and Pennsylvania over the last five years

 

  Long-Standing Corporate Giving Program: Company Foundation matches employee donations, dollar for dollar, up to $1,000 per employee through the Employee Charitable Giving Program

 

  Meaningful Community Volunteering Opportunities: Employees provided nearly 3,900 volunteer hours across several company-coordinated volunteer opportunities in 2024

 

  Significant Community Impact: Community impact dollars exceeding $1.6 billion in 2024, as graphically depicted below

 

 

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Our Diverse, Experienced, and Independent Board of Directors

 

 

National Fuel’s commitment to diversity also extends to our Board of Directors. Our Board has continued its commitment to attracting and retaining qualified, diverse directors whose expertise and professional characteristics align with the Company’s long-term business strategy.

Focused on Board Diversity

Our Nominating/Corporate Governance Committee, chaired by Rebecca Ranich, makes recommendations to the full Board on nominees for director positions, and has invited qualified gender and racially diverse candidates to stand for election to the Board, with successful results. Three of the Company’s last six directors to join the Board have increased Board diversity. While currently at a full complement of directors, the Board will continue its efforts, when vacancies arise, to attract qualified, diverse candidates whose expertise and personal characteristics align with the Company’s long term business strategy.

 

 

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Proxy Summary

 

Extensive Experience

The Company’s Board of Directors consists of individuals with extensive and diverse leadership experience within the energy industry, as well as complementary industries, including manufacturing and consulting. Our eleven Board members have experience in the areas depicted below, among others:

 

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Strong Corporate Governance Practices

Our Board has implemented strong governance practices, including maintaining a significant complement of independent directors (currently ten out of eleven directors), designating a Lead Independent Director, holding regular meetings of the non-management and/or independent directors, separating the roles of Chairman of the Board and Chief Executive Officer, and providing a process for stockholders meeting certain requirements to have nominees included in the Company’s proxy materials.

 

 

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Active Oversight

The Board actively oversees management of the business and affairs of the Company, engaging with the executive team on important matters throughout the year. For example, in connection with the Board’s self-evaluation process, the Board identified industry-specific accounting practices as an area of interest. In response, management organizes presentations periodically to the Board reviewing the accounting treatment for key financial statement items, such as asset impairments, plugging and abandonment costs, and other, related matters unique to the Company’s various business operations.

At each quarterly meeting of the Board, management provides an update on each business segment, covering operations, financial performance, and regulatory and legislative matters. In addition, as a regular agenda item, management provides a closer look at specific parts of the business. At a recent meeting, for example, management made a detailed presentation on gathering system projects serving the Company’s production areas. In addition, as part of the Company’s practice of regularly updating the directors on safety matters, management provided a presentation detailing the Company’s incident response simulations.

 

 

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Proxy Summary

 

Proposal 1 — Election of Directors

 

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES FOR THE BOARD OF DIRECTORS.

Nominees for one-year term:

David H. Anderson — age 63

Principal Occupation: Chief Executive Officer of Northwest Natural Holding Company

Expertise: Leadership, Industry, Environmental, SEC Financial Expert

David P. Bauer — age 55

Principal Occupation: President and Chief Executive Officer of National Fuel Gas Company

Expertise: Leadership, Industry, Financial, Regional

Barbara M. Baumann — age 69

Principal Occupation: President, Cross Creek Energy Corporation

Expertise: Leadership, Exploration and Production, Investment Advisory, SEC Financial Expert

David C. Carroll — age 68

Principal Occupation: Former President and Chief Executive Officer of GTI Energy

Expertise: Leadership, Industry, Energy Transition/Technology

Steven C. Finch — age 66

Principal Occupation: Former President of Manufacturing and Community Engagement, Viridi Parente, Inc.

Expertise: Leadership, Manufacturing, Capital and Labor Management, Energy Transition/Sustainability, Regional

Joseph N. Jaggers — age 71

Principal Occupation: Former President, Chief Executive Officer and Chairman of Jagged Peak Energy Inc.

Expertise: Leadership, Exploration and Production

Rebecca Ranich — age 67

Principal Occupation: Former Director of Deloitte Consulting, LLP

Expertise: Leadership, Industry, Sustainability, Technology, Energy Transition

Jeffrey W. Shaw — age 66

Principal Occupation: Former President and Chief Executive Officer, Southwest Gas Corporation

Expertise: Leadership, Industry, SEC Financial Expert

Thomas E. Skains — age 68

Principal Occupation: Former President and Chief Executive Officer, Piedmont Natural Gas Company

Expertise: Leadership, Industry, Regulatory

David F. Smith — age 71

Principal Occupation: Chairman of the Board and Former Chief Executive Officer of National Fuel Gas Company

Expertise: Leadership, Industry

Ronald J. Tanski — age 72

Principal Occupation: Former President and Chief Executive Officer, National Fuel Gas Company

Expertise: Leadership, Industry, Financial

For complete information on this proposal, please refer to page 14 and following.

 

 

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Proxy Summary

 

Proposal 2 — Advisory Approval of Named Executive Officer Compensation

 

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE COMPANY’S NAMED EXECUTIVE OFFICER COMPENSATION.

This proposal allows stockholders to take part in a non-binding, advisory vote to approve the compensation of the Company’s named executive officers (the “say-on-pay” vote). The summary below and the discussion in the Compensation Discussion and Analysis provide information about the Company’s named executive officer compensation programs. Unless otherwise indicated, we intend capitalized and abbreviated terms to have the same meaning in this section as in the Compensation Discussion and Analysis.

Objectives of the Compensation Committee

When setting compensation for the Company’s named executive officers, the Compensation Committee’s primary goal is to provide balanced incentives for creating value for stockholders in both the near-term and long-term. In order for this to occur, the Compensation Committee awards a combination of cash and equity components that are designed to:

 

  Ø

Focus management efforts on both near-term and long-term drivers of stockholder value, including financial, safety, environmental, and customer service metrics;

 

  Ø

Tie executive compensation to long-term total shareholder return (“TSR”), long-term total return on capital (“ROC”), and long-term sustainability, by linking a significant portion of named executive officers’ potential compensation to the future price of the Company’s common stock (and the payment of dividends) and the future returns on capital achieved by the Company, both relative to peers, and to future reductions in GHG emissions and methane intensity levels; and

 

  Ø

Attract, motivate, reward and retain management talent in the highly competitive energy industry in order to achieve the objectives that contribute to the overall success of the Company.

Main Elements of Compensation

The Compensation Committee has developed the Company’s compensation policies and procedures to align the interests of named executive officers with those of the Company’s stockholders and, where appropriate, other stakeholders, including customers. The main elements of the named executive officer compensation program are as follows:

 

BASE SALARY (CASH)

Provides a predictable base compensation for day-to-day

job performance;

   

SHORT-TERM

PERFORMANCE

INCENTIVES (CASH)

Utilizes metrics specific to each
executive in order to motivate

them to deliver near-term

financial, operational, and

ESG results, generally over a period

that is no longer than two years; and

    

LONG-TERM PERFORMANCE

INCENTIVES (EQUITY)

Focuses the attention of

executives on delivering long-

term stockholder value and on
maintaining a significant personal
investment in the Company

through stock ownership.

Executive Compensation Aligned with Stockholders’ Interests

The Company recognizes and rewards named executive officers through compensation arrangements that directly link executive pay to the Company’s performance, and we seek to help ensure a strong alignment of interests with our stockholders by including a significant amount of equity in the overall mix of pay. As shown in the chart below, which includes the fiscal 2024 target compensation mix for the CEO and an average for the other four named executive officers, 84% of the target compensation of David Bauer, the Company’s CEO, was at-risk or variable compensation, with 63% tied to equity (in the form of performance shares and restricted stock units), and 21% tied to cash-based incentive awards subject to short-term performance goals.

 

 

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Proxy Summary

 

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2024 Say-on-Pay Vote and Stockholder Engagement

The 2024 say-on-pay advisory vote yielded a result of 96.4% of votes cast in support of the compensation of the Company’s named executive officers. The Board considered this outcome another indicator of strong stockholder support for the overall philosophy and structure of the Company’s executive compensation policies and decisions. Given the high approval percentage of the vote, the Compensation Committee did not make any significant changes to the executive compensation program that were based on the results of the 2024 say-on-pay advisory vote.

From time to time members of Company management have held meetings with some of the Company’s largest stockholders to obtain feedback on matters of interest to them. The Board has directed management to continue to engage as appropriate with interested stockholders, and to inform it of any requests for meetings with members of the Board. The Board and management believe that engagement with stockholders facilitates important dialogue from which we gather various important viewpoints.

The Board of Directors believes that the Company’s compensation policies and practices, as developed following engagement with stockholders, including with respect to ESG factors, encourage a culture of pay for performance and are strongly aligned with the interests of the Company’s stockholders. Accordingly, the Board recommends a vote FOR the advisory approval of named executive officer compensation.

For complete information on this proposal, please refer to the Compensation Discussion and Analysis, accompanying compensation tables and related narrative discussion, starting at page 41, and to the proposal at page 82.

Proposal 3 — Ratification of Appointment of Independent Registered Public Accounting Firm

 

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THIS APPOINTMENT.

As a matter of good governance, it is important that stockholders vote to ratify the selection of the Company’s independent auditor. The Company has selected PricewaterhouseCoopers LLP as the Company’s independent auditor for fiscal 2025.

For complete information on this proposal, please refer to page 83.

 

 

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  General Information     LOGO  

 

NATIONAL FUEL GAS COMPANY

6363 MAIN STREET

WILLIAMSVILLE, NEW YORK 14221

PROXY STATEMENT

Introduction

 

 

This proxy statement is furnished to the holders of National Fuel Gas Company (“National Fuel” or the “Company”) common stock (the “Common Stock”) in connection with the solicitation of proxies on behalf of the Board of Directors of the Company (the “Board of Directors” or the “Board”) for use at the Annual Meeting of Stockholders (the “Annual Meeting”) to be held on March 13, 2025, or any adjournment or postponement thereof. This proxy statement and the accompanying proxy/voting instruction card are first being mailed to stockholders or made available on the Internet on or about January 24, 2025.

Solicitation of Proxies

 

 

All costs of soliciting proxies will be borne by the Company. MacKenzie Partners, Inc., 1407 Broadway, 27th Floor, New York, NY 10018, has been retained to assist in the solicitation of proxies by mail, telephone, and electronic communication and will be compensated in the estimated amount of $18,500 plus reasonable out-of-pocket expenses. A number of regular employees of the Company and its subsidiaries, and one or more retirees of the Company and its subsidiaries, may solicit proxies in person, by telephone or by other methods. Costs, if any, associated with solicitation by retirees are expected to be de minimis.

Record Date, Outstanding Voting Securities and Voting Rights

 

 

Only stockholders of record at the close of business on January 13, 2025, will be eligible to vote at the Annual Meeting or any adjournment or postponement thereof. As of that date, 90,552,173 shares of Common Stock were issued and outstanding. The holders of 45,276,087 shares will constitute a quorum at the meeting.

Each share of Common Stock entitles the holder thereof to one vote with respect to each matter that is subject to a vote at the Annual Meeting. Shares may not be voted unless the owner is present or represented by proxy. In order to grant a proxy, a stockholder can use the telephone, QR Code or Internet voting procedures or return a signed proxy card. All shares that are represented by effective proxies received by the Company in time to be voted shall be voted by the authorized Proxy at the Annual Meeting or any adjournment or postponement thereof.

If you hold your shares through a broker, bank or other nominee (in “street name”), you will receive instructions from them on how to vote your shares. If you do not give the broker specific instructions on how you would like your shares to be voted, your broker may only vote your shares on “routine” matters, such as Proposal 3 — Ratification of Appointment of Independent Registered Public Accounting Firm. However, your broker is prohibited from voting uninstructed shares on “non-routine” matters such as Proposal 1 — Election of Directors and Proposal 2 — Advisory Approval of Named Executive Officer Compensation. The absence of voting instruction results in what is called a “broker non-vote” on those proposals and will not be counted. Your vote is important. PLEASE MAKE YOUR VOICE HEARD BY VOTING YOUR SHARES ON THESE IMPORTANT MATTERS.

Where stockholders direct how their votes shall be cast, shares will be voted in accordance with such directions. Proxies submitted with abstentions and broker non-votes will be included in determining whether or not a quorum is present. Abstentions and broker non-votes will not be counted in tabulating the number of votes cast on proposals submitted to stockholders and therefore will not have the effect of a vote cast for or against any proposal.

 

 

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General Information

 

The proxy also confers discretionary authority to vote on all matters that may properly come before the Annual Meeting, or any adjournment or postponement thereof, respecting: (i) matters of which the Company did not have timely notice but that may be presented at the meeting; (ii) approval of the minutes of the prior annual meeting of stockholders; (iii) the election of any person as a director if a nominee is unable to serve or for good cause will not serve; (iv) any stockholder proposal omitted from this proxy statement pursuant to Rule 14a-8 or 14a-9 of the Securities and Exchange Commission’s (the “SEC”) proxy rules; and (v) all matters incident to the conduct of the meeting.

With respect to Proposal 1, the affirmative vote of a plurality of the votes cast by the holders of shares of Common Stock entitled to vote is required to elect each of the nominees for director. Approval of each of Proposals 2 and 3 requires a majority of the votes cast by the holders of shares of Common Stock entitled to vote on the proposal.

Attending the Meeting

 

 

The Company is holding the Annual Meeting in a virtual meeting format only on March 13, 2025 at 10:00 a.m. Eastern Time. Stockholders as of the close of business on January 13, 2025, the record date, are entitled to participate in the Annual Meeting, including to vote their shares and ask questions.

To participate in the virtual Annual Meeting, please visit www.virtualshareholdermeeting.com/NFG2025, where you will be prompted to enter the 16-digit control number found on your proxy card or your voting instruction form provided by your broker, bank, or other nominee. If you receive your Annual Meeting materials electronically and wish to participate in the virtual meeting, please follow the instructions provided online for attendance. Once you have joined the virtual meeting, you may vote your shares electronically during the meeting by following the instructions available on the meeting website.

Questions for the Meeting

 

 

Stockholders as of the record date who participate in the virtual Annual Meeting using their control number (as described above) will have an opportunity to submit questions during the meeting. The Company will try to answer as many stockholder-submitted questions that comply with the posted rules of conduct as time permits. If the Company receives substantially similar questions, the Company will group such questions together and provide a single response to avoid repetition.

Additional Information about the Meeting

 

 

Additional information regarding the rules of conduct and procedures for participating in the virtual Annual Meeting will be posted prior to and during the meeting at www.virtualshareholdermeeting.com/NFG2025.

Revoking a Proxy

 

 

Any stockholder giving a proxy may revoke it at any time prior to the voting thereof by mailing a revocation or a subsequent proxy to National Fuel Gas Company, Attn: Michael W. Reville, Secretary of the Company, 6363 Main Street, Williamsville, NY 14221, by voting a subsequent proxy by phone, QR Code or by Internet, or by filing written revocation at the meeting with Mr. Reville, Secretary of the meeting, or by casting a ballot at the meeting. If you are an employee stockholder or retired employee stockholder, you may revoke voting instructions given to Vanguard Fiduciary Trust Company (the “Trustee”) by following the instructions under “Employee and Retiree Stockholders” in this proxy statement.

Employee and Retiree Stockholders

 

 

If you are a participant in the Company’s Employee Stock Ownership Plan or any of the Company’s Tax-Deferred Savings Plans (the “Plans”), the proxy card will also serve as a voting instruction form to instruct the Trustee as to how to vote your shares. All shares of Common Stock for which the Trustee has not received timely directions shall be voted by the Trustee in the same proportion as the shares of Common Stock for which the Trustee received timely directions, except in the case where to do so would be inconsistent with the provisions of Title I of the Employee Retirement Income Security Act (“ERISA”). If the voting instruction form is returned signed but without directions marked for one or more items, regarding the unmarked items you are instructing the Trustee and the Proxies to vote FOR all of the director nominees named in this

 

 

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General Information

 

proxy statement, FOR Proposal 2, and FOR Proposal 3. Participants in the Plan(s) may also provide those voting instructions by telephone, QR Code or the Internet. Those instructions may be revoked by re-voting or by written notice to the Trustee on or before noon on March 11, 2025 in care of the following address:

To: Vanguard Fiduciary Trust Co.

c/o National Fuel Gas Company

Attn: Legal Department

6363 Main Street

Williamsville, NY 14221

Multiple Copies of Proxy Statement

 

 

The Company has adopted a procedure approved by the SEC called “householding.” Under this procedure, some stockholders of record who have the same address and last name may receive only one copy of the proxy statement and the Company’s annual report. However, if any stockholder wishes to revoke consent for householding and receive a separate annual report or proxy statement for the upcoming Annual Meeting or in the future, he or she may telephone, toll-free, 1-866-540-7095. The stockholder will need their 16-digit control number and should simply follow the prompts. Stockholders may also write Broadridge Householding Department, 51 Mercedes Way, Edgewood, NY 11717. Stockholders sharing an address who wish to receive a single set of reports may do so by contacting their banks or brokers if they are the beneficial holders, or by contacting Broadridge at the address provided above if they are the record holders. This procedure will reduce our printing costs and postage fees and reduce the quantity of paper arriving at your address.

Stockholders who participate in householding will continue to receive separate proxy cards. Householding will not affect your dividend check mailings.

For additional information on householding, please see “IMPORTANT NOTICE REGARDING DELIVERY OF STOCKHOLDER DOCUMENTS” in this proxy statement.

Other Matters

 

 

The Board of Directors does not know of any other matter that will be presented for consideration at the Annual Meeting. If any other matter does properly come before the Annual Meeting, the Proxies will vote in their discretion on such matter.

Annual Report

 

 

Mailed herewith or made available on the Internet is a copy of the Company’s Annual Report for the fiscal year ended September 30, 2024 (“fiscal 2024”). The Company will furnish any exhibit to its Form 10-K upon request to the Secretary at the Company’s principal office, and upon payment of $5 per exhibit.

 

 

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Table of Contents
 

Proposal 1.

Election of Directors

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Your Company’s Board of Directors is a multi-disciplined cohesive and engaged group whose experiences reflect the integrated nature of the Company’s business. The following matrix summarizes the key skills, attributes and experiences of each of our directors that are most relevant to their board service. The matrix is not intended to list each and every skill, experience or other attribute of our directors. The diversity and breadth of knowledge, skill, experience, and attributes of our directors, collectively, lends itself to a highly collaborative and effective Board. To that end, we believe that each of the Company’s directors makes unique, valuable and substantial contributions to the Board and the leadership of our Company.

A biography for each director, including detailed qualifications, is included beginning on page 16.

 

                       
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Independent

 

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Senior Leadership

 

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Energy Industry

 

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Other Public Company Board

 

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Operational/Safety

 

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Legal/Regulatory/Government Relations

 

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Risk Management

 

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Consumer/Customer Relations

 

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Financial/Accounting

 

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Environmental/Sustainability/Energy Transition

 

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Age(1)

 

63

 

55

 

69

 

68

 

66

 

71

 

67

 

66

 

68

 

71

 

72

Tenure(1)

 

6

 

5

 

5

 

13

 

7

 

10

 

9

 

11

 

8

 

18

 

11

Gender Diversity

         

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Racial/Ethnic Diversity

                 

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(1)

As of March 13, 2025 (Annual Meeting).

Your Board of Directors has continued its efforts to attract qualified, diverse candidates whose expertise and personal characteristics align with the Company’s long-term business strategy. Our Nominating/Corporate Governance Committee, which makes recommendations to the full Board on nominees for director positions, has invited qualified gender and racially diverse candidates to stand for election to the Board, with successful results. Three of the Company’s last six directors to join the Board have increased Board diversity.

 

 

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Proposal 1. Election of Directors

 

Nominees for Election as Directors at the 2025 Annual Meeting of Stockholders

 

 

At the Annual Meeting, 11 individuals will be elected to serve as directors for one-year terms expiring in 2026. The nominees for the 11 directorships are: David H. Anderson, David P. Bauer, Barbara M. Baumann, David C. Carroll, Steven C. Finch, Joseph N. Jaggers, Rebecca Ranich, Jeffrey W. Shaw, Thomas E. Skains, David F. Smith and Ronald J. Tanski. The nomination process is discussed under “Process for Nominating Directors” below.

Directors hold office until the next annual meeting following their election and until their respective successors are elected and qualified, subject to prior death, resignation, retirement, disqualification or removal from office.

It is intended that the Proxies will vote for the election of each of the Company’s nominees, unless the Proxies are otherwise directed by the stockholders. Although the Board has no reason to believe that any of the nominees will be unavailable for election or service, stockholders’ proxies confer discretionary authority upon the Proxies to vote for the election of another nominee for director in the event any nominee is unable to serve, or for good cause will not serve. Each of the nominees has consented to being named in this proxy statement and to serve if elected.

The affirmative vote of a plurality of the votes cast by the holders of shares of Common Stock entitled to vote is required to elect each of the nominees for director.

 

 

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Proposal 1. Election of Directors

 

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The Board of Directors recommends that you vote FOR
the election of each of the 11 nominees named below.

David H. Anderson

 

 

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AGE: 63

 

DIRECTOR SINCE:

2019

 

BOARD COMMITTEES:

•  Audit

•  Compensation

•  Financing

 

PUBLIC COMPANY DIRECTORSHIPS

Northwest Natural Holding Company

 

EDUCATION:

•  Texas Tech University, B.B.A. in Accounting

•  Certified Public Accountant (retired)

•  Chartered Global Management Accountant

 

     

Independent Director

With senior executive leadership experience in the natural gas, electric and water industries and a strong background in financial and operational management, Mr. Anderson brings critical insights on the Company’s business operations, risk management, and financial positioning. Mr. Anderson has spent decades in highly regulated industries, enabling him to provide valuable perspective and management oversight of public policy, government relations, and regulatory compliance. As a retired Certified Public Accountant and a former Chief Financial Officer, Mr. Anderson qualifies as a financial expert and contributes valuable expertise to overseeing the Company’s financial reporting. His involvement with Northwest Natural Renewables, LLC, a subsidiary of Northwest Natural Holding Company focused on developing cost-effective solutions designed to decarbonize a variety of sectors, and his past service on Oregon’s Global Warming Commission, enable him to contribute critical environmental stewardship and sustainability perspective to the Board’s oversight of the Company’s growth strategy.

 

Professional and Educational Background

Mr. Anderson currently serves as the CEO and director of Northwest Natural Holding Company (NYSE: NWN) and Northwest Natural Gas Company, a utility serving the natural gas needs of approximately two million people with one of the most modern pipeline systems in the nation. Since joining Northwest in 2004, Mr. Anderson has held a number of executive leadership positions, including COO, CFO, and President. Previously, he served as Senior Vice President and CFO at TXU Gas Company and as Chief Accounting Officer at TXU Corporation, an energy services company.

 

Mr. Anderson serves as a director of the American Gas Association, where he was past Chair of the Board and Co-Chair of the AGA Clean Energy Task Force.

 

Mr. Anderson is a Certified Global Management Accountant and retired Certified Public Accountant. He holds a B.B.A. in Accounting from Texas Tech University.

 

 

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Table of Contents

Proposal 1. Election of Directors

 

David P. Bauer

 

 

LOGO

AGE: 55

 

DIRECTOR SINCE:

2020

 

BOARD COMMITTEES:

•  Executive

•  Financing

 

EDUCATION:

Boston College, B.S. in Accounting

   

President and Chief Executive Officer, National Fuel Gas Company

As the Company’s President and CEO, Mr. Bauer brings to the Board substantial management experience and in-depth knowledge of the Company’s operations and strategic direction. A member of the executive team since 2004, Mr. Bauer has served in numerous positions with the Company and its operating subsidiaries. His vision and strategic leadership are key to the Company’s infrastructure modernization and expansion projects, and he has overseen the continued growth of the Company’s Appalachian development program while maintaining the Company’s position of fiscal strength. Additionally, his robust financial knowledge of the Company, combined with more than a decade of experience with a leading global public accounting firm, enables him to provide critical insights to the Board on capital allocation, risk management, and investment strategies.

 

Professional and Educational Background

Mr. Bauer has been President and CEO of the Company since 2019. He joined the Company in 2001 and has held several leadership positions, including President of National Fuel Gas Supply Corporation, from 2016 to 2019, Treasurer and Principal Financial Officer from 2010 to 2019, and Assistant Treasurer or Treasurer of the Company’s various operating subsidiaries from 2004 to 2019. Prior to joining National Fuel, he served in public accounting at PricewaterhouseCoopers LLP (PwC) from 1991 to 2001.

 

Mr. Bauer is a director of the American Gas Association and lnvest Buffalo Niagara, a business association that promotes and facilitates business growth in Western New York, the location of the Company’s headquarters and several key subsidiary operations.

 

Mr. Bauer received a B.S. from Boston College.

 

 

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Table of Contents

Proposal 1. Election of Directors

 

Barbara Baumann

 

 

LOGO

AGE: 69

 

DIRECTOR SINCE:

2020

 

BOARD COMMITTEES:

•  Audit

•  Financing

 

PUBLIC COMPANY

DIRECTORSHIPS

Devon Energy Corporation

 

EDUCATION:

•  Mount Holyoke College, B.A.

•  Wharton School of the University of Pennsylvania, MBA

 

   

Independent Director

Ms. Baumann contributes to the Board extensive industry experience in the oil and gas exploration and production (E&P) sector. She also has prior public company board experience with a utility, a midstream entity, and several E&P companies. Her career includes senior executive leadership roles with a global oil company, a private equity firm investing in energy companies and the founding of her own energy advisory firm. Throughout these roles, Ms. Baumann acquired extensive skills and experience in strategic planning, capital markets, operations, natural gas marketing and human resources management. Ms. Baumann also served in various corporate finance roles, including Chief Financial Officer of Ecova Corporation, Amoco’s wholly owned environmental remediation business, which qualifies her as a financial expert and enhances the Board’s oversight of the Company’s financial reporting and risk management. Her experience as an independent trustee of a large family of mutual funds provides valuable insight into the perspective of institutional stockholders.

 

Professional and Educational Background

Prior to founding her own energy advisory firm focused on the domestic oil and gas industry in 2003, Cross Creek Energy, Ms. Baumann served as Executive Vice President of Associated Energy Managers, an energy-focused private equity firm. Ms. Baumann launched her career in the energy sector at Amoco (later BP Amoco) in 1981, where she held several leadership positions of increasing responsibility in finance and operations, including Chief Financial Officer of Ecova Corp., BP Amoco’s environmental remediation business, and Vice President of Amoco’s San Juan Basin business unit.

 

Ms. Baumann is Chair of the independent Board of Trustees of Putnam Mutual Funds, and she also serves on the Board of Directors of Devon Energy Corporation (NYSE: DVN).

 

She holds a B.A. from Mount Holyoke College and an M.B.A. from the Wharton School of the University of Pennsylvania.

 

 

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Table of Contents

Proposal 1. Election of Directors

 

David C. Carroll

 

 

LOGO

AGE: 68

 

DIRECTOR SINCE:

2012

 

BOARD COMMITTEES:

•  Executive

•  Nominating/ Corporate Governance

 

EDUCATION:

•  University of Pittsburgh,
B.S. in Chemical
Engineering

•  Lehigh University, MBA

•  Stanford University
Graduate School of
Business, Stanford
Executive Program

 

.

   

Independent Director

Mr. Carroll brings to the Board over 30 years of experience driving innovative technologies that enable transformation of the global energy sector. He has a deep understanding of the industry’s regulatory and economic environments, and his technological and leadership experience provides insights into the risks and opportunities of the shift toward low-carbon fuels. Mr. Carroll also contributes to the Board his expertise in unconventional gas production, transmission, safety, reliability, and distribution pipeline integrity. He plays an active role in both the domestic and international natural gas business communities, providing the Board with a broad perspective on evolving public policy issues and the positioning of natural gas among future global energy supplies.

 

Professional and Educational Background

Mr. Carroll is the former President and CEO of GTI Energy, a leading research and training organization focused on developing, scaling, and deploying energy transition solutions. He led GTI from 2006 to 2022 and previously served as Vice President of Business Development from 2001-2006. Prior to joining GTI, he held several technical and management positions with industrial companies Praxair, lnc., Chicago Bridge & Iron, and Air Products and Chemicals, Inc.

 

Mr. Carroll currently serves as a trustee of the American Gas Foundation, an independent organization that provides research and information on energy matters affecting public policy, and as a strategic advisor to Inter-Atlantic Energy Capital Ventures, an early-stage technology venture fund focusing on the sustainability imperatives and digital transformation of the natural gas industry. He is also a member of the Technical Advisory Board of Mountain View Clean Energy, a start-up company working to advance low carbon hydrogen and related fuels worldwide.

 

Mr. Carroll has a B.S. in Chemical Engineering from the University of Pittsburgh and an M.B.A. from Lehigh University.

 

 

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Table of Contents

Proposal 1. Election of Directors

 

Steven C. Finch

 

 

LOGO

AGE: 65

 

DIRECTOR SINCE:

2018

 

BOARD COMMITTEES:

•  Audit

•  Nominating/ Corporate Governance

 

PUBLIC COMPANY DIRECTORSHIPS

Allient Inc.

 

EDUCATION:

Kettering University
(formerly General
Motors Institute), B.S. in
Electrical Engineering

 

   

Independent Director

Mr. Finch is an experienced operational leader with a proven track record of guiding organizations through major corporate and industry-wide transformations. Over his 40-year career, he gained extensive expertise in operations, customer relations, and capital and labor management. As Plant Manager at a major General Motors engine plant, Mr. Finch played a critical role in navigating the workforce through significant change management initiatives, overseeing more than $3 billion in plant investments during the company’s reorganization. Mr. Finch has successfully managed highly technical manufacturing operations with a demonstrated commitment to safety, environmental sustainability, and cost-efficiency, which enables him to provide critical support to the Board’s oversight of the Company’s focus on sustainable operations, employee safety, and customer experience. Mr. Finch’s strong community involvement enhances his ability to advise the Board on local and regional issues and stakeholder engagement.

 

Professional and Educational Background

Mr. Finch is the former President of Manufacturing and Director of Community Engagement at Viridi Parente, a company focused on environmentally sustainable energy usage and storage products. He previously served as Senior Vice President of Automotive Services at AAA Western and Central New York. Prior to that, Mr. Finch spent more than 40 years at General Motors (NYSE: GM), including ten years as Plant Manager at the Tonawanda Engine Plant and multiple prior assignments with increasing responsibility at various GM facilities outside Western New York.

 

Mr. Finch is a member of the Board of Directors of Allient lnc. (NASDAQ: ALNT), a designer and manufacturer of precision and specialty-controlled motion components and systems.

 

He earned a B.S. in Electrical Engineering from the General Motors Institute.

 

 

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Proposal 1. Election of Directors

 

Joseph N. Jaggers

 

 

LOGO

AGE: 71

 

DIRECTOR SINCE:

2015

 

BOARD COMMITTEES:

•  Audit

•  Compensation, Chair

•  Executive

 

EDUCATION:

United States Military
Academy at
West Point, B.S.

 

   

Independent Director

Mr. Jaggers brings more than 40 years of oil and gas industry experience to the Board, including a successful track record of operational efficiency and achievement of production and reserve growth. As a senior executive leader with a number of large, publicly traded exploration and production companies, Mr. Jaggers worked on various significant domestic and international assignments. These experiences contributed to his robust understanding of energy market cycles and dynamics, oil and gas operations, and asset evaluation, which enhances the Board’s oversight of the ongoing development of the Company’s natural gas assets and the evaluation of the continued advancement of its Appalachian drilling program.

 

Professional and Educational Background

Mr. Jaggers is the founder and former President, CEO and Chairman of Jagged Peak Energy Inc., an independent oil and natural gas exploration and production company, which was established in 2013. Previously, he served as President, CEO and director of Ute Energy, LLC, from 2010 until its sale in 2012. From 2006 to 2010, he served as director, President and COO of Bill Barrett Corporation. Throughout his career, Mr. Jaggers held a variety of leadership positions at energy and oil and gas companies, including Williams Companies, Barrett Resources, and BP Amoco (NYSE: BP).

 

Mr. Jaggers is past President of the Colorado Oil and Gas Association, past Executive Director of the lndependent Producers Association of the Mountain State, and an inductee into the Rocky Mountain Oil and Gas Hall of Fame.

 

He earned a B.S. from the United States Military Academy at West Point.

 

 

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Table of Contents

Proposal 1. Election of Directors

 

Rebecca Ranich

 

 

LOGO

AGE: 67

 

DIRECTOR SINCE:

2016

 

BOARD COMMITTEES:

•  Audit

•  Nominating/Corporate Governance, Chair

 

EDUCATION:

•  Northwestern University, B.A. in Soviet Studies

•  University of Detroit Mercy, MBA

   

Independent Director

Ms. Ranich contributes her extensive global energy industry expertise to the Board, providing deep insights into the regulatory and market forces shaping the ongoing energy transition. In her previous role as leader of Energy and Sustainability Investment Advisory Services for public sector clients at Deloitte Consulting, LLP, she provided counsel on more than $1 billion of investments, focusing on strategies related to mitigating risks associated with energy supply, demand, and climate change. She developed extensive risk oversight and operational expertise through her senior leadership roles managing cross-border energy and environmental engineering projects across Europe, Russia, and the Caspian region valued at over $40 billion. With her track record for establishing, building, and leading energy-focused businesses, Ms. Ranich brings critical strategic management skills to support the Board in its oversight of the Company’s strategy to remain a leader in safe, reliable, and sustainable energy.

 

Professional and Educational Background

Ms. Ranich is a former director of Deloitte Consulting, LLP, where she led the firm’s Energy and Sustainability Investment Advisory Services from 2005 to 2013. Previously, she served on the project management team of PSG international from 1999 to 2002, leading negotiations to implement the multi- billion dollar Trans-Caspian Gas Pipeline, and was Vice President at Michael Baker Corporation, an international engineering, energy, and environmental services firm, from 1992 to 1999. Ms. Ranich serves as a Strategic Advisory Board member at WAVE Equity Partners, a clean technology innovation investment group. She also serves on the Board of Directors of QiO Technologies, an artificial intelligence platform to optimize energy efficiency and operational performance in data centers and for Industrial Internet of Things (IIoT) applications. ln addition to being an investor in and advisor to emerging technology companies, she is a member of the Technology Commercialization Panel for the Johns Hopkins University Applied Physics Laboratory. She served as a director on a number of energy, oil and gas, and clean technology company boards, encompassing both public and private, domestic, and international companies, including: Questar Corporation (NYSE: STR), GTl Energy, Cardno Limited (an Australian infrastructure and environmental services company), and Uniper SE (a German power generation and energy supply chain corporation).

 

Ms. Ranich earned a B.A. from Northwestern University and an M.B.A from University of Detroit Mercy.

 

 

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Proposal 1. Election of Directors

 

Jeffrey W. Shaw

 

 

LOGO

AGE: 66

 

DIRECTOR SINCE:

2014

 

BOARD COMMITTEES:

•  Audit, Chair

•  Nominating/ Corporate Governance

 

EDUCATION:

•  University of Utah, B.S.
in Accounting

•  Certified Public
Accountant

 

   

Lead Independent Director

Mr. Shaw contributes to the Board his extensive executive leadership experience in the energy industry, obtained through his service as CEO of a publicly traded natural gas utility company. His background includes significant experience in accounting and finance, qualifying him as a financial expert, and in operations, risk management and compliance with state-level regulatory requirements. Throughout his career, Mr. Shaw played a prominent role in designing enterprise risk management processes and implementing critical safety policies and programs. He is also Certified Public Accountant (CPA) with prior experience in the audit division of a leading accounting firm, enabling him to play a key role in performing the Board’s audit and risk oversight functions.

 

Professional and Educational Background

Mr. Shaw served as CEO and director of Southwest Gas Corporation (NYSE: SWX) from 2004 to 2015. Joining Southwest in 1988, he held various senior positions with the company, including Director of Internal Audit, Vice President, Controller and Chief Accounting Officer, Vice President and Treasurer, Senior Vice President of Finance and Gas Resources and Pricing, and President. Mr. Shaw began his career at Arthur Andersen & Co. He is a member of the American Institute of Certified Public Accountants and the Nevada Society of CPAs.

 

Mr. Shaw is a former director of the American Gas Association and a former Chairman and director of the Western Energy Institute.

 

He earned a B.A. in Accounting from the University of Utah.

 

 

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Table of Contents

Proposal 1. Election of Directors

 

Thomas E. Skains

 

 

LOGO

AGE: 68

 

DIRECTOR SINCE:

2016

 

BOARD COMMITTEES:

•  Compensation

•  Nominating/ Corporate Governance

 

PUBLIC COMPANY

DIRECTORSHIPS

•  Duke Energy Corporation

•  Truist Financial
Corporation

 

EDUCATION:

•  Sam Houston State
University, B.B.A

•  University of Houston
Law School, J.D.

 

   

Independent Director

Mr. Skains contributes to the Board his strong leadership and strategic management skills, developed during his 36-year career in the natural gas industry. In his most recent role as Chairman, CEO and President of Piedmont Natural Gas Company, Mr. Skains developed a deep understanding of operations management, marketing, supply chain services, strategic planning, and stakeholder engagement. He initially joined the industry as an attorney at Transcontinental Gas Pipe Line Corporation (Transco), where he gained valuable expertise in compliance aspects of the natural gas industry, particularly natural gas supply, rate, and federal energy regulatory matters. Mr. Skains’ extensive operational and legal industry expertise provides a valuable perspective on the complexities, challenges, and opportunities facing the natural gas industry.

 

Professional and Educational Background

Mr. Skains is the former Chairman of the Board, Chief Executive Officer and President of Piedmont Natural Gas Company, Inc. (formerly NYSE: PNY, acquired by Duke Energy in 2016). He served as the President and COO from 2002 and as Chairman and CEO from 2003, until his retirement in 2016. Joining Piedmont in 1995, Mr. Skains held various leadership positions, including Chief Operating Officer and Senior Vice President — Marketing and Supply Services. Mr. Skains also held positions of increasing responsibility with Transcontinental Gas Pipe Line Corporation from 1981 to 1995.

 

He previously served as Chairman of both the American Gas Association and the Southern Gas Association. Mr. Skains has served as a director on the Boards of Duke Energy Corporation (NYSE: DUK) since 2016 and Truist Financial Corporation (NYSE: TFC; formerly BB&T Corporation) since 2009.

 

He earned a B.B.A. from Sam Houston State University and a J.D. from the University of Houston Law School.

 

 

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Table of Contents

Proposal 1. Election of Directors

 

David F. Smith

 

 

LOGO

AGE: 71

 

DIRECTOR SINCE:

2007

 

BOARD COMMITTEES:

•  Executive, Chair

•  Financing, Chair

 

EDUCATION:

•  State University of
New York at Fredonia,
B.A. in Political Science

•  State University of
New York at Buffalo
School of Law, J.D.

 

   

Chairman of the Board

Mr. Smith is an experienced executive leader in the energy industry with a deep understanding of the Company’s business, stakeholders, and regulatory landscape which he developed over his more than 35-year career with the Company. During his tenure he held key leadership positions within all of the Company’s business segments before being appointed Chief Executive Officer. Mr. Smith played a key role in driving the Company’s transformation from a regional utility to a diversified energy corporation, providing him with critical perspectives on pipeline safety, system reliability, evolution of customer preferences, and corporate culture to provide valuable insights to the Board’s oversight of various aspects of the Company’s growth strategy. Through his decades of active participation in industry groups and state and federal public policy initiatives, Mr. Smith has built deep relationships with other industry players, businesses, and civic organizations, enabling him to contribute valuable insights to the Board on the evolving trends impacting the Company’s regulated interstate pipeline and storage, and utility businesses.

 

Professional and Educational Background

Mr. Smith joined National Fuel Gas in 1978 and held multiple leadership positions over his career with the Company, including as CEO from 2008 to 2013, as President from 2006 to 2010, and as COO from 2006 to 2008, in addition to President and/or Chairman of each of the Company’s major subsidiaries.

 

He is a former director of the American Gas Association and of GTl Energy, a leading research and training organization focused on developing, scaling, and deploying energy transition solutions. Mr. Smith was also Chairman of the Northeast Gas Association and the Board of the Business Council of New York State.

 

Mr. Smith has a J.D. from the University at Buffalo School of Law and a B.A. in Political Science from the State University of New York at Fredonia.

 

 

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Table of Contents

Proposal 1. Election of Directors

 

Ronald J. Tanski

 

 

LOGO

AGE: 72

 

DIRECTOR SINCE:

2014

 

BOARD COMMITTEES:

•  Executive

•  Financing

 

PUBLIC COMPANY

DIRECTORSHIPS

•  CMS Energy Corporation

•  Consumers Energy Company

 

EDUCATION:

•  State University of
New York at Buffalo,
B.A. in Biology

•  State University of
New York at Buffalo,
MBA

•  State University of
New York at Buffalo
School of Law, J.D.

 

   

Independent Director

Mr. Tanski contributes to the Board more than four decades of industry experience, having started his career as an attorney for the Company and advancing through roles within the Company’s diversified energy business. His previous roles include senior leadership positions in the regulated utility, interstate natural gas transmission and storage sectors, and the Company’s exploration and production subsidiary. As former CEO, COO, and Principal Financial Officer of the Company, Mr. Tanski brings a deep understanding of the national gas industry and virtually every aspect of the Company’s operations. Mr. Tanski’s experience navigating the Company through regulatory changes and commodity price cycles, combined with his financial and legal background, and past involvement in industry trade associations, including as chairman of a national pipeline trade association, enables him to provide critical insights to the Board’s oversight of the Company’s strategy and risk management.

 

Professional and Educational Background

Mr. Tanski was President and Chief Executive Officer of the Company from 2013 until his retirement in 2019. He previously served as President and Chief Operating Officer from 2010 to 2013 and as Treasurer and Principal Financial Officer from 2004 to 2010. Having joined National Fuel in 1979, he has also held senior management roles with the Company’s subsidiaries, including Seneca Resources Corporation (now Seneca Resources Company, LLC) and Horizon Energy Development.

 

Mr. Tanski is a Board member of CMS Energy Corporation (NYSE: CMS) and its wholly-owned subsidiary, Consumers Energy Company. He is also a former director of the American Gas Association and former Chairman of the lnterstate Natural Gas Association of America.

 

Mr. Tanski earned a B.A., MBA, and J.D. from the State University of New York at Buffalo.

 

 

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Table of Contents
  Corporate Governance     LOGO  

 

The Board of Directors is committed to effective corporate governance. The Board has adopted Corporate Governance Guidelines that provide a framework for the governance of the Company, and it regularly reviews corporate governance developments. The Board has implemented many strong governance practices, including maintaining a significant complement of independent directors (ten out of eleven), designating a Lead Independent Director, holding regular meetings of the non-management and/or independent directors, separating, at the Board’s discretion, the roles of Chairman of the Board and Chief Executive Officer, and providing a process for stockholders meeting certain requirements to have nominees included in the Company’s proxy materials. In addition, the Company’s Code of Business Conduct and Ethics, which applies to all directors, officers and employees, sets forth standards for conducting business in an honest and ethical manner.

Diversity

 

 

National Fuel’s commitment to diversity extends both to its workforce and your Board of Directors. Under the Company’s Corporate Governance Guidelines, the Board of Directors is required, when selecting candidates for re-election and candidates for Board membership, to consider factors that include diversity of perspectives, including all aspects of diversity (race, ethnicity, national origin, gender and other protected classes), to be brought to the Board by the individual members. In recent years, National Fuel’s Nominating/Corporate Governance Committee, which makes recommendations to the full Board on nominees for director positions, has invited qualified gender and racially diverse candidates to stand for election to the Board, with successful results. While currently at a full complement of directors, the Board will continue its efforts, when vacancies arise, to attract qualified, diverse Board candidates whose expertise and personal characteristics align with the Company’s long term business strategy. This commitment to diversity is reflected in the “Rooney Rule” incorporated into the Company’s Process for Identifying and Evaluating Nominees for Director (Exhibit B to the Corporate Governance Guidelines), which provides that, in identifying independent director candidates for nomination to the Board, the Nominating/Corporate Governance Committee, and any search firm it engages, is committed to including in any initial candidate pool qualified racially, ethnically and/or gender diverse candidates. Board member Rebecca Ranich serves as Chair of the Nominating/Corporate Governance Committee, and women have long occupied National Fuel’s top corporate levels. Today, for example, women hold the important positions of President of the Company’s Utility segment; Controller and Chief Accounting Officer; Vice President Human Resources; and Corporate Responsibility Officer.

Director Independence

 

 

The Board of Directors has determined that directors Anderson, Baumann, Carroll, Finch, Jaggers, Ranich, Shaw, Skains, Smith and Tanski are independent, and that Mr. Bauer is not independent due to his current employment relationship with the Company. The Board’s determinations of director independence were made in accordance with the listing standards of the New York Stock Exchange (the “NYSE”) and SEC regulations.

Board Leadership Structure

 

 

Non-management directors meet at regularly scheduled executive sessions without management. In addition, the independent directors met during fiscal 2024, in accordance with NYSE listing standards. The sessions were chaired by Jeffrey W. Shaw, as Lead Independent Director.

In March 2024, the Board of Directors re-elected Mr. Smith as Chairman of the Board and Mr. Bauer as President and Chief Executive Officer. The Board believes this is the optimal leadership structure at this time and reviews and considers this structure at least annually. As in the past, it is the Board’s opinion that the stockholders’ interests are best served by allowing the Board to retain flexibility to determine the optimal organizational structure for the Company at a given time, including

whether the roles of Chairman and CEO should be filled by the same person. At times in the past the roles have been separate and at other times they have been combined. The members of the Board possess considerable experience and unique knowledge of the challenges and opportunities the Company faces, have significant industry experience and are well

 

 

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Table of Contents

Corporate Governance

 

positioned to evaluate the Company’s needs and determine how best to organize the capabilities of the directors and management to meet those needs.

The Board of Directors provides a process for stockholders and other interested parties to send communications to the Board or to certain directors. Communications to the Lead Independent Director, to the non-management directors as a group, or to the entire Board should be addressed as follows: Lead Independent Director, c/o National Fuel Gas Company, 6363 Main Street, Williamsville, NY 14221. All stockholder and interested parties’ communications addressed in such manner will go directly to the indicated directors. If the volume of communication becomes such that the Board determines to adopt a process for determining which communications will be relayed to Board members, that process will appear on the Company’s website at www.nationalfuel.com.

Annual Meeting Attendance

 

 

Last year, all directors attended the 2024 Annual Meeting, and all directors are expected to attend this year’s meeting.

Meetings of the Board of Directors and Standing Committees

 

 

In fiscal 2024, there were four meetings of the Board of Directors. In addition, directors attended meetings of standing committees. The Audit Committee held nine meetings, the Compensation Committee held five meetings, the Financing Committee held one meeting, and the Nominating/Corporate Governance Committee held four meetings. The Executive Committee did not meet. During fiscal 2024, all directors attended at least 75% of the aggregate of meetings of the Board and of the committees of the Board on which they served. In addition, Board members are encouraged to and regularly attend meetings of committees on which they do not serve, although committee decision-making is reserved to committee members.

The table below shows the number of committee meetings conducted in fiscal 2024 and the directors who served on these committees as of September 30, 2024.

 

      BOARD COMMITTEES

DIRECTOR

   AUDIT    COMPENSATION    EXECUTIVE    FINANCING    NOMINATING/
CORPORATE
GOVERNANCE

David H. Anderson

   X    X         X     

David P. Bauer

             X    X     

Barbara M. Baumann

   X              X     

David C. Carroll

             X         X

Steven C. Finch

   X                   X

Joseph N. Jaggers

   X    Chair    X          

Rebecca Ranich

   X                   Chair

Jeffrey W. Shaw

   Chair                   X

Thomas E. Skains

        X              X

David F. Smith

             Chair    Chair     

Ronald J. Tanski

             X    X     

Number of Meetings in Fiscal 2024

   9    5    0    1    4

Audit Committee

The Audit Committee is a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Audit Committee held nine meetings during fiscal 2024 in order to review the scope and results of the annual audit, to receive reports of the Company’s independent registered public accounting firm and chief internal auditor, to monitor compliance with the Company’s Reporting Procedures for Accounting and Auditing Matters (included in this proxy statement as Appendix A), to review the Company’s enterprise risk management program and to prepare a report of the Audit Committee’s findings and recommendations to the Board of Directors. A current copy of the charter of the Audit Committee is available on the

 

 

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Corporate Governance

 

Company’s website at www.nationalfuel.com, under the Governance section of our Investor Relations page. The members of the Audit Committee are independent as independence for audit committee members is defined in NYSE listing standards and in SEC regulations. No Audit Committee member simultaneously serves on the audit committees of more than three public companies. The Board limits the number of audit committees on which an Audit Committee member can serve to three,

unless the Board has determined that such simultaneous service would not impair the ability of such members to serve effectively. The Company’s Board of Directors has determined that the Company has three audit committee financial experts (as defined by SEC regulations) serving on its Audit Committee, namely Mr. Anderson, Ms. Baumann and Mr. Shaw. The Board has also determined, in its business judgment in accordance with NYSE listing standards, that all members of the Audit Committee are financially literate.

In connection with its review of the Company’s internal audit function, the Audit Committee in 2021 had an external quality assessment performed by IIA Quality Services, LLC under the Institute of Internal Auditors’ (the “IIA”) International Standards for the Professional Practice of Internal Auditing (the “Standards”). The assessment concluded that the Company’s Audit Services Department generally conforms to the Standards, the IIA Code of Ethics, and the Definition of Internal Auditing. “Generally conforms” is the IIA’s highest rating. The Standards state that an external quality assessment should be conducted at least once every five years.

Further information relating to the Audit Committee appears in this proxy statement under the headings “Audit Fees” and “Audit Committee Report.”

Compensation Committee

As described in the Compensation Discussion and Analysis in this proxy statement, the Compensation Committee held five meetings during fiscal 2024 in order to review and determine the compensation of Company executive officers and to review reports and/or grant awards under the National Fuel Gas Company 2010 Equity Compensation Plan, as amended and restated (the “2010 Equity Compensation Plan”), the 2012 Annual At Risk Compensation Incentive Plan (“AARCIP” or the “At Risk Plan”), and the Executive Annual Cash Incentive Program (“EACIP”). The members of the Compensation Committee are independent under NYSE listing standards and “non-employee directors” as defined in SEC regulations. A current copy of the charter of the Compensation Committee is available on the Company’s website at www.nationalfuel.com, under the Governance section of our Investor Relations page.

The Compensation Committee is responsible for various aspects of executive compensation, including approval of the base salaries and incentive compensation of the Company’s executive officers. The Compensation Committee is authorized to evaluate director compensation and make recommendations to the full Board regarding director compensation. The Compensation Committee may form subcommittees and delegate to those subcommittees such authority as the Compensation Committee deems appropriate, other than authority required to be exercised by the Compensation Committee as a whole. The Compensation Committee also administers the 2010 Equity Compensation Plan and the At Risk Plan and approves performance conditions and target incentives for executive officers who are participants in the EACIP. As described more fully in the Compensation Discussion and Analysis, the Compensation Committee directly retained two independent compensation consulting firms to assist in determining executive compensation and evaluating director compensation. In addition, as set forth in the Compensation Committee’s charter, the Chief Executive Officer may and does make, and the Compensation Committee may and does consider, recommendations regarding the Company’s compensation and employee benefit plans and practices, including the compensation of executive officers other than himself. The Compensation Committee then approves executive compensation as it deems appropriate. The Compensation Committee has assessed the independence of the compensation consultants under NYSE listing standards and has determined their work presents no conflicts of interest under SEC regulations. For more information regarding the role of the compensation consultants and the Chief Executive Officer in determining or recommending the amount or form of executive compensation and director compensation, see the Compensation Discussion and Analysis.

Executive Committee

The Executive Committee did not meet during fiscal 2024. The Executive Committee has, and may exercise, the authority of the full Board, except as may be prohibited by New Jersey corporate law (N.J.S.A. § 14A:6-9).

Financing Committee

The Financing Committee met once during fiscal 2024. The Financing Committee may exercise Board authority with respect to specific financing matters for which the Board has delegated responsibility to it.

 

 

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Corporate Governance

 

Nominating/Corporate Governance Committee

All the members of the Nominating/Corporate Governance Committee are independent, as independence is defined in NYSE listing standards. The Nominating/Corporate Governance Committee makes recommendations to the full Board on nominees for the position of director. The Nominating/Corporate Governance Committee also has duties regarding corporate governance matters as required by law, regulation or NYSE rules. Additionally, the Nominating/Corporate Governance Committee oversees the Company’s strategy and reporting with respect to corporate responsibility matters, including ESG factors that are of significance to the Company and its stakeholders. The Nominating/Corporate Governance Committee provides guidance to management on corporate responsibility issues and makes recommendations to the Board regarding corporate responsibility initiatives and strategies. A current copy of the charter of the Nominating/Corporate Governance Committee is available on the Company’s website at www.nationalfuel.com, under the Governance section of our Investor Relations page. The Nominating/Corporate Governance Committee held four meetings during fiscal 2024.

Method of Evaluating Board and Committee Effectiveness

 

 

Annually, the Board and each of the Audit Committee, Compensation Committee and Nominating/Corporate Governance Committee take part in a self-evaluation process to determine their effectiveness and opportunities for improvement. Questionnaires are provided to each director soliciting comments with respect to dynamics of the full Board and each of the above committees, on which the director serves, as well as director performance and adequacy of Board materials. The confidential responses are summarized for Board and Nominating/Corporate Governance committee review. Board members are requested to report dissatisfaction with individual performance to the Chairman of the Board and the Chairman of the Nominating/Corporate Governance Committee. At a Board and Nominating/Corporate Governance Committee meeting, time is allocated to discuss the summary and review any comments or inadequacies.

Process for Nominating Directors

 

 

Stockholders may recommend individuals to the Nominating/Corporate Governance Committee to consider as potential nominees. Procedures by which stockholders may make such recommendations are set forth in Exhibit B to the Company’s Corporate Governance Guidelines, described in the following paragraph. In addition, the Company’s By-Laws provide a process for stockholders meeting certain requirements to have nominees included in the Company’s proxy materials.

In general, the Nominating/Corporate Governance Committee’s charter provides for the Nominating/Corporate Governance Committee to develop and recommend to the Board criteria for selecting new director nominees and evaluating unsolicited nominations, which criteria are included in this proxy statement as part of the Company’s Corporate Governance Guidelines. A current copy of the Corporate Governance Guidelines is included in this proxy statement as Appendix B, and is available on the Company’s website at www.nationalfuel.com, under the Governance section of our Investor Relations page. Appendix B also addresses the qualifications and skills the Nominating/Corporate Governance Committee believes are necessary in a director, and the Nominating/Corporate Governance Committee’s consideration of stockholder recommendations for director. Pursuant to the Corporate Governance Guidelines, in order to be considered in connection with the 2026 Annual Meeting of Stockholders, stockholder recommendations identifying a proposed nominee and setting out his or her qualifications should be delivered to the Company’s Secretary at its principal office no later than September 26, 2025.

Under the process for selecting new Board candidates, the Chairman, the Chief Executive Officer and the Nominating/Corporate Governance Committee discuss the need to add a new Board member or to fill a vacancy on the Board. The Nominating/Corporate Governance Committee will initiate a search, working with staff support and seeking input from Board members and senior management, hiring a search firm if necessary, and considering candidates recommended by stockholders in accordance with Exhibit B to the Corporate Governance Guidelines.

Charitable Contributions by Company

 

 

Within the preceding three years, the Company did not make any charitable contributions to any charitable organization in which a director served as an executive officer which exceeded the greater of $1 million or 2% of the charitable organization’s consolidated gross revenues in a single fiscal year.

 

 

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Corporate Governance

 

Compensation Committee Interlocks and Insider Participation

 

 

There are no “Compensation Committee interlocks” or “insider participation” which SEC regulations or NYSE listing standards require to be disclosed in this proxy statement.

Risk Oversight

 

 

The Board retains oversight of safety, environmental, social, operational, cybersecurity and corporate governance risks, among other areas central to corporate responsibility, including strategic, financial and regulatory risks and opportunities. An important aspect of the Board’s oversight role is the enterprise risk management process, under which enterprise-wide risks have been identified, including climate-related risk and cybersecurity risk, along with mitigative measures to address and manage such risks. Through its enterprise risk management process, the Company has identified specific foundational risks, critical risks and potentially-emerging risks and reviews the assessment of these risks, including risk trends, along with any newly identified risks, on a quarterly basis with the Board. Management also reports quarterly to the Board on significant matters within these risk categories. In addition, management provides a detailed presentation on a topic related to one or more risk categories at each Board meeting. Additional review or reporting on enterprise risks is conducted as needed or as requested by the Board. The Board and management consider enterprise risks and opportunities in their strategic and capital spending decision process, and the Board directs management to integrate corporate responsibility concerns into decision-making throughout the organization.

The Nominating/Corporate Governance Committee specifically has oversight responsibility for corporate responsibility matters that are significant to the Company and its stakeholders. The Company conducts business consistent with our six guiding principles of safety, environmental stewardship, community, innovation, satisfaction, and transparency. To that end, corporate responsibility and ESG matters are a standing agenda item at Nominating/Corporate Governance Committee meetings. In fiscal 2022, the Company published its Climate Report, which aligns our climate-risk disclosures with the Task Force on Climate-Related Financial Disclosures framework. In fiscal 2024, the Company published its fifth annual Corporate Responsibility Report, highlighting our ESG-related initiatives, programs, and actions.

The Audit Committee discusses guidelines and policies governing management’s process for assessing and managing the Company’s exposure to risk, and on a quarterly basis, at meetings which are typically attended by the entire Board, reviews the enterprise risk management process described above. The Audit Committee also oversees the scope of work of the Audit Services Department, which includes review of the internal audit function’s annual risk-based audit plan. The Audit Services Department considers significant risk categories identified through the enterprise risk management process when creating its internal audit plan. Additionally, in conjunction with its review of the integrity of the Company’s financial statements, the Audit Committee discusses with management major financial risk exposures and the steps taken to monitor and control those exposures.

Related Person Transactions

 

 

The Company had no related person transactions in fiscal 2024. The Company’s Code of Business Conduct and Ethics (the “Code of Conduct”) (which is in writing and available to stockholders as described at the end of this proxy statement) identifies the avoidance of any actual or perceived conflicts between personal interests and Company interests as an essential part of the responsibility of the Company’s directors, officers and employees. The Code of Conduct provides that a conflict of interest may arise when a director, officer or employee receives improper personal benefits as a result of his or her position in the Company, or when personal situations tend to influence or compromise a director’s, officer’s or employee’s ability to render impartial business decisions in the best interest of the Company. Potential conflicts of interest under the Code of Conduct would include but not be limited to related person transactions. The Audit Committee administers the Code of Conduct as it relates to the Company’s directors and executive officers.

The Company’s policies and procedures for the review, approval or ratification of related person transactions are set forth in writing in the charter of the Audit Committee. The charter provides that the Audit Committee will review and, if appropriate, approve or ratify any transaction between the Company and a related person which is required to be disclosed under SEC rules. In the course of its review of a transaction, the Audit Committee will consider the nature of the related person’s interest in the transaction, the material terms of the transaction, the significance of the transaction to the related person and to the Company, whether the transaction would affect the independence of a director, and any other matters the Audit Committee

 

 

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Corporate Governance

 

deems appropriate. The Audit Committee will approve or ratify only those transactions that it considers to be in, or not inconsistent with, the best interests of the Company and its stockholders, as the Audit Committee determines in good faith. Any member of the Audit Committee who is a related person with respect to a transaction under review may not participate in the deliberations or vote respecting approval or ratification of the transaction.

Code of Ethics

 

 

The Company has adopted a Code of Business Conduct and Ethics that applies to the Company’s directors, principal executive officer, principal financial officer, controller, other officers and employees that is designed to deter wrongdoing and to promote honest and ethical conduct. The code deals with a variety of corporate matters, including compliance with laws, conflicts of interest, corporate opportunities, use of company resources, fair dealing and confidentiality of company information. The text of the code is available on the Company’s website at www.nationalfuel.com, under the Governance section of our Investor Relations page.

 

 

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  Director Compensation     LOGO  

 

The 2009 Non-Employee Director Equity Compensation Plan was approved at the 2009 Annual Meeting of Stockholders and reapproved at the 2016 and 2019 Annual Meetings of Stockholders (such plan, as reapproved, the “Director Equity Compensation Plan”). This plan provides for the issuance of shares on a quarterly basis to non-employee directors in such amounts as the Board may determine from time to time. In addition, non-employee directors receive a portion of their compensation in cash, paid on a quarterly basis in an amount determined by the Board from time to time. Directors who are not Company employees or retired employees do not participate in any of the Company’s employee benefit or compensation plans. Directors who are current employees receive no compensation for serving as directors.

In fiscal 2024, non-employee directors were paid shares of Common Stock equal in value to approximately $175,000. Common Stock issued to non-employee directors under the Director Equity Compensation Plan is nontransferable until the later of two years from issuance or six months after the recipient’s cessation of service as a director of the Company, except that transferability restrictions lapse upon the death of the recipient. Non-employee directors were also paid a cash retainer at a rate of $27,500 per quarter (or $110,000 per year) for the first three quarters of the fiscal year, and $28,750 per quarter (or $115,000 per year) for the final quarter. The Board increased the annual cash retainer in fiscal 2024 after review of a market assessment provided by one of the Compensation Committee’s independent consultants.

The Lead Independent Director (Mr. Shaw) was paid an additional annual retainer of $25,000, an increase of $5,000 from the prior year. The Chairs of the Audit and Compensation Committees (Mr. Shaw and Mr. Jaggers, respectively) were each paid an additional annual retainer of $20,000, an increase of $5,000 from the prior year for the Compensation Committee Chair. The Chair of the Nominating/Corporate Governance Committee (Ms. Ranich) was paid an additional annual retainer of $15,000. These payments were made in July 2024. For his service as Chairman of the Board, Mr. Smith was paid an additional retainer at a rate of $25,000 per quarter (or $100,000 per year) for the first three quarters of the fiscal year, and $28,750 per quarter (or $115,000 per year) for the final quarter. Where the Board increased these additional retainer amounts, it did so after review of the independent consultant’s market assessment.

The Company requires that each non-employee director beneficially own shares of common stock of the Company (or common stock equivalents) equal in value to at least five times the annual cash retainer by the end of the fifth year of service, and continuing thereafter until the director’s cessation of service as a director. All directors are in compliance with this requirement.

Non-employee members of the Board are eligible to participate in the Company’s Deferred Compensation Plan for Directors and Officers (the “DCP”). In general, the DCP is an unfunded, nonqualified deferred compensation plan open to the directors of the Company and the officers of the Company and its subsidiaries. Under the DCP, and subject to administration by the Compensation Committee of the Board, each eligible officer may defer receipt of his or her base salary and discretionary cash bonuses, and each eligible director may defer receipt of his or her annual cash retainer and quarterly Company common stock awards. Eligible officers may also defer receipt of their performance-based cash bonuses and Company common stock received in settlement of restricted stock units, performance shares or performance units awards under terms and conditions as described in the DCP. Compensation deferred under the DCP is recorded as deferred compensation in cash or stock accounts, as applicable, and certain transfers among accounts are permitted as described in the DCP. Cash accounts accrue interest and will be settled in cash. Interest is credited as of the last day of each calendar quarter. The rate of interest applied at the end of each quarter is the quarterly equivalent of the annual yield on Moody’s Average Corporate Bond Yield as of the last day of the immediately preceding quarter, as published by Moody’s Investors Service, Inc. Stock accounts accrue dividend equivalents and generally will be settled in Company common stock. Payouts will generally be made in accordance with the participants’ deferral elections. The deferred compensation obligations are unsecured general obligations of the Company, and the participants have no right, interest or claim in the assets of the Company, except as unsecured general creditors.

 

 

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Table of Contents
  Director Compensation Table —Fiscal 2024     LOGO  

 

The following table sets forth the compensation paid to each non-employee director for service during fiscal 2024:

 

NAME    FEES
EARNED OR
PAID IN
CASH
($)
(1)
   STOCK
AWARDS
($)
(2)
   ALL OTHER
COMPENSATION
($)
(3)
   TOTAL
($)

David H. Anderson

   111,250    175,053    8    286,311

Barbara M. Baumann

   111,250    175,053    8    286,311

David C. Carroll

   111,250    175,053    8    286,311

Steven C. Finch

   111,250    175,053    8    286,311

Joseph N. Jaggers

   131,250    175,053    8    306,311

Rebecca Ranich

   126,250    175,053    8    301,311

Jeffrey W. Shaw

   156,250    175,053    8    331,311

Thomas E. Skains

   111,250    175,053    8    286,311

David F. Smith

   215,000    175,053    8    390,061

Ronald J. Tanski

   111,250    175,053    8    286,311

 

(1)

Represents the portion of the annual retainer paid in cash, plus additional retainers, as applicable, for service as a committee Chairperson, Lead Independent Director, or Chairman of the Board, including any amounts deferred at the director’s election pursuant to the terms of the DCP.

 

(2)

Represents the aggregate grant date fair value of the Common Stock issued as compensation under the Director Equity Compensation Plan, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, including any amounts deferred at the director’s election pursuant to the terms of the DCP. The average of the high and low stock price on each date of issuance was used to compute the fair value. The average prices (and resultant values of the Stock Awards) were as follows: $51.065 for October 2, 2023 (stock in total valued at $43,763); $50.595 for January 2, 2024 (stock in total valued at $43,765); $53.365 for April 1, 2024 (stock in total valued at $43,759); and $54.30 for July 1, 2024 (stock in total valued at $43,766). As of September 30, 2024, the aggregate compensatory shares paid to the directors (or, as applicable, deferred) for all years of service were as follows: Anderson, 18,184; Baumann, 15,568; Carroll, 35,796; Finch, 21,090; Jaggers, 29,459; Ranich, 26,973; Shaw, 32,243; Skains, 25,884; Smith, 27,665; and Tanski, 18,018.

 

(3)

Represents premiums paid on a blanket travel insurance policy, which covers each director up to a maximum benefit of $500,000. This insurance provides coverage in case of death or injury while on a trip for Company business.

 

 

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  Audit Fees     LOGO  

 

In addition to retaining PricewaterhouseCoopers LLP to report on the annual consolidated financial statements of the Company for fiscal 2024, the Company retained PricewaterhouseCoopers LLP to provide various non-audit services in fiscal 2024. The aggregate fees for professional services by PricewaterhouseCoopers LLP for each of the last two fiscal years were as follows:

 

      2024      2023  

Audit Fees(1)

   $ 2,261,147      $ 2,285,187  

Audit-Related Fees(2)

   $ 0      $ 62,500  

Tax Fees(3)

   $ 46,401      $ 82,243  

All Other Fees(4)

   $ 2,175      $ 2,175  

TOTAL

   $ 2,309,723      $ 2,432,105  

 

(1)

Audit Fees include audits of consolidated financial statements and internal control over financial reporting, reviews of financial statements included in quarterly Forms 10-Q, comfort letters and consents, and audits of certain of the Company’s wholly owned subsidiaries to meet statutory or regulatory requirements.

 

(2)

Audit-Related Fees include audits of certain of the Company’s wholly owned subsidiaries not required by statute or regulation, and consultations concerning technical financial accounting and reporting standards.

 

(3)

Tax Fees include consultations on various federal and state tax matters, tax return preparation and tax audit assistance.

 

(4)

All Other Fees relate to permissible fees other than those described above and include consulting fees and the software-licensing fee for an accounting and financial reporting research tool.

The Audit Committee’s charter references its pre-approval policies and procedures. The Audit Committee has pre-approved the use of PricewaterhouseCoopers LLP for specific types of services, including various audit and audit-related services and certain tax services, among others. The chair of the Audit Committee and, in his absence, another specified member of the committee are authorized to pre-approve any audit or non-audit service on behalf of the committee. Each pre-approval is to be reported to the full committee at the first regularly scheduled committee meeting following such pre-approval.

For fiscal 2024, none of the services provided by PricewaterhouseCoopers LLP were approved by the Audit Committee in reliance upon the “de minimis exception” contained in Section 202 of Sarbanes-Oxley and codified in Section 10A(i)(1)(B) of the Exchange Act and in 17 CFR 210.2-01(c)(7)(i)(C).

 

 

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Table of Contents
  Audit Committee Report     LOGO  

 

The Audit Committee is composed solely of six directors who meet the independence and financial literacy requirements of the New York Stock Exchange and the Securities and Exchange Commission (SEC). The Audit Committee Chairman, Jeffrey W. Shaw, and members David H. Anderson and Barbara M. Baumann, each qualify as an “audit committee financial expert” as defined by the SEC. The responsibilities of the Audit Committee are set forth in the Audit Committee Charter, a copy of which is available on the Company’s website.

The Audit Committee reviews the integrity of the Company’s financial statements and discusses with management major financial risk exposures and the steps taken to monitor and control those exposures. The Audit Committee also oversees the scope of work of the Audit Services Department. That scope includes reviewing the accuracy, reliability and integrity of financial and operational information and the means used to identify, measure, classify and report such information. To that end, management reports quarterly to the Board of Directors on significant risk categories identified through the enterprise risk management process, which the Audit Services Department considers when creating its internal audit plan. The Audit Committee also directly appoints, retains, compensates, evaluates, terminates and oversees the work of the independent auditor for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company, and such firm must report directly to the Audit Committee. In addition to those responsibilities, with respect to the independent auditor, the Audit Committee:

 

   

reviews and evaluates the annual engagement letter, including the independent auditor’s proposed fees;

 

   

reviews, evaluates and monitors the annual audit plan and its progression, including the timing and scope of audit activities;

 

   

annually reviews and evaluates the qualifications, performance and independence of the independent auditor, including the lead partner, and ensures that the lead partner and any other audit partners are rotated at appropriate intervals in compliance with applicable laws, rules and regulations;

 

   

reviews and evaluates the independent auditor report describing internal quality-control procedures and any material issues raised by the most recent internal quality-control review of the independent auditors or outside inquiry or investigation; and

 

   

reviews the independent auditor report describing all relationships between the independent auditor and the Company, including a list of the fees billed for each category, in order to assess the independent auditor’s independence.

Management is responsible for the Company’s consolidated financial statements and for establishing, maintaining, and assessing internal control over financial reporting. PricewaterhouseCoopers LLP, the Company’s independent auditor, is responsible for expressing opinions on the conformity of the Company’s audited financial statements with generally accepted accounting principles and on the Company’s internal control over financial reporting.

As part of its auditor engagement process, the Audit Committee considers whether to rotate the independent auditor. PricewaterhouseCoopers LLP has been the Company’s independent auditor since 1941. PricewaterhouseCoopers LLP rotates its lead audit engagement partner every five years; the Audit Committee interviews proposed candidates and selects the lead audit engagement partner. The Audit Committee believes that there are significant benefits to having an independent auditor with an extensive history with the Company. These include:

 

   

Higher quality audit work and accounting advice, due to the independent auditor’s institutional knowledge of our business and operations, accounting policies and financial systems, and internal control framework; and

 

   

Operational efficiencies because of the independent auditor’s history and familiarity with our business.

In fulfilling its responsibilities, the Audit Committee has reviewed and discussed the Company’s audited financial statements for fiscal 2024 with management. The Audit Committee has also reviewed with management its evaluation of the structure and effectiveness of the Company’s internal control over financial reporting. The Audit Committee has discussed with PricewaterhouseCoopers LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC. The Audit Committee has received the written disclosures and the letter

 

 

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Audit Committee Report

 

from PricewaterhouseCoopers LLP required by the applicable requirements of the PCAOB regarding PricewaterhouseCoopers LLP’s communications with the audit committee concerning independence, and has discussed with PricewaterhouseCoopers LLP that firm’s independence. The Audit Committee also has considered whether PricewaterhouseCoopers LLP’s level of fees and provision of non-audit services to the Company and its affiliates are compatible with PricewaterhouseCoopers LLP’s independence and has concluded that PricewaterhouseCoopers LLP is independent from the Company and its management.

Based on the review, discussions and considerations referred to in the preceding paragraph, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for fiscal 2024 for filing with the SEC.

 

    

AUDIT COMMITTEE

 

Jeffrey W. Shaw, Chairman

David H. Anderson

Barbara M. Baumann

Steven C. Finch

Joseph N. Jaggers

Rebecca Ranich

 

 

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Table of Contents
  Security Ownership of Certain Beneficial Owners and Management     LOGO  

 

The following table sets forth for each current director, each nominee for director, each of the named executive officers identified in the Fiscal 2024 Summary Compensation Table, and for all directors, nominees and current executive officers as a group, information concerning beneficial ownership of Common Stock. The Common Stock is the only class of Company equity securities outstanding. Unless otherwise noted, to the best of the Company’s knowledge, each person has sole voting and investment power with respect to the shares listed. Security holdings are as of December 16, 2024. As of that date, 90,710,599 shares of Common Stock were issued and outstanding.

 

NAME OF BENEFICIAL

OWNER

   SHARES HELD
IN ESOP
(1)
     SHARES HELD IN
401(K)
PLAN
(2)
     SHARES OTHERWISE
BENEFICIALLY OWNED
(3)
    PERCENT OF
CLASS
(4)

David H. Anderson

     0        0        8,336 (5)    *

David P. Bauer

     0        14,631        74,243 (6)    *

Barbara M. Baumann

     0        0        18,493     *

David C. Carroll

     0        0        32,583 (7)    *

Donna L. DeCarolis

     294        25,030        85,415     *

Steven C. Finch

     0        0        22,864 (8)    *

Joseph N. Jaggers

     0        0        30,684     *

Ronald C. Kraemer

     4,444        19,464        46,737 (9)    *

Justin I. Loweth

     0        10,695        53,243 (10)    *

Rebecca Ranich

     0        0        18,324 (11)    *

Jeffrey W. Shaw

     0        0        33,068 (12)    *

Timothy J. Silverstein

     0        4,399        5,629     *

Thomas E. Skains

     0        0        27,733 (8)    *

David F. Smith

     2,269        23,128        315,659 (13)    *

Ronald J. Tanski

     0        0        355,662 (14)    *

Directors, Nominees and Current Executive Officers as a Group (18 Total)

     7,007        120,756        1,153,374 (15)    1.41%

 

*

Represents beneficial ownership of less than 1% of issued and outstanding Common Stock.

 

(1)

This column lists shares held in the National Fuel Gas Company Employee Stock Ownership Plan (“ESOP”). The beneficial owners of these shares have sole voting power with respect to the shares, but do not have investment power until the shares are distributed.

 

(2)

This column lists shares held in the National Fuel Gas Company Tax-Deferred Savings Plan for Non-Union Employees (“TDSP”), a 401(k) plan. The beneficial owners of these shares have sole voting and investment power with respect to the shares.

 

(3)

This column includes shares held of record and any shares beneficially owned through a bank, broker or other nominee, plus deferred stock units under the DCP to the extent shares in respect of such units would have been distributed within 60 days following a separation from service had one occurred on December 16, 2024.

 

(4)

This column lists the sum of the individual’s (or individuals’) holdings shown on this table, expressed as a percentage of the Company’s outstanding shares.

 

(5)

Includes 212 shares held through a family trust, as to which Mr. Anderson shares voting and investment power, and 2,951 shares beneficially owned under the DCP, as to which Mr. Anderson does not have voting or investment power. In addition to shares beneficially owned and reflected in the table, Mr. Anderson owns 11,809 deferred stock units under the DCP with respect to which shares of stock would not have been distributed within 60 days following a separation from service had one occurred on December 16, 2024.

 

(6)

Includes 2,196 shares held by Mr. Bauer’s children, as to which Mr. Bauer does not have voting or investment power. In addition to shares beneficially owned and reflected in the table, Mr. Bauer owns 205,193 deferred stock units under the DCP with respect to which shares of stock would not have been distributed within 60 days following a separation from service had one occurred on December 16, 2024.

 

(7)

Includes 2,951 shares beneficially owned under the DCP, as to which Mr. Carroll does not have voting or investment power. In addition to shares beneficially owned and reflected in the table, Mr. Carroll owns 11,809 deferred stock units under the DCP with respect to which shares of stock would not have been distributed within 60 days following a separation from service had one occurred on December 16, 2024.

 

(8)

Includes 14,760 shares beneficially owned under the DCP, as to which the director does not have voting or investment power.

 

(9)

In addition to shares beneficially owned and reflected in the table, Mr. Kraemer owns 46,059 deferred stock units under the DCP with respect to which shares of stock would not have been distributed within 60 days following a separation from service had one occurred on December 16, 2024.

 

 

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Security Ownership of Certain Beneficial Owners and Management

 

(10)

Includes 38,970 shares owned jointly with Mr. Loweth’s wife, as to which Mr. Loweth shares voting and investment power, 225 shares held by Mr. Loweth’s wife in an individual retirement account, as to which Mr. Loweth does not have voting or investment power, and 500 shares held in custodial accounts for Mr. Loweth’s children, as to which Mr. Loweth holds voting and investment power.

 

(11)

Includes 983 shares beneficially owned under the DCP, as to which Ms. Ranich does not have voting or investment power. In addition to shares beneficially owned and reflected in the table, Ms. Ranich owns 13,777 deferred stock units under the DCP with respect to which shares of stock would not have been distributed within 60 days following a separation from service had one occurred on December 16, 2024.

 

(12)

Includes 100 shares held through a family trust, as to which Mr. Shaw shares voting and investment power.

 

(13)

Includes 210,772 shares held through a family partnership, as to which Mr. Smith shares voting and investment power, and 14,760 shares beneficially owned under the DCP, as to which Mr. Smith does not have voting or investment power.

 

(14)

Includes 429 shares owned jointly with Mr. Tanski’s wife, as to which Mr. Tanski shares voting and investment power.

 

(15)

In addition to shares beneficially owned and reflected in the table, executive officers not listed individually in the table own an aggregate of 14,105 deferred stock units under the DCP with respect to which shares of stock would not have been distributed within 60 days following a separation from service had one occurred on December 16, 2024.

As of December 16, 2024, each of the following persons is known to the Company to be the beneficial owner of more than five percent of the Common Stock, as set forth in a Schedule 13G filed with the SEC. The Common Stock is the only class of Company stock outstanding.

 

NAME AND ADDRESS OF

BENEFICIAL OWNER

   SHARES HELD AS
TRUSTEE FOR COMPANY
EMPLOYEE BENEFIT
PLANS
    SHARES
OTHERWISE
BENEFICIALLY HELD
    PERCENT
OF
CLASS
(1)
 

The Vanguard Group

100 Vanguard Boulevard

Malvern, PA 19355

     1,936,640 (2)      13,208,477 (3)      16.70

BlackRock, Inc.

55 East 52nd Street

New York, NY 10055

     N/A       8,283,291 (4)      9.13

 

(1)

This column lists the sum of the shares shown on this table, expressed as a percentage of the Company’s outstanding shares at December 16, 2024.

 

(2)

This amount represents the shares held by Vanguard Fiduciary Trust Company, a wholly owned subsidiary of The Vanguard Group, in its capacity as trustee for certain employee benefit plans. These shares have been allocated to plan participants. The plan trustee votes the shares allocated to participant accounts as directed by those participants. Shares held by the trustee on behalf of the plans as to which participants have made no timely voting directions are voted by the trustee in the same proportion as the shares of Common Stock for which the trustee received timely directions, except in the case where to do so would be inconsistent with provisions of Title I of ERISA.

 

(3)

The number of shares is derived from Amendment No. 12 to Schedule 13G filed on February 13, 2024 by The Vanguard Group. The filing states that The Vanguard Group has sole voting power with respect to zero shares of Common Stock, shared voting power with respect to 32,818 shares of Common Stock, sole dispositive power with respect to 13,090,813 shares of Common Stock, and shared dispositive power with respect to 117,664 shares of Common Stock.

 

(4)

The number of shares is derived from the Schedule 13G filed on January 25, 2024 by BlackRock, Inc. The filing states that BlackRock, Inc. has sole voting power with respect to 8,076,268 shares of Common Stock, shared voting power with respect to zero shares of Common Stock, sole dispositive power with respect to 8,283,291 shares of Common Stock, and shared dispositive power with respect to zero shares of Common Stock.

 

 

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Equity Compensation Plan

Information

    LOGO  

 

As of September 30, 2024

 

 

 

PLAN CATEGORY

NUMBER OF SECURITIES TO BE
ISSUED UPON EXERCISE OF
OUTSTANDING OPTIONS,
WARRANTS AND RIGHTS
(A)
WEIGHTED-
AVERAGE EXERCISE
PRICE OF OUTSTANDING
OPTIONS, WARRANTS AND
RIGHTS
(B)
NUMBER OF SECURITIES
REMAINING AVAILABLE FOR
FUTURE ISSUANCE UNDER
EQUITY COMPENSATION PLANS
(EXCLUDING SECURITIES
REFLECTED IN COLUMN (A))
(C)

Equity compensation plans approved by security holders

  1,157,770 (1)  $ 0   3,986,467 (2) 

Equity compensation plans not approved by security holders

  0 $ 0   0

Total

  1,157,770 $ 0   3,986,467

 

(1)

The securities listed in column (A) include 719,577 shares of Common Stock which would be issued under performance-based awards outstanding at September 30, 2024 if the target level of performance is achieved under those awards. If actual performance rises above the target level of performance for these awards, additional shares would generally be issued. For example, if maximum performance were achieved, 1,439,154 shares of Common Stock would be issued under performance-based awards outstanding at September 30, 2024. In that event, the number of shares to be issued noted in column (A) would be 1,877,347.

 

(2)

Of the securities listed in column (C), 97,440 were available at September 30, 2024 for future issuance pursuant to the Director Equity Compensation Plan and 3,889,027 were available for future issuance under the 2010 Equity Compensation Plan. All securities included in column (C) are available for issuance for awards other than options, warrants or rights.

 

 

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  Executive Compensation     LOGO  

 

Compensation Committee Report

 

 

The Compensation Committee of the Board of Directors has reviewed and discussed with management the Compensation Discussion and Analysis contained in this proxy statement. Based upon this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

 

    

COMPENSATION COMMITTEE

 

J. N. Jaggers, Chairman

D. H. Anderson

T. E. Skains

Compensation Discussion and Analysis

 

 

This Compensation Discussion and Analysis (“CD&A”) provides a detailed review of the Company’s compensation of named executive officers, including the goals of the compensation program, the process for determining compensation levels, and analysis of the specific components of compensation, among other things. The Board of Directors believes that the Company’s compensation policies and practices, as developed following engagement with stockholders, including discussions with respect to ESG factors, encourage a culture of pay for performance and are strongly aligned with the long-term interests of the Company’s stockholders.

The Company’s named executive officers for fiscal 2024 are David P. Bauer, President and Chief Executive Officer; Timothy J. Silverstein, Treasurer and Chief Financial Officer; Ronald C. Kraemer, Chief Operating Officer, and President of the Company’s Pipeline and Storage segment; Justin I. Loweth, President of the Company’s E&P and Gathering segments; and Donna L. DeCarolis, President of the Company’s Utility segment.

Stockholder Engagement and Alignment

 

 

2024 Say-on-Pay Vote and Stockholder Engagement

The 2024 say-on-pay advisory vote yielded a result of 96.4% of votes cast in support of the compensation of the Company’s named executive officers. The Board (including the Compensation Committee) considered this outcome another indicator of strong stockholder support for the overall philosophy and structure of the Company’s executive compensation policies and decisions. Given the high approval percentage of the vote, the Compensation Committee did not make any significant changes to the executive compensation program that were based on the results of the 2024 say-on-pay advisory vote.

Members of Company management periodically engage with stockholders throughout the year, including institutional investors and retail stockholders, to obtain feedback on matters of interest to them. The Board has directed management to continue to engage as appropriate with interested stockholders, and to inform it of any requests for meetings with members of the Board. The Board and management value and consider stockholder feedback and believe that engagement with stockholders enables the Company to enhance its disclosures and initiatives, where appropriate.

Executive Compensation Aligned with Stockholders’ Interests

The Compensation Committee has developed the Company’s compensation policies and procedures to align the interests of executives with those of the Company’s stockholders. The Company recognizes and rewards executives through compensation arrangements that directly link executive pay to the Company’s performance, and we seek to help ensure a strong alignment of interests with our stockholders by including a significant percentage of equity in the overall mix of pay. As shown in the chart below, which includes the fiscal 2024 target compensation mix for the CEO and an average for the other four named executive officers, 84% of the target compensation of David Bauer, the Company’s CEO, was at-risk or variable

 

 

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Executive Compensation

 

compensation, with 63% tied to equity (in the form of performance shares and restricted stock units), and 21% tied to cash-based incentive awards subject to short-term performance goals. The average for the named executive officers other than the CEO includes special retention equity awards granted to two of those officers. The special retention awards are discussed in detail starting at page 56 below.

 

 

LOGO

Key features of the Company’s regular executive compensation program include the following:

 

  Ø

Annual performance incentives of the named executive officers are based on objective performance goals;

 

  Ø

Long-term performance incentives are composed entirely of equity;

 

  Ø

Long-term performance goals beginning with fiscal 2022 consist of three-year relative TSR, three-year relative ROC, and three-year reductions in GHG emissions and methane intensity levels;

 

  Ø

Named executive officers and other officers are required to meet stock ownership guidelines that range from one to six times base salary (six times for the CEO and three times for other named executive officers);

 

  Ø

Executive officers may not hedge or pledge Company stock;

 

  Ø

Equity incentive plans prohibit the repricing of equity awards;

 

  Ø

The Compensation Committee engages two independent compensation consultants to assist in setting compensation;

 

  Ø

All change-in-control agreements are double triggered;

 

  Ø

The Company does not provide tax “gross-ups” on any compensation or with respect to any change-in-control payments; and

 

  Ø

The Company has a clawback policy in compliance with NYSE requirements.

 

 

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Executive Compensation

 

CEO Pay Relative to Peers

Reflected in the table below is a comparison of fiscal 2023 total direct compensation for Mr. Bauer against that of CEOs in the Corporate Peer Group (as defined below) selected by our Compensation Committee in September 2023. Fiscal 2023 is the most recent fiscal year for which proxy statement data is available for our peers. Mr. Bauer’s target total direct compensation and actual total direct compensation, as shown in the table, were at the 53rd and 45th percentiles, respectively, of the peer group.

CEO & President

Compared to CEO Proxy Data for FY 2023

 

  COMPANY (N=17)   TITLE  

TOTAL
REVENUES

($MM)

 

MARKET CAP

AS OF 09/30/2023

($MM)

  FYE # OF
EMPLOYEES
  TOTAL DIRECT COMPENSATION
   ACTUAL     TARGET 

ANTERO MIDSTREAM CORPORATION

  Chairman, Chief Executive Officer and President     $ 1,042     $ 5,747       604     $ 11,325,414     $ 10,872,227

ATMOS ENERGY CORPORATION

  President and Chief Executive Officer     $ 4,275     $ 15,727       5,019     $ 6,404,876     $ 6,041,068

CNX RESOURCES CORPORATION

  President and Chief Executive Officer     $ 3,432     $ 3,646       470     $ 4,760,010     $ 4,760,010

COTERRA ENERGY INC.

  Chairman, Chief Executive Officer and President     $ 5,914     $ 20,424       894     $ 14,271,724     $ 13,951,724

DT MIDSTREAM INC

  President and Chief Executive Officer     $ 922     $ 5,128       402     $ 8,946,236     $ 8,490,536

EQT CORPORATION

  President and Chief Executive Officer     $ 6,909     $ 16,689       881     $ 10,600,926     $ 10,550,926

EQUITRANS MIDSTREAM CORPORATION

  Chairman and Chief Executive Officer     $ 1,394     $ 3,869       773     $ 15,370,224     $ 7,102,344

GULFPORT ENERGY CORPORATION

  President and Chief Executive Officer     $ 1,792     $ 2,216       226     $ 5,575,809     $ 4,963,509

MDU RESOURCES GROUP, INC.

  President and Chief Executive Officer     $ 4,657     $ 3,987       9,145     $ 6,851,870     $ 5,773,651

NEW JERSEY RESOURCES CORPORATION

  President and Chief Executive Officer     $ 1,963     $ 3,964       1,350     $ 5,089,647     $ 4,738,329

ONE GAS, INC.

  President and Chief Executive Officer     $ 2,372     $ 3,868       3,900     $ 4,368,722     $ 4,308,820

RANGE RESOURCES CORPORATION

  President and Chief Executive Officer.     $ 3,374     $ 7,816       548     $ 6,267,016     $ 5,850,016

SM ENERGY COMPANY

  President, Chief Executive Officer and Director     $ 2,374     $ 4,705       544     $ 7,438,905     $ 6,818,949

SOUTHWESTERN ENERGY CORPORATION

  President and Chief Executive Officer     $ 6,522     $ 8,105       1,165     $ 8,603,752     $ 8,027,729

SOUTHWEST GAS HOLDINGS, INC.

  President and Chief Executive Officer     $ 5,434     $ 4,318       14,943     $ 5,466,259     $ 5,016,259

SPIRE INC.

  President and Chief Executive Officer     $ 2,666     $ 2,976       3,589     $ 4,642,993     $ 4,849,025

UGI CORPORATION

  President and Chief Executive Officer     $ 8,928     $ 4,818       5,160     $ 8,264,848     $ 8,505,098

Summary Statistics

   

 

     

 

 

 

 

 

     

 

 

 

 

 

     

 

 

 

 

 

     

 

 

 

 

 

     

 

 

 

 

 

75th Percentile

   

 

    $ 5,434     $ 7,816       3,900     $ 8,946,236     $ 8,490,536

Average

   

 

    $ 3,644     $ 6,941       3,197     $ 7,897,014     $ 7,095,307

Median

   

 

    $ 3,374     $ 4,705       894     $ 6,851,870     $ 6,041,068

25th Percentile

   

 

    $ 1,797     $ 3,869       548     $ 5,466,259     $ 4,963,509

NATIONAL FUEL GAS COMPANY

  CEO & President     $ 2,174     $ 4,766       2,240     $ 6,503,542     $ 6,514,948

Percentile Rank

   

 

      29%         53%         65%         45%         53%  

 

 

1 | ®2024 Korn Ferry

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KORN FERRY

BE MORE THAN

Objectives of the Named Executive Officer Compensation Program

 

 

The Company’s named executive officer compensation program is designed to attract, motivate, reward and help retain executive talent in order to achieve the objectives that contribute to the overall success of the Company. When setting compensation for the Company’s named executive officers, the Compensation Committee’s primary goal is to provide

 

 

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Executive Compensation

 

balanced incentives for creating stockholder value in both the near-term and long-term. The Compensation Committee awards a combination of cash and equity components that are designed to focus management efforts on drivers of stockholder value, including financial, safety, environmental, diversity, and customer service metrics. The Compensation Committee establishes the compensation program based on its business judgment after consultation with its compensation consultants.

Total compensation for named executive officers includes the following key components, each of which is addressed in greater detail below:

 

COMPENSATION COMPONENT

  OBJECTIVES   KEY FEATURES IN 2024
Base Salary  

• Provide a fixed level of pay in recognition of day-to-day job performance.

 

• Attract, retain and motivate leadership with compensation reflecting specific responsibilities, experience and effectiveness.

 

• Generally references the energy industry median provided by independent compensation consultants; may pay greater base salary to attract, retain and motivate executives.

 

• Adjustments are made based on Compensation Committee members’ business judgment.

 

• Overall corporate performance and individual performance are factors for subjective consideration.

Annual Cash Incentive
Compensation
 

• Motivate performance toward, and reward achievement of, near-term financial, operating, and ESG goals.

 

• Target awards are set as a percentage of base salary.

Long-Term Equity Incentive
Compensation
 

• Focus attention on managing the Company from a long-term investor’s perspective to create long-term stockholder value.

 

• Encourage executives and other managers to have a significant, personal investment in the Company through stock ownership.

 

• Reward executives for longer-term financial performance of the Company relative to an industry peer group and achievement of emissions goals.

 

• Long-term incentive compensation denominated in equity.

 

• Excluding special retention awards granted in fiscal 2024, long-term incentive compensation allocated two-thirds to performance shares and one-third to time-based RSUs as an additional retention tool, or, for long-tenured named executive officers (Mr. Kraemer and Ms. DeCarolis), entirely to performance shares, to enhance emphasis on achievement of performance targets.

 

• Beginning in fiscal 2022, performance shares allocated among three distinct performance conditions — three-year reductions in GHG emissions and methane intensity levels; three-year TSR; and three-year ROC.

• Performance conditions are objective and, with respect to TSR and ROC goals, measured relative to a recognized peer group.

 

• Special long-term retention awards granted to two officers (Mr. Silverstein and Mr. Loweth) in fiscal 2024, allocated one-half to performance shares and one-half to time-based RSUs, each with ten-year vesting periods.

 

 

 

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Executive Compensation

 

COMPENSATION COMPONENT

  OBJECTIVES   KEY FEATURES IN 2024
Executive Health, Welfare, and Retirement Benefits  

• Provide executives with reasonable and competitive benefits commensurate with those in the regulated and unregulated energy industry.

 

• Help the Company attract and retain high-caliber employees in high-level management positions.

 

• Retirement benefits consisting of:

 

• qualified defined contribution plan (401(k));

 

• qualified non-contributory defined contribution plan (retirement savings account or “RSA”) or qualified defined benefit plan (depending on year of hire); and

 

• non-qualified executive retirement plan and/or non-qualified tophat plan, depending on year of hire.

Change in Control Agreements  

• Help ensure that executives direct their attention to their duties, acting in the best interests of stockholders, notwithstanding potential for loss of employment in connection with a change in control.

 

• Double-trigger provision to avoid providing benefits to officers who continue to enjoy employment with the Company after a change in control event.

 

• No tax gross-up on payment.

 

• Lump sum severance payment is reduced on a pro-rata basis if termination occurs between age 62 and 65.

Process for Determining Compensation

 

 

Risk Assessment

The Board conducted a risk assessment of the Company’s compensation programs during fiscal 2024. Based on the assessment, the Board concluded that the Company’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.

Role of the Compensation Committee

The Compensation Committee comprises three directors, all of whom have been determined by the Board to be independent. The Compensation Committee administers the Company’s compensation program for named executive officers, setting base salaries and available incentive compensation ranges. The Compensation Committee exercises the authority delegated to it by the stockholders or the Board under the Company’s cash and equity incentive compensation plans, which include:

Cash Compensation Plans/Short-Term Incentive

 

   

AARCIP, generally for named executive officers; and

 

   

EACIP, generally for other executive officers; and

Equity Compensation Plan/Long-Term Incentive

 

   

2010 Equity Compensation Plan.

In addition, the Compensation Committee makes recommendations to the Board with respect to the development of incentive compensation plans and equity-based plans and changes in compensation for non-employee directors.

As described below, the Compensation Committee retained the services of independent compensation consultants to assist it in administering the Company’s compensation program. Further, as described earlier in this proxy statement, the members of the Compensation Committee have significant experience in the energy industry and as leaders of major corporations. In these roles, as well as through their experiences with the Company, the Compensation Committee has garnered extensive knowledge regarding the establishment of a competitive and properly focused compensation program for the Company’s named executive officers. In making the decisions discussed below, the Compensation Committee uses its subjective business judgment developed through its years of experience.

 

 

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Executive Compensation

 

Role of the Chief Executive Officer

In making its subjective determinations with respect to named executive officers other than the Chief Executive Officer, the Compensation Committee discusses the information it receives from its independent compensation consultants with the CEO and seeks his recommendation as to the appropriate base salaries and target short-term and long-term incentive awards for each of these officers, based on his assessment of the officers’ performance, contributions and abilities, and taking into account the compensation consultants’ recommendations. The CEO also provides input to the Compensation Committee’s compensation consultants with regard to the responsibilities of the Company’s named executive officers, to facilitate the consultants’ recommendations and comparisons of such officers and their positions to other positions in the marketplace. The CEO made no recommendations with regard to his own compensation.

Independent Compensation Consultants

The Compensation Committee retains independent compensation consultants to inform its business judgment as to compensation matters, including the selection of peer companies for compensation comparison purposes. The Compensation Committee retained the services of Korn Ferry (a unit of Korn/Ferry International) (“Korn Ferry”) to provide a competitive assessment of compensation at the Company’s businesses other than its exploration and production business, and Meridian Compensation Partners, LLC (“Meridian”) to assess compensation at its exploration and production business.

Determining Our Peers

The Compensation Committee understands the importance of using comparative data that reflects information from companies with business segments comparable to those of the Company. Because of the Company’s diverse asset mix, selecting an appropriate peer group of companies requires a customized approach that calls for more critical thought than simple selection of a standard industry group, which may include utility companies without a presence in the broader natural gas industry. The Company’s assets span the entire natural gas value chain and include exploration and production (“E&P”), interstate natural gas transmission and storage, natural gas gathering, and natural gas utility operations. For compensation and performance comparisons, the Compensation Committee utilizes two separate peer groups. The Korn Ferry corporate peer group (the “Corporate Peer Group”) is the primary peer group against which the Compensation Committee generally compares named executive officer compensation and is intended to include a group of companies that, as a whole, represents our asset mix. Meridian assists in the formulation of a peer group that is targeted to evaluate our E&P business and the compensation of executives who oversee it (the “E&P Peer Group”). Both peer groups may change over time due to corporate transactions or as the Compensation Committee believes is warranted based on its business judgment. The Compensation Committee believes that the peer groups include an appropriate mix of companies that reflect businesses in which the Company participates, or with which it competes, as reflected in the tables below.

For the purpose of establishing 2024 compensation, the Compensation Committee selected the peer groups listed below. In addition, the Compensation Committee utilized the Corporate Peer Group for purposes of setting relative performance conditions on long-term incentive awards of performance shares.

Corporate Peer Group

Korn Ferry provides information to the Compensation Committee to consider in evaluating and setting compensation for Company officers and officers of affiliate companies other than Seneca, the Company’s E&P business. For those officers, the Compensation Committee reviewed an analysis of the following forms of compensation for comparable positions in general industry and the energy industry:

 

  1)

base salary;

 

  2)

total cash compensation (base salary plus short-term cash incentive); and

 

  3)

total direct compensation (base salary plus short-term cash incentive plus long-term equity incentive).

The Compensation Committee also reviewed recommendations on incentive compensation target amounts with respect to:

 

  1)

short-term cash incentive; and

 

  2)

long-term equity incentive.

 

 

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Additionally, the Compensation Committee reviewed a proxy analysis of base salary, incentive targets, total cash compensation, long-term incentive and total direct compensation for the offices of President and CEO of the Company, Chief Operating Officer of the Company, Treasurer and Chief Financial Officer of the Company, and President of National Fuel Gas Distribution Corporation, based on proxy data for the Company and the 17 energy companies in the Corporate Peer Group listed below. The Compensation Committee selected these 17 companies for purposes of establishing compensation for 2024 because each participated in one or more businesses that are similar to those of the Company.

 

     CORPORATE PEER COMPANIES FOR FISCAL 2024   

 EXPLORATION 

 & 

 PRODUCTION 

  

 PIPELINE 

 & STORAGE 

 AND/OR 

 GATHERING 

  

 NATURAL 

 GAS UTILITY 

1

 

Antero Midstream Corporation

        X     

2

 

Atmos Energy Corporation

        X    X

3

 

CNX Resources Corporation

   X    X     

4

 

Coterra Energy Inc.

   X          

5

 

DT Midstream Inc.

        X     

6

 

EQT Corporation

   X    X     

7

 

Equitrans Midstream Corporation

        X     

8

 

Gulfport Energy Corporation

   X          

9

 

MDU Resources Group, Inc.

        X    X

10

 

New Jersey Resources Corporation

        X    X

11

 

ONE Gas, Inc.

             X

12

 

Range Resources Corporation

   X          

13

 

SM Energy Company

   X          

14

 

Southwest Gas Holdings, Inc.

             X

15

 

Southwestern Energy Company

   X          

16

 

Spire Inc.

        X    X

17

 

UGI Corporation

        X    X
   

TOTAL

   7    10    7

The Compensation Committee reviews the members of the Corporate Peer Group each year and makes such adjustments as it believes are warranted. The Compensation Committee made no revisions to the peer group for purposes of establishing compensation for 2024.

E&P Peer Group

Meridian provides information to the Compensation Committee to consider in evaluating and setting compensation for employees at Seneca, including Mr. Loweth. Meridian also provides information relevant to the compensation of Mr. Bauer, Mr. Kraemer and Mr. Silverstein. The Compensation Committee requested these additional analyses due to the importance of the Company’s E&P segment and the contributions of Mr. Bauer, Mr. Kraemer and Mr. Silverstein in the management of that segment. The Compensation Committee selected Meridian due to its expertise in E&P industry compensation matters.

The Compensation Committee reviewed an analysis for officers of Seneca and select officers of the Company of compensation practices with respect to the following forms of compensation for comparable positions in the E&P industry:

 

  1.

base salary;

 

  2.

target short-term incentive;

 

  3.

target cash compensation (base salary plus short-term incentive);

 

  4.

long-term incentive; and

 

  5.

total target compensation (base salary plus short-term and long-term incentive).

 

 

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Executive Compensation

 

The Compensation Committee reviewed an analysis based on data from Meridian’s proprietary North America Oil & Gas Exploration & Production compensation database, supplemented by publicly available sources. The Compensation Committee selected 15 E&P peer companies based on criteria such as revenues, assets, and nature of operations that made them relatively comparable to Seneca, in terms of operations, and similar in size to Seneca or the Company. The companies in the 15-member E&P Peer Group ranged in size from approximately $2.6 billion to $14.4 billion in assets (with a median of $6.8 billion). By comparison, at the time the E&P Peer Group was selected, Seneca’s assets and the Company’s consolidated assets totaled approximately $2.8 and $8.3 billion, respectively.

 

     E&P PEER COMPANIES FOR FISCAL 2024

1

   Antero Resources Corporation    9    Matador Resources Company

2

   Callon Petroleum Company    10    Permian Resources Corporation

3

   Chesapeake Energy Corporation    11    Range Resources Corporation

4

   CNX Resources Corporation    12    SM Energy Company

5

   Comstock Resources Inc.    13    Southwestern Energy Company

6

   Earthstone Energy, Inc.    14    Talos Energy Inc.

7

   Gulfport Energy Corporation    15    Vital Energy, Inc. (formerly Laredo Petroleum, Inc.)

8

   Magnolia Oil & Gas Corporation          

The Compensation Committee reviews the companies in the E&P Peer Group from time to time and makes adjustments as it believes are warranted. For purposes of establishing compensation for 2024, the Compensation Committee removed PDC Energy, Inc., which was involved in a merger. The Compensation Committee added Magnolia Oil & Gas Corporation, based on the criteria noted above.

Fiscal 2024 Total Compensation

 

 

Base Salary

Base salaries provide a predictable base compensation for day-to-day job performance. The Compensation Committee reviews named executive officer base salaries at calendar year-end and adjusts them, if it deems appropriate in its subjective business judgment, following review of its compensation consultants’ competitive analyses and, with respect to named executive officers other than the CEO, upon consideration of the recommendations of the CEO. In addition, base salary may be adjusted during the calendar year when changes in responsibility occur or when circumstances otherwise warrant. Base salary is not adjusted based on specific objective financial results, although overall corporate performance is reviewed by the Compensation Committee in its decision-making process. The Compensation Committee does not use formulas; rather, it exercises its business judgment.

In establishing base salaries for named executive officers other than those employed by Seneca, the Compensation Committee generally references the 50th percentile of the Korn Ferry Energy Industry survey data. For the President of Seneca, the Compensation Committee generally references Meridian survey data for the chief operating officer at independent exploration and production company peers. Because that position is not a direct match, however, the Compensation Committee also references, as a supplement, the position of chief executive officer at a subset of those peers (the subset excludes the three largest companies in the peer group). In its subjective business judgment, the Compensation Committee may pay a salary greater than a referenced amount if it is necessary to attract, retain and motivate the individuals responsible for the success of the business enterprise. The Compensation Committee considers overall corporate performance and an individual’s specific responsibilities, experience (including time in position) and effectiveness and makes adjustments based on business judgment and, for named executive officers other than the CEO, the CEO’s recommendations.

In setting Mr. Bauer’s base salary for calendar year 2024, the Compensation Committee referenced the independent compensation consultant’s report indicating Mr. Bauer’s then-current base salary was below the 50th percentile of the consultant’s Energy Industry market data. The Compensation Committee increased Mr. Bauer’s salary from $1,040,000 to $1,080,000, a level still below the 50th percentile level.

In determining Mr. Silverstein’s base salary for calendar year 2024, the first full calendar year following his promotion to Chief Financial Officer in May 2023, the Compensation Committee referenced the independent compensation consultants’ reports and increased Mr. Silverstein’s salary from $370,000 to $426,000, a level below the Energy Industry 50th percentile for chief financial officers. The increase followed discussion with Mr. Bauer regarding Mr. Silverstein’s responsibilities, effectiveness

 

 

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Table of Contents

Executive Compensation

 

and experience. The Compensation Committee expects to increase Mr. Silverstein’s compensation in steps to the median for CFOs.

For calendar year 2024, upon review of the independent compensation consultants’ reports and consultation with Mr. Bauer, the Compensation Committee increased Mr. Kraemer’s base salary from $805,000 to $825,000, a level below the Energy Industry 50th percentile for positions comparable to his position as Chief Operating Officer.

For calendar year 2024, the Compensation Committee increased Mr. Loweth’s base salary as President of Seneca and President of National Fuel Gas Midstream Company, LLC (“Midstream”) from $675,000 to $699,000, a level above the 75th percentile of the independent compensation consultant’s survey data for chief operating officers of independent exploration and production company peers, but below the 25th percentile of the consultant’s survey data for chief executive officers of the subset those of peers. The Compensation Committee’s action on Mr. Loweth’s salary followed discussion with Mr. Bauer of Mr. Loweth’s responsibilities, experience and effectiveness.

For calendar year 2024, following discussion with Mr. Bauer regarding Ms. DeCarolis’ responsibilities, experience and effectiveness, the Compensation Committee increased her base salary from $670,000 to $694,000, an amount in line with the Energy Industry 50th percentile for positions comparable to her position as President of the Company’s Utility segment.

The fiscal 2024 base salaries paid to the named executive officers are shown in the Fiscal 2024 Summary Compensation Table under the “Salary” column within this proxy statement.

Annual Cash Incentive

The Company provides an annual cash incentive to its executives to motivate their performance over a short term (which is generally considered to be no longer than two years). Early in the fiscal year, the Compensation Committee establishes for each participant in the AARCIP a target amount for the annual cash incentive, stated as a percentage of base salary. Subject to the limitations described in this paragraph, executives generally can earn up to two times the target percentage, based on performance on written goals. The maximum payment may not exceed the lesser of (i) two times the executive’s base salary, or (ii) two million dollars. In addition, because earnings-related goals take into account performance over two fiscal years, as described below, performance below the maximum level on an earnings-related goal in the first year will negate the possibility of achieving maximum performance on the averaged two-year goal. For participants in the EACIP, the process is similar, except the CEO has broad discretion to reduce the amount otherwise payable as annual cash incentive based on such factors as the CEO may determine.

Target Award Levels

In considering target award levels for the annual cash incentive for fiscal 2024, the Compensation Committee took into account the recommendations of the independent compensation consultants based on reviews of competitive market practices, and the recommendations of Mr. Bauer with respect to participants in the AARCIP other than himself. The Compensation Committee exercised its business judgment and maintained target awards for fiscal 2024 at the same levels it had set in 2023 for Messrs. Bauer, Kraemer and Loweth and Ms. DeCarolis. Mr. Bauer’s target annual incentive brought his fiscal 2024 target total cash (salary plus target annual incentive) to a level slightly below the Energy Industry 50th percentile for chief executive officers. For Mr. Silverstein, the Compensation Committee set a target award of 80% of base salary for fiscal 2024. This was the first annual incentive target set by the Compensation Committee for Mr. Silverstein, who became an executive officer during fiscal 2023. Mr. Silverstein’s target annual incentive brought his fiscal 2024 target total cash (salary plus target annual incentive) to a level in line with the Energy Industry 50th percentile for chief financial officers.

 

AARCIP PARTICIPANT

   TARGET
(AS A PERCENTAGE OF BASE SALARY)
 

Mr. Bauer

     125

Mr. Silverstein

     80

Mr. Kraemer

     100

Mr. Loweth

     95

Ms. DeCarolis

     80

Fiscal Year 2024 Performance Goals

Based upon discussions with Mr. Bauer and upon review of forecasted financial and operational data, the Compensation Committee approved for each participant in the AARCIP a set of particular performance goals for the 2024 fiscal year. The Compensation Committee aligned these goals with the Company’s strategic business plans, as well as its ongoing corporate responsibility efforts, including ESG matters. Certain goals overlapped among participants; for example, each had goals tied to consolidated EBITDA, emissions reduction, safety and diversity. Incentive payments are based upon performance against the objective performance criteria. All performance criteria applicable to a particular executive are communicated to that executive in writing at the time the criteria are established.

 

 

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Executive Compensation

 

Two-Year Averaging of Earnings-Related Goals

The earnings-related goals established by the Compensation Committee are structured so as to average current-year and prior-year performance. As a result, earnings performance in any given year will impact compensation over two years, mitigating against a potential incentive to pursue short-term results at the expense of longer-term value. In the Company’s E&P segment, for example, a low commodity price environment can militate in favor of scaling back drilling plans, a change that can negatively affect near-term earnings but enhance longer-term value. The Compensation Committee endeavors to incentivize strong short-term results without encouraging activity that is not economic under prevailing market conditions. Averaging earnings-related goals over two years helps to balance those two objectives. The use of a two-year averaging technique for earnings-related goals will impact the performance percentage points earned on those goals in a given year, but over time and all other things being equal, it will not change the cumulative performance percentage points earned for actual performance.

Targets Based on Financial Forecast

The Compensation Committee sets certain annual incentive targets based on the Company’s financial forecast for the current fiscal year. Many factors affect the forecast, including some that are not within the Company’s control. For example, although the Company enters into hedging arrangements to mitigate the volatility of natural gas prices, natural gas futures prices themselves are beyond the Company’s control. The Company uses the then-current outlook for natural gas prices when it develops its financial forecast. The Company’s natural gas price projections approximate the NYMEX forward curve and consider the impact of local sales point differentials and new physical firm sales, transportation, and financial hedge contracts. Early in fiscal 2024, the Company expected that NYMEX natural gas prices would average $3.25 per MMBtu for the fiscal year. By contrast, early in fiscal 2023, the Company expected that NYMEX natural gas prices would average $6.00 per MMBtu for the first half of fiscal 2023 and $4.74 per MMBtu for the second half. The significant decline year over year in expected natural gas prices led to a lower target range for the Seneca EBITDA goal for fiscal 2024 as compared to fiscal 2023. In addition, because Seneca contributes substantially to consolidated EBITDA, the lower Seneca target range meaningfully impacted the consolidated EBITDA goal, which likewise fell below the prior year’s target. Nevertheless, the fiscal 2024 target ranges for all of the EBITDA goals exceeded actual results from fiscal 2023.

The types of objective goals approved for fiscal 2024 and the purpose of the goals are set forth in the following table:

 

GOALS

  PURPOSE
Financial performance goals related to earnings (EBITDA*)   To focus executives’ attention on the Company’s overall profitability, as well as the profitability of certain segments, as appropriate. Performance is averaged with the prior year’s performance to mitigate against short-term action to impact one year’s earnings.
Operations performance goals related to expenses and finding and development costs in the exploration and production business, compression reliability in the pipeline and storage and gathering businesses, and customer service in the utility business   To focus executives’ attention on controlling expense, ensuring operational reliability, and continued excellence in customer service.
ESG performance goals related to emissions reductions, safety, and diversity and inclusion   To focus executives’ attention on environmental stewardship, employee, customer and public safety, workplace inclusiveness, and diversity among the workforce

 

*

For purposes of the goals, EBITDA is calculated as operating income plus depreciation, depletion and amortization, plus any period-end impairment charges, excluding the effect of tax code amendments and regulatory responses thereto that impact EBITDA, any reversal of reserves for preliminary survey and investigation charges recorded in a prior fiscal year, and the impact any joint development agreement, restructuring, reorganization, acquisition, disposition, or winding down of any business unit.

To determine the annual cash incentive award payout based on stated performance objectives, the weight assigned to each goal is multiplied by the percentage of the goal achieved to calculate a weighted percentage for each goal. Once the weighted percentage for each goal is determined, the percentages are totaled. That total weighted percentage is multiplied by the target award to arrive at the total incentive payment amount.

The fiscal 2024 annual cash incentives earned by the named executive officers are shown in the Fiscal 2024 Summary Compensation Table in the “Non-Equity Incentive Plan Compensation” column. For each named executive officer, the amount earned was based on performance against objective goals established by the Compensation Committee. As described above, each of the EBITDA goals averaged fiscal 2024 performance with the prior year’s performance. The Compensation Committee approved the incentive payments made to each of the named executive officers.

 

 

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The following chart identifies the goals assigned to each AARCIP participant for the 2024 fiscal year, the percentage of each goal achieved, the weight assigned to each goal, and the weighted percentage achieved for each goal. Also noted is each participant’s target percentage of base salary, total weighted percentage achieved, target amount, and actual incentive payout. Following the chart, numbered sequentially to match the appearance of the performance objective in the chart, is a summary of what the objective was at the threshold level, target level and maximum level of performance, and a summary of actual performance. Where a target level of performance is stated as a range, achievement at any point within the range will result in the same contribution to the total payout. With regard to EBITDA goals, performance is averaged with the prior year’s performance as a mechanism to mitigate against short-term action to impact one year’s earnings.

 

              

ANNUAL CASH INCENTIVE

 

EXECUTIVE

    BAUER     SILVERSTEIN     KRAEMER     LOWETH     DECAROLIS  

Target Percentage of Base Salary

      125%       80%       100%       95%       80%  

FISCAL 2023
PERFORMANCE GOALS

  PERFORMANCE
(%)
    WGHTD    

WGHTD %

ACHVD

    WGHTD    

WGHTD %

ACHVD

    WGHTD    

WGHTD %

ACHVD

    WGHTD    

WGHTD %

ACHVD

    WGHTD    

WGHTD %

ACHVD

 

Financial Goals

                                                                 
1.    Consolidated EBITDA*     81       0.25       20.25       0.25       20.25       0.25       20.25       0.25       20.25       0.30       24.30  
2.

3.

  

Regulated EBITDA*

Seneca EBITDA*

   

117

76

 

 

   

0.20

0.10

 

 

   

23.40

7.60

 

 

   

0.20

0.10

 

 

   

23.40

7.60

 

 

   

0.25

0.10

 

 

   

29.25

7.60

 

 

    0.20       15.20       0.35       40.95  
4.    Midstream EBITDA*     93       0.10       9.30       0.10       9.30       0.05       4.65       0.10       9.30                  

Operations Goals

                                                                 
1.    Seneca Lease Operating Expense     133                                                       0.10       13.30                  
2.    Seneca Finding and Development Cost     200       0.10       20.00       0.10       20.00           0.10       20.00      
3.    Seneca General and Administrative Expense     200                   0.05       10.00      
4.    Compression Reliability     200               0.05       10.00          
5.    Customer Service     137                                       0.05       6.85                       0.10       13.70  

Environmental, Social and

Governance Goals

                                                                 
1.    Seneca Emissions Reduction     100                                                       0.05       5.00                  
2.    Pipeline Emissions Reduction     100