HOUSTON - APA Corp (NASDAQ:APA), a $8.95 billion market cap company in the crude petroleum and natural gas industry, announced on Thursday the approval of new executive compensation agreements by its Management Development and Compensation Committee.
The changes are part of the company's initiative to align executive rewards with performance and shareholder value. According to InvestingPro data, APA has maintained strong profitability with a 72% return on equity over the last twelve months.
The updated agreements introduce a new form of Performance Share Program Agreement and Stock Option Award Agreement under APA Corp's 2016 Omnibus Compensation Plan. These agreements will govern the awarding of performance shares and stock options to the company's executive officers.
The new Performance Share Program Agreement has been revised to include vesting conditions based on two performance measures: Relative Total (EPA:TTEF) Shareholder Return (60%) and Cash Return on Invested Capital (40%).
This change reflects a shift from the company's previous performance share program agreement, aiming to strengthen the link between executive compensation and company performance. InvestingPro analysis reveals that APA currently trades at an attractive P/E ratio of 3.58, with six analysts recently revising their earnings expectations upward.
Additionally, the Stock Option Award Agreement has been updated to reflect amendments made since the previous form used in 2018. Notably, the definition of "Involuntary Termination" has been revised. These updates are intended to ensure that the company's executive compensation practices remain competitive and in line with industry standards.
This announcement is based on the information disclosed in a recent SEC filing by APA Corp. The company, headquartered in Houston, Texas, has not provided any additional comments on the potential impact of these changes on its financial performance or strategic direction.
Currently offering a 4.22% dividend yield and maintaining dividend payments for 55 consecutive years, APA appears undervalued according to InvestingPro's Fair Value model. Discover more insights and detailed analysis in APA's comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, APA Corporation has announced plans to issue senior notes due in 2035 and 2055 as part of a broader debt restructuring strategy. The net proceeds from this issuance will be used to purchase outstanding senior indebtedness of its subsidiary, Apache Corporation (NASDAQ:APA). Additionally, APA Corporation has announced significant changes to its executive leadership team, with Executive Vice President of Operations, Clay Bretches, set to retire in 2025, and Kimberly Warnica appointed as Executive Vice President and Chief Legal Officer.
APA Corporation recently finalized the acquisition of Callon (NYSE:CPE) Petroleum Company, marking a significant expansion in the energy sector. This strategic merger is expected to consolidate APA's industry foothold and capitalize on synergies between the two companies. UBS, Evercore ISI, and RBC Capital Markets have adjusted their price targets for APA Corporation following the company's announcement of a third-quarter consolidated net loss of $223 million, though the adjusted net income stood at $370 million.
The company is strategically focusing on its Permian operations and planning exploration in Alaska for the first half of 2025. APA Corporation also plans to sustain production in the Permian and Egypt with a 2025 capital budget of $2.2 billion to $2.3 billion.
Amid these recent developments, APA Corporation faces a $2 billion liability in the North Sea and a slight decline in Egyptian production. However, the GranMorgu project in Suriname is expected to contribute significantly from 2028.
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