PRINCIPAL SHAREHOLDERS

The following table reports, as of February 15, 2023, beneficial ownership of the Company’s common stock (“Common Stock”) by holders of more than five percent of the Company’s Common Stock as of the dates reported by such holders. Unless otherwise noted, all ownership information is based upon filings made by such persons with the Securities and Exchange Commission (“SEC”).

DIRECTORS AND EXECUTIVE OFFICERS

The following table reports, as of February 15, 2023, beneficial ownership of Common Stock by each director and nominee for director, by each named executive officer listed in the “Summary Compensation Table” below and by all directors, nominees and executive officers as a group. Unless otherwise indicated and pursuant to applicable community property laws, the persons below have sole voting and investment power with respect to the shares of Common Stock showed as beneficially owned by them.

DELINQUENT SECTION 16(A) REPORTS

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s executive officers and directors to file initial reports of ownership and reports of changes in ownership of our common stock with the SEC and, pursuant to rules promulgated under Section 16(a), such individuals are required to furnish the Company with copies of Section 16(a) reports they file. Based solely on a review of the copies of such reports furnished to the Company, and written representations that those reports accurately reflect all reportable transactions and holdings, all reports required by Section 16(a) were timely filed in 2022, except that the Company inadvertently omitted the 2022 annual director restricted stock unit awards that were granted to the following individuals on June 1, 2022, as described in the Company’s proxy statement for its 2022 annual meeting of shareholders: Dorothy M. Ables, Robert S. Boswell, Amanda M. Brock, Paul N. Eckley, Hans Helmerich, Lisa A. Stewart, Frances M. Vallejo, and Marcus A. Watts. Forms 5 reflecting such awards were timely filed in February 2023. The Company also inadvertently omitted two acquisitions made on March 30, 2022 by Hans Helmerich. Such transactions were included on Mr. Helmerich’s Form 5 filed on February 9, 2023.

POLICY ON RELATED PARTY TRANSACTIONS

Our legal staff is primarily responsible for developing and implementing processes and controls to obtain information regarding our directors, executive officers, and significant shareholders with respect to related party transactions and then determining, based on the facts and circumstances, whether we or a related party has a direct or indirect interest in these transactions. On a periodic basis, the legal team reviews all transactions involving payments between the Company and any company that has a Coterra executive officer or director as an officer or director. In addition, our directors and executive officers are required to notify us of any potential related party transactions and provide us with the information regarding such transactions.

Our GSR Committee reviews our disclosure of related-party transactions in connection with its annual review of director independence. These procedures are not in writing but are documented through the meeting agendas and minutes of our GSR Committee, in each case with the assistance of our legal staff.

RELATED PARTY TRANSACTIONS

Several of our Board members serve as directors or executive officers of other organizations, including organizations with which the Company has commercial relationships. The Company does not believe that any director had a direct or indirect material interest in any such relationships during 2022 and through the date of this proxy statement.

Our Board has adopted Corporate Governance Guidelines to assist the Board and its committees in performing their duties to oversee the governance of the Company. Our Corporate Governance Guidelines outline the functions and responsibilities of the Board, director qualifications, and various processes and procedures designed to ensure effective and responsive governance. The guidelines are reviewed annually and revised as appropriate to reflect changing regulatory requirements and best practices. All of our key corporate governance documents, including the Corporate Governance Guidelines, the charters of our Board committees, our Code of Business Conduct and Ethics and our 2022 Sustainability Report, can be found on the Company’s website at www.coterra.com.

DIRECTOR NOMINATIONS AND QUALIFICATIONS

Nomination Process

Under its charter, the GSR Committee seeks out and evaluates qualified candidates to serve as Board members as necessary to fill vacancies or the additional needs of the Board, and considers candidates recommended by shareholders and management of the Company. The GSR Committee identifies nominees through a number of methods, which may include retention of professional executive search firms, use of publicly available director databases or referral services and recommendations made by incumbent directors. A resume is reviewed and, if merited, an interview follows. Any shareholder desiring to propose a nominee to the Board of Directors should submit such proposed nominee for consideration by the GSR Committee, including the proposed nominee’s qualifications, to: Corporate Secretary, Coterra Energy Inc., 840 Gessner Road, Suite 1400, Houston, Texas 77024. Shareholders who meet certain requirements specified in our bylaws may also nominate candidates for inclusion in our proxy materials for an annual meeting as described in “General Information” below. There are no differences in the manner in which the GSR Committee evaluates nominees for director based on whether the nominee is recommended by a shareholder or the incumbent directors.

Board Composition Following the Merger

Pursuant to the Merger Agreement, the Board consists of five members selected by Cabot and five members selected by Cimarex. Until the 2024 annual meeting of shareholders, if a vacancy on the Board results from the departure of a legacy Cabot director, the appointment or nomination of the individual to fill that vacancy must be approved by not less than a majority of the legacy Cabot directors and, if the vacancy results from the departure of a legacy Cimarex director, the appointment or nomination of the individual to fill that vacancy must be approved by not less than a majority of the legacy Cimarex directors.

Skills and Qualifications

Whether nominated by a shareholder or through the activities of the GSR Committee, the GSR Committee seeks to select candidates who have personal and professional integrity, who have demonstrated exceptional ability and judgment and who will be most effective, in conjunction with the other nominees and Board members, in collectively serving the long-term interests of the Company and its shareholders. The GSR Committee’s assessment of candidates will include, but not be limited to, considerations of character, judgment, diversity, age, expertise, industry experience, independence, other board commitments and the ability and willingness to devote the time and effort necessary to be an effective board member. The GSR Committee has adopted minimum criteria for Board membership that include (i) a strong commitment to his or her fiduciary responsibilities to the Company’s shareholders, with no actual or perceived conflict of interest that would interfere with his or her responsibilities to or relationships with the Company’s shareholders, employees, suppliers, and customers; (ii) the ability to think strategically and the insight to assist management in placing the Company in a competitive position within the industry; (iii) a record of achievement, and a position of leadership in his or her field, with the interest and intellect to be able to address energy industry challenges and opportunities; and (iv) the time to attend Board meetings and the commitment to devote any reasonable required additional time to deal with Company business.

The Board encourages a diversity of backgrounds, including with respect to race, gender and ethnic background, among its members. In February 2021, the Board formalized its commitment to diversity among its members by amending the GSR Committee charter to add a commitment to include qualified racially, ethnically and gender diverse candidates in the initial candidate list for all director searches. In this way, the Board has ensured that the nomination process will include diverse candidates for consideration each time it seeks to nominate a new director.

The Board considers candidates with significant direct or indirect energy industry experience that will provide the Board as a whole the talents, skills, diversity and expertise to serve the long-term interests of the Company and its shareholders. Specifically, the following are the key skills and qualifications considered in evaluating the director nominees and the Board composition as a whole.

DIRECTOR SKILLS AND EXPERIENCE

Public Company C-Suite

Private Company C-Suite

Exploration & Production

Climate Change

Related Industry

Other Public Company Boards

Financial/ Accounting

Cyber- security

Legal

Operating/ Strategic Responsibility

EHS Responsibility

Ables

Boswell

Brock

Dinges

Eckley

Helmerich

Jorden

Stewart

Vallejo

Watts

Director Independence

The Company’s Corporate Governance Guidelines require that at least a majority of the Company’s directors be independent under the New York Stock Exchange (“NYSE”) listing standards and all other applicable legal requirements. Additionally, all members of the Audit Committee, Compensation Committee and GSR Committee are required to be independent. The NYSE listing standards include objective tests that can disqualify a director from being treated as independent, as well as a subjective element, under which the Board must affirmatively determine that each independent director has no material relationship with the Company or management. In making its independence determinations, the Board considered all material relationships with each director, and all transactions since the start of 2020 between the Company and each director nominee, members of their immediate families and entities associated with them.

The Board has determined that each director, with the exception of Mr. Jorden, our Chairman, Chief Executive Officer and President, and Mr. Dinges, our former Executive Chairman and former Chief Executive Officer, is independent. In making its independence determination, the Board reviewed and discussed additional information provided by the directors and the Company with regard to each director’s business and personal activities as they may relate to the Company and the Company’s management. The Board considered the transactions in the context of the NYSE’s objective listing standards, the additional standards established for members of audit committees, and the SEC, U.S. Internal Revenue Service and NYSE standards for compensation committee members. Some members of the Company’s Board also serve as directors of other entities with which the Company does business. Each of these relationships is reviewed by the Board, which examines the amount of business done by the Company and the other entities and the gross revenue for each of the other entities. This review is for each of the last three fiscal years for which financial data is available.

Each of Ms. Ables, Mr. Boswell, Ms. Brock, Mr. Helmerich, and Ms. Stewart serve or have served on boards of directors or as officers of companies with which we have done business in the last three years. When evaluating the independence of Ms. Ables, Mr. Boswell, Mr. Helmerich, and Ms. Stewart, the Board considered that each served as a director, and not an officer, of the other companies involved in the applicable transactions with the Company.

Mr. Boswell is the Chairman of the Board and Chief Executive Officer of Laramie Energy, LLC (“Laramie”). On January 11, 2022, Cimarex entered into a sub-lease of a portion of its office space in Denver, Colorado with Laramie. This space is no longer needed by the Company as it integrates its management team at Coterra’s headquarters in Houston, Texas. The sublease is for a term from March 1, 2022 through August 31, 2026, with rental payments to the Company of approximately $405,000 per year increasing to approximately $450,000 per year, payable monthly on a pro-rata basis. The Board reviewed this transaction with Laramie and concluded: (i) the transaction is proper and not material when compared to Coterra’s and Laramie’s consolidated gross revenues and anticipated revenues for the relevant periods; (ii) the transaction occurred in the ordinary course of business, at market rates and on arms’ length terms; (iii) the Board does not review or approve office leases or subleases; and (iv) Mr. Boswell’s relationship with Laramie does not interfere with his independent judgment as a director of Coterra.

When determining the independence of Ms. Brock, the Board considered that Ms. Brock is the Chief Executive Officer of Aris Water, a publicly-traded growth-oriented environmental infrastructure and solutions company that owns, operates and designs crucial water midstream assets across key unconventional U.S. basins, including the Permian Basin. The Company’s 2022 payments to Aris Water represented approximately one percent of Aris Water’s consolidated gross revenues for 2022. The Board reviewed these transactions and concluded: (i) the transactions are proper and not material when compared to both the Company’s total costs and Aris Water’s gross revenues; (ii) the transactions occurred in the ordinary course of business and at arms’ length; (iii) the produced water disposal agreement governing such transactions was entered into before Cabot and Cimarex entered into the Merger Agreement and, as a result, was not reviewed or approved by the Board; and (v) Ms. Brock’s relationship with Aris Water does not interfere with her independent judgment as a director of Coterra.

In each case, the Board made a subjective determination that, because of the nature of the transactions, the director’s relationship with the other entity and the amount involved, no relationships exist that, in the opinion of the Board, would impair the director’s independence. Further, the Board has determined that all members of the Audit Committee, Compensation Committee and GSR Committee are independent.

Director Orientation and Continuing Education

Each new director appointed to fill a vacancy or elected at the annual meeting of shareholders undergoes an orientation program immediately upon joining the Board. The program adopted by the Company includes in-person meetings with the Chair and the CEO and other key officers to discuss Company business and strategy, review of a comprehensive director handbook that encompasses all Board policies and procedures and corporate documents, access to the Board’s portal containing all past board meeting materials and a briefing by the Corporate Secretary as to the legal requirements and obligations of Board membership. New directors will typically attend Board committee meetings for committees on which they do not serve for a period of time to familiarize themselves with the areas of responsibility of each committee.

All of our directors are encouraged to pursue continuing education opportunities for directors of public companies, generally, and the Company will reimburse directors for reasonable expenses incurred in connection with one such continuing education program each year. Ms. Stewart, our former independent Lead Director and the Chair of the Environmental, Health & Safety Committee, and Ms. Vallejo, Co-Chair of the GSR Committee, received the National Association of Corporate Directors Director Certification (NACD.DC) in 2021. NACD.DC is the premier director designation available in the United States and consists of three components: study and education, an exam and ongoing professional development in the field of corporate governance.

Director Succession

Our GSR Committee engages in regular director succession planning as part of its duty to oversee the composition and effectiveness of the Board and its committees. Regular succession planning allows the GSR Committee to nominate qualified candidates for annual shareholder elections and to fill vacancies created upon the planned or unplanned departure of sitting directors or upon increasing the size of the Board to meet additional needs of the Board. In its succession planning activities, the GSR Committee reviews annual Board and committee self-assessments, reviews a Board skills matrix of identified skills for each director and for the effective functioning of the Board, tracks director tenure and expected director departures and engages in various director recruitment activities. The Board does not have a mandatory retirement policy.

Chairman of the Board

The Board believes having a combined Chairman/CEO and a Lead Independent Director, who have the duties described above, best serve the interests of our shareholders because this structure provides an appropriate balance between strategy development and independent oversight of management.

Mr. Dinges served as the Executive Chairman of the Board of the Company from the closing of the Merger with Cimarex on October 1, 2021 until the expiration of his term on December 31, 2022 in accordance with the Merger Agreement. He served as Chairman, President and Chief Executive Officer until the closing of the Merger on October 1, 2021.

Mr. Jorden began serving as Chief Executive Officer and President of the Company effective on the closing of the Merger on October 1, 2022. Following the expiration of Mr. Dinges’s term as Executive Chairman on December 31, 2022, the Board appointed Mr. Jorden as Chairman of the Board effective January 1, 2023.

Our Corporate Governance Guidelines contain strong checks and balances regarding the roles, or combined roles, of CEO and Chair. Those provisions include the requirement that only non-employee directors serve on committees of the Board (other than the Executive Committee), and the requirement that a substantial majority of the directors be independent, as discussed above under “Director Independence.” All of our directors, other than Mr. Dinges and Mr. Jorden, are independent.

Lead Independent Director

The Chairman is joined in the leadership of the Board by our Lead Independent Director, who ordinarily is nominated by the GSR Committee and elected by the non-employee directors. Pursuant to the Merger Agreement, the Company agreed that, until the Company’s 2024 annual meeting of shareholders, the Board shall have a lead independent director who shall be (i) a continuing Cimarex director at any time when the Chair of the Board is a continuing Cabot director and (ii) a continuing Cabot director at times that the Chair of the Board is a continuing Cimarex director. Pursuant to this arrangement, Ms. Stewart served as the Lead Independent Director from the closing of the Merger on October 1, 2021 until December 31, 2022 when Mr. Jorden was elected as Chairman. Because Mr. Jorden is a continuing Cimarex director, the Board appointed Mr. Boswell as Lead Independent Director effective January 1, 2023. Mr. Boswell is a continuing Cabot director.

BOARD MEETINGS AND COMMITTEES

The Board of Directors held four regularly scheduled and five special meetings during 2022. All directors attended at least 75 percent of the meetings of the Board of Directors and of the committees on which they served that were held during the period that the directors served.

The Company’s policy is that it expects all members of the Board of Directors to attend the Company’s annual meeting of shareholders. In 2022, all of the members of the Board attended the annual meeting.

Committee Membership

Information on each of the Board’s standing committees as of the date hereof is discussed below. The charters of Board committees can be found on the Company’s website at www.coterra.com. The following is a summary of the composition of each of the standing committees during 2022 and through the date of this proxy statement:

Committees

Independent?

2022 Meetings

Dinges

Jorden

Ables

Boswell

Brock

Eckley

Helmerich

Stewart

Watts

Vallejo

Governance & Social Responsibility

Yes

4

-

Audit

Yes

4

Compensation

Yes

7

Environment, Health & Safety

Yes

4

Executive

No

1

	COMMITTEE CHAIR OR CO-CHAIR
	MEMBER OF COMMITTEE

Committee Responsibilities

Governance and Social Responsibility Committee

The function of the GSR Committee is to assist the Board in fulfilling its responsibility to the shareholders by:

In accordance with its charter, the GSR Committee has adopted minimum criteria for Board membership, which are discussed in more detail at “Director Nominations and Qualifications” above.

Audit Committee

The function of the Audit Committee is to assist the Board in overseeing:

The Audit Committee Charter provides that the Audit Committee shall pre-approve all audit, review or attest engagements and permissible non-audit services, including the fees and terms thereof, to be performed by the independent auditors, subject to, and in compliance with, the de minimis exception for non-audit services described in Section 10A(i)(1)(B) of the Securities Exchange Act of 1934 and the applicable rules and regulations of the SEC. The Audit Committee has delegated to each member of the Audit Committee authority to pre-approve permissible services to be performed by the independent auditors. Decisions of a member to pre-approve permissible services must be reported to the full Audit Committee at its next scheduled meeting.

Each member of the Audit Committee satisfies the financial literacy and independence requirements of the NYSE listing standards. The Board has also determined that each member of the Audit Committee meets the requirements of an “audit committee financial expert” as defined by the SEC.

Compensation Committee

The function of the Compensation Committee is to:

Environment, Health & Safety Committee

The function of the Environment, Health & Safety (“EHS”) Committee is to assist the Board in providing risk oversight and support of the Company’s policies, programs and initiatives on the environment, health and safety. Among other things, the EHS Committee:

The EHS Committee also reviews comparisons of our safety performance with established benchmarks, such as the Bureau of Labor Statistics (BLS), American Exploration and Production Council (AXPC) and the Independent Producers EHS Managers Forum. This allows the Board to assess safety performance on a continuous basis and provides the governance structure to ensure our programs are effective for providing a safe working environment for our employees.

Executive Committee

The function of the Executive Committee is to exercise all power and authority of the Board of Directors in the event action is needed between regularly scheduled Board meetings and a meeting of the full Board is deemed unnecessary, except as limited by the Company’s bylaws or applicable law. The Executive Committee met once during 2022 and all members were in attendance.

BOARD’S OVERSIGHT OF RISK MANAGEMENT

Cybersecurity Risk Oversight

Cybersecurity preparedness is an area of increasing focus for our Board, the Audit Committee, and our management team, particularly as our operations increasingly rely on digital technologies. The Audit Committee receives a quarterly update from the Company’s Vice President – Information Technology regarding cybersecurity and information security risks, including the nature of threats, defense and detection capabilities, incident response plans and employee training activities, among others, as applicable.

CODE OF BUSINESS CONDUCT AND ETHICS

Every director, officer and employee is required to comply with the Company’s Code of Business Conduct and Ethics, or Code of Conduct. The purpose of the Code of Conduct is to promote honest and ethical conduct and compliance with the law. Any suspected violations of applicable laws, rules or regulations, the Code of Conduct, or unethical business practices may be reported through use of the Company’s confidential telephonic hotline at (877) 813-9101 or online at www.coterra.ethicspoint.com. The full text of the Code of Conduct can be found on the Company’s website at www.coterra.com.

Any waiver of the Code of Conduct for non-executive officers or employees may be granted by the Company’s Chief Executive Officer, General Counsel, Chief Financial Officer, or Chief Human Resources Officer. Any waiver of the Code of Conduct for directors or executive officers may be granted only by the Board of Directors or by the GSR Committee, subject to the disclosure and other provisions of the Securities Exchange Act of 1934, as amended, the rules promulgated thereunder and the applicable rules of the NYSE. In case a waiver is granted to a director or executive officer, the notice of the waiver shall be posted on the Company’s website, www. coterra.com, within four business days of the vote by the Board of Directors or shall be otherwise disclosed as required by applicable law or NYSE rules. Notices of waivers posted on the website shall remain there for a period of 12 months and shall be retained in our files as required by law.

EXECUTIVE SUMMARY

This Compensation Discussion and Analysis (“CD&A”) describes our compensation philosophy, objectives, policies and practices in place during 2022. Many of the decisions made by the Compensation Committee of the Board of Directors of the Company were the result of the merger with Cimarex Energy Co. (“Cimarex”) on October 1, 2021 (the “Merger”), pursuant to the Agreement and Plan of Merger among Cabot Oil & Gas Corporation (“Cabot”) Double C Merger Sub, Inc. and Cimarex, dated May 23, 2021 (the “Merger Agreement”). The closing of the Merger in the fourth quarter of 2021 resulted in certain changes to the Company’s compensation programs. This CD&A also discusses certain actions taken by our Committee after the Merger with respect to the legacy Cimarex executive officers, as contemplated by the Merger Agreement, and certain legacy Cabot executive officers, as well as the Compensation Committee’s early 2023 executive compensation decisions.

This CD&A focuses on the compensation of our Chief Executive Officer, our Chief Financial Officer, our three other most highly compensated executive officers for 2022 (the “NEOs”), including our Executive Chairman through December 31, 2022 (who was formerly our Chairman, President and Chief Executive Officer prior to the Merger), namely:

Mr. Dinges and Mr. Schroeder were executive officers of Cabot prior to the Merger and this CD&A will sometimes refer to them collectively as “legacy Cabot NEOs.” Mr. Jorden, Mr. Bell and Mr. Clason were executive officers of Cimarex prior the Merger and this CD&A will sometimes refer to them collectively as “legacy Cimarex NEOs.”

Our compensation plans and practices are designed to align the financial interests of our NEOs with the financial interests of our shareholders. To that end, we provide our NEOs with a competitive base salary, an annual cash bonus opportunity based on the achievement of specific goals aligned with shareholder value creation and long-term incentives tied to long-term total shareholder return and annual cash flow attainment. In 2022 the level of at-risk pay for the NEOs ranged from 86 percent to 91 percent of the total annual compensation opportunity, with our CEO having the highest level of at-risk pay of the NEOs.

2022 Compensation Highlights

ALIGNING 2022 COMPENSATION PROGRAM WITH BEST PRACTICES

In February and March 2022, the Compensation Committee adopted Coterra’s first post-Merger executive compensation program. The 2022 executive compensation program is designed to align with governance best practices, shareholder expectations and Coterra’s business strategy as a combined company. The highlights of the 2022 executive compensation program include the following:

Shareholder Outreach and Response

For 2019 through 2021, we have received over 94 percent support from shareholders on our say-on-pay vote. In 2022, we received 74 percent support from shareholders, and in response, we engaged with shareholders to solicit feedback:

OVERVIEW OF OUR COMPENSATION PROGRAM

Philosophy and Objectives of Our Compensation Program

Following the closing of the Merger on October 1, 2021, the Compensation Committee began to build an integrated and aligned set of compensation programs for Coterra NEOs. That integration continued into 2022. Based on requirements of the Merger Agreement, our NEOs continued to participate in some of their respective legacy company’s programs until full integration was completed in late 2022.

The Compensation Committee oversees an executive compensation program designed to attract, retain, and engage highly qualified executives and to capture value for shareholders. The primary objectives of our compensation program are:

We achieved these objectives in 2022 by:

Our Compensation Practices

The following practices and policies in place in 2022 ensured that our executives’ compensation was aligned with shareholders’ interests.

What we do:
	For 2022, added emissions reductions target metrics to the short-term incentive program
	Emphasis on long-term, performance-based equity compensation
	Short-term incentive compensation based on disclosed performance metrics (with payout caps) including operational, financial and returns metrics
	Provide for “double trigger” cash payouts in change-in-control agreements
	Substantial stock ownership and retention requirements for executive officers and directors
	Clawback policy
	Hold annual advisory “say-on-pay” vote
	Only independent directors on Compensation Committee
	Use an independent compensation consultant

What we don’t do:
	No vesting periods of less than three years for equity awards issued in February 2022, other than pro-rata vesting for transitioning officers
	No hedging or pledging of company stock by executive officers or directors
	No excise tax gross-ups for executive officers after amendment of change in control agreement with former CEO and expiration of last agreement with tax gross-up provision without making any gross-up payments
	No vesting of equity awards after retirement if competing with Company
	No re-pricing or discounting of options or stock appreciation rights (“SARs”)
	No performance metrics that would encourage excessive risk-taking

ELEMENTS OF OUR COMPENSATION PROGRAM DESIGNED TO SUPPORT PAY AND PERFORMANCE ALIGNMENT

In 2022 we used various elements of executive compensation, with an emphasis on variable compensation and long-term incentives, a large portion of which is considered at-risk. The elements of executive compensation utilized in 2022 are presented in the table below and discussed in more detail later in the CD&A.

EXECUTIVE COMPENSATION

We believe our executive compensation policies and programs effectively served the interests of the shareholders and the Company in 2022. The Compensation Committee has worked to devise, manage and provide an executive compensation program that is designed to meet its intended objectives and contribute to the Company’s overall success.

2022 Committee Activity

At its February 2022 meeting and periodically throughout the year, the Compensation Committee referenced competitive market study data of the compensation peer group prepared by FW Cook, the Compensation Committee’s independent compensation consultant. Based on the data and the CEO’s recommendations with respect to the other officers, the requirements of the Merger Agreement that compensation opportunities not be reduced for one year after the October 1, 2021 closing of the Merger and the employment agreements entered into by Mr. Jorden and Mr. Dinges in connection with the Merger, the Compensation Committee determined 2022 salaries, bonus payouts for 2021 performance, and the 2022 annual grant of long-term incentive awards for the executive officers. A detailed discussion of each item of compensation can be found below under “2022 Compensation Decisions.”

Also at its February 2022 meeting, and prior to making any compensation decisions, the Compensation Committee reviewed a detailed analysis of equity awards and their retentive value for each NEO. Over the course of the year, the Compensation Committee reviewed each element of compensation for the NEOs, including elements of total direct compensation and payments upon severance or change-in-control, as well as other benefits and perquisites. Lastly, at the February 2022 meeting, the Compensation Committee and the Board of Directors discussed and approved the 2022 performance criteria for the 2022 annual cash bonus plan.

PEER GROUP

In February 2022, the Compensation Committee approved a new compensation peer group to better reflect the size, operations and market of Coterra following the closing of the Merger. The Compensation Committee also approved a new performance peer group (the “Stock Performance Group”) for the February 2022 relative TSR performance awards comprised of the same companies that were selected for the compensation peer group plus two indices: the SPDR S&P Oil and Gas Exploration and Production ETF Index and the S&P 500 Industrials Index. The new compensation peer group for 2022, is as follows (new peer companies in bold):

2022 COMPENSATION DECISIONS

Base Salary

The Compensation Committee believes base salary is a critical element of executive compensation because it provides executives with a base level of income. In February 2022, base salary for all executive positions was reviewed by the Compensation Committee. Individual salaries in 2022 took into account our established salary practices and our current salary budget; the individual’s levels of responsibility, contribution and value to the Company; individual performance; prior relevant experience; breadth of knowledge; internal and external pay equity issues; and, with respect to Mr. Jorden and Mr. Dinges, their employment agreements entered into in connection to the Merger.

Effective upon the closing of the Merger on October 1, 2021, Mr. Dinges resigned as President and Chief Executive Officer and became the Executive Chairman of the Company, under the terms and base salary established in the Dinges Agreement. His base salary was to remain the same as for his prior role for the duration of the Dinges Employment Period. See “Merger-Related Compensation Decisions—Compensation Arrangements with Dan O. Dinges” below.

Annual Cash Incentive Bonus

The annual cash incentive bonus opportunity provides the NEOs, as well as other executives and key employees, with an incentive in the form of an annual cash bonus to achieve overall business goals. Annual bonus opportunities are based on metrics and performance goals that are of primary importance to the Company during the coming year and motivate executives to achieve those goals.

Upon completion of each fiscal year, the level of achievement of each of the metrics established for the bonus plan for that year is calculated using the actual results for the bonus plan fiscal year. The calculation yields a potential overall bonus pool payout, stated as a percentage of target. The CEO makes recommendations to the Compensation Committee for annual bonuses to be paid to each executive officer (other than the CEO), based on the formulaic output for the total bonus pool, with individual performance adjustments recommended by the CEO. The Compensation Committee references both the CEO’s recommendations and the formula output in determining the bonuses to be paid to the NEOs other than the CEO. The Compensation Committee also retains discretion to take into account the effect on the bonus metrics of unanticipated factors, such as acquisitions and divestitures or changes in laws or regulations or their interpretation, which are not part of establishing the target metrics because the Company cannot budget for these events, when arriving at the approved total bonus pool. When acquisition or divestiture activity occurs, for example, the Compensation Committee assesses its impact and exercises discretion to adjust for the impact on the overall bonus pool. The Compensation Committee will determine the total bonus pool payout, but individual awards can vary from the payout, at the discretion of the Compensation Committee. The Compensation Committee will also take into account the formulaic output in determining the CEO’s bonus payout, along with Company and individual performance, as discussed further below.

2022 Performance Metrics and Goals

The 2022 bonus plan was designed by the Compensation Committee to incentivize desired outcomes for Company performance by using measurable, value-generating metrics, that when achieved at target or higher levels, are additive to shareholder value and returns. Over the last several years, the Compensation Committee adjusted the bonus plan metrics to reduce the emphasis on growth of production and reserves, which had been the core tenets in the industry for many years, and increase the focus on financial and returns metrics, as requested by the investment community. The 2022 bonus opportunity metrics and weighting for the NEOs were as follows:

In February 2022, the bonus metrics and performance goals were established with the target level of performance (100 percent) based on the operating budget approved in February by the Board of Directors. The performance goals for no payout (zero percent) and a payout at 200 percent of target for each metric were also created at that time.

Determination of 2022 Bonus Payout

The following table provides details of the level of achievement of the 2022 annual cash incentive performance metrics reviewed and approved by the Compensation Committee on February 20, 2023.

Metrics 2022 Results Goals and Objectives Weight Threshold (50%) Target (100%) Max (200%) Financial/ Operational Results Comments Funding Weighted Funding ROIC(1) 2022 ROIC reached our target goal of 50% after tax rate of return (fully-burdened for all costs indicated) at $55/bbl and $2.75/mcf. This was primarily driven by strong well performance and partially offset by increasing capital costs due to inflation. 100% 30% Annual Production Guidance (MBOE/ day)(2) 2022 annual production exceeded the upper end of our max goal of 630 MBOE/day. This performance was driven by a combination of project timing and well productivity improvements. 200% 50% Free Cash Flow(3) 2022 annual free cash flow was above the max goal of $3.2 Billion. This was due to higher than forecasted commodity prices, partially offset by higher capital investments due to inflation. 200% 40% Drilling cost measured $/Foot 2022 total company average drilling cost $/foot was above our threshold allowable cost goal. The miss on cost performance was due to inflation. 0% 0%

Metrics 2022 Results Goals and Objectives Weight Threshold (50%) Target (100%) Max (200%) Financial/ Operational Results Comments Funding Weighted Funding Green House Gas Intensity (Metric Tons [MT] CO2e/ MBOE) 2022 GHG intensity was between our target and max goals. This improvement was driven by electric compression installations and utilization of an electric hydraulic fracturing fleet instead of the usual diesel fleet. 167% 8% Methane Intensity (MT CH4/MT CH4) (%) 2022 methane intensity achieved our target goal. The main drivers of reduction were instrument air installations, well liquid unloading management practices, and combustion of gas when drilling out plugs. 100% 5% Flare Intensity (MMCF/MMCF)(%) 2022 flare intensity reduction was better than our max goal. This was driven by improved flare management practices around curtailment events. 200% 10% TOTAL 100% TOTAL STI SCORE YTD 143%

As noted in the table above, the short term incentive (“STI”) annual cash incentive bonus payouts for NEOs were scored at 143 percent of target. In February 2023, the Compensation Committee approved the level of performance against the STI performance metrics approved by the Compensation Committee in February 2022 based on actual achievement during 2022. In addition to these outcomes, the Compensation Committee considered Mr. Jorden’s annual review of the Company’s 2022 performance including strong progress in integrating the legacy businesses and management teams, offset by the lack of progress to offset inflationary pressures, as well as share price performance and the overall macro-economic environment. Upon Mr. Jorden’s recommendation to the committee, the net impact of these and other considerations was to exercise negative discretion and reduce the overall STI payout from 143 percent of target as calculated from the results of the 2022 STI goals to 125 percent of target.

2022 Bonus Considerations for Our CEO and Former Executive Chairman

Following the Merger and during fiscal year 2022, Mr. Jorden led a senior leadership review of the Company’s operations, organization, and assets as part of the integration process, which resulted in, among other things, the previously disclosed downward adjustment to our reserves estimates. Given the results of the reserves review, Mr. Jorden and Mr. Dinges asked the Committee to pay their respective 2022 bonuses at no more than target.

The Compensation Committee, after fulsome discussion with all independent directors in executive session, determined that paying their bonuses at target (rather than at 143 percent of target based on performance compared to the 2022 STI goals or 125 percent of target after the Compensation Committee’s exercise of negative discretion for the economic reasons noted in the previous section) was appropriate under the circumstances.

Long-Term Incentive Awards

Our long-term equity incentive award program balances the short-term annual cash incentive program by focusing executive efforts on the activities and results that lead to long-term and sustainable shareholder value.

In February 2022, the Compensation Committee awarded 100 percent of the CEO’s and 60 percent of each other NEO’s long-term incentive opportunity in the form of performance shares payable solely on the basis of our total shareholder return (TSR) relative to our industry peer group over a three-year performance period (see “—Long-Term Incentive Awards—TSR Performance Shares” and the “Grants of Plan-Based Awards” table below). The CEO’s 2022 long-term incentive opportunity was 100 percent performance shares because his 2021 LTI grants were delivered in the form of time-based awards as the combined company was merging annual LTI grant practices in 2021 and did not have an approved structure for the combined company in 2021.

In 2022, we awarded none of the CEO’s, and 40 percent of each other executive’s, long-term incentive value through time-based restricted shares (see “—Long-Term Incentive Awards—Time-Based Restricted Stock Units” and the “Grants of Plan-Based Awards” table below). The time-based shares vest 100 percent on the third anniversary.

Long-term incentives awarded to the legacy Cabot NEOs in 2022 were granted under the Prior Cabot Plan and all long-term incentives awarded to the legacy Cimarex NEOs in 2022 were granted under the Amended and Restated Cimarex Energy Co. 2019 Equity Incentive Plan (the “Prior Cimarex Plan”).

For 2022, the Compensation Committee approved the following target LTI grant values for the NEOs:

TSR Performance Shares

The Compensation Committee awarded performance shares based on the Company’s total shareholder return relative to that of its peers to provide a strong link between the performance of the executives and their pay. The Compensation Committee also determined that a relative comparison of performance against peers over a three-year period, as opposed to a single year, provides a better evaluation of how management performed under changing economic conditions. For these reasons, the Compensation Committee determined that TSR performance share awards are a good measure of performance versus the peer group and appropriately link stock performance and compensation. To allow for payouts in excess of target without excessive dilution or the need to reserve shares in excess of target, all payouts in excess of 100 percent of target are to be paid in the cash value of the shares. For additional information about the 2022 awards of TSR performance shares, see the table “Grants of Plan-Based Awards” below.

The Performance Shares Earned for such period, and the Common Stock issued and cash paid with respect to each Performance Share, shall be determined using the following scale:

If the Company’s TSR for the Performance Period is negative, then the Performance Shares Earned, as calculated in the above table, shall not exceed 100 percent of the Performance Shares, regardless of the Company’s actual percentile ranking in the Peer Group. For example: If (a) Company TSR for the Performance Period is -14 percent and (b) Company relative TSR performance is in the 75^th percentile the Performance Shares Earned would be capped at 100 percent.

Dividend Equivalents

At the same time that the Company delivers the Performance Shares Earned, the Company will pay to the NEO an amount in cash equal to the dividends that would have been paid on each share of Common Stock underlying the Performance Shares Earned had such share been outstanding from the date of grant until the date shares and cash, if applicable, are delivered to the NEO.

Time-Based Restricted Stock Units

In February 2022, the Compensation Committee awarded to NEOs and other officers time-based restricted stock units (“RSUs”) payable in common stock that vest January 31, 2025 provided that such recipients remain continuously employed by the Company from the date of grant through and including the vesting date. Our time-based awards that vest based on continuous employment and the passage of time promote

retention of executives. RSUs issued to legacy Cabot NEOs were made pursuant to the Plan and RSUs issued to legacy Cimarex NEOs were made pursuant to the Prior Cimarex Plan to preserve shares available under the Prior Cabot Plan.

Consistent with legacy Cimarex time-based restricted stock awards, dividends are paid on the awards to the legacy Cimarex officers when dividends are paid on the Company’s common stock. For additional information about the 2022 time-based awards, see the table “Grants of Plan-Based Awards” below.

Merger-Related Compensation Decisions

Compensation Arrangements with Dan O. Dinges

On May 23, 2021, Mr. Dinges entered into a letter agreement with Cabot (the “Dinges Agreement”) that is effective from the closing of the Merger on October 1, 2021, through the earlier of (1) December 31, 2022, or (2) the Chairman Succession Date (which is the date a new Chairman of the board is appointed) (the “Dinges Employment Period”). The Dinges Agreement provides that Mr. Dinges will be employed as Executive Chairman of the board and serve as a member of the board during the Dinges Employment Period. Under the terms of the Dinges Agreement, Mr. Dinges continued to receive an annual base salary of $1,100,000 and an annual cash incentive award with a target opportunity of 130 percent of his annual base salary, just as he received in his role as Chairman, President and Chief Executive Officer prior to the closing of the Merger. His annual long-term incentive award opportunity, however, was reduced from a grant date value of $9,000,000 in 2021 to a target grant date value of $4,500,000 in 2022, reflecting a reduction in the scope of his duties in his new role with Coterra. The letter agreement also provided that Mr. Dinges will also be provided employee benefits and perquisites no less favorable to those provided to Coterra executive officers during the Dinges Employment Period. Effective on the closing date of the Merger, the Company’s bylaws were amended to provide that Mr. Dinges may not be removed from his position as Executive Chairman during the Dinges Employment Period without an affirmative vote of at least 75 percent of the other members of the Coterra board. The letter agreement provided that if Mr. Dinges was terminated prior to or on the Chairman Succession Date, he will be entitled to the termination benefits provided under his existing change-in-control agreement with the Company, and any outstanding Coterra equity awards will be treated in accordance with the retirement provisions of the equity award agreements. In addition to Mr. Dinges’s existing perpetual confidentiality covenant in his change-in-control agreement, he agreed to be subject to one-year post-termination non-competition and non-solicitation covenants pursuant to the Dinges Agreement. The Dinges Agreement was amended in December 2022 to eliminate the requirement that the Company make Mr. Dinges “whole” for any excise tax applicable to payments to Mr. Dinges by the Company upon a change in control. Mr. Dinges’s employment with the Company terminated on December 31, 2022 when his term as Executive Chair expired and Mr. Jorden was elected as Chairman of the Board and, as a result, Mr. Dinges was entitled to the termination benefits under his change-in-control agreement. See “Change-in-Control Agreements” below for a more complete discussion of Mr. Dinges’s post-termination benefits.

Compensation Arrangements with Thomas E. Jorden

On May 23, 2021, Mr. Jorden entered into a letter agreement with Cabot (the “Jorden Letter Agreement”) with respect to the terms of his employment with the Company following the closing of the Merger. Under the terms of the Jorden Letter Agreement, Mr. Jorden is employed as the Company’s President and Chief Executive Officer and serves as a member of the board from the effective time of the Merger through the third anniversary thereof (October 1, 2024) or upon his earlier termination of employment (the “Jorden Employment Period”). During the Jorden Employment Period, Mr. Jorden will receive a base salary of $1,125,000, subject to review annually for increase but not decrease, will be eligible for an annual cash incentive award with a target opportunity of 130 percent of his annual base salary, will be granted annual long-term incentive awards with a target grant date value of $10,000,000, and was provided with relocation assistance and other employee benefits and perquisites no less favorable to those provided to other Coterra executive officers. Pursuant to the Jorden Letter Agreement, effective on the closing date of the Merger, the Company’s bylaws were amended to provide that Mr. Jorden may not be removed from his position as President and Chief Executive Officer or as a member of the board during the Jorden Employment Period without an affirmative vote of at least 75 percent of the other members of the Coterra board.

Mr. Jorden’s severance compensation agreement with Cimarex was assumed by Coterra and will remain in full force and effect during the Jorden Employment Period. The Jorden Letter Agreement also revised the definition of “good reason” under such agreement to also include a diminution of Mr. Jorden’s duties or responsibilities, authorities, powers or functions, the failure of the Coterra board to nominate him for election to the Board, a reduction in his annual long-term incentive award opportunity as described above, or a required relocation to any location other than Houston, Texas. Upon the expiration of the Jorden Employment Period, if Mr. Jorden’s employment with Coterra is continuing, then he and Coterra will enter into a change-in-control agreement that is consistent with, and no less favorable than, the change-in-control agreements then applicable to other executive officers of Coterra.

Subsequent to the Jorden Letter Agreement, on June 29, 2021, Mr. Jorden entered into a side letter agreement with Cimarex and Cabot (the “Jorden Side Letter”). The Jorden Side Letter provided that, notwithstanding the preexisting terms applicable to his Cimarex equity awards or anything to the contrary contained in the Merger Agreement, Mr. Jorden’s outstanding Cimarex equity awards would not vest at the effective time of the Merger, which is referred to as “single-trigger vesting.” Instead of single-trigger vesting, each such award was converted into a corresponding award with

respect to Coterra common stock, with the number of shares underlying each award adjusted based on the exchange ratio for the Merger, and if subject to performance-based vesting, determined with respect to the greater of the target level and the level determined or certified by the Cimarex board or the compensation committee based on the results achieved by Cimarex prior to the effective time of the Merger. The performance goals applicable to Mr. Jorden’s Cimarex restricted stock awards subject to performance-based vesting were deemed satisfied at the effective time of the Merger at the same levels applicable to other performance-based Cimarex restricted stock awards. Each such award, once converted into a Coterra award, continued to be subject to the same service-based vesting terms as applied to the Cimarex award immediately prior to the effective time of the Merger.

The Jorden side letter also provides that if Mr. Jorden’s employment is terminated by the Company without cause or by Mr. Jorden for good reason, or if Mr. Jorden dies or becomes disabled, in each case, during the Jorden Employment Period, his outstanding Coterra equity awards, including his Cimarex equity awards converted in the Merger in accordance with the Jorden Side Letter, will vest in full (with achievement of any applicable performance metrics determined based on actual performance as of the date of his termination of employment or the date of death or disability, as applicable). This vesting after both a change-in-control and a termination of employment is referred to as “double-trigger vesting.”

Mr. Jorden remains subject to his existing perpetual confidentiality covenant and the one-year post-termination non-competition and non-solicitation covenants contained in his severance agreement.

Elements of Post-Termination Compensation

Following the closing of the Merger on October 1, 2021, the Compensation Committee began to evaluate and integrate the designs of the compensation programs enacted by the legacy Cabot and legacy Cimarex compensation committees, including the elements of post-termination compensation offered by each. That evaluation and integration continued into 2022. Until we complete the full integration of those programs, our NEOs may continue to participate in some of their respective legacy company’s programs. The programs of both Cabot and Cimarex that were assumed or continued by Coterra after the effective time of the Merger are described below.

Retirement Compensation

Coterra Savings Investment Plan

The Coterra Energy Inc. Savings Investment Plan, formerly known as the Cabot Oil & Gas Corporation Savings Investment Plan (the “Cabot 401(k) Plan”), is a tax-qualified retirement savings plan, or 401(k) plan, in which all legacy Cabot employees, including the legacy Cabot NEOs, may participate. It allows participants to contribute the lesser of up to 50 percent of their annual salary, or the limit prescribed by the Internal Revenue Service, on a pre-tax basis. We match 100 percent of the first six percent of a participant’s eligible pre-tax contribution. Participants are 100 percent vested in the Company’s contributions after three years of service, vesting 33 percent in the first year, 66 percent in the second year and 100 percent in the third year.

During 2022, the Company contributed 10 percent of salary and bonus of all eligible legacy Cabot employees, including all legacy Cabot NEOs, into the Cabot 401(k) plan (or into the nonqualified deferred compensation plan to the extent in excess of the qualified plan limits). Participants are 100 percent vested in the contributions after three years of service, vesting 33 percent in the first year, 66 percent in the second year and 100 percent in the third year. The Company’s contribution is approved annually by the Board of Directors.

Beginning on January 1, 2023, all Coterra employees, including legacy Cimarex employees, began participating in the renamed Coterra Energy Inc. Savings Investment Plan and the Cimarex 401(k) Plan was discontinued. Funds previously held in the Cimarex 401(k) Plan were moved into the Coterra Energy Inc. Savings Investment Plan.

Cimarex 401(k) Plan

Upon the effective time of the Merger, Coterra assumed the Cimarex Energy Co. 401(k) defined contribution retirement plan (“Cimarex 401(k) Plan”). Legacy Cimarex employees, including the legacy Cimarex NEOs, are eligible to participate in the Cimarex 401(k) Plan. In 2022, Coterra matched dollar-for-dollar employee contributions to the Cimarex 401(k) Plan up to seven percent of the employee’s cash compensation, subject to limits imposed by the Internal Revenue Code. Beginning in July 2022, the Company changed the Company match to dollar-for-dollar up to six percent and contributed 10 percent of salary and bonus of all eligible legacy Cimarex employees, including all legacy Cimarex NEOs, into the Cimarex 401(k) plan. The Board is authorized to make profit-sharing contributions under the Cimarex 401(k) Plan.

Cabot Deferred Compensation Plan

The nonqualified deferred compensation plan provides supplemental retirement income benefits for our NEOs, other officers and other key employees, through voluntary deferrals of salary, bonus and certain long-term incentives. It also allows for the Company to provide its full six percent match and 10 percent non-elective contribution when contributions of the matching amount cannot be made to our 401(k) plan due to federal income tax limitations. The plan allows the officers to defer the receipt and taxation of income until retirement from the Company. We make no additional contributions to, nor do we pay in excess of market interest rates on, the deferred compensation plan. Amounts deferred by an officer under the deferred compensation plan are held and invested by the

Company in various mutual funds and other investment options selected by the officer at the time of deferral. For additional information about the deferred compensation plan, including the investment options and the manner of distributions, see “Nonqualified Deferred Compensation” table below.

Cimarex Supplemental Savings Plan

Eligible legacy Cimarex employees, including the legacy Cimarex NEOs, who had so elected, were at the effective time of the Merger participating in the Cimarex Energy Co. Supplemental Savings Plan (“Cimarex SSP”). Under the terms of the Cimarex SSP, participants could make an elective contribution of an amount that exceeds the maximum amount permitted to be contributed to his or her account in the Cimarex 401(k) plan (an “excess contribution”), provided that the excess contribution did not exceed the dollar limitation on elective deferrals under the internal Revenue Code Section 402(g) in effect of January 1 of the calendar year of deferral (2021 limitation was $19,500). Cimarex matched 100 percent of the excess contributions up to 7 percent of a participant’s eligible compensation. A participant could also elect to have up to 50 percent of his or her base salary and up to 100 percent of his or her bonus withheld from his or her compensation. Cimarex did not match those contributions.

In connection with the Merger, the Cimarex SSP was liquidated effective October 1, 2021 and all account balances distributed to the participants, including the legacy Cimarex NEOs, but the plan remained effective for elections through the end of 2021, including deferral elections for the 2021 bonuses paid by Coterra to the legacy Cimarex NEOs in March 2022.

Retiree Medical Coverage

The legacy Cabot NEOs are eligible for certain health benefits for retired employees, including their spouses, eligible dependents and surviving spouses. The health care plans are contributory with participants’ contributions adjusted annually. Employees become eligible for this benefit if they meet certain age and service requirements at retirement. All of the legacy Cabot NEOs were retirement eligible on December 31, 2022.

Personal Benefits and Perquisites

The Compensation Committee periodically reviews the level of perquisites and other personal benefits provided to the NEOs. In 2022 we provided the legacy Cabot NEOs with limited perquisites and other personal benefits that the Company and the Compensation Committee believe are reasonable and consistent with the overall compensation program to better enable us to attract and retain superior employees for key positions. In 2022, pursuant to the terms of the Merger Agreement, the legacy Cabot NEOs were reimbursed for expenses incurred in connection with club membership dues, a Company-paid physical examination for the NEO and his or her spouse, a financial and tax planning stipend of up to $3,000 annually, life insurance, and spouse travel to certain business meetings. Following the Merger, also pursuant to the terms of the Merger Agreement, the legacy Cimarex NEOs were provided with the same level of perquisites and other personal benefits provided to the legacy Cimarex NEOs under the Cimarex policies prior to the Merger, which included the provision of financial and estate planning services, annual medical examinations, and insurance premiums. The aggregate cost to the Company of the perquisites and personal benefits described above for the NEOs for 2022 are included under “All Other Compensation” in the Summary Compensation Table below. As part of the integration of management teams following the Merger, executive perquisites and benefits will be combined in 2023 such that all Coterra NEOs and other officers are entitled to the same benefits.

Other Compensation Policies

We offer all our employees, including the NEOs, industry competitive benefits including medical, dental and vision benefits, short-term and long-term disability plans, basic life and accident insurance and an employee assistance program. We offer a retirement program consisting of both qualified and nonqualified defined contribution savings plans. See “Elements of Post-Termination Compensation” below for further descriptions of these programs.

Change-in-Control and Severance Agreements

The Compensation Committee generally views the potential payments and benefits under change-in-control and severance agreements as a separate compensation element because such payments and benefits are not expected to be paid in a particular year and serve a different purpose for the executive other than elements of compensation. Accordingly, those payments and benefits do not significantly affect decisions regarding other elements of compensation.

The consummation of the Merger on October 1, 2021 constituted a “change-in-control” under the change-in-control agreements between Cabot and the legacy Cabot executives, including the legacy Cabot NEOs, and the severance compensation agreements between Cimarex and the legacy Cimarex NEOs, which severance compensation agreements were assumed by Coterra at the effective time of the Merger. The terms of these various agreements were determined by the Compensation Committee and the Cimarex compensation committee, respectively, and are discussed separately below.

Legacy Cabot Change-in-Control Agreements

All legacy Cabot executive officers, including the legacy Cabot NEOs, entered into change-in-control agreements with Cabot upon their appointment as executive officers that provide for cash payments and certain other benefits in the event that the executive is actually or constructively terminated within two years of a change-in-control event. The cash payments included three times the sum of base salary and the highest bonus paid in the last three years or targeted to be paid in the year of termination and payment of a target bonus for the fiscal year of termination, prorated for the actual days served. Benefits included continued eligibility for medical, dental and life insurance for three years, provided the executive pays the premiums, limited outplacement assistance and tax gross-up on excise taxes for agreements that were in place prior to 2010. In 2010, the Compensation Committee adopted a policy to exclude excise tax gross-up provisions for change-in-control agreements adopted after that date. The agreements also provided for accelerated vesting of all equity awards immediately upon a change-in-control, subject, in the case of the TSR performance shares, to the level of the Company’s TSR performance relative to its peers as of the last day of the month immediately preceding the month in which the change-in-control event occurs.

When originally approving the change-in-control agreements, the Compensation Committee reviewed data regarding similar plans within the peer group and the Company’s industry generally and applied its judgment to determine whether triggering events and benefit levels under these agreements were necessary to meet the Compensation Committee’s objectives of encouraging such employees to remain with the Company in the event of a change-in-control and during circumstances suggesting a change-in-control might occur. The Compensation Committee believes this program was important in recruiting and retaining strong leadership and in encouraging retention in these situations.

In May 2021, in conjunction with the execution of the Merger Agreement, the Cabot board approved a clarification to the definition of “change-in-control” in the existing legacy Cabot executives’ change-in-control agreements to specifically include as a change-in-control event the legal structure of the Merger as provided in the Merger Agreement. The legacy Cabot Committee determined that this action was not an expansion of the NEO’s rights under the existing change-in-control agreements, but merely captured the intent of the Compensation Committee when originally adopting the change-in-control agreements to provide the legacy Cabot executives with those benefits in transactions such as the Merger when they would likely experience adverse changes in their positions and that the clarification was consistent with the terms of the Merger Agreement that contemplated that legacy Cabot executives would experience a change in control at the effective time of the Merger.

As contemplated by the Merger Agreement, in order to keep executive management of the Company focused on the ongoing success of the business and the integration efforts of the two legacy companies and to retain them for a minimum period following the effective time of the Merger, in September 2021 the legacy Cabot NEOs other than Mr. Dinges agreed to terminate their change-in-control agreements in exchange for payments noted in the Summary Compensation Table as “Other Compensation” for 2021. The Compensation Committee believes that these arrangements lessened the potential impact that the former change-in-control agreements may have had on the continuity of the management team of the Company following the Merger.

After the effective time of the Merger, none of the legacy Cabot executives other than Mr. Dinges had continuing change-in-control benefits. In response to the recommendation by a proxy advisory firm to vote against our 2022 say-on-pay proposal and the shareholder vote on executive compensation at the 2022 annual meeting of shareholder, and shareholder outreach, Mr. Dinges entered into an amendment to his change-in-control agreement that eliminated the excise tax gross-up provision of the agreement. As consideration, the amendment provides that the change-in-control payment due to Mr. Dinges as a result of the termination of his employment as Executive Chairman on December 31, 2022 would accrue interest for the period from termination on December 31, 2022 until paid on or about July 24, 2023 based on the 6-month Treasury Bill rate posted to the Daily Treasury Par Yield Curve Rates section of the U.S. Department of the Treasury’s website on December 31, 2022. Mr. Dinges’s change-in-control agreement, as described, remained in full force and effect, and pursuant to the Dinges Agreement, he was entitled to receive his full change-in-control benefits following the termination of his employment as Executive Chair on December 31, 2022. See “Merger-Related Compensation Decisions—Compensation Arrangements with Dan O. Dinges” above.

Legacy Cimarex Severance Compensation Agreements

Each of the legacy Cimarex NEOs, including Mr. Jorden, is party to a severance compensation agreement which provides for certain severance benefits upon a termination of employment by Coterra other than for “cause” or a termination by the executive officer for “good reason”, including severance benefits if the qualifying termination occurs within two years following a change-in-control. The Merger constituted a change-in-control under the severance compensation agreements. See the “Potential Payments Upon Termination or Change in Control—Severance Agreements” section for a description of amendments made to the legacy Cimarex severance compensation agreements in connection with the Merger and for additional information on the benefits payable under these agreements. The terms of the severance compensation agreements are reflective of compensation decisions of the legacy Cimarex compensation committee.

The severance compensation agreements provide for the following benefits upon a qualifying termination within two years following a change-in-control or, with respect to Mr. Jorden, during the Jorden Employment Period (as described above in “Merger-Related Compensation Decisions— Compensation Arrangements with Thomas E. Jorden”):

In connection with the Merger, on May 23, 2021, Cimarex entered into amendments to the severance compensation agreements with each executive officer other than Mr. Jorden, to revise the definition of “good reason” under such agreements. The revised definition includes a material diminution of the executive officer’s duties or responsibilities, authorities, powers or functions; a material reduction in the executive officer’s long-term incentive compensation opportunity; or a required relocation of more than 50 miles from the executive officer’s principal place of business location (other than a relocation to the Midland, Texas or Tulsa, Oklahoma metropolitan areas in connection with a move of Cimarex’s corporate headquarters to such area).

The severance compensation agreements contain a Section 280G “best-net” cutback provision, which provides that, if the total payments to the executive officer under his severance compensation agreement would exceed the applicable threshold under Section 280G of the Code, then those payments will be reduced to the applicable threshold to avoid the imposition of the excise taxes under Section 4999 of the Code in the event such reduction would result in a better after-tax result for the executive officer. The legacy Cimarex severance compensation agreements do not contain excise tax gross-up provisions. Because of the structure of the Merger, Section 280G did not apply to legacy Cimarex officers in connection with the Merger. The severance compensation agreements also contain perpetual confidentiality covenants and one-year post-termination non-competition and non-solicitation covenants.

In connection with the Merger, Mr. Jorden entered into the Jorden Letter Agreement and the Jorden Side Letter Agreement providing for the modifications to Mr. Jorden’s severance agreement. The Jorden Letter Agreement provides that Mr. Jorden’s severance compensation agreement will remain in full force and effect following the Merger, except that the length of the “change-in-control” period thereunder will be for the duration of the Jorden Employment Period. The Jorden Letter Agreement also revises the definition of “good reason” under such agreement to also include a diminution of Mr. Jorden’s duties or responsibilities authorities, powers or functions, the failure of the Coterra board to nominate him for election to the Coterra board, a reduction in his annual long-term incentive award opportunity contained in the Jorden Letter Agreement, or a required relocation to any location other than Houston, Texas. Upon the expiration of the Jorden Employment Period, if Mr. Jorden’s employment with Coterra is continuing, then he and Coterra will enter into a change-in-control agreement that is consistent with, and no less favorable than, the change-in-control agreements then applicable to other executive officers of Coterra. For a description of the other terms of the Jorden Letter Agreement and the Jorden Side Letter, see “Merger-Related Compensation Decisions— Compensation Arrangements with Thomas E. Jorden” above.

COMPENSATION GOVERNANCE

Role of the Compensation Consultant

The Compensation Committee employs the services of an independent executive compensation consultant. In November 2021, the Compensation Committee engaged FW Cook as its independent executive compensation consultant. Prior to this engagement, the Compensation Committee reviewed FW Cooks’ independence in accordance with the six factors established by the NYSE and found it to be independent and without conflicts of interest in providing services to the Compensation Committee. FW Cook also advised the Compensation Committee on executive and director compensation matters leading up to 2022 compensation decisions. FW Cook worked exclusively for the Compensation Committee and performed no services directly for management. Management does not retain the services of a compensation consultant.

Role of Executives in Establishing Compensation

Our CEO made recommendations in February 2022, and as new officers were hired, to the Compensation Committee with respect to salary, bonus and long-term incentive awards for executive officers other than himself (with the exception of his recommendation to pay his bonus below the level calculated based on our 2022 STI metrics). In making recommendations, our CEO considered input from FW Cook’s independent competitive market study, internal pay equity issues, individual performance and Company performance. The CEO’s recommendations were just one of the factors considered by the Compensation Committee, in conjunction with the other factors discussed in this CD&A, in setting compensation for all executive officers. The Senior Vice President and Chief Human Resources Officer (“CHRO”), who was ultimately responsible for human resources administration in 2022, provided the Compensation Committee with survey data from a wider group of companies in the energy sector than the industry peer group described above, which the Compensation Committee used for evaluation of non-executive compensation trends, and general administrative support implementing the Compensation Committee’s decisions. The CEO and the CHRO also provided recommendations to the Compensation Committee regarding appropriate bonus metrics, taking into account current industry drivers and Company strategic objectives, as well as appropriate performance targets for each year. The CHRO and his staff assisted the Compensation Committee in determining bonus payouts in February 2023 by providing the calculations of bonus metric achievement, which the Compensation Committee took into account in determining the ultimate bonus payout pool for 2022. The CEO and the CHRO, along with the General Counsel, attended the Compensation Committee meetings in 2022 and February 2023. In addition, the Chief Financial Officer (“CFO”) attended meetings in an advisory role to the Compensation Committee, primarily related to the legacy Cabot compensation practices and policies. All the officers were excused from the meetings to enable the Compensation Committee to meet privately in executive session, both with and without the compensation consultant also being present for the regular meetings. As directed by the Compensation Committee, the executives listed above prepared materials and agendas for the Compensation Committee meetings and prepared the long-term equity plans and award agreements. The terms of all award agreements and the specific individual awards for executives, however, were all approved by the Compensation Committee and, as needed, by the Board.

Stock Ownership Guidelines

The GSR Committee and the Board of Directors have adopted stock ownership guidelines for our officers and directors. Under those guidelines, non-employee directors are expected to hold stock having a market value or cost basis, whichever is greater, of at least five times the current annual cash retainer paid to nonmanagement directors. The Chief Executive Officer is expected to hold shares of the Company’s Common Stock with a market value or cost basis, whichever is greater, equal to a minimum of six times his or her annual base salary. All other executive officers who report to the CEO are expected to hold shares of the Company’s Common Stock with a market value or cost basis, whichever is greater, equal to a minimum of three times their annual base salary.

Directors have five years from their initial election, and executive officers have three years from their initial appointment to their position, to comply with these guidelines. Unvested restricted stock and unvested restricted stock units may be counted in calculating ownership, but options and unvested performance-based awards may not be counted toward the ownership minimum. No sales will be approved if such sale would cause the executive officer’s holdings to go below the minimum required shares except where necessary to pay income taxes related to equity awards.

Clawback Policy

The Company has adopted a “clawback” policy to allow the Company to recoup paid compensation from current or former executive officers in the event of a material financial statement restatement if the executive’s intentional misconduct caused, in whole or in part, the restatement. The amount of compensation recouped would be that which the executive would not have received if the financials had been properly reported at the time of first public release or filing with the SEC. Both cash and all types of equity compensation, including time-based and performance-based awards, are covered by the policy. The Compensation Committee believes that this clawback policy furthers the interests of the Company and shareholders in preventing an executive from being unjustly enriched through misconduct that results in a financial restatement that harms all shareholders. The Prior Cabot Plan and the legacy Cimarex incentive plans provide that any award made pursuant to the plan be subject to any applicable clawback policy, so by accepting any award under those plans, each executive has agreed to be bound by the applicable policy.

The NYSE has recently proposed rules to implement the clawback provisions of Section 954 of the Dodd-Frank Wall Street Consumer Protection Act. We will amend our policy to comply with the new NYSE rules when they are finalized. Among other changes, the new policy will require us to recoup compensation from executives in the circumstances contemplated by the rules regardless of whether the restatement resulted from the executive’s misconduct.

Anti-Hedging Policy

We have a policy prohibiting directors and officers from speculative trading in Company securities, including hedging transactions, short selling, and trading in put options, call options, swaps or collars. To our knowledge, all directors and executive officers are in compliance with the policy.

The Company’s policy also requires that all employees provide notice and obtain pre-approval before engaging in hedging activities in our stock and any such request for approval will only be considered with a valid justification.

Executive Compensation Business Risk Review

The ownership stake in the Company provided by our equity-based compensation, the extended vesting periods of these awards and our stock ownership guidelines are designed to align the interests of our NEOs with our shareholders, maximize performance and promote executive retention. At the same time, the Compensation Committee believes, with the concurrence of our independent consultant, that our executive compensation program does not encourage management to take unreasonable risks related to the Company’s business. The factors that support this conclusion are our focus on long-term incentive compensation, our use of balanced long-term incentives, metric diversification and capped opportunities in our annual bonus plan and long-term incentives and our stock ownership guidelines.

Tax Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code imposes a $1 million limit on the amount that a public company may deduct for compensation paid to its principal executive officer, principal financial officer, any of its three other most highly compensated executive officers for the taxable year (other than the principal executive officer or the principal financial officer) (collectively the “covered employees”). The group of covered employees also includes certain employees once considered a covered employee, who continue to receive compensation from the Company. For certain grandfathered arrangements in effect as of November 2, 2017, this limitation does not apply, for example to compensation that is paid only if the covered employees performance meets pre-established objective goals based on performance criteria approved by shareholders. We strive to take action, where possible and considered appropriate, to preserve the deductibility of compensation paid to our executive officers. However, other than certain grandfathered arrangements, compensation paid to our expanded group of covered employees will be subject to a $1 million annual deduction limitation. Although the deductibility of compensation is a consideration evaluated by the Compensation Committee, the Compensation Committee believes that the lost deduction on compensation payable in excess of the $1 million limitation is not material relative to the benefit of being able to attract and retain talented management. We have also awarded compensation that might not be fully tax deductible when such grants were nonetheless in the best interest of the Company and our shareholders. Accordingly, the Compensation Committee will continue to retain the discretion to pay compensation that is subject to the $1 million deductibility limit.