This excerpt taken from the DVN DEF 14A filed Apr 24, 2009.
Annual Cash Bonus
Overall in 2008, the Committee is of the view that the Company achieved key operational and other successes in a challenging economic environment. In its evaluation, the Committee noted the following metrics related to Company performance:
The Committee also noted that the Company did not meet its budget goals in the areas of lease operating expenses and general and administrative expenses.
Commitment Runs Deep
In its evaluation of the Companys performance relating to stakeholders, business processes and learning and people, the Committee noted that the Company met the following goals:
The Committee conducted a thorough evaluation of each named executive officers performance, including the individual interviews described above. Among the named executive officers for whom it made bonus determinations, the Committee determined that each had made significant contributions to the Companys overall results. As previously noted, the Committee does not determine the bonus for Mr. Heatly.
The 2008 benchmarking indicated that bonuses paid to the named executive officers for 2007 performance generally met the Companys market objective on an overall basis, with individual bonuses approximating the 75th percentile of the benchmarking data.
Based on the Committees evaluation of the Companys performance in 2008 and other factors that it considers when making annual cash bonus decisions (described in Annual Cash Bonus under the Overview of Executive Compensation Elements in 2008 section of this CD&A), the following cash bonuses were awarded to the named executive officers:
Please refer to the Summary Compensation Table for further information on the annual cash bonuses of named executive officers.
This excerpt taken from the DVN DEF 14A filed Apr 28, 2008.
Annual Cash Bonus
The Committee awards, on an annual basis, cash bonuses to our named executive officers. The Committee believes that executives cash bonuses should reflect, above all, the ongoing enhancement of shareholder value, both in the short-term and the long-term. In that regard, bonuses awarded by the Committee are intended to be competitive with the market while rewarding senior executives for:
To that end, in determining the appropriate bonus amounts, the Committee considers recent Company performance; each senior executive officers individual performance during the year; competitive market conditions; historical practices; incentive awards for others in the organization; and our compensation philosophy. The Committee does not assign target or maximum cash bonus award levels to the named executive officers.
When evaluating recent Company performance, the Committee considers performance against goals approved by the Board at the beginning of the year. The Companys performance goals cover a number of both quantitative and qualitative targets. Consistent with the flexible nature of the annual bonus program, the Committee does not assign any specific weight to any particular performance goal nor is any specific weight assigned to the performance goals in the aggregate.
The Committee considers not only the Companys performance during the year with respect to the quantitative and qualitative goals set at the beginning of the year, but also market and economic trends and forces, extraordinary internal and market-driven events, unanticipated developments, and other extenuating circumstances. In short, the Committee analyzes the total mix of available information (including performance against any quantitative performance goals) on a qualitative, rather than quantitative, basis in making bonus determinations.
For 2007, the Committee noted, in its evaluation of Company performance:
Commitment Runs Deep
Further, the Committee determined that the Company substantially met the goals related to:
With respect to finding and development costs, the Committee especially noted that the Company achieved competitive costs even while it invested significant capital in long-term projects that were not expected to yield new reserve additions in 2007. The Committee concluded that negative variances from performance goals were minor and due to circumstances largely beyond managements control.
The Committee determined that the Company had substantially met the goals related to environmental, health and safety performance, though it noted that improvement was needed in the area of tracking corrective actions. With respect to regulatory matters, the Committee determined that the Company managed favorable permitting turnaround times and conducted our operations in a manner so as to avoid any material operational delays related to regulatory action. The Committee also found that considerable efforts had been made to broaden and strengthen the Companys relationships with key stakeholders. In addition, the Committee considered the significant strides made by the Company in improving the efficiency of business processes. The Committee did note that workforce planning and leadership development efforts had been delayed but that momentum had been achieved in each of these areas.
The Committee conducted a thorough evaluation of individual senior executive performance, including the individual, in-depth interviews described above. Among the named executives for which it made bonus determinations, the Committee determined that each had made the expected balanced contribution to overall results.
While our approach to annual bonuses is not formulaic, it is methodical and purposeful. We have considered the relative merits of a non-formulaic, subjective approach to paying annual bonuses versus a formulaic approach. We have concluded that the present non-formulaic approach results in the creation of a highly-effective, nimble management team that is evaluated on its ability to be flexible in addressing changing market and industry conditions while executing the Companys overall business strategy. We think the Companys recent and long-term performance demonstrate that this flexible approach works well.
The 2007 benchmarking indicated that bonuses for the named executive officers would generally meet the Companys market objective on an overall basis, with individual bonuses ranging from below to above the 75th percentile of the benchmarking data.
For additional detail on the bonuses awarded in 2007, please refer to the Summary Compensation Table.