XML 31 R14.htm IDEA: XBRL DOCUMENT v3.22.0.1
Employee Benefit Plans (Notes)
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Employee Benefit Plans Employee Benefit Plans
Stock-Based Compensation

During 2021, EOG maintained various stock-based compensation plans as discussed below.  EOG recognizes compensation expense on grants of stock options, SARs, restricted stock and restricted stock units, performance units and grants made under the EOG Resources, Inc. Employee Stock Purchase Plan (ESPP).  Stock-based compensation expense is calculated based upon the grant date estimated fair value of the awards, net of forfeitures, based upon EOG's historical employee turnover rate.  Compensation expense is amortized over the shorter of the vesting period or the period from date of grant until the date the employee becomes eligible to retire without company approval.
Stock-based compensation expense is included on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) based upon the job functions of the employees receiving the grants.  Compensation expense related to EOG's stock-based compensation plans for the years ended December 31, 2021, 2020 and 2019 was as follows (in millions):
 202120202019
Lease and Well$49 $52 $56 
Gathering and Processing Costs3 1 1 
Exploration Costs20 21 26 
General and Administrative80 72 92 
Total$152 $146 $175 

The Amended and Restated EOG Resources, Inc. 2008 Omnibus Equity Compensation Plan (2008 Plan) provided for grants of stock options, SARs, restricted stock and restricted stock units, performance units, and other stock-based awards. 

EOG's stockholders approved the EOG Resources, Inc. 2021 Omnibus Equity Compensation Plan (2021 Plan) at the 2021 Annual Meeting of Stockholders. Therefore, no further grants were made from the 2008 Plan from and after the April 29, 2021 effective date of the 2021 Plan. The 2021 Plan provides for grants of stock options, SARs, restricted stock and restricted stock units, restricted stock units with performance-based conditions (together with the performance units granted under the 2008 Plan, "Performance Units") and other stock-based awards, up to an aggregate maximum of 20 million shares of common stock, plus any shares that are subject to outstanding awards under the 2008 Plan as of April 29, 2021, that are subsequently canceled, forfeited, expire or are otherwise not issued or are settled in cash. Under the 2021 Plan, grants may be made to employees and non-employee members of EOG's Board of Directors (Board).

The vesting schedules for grants of stock options, SARs, restricted stock and restricted stock units, and Performance Units are generally as follows:
Grant TypeVesting Schedule
Stock Options/SARsVesting in increments of one-third on each of the first three anniversaries, respectively, of the date of grant
Restricted Stock/Restricted Stock Units"Cliff" vesting three years from the date of grant
Performance Units
"Cliff" vesting on the February 28th following the three-year performance period and the Compensation and Human Resources Committee's certification of the applicable performance multiple

At December 31, 2021, approximately 18 million common shares remained available for grant under the 2021 Plan.  EOG's policy is to issue shares related to the 2021 Plan from previously authorized unissued shares or treasury shares to the extent treasury shares are available.

During 2021, 2020 and 2019, EOG issued shares in connection with stock option/SAR exercises, restricted stock grants, restricted stock unit and Performance Unit releases and ESPP purchases.  Net tax deficiencies recognized within the income tax provision were $(11) million, $(22) million and $(1) million for the years ended December 31, 2021, 2020 and 2019, respectively.
Stock Options and Stock-Settled Stock Appreciation Rights and Employee Stock Purchase Plan.  Participants in EOG's stock-based compensation plans (including the 2008 Plan and 2021 Plan) have been or may be granted options to purchase shares of Common Stock.  In addition, participants in EOG's stock plans (including the 2008 Plan and 2021 Plan) have been or may be granted SARs, representing the right to receive shares of Common Stock based on the appreciation in the stock price from the date of grant on the number of SARs granted.  Stock options and SARs are granted at a price not less than the market price of the Common Stock on the date of grant.  Terms for stock options and SARs granted have generally not exceeded a maximum term of seven years.  EOG's ESPP allows eligible employees to semi-annually purchase, through payroll deductions, shares of Common Stock at 85 percent of the fair market value at specified dates.  Contributions to the ESPP are limited to 10 percent of the employee's pay (subject to certain ESPP limits) during each of the two six-month offering periods each year.

The fair value of stock option grants and SAR grants is estimated using the Hull-White II binomial option pricing model.  The fair value of ESPP grants is estimated using the Black-Scholes-Merton model.  Stock-based compensation expense related to stock option, SAR and ESPP grants totaled $48 million, $62 million and $63 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Weighted average fair values and valuation assumptions used to value stock option, SAR and ESPP grants for the years ended December 31, 2021, 2020 and 2019 were as follows:
 Stock Options/SARsESPP
 202120202019202120202019
Weighted Average Fair Value of Grants
$24.92 $11.06 $19.49 $18.12 $19.14 $22.83 
Expected Volatility42.24 %44.47 %32.02 %51.27 %53.48 %34.78 %
Risk-Free Interest Rate0.50 %0.21 %1.69 %0.07 %0.90 %2.27 %
Dividend Yield2.26 %3.27 %1.39 %2.89 %2.27 %1.04 %
Expected Life5.2 years5.2 years5.1 years0.5 years0.5 years0.5 years

Expected volatility is based on an equal weighting of historical volatility and implied volatility from traded options in EOG's Common Stock.  The risk-free interest rate is based upon United States Treasury yields in effect at the time of grant.  The expected life is based upon historical experience and contractual terms of stock option, SAR and ESPP grants.

The following table sets forth the stock option and SAR transactions for the years ended December 31, 2021, 2020 and 2019 (stock options and SARs in thousands):
 202120202019
 Number
of Stock
Options/
SARs		Weighted
Average
Grant
Price		Number
of Stock
Options/
SARs		Weighted
Average
Grant
Price		Number
of Stock
Options/
SARs		Weighted
Average
Grant
Price
Outstanding at January 110,186 $84.08 9,395 $94.53 8,310 $96.90 
Granted1,982 81.68 1,996 37.63 1,965 75.39 
Exercised (1)
(1,130)63.98 (23)69.59 (606)61.43 
Forfeited(1,069)98.15 (1,182)88.93 (274)102.57 
Outstanding at December 319,969 84.37 10,186 84.08 9,395 94.53 
Stock Options/SARs Exercisable at December 31
6,197 95.33 6,343 96.41 5,275 94.21 
(1)The total intrinsic value of stock options/SARs exercised during the years 2021, 2020 and 2019 was $27 million, $0.4 million and $14 million, respectively.  The intrinsic value is based upon the difference between the market price of the Common Stock on the date of exercise and the grant price of the stock options/SARs.

At December 31, 2021, there were 9.7 million stock options/SARs vested or expected to vest with a weighted average grant price of $84.97 per share, an intrinsic value of $120 million and a weighted average remaining contractual life of 4.1 years.
The following table summarizes certain information for the stock options and SARs outstanding and exercisable at December 31, 2021 (stock options and SARs in thousands):
Stock Options/SARs OutstandingStock Options/SARs Exercisable
Range of
Grant
Prices		Stock
Options/
SARs		Weighted
Average
Remaining
Life
(Years)		Weighted
Average
Grant
Price
 
 
Aggregate
Intrinsic
Value(1)
Stock
Options/
SARs		Weighted
Average
Remaining
Life
(Years)		Weighted
Average
Grant
Price
 
 
Aggregate
Intrinsic
Value (1)
$ 34.00 to $  52.991,640 6$37.50  414 5$37.46   
53.00 to     75.991,906 473.68  1,313 373.11   
   76.00 to     90.991,976 781.86  33 283.71   
   91.00 to     95.991,114 294.95  1,109 294.96   
   96.00 to   101.991,657 396.34  1,652 396.33   
 102.00 to   129.991,676 4126.51 1,676 4126.51 
 9,969 484.37 $127 6,197 395.33 $42 
(1)Based upon the difference between the closing market price of the Common Stock on the last trading day of the year and the grant price of in-the-money stock options and SARs, in millions.

At December 31, 2021, unrecognized compensation expense related to non-vested stock option and SAR grants totaled $60 million.  This unrecognized expense will be amortized on a straight-line basis over a weighted average period of 2.1 years.

At the 2018 Annual Meeting of Stockholders, EOG stockholders approved an amendment and restatement of the ESPP to (among other changes) increase the number of shares available for grant. At December 31, 2021, approximately 1.6 million shares of Common Stock remained available for grant under the ESPP.  The following table summarizes ESPP activity for the years ended December 31, 2021, 2020 and 2019 (in thousands, except number of participants):
 202120202019
Approximate Number of Participants2,036 2,063 1,998 
Shares Purchased316 377 224 
Aggregate Purchase Price$17,224 $16,103 $16,533 

Restricted Stock and Restricted Stock Units.  Employees may be granted restricted (non-vested) stock and/or restricted stock units without cost to them.  Upon vesting of restricted stock, shares of Common Stock are released to the employee.  Upon vesting, restricted stock units are converted into shares of Common Stock and released to the employee.  Stock-based compensation expense related to restricted stock and restricted stock units totaled $89 million, $75 million and $97 million for the years ended December 31, 2021, 2020 and 2019, respectively.
The following table sets forth the restricted stock and restricted stock unit transactions for the years ended December 31, 2021, 2020 and 2019 (shares and units in thousands):
 202120202019
 Number of Shares and UnitsWeighted Average Grant Date Fair ValueNumber of Shares and UnitsWeighted Average Grant Date Fair ValueNumber of Shares and UnitsWeighted Average Grant Date Fair Value
Outstanding at January 14,742 $74.97 4,546 $90.16 3,792 $96.64 
Granted1,422 81.50 1,488 38.10 1,749 80.01 
Released (1)
(1,388)101.00 (1,213)85.92 (855)96.93 
Forfeited(96)68.26 (79)86.52 (140)97.54 
Outstanding at December 31 (2)
4,680 69.37 4,742 74.97 4,546 90.16 
(1)
(1)The total intrinsic value of restricted stock and restricted stock units released during the years ended December 31, 2021, 2020 and 2019 was $110 million, $48 million and $70 million, respectively. The intrinsic value is based upon the closing price of EOG's common stock on the date restricted stock and restricted stock units are released.
(2)
(2)The total intrinsic value of restricted stock and restricted stock units outstanding at December 31, 2021, 2020 and 2019 was $416 million, $236 million and $381 million, respectively. The intrinsic value is based on the closing market price of the Common Stock on the last trading day of the year.

At December 31, 2021, unrecognized compensation expense related to restricted stock and restricted stock units totaled $199 million. Such unrecognized expense will be recognized on a straight-line basis over a weighted average period of 1.5 years.

Performance Units.  EOG has granted Performance Units to its executive officers annually since 2012. As more fully discussed in the grant agreements, the performance metric applicable to these performance-based grants is EOG's total shareholder return over a three-year performance period relative to the total shareholder return of a designated group of peer companies (Performance Period). Upon the application of the performance multiple at the completion of the Performance Period, a minimum of 0% and a maximum of 200% of the Performance Units granted could be outstanding. The fair value of the Performance Units is estimated using a Monte Carlo simulation. Stock-based compensation expense related to the Performance Unit grants totaled $15 million, $9 million and $15 million for the years ended December 31, 2021, 2020 and 2019, respectively.

  Weighted average fair values and valuation assumptions used to value Performance Units during the years ended December 31, 2021, 2020 and 2019 were as follows:
 202120202019
Weighted Average Fair Value of Grants$95.16 $42.77 $79.98 
Expected Volatility53.80 %47.27 %29.20 %
Risk-Free Interest Rate0.59 %0.16 %1.51 %

Expected volatility is based on the term-matched historical volatility over the simulated term, which is calculated as the time between the grant date and the end of the Performance Period. The risk-free interest rate is derived from the Treasury Constant Maturities yield curve on the grant date.
The following table sets forth the Performance Unit transactions for the years ended December 31, 2021, 2020 and 2019 (units in thousands):
 202120202019
 Number of UnitsWeighted Average Grant Date Fair ValueNumber of UnitsWeighted Average Grant Date Fair ValueNumber of UnitsWeighted Average Grant Date Fair Value
Outstanding at January 1613 $88.38 598 $103.91 539 $116.96 
Granted222 95.16 172 42.77 172 79.98 
Granted for Performance Multiple (1)
19 113.81 66 119.10 72 80.64 
Released (2)
(175)113.06 (223)103.87 (185)110.65 
Forfeited— — — — — — 
Outstanding at December 31 (3)
679 (4)84.97 613 88.38 598 103.91 
(1)Upon completion of the Performance Period for the Performance Units granted in 2017, 2016 and 2015, a performance multiple of 125%, 150% and 200%, respectively, was applied to each of the grants resulting in additional grants of Performance Units in February 2021, 2020 and 2019.
(2)The total intrinsic value of Performance Units released during the years ended December 31, 2021, 2020 and 2019 was $13 million, $13 million and $15 million, respectively. The intrinsic value is based upon the closing price of EOG's common stock on the date Performance Units are released.
(3)The total intrinsic value of Performance Units outstanding at December 31, 2021, 2020 and 2019 was $60 million, $31 million and $50 million, respectively. The intrinsic value is based on the closing market price of the Common Stock on the last trading day of the year.
(4)Upon the application of the relevant performance multiple at the completion of each of the remaining Performance Periods, a minimum of zero and a maximum of 1,358 Performance Units could be outstanding.

At December 31, 2021, unrecognized compensation expense related to Performance Units totaled $13 million. Such unrecognized expense will be amortized on a straight-line basis over a weighted average period of 1.9 years.

Upon completion of the Performance Period for the Performance Units granted in September 2018, a performance multiple of 50% was applied to the grants resulting in a forfeiture of 56,671 Performance Units in February 2022.

Pension Plans.  EOG has a defined contribution pension plan in place for most of its employees in the United States.  EOG's contributions to the pension plan are based on various percentages of compensation and, in some instances, are based upon the amount of the employees' contributions.  EOG's total costs recognized for the plan were $52 million, $46 million and $51 million for 2021, 2020 and 2019, respectively.

In addition, EOG's Trinidadian subsidiary maintains a contributory defined benefit pension plan and a matched savings plan.  These pension plans are available to most employees of the Trinidadian subsidiary. EOG's combined contributions to these plans were $1 million, for each of 2021, 2020 and 2019, respectively.

For the Trinidadian defined benefit pension plan, the benefit obligation, fair value of plan assets and (prepaid)/accrued benefit cost totaled $13 million, $14 million and $(0.1) million, respectively, at December 31, 2021, and $13 million, $12 million and $0.1 million, respectively, at December 31, 2020.

Postretirement Health Care.  EOG has postretirement medical and dental benefits in place for eligible United States and Trinidad employees and their eligible dependents, the costs of which are not material.