HEALTH WEALTH CAREER 2017 CA MTCS: MERCER TOTAL COMPENSATION SURVEY FOR THE ENERGY SECTOR OVERVIEW AND SURVEY DEFINITIONS

Transcription

1 HEALTH WEALTH CAREER 2017 CA MTCS: MERCER TOTAL COMPENSATION SURVEY FOR THE ENERGY SECTOR OVERVIEW AND SURVEY DEFINITIONS

2 01 APRIL 2017 TABLE OF CONTENTS CA MTCS FOR THE ENERGY SECTOR OVERVIEW About the Survey... 1 About the Report... 2 Custom Analysis... 3 Survey Methodology... 4 Confidentiality... 4 Questions... 6 Mercer Universal Position Coding System (MUPCS )... 6 Use of Specialization Flags... 6 Data Integrity/Exclusion Policy... 6 Survey Usage... 7 Participant Profile... 8 Incentive Compensation by Pay Level Total Direct Compensation by Pay Level SURVEY DEFINITIONS AND METHODOLOGY Report Table Types... 1 Sample Report... 2 Statistics... 5 Variables... 5 Long-term Incentive Definitions... 7 Long-term Incentives Valuation Methodology... 8 PARTICIPATING ORGANIZATIONS An Excel file of the participants is provided for your convenience. The file includes all organizations in the Survey with industry, and the Module(s) in which they appear. Click here to open attachments panel RESULTS BY POSITION CODE An Excel file of the positions is provided for your convenience. The file includes all positions in the Survey with their corresponding Position Code,Title, Description, Specializations and the Module(s) in which they appear. The following filters are included to simplify your searches: New Positions Revised Positions Position Code Revisions Insufficient Data Click here to open attachments panel 2017 Mercer LLC i

3 01 APRIL 2017 OVERVIEW CA MTCS FOR THE ENERGY SECTOR OVERVIEW ABOUT THE SURVEY Mercer is pleased to introduce the 2017 CA Mercer Total Compensation Survey (MTCS) for the Energy Sector. Enhancements were driven by feedback from you, industry leaders, and stakeholders. MTCS provides you with the most comprehensive perspective on the energy industry reward levels in Canada for any size organization in any sector of the industry. As shown in the table below, this year 172 distinct organizations submitted data for the survey. Mercer defines distinct organizations as the total number of questionnaires submitted, and organizations as the number of entities (corporate, subsidiary, group and division) represented in those submissions CA MTCS for the Energy Sector Survey Profile ber of Distinct Organizations Participating in Survey 172 Total ber of Organizations (Corporate, Subsidiary, Group and Division) 239 Observations Represented 113,559 ber of Positions Surveyed 828 Data Effective Date April 1, 2017 MTCS Modules The MTCS survey results are segmented into modules to let you focus on areas that are relevant to your organization. Core Modules General Benchmark - Shared-services functions such as HR, accounting and IT, as well as other general industry benchmarks in administration, procurement/purchasing and finance are included in this module. Cross-segment - This module includes core jobs in upstream, midstream, downstream and utilities environments such as engineers, joint ventures representatives, geologists and geophysicists, health, safety, and environmental positions and technician/technologist roles. Policy - This module includes a detailed corporate policy report, which summarizes the key policies of our participants in such areas as compensation practices, long-term incentives, staffing practices, training and development and more. Choice Modules Upstream/Midstream - Includes the exploration, production, and transportation of oil & gas materials prior to the refining process. Functional executive, managerial and professional roles are included. Examples of jobs in this module include top land executives, exploration and production executives and managers. Downstream and Oilfield Services - Includes professional, managerial and executive roles specific to the downstream sector, and oilfield services. It also covers the technical and non-technical sales roles that are common to both segments. Examples of jobs in this module include refinery managers and executives, product plus category managers, and field service supervisors Mercer LLC (1) Overview - 1

4 01 APRIL 2017 OVERVIEW CA MTCS FOR THE ENERGY SECTOR ABOUT THE SURVEY Utilities - This module includes roles unique to the utilities sector, including utility specific executive roles and transmission and distribution roles on the ground. Examples are utilities executives, rate analysts, service dispatchers, and energy programs representatives. Optional Modules Field/Hourly Module Mercer WIN - Includes position pages and Mercer WIN access for non-managerial positions in non-corporate/office environments such as oil fields, plants, refineries, terminals, or along pipelines. Examples of benchmarks in this module include maintenance/ trades positions, plant operators, field operators and laboratory/chemical technicians. Field/Hourly Module Full Disclosure - Includes a fully-disclosed spreadsheet for non-managerial positions in non-corporate/office environments such as oil fields, plants, refineries, terminals, or along pipelines. Examples of benchmarks in this module include maintenance/trades positions, plant operators, field operators and laboratory/chemical technicians. This module is only available to participants who have agreed to full-disclosure of their own matches to this module. ABOUT THE REPORT Survey Definitions and Methodology Provides a description of the methodology used in analyzing the compensation data collected and definitions of all variables and statistics included in the survey report. Explanations of the methodologies used to determine long-term incentive values, as shown in the report tables, are described within this section. Alternative methodologies that can be used to calculate long-term incentive values (i.e., Accounting Cost, Net Present Value and Binomial Valuation), accessible through the analytic software only, are also described. This section is followed by the statistical analyses of the compensation and related data for each of the surveyed positions. The positions are arranged alphabetically in the compensation data section. Participating Organizations An Excel file of the participants is provided for your convenience. The file includes all organizations in the Survey with their corresponding location, industry, and the Module(s) in which they appear. Click here to open attachments panel Field Site Policy Module Gain access to policy data for Field employees at the site level, with results presented in summary format. This report summarizes the key policies of participants in such areas as joint councils and employee associations, living and other types of allowances, overtime, breaks, change of work policies, call-out policies, shift rotations and premiums, and much more. This module contains policies for the sample as a whole, as well as cuts of the report for each of 7 pre-defined geographic zones including the Oil Sands in and around Fort McMurray Mercer LLC (1) Overview - 2

5 01 APRIL 2017 OVERVIEW CA MTCS FOR THE ENERGY SECTOR CUSTOM ANALYSIS For analysis requirements that go beyond the data presented in this report Mercer provides the Mercer WIN platform to all survey purchasers. Mercer WIN Mercer WIN is a Workforce Intelligence Network that provides a single access point to Mercer's survey data and analytics. This tool represents one of the most comprehensive and intuitive platforms available and allows users to easily retrieve and synthesize vast amounts of data into usable packets of information relating to compensation and other HR issues. Mercer WIN enables you to: Customize your analysis by job. Compare side-by-side job descriptions. Change salary elements to support the right level of analysis. Perform function and career-level analysis. Refine your market by industry, location, size, or peer group. Export your data for integration into other systems. Run presentation-quality detail or summary reports. Print a PDF of the survey results. In addition, as a survey participant you can: Establish unlimited numbers of custom queries based on any combination of survey scope variables (e.g., organizations in selected industries having sales volume within a specific range). Request custom peer group databases by organization name. Specify custom percentile statistics for the compensation variables you need (e.g., 65th percentile base pay and total cash compensation). Include or exclude your organization s data in the generation of statistics. Display your organization s competitive position (i.e., your company vs. the market). Display my data by aggregate by position. Include the Accounting Cost, Net Present or Binomial Long-term Incentive value instead of Black-Scholes value in the calculation of Total Direct Compensation. To ensure the confidentiality of all data, statistics are generated only if a data selection includes a predefined minimum number of organizations. Custom Reports - Mercer can produce a customized summary from the survey database based on your unique selection criteria. For example, you may be interested in a particular group of peer companies, or prefer to specify a custom scope range. For more information about custom reports, call Mercer s customer service line at or us at surveys@mercer.com Mercer LLC (1) Overview - 3

6 01 APRIL 2017 OVERVIEW CA MTCS FOR THE ENERGY SECTOR SURVEY METHODOLOGY Mercer follows a standardized methodology that has proven highly effective in executing surveys of national scope, as defined below: CONFIDENTIALITY Mercer uses a number of market data masking rules in this report and Mercer WIN to guarantee client data confidentiality and to ensure the reported market data is as meaningful and useful as possible. Summary of Market Data Masking Approaches A minimum number of incumbents, organizations and distinct organizations are required to present remuneration statistics. If the minimums are not met, market data is suppressed ( masked ) to protect confidentiality. Incumbents represent the number of distinct employees (i.e., observations) that are used to present mean, median and percentile remuneration statistics. Organization is defined as any entity or operating unit (e.g., divisions, subsidiaries, headquarters) providing unique incumbent remuneration data to the survey. A distinct organization is defined as either a stand-alone organization or a parent organization with multiple entities (i.e., divisions and/or subsidiaries). Multiple entities may provide survey data and be part of the same distinct organization which is counted only once. We gauge whether or not an organization dominates the analysis, i.e., if an organization s incumbents represent a disproportionate share of the sample. We test for and report on two tiers of dominance. Tier 1 organization dominance alert at this level we alert the data user that a certain threshold of organization dominance has occurred and recommend that the user take this into account and/or also consider switching to organization weighted statistics. Tier 2 organization dominance masking at this level we mask (suppress) all statistics except mean and median. Market Data Masking Criteria Minimum Counts to Display Statistics Statistic Mean (average) and frequency percentages # of Incumbents # of Organizations # of Distinct Organizations th percentile (median) th and 75 th percentile th and 90 th percentile 10 5/10* 3 * 5 organizations if the statistics are incumbent weighted; 10 if they are organization weighted Note masked data is indicated in this report and Mercer WIN with a double hyphen, i.e. - - Organization Dominance Criteria Thresholds Tier 1 Alert Tier 2 Data Masking Percent of incumbents from one organization 35% to 49% 50% + Dominance indicator (symbol) Single asterisk * Double asterisk Note The dominance indicators are displayed to the left of the num orgs column in Mercer WIN. Most PDF reports do not display the indicators although the Tier 2 masking is applied. Mercer s goal in establishing the methodology and parameters set forth in 2017 Canada Mercer Total Compensation Survey for the Energy Sector (MTCS) is to provide its clients with information that permits them to independently make pay decisions so that they can compete in the marketplace for talent, while at the same time avoiding the circumstances that could lead to an inappropriate inference of an antitrust violation. Mercer's operational processes minimize the use of this data for anticompetitive purposes. ** 2017 Mercer LLC (1) Overview - 4

7 01 APRIL 2017 OVERVIEW CA MTCS FOR THE ENERGY SECTOR Peer Group Confidentiality Peer groups (client defined subsets of this survey s participants) may be created in Mercer WIN. To protect the confidentiality of survey participants, the following rules apply to creating and modifying peer groups. Peer Group Minimums Criteria Minimum # ber of organizations 10 ber of distinct organizations 8 ber of organizations each peer group must vary by 4 Questionnaire Design The survey materials are reviewed and revised annually to incorporate participant and survey advisor suggestions where possible. Participation Solicitation Mercer takes several steps to secure survey commitment. This is necessary in order to ensure a robust and consistent sample of participating organizations. A participation alert is sent to past participants and purchasers prior to distribution of data submission material. An announcement is sent via mail with the instructions for downloading the submission questionnaire via the Mercer website. Participants are asked to return their completed questionnaires by the survey due date. Two weeks before the submission deadline, a participation reminder is issued to all targeted participants to remind them of the approaching deadline. An additional notice is sent to non-responding organizations to alert them that there is still time to participate in the survey and to please call for confirmation of participation. Follow-up phone calls are made to past participants to ensure their participation and minimize year-over-year data fluctuations. Data Collection Participants are asked to provide information regarding financial data, employment policies and practices, and compensation levels according to the survey effective date. The data collection process ensures all data is properly verified and validated. Specific steps taken: Data submissions are thoroughly screened for consistency and thoroughness of responses. Submissions are also electronically audited for format and value consistency. Mercer prepares questions for each organization in an Audit Workbook that is ed to survey contacts. Questions are related to missing, ambiguous or incorrect data. Responses to Audit Workbook questions are requested within five business days. Further questions are clarified or corrected via followup phone calls and s to participants. Data Analysis All survey data are validated to ensure accuracy and reasonableness. The database is then compiled and further analysis is conducted for quality assurance and market representation. Computerized diagnostic programs are used to identify statistical anomalies (e.g., responses that are significantly above or below all other responses) that could skew the survey results, and decisions are made regarding their inclusion in the results. Additionally, irregularities found in year-over-year analyses for repeat participants are researched. Anomalies are explained by supplemental data that is collected in follow-up phone calls. Mercer may exclude data that is considered invalid, could not be verified by the participant, does not represent the market, or that may result in a breach of confidentiality for any survey participant Mercer LLC (1) Overview - 5

8 01 APRIL 2017 OVERVIEW CA MTCS FOR THE ENERGY SECTOR SURVEY METHODOLOGY Data Reporting A comprehensive analysis of the survey data is performed. Where appropriate, analyses are completed based on size, type of organization, organizational structure, geographic region, or a combination of one or more of these factors. A few survey reporting notes: Percentages in columns may not add to 100 percent when organizations are given the option to provide more than one response to a specific question. Those responses are valid and are further explained after each table. For all questions that provide a percentage response, the percentage was calculated based on the number of organizations that responded to each question and not the total number of survey respondents. Mercer reminds participants to exercise caution in drawing definitive conclusions on data where sample sizes are small (e.g., less than 10 organizations). This could potentially represent an insufficient sample size and not be an accurate reflection of the marketplace. QUESTIONS If you have questions regarding the survey or the report, please call our toll-free customer service line at , or us at surveys@mercer.com. identifies four overlapping career paths. With Mercer WIN, users can develop a cross-functional view that facilitates salary planning as well as career planning. 110 Corporate Affairs 120 Human Resources 210 Finance 000 General 220 Recruitment 228 Compensation USE OF SPECIALIZATION FLAGS 110 Executive Head of Organization 120 Executive Function Head 130 Executive Sub-Function Head Specialization flags are used for jobs that may have specific skills related to that job. This flag helps differentiate between skill sets that may have an impact on pay in today s labour market. DATA INTEGRITY/EXCLUSION POLICY Where necessary, Mercer s staff will verify individual responses with participants. Mercer reserves the right to exclude data which it considers invalid, cannot be verified by the participant, or may result in a breach of confidentiality for any survey participants. MERCER UNIVERSAL POSITION CODING SYSTEM (MUPCS) In 2008, energy sector job codes were changed to the Mercer Universal Position Coding System, allowing easy cross-referencing to general industry and worldwide databases. It will allow consistent use of career leveling and consistent structure of functions and sub-functions. MUPCS 2017 Mercer LLC (1) Overview - 6

9 01 APRIL 2017 OVERVIEW CA MTCS FOR THE ENERGY SECTOR SURVEY USAGE Compensation professionals who deal regularly with surveys are aware of the variance that may exist in survey data. Data may fluctuate slightly from year to year due to changes in the participant base. These shifts in the underlying data can produce notably different results on a year-overyear basis. Some of these variances can be minimized by selecting organizations of similar size, industry, etc. Comparing the same peer group year-over-year can also provide valuable insight about trends. Since every organization looks at peer groups differently, if you wish to explore additional analysis of a year-over-year nature, please contact your Mercer consultant or call us at to discuss options. When observing year-over-year comparisons, please also consider the following market events or conditions when reviewing market data: More than 35% of sample coming from one company (statistics are marked with an asterisk) Significant change in sample size Difference in pay mix (more differentiation in options and bonus payments) A change in industry segment composition Significant reorganization within newly merged companies Enhancements to our job list and descriptions It is also important to note that executive pay can vary significantly, especially short-term and long-term incentives. Therefore, in some instances, the 75th percentile may even be lower than the mean. In all cases, the data has been verified. Given this potential for variance, it may be more appropriate to use percentiles rather than the mean Mercer LLC (1) Overview - 7

10 01 APRIL 2017 OVERVIEW CA MTCS FOR THE ENERGY SECTOR PARTICIPANT PROFILE Industry Survey participants were asked to report their primary industry segment. This is summarized in the table below. The Entities column includes corporate entities, subsidiaries, groups and divisions. Segment Participants Percent Entities Percent Fully Integrated and Exploration and Production Fully Integrated Exploration and Production Services and Drilling Services and Equipment Drilling Energy Marketing Utilities Public Sector Pipeline/Midstream Upgrading Downstream Engineering, Procurement & Construction Alternative Energy Other Based on 178 participants and 239 entities; Percentages may not equal to 100% due to rounding Mercer LLC (1) Overview - 8

11 01 APRIL 2017 OVERVIEW CA MTCS FOR THE ENERGY SECTOR PARTICIPANT PROFILE Organization Size The following tables provide information about the size of the organizations participating in the survey based on their reported net sales revenue, barrel of oil equivalent/day, and total employment. Not all organizations were able to provide the requested scope measure information. Total Employment Participant level Scope Measure 25th Median 75th * Less than < < 1, , ,500 and Over 1,786 2,822 5, Net Sales Revenue* Participant level Scope Measure 25th Median 75th All Participants , Less than $100 Million $100 < $500 Million $500 Million < $1 Billion $1 < $3 Billion 1,161 1,825 2, $3 < $5 Billion 3,437 4,030 4,271 9 $5 Billion and Over 6,093 9,300 15, Net Sales Revenue* Entity level All Participants , Less than $100 Million $100 < $500 Million $500 Million < $1 Billion $1 < $3 Billion 1,214 1,828 2, $3 < $5 Billion 3,399 4,038 4, $5 Billion and Over 7,642 9,470 15, * Figures reported in millions of Canadian dollars. Total Employment Entity level Less than < < 1,500 1,500 and Over , ,774 2,753 5, Mercer LLC (1) Overview - 9

12 01 APRIL 2017 OVERVIEW CA MTCS FOR THE ENERGY SECTOR PARTICIPANT PROFILE Barrel of Oil Equivalent/day Participant level Scope Measure 25th Median 75th * Under 10,000 3,507 5,334 8, Under 5,000 2,735 3,254 3, ,000 < 10,000 5,417 8,597 9, ,000 < 100,000 17,276 26,589 57, ,000 < 25,000 12,861 15,127 19, ,000 < 100,000 28,633 54,659 67, ,000 and Over 134, , , ,000 < 300, , , , ,000 and Over 315, , ,850 6 Barrel of Oil Equivalent/day Entity level Under 10,000 3,579 5,417 8, Under 5,000 2,735 3,254 3, ,000 < 10,000 5,459 7,927 9, ,000 < 100,000 17,276 26,589 57, ,000 < 25,000 12,861 15,127 19, ,000 < 100,000 28,633 54,659 67, ,000 and Over 123, , , ,000 < 300, , , , ,000 and Over 328, , ,325 8 *Barrel of Oil Equivalent/day collected for Fully Integrated, Exploration & Production and Upgrading industry segments only Mercer LLC (1) Overview - 10

13 01 APRIL 2017 OVERVIEW CA MTCS FOR THE ENERGY SECTOR INCENTIVE ELIGIBILITY BY PAY LEVEL The following table indicates the percentage of incumbents eligible for short- and long-term incentives and the percentage of incumbents receiving the award. STI and LTI Eligibility and Receivers by Pay Level Base Salary Range STI Eligibility and Receivers Distinct Obs % Eligible % Receiving LTI Eligibility and Receivers Distinct Less than * * < , , < , , < , , < , , < , , < , , < , , < , , < < < < < < < 1, * * ,000.0 or More *More than 35% of sample supplied by one organization. Obs % Eligible % Receiving 2017 Mercer LLC (2) Overview - 11

14 01 APRIL 2017 OVERVIEW CA MTCS FOR THE ENERGY SECTOR INCENTIVE COMPENSATION BY PAY LEVEL The tables on this page and the following pages indicate the value of short- and long-term incentives, expressed as a dollar amount and as a percent of base pay. Base pay ranges, Actual STI $, Target STI $ and Actual LTI $ are expressed in $000s. The expected progression of percentile values for each subsequent pay level may not be realized due to variations in organizations and observations represented at each pay level. Values in the LTI tables are based on the Black-Scholes valuation methodology for gain-based plans, but include all forms of LTI. Note: The organizations, observations and STI levels summarized in the table below reflect STI recipients only. Payouts by Pay Level Base Salary Range Distinct Obs Actual STI % of Base Actual STI $ Less than * < , < , < , < , < , < , < , < , < < < < < < < 1, * ,000.0 or More , ,680.9 *More than 35% of sample supplied by one organization. 25th Median 75th 25th Median 75th 2017 Mercer LLC (2) Overview - 12

15 01 APRIL 2017 OVERVIEW CA MTCS FOR THE ENERGY SECTOR INCENTIVE COMPENSATION BY PAY LEVEL Note: The organizations, observations and target STI summarized in the table below reflect only those employees whose position has a formal STI target assigned to it. Payouts by Pay Level Base Salary Range Distinct Obs Target STI % of Base Target STI $ Less than * < , < , < , < , < , < , < , < , < < < < < < < 1, * ,000.0 or More , , ,927.3 *More than 35% of sample supplied by one organization. 25th Median 75th 25th Median 75th 2017 Mercer LLC (2) Overview - 13

16 01 APRIL 2017 OVERVIEW CA MTCS FOR THE ENERGY SECTOR INCENTIVE COMPENSATION BY PAY LEVEL Note: Long-term incentive data reflects values based upon the Black-Scholes methodology. The organizations, observations and LTI levels summarized in the table below reflect LTI recipients only. Payouts by Pay Level Base Salary Range Distinct Obs Actual LTI % of Base Actual LTI $ Less than * < < , < , < , < , < , < , < , < < < < , < , , < , , , < 1, * ,000.0 or More , , ,357.7 *More than 35% of sample supplied by one organization. 25th Median 75th 25th Median 75th 2017 Mercer LLC (3) Overview - 14

17 01 APRIL 2017 OVERVIEW CA MTCS FOR THE ENERGY SECTOR TOTAL DIRECT COMPENSATION BY PAY LEVEL The table below indicates short-term incentives, expected value of long-term incentives, and total direct compensation by base pay range. Base pay ranges are expressed in $000s. The expected progression of percentile values for each subsequent pay level may not be realized due to variations in organizations and observations represented at each pay level. Long-term incentive and total direct compensation values are based on the Black- Scholes valuation methodology for gain-based plans, but include all forms of LTI. Payouts by Pay Level (in $000s) Base Salary Range Distinct Short-term Incentives (Receivers) Long-term Incentives (Receivers) Total Direct Compensation (All) Obs Median Distinct Less than * * < , , < , , , < , , , < , , , < , , , < , , , < , , , < , , , < < < < , < , , < , , < 1, * * * ,000.0 or More , , ,308.4 *More than 35% of sample supplied by one organization. Obs Median Distinct Obs Median 2017 Mercer LLC (4) Overview - 15

18 01 APRIL 2017 SURVEY DEFINITIONS CA MTCS FOR THE ENERGY SECTOR SURVEY DEFINITIONS The analysis of the compensation and related information collected is displayed for each of the survey positions where sufficient data were reported. A description of each type of analysis provided for each of the positions is included below. Definitions of the variables and statistics displayed on the tables are provided on the following pages. REPORT TABLE TYPES Three types of report tables are provided for each position as described below. Multiple versions of each report table exist to accommodate reporting in both annual and hourly formats. The sample tables on the following pages represent the annual versions. The first report table provided for each position is the analysis of all data reported for the position by all survey participants. Information on base pay, short-term incentives, total cash and total direct compensation is provided as well as short- and long-term incentive prevalence, target short-term incentive percentage, compa-ratios, and salary ranges. Where sample sizes permit, the first report table is reproduced for each specialization flag collected for the position. The second report table provided for each position is the analysis of data reported by scopes based on industry segment and incumbent location. The third report table provided for each position is the analysis of data reported by scopes based on the total size of the organization (i.e., revenue, employment, and barrel of oil equivalent (BOE)/day) Mercer LLC Definitions - 1

19 01 APRIL 2017 SURVEY DEFINITIONS CA MTCS FOR THE ENERGY SECTOR SAMPLE REPORT Position Code Specialization: Position Description Incumbents in the same position: (Compensation Data Displayed in $000s) Actual Annual Cash Compensation Base Salary Inc Weighted Base Salary Org Weighted STI Actual ($ Amount) STI Actual (% of Base) Position Title All Incumbents Other Non-Guaranteed Cash ($ Amt) Rcvrs Distinct Obs 10th 25th Median Mean 75th 90th Year over Year % Increase (Mean): Incentives and Eligibility STI Other Guaranteed Cash Other Non-Guaranteed Cash Total Cash Comp, Actual Inc Weighted Salary Range Dist. Obs Median Total Cash Comp, Actual Org Weighted Target Annual Cash Compensation STI Threshold (% of Base) STI Target (% of Base) STI Maximum (% of Base) LTI Overtime Minimum Midpoint Maximum Compa-ratio Dist. Obs % of Obs Elig Total Cash Compensation, Target Demographics Dist. Obs Median Estimated Total Direct Compensation Total Perquisites ($ Amount) Long-term Incentive Graduation Year Year of Birth Total Direct Comp, Target Receivers Dist. Obs % of Obs Total Direct Comp, Target Hired since 2015 Total Direct Comp, Actual Receivers Total Direct Comp, Actual Total Other Guaranteed Cash Total Other Guaranteed Cash ($ Amount) *More than 35% of the rates within the sample are supplied by one organization. Note only median and mean will be displayed if 50% or more of the incumbents are supplied by one organization 2017 Mercer LLC Definitions - 2

20 01 APRIL 2017 SURVEY DEFINITIONS CA MTCS FOR THE ENERGY SECTOR SAMPLE REPORT Position Code Scope Category Primary Industry Segment** Fully Integrated and Exploration & Production Fully Integrated Exploration & Production Services and Drilling Services and Equipment Drilling Energy Marketing Utilities Public Sector (Regulatory Agencies, Government) Pipeline/Midstream Upgrading Downstream (Refining, Petrochemical Manufacturing) Engineering, Procurement & Construction Alternative Energy Other Incumbent Location*** British Columbia All Alberta Calgary Edmonton Fort McMurray Other Alberta Manitoba/Saskatchewan Eastern Canada Atlantic Canada Ontario Québec Position Title Distinct Obs 25th Median Mean *More than 35% of the rates within the sample are supplied by one organization. **Incumbents in this table are classified under the industry segment of the entity with which they are associated. ***Incumbents in this table are assigned to locations based on the workplace postal code reported for the incumbent. Base Salary Total Cash Compensation Total Direct Compensation 75th 25th Median Mean 75th 25th Median Mean 75th 2017 Mercer LLC Definitions - 3

21 01 APRIL 2017 SURVEY DEFINITIONS CA MTCS FOR THE ENERGY SECTOR SAMPLE REPORT Position Code Position Title Base Salary Total Cash Compensation Total Direct Compensation Scope Category** Net Sales Revenue Distinct Obs Median Scope 25th Median Mean 75th 25th Median Mean 75th 25th Median Mean 75th All Under $100 Million $100 < $500 Million $500 < $1 Billion $1 < $3 Billion $3 < $5 Billion $5 Billion and Over Barrel of Oil Equivalent/Day All Under 10,000 Under 5,000 5,000 < 10,000 10,000 < 100,000 10,000 < 25,000 25,000 < 100, ,000 and Over 100,000 < 300, ,000 and Over Total Employment Less than < < 1,500 1,500 and Over *More than 35% of the rates within the sample are supplied by one organization. **Incumbents on this page are assigned to scope categories based on the total scope values of the participant, as opposed to the scope values of the individual entities (corporate, subsidiary, group or division) with which the incumbents are associated Mercer LLC Definitions - 4

22 01 APRIL 2017 SURVEY DEFINITIONS CA MTCS FOR THE ENERGY SECTOR STATISTICS 10th Percentile (10th ) - The data point that is higher than 10% of all other data in the sample when ranked from low to high. 25th Percentile (25th ) - The data point that is higher than 25% of all other data in the sample when ranked from low to high. Also known as the first quartile. 75th Percentile (75th ) - The data point that is higher than 75% of all other data in the sample when ranked from low to high. Also known as the third quartile. 90th Percentile (90th ) - The data point that is higher than 90% of all other data in the sample when ranked from low to high. Mean - The sum of all data reported divided by the number of observations in the sample. Also called the average. Median - The data point that is higher than 50% of all other data in the sample when ranked from low to high. Also known as the 50th percentile. ber of Distinct Organizations (Distinct ) - The number of distinct survey submissions received from participants for the position and variable reported. ber of Observations ( Obs) - The number of incumbents for which data are reported for the variable. ber of Organizations ( ) - The number of entities (corporate, subsidiary, group and division) reporting data for the variable. Note that each variable, such as base pay or incentive amount, is analyzed individually using the data reported for that variable only. The organization and observation counts that are listed provide you with information on the number of observations used in the calculations for each variable. If an organization could not provide a piece of data for a position (e.g. BOE/Day at an upstream company), this organization s information would not be included in the calculations requiring that data. Therefore the organization/observation counts may differ by variable. VARIABLES Base Salary Inc Weighted - Base salary statistics calculated using individual rates reported for each incumbent across all organizations. Base Salary Org Weighted - Base salary statistics calculated using organizational averages (i.e., sum of variable for all incumbents for the organization divided by the number of incumbents). STI Eligibility - The percent of incumbents in the position eligible for a short-term cash incentive. STI Actual ($ Amount) - Actual cash incentive statistics calculated using those incumbents who received a short-term incentive payment. STI Actual (% of Base) - The incentive received divided by the base pay. STI Maximum (% of Base)- The maximum annual cash incentive opportunity as a percentage of base pay. STI Target (% of Base) - The target annual cash STI as a percentage of base pay if all goals for the year are met. STI targets typically constitute a reasonable expectation Mercer LLC Definitions - 5

23 01 APRIL 2017 SURVEY DEFINITIONS CA MTCS FOR THE ENERGY SECTOR VARIABLES STI Threshold (% of Base) - The minimum annual cash incentive as a percentage of base pay if partial goals for the year are met. This amount is typically payable when minimal/threshold level performance is achieved. Compa-Ratio - The percentage representing the ratio of base pay to the midpoint of the pay range reported. The computation uses only data for incumbents for which base pay and complete pay range information are reported. Graduation Year - This is the year the employee graduated with a Bachelor s degree from a university or year of diploma/certificate graduation from a college, trade or technical institution. If the employee had multiple educational awards, this is the year of first graduation. Hired since The percentage of incumbents hired since January 1, Incumbents in the Same Position - The number of incumbents deemed to be in the same role as prior year (not promoted), for whom base salary data were submitted for both 2016 and LTI Eligibility - The percentage of incumbents in the position eligible for a long-term incentive. Other Guaranteed Cash Eligibility - The percentage of incumbents in the position eligible for guaranteed cash awards. Other Non-Guaranteed Cash Eligibility - The percentage of incumbents in the position eligible for non-guaranteed cash awards. Other Non-Guaranteed Cash ($ Amt) Rcvrs - Actual nonguaranteed cash awarded which may include one time awards for performance, achievement awards, commissions, etc. Overtime Eligibility - The percentage of incumbents in the position eligible for overtime pay. Salary Range Maximum - The maximum (highest) rate of the salary range for the position. Salary Range Midpoint - The middle point of the salary range, or the position rate for the position. Salary Range Minimum - Also known as the Entry Rate, the minimum (lowest) rate of the salary range for the position. Total Cash Compensation, Target - Base pay, plus Other Non- Guaranteed Cash Payments, plus expected short-term incentive payout for all incumbents. Total Direct Compensation, Target - Base pay, plus Other Non- Guaranteed Cash Payments, plus Total Perquisite Value, plus expected short-term incentive payout for only those incumbents who are eligible for a short-term incentive and reported a target percent based on the design elements of the incentive plan, plus expected value of long-term incentives. Total Direct Compensation, Target Receivers - Base pay, plus Other Non-Guaranteed Cash Payments, plus Total Perquisite Value, plus expected short-term incentive payout for only those incumbents who are eligible for a short-term incentive and reported a target percent based on the design elements of the incentive plan, plus expected value of long-term incentives. Sample includes only those incumbents who received a long-term incentive award. Total Cash Compensation, Actual Inc Weighted - Base pay, plus Other Non-Guaranteed Cash Payments, plus short-term incentive for all incumbents. Incumbents who are not eligible for an incentive and incentive eligible incumbents who did not receive a payout are included. Total Cash Compensation, Actual Org Weighted - Base pay, plus Other Non-Guaranteed Cash Payments, plus short-term incentive for all incumbents using organizational average (i.e., sum of variable for all incumbents for the divided by the number of incumbents) Mercer LLC Definitions - 6

24 01 APRIL 2017 SURVEY DEFINITIONS CA MTCS FOR THE ENERGY SECTOR VARIABLES Total Direct Compensation, Actual - Base pay, plus Other Non- Guaranteed Cash Payments, plus Total Perquisite Value, plus shortterm incentive plus expected value of long-term incentives for all incumbents. Incumbents who are not eligible for either a short-term or long-term incentive are included. Also, short-term incentive eligible incumbents who did not receive a payout and long-term incentive eligible incumbents who did not receive an award are included. Total Direct Compensation, Actual Receivers - Base pay, plus Other Non-Guaranteed Cash Payments, plus Total Perquisite Value, plus short-term incentive, plus expected value of long-term incentives for all incumbents receiving a long-term incentive grant. Long-term Incentive - Long-term incentive award valuation statistics calculated using incumbents who receive an award. Total Other Guaranteed Cash ($ Amount) - Actual cash awards guaranteed, such as skill premiums, housing allowances, shift premiums, etc. These amounts generally apply to specific/unique situations, and are therefore not considered to be part of the going market rate for the job. So as not to overstate the market rate for the position, the Other Guaranteed Cash Payments are excluded from the Total Cash and Total Direct Compensation amounts. Total Perquisites ($ Amount) - The total value of all perquisites awarded to the incumbent, including vehicles and associated expenses, vehicle allowances, parking, public transportation passes, lunch/country club fees, fitness club fees, etc. Amounts reported reflect the annual cost to the company, rather than the taxable benefit to the employee. Year-over-Year % Increase - The average percentage increase in base salary from 2016 to 2017 for incumbents remaining in the same position. Year of Birth - The incumbent s year of birth. LONG-TERM INCENTIVES DEFINITIONS Stock/Share Options - Stock/Share Options allow for the purchase of stock at a fixed price over a specified period. The exercise price (known also as strike or subscription price) is often equal to the market price on the date of grant, but may be less than (with discount) or greater than (with premium) the market price on the date of grant. Share Appreciation Rights (SARs) - Share Appreciation Rights provide an incumbent with the appreciation in market value of the share. They may be paid out in cash, stock, or a combination of cash and stock. No investment on the part of the incumbent is required. Share Appreciation Rights include Phantom Appreciation Shares. Phantom Appreciation Shares are an award denominated in hypothetical shares, the value of which is based on an increase in actual share value or another measure of organization value (e.g., book value). There are three types of Share Appreciation Rights: Freestanding - SAR grant that is not attached to a stock/share option. Limited - SAR that is exercisable only upon the occurrence of a specific event such as a change in control. Tandem - SAR that is granted with a stock/share option. The exercise of one cancels the other. Restricted Shares/Share Units - Conditional grants of notional, actual or phantom shares of stock with vesting contingent upon employment for a specified period of time. The value of each share depends upon the market value of the share at the end of the vesting period. Performance Shares/Share Units - Conditional grant of notional or actual shares, with payment or vesting contingent upon achievement of specified performance goals over a multi-year performance period. While the number of Performance Shares/ Share Units earned depends on the extent to which the performance goals are achieved, the value of each Performance Share/Share Unit depends upon the market value of the share at the end of the performance period Mercer LLC Definitions - 7

25 01 APRIL 2017 SURVEY DEFINITIONS CA MTCS FOR THE ENERGY SECTOR LONG-TERM INCENTIVES DEFINITIONS Performance Cash Units - Conditional grant denominated in units other than notional or actual shares, with payment contingent upon achievement of specified performance goals over a multi-year performance period. Performance Cash Units are cash-denominated and not tied to the price of a share of stock. Although units are usually cash-denominated, their value may also be based on other constructs, such as dividends or EPS (Earnings Per Share). Where the value of each unit is equal to 1.00, the incentive type is also known as Longterm Cash. Long-term Cash - A pre-determined cash amount paid out contingent upon achievement of specified performance goals over a multi-year performance period. Project Bonus - Project bonuses are sometimes paid to employees working on large-scale construction projects or other major projects with a finite lifespan. Payouts are typically tied to the successful completion of the project, or to specific project milestones. LONG-TERM INCENTIVES VALUATION METHODOLOGY Grant data provided by the survey participants was used to calculate the value of Long-term Incentives (LTI) such that the result is a fair, monetary-based measure that can be used with other compensation amounts to determine Total Direct Compensation (i.e., Comp 4). Company matches to Short-term Incentive Deferrals are included in the grant data. In this report, long-term incentive values have been calculated using Black-Scholes, Accounting Cost, Net Present Value, and Binomial Methodologies. Black-Scholes Method Under the Black-Scholes methodology certain LTI awards are discounted for required performance conditions. A performance discount is applicable to all plan types if vesting is designated as performance based and the plan structure is defined as Fixed Amount or Defined Maximum. Performance-contingent awards with these plan structures are discounted by 20% to 50% to reflect the risk that the award will not vest or be paid out. A 20% discount is applied if the performance measure does not include Relative Total Shareholder Return. Other discounts, ranging from 35% to 50%, are applied depending upon the degree to which Relative Total Shareholder Return is used as the performance measure. Otherwise, LTI values generally have not been adjusted to reflect any discounts for service-based vesting, lack of transferability, or risk of forfeiture. Fixed Amount awards do not have a downside or upside potential and in some markets may commonly be referred to as an All or Nothing type of award. For example, these might include awards where a participant will receive 100 shares if an EPS (Earnings Per Share) goal is met and nothing if the goal is not met. Defined Maximum awards include a maximum number of shares/share units corresponding to performance. The number of shares awarded may be less based upon performance. Fixed Amount and Defined Maximum plans are in contrast to Defined Target Plans. Defined Target awards include a target number of shares/share units corresponding to target performance. The number of shares awarded may be more or less based upon actual performance (e.g., payouts may be 0% to 200% of target). Defined Target awards are valued at the target level with no discount Mercer LLC Definitions - 8