XML 33 R13.htm IDEA: XBRL DOCUMENT v3.20.4
Employee Benefit Plans (Notes)
 12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]  
Employee Benefit Plans Employee Benefit Plans
Stock-Based Compensation

During 2020, 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, 2020, 2019 and 2018 was as follows (in millions):
 202020192018
Lease and Well$52 $56 $51 
Gathering and Processing Costs1 1 1 
Exploration Costs21 26 25 
General and Administrative72 92 78 
Total$146 $175 $155 

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

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 Committee's certification of the applicable performance multiple

At December 31, 2020, approximately 2.0 million common shares remained available for grant under the 2008 Plan.  EOG's policy is to issue shares related to the 2008 Plan from previously authorized unissued shares or treasury shares to the extent treasury shares are available.

During 2020, 2019 and 2018, 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 and excess tax benefits recognized within the income tax provision were $(22) million, $(1) million and $20 million for the years ended December 31, 2020, 2019 and 2018, 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) 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) 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 $62 million, $63 million and $60 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Weighted average fair values and valuation assumptions used to value stock option, SAR and ESPP grants for the years ended December 31, 2020, 2019 and 2018 were as follows:
 Stock Options/SARsESPP
 202020192018202020192018
Weighted Average Fair Value of Grants
$11.06 $19.49 $33.46 $19.14 $22.83 $25.75 
Expected Volatility44.47 %32.02 %28.23 %53.48 %34.78 %24.59 %
Risk-Free Interest Rate0.21 %1.69 %2.68 %0.90 %2.27 %1.89 %
Dividend Yield3.27 %1.39 %0.72 %2.27 %1.04 %0.64 %
Expected Life5.2 years5.1 years5.0 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, 2020, 2019 and 2018 (stock options and SARs in thousands):
 202020192018
 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 19,395 $94.53 8,310 $96.90 9,103 $83.89 
Granted1,996 37.63 1,965 75.39 1,906 126.49 
Exercised (1)
(23)69.59 (606)61.43 (2,493)72.21 
Forfeited(1,182)88.93 (274)102.57 (206)94.43 
Outstanding at December 3110,186 84.08 9,395 94.53 8,310 96.90 
Stock Options/SARs Exercisable at December 31
6,343 96.41 5,275 94.21 3,969 85.82 
(1)The total intrinsic value of stock options/SARs exercised during the years 2020, 2019 and 2018 was $0.4 million, $14 million and $118 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, 2020, there were 9.9 million stock options/SARs vested or expected to vest with a weighted average grant price of $84.76 per share, an intrinsic value of $22.5 million and a weighted average remaining contractual life of 4.2 years.
The following table summarizes certain information for the stock options and SARs outstanding and exercisable at December 31, 2020 (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 $  43.991,974 7$37.43  10 1$37.44   
44.00 to     74.99872 269.37  846 269.47   
   75.00 to     75.991,863 675.09  636 575.09   
   76.00 to     95.991,242 394.47  1,215 394.63   
   96.00 to   101.992,477 397.95  2,457 397.95   
 102.00 to   129.991,758 5126.44 1,179 5126.37 
 10,186 484.08 $24,578 6,343 396.41 $124 
(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 thousands.

At December 31, 2020, unrecognized compensation expense related to non-vested stock option and SAR grants totaled $53 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, 2020, approximately 1.9 million shares of Common Stock remained available for grant under the ESPP.  The following table summarizes ESPP activity for the years ended December 31, 2020, 2019 and 2018 (in thousands, except number of participants):
 202020192018
Approximate Number of Participants2,063 1,998 1,934 
Shares Purchased377 224 180 
Aggregate Purchase Price$16,103 $16,533 $14,887 

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 $75 million, $97 million and $81 million for the years ended December 31, 2020, 2019 and 2018, respectively.
The following table sets forth the restricted stock and restricted stock unit transactions for the years ended December 31, 2020, 2019 and 2018 (shares and units in thousands):
 202020192018
 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 14,546 $90.16 3,792 $96.64 3,905 $88.57 
Granted1,488 38.10 1,749 80.01 812 117.55 
Released (1)
(1,213)85.92 (855)96.93 (740)78.16 
Forfeited(79)86.52 (140)97.54 (185)92.12 
Outstanding at December 31 (2)
4,742 74.97 4,546 90.16 3,792 96.64 
(1)The total intrinsic value of restricted stock and restricted stock units released during the years ended December 31, 2020, 2019 and 2018 was $48 million, $70 million and $84 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)The total intrinsic value of restricted stock and restricted stock units outstanding at December 31, 2020, 2019 and 2018 was $236 million, $381 million and $331 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, 2020, unrecognized compensation expense related to restricted stock and restricted stock units totaled $178 million. Such unrecognized expense will be recognized on a straight-line basis over a weighted average period of 1.6 years.

Performance Units.  EOG has granted performance units (Performance Awards) 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 Awards granted could be outstanding. The fair value of the Performance Awards is estimated using a Monte Carlo simulation. Stock-based compensation expense related to the Performance Award grants totaled $9 million, $15 million and $14 million for the years ended December 31, 2020, 2019 and 2018, respectively.

  Weighted average fair values and valuation assumptions used to value Performance Awards during the years ended December 31, 2020, 2019 and 2018 were as follows:
 202020192018
Weighted Average Fair Value of Grants$42.77 $79.98 $136.74 
Expected Volatility47.27 %29.20 %29.92 %
Risk-Free Interest Rate0.16 %1.51 %2.85 %

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 Award transactions for the years ended December 31, 2020, 2019 and 2018 (units in thousands):
 202020192018
 Number of UnitsWeighted Average Price per Grant DateNumber of UnitsWeighted Average Price per Grant DateNumber of UnitsWeighted Average Price per Grant Date
Outstanding at January 1598 $92.19 539 $101.53 502 $90.96 
Granted172 37.44 172 75.09 113 125.73 
Granted for Performance Multiple (1)
66 100.95 72 69.43 72 101.87 
Released (2)
(223)88.52 (185)94.63 (148)84.43 
Forfeited— — — — — — 
Outstanding at December 31 (3)
613 (4)79.10 598 92.19 539 101.53 
(1)Upon completion of the Performance Period for the Performance Awards granted in 2016, 2015 and 2014, a performance multiple of 150%, 200% and 200%, respectively, was applied to each of the grants resulting in additional grants of Performance Awards in February 2020, 2019 and 2018.
(2)The total intrinsic value of Performance Awards released during the years ended December 31, 2020, 2019 and 2018 was $13 million, $15 million and $18 million, respectively. The intrinsic value is based upon the closing price of EOG's common stock on the date Performance Awards are released.
(3)The total intrinsic value of Performance Awards outstanding at December 31, 2020, 2019 and 2018 was $31 million, $50 million and $47 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 77 and a maximum of 1,149 Performance Awards could be outstanding.

At December 31, 2020, unrecognized compensation expense related to Performance Awards totaled $5 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 Awards granted in September 2017, a performance multiple of 125% was applied to the grants resulting in an additional grant of 19,629 Performance Awards in February 2021.

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 $46 million, $51 million and $43 million for 2020, 2019 and 2018, 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 2020, 2019 and 2018, respectively.

For the Trinidadian defined benefit pension plan, the benefit obligation, fair value of plan assets and accrued benefit cost totaled $13 million, $12 million and $0.1 million, respectively, at December 31, 2020, and $12 million, $10 million and $0.1 million, respectively, at December 31, 2019.

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.