APA Corp Updated Executive Compensation Arrangements From Investing.com

HOUSTON – APA Corp (NASDAQ:APA), an $8.95 billion market capitalization company in the oil and gas industry, said Thursday that its management development committee has approved new executive compensation arrangements.

The changes are part of the company’s initiative to link executive pay more closely to performance and shareholder value. According to InvestingPro data, APA has delivered significant profitability over the past twelve months, with a return on equity of 72%.

The updated agreements introduce a new form of Performance Share Program Agreement and Stock Option Award Agreement under APA Corp’s 2016 Omnibus Compensation Plan. In the future, these agreements will regulate the allocation of performance-related shares and stock options to the company’s executives.

The new Performance Share Program Agreement has been revised and now includes performance conditions based on two metrics: Relative Total Shareholder Return (60%) and Cash Return on Invested Capital (40%). This change represents a departure from the previous program and calls for strengthening the link between executive compensation and company performance. An analysis by InvestingPro shows that APA is currently trading at an attractive price-to-earnings ratio of 3.58, with six analysts recently revising their earnings expectations upwards.

Additionally, the Stock Option Award Agreement has been updated to reflect changes since the last version in 2018. Particularly noteworthy is the revision of the definition of “involuntary termination”. These updates are intended to ensure that the Company’s executive compensation practices remain competitive and in line with industry standards.

This announcement is based on information from APA Corp.’s recent SEC filing. The Houston, Texas-based company has provided no further comment on the potential impact of these changes on its financial performance or strategic direction.

APA currently offers a dividend yield of 4.22% and has paid dividends for 55 consecutive years. According to InvestingPro’s fair value model, the stock appears undervalued. For more insights and detailed analysis, check out APA’s comprehensive Pro Research Report, exclusive to InvestingProsubscribers.

In other recent news, APA Corporation has announced plans to issue senior notes due 2035 and 2055 as part of a broader debt restructuring strategy. The net proceeds from this offering will be used to repurchase outstanding senior terms of its subsidiary Apache Corporation (NASDAQ:). Additionally, APA Corporation announced significant changes to its leadership team: Executive Vice President of Operations Clay Bretches will retire in 2025 and Kimberly Warnica has been named Executive Vice President and Chief Legal Officer.

APA Corporation recently completed the acquisition of Callon Petroleum Company, representing a significant expansion in the energy sector. This strategic merger is intended to consolidate APA’s market position and exploit synergies between the two companies. UBS, Evercore ISI and RBC Capital Markets adjusted their price targets on APA Corporation after the company reported a consolidated net loss of $223 million in the third quarter, with calculated net income coming in at $370 million.

The Company is strategically focused on its activities in the Permian Basin and plans exploration in Alaska for the first half of 2025. APA Corporation also intends to continue production in the Permian Basin and Egypt with a capital budget of 2.2 to 2.3 Billion US dollars claimed for 2025.

Amid these recent developments, APA Corporation faces a $2 billion purchase in the North Sea and a slight decline in production in Egypt. However, the GranMorgu project in Suriname is expected to make a significant contribution from 2028.

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