DEF 14A 1 ny20002262x1_def14a.htm DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

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Kosmos Energy Ltd.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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TABLE OF CONTENTS

TABLE OF CONTENTS

TABLE OF CONTENTS

A MESSAGE FROM OUR CHAIRMAN AND CEO

April 28, 2022

Fellow shareholders:

Just as we were looking forward to the resurgence of the global economy after the difficult years of the pandemic, Russia’s invasion of Ukraine has shocked the world and illustrated the fragility of the peace and democracy we hold so dear. The tragic loss of life, the displacement of millions of people, and the economic devastation will cast a long shadow.

For the energy sector, the conflict is re-shaping the industry’s outlook. At the most basic level, it has reminded the world of the necessity of ensuring the energy transition whilst providing energy security. Europe’s reliance on Russia highlights the need for new sources of energy, ultimately renewables with hydrocarbons playing a long-term role in the transition. Kosmos can play a role in meeting that challenge with a portfolio of low cost, lower carbon oil production, and low cost, lower carbon liquified natural gas (LNG) projects offshore Mauritania and Senegal, which are poised to bring a new source of gas to the world as soon as production starts late next year. By sourcing LNG from Mauritania and Senegal, Europe would enhance its energy security and help these countries meet their own development goals – a positive and necessary outcome for all involved. For Kosmos, this illustrates our role in bringing a just and secure energy transition to life, and 2021 was a productive year for the company in fulfilling that vision.

We rebuilt operational momentum across the portfolio with a return to drilling in Ghana, Equatorial Guinea, and the Gulf of Mexico. This increased activity helped push net production above our year-end exit target of 75,000 barrels of oil equivalent per day. Importantly, this increased production boosted free cash flow and reduced leverage to around 2.5 times at year-end. Our LNG development offshore Mauritania and Senegal made significant progress with Greater Tortue Ahmeyim Phase 1 around 70% complete at year end. In addition, Kosmos executed a highly accretive transaction in Ghana, acquiring additional interests in the Jubilee and TEN fields, which has helped transform the balance sheet and further increase free cash flow generation.

As we executed the company’s strategy in 2021, we continued to be guided by our long-standing commitment to sustainability. Our most recent TCFD-aligned Sustainability Report advances the approach we introduced last year and covers our full ESG agenda, including the actions we have taken to mitigate climate-related risks and enhance the resilience of our business. Given the importance of ESG performance, the data in our most recent report has been reviewed by our independent auditor. This is an added step we have taken to increase confidence in our reporting, further demonstrating our commitment to transparency and openness.

The outlook for Kosmos in 2022 and beyond remains positive. The company is underpinned by low-cost, lower carbon assets – world class fields that have the longevity to deliver sustainable, high-margin cash flow at current prices. With our existing assets and sanctioned projects, production is expected to grow around 50% in the next two years, with a growing natural gas weighting at a time when there is a need for new sources of gas. With growing production and a strong commodity price backdrop, we expect to make further progress de-leveraging the balance sheet, with a year-end 2022 leverage target of around 1.5 times at current prices. As we deliver on this plan and new projects start up, sustainable free cash flow is expected to increase materially, creating the potential for meaningful shareholder returns.

Kosmos has emerged from the last two years of the pandemic with a stronger business and an important role to play in supporting the energy transition and strengthening energy security. We are excited about the future and look forward to sharing more about our company at our annual meeting. On behalf of the entire board of directors, I thank you for your participation and investment in our company.

Sincerely yours,

Andrew G. Inglis

Chairman and Chief Executive Officer

TABLE OF CONTENTS

	Proxy Notice from Corporate Secretary			1
	Cast Your Vote			2
	Proxy Statement and Summary			3
	Corporate Governance Highlights and Practices			4
	Sustainability Highlights and Practices			5
	What We Do and What We Don’t Do			6
	Proposal 1 – Election of Directors			7
	Class III Director Nominees			8
	Vote Required			9
	Recommendation			9
	Continuing Directors			10
	Corporate Governance Matters			13
	Board Composition			13
	Board Leadership Structure			13
	Committees of the Board of Directors			13
	Audit Committee			14
	Compensation Committee			15
	Nominating and Corporate Governance Committee			16
	Health, Safety, Environment and Sustainability Committee			17
	Meetings of the Board and Committees			18
	Director Independence			18
	Board’s Role in Risk Oversight			18
	Code of Business Conduct and Ethics			18
	Corporate Governance Guidelines			19
	Communications with the Board			19
	Director Compensation			20
	Director Share Ownership Guidelines			21
	Certain Relationships and Related Transactions			22
	Stock Ownership Matters			23
	Delinquent Section 16(a) Reports			23
	Security Ownership of Management and Certain Beneficial Owners			23
	Proposal 2 – Appointment of Ernst &Young			25
	Changes in and Disagreements with Accountants			25
	Fees Paid to Independent Auditors			25
	Pre-Approval Policies and Procedures			26
	Vote Required			26
	Recommendation			26
	Audit Committee Report			27

	Proposal 3 – NEO Compensation			28
	Vote Required			28
	Recommendation			28
	Executive Officers			29
	Executive Compensation			31
	Compensation Discussion and Analysis			31
	Executive Summary			31
	2021 Business Highlights			32
	2021 Key Compensation Decisions			33
	Compensation Philosophy			34
	Elements of Our Executive Compensation Program			35
	Executive Compensation Procedures			36
	Advisory Vote to Approve NEO Compensation			37
	Analysis of 2021 Executive Compensation Decisions			38
	Compensation Committee Report			48
	2021 Compensation Tables			49
	2021 CEO Pay Ratio Disclosure			59
	General Matters			61
	Record Date			61
	Voting Your Proxy			61
	Shares Held of Record			61
	Shares Held in Street Name			62
	Revoking Your Proxy			62
	Quorum and Vote Required			62
	Cost of Solicitation			62
	Annual Report

SEC Form DEF 14A filed by Kosmos Energy Ltd.