DEF 14A 1 swn3797081-def14a.htm DEFINITIVE PROXY STATEMENT

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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SOUTHWESTERN ENERGY COMPANY

(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

NOTICE OF 2021

ANNUAL
MEETING

OF SHAREHOLDERS

May 18, 2021 - 9:00 a.m.

Central Daylight Time

Table of Contents

Contents

Letter from the Chair	1
Proxy Statement Highlights	3
Environmental	3
Social	3
Governance	4
Board Highlights	7
Voting at the Annual Meeting	9
Notice of Annual Meeting of Shareholders on May 18, 2021	10
Proposal No. 1: Election of Directors	11
Nominees for Election	12
Director Independence	17
Selection Criteria for Nominees for Directors	17
Director Nomination Process	18
Voting for Directors	18
Corporate Governance	19
Corporate Governance Policies	19
Corporate Responsibility	20
Communications with the Board of Directors	20
Committees of the Board of Directors	20
Committee Reports	21
Board Leadership Structure and Executive Sessions	25
Board, Committee and Director Evaluations	25
Succession Planning	25
Shareholder Rights	25
Shareholder Nominations	26
Certain Transactions with Directors and Officers	26
Compensation Risk Assessment	27
Director Compensation	28
Deferred Compensation Plan	28
Total Director Compensation for Year Ended December 31, 2020	28
Stock Ownership Information	30
Share Ownership of Officers and Directors	30
Equity Compensation Plans	31
Security Ownership of Principal Shareholders	31
Stock Ownership Guidelines	32
Proposal No. 2: Non-Binding Advisory Vote to Approve the Compensation of our Named Executive Officers	33

Compensation Discussion and Analysis	34
2020 Highlights	34
2020 Compensation Decisions	38
How We Make Compensation Decisions	45
Practices and Policies Related to Compensation	47
Health, Welfare, Retirement and Other Benefits	48
Executive Compensation	49
Summary Compensation Table	49
Grants of Plan-Based Awards	51
Outstanding Equity Awards at Fiscal Year-End	52
2020 Option Exercises, Performance Units Settled and Stock Vested	53
Pension Benefits	54
Non-Qualified Deferred Compensation	56
Termination and Change in Control Benefits	57
Separation of Employment	59
CEO Pay Ratio	59
Proposal No. 3: Ratification of Independent Registered Public Accounting Firm	60
Pre-Approval Policy for Services of Independent Registered Public Accounting Firm	60
Relationship with Independent Registered Public Accounting Firm	60
Proposal No. 4: Shareholder Proposal Regarding Special Meetings	61
Questions and Answers about the Annual Meeting and Voting	63
Requirements for Submitting Proxy Proposals and Transaction of Business at Annual Meeting	67
Transaction of Business at the Annual Meeting	67
Date for Receipt of Shareholder Proposals for the 2022 Annual Meeting	67
Date for Receipt of Shareholder Director Nominations for the 2022 Annual Meeting	67

Learn More
Read about Southwestern Energy Company and vote online
www.proxyvotenow.com/swn

*	This proxy statement and the accompanying proxy are first being mailed, given or made available to shareholders, on or about April 8, 2021.

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Letter from the Chair

Dear Fellow Shareholders,

This past year brought a myriad of historic and unforeseen challenges to navigate for SWN’s management team and board. SWN’s resilience highlighted the capability and commitment of SWN’s management team and all of SWN’s employees as well as the importance of a fully engaged and committed board of directors. Our intentional approach to risk oversight, shareholder value, and focus on key values of operational responsibility, safety, honesty, transparency, and respect for the environment helped ensure SWN’s stability and strategic growth through this challenging time.

Social and Environmental Responsibility

Your Board is committed to ensuring that strong performance is accompanied by responsible governance. We thoughtfully consider the alignment of the Company’s culture, values, and strategy which includes ensuring the safety and wellbeing of SWN’s employees and contractors while minimizing the Company’s impact on the environment and the communities in which it operates.

In 2020, your Board regularly engaged with management regarding SWN’s response to COVID-19, which, as explained more fully in this proxy, included the establishment of remote work protocols for office workers and paid time off for non-exempt workers required to isolate or quarantine. For those employees in the field unable to work remotely, the Company instituted strong safety protocols to mitigate the risk of employee-to-employee transmission, while continuing a heightened focus on overall safety. For the year, SWN’s employees and contractors achieved first quartile, record safety performance and your Board was proud to recognize this achievement at our recent meeting.

Your Board also oversaw the publication of SWN’s seventh annual corporate responsibility report, which highlighted the Company’s position as a leader among its peers in greenhouse gas and methane intensity and the achievement of fresh water neutrality for the fifth year in a row. As with safety, SWN achieved record environmental performance for the year.

Strategy and Performance

Our focus on long-term shareholder value has led to continued improvement in SWN’s existing business and disciplined analysis and execution of strategic opportunities. SWN has continued its multi-year plan to strengthen the balance sheet, optimize the cost structure, and improve margins. This disciplined approach extended to the successful strategic acquisition of Montage Resources, resulting in accretion to per share metrics for shareholders as well as to the balance sheet.

Ongoing emphasis on a long-term strategic hedging program as well as nimble liability management brought stability to both the balance sheet and the operating plan during the historic commodity price volatility experienced in 2020. Hedge gains totaled $362 million, absolute debt was reduced through bond purchases, and debt ratios were further reduced via incremental cash flow from the Montage acquisition. The financing of the Montage transaction was emblematic of a strategy of balancing risk while enhancing shareholder value.

Executive Compensation

Throughout 2020, your Board considered feedback from its shareholders and its independent compensation consultant and approved changes to the 2021 compensation program to better align with a peer group reflective of the scale of SWN after the sale of the Fayetteville assets. Highlights of the changes to the 2021 compensation program include:

•	Long-term incentive award grants have been reduced by 20% for the CEO, COO and Senior VP level employees. This is in addition to the 10% reduction for all officers in 2020.
•	There are no changes to base salaries for the second consecutive year.
•	The Annual Incentive program has been modified by replacing the “Production” metric with a “Proved Developed F&D cost” metric and adding an ESG metric for “Methane Intensity.”
•	The Long-term Incentive program now includes “ROCE” and “Reinvestment Ratio” metrics, replacing the ROACE metric in last year’s program.

SOUTHWESTERN ENERGY COMPANY | 1

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Governance

As described more fully in this proxy, your Board believes effective governance depends on the diversity of thought, experience, and skillset of its members. In 2020, we welcomed Sylvester “Chip” Johnson, who brings over 40 years of energy experience and an entrepreneurial view of the business. His industry perspective helps inform our continued engagement regarding the strategic direction of our industry. Leading governance practices remain a key tenet of your Board’s culture.

On behalf of the Board, I would also like to remember Julian Bott, SWN’s CFO who passed away suddenly in early January. Julian will be remembered for his leadership, his professional capability, but most of all, as a consummate member of the team.

The COVID-19 pandemic has tested us as a country and as a company. Thank you to SWN’s management team and all of the employees of SWN for their tireless efforts during this challenging and demanding year, thank you to fellow shareholders for your continued support, and thank you to everyone in our communities helping with the fight against COVID-19.

Sincerely,

Catherine A. Kehr

Chairman of the Board

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PROXY STATEMENT HIGHLIGHTS

At Southwestern Energy, operating responsibly is part of who we are and is embedded in our Formula that guides everything that we do. We believe The Right People doing the Right Things includes a commitment to Environmental, Social, and Governance (“ESG”) matters. To ensure that we live up to the high bar that we have set for ourselves, the Board directly and through its committees oversees ESG matters, and the Company has formalized the oversight and management of ESG matters through a cross-functional senior management committee that helps set general strategy relating to ESG matters and helps develop, implement, and monitor initiatives and policies based on that strategy. Below are some highlights that we believe show our commitment to ESG.

ENVIRONMENTAL

We believe natural gas is an essential part of a low carbon energy future, and we are well-positioned to help deliver this future through responsible energy development, which includes our efforts to conserve and protect two of our most valuable resources – water and air. SWN is a founding member of the Our Nation’s Energy (“ONE”) Future coalition, a group of 16 companies working to reduce methane emissions across the natural gas value chain, and a member of The Environmental Partnership, a group of 83 companies that have committed to implement a range of emission reduction best practices. Here are some highlights of our commitment to air and water.

Leader In Air Quality

Leader In Water Conservation

	85% LOWER Methane intensity substantially lower than the 2025 ONE Future target			14.3 BILLION+ Gallons of fresh water returned to the environment
	0.01% FLARING Essentially no flaring of production			5^THYEAR IN A ROW Accomplishing fresh water neutrality
	LOWEST GHG INTENSITY among AXPC* peers in annual EHS* survey			95% RECYCLED Produced water recycled in operations
	100% SURVEYED Operational and compressor facilities surveyed for potential leaks in 2020			10 PROJECTS Major water conversation projects completed in collaboration with governmental agencies, NGOs, and local community organizations

* The American Exploration and Production Council (“AXPC”) is a national trade association representing the largest independent oil and natural gas exploration and production companies in the United States. EHS is an acronym for Environment, Health and Safety.

SOCIAL

Being socially responsible includes protecting the health and safety of our employees and contractors, recognizing the personal value of every employee, and believing that every person should be treated fairly and with respect. It also requires that beliefs are lived out through our actions. Here are a few examples of our actions that we think prove our commitment to social responsibility.

Workforce

Communities

Investing in our employees and contractors		Supporting the communities where we work and live
	30,364+ HSE training hours completed in 2020		^$234,000 Donated in 2020 for COVID-19 relief
	0.36 2020 total recordable injury rate (employees + contractors) – a SWN record		^$1.7 MILLION Given to STEM education & skilled workforce development since 2015
	104% Average women’s salaries to average men’s salaries in 2020		1.3 MILLION+ Water truck trips eliminated since 2015

SOUTHWESTERN ENERGY COMPANY | 3

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Proxy Statement Highlights

COVID-19 RESPONSE

Our response to COVID-19 in 2020 was driven by our SWN core value of safety. A workplace that is safe ensures that we are able to deliver on our strategy and commitments to the Company’s shareholders, and it is the Right Thing To Do. Here are just a few, select highlights of our swift and vigorous COVID-19 response in 2020:

2020 COVID-19 Response:

• Formed cross-functional COVID-19 Incident Response Team (“IRT”) in March 2020 to manage and oversee prolonged company-wide response and risk mitigation efforts; IRT met daily and provided real-time and weekly reports to Executive Leadership Team

• Required masks, social distancing, and quarantine procedures at all field and office locations based on state and federal guidance

• Provided priority COVID-19 testing for all office and field employees and their families

• Instituted dynamic office closure and remote work protocols for office workers

• Provided paid time off for non-exempt workers required to isolate or quarantine

• Developed heightened and, as necessary, rapid cleaning response protocols for all field and office locations

• Installed automated electronic temperature screening devices at controlled access points at office locations, and employed manned temperature screeners at field locations

• Utilized COVID-19 questionnaires for employees and contractors visiting field or office locations

• Held routine (usually twice monthly) all-employee town halls with the CEO to discuss operations and our approach to managing during the pandemic

• Modified protocols as necessary based on continuous monitoring of relevant data and guidance

• Offered confidential support and resources through Employee Assistance Services, a program for employees and their families to access 24/7

• No known workplace transmission of the virus

GOVERNANCE

2020 EXECUTIVE COMPENSATION

OUR CEO’S COMPENSATION ALIGNS WITH THE SHAREHOLDER’S EXPERIENCE

Over the past three years, our share price decreased 47% from December 29, 2017 ($5.58) to December 31, 2020 ($2.98), in parallel with the broader energy industry. As set out below, Mr. Way’s three-year average realized pay (“Actual W-2”) was 63% less than the three-year average total compensation reported in the Summary Compensation Table (“SCT Reported”) and 64% less than his three-year average realizable pay (“Realizable Pay”). In 2020, however, our stock performed well, up 23% from December 31, 2019 to December 31, 2020. Mr. Way’s realizable pay was likewise up, although the vast majority of that value lies in long-term incentives that will not vest for up to two years.

(1)	Actual W-2 refers to taxable wages reported in accordance with IRS requirements. For Mr. Way these amounts include salary, vacation, annual incentive compensation paid to him during the year before the subtraction of his elective deferrals into the Company’s defined contribution plans, contributions made into those plans by the Company, income achieved from the vesting of restricted stock, restricted stock units, performance units, and other reportable compensation.
(2)	Realizable Pay includes base salary and annual incentive bonus paid during the year, the value of the unvested time-based restricted stock unit awards, and an estimated value of the unvested performance awards (scheduled to vest in 2021, 2022, and 2023) based on the Company’s closing stock price on December 31, 2020, of $2.98.
(3)	SCT Reported refers to the total reported compensation amount in column j of the Summary Compensation Table on page 49.

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Proxy Statement Highlights

89% OF OUR CEO’S 2020 COMPENSATION IS AT RISK

We embrace a pay-for-performance philosophy. Thus, the vast majority of our Chief Executive Officer’s total direct compensation is at risk, as noted in the graphic below.

2020 Compensation Program Changes

•	No increase in base salary from 2019 to 2020
•	Reduced 2020 long-term incentive (LTI) value by 10% from 2019 grant values
•	Applied a 50% adjustment to any stock price appreciation or depreciation for equity-based long-term incentive awards (see “Adjusted Stock Price” under 2020 Long-Term Incentive Awards on page 41)

What We Do

Alignment with Shareholders. Long-term incentive awards vest over periods of several years to reward sustained Company performance over time.

Share Ownership Guidelines. Our named executive officers (“NEOs”) must hold a value equivalent to multiples of their base salaries (two times for senior vice presidents, three times for executive vice presidents and six times for our CEO).

Clawbacks. If we restate our financial statements, other than as a result of changes to accounting rules or regulations, we may recover incentive compensation that was paid or granted in the three-year period prior to the restatement, regardless of whether misconduct caused the restatement.

Double-Trigger Severance. Cash severance in connection with a change in control is paid only if an actual or constructive termination of employment also occurs.

Annual Risk Assessments. The Compensation Committee evaluates the influence of executive compensation on corporate risk.

Peer Group Comparison. With the help of independent compensation consultants, we compare executive compensation against industry compensation practices.

At-will employment. Each of the NEOs is employed at-will and is expected to demonstrate exceptional personal performance to continue serving as a member of the executive team. None of the NEOs has a severance arrangement other than in the context of a change in control.

Decisions by Independent Compensation Committee. Executive compensation is determined by the Compensation Committee of the Board, which is comprised solely of independent directors and approved by the full Board (only independent directors in the case of CEO compensation).

Independent Compensation Consultant. The Compensation Committee retains its own independent consultant to advise on compensation matters.

What We Don’t Do

No Tax Gross-Ups in Change in Control Agreements. Our severance agreements apply only in case of termination following a change in control and contain no tax gross-ups for NEOs.

No Automatic Base Salary Increases. Our NEOs’ base salaries are reviewed annually, and decisions are based on demonstrated individual performance, business conditions and external market data provided by our independent compensation consultants.

No Hedging and Pledging of Company Stock. Our policies prohibit the hedging and pledging of our stock by our executives and directors.

No Repricing of Stock Options. We do not permit the repricing of stock options without shareholder approval.

SOUTHWESTERN ENERGY COMPANY | 5

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Proxy Statement Highlights

SHAREHOLDER ENGAGEMENT

Shareholders have supported the Company’s compensation program with an average of 85% of votes cast in favor of say-on-pay over the past five years. Even though we received strong support of 92% in 2019, we were disappointed to receive only 76% of votes cast in favor in 2020. As a result, in addition to our routine shareholder engagement with large institutional shareholders, in 2020 we reached out to every shareholder for whom we were able to identify contact information, who combined held approximately 83% of outstanding shares. Shareholders holding 38% of outstanding shares accepted our invitation to speak. The others either declined or did not respond to our request.

The graphics below illustrates our shareholder engagement process in 2020, including key topics discussed with shareholders and changes to our 2021 compensation program based on shareholder feedback, specifically, removing production from the annual bonus program and adding an emissions metric to the compensation program.

2021 Compensation Changes in Response to Shareholder Feedback

Annual Salary:

•	No increases for the second consecutive year
Annual Bonus:
•	Replaced the “Production” metric with a “Proved Developed F&D cost” metric*
•	Added an ESG metric, “Methane Intensity”*
•	Increased the weighting of HSE/ESG metrics to 15% from 10%
Long-term Incentives:
•	Reduced LTI award grants by 20% for the CEO, COO and Senior VP’s
•	Replaced return on average capital employed (“ROACE”) with return on capital employed (“ROCE”)
•	Added a “Reinvestment Ratio” metric to place further emphasis on free cash flow generation

* Responsive to specific shareholder feedback.

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Proxy Statement Highlights

BOARD HIGHLIGHTS

BOARD COMPOSITION

As the natural gas and liquids exploration and production industry has become increasingly competitive and volatile over the last several years, the Board has engaged in a deliberate and measured process to review and refresh the composition of our Board, and have targeted specific skills that provide insight into where we collectively have determined SWN and our industry are headed. We believe all of our directors possess an acute understanding of how shareholder value is generated and extensive experience in shareholder engagement. In addition, each director has experience managing in a global context or analyzing the energy industry from a global perspective.

Core Skill Set

Critical Skills And Backgrounds

We believe all of our directors possess the following core skills crucial to a successful Board:

ACUTE UNDERSTANDING

of how shareholder value is generated, and extensive experience in shareholder engagement

DIRECT EXPERIENCE

managing in a global context or analyzing the energy industry from a global perspective

DEEP-ROOTED

risk and value understanding of cyclical commodity businesses

STRATEGIC AND NIMBLE

mindset gained through strategy analysis, formation, or implementation

STRONG

financial capability or competency

A substantial percentage of our nominees have the following critical skills and backgrounds that bring important perspectives to the Board:

CEO LEADERSHIP EXPERIENCE HANDS-ON

health, safety and environment, and corporate responsibility experience

DIRECT EXPERIENCE

in cyclical industries and those with which the Company deals

CORPORATE GOVERNANCE

experience from other boards

INDUSTRIAL

operating and workforce management experience

Corporate Governance Snapshot

The Board of Southwestern Energy is committed to the highest standards of corporate governance. The Corporate Governance section of our proxy statement describes our governance framework in depth, highlights of which include:
Adoption of best practices		Boardroom culture
•	Annual “Say-on-Pay” vote	•	Disciplined decision-making
•	Majority voting in director elections	•	Long-term outlook
•	Annual election of all directors	•	Focus on Company risks and mitigation
•	Proxy access	•	Practices for increasing Board diversity
•	Ability to call special meetings	•	Engagement with management, asking the difficult questions
•	Active shareholder engagement program	•	Willingness to engage deeply and respectfully in the boardroom
•	No supermajority voting standards	•	Value focused
•	All directors independent except CEO

SOUTHWESTERN ENERGY COMPANY | 7

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Proxy Statement Highlights

BOARD PARTICIPATION

The Company’s Corporate Governance Guidelines state that directors are expected to attend all or substantially all Board meetings and meetings of the committees of the Board on which they serve and to attend the Annual Meeting. During 2020, the Board held 14 regular or special meetings. Information and reports regarding the committees of the Board begin on page 21.

BOARD’S ROLE IN RISK MANAGEMENT

A primary responsibility of the Board is assuring that processes are in place to identify and properly manage risks to the Company and its business. Each standing committee of the Board oversees and evaluates risks directly in its sphere. For example, the Nominating and Governance Committee reviews corporate governance matters, matters involving members of the board, and succession planning. Compensation Committee reviews compensation and human resources matters, the Health, Safety, Environmental and Corporate Responsibility Committee reviews health, safety, environmental and public policy matters and the Audit Committee assesses financial, cyber security, and overall risks to the enterprise. Each of these committees is comprised entirely of independent directors.

The Company’s executive management meets at least quarterly with representatives of all business units and corporate functions specifically to review and assess risks and the steps being taken to manage them. These risks and management’s steps to mitigate them are discussed with the Audit Committee at least quarterly and with the full Board at least annually. The Audit Committee also meets independently with the Company’s external accounting and reserves auditors and the head of internal audit to discuss risks in financial reporting and other matters.

The chart below illustrates how the Board oversees risk:

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Proxy Statement Highlights

VOTING AT THE ANNUAL MEETING

Every vote cast at the Annual Meeting plays a part in the future of Southwestern Energy. Please review our proxy statement and take the time to vote right away, using one of the methods explained below. If you are a beneficial owner, please follow the voting instructions in the proxy materials provided by your broker, bank or nominee.

WHO IS ENTITLED TO VOTE?

Shareholders who own shares of common stock as of March 19, 2021, the Record Date, may vote at the meeting. There were 676,781,132 shares of common stock outstanding on that date. Each share of common stock entitles the holder to one vote on all matters submitted to a vote at the Annual Meeting and any adjournment or postponement of the meeting.

Voting Matters

You are being asked to vote on the following:

Proposal		Board Recommendation	Page
PROPOSAL 1	Election of Directors	FOR each of the nominees	11
PROPOSAL 2	Non-Binding Advisory Vote to Approve the Compensation of our Named Executive Officers for 2020	FOR	33
PROPOSAL 3	Ratification of Independent Registered Public Accounting Firm	FOR	60
PROPOSAL 4	Shareholder Proposal Regarding Special Meetings	AGAINST	61

Attending the Annual Meeting

	9:00 a.m. Central Daylight Time		All shareholders as of the record date or holders of proxies for them may attend the Annual Meeting but must have photo identification and proof of stock ownership and, in the case of a proxy holder, the proxy. If you are a shareholder of record (your shares are held in your name) or hold a proxy for such a shareholder, valid photo identification such as a driver’s license or passport showing a name that matches our records will suffice. If you are a beneficial owner (your shares are held through a broker, bank or nominee) or hold a proxy for such a shareholder, you must provide valid photo identification and evidence of current ownership of the shares, which you can obtain from your broker, bank or nominee.
	Tuesday, May 18, 2021
	Southwestern Energy Company 10000 Energy Drive Spring, Texas 77389

How to Vote

Even if you plan to attend the Annual Meeting in person, please vote immediately using one of the following voting methods. In all cases, you will need to have your Control number in hand.

By Internet

Vote your shares online at
www.proxyvotenow.com/swn

By Telephone

Vote your shares by calling
1 (866) 257-2279

By Mail

To vote by mail, you must first request a proxy card by calling 1-800-662-5200 (you will be asked for your shareholder Control Number, which is printed on the back of the notice); sending an email to SWN@investor.morrowsodali.com and inserting your shareholder Control Number in the subject line; or by going online at www.proxyvotenow.com/swn. Vote by mail by marking, dating and signing your proxy card or voting instruction form and returning it in the postage-paid envelope

Learn more about the 2021 Annual Meeting at www.swn.com/annualmeeting.

Due to the continuing public health impact of coronavirus disease 2019 (COVID-19), we are planning for the possibility that the Company’s annual shareholder meeting may be held solely by means of remote communication. If we take this step, we will announce the decision to do so in advance, and details on how to participate will be set forth in a press release issued by the Company and available at www.swn.com/annualmeeting.

Questions and Answers about the Annual Meeting and Voting

Please see the “Questions and Answers about the Annual Meeting and Voting” section beginning on page 63 for answers to common questions on the rules and procedures surrounding the proxy and Annual Meeting process.

SOUTHWESTERN ENERGY COMPANY | 9

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10000 Energy Drive
Spring, Texas 77389

Notice of Annual Meeting of Shareholders on
May 18, 2021

The Annual Meeting of Shareholders of Southwestern Energy Company, or the Company, will be held at Southwestern Energy Company Headquarters, 10000 Energy Drive, Spring, Texas 77389, on Tuesday, May 18, 2021, at 9:00 a.m. Central Daylight Time for the following purposes:

(1)	To elect nine directors to the Board to serve until the 2022 Annual Meeting or until their respective successors are duly elected and qualified, with the Board presenting for election John D. Gass, S.P. “Chip” Johnson IV, Catherine A. Kehr, Greg D. Kerley, Jon A. Marshall, Patrick M. Prevost, Anne Taylor, Denis J. Walsh III and William J. Way;
(2)	To conduct a non-binding advisory vote to approve the compensation of our Named Executive Officers for 2020 (Say-on-Pay);
(3)	To ratify the appointment of PricewaterhouseCoopers LLP, or PwC, to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021;
(4)	To consider a shareholder proposal contained in this proxy statement, if properly presented at the Annual Meeting; and
(5)	To transact such other business as may properly come before the meeting or any adjournment or adjournments thereof.

The Board of Directors fixed the close of business on March 19, 2021 as the Record Date for the determination of shareholders entitled to notice of and to vote at the meeting and any adjournment thereof.

You are welcome to attend the meeting. If you do not attend, it is important that your shares be represented and voted at the meeting. You can vote your shares by telephone or over the Internet as described in more detail in the proxy materials found at www.swn.com/annualmeeting. You may revoke a proxy at any time prior to its exercise by giving written notice to that effect to the Secretary of the Company or by submitting a later-dated proxy or subsequent Internet or telephonic proxy. If you attend the meeting, you may revoke any proxy you previously granted and vote in person.

By Order of the Board of Directors

CHRIS LACY
Secretary
April 8, 2021

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE 2021 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 18, 2021:

The Notice of Internet Availability of Proxy Materials, Notice of Annual Meeting of Shareholders, 2021 Proxy Statement and the 2020 Annual Report to Shareholders are available free of charge at: www.swn.com/annualmeeting

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Proposal No. 1: Election of Directors

At this meeting, shareholders are being asked to elect nine directors to serve until the next Annual Meeting or until their respective successors are duly elected and qualified.

As the natural gas and liquids exploration and production industry has become increasingly competitive and volatile over the last several years, we have engaged in a deliberate and measured process to review and refresh the composition of our Board. The Board, upon the recommendation of the Nominating and Governance Committee, has proposed nine nominees for election as directors. All nominees for director are presently directors of the Company.

We believe all of our directors possess the following core skills crucial to a successful Board:

	•	Acute understanding of how shareholder value is generated, and extensive experience in shareholder engagement
	•	Direct experience managing in a global context or analyzing the energy industry from a global perspective
	•	Deep-rooted risk and value understanding of cyclical commodity businesses
	•	Strategic and nimble mindset gained through strategy formation or implementation
	•	Strong financial competency

A substantial percentage of our nominees have the following critical skills and backgrounds that bring important perspectives to the boardroom:

	•	CEO leadership experience
	•	Hands-on HSE and corporate responsibility experience
	•	Direct experience in contiguous, cyclical industries
	•	Corporate governance experience from other boards
	•	Industrial operating and workforce management experience
	•	Mergers and acquisitions execution, implementation or analysis skills

RECOMMENDATION OF THE BOARD

The Board recommends that the shareholders vote “FOR” the election of each of the

nominees to the Board as set forth in this proposal.

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Proposal No. 1: Election of Directors

Nominees for Election

JOHN D. GASS

Independent Director

Age: 69

Director since: 2012

Committees: Compensation (Chair); Health, Safety, Environment and Corporate Responsibility

Other Public Boards: Suncor Energy Inc.

Degrees: BS in Civil Engineering, Vanderbilt University; MS in Civil Engineering, Tulane University

Director Qualification Highlights

	•	Former Vice President of Chevron Corporation and President of Chevron Gas and Midstream
	•	Operational and HSE experience in upstream and midstream sectors in US and around the world
	•	Director, Suncor Energy Inc., since February 2014 (Chairman, Human Resources and Compensation Committee; member of Governance Committee)
	•	Former director, Weatherford International, Ltd., June 2013 through December 2019 (Chairman, Compensation Committee and member of Nominating and Governance Committee)
	•	Former director of Sasol Chevron Holdings Ltd and GS Caltex

Skills and Qualifications of Particular Relevance to Southwestern Energy

	•	Career-long experience in the Company’s industry sectors, including at executive level
	•	Executive positions in global operations
	•	Managed capital-intensive, cyclical commodity businesses
	•	Valuable governance experience gained from his service on two other public company boards of directors
	•	Strong environmental and safety skills, including implementation of best practices

S. P. “CHIP” JOHNSON IV

Independent Director

Age: 65

Director since: 2020

Committees: Health, Safety, Environment and Corporate Responsibility; Nominating and Governance

Other Public Boards: Callon Petroleum

Degrees: BS in Mechanical Engineering, University of Colorado

Director Qualification Highlights

	•	Former President and CEO of Carrizo Oil & Gas, which he co-founded, until its merger with Callon Petroleum in December 2019
	•	Director, Callon Petroleum since December 2019 (Member, Strategic Planning and Reserves Committee)
	•	Director, SEARCH Homeless Services (nonprofit)
	•	Former director, Basic Energy Services
	•	Former director, Pinnacle Gas Resources

Skills and Qualifications of Particular Relevance to Southwestern Energy

	•	Business leadership skills as a former President and CEO of a NYSE-listed company
	•	Registered Petroleum Engineer
	•	Extensive experience in oil and gas exploration and production
	•	Risk management, strategy, and corporate governance experience

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Proposal No. 1: Election of Directors

CATHERINE A. KEHR

Independent Director and Chairman of the Board

Age: 58

Director since: 2011

Committees: Audit; Nominating and Governance (Chair)

Other Public Boards: None

Degrees: BA, Yale University; MBA, The Wharton School, University of Pennsylvania

Director Qualification Highlights

	•	Retired Senior Vice President and Director of Capital Research Company, a division of The Capital Group, investment advisor to the American Funds
	•	Led investment analysis and served as portfolio manager of global energy equities and also served as investment analyst and portfolio manager with responsibility for global energy high-yield debt
	•	Ranked by Reuters survey among top 10 US portfolio managers in 2002
	•	Formerly with Atlantic Richfield Company and Payden & Rygel Investment Management
	•	Former director, California Resources Corporation, February 2015 through May 2017 (Chairman of Compensation Committee and member of Audit Committee)

Skills and Qualifications of Particular Relevance to Southwestern Energy

	•	Deep understanding of financial analysis and capital markets
	•	Investor perspective from career as a global energy sector investor at major fund manager
	•	Broad global knowledge of energy sector, including impacts of commodity price cyclicality
	•	Corporate governance and compensation experience from service as a director of another E&P company

GREG D. KERLEY

Independent Director

Age: 65

Director since: 2010

Committees: Health, Safety, Environment and Corporate Responsibility; Nominating and Governance

Other Public Boards: None

Degrees: BS in Accounting, Oklahoma State University

Director Qualification Highlights

	•	Retired Executive Vice President and Chief Financial Officer of Southwestern Energy (last employed October 2012)
	•	Rated by Institutional Investor in 2010 as one of the top performing E&P CFOs
	•	Former Controller, Chief Accounting Officer, Treasurer and Secretary
	•	Senior financial and accounting positions at Agate Petroleum, Inc.
	•	Arthur Andersen LLP, working for energy clients

Skills and Qualifications of Particular Relevance to Southwestern Energy

	•	Extensive experience in finance, accounting, and financial reporting, including serving as chief financial officer of a publicly traded company
	•	Executive leadership experience
	•	Deep risk management background
	•	Strong strategic skills and background
	•	Former CPA
	•	More than 30 years of oil and gas industry experience

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Proposal No. 1: Election of Directors

JON A. MARSHALL

Independent Director

Age: 69

Director since: 2017

Committees: Compensation; Health, Safety, Environment and Corporate Responsibility (Chair)

Other Public Boards: Noble Corporation plc

Degrees: BS in Engineering, United States Military Academy

Director Qualification Highlights

	•	Former Chief Executive Officer and President of GlobalSantaFe Corporation
	•	Former President and Chief Operating Officer, Transocean Ltd.
	•	Director, Noble Corporation plc, since 2009 (Chairman, Compensation Committee; member, Health, Safety, Environment and Engineering Committee; member, Finance Committee)
	•	Chairman of the Board of Directors, Chahta Foundation (nonprofit promoting education, cultural identity and health for the Choctaw Nation)
	•	Director, Choctaw Global Services (a for-profit entity of the Choctaw Nation of Oklahoma)
	•	Former Director, Sentinel Energy Services, Inc., (2018-2020)
	•	Former Director, Cobalt International Energy, Inc. (2010-2018)
	•	Former Director, Jones Academy Foundation (foundation supporting residential learning center for Choctaw youth)

Skills and Qualifications of Particular Relevance to Southwestern Energy

	•	Former CEO of NYSE-listed company that went through transformative changes
	•	Significant experience as a senior executive of multiple energy services companies
	•	Executive experience in cyclical global businesses
	•	Experience overseeing best operational, safety and environmental practices
	•	Added cultural and ethnic perspective, with strong leadership in giving back to communities

PATRICK M. PREVOST

Independent Director

Age: 65

Director since: 2017

Committees: Audit (Chair); Nominating and Governance

Other Public Boards: Materion Corporation

Degrees: BS in Chemistry, University of Geneva; MBA, University of Chicago

Director Qualification Highlights

	•	Former President and Chief Executive Officer of Cabot Corporation, a global specialty chemical and performance materials company, January 2008 until March 2016
	•	Responsible CEO of the Year, Corporate Responsibility Magazine, 2013
	•	Director, Materion Corporation, since 2019 (member, Compensation Committee; member, Governance and Organization Committee)
	•	Former President, Performance Chemicals, BASF, AG
	•	Former senior management positions at BP plc and Amoco, Inc.
	•	Former director, Cabot Corporation (2008 to 2020), General Cable Corporation (2010 to 2018) and American Chemical Industry Council

Skills and Qualifications of Particular Relevance to Southwestern Energy

	•	Former service as CEO of NYSE-listed company and service on public company boards in leadership positions
	•	Experience in chemical industry and managing commodity price risks
	•	Led capital-intensive business operations
	•	Experience in acquisitions and strategic alliance
	•	Deep commitment and skills in safety, environmental compliance and best practices and asset integrity
	•	Global perspective in international company and having been born, raised and spent much of his career outside the US

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Proposal No. 1: Election of Directors

ANNE TAYLOR

Director

Age: 65

Director since: 2018

Committees: Audit; Compensation

Other Public Boards: Group1 Automotive; Whiting Petroleum

Degrees: BS and MS in Civil Engineering, University of Utah

Director Qualification Highlights

	•	30-year career with Deloitte, LLP (1987 until her retirement in June 2018)
	•	Director, Group 1 Automotive, since 2018 (member, Audit and Compensation Committees)
	•	Director, Whiting Petroleum, since September 2020 (member, ESG and Compensation Committees)
	•	Director, Conway MacKenzie (private financial consulting firm)
	•	Director, Central Houston, Inc. (non-profit)
	•	Former Vice Chairman and Managing Partner, Houston office, Deloitte, LLP (2007-2018)
	•	Former Regional Managing Partner, Mid-America Region, Deloitte, LLP
	•	Former U.S. Chief Strategy Officer, Deloitte, LLP
	•	Former director, Deloitte, LLP (Chair of the Investment Committee; member of the US and Global Nominating and the CEO Evaluation and Compensation Committees)
	•	Former director, Deloitte Consulting, LLP

Skills and Qualifications of Particular Relevance to Southwestern Energy

	•	Extensive strategy development and execution experience
	•	Change management experience
	•	Talent development experience
	•	Board and corporate governance experience
	•	Insight into innovation and growth strategies
	•	Energy industry knowledge

DENIS J. WALSH III

Director

Age: 60

Director since: 2019

Committees: Audit; Compensation

Other Public Boards: None

Degrees: BS in Economics, University of Massachusetts; MS in Finance, Boston College

Director Qualification Highlights

	•	Retired in 2013 as a Managing Director of BlackRock, Inc., the world’s largest investment management company
	•	Former lead Portfolio Manager for BlackRock, Inc.’s All-Cap Energy strategies (2005-2013)
	•	Former Managing Director at State Street Research & Management Company (1999-2005)
	•	Founded and previously served as a lead Portfolio Manager for State Street’s Analyst Fund
	•	Former Research Analyst at Fleet Investment Advisors (1994-1999)
	•	Recognized by Institutional Investor magazine as “The Best Of The Buyside” Energy Analyst seven times
	•	Adjunct faculty member at Providence College teaching investment management since 2013

Skills and Qualifications of Particular Relevance to Southwestern Energy

	•	Chartered Financial Analyst
	•	20+ year career as a securities analyst
	•	Extensive investment management experience focusing on energy and natural resources
	•	Global energy sector investment and analysis experience

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Proposal No. 1: Election of Directors

WILLIAM J. WAY

Director

Age: 62

Director since: 2016

Committees: None

Other Public Boards: None

Degrees: BS in Industrial Engineering, Texas A&M University; MBA, Massachusetts Institute of Technology

Director Qualification Highlights

	•	President and Chief Executive Officer of the Company since January 2016
	•	President and Chief Operating Officer of the Company, December 2014 to January 2016
	•	Executive Vice President and Chief Operating Officer of the Company, October 2011 to December 2014
	•	Former Senior Vice President-Americas, BG Group plc with responsibility for E&P, Midstream, LNG and global shipping operations in the US, Trinidad and Tobago, Chile, Bolivia, Canada and Argentina
	•	Former President, Dubai Petroleum Company, 2002-2007
	•	Various senior technical, operational and leadership positions at ConocoPhillips 1981-2007
	•	Extensive managerial, operational, technical and leadership experience in U.S. and international upstream and midstream sectors
	•	Current Director of the American Petroleum Institute and the National Petroleum Council

Skills and Qualifications of Particular Relevance to Southwestern Energy

	•	Insights into the Company’s operations, strategy and talent development as well as its relations with investors and other key stakeholders from his position as leader of the Company
	•	Extensive leadership experience in upstream and midstream businesses
	•	Deep background in managing commodity risk and capital programs
	•	Strong HSE commitment and experience
	•	History of talent development

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Proposal No. 1: Election of Directors

Director Independence

The Company’s Corporate Governance Guidelines require that a majority of the members of the Board be independent of the Company’s executive leadership and its significant shareholders. For a director to be deemed “independent,” the Board must affirmatively determine that the director has no material relationship with the Company or its affiliates (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company or its affiliates), or any person (including the director) that, with its affiliates, is the beneficial owner of 5% or more of the Company’s outstanding voting stock or any member of the executive leadership of the Company or

his or her affiliates. Material relationships include commercial, banking, industrial, consulting, legal, accounting, charitable and familial relationships. For making this determination, the Board has adopted a set of director independence standards as required by the NYSE. These independence standards can be found in the Company’s Corporate Governance Guidelines at www.swn.com.

Our Board has determined that all of the nominees for director, other than our CEO, Mr. Way, are independent under our applicable independence standards.

Selection Criteria for Nominees for Directors

Each member of the Board is expected to bring a valuable and often different perspective to the governance of the Company. When these differing skill sets and backgrounds are combined in an environment of interaction and respect, they give a greater overall skill set to the

Board and provide a strong governance structure. Our Corporate Governance Guidelines, which are available on our website at www.swn.com, set forth certain criteria that apply to the selection of director candidates.

Director Selection Criteria

Each director nominee should:

• be chosen without regard to sex, race, religion or national origin

• be an individual of the highest character and integrity and have the ability to work well with others

• have an inquiring mind, vision and good judgment

• be free of any conflict of interest that would violate any applicable law or regulation or interfere with the proper performance of the responsibilities of a director

• have a skill set that complements the backgrounds and experience of other Board members

• possess substantial and significant business experience in specific areas of expertise that would be important to the Company in the performance of the duties of a director

• have sufficient time available to devote to the affairs of the Company to carry out the responsibilities of a director

• have the capacity and desire to represent the balanced, best interests of all shareholders and objectively appraise management performance

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Proposal No. 1: Election of Directors

Director Nomination Process

The Nominating and Governance Committee evaluates the qualifications of each director candidate against the foregoing criteria in making a recommendation to the Board concerning that individual’s election or re-election as a director, including members of the Nominating and Governance Committee. The Nominating and Governance Committee, with direct input and advice from our CEO, is responsible for assessing the appropriate mix of skills and characteristics required of Board members based on the Board’s needs at a given point in time and periodically reviews and updates the foregoing criteria as deemed necessary. The Company is committed to considering candidates for the Board regardless of gender, ethnicity and national origin. Any search firm retained to assist the Nominating and Governance Committee in seeking candidates is instructed to seek diverse candidates from traditional and nontraditional candidate groups.

In 2020, the Board added one new director, which means 56% of this year’s nominees have been added since 2017. Their selection followed a thorough search process, aided by an external search firm. The following key goals informed these choices:

	•	We believe an effective Board brings together a diversity of perspectives based upon a strong balance of skills, experience and personal qualities that, when united with a set of core competencies, provide a solid platform for prudent oversight of the Company.
	•	We have targeted specific skill resources that provide insights into where we collectively determine SWN and our industry are headed.

•

We actively pursue diversity of thought, approach, gender and ethnicity.

Each director’s continuation on the Board is reviewed near the end of his or her term and before that director is reconsidered for election. As described more fully on page 25, the Nominating and Governance Committee conducts a peer review evaluation process for directors and, with this information and in consultation with the Chairman of the Board, reviews and assesses the contributions of those directors selected for re-election. At the conclusion of this process, the Chairman of the Nominating and Governance Committee reports the Nominating and Governance Committee’s conclusions to the full Board. Once a director reaches the age of 75, he or she may not be considered for re-election to the Board of Directors, with certain exceptions provided in our Corporate Governance Guidelines.

The Board recognizes the importance of soliciting new candidates for Board membership and that the needs of the Board, in terms of the relative experience and other qualifications of candidates, may change over time. Candidates for membership on the Board may be suggested by any director or shareholder, and the Board may retain professional search firms to identify suitable candidates. Shareholders may nominate candidates for directors by following the procedures described on page 26 under “Shareholder Nominations.”

Voting for Directors

The shares of common stock represented by the enclosed proxy will be voted as instructed by the shareholder for the election of the nominees named in this section. If no direction is made, the proxy will be voted “FOR” the election of all of the nominees named above other than in the case of broker non-votes, which will be treated as described below. This year, with no shareholders having made nominations, the number of nominees equals the number of directors to be elected. Our bylaws provide that, in any uncontested election of directors (an election in which the number of nominees does not exceed the number of directors to be elected), any nominee who receives a greater number of votes cast “FOR” his or her election than votes cast “AGAINST” his or her election will be elected to the Board.

Shares not represented in person or by proxy at the Annual Meeting, abstentions and broker non-votes, will have no effect on the election

of directors, other than counting for purposes of a quorum. Our bylaws also provide that any nominee who does not receive a majority of votes cast “FOR” his or her election in an uncontested election is expected to tender his or her conditional resignation to the Chairman of the Board promptly following the certification of the vote, which resignation shall be promptly considered through a process overseen by the Nominating and Governance Committee, excluding (other than in certain limited circumstances set forth in our bylaws) any nominees who did not receive a majority vote. If any nominee becomes unavailable for any reason, or if a vacancy should occur before the election, the shares of common stock represented by the enclosed proxy may be voted for such other person as the Board may recommend. The Company does not expect that any nominee will be unavailable for election.

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Corporate Governance

Corporate Governance Policies

Southwestern Energy recognizes that strong corporate governance plays an important part in achieving our objective of enhancing the Company’s long-term value for our shareholders. Executive leadership, led by the CEO, is responsible for running the Company’s operations, under the oversight of the Board of Directors.

The Board has adopted corporate governance principles that serve as the framework of the Board and its committees. From time to time, the Board revises its corporate governance policies in response to changing regulatory requirements, evolving best practices and the perspective of our shareholders and other stakeholders.


Corporate Governance Materials
The following materials related to corporate governance at Southwestern Energy are available at www.swn.com, under the section “Corporate Governance.”

• Certificate of Incorporation • Bylaws • Audit Committee Charter • Compensation Committee Charter • Nominating and Governance Committee Charter • Health, Safety, Environment and Corporate Responsibility Committee Charter • Corporate Governance Guidelines		• Business Conduct Guidelines • Code of Ethics for Section 406 Officers • Anti-Corruption Compliance Policy • Confidential Complaint Procedures for Questionable Accounting Practices • Procedures for Contacting the Board • Political Contributions Policy

Copies of all of these documents are also available in print free of charge to any shareholder upon request to our Investor Relations Department located at our corporate headquarters and reachable at (832) 796-4700.

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Corporate Governance

Corporate Responsibility

Southwestern Energy Company is committed to providing the energy that powers our world, today and into the future. Creating Value+ is SWN’s core goal, with a clear focus on continuous improvement, innovation, integrity and responsibility. We seek to create value for our shareholders while providing a safe and healthy workplace for

our people, acting as good environmental stewards and being respected members of the communities in which we operate. Our Corporate Responsibility Report provides additional insight into our operations, goals, strategy and performance. It is located at www.swn.com/responsibility.

Communications with the Board of Directors

The Board provides a process for shareholders and other interested persons to send communications to the independent Chairman of the Board, the non-employee directors as a group or any of the other directors, including the entire Board. Shareholders and other interested persons may send written communications to the non-employee directors, the Chairman of the Board or any of the other directors to

the attention of the Secretary, Southwestern Energy Company, 10000 Energy Drive, Spring, Texas 77389-4954. The Secretary will review, sort and summarize the communications and forward them to the intended recipient(s) on a periodic basis, but no less frequently than every calendar quarter.

Committees of the Board of Directors

The Board has four standing committees: the Audit Committee, the Compensation Committee, the Nominating and Governance Committee, and the Health, Safety, Environment and Corporate Responsibility Committee. In addition, the Board may from time to time authorize additional standing or ad hoc committees, as it deems

appropriate. The Board creates ad hoc committees from time to time for special matters, such as finance or strategy. The following table lists our director nominees’ standing committee assignments and chairmanships as of December 31, 2020.

Board Member	Audit	Compensation	Nominating and Governance	Health, Safety, Environmental and Corporate Responsibility
John D. Gass		C		✓
S. P. “Chip” Johnson IV*				✓
Catherine A. Kehr	✓		C
Greg D. Kerley			✓	✓
Jon A. Marshall		✓		C
Patrick M. Prevost	C		✓
Anne Taylor	✓	✓
Denis J. Walsh III	✓	✓
William J. Way

*	Mr. Johnson was added to the Nominating and Governance Committee in February 2021

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Corporate Governance

Committee Reports

Audit Committee Report

Each member of the Audit Committee is financially literate and independent under SEC, NYSE and the Company’s rules and guidelines. The Audit Committee is charged with assisting the Board in its oversight of the following, among other things:

• the integrity of the Company’s financial statements and financial reporting process and the Company’s systems of internal accounting and financial controls

• the performance of the internal audit services functions

• the annual independent audit of the Company’s financial statements, the engagement of the independent auditors and the evaluation of the independent auditors’ qualifications, independence and performance

• the Company’s compliance with legal and regulatory requirements, including disclosure controls and procedures

• the evaluation of enterprise risks

Members during 2020:

All independent

Patrick M. Prevost (Chair)

Catherine A. Kehr

Anne Taylor

Denis J. Walsh III

Meetings during 2020:

Four, each attended by all members

Audit Committee Financial Experts

The Board has determined that each of the following members of the Audit Committee is an Audit Committee Financial Expert based on a qualitative assessment of the individual’s knowledge and experience:

• Ms. Kehr – MBA from The Wharton School at the University of Pennsylvania; extensive experience in debt and equity markets during career as investment analyst and portfolio manager

• Mr. Prevost – Former CEO of a publicly-traded company

• Mr. Walsh – Former managing director of the world’s largest investment management company

During 2020, the Audit Committee, among other things:

	•	Reviewed and discussed each quarter the Company’s financial performance, liquidity position and hedging portfolio
	•	Before filing both the annual and the quarterly financial statements of the Company

	_°	discussed these financial statements with executive leadership and PricewaterhouseCoopers LLP (“PwC”), the Company’s independent public accounting firm, including the matters required by applicable auditing standards
	_°	reviewed with management disclosure procedures and controls
	_°	in the case of annual financial statements, received and reviewed the written disclosures and the letter from PwC under applicable requirements of the Public Company Accounting Oversight Board and discussed with PwC its independence from the Company and its management
	_°	met privately (i.e., without Company management) and separately with each of PwC, the Company’s head of internal audit services, and individuals in executive leadership
	_°	reviewed reserves calculations with management and, in the case of year-end calculations, met privately (i.e., without Company management) with Netherland, Sewell & Associates, Inc., the Company’s independent reserves audit firm

_°

based on the review and discussion described above, recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as applicable

	•	Reviewed the performance of the Company’s independent public accounting firm and the scope of its engagement and recommended its continued engagement, including fees and any non-audit matters
	•	Reviewed in detail the Company’s risk management process and specific risks identified, including cybersecurity
	•	Received quarterly reports regarding the Company’s cybersecurity posture
	•	Discussed and approved scope of internal audit services’ review of transactions and compliance matters and reviewed results on a quarterly basis
	•	Received and reviewed reports on litigation and on confidential hotline calls on a quarterly basis

Patrick M. Prevost, Chair		Anne Taylor
Catherine A. Kehr		Denis J. Walsh III

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Corporate Governance

Compensation Committee Report

Each member of the Compensation Committee is independent under SEC, NYSE and the Company’s rules and guidelines. Among other things, the Compensation Committee is charged with assisting the Board in:

• discharging its responsibilities related to the compensation of the Company’s executive officers and certain other employees of the Company

• preparing the report on executive compensation for inclusion in the Company’s annual proxy statement

Members during 2020:

All independent

John D. Gass (Chair)

Jon A. Marshall

Anne Taylor

Denis J. Walsh III

Meetings during 2020:

Three regular meetings and two special meetings, each attended by all members

During 2020, the Compensation Committee, among other things:

•

Conducted an in-depth review of the Company’s executive compensation programs, including:

	_°	extensive benchmarking of compensation levels and components against the Company’s peer group, using data from the Committee’s independent compensation consultant
	_°	consideration of compensation trends
	_°	assessment of risks in compensation programs
	_°	approved the 2020 Compensation program for named executive officers, including:

		_°	no base salary increases
		_°	reduction of LTI target values by 10%
		_°	inclusion in LTI program of 50% adjustment to any stock price appreciation or depreciation

	•	Engaged with a large majority of shareholders and analyzed feedback regarding the Company’s executive compensation program
	•	Determined individual bonuses for 2019 and payouts of long-term performance awards whose performance periods ended in 2019
	•	After review with independent compensation consultants of overall payment levels, established salary levels, annual bonus targets and long-term incentive grants for 2020 for all Section 16 officers, subject to the approval of the Board
	•	Determined the 2019 annual bonus pool for non-officer employees
	•	Reviewed benefits policies and programs, including status of Company pension plan and determined to “freeze” the pension plan and to modify the 401(k) plan to align retirement benefits with market data
	•	Reviewed the Company’s stock ownership guidelines and prohibition on hedging and pledging and officers’ compliance with them
	•	Modified its charter to formalize and to clarify its role in overseeing strategies and initiatives related to human capital management, including employee engagement and diversity and inclusion.

The Compensation Committee continued to engage Meridian Compensation Partners, LLC (“Meridian”) as its independent compensation consultant for 2020 to advise on all matters related to executive compensation. In particular, Meridian collected and provided quantitative competitive market data for peer companies and advised in the selection of the peer groups of companies for compensation levels and performance-based long-term incentives. The Compensation Committee has sole authority to retain and terminate consultants such as Meridian and determines the interaction between consultants and Company management and personnel. Meridian provides no other services to the Company other than supplying the Nominating and Governance Committee with comparative data for compensation of non-employee directors and providing the Company on a quarterly basis data to assist in valuing unvested performance units for the purpose of applying generally accepted accounting principles regarding liability award accounting, the fees for which are about $65,000 annually. The Compensation Committee regularly meets with Meridian without any Company officers or employees present.

Report of the Compensation Committee

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis appearing in this proxy statement with executive leadership and, based on that review and discussion, recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

Compensation Committee Interlocks and Insider Participation

During 2020, there was no interlocking relationship between the Board or the Compensation Committee and the board of directors or compensation committee of any other company.

John D. Gass, Chair		Anne Taylor
Jon A. Marshall		Denis J. Walsh III

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Corporate Governance

Nominating and Governance Committee Report

Each member of the Nominating and Governance Committee is independent of the Company and executive leadership under the standards set forth in the SEC rules and the Corporate Governance Rules of the NYSE. In accordance with its charter, the purpose of the Nominating and Governance Committee is to discharge the responsibility of the Board relating to:

• the identification of individuals qualified to become members of the Board

• the recommendation to the Board of the director nominees for each Annual Meeting of Shareholders

• the consideration and periodic reporting to the Board on all matters relating to the selection, qualification and compensation of members of the Board and candidates nominated to the Board

• the development and recommendation to the Board of a set of corporate governance guidelines applicable to the Company

• the review of the overall corporate governance structure of the Company and the recommendation of any proposed changes regarding the Company’s corporate governance practices

Members during 2020:

All independent

Catherine A. Kehr (Chair)

Greg D. Kerley

Patrick M. Prevost

Meetings during 2020:

Three regular meetings and one special meeting, each attended by all members

During 2020, the Nominating and Governance Committee, among other things:

	•	Conducted an annual review of each director and the full Board’s performance, and based on that, evaluated the Board’s composition
	•	Recommended the election of a new director to balance the Board’s and its committees’ skill sets and knowledge basis, as described more fully below
	•	Oversaw the process for the Board to plan for the succession and development for key executives
	•	Reviewed the Company’s Corporate Governance Guidelines and all committee charters, with input from other committees as applicable, and recommended changes that the Board adopted
	•	Reviewed director compensation, benchmarking the Company against peer companies based on input from Meridian Compensation Partners, LLC (“Meridian”), the independent compensation consultant that the Compensation Committee also uses
	•	Modified its charter to formalize and to clarify its role in coordinating oversight of the Company’s culture among the existing Board committees in order to ensure alignment among the Company’s culture, values, and strategy.

The Nominating and Governance Committee devoted time in 2020 to Board assessment and refreshment. The Committee engaged

in a lengthy and deliberate process, assisted by an outside search firm, of identifying and analyzing a qualified candidate whose skills and background complement those of the continuing directors and increase the collective knowledge and insights of our Board. In particular, the Committee deliberately sought out an individual with strategic perspectives on our industry, leadership experience, and other complementary skills for this stage in the Company’s history. The Company is committed to considering diverse candidates for the Board and the search firm was instructed to seek diverse candidates from traditional and nontraditional candidate groups. We were guided by the criteria set forth in our Corporate Governance Guidelines, which are available to view on our website at https://www.swn.com/investors/corporate-governance/.

Our Committee recommended, and the Board elected, S. P. “Chip” Johnson IV as a new independent director in 2020. He is the former President and CEO of Carrizo Oil & Gas and brings important experience to the Board’s mix of skills. The Committee also recommended, and the Board approved, certain realignments in the composition of our standing committees to take advantage of our new director’s skills. We have eight independent directors with a variety of backgrounds, both inside our industry and relevant to it.

Catherine A. Kehr, Chair		Patrick M. Prevost
Greg D. Kerley

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Corporate Governance

Health, Safety, Environment and Corporate Responsibility Committee Report

Although not required by SEC or NYSE rules or regulations, each member of the Health, Safety, Environment and Corporate Responsibility Committee is independent under SEC, NYSE and the Company’s rules and guidelines. Among other things, the Health, Safety, Environment and Corporate Responsibility Committee is charged with assisting the Board in:

• matters of health, safety and environment arising out of the Company’s activities and operations and their impact on employees, contractors and the communities in which the Company operates

• current and emerging trends in social, political and public policy issues that may affect the Company, its business and its reputation and that are not in the purview of other standing committees of the Board of Directors

Members during 2020:

All independent

Jon A. Marshall (Chair)

John D. Gass

S. P. “Chip” Johnson IV (joined September 2020)

Greg D. Kerley

Meetings during 2020:

Four, each attended by all who were members at the time of the meeting

During 2020, the Health, Safety, Environment and Corporate Responsibility Committee, among other things:

	•	Reviewed in depth each quarter compliance statistics and incident rates in the areas of health, safety and the environment
	•	Considered reports on HSE incidents and related investigations and discussed lessons learned
	•	Reviewed and assessed the Company’s programs to assure safety and compliance with Company policies at all of its locations, including by service providers and other non-employees onsite or working with our businesses

	•	Reviewed key risks associated with the Company’s operations and business in the areas of health, safety and the environment and the Company’s programs and policies to address these risks
	•	Recommended to the Compensation Committee the metrics related to health, safety and the environment to be included in the Company’s compensation programs, including adding methane intensity as a metric to the Company’s annual bonus program
	•	Reviewed and discussed environmental, social and political trends, legislation and policies and their potential impact on the Company
	•	Reviewed and oversaw the publication of the annual corporate responsibility report

Jon A. Marshall, Chair		S. P. “Chip” Johnson IV
John D. Gass		Greg D. Kerley

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Corporate Governance

Board Leadership Structure and Executive Sessions

Currently an independent director, Catherine A. Kehr, serves as Chairman of the Board of Directors. At many times in our past, the Board has named the CEO as Chairman with an independent director serving as presiding, or lead, director. The Board may modify the current structure again in the future if it determines that it would be more effective and likely to advance the interests of the Company and its shareholders.

The independent directors are required to meet in executive sessions as appropriate matters for their consideration arise, but, in any event, at least once a year. During 2020, the Board conducted these executive

sessions at each of its regularly scheduled meetings. The agenda of these executive sessions includes such topics as the participating directors determine. The Chairman of the Board (or the presiding director if the CEO is Chairman) acts as the chair of all executive sessions and is responsible for coordinating the activities of the other outside directors, as required by our corporate governance guidelines and the NYSE listing standards. The Chairman (or the presiding director if the CEO is Chairman) also acts as the liaison director for any informal, confidential communications with the CEO outside of the normal committee and Board procedures.

Board, Committee and Director Evaluations

Each year, the Nominating and Governance Committee supervises a thorough evaluation process of the performance of the Board as a whole, each of its committees and each of its directors. Steps and actions include:

EVALUATION	PROCEDURE	SUMMARY AND FEEDBACK
Individual Director	• Each director anonymously evaluates each other director on multiple criteria • Results are compiled by an outside legal firm to assure anonymity	• Individual results are shared with the director and the Chair of the Nominating and Governance Committee • Results are considered in committee assignments and in deciding whether to re-nominate the director
Committee	• Each member completes a multi-question evaluation of the committee’s performance tailored to its specific tasks	• Committee discusses results and potential improvements • Can lead to recommending revisions to committee’s charter and practices
Board	• Each director completes a comprehensive questionnaire regarding the Board’s overall performance and effectiveness	• Results discussed in executive session • Nominating and Governance Committee considers results in evaluating committee structure and assignments

Succession Planning

The Board regularly reviews emergency and long-term succession plans for the CEO and other senior leadership positions. In assessing future possible CEOs, the independent directors identify the skills, experience and attributes they believe are required to be an effective CEO in light of the Company’s business strategies, opportunities and challenges. The Board also ensures that directors have substantial opportunities over the course of time to engage with possible succession candidates.

The Board also considers its own composition and succession plans. The Nominating and Governance Committee is responsible for establishing criteria for nominees, screening candidates (in consultation with the CEO), and upon review and feedback from the remaining directors, making a recommendation for final approval of candidates for the full Board. The decision to name a new director is made by the full Board.

Shareholder Rights

Under our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws, our shareholders have the right to call a special meeting of shareholders and to nominate director candidates to appear in our proxy. Holders of at least 20% of our common stock meeting certain “net long” holding requirements may require the Secretary to call a special meeting. Our Amended and Restated Bylaws allow shareholders to nominate candidates for

director, as described in the section “Shareholder Nominations.” This includes a “proxy access” right. We have no supermajority voting requirements. Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws are available to shareholders at no charge upon request to the Secretary or on our website at www.swn.com.

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Shareholder Nominations

Our Amended and Restated Bylaws permit shareholders to nominate directors for consideration at an annual meeting of shareholders. During the past year, no shareholder nominated a candidate for the Company’s Board pursuant to procedures discussed in our Amended and Restated Bylaws or otherwise formally suggested a candidate to the Nominating and Governance Committee.

The chairman of the meeting may disregard any nomination of a candidate for director if it is not made in compliance with the procedures in our Amended and Restated Bylaws or other requirements under the Securities Exchange Act of 1934, as amended. For more information

on shareholder participation in the selection of director nominees, please refer to Section 2.4 of our Amended and Restated Bylaws, which can be found on our website at www.swn.com under “Corporate Governance.”

It is the policy of the Nominating and Governance Committee to consider properly submitted shareholder nominations for directors as described under “Succession Planning.” In evaluating such nominations, the Nominating and Governance Committee seeks to address the criteria set forth under “Election of Directors–Selection Criteria for Nominees for Directors.”

Proxy Access Nominations

A shareholder, or a group of up to 20 shareholders (with funds having specified relationships constituting a single shareholder), owning 3% or more of the Company’s outstanding common stock continuously for at least the preceding three years may nominate and include in the Company’s proxy materials director candidates constituting up to 20% of the Board or two directors, whichever is greater, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in the Amended and Restated Bylaws. Shares that have been loaned during any portion of the three-year holding period count as being owned as long as certain conditions for the recall of shares are met. This is in addition to the right of any shareholder to nominate director candidates outside the proxy access process.

To make a proxy access nomination, an eligible shareholder (as defined in our Amended and Restated Bylaws) generally must deliver a qualifying notice to the Secretary at the principal executive offices of the Company not less than 120 days nor more than 150 days prior to the first anniversary of the date that the Company first distributed its proxy statement to shareholders for the previous year’s Annual Meeting of Shareholders and otherwise comply with all of the requirements of the Amended and Restated Bylaws. For the 2022 Annual Meeting, we must receive notice of the nomination for inclusion in the Company’s proxy materials no earlier than November 9, 2021 and no later than December 9, 2021.

Other Nominations

Our Amended and Restated Bylaws also allow any shareholder to nominate a candidate for election to the Board without the nomination included in the Company’s proxy materials by delivering written notice by mail to the Secretary at the principal executive offices of the Company generally not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding Annual Meeting of Shareholders, assuming that meeting is held within 25 days of such anniversary. The notice must include information specified in the Amended and Restated Bylaws. For the 2022 Annual Meeting,

assuming it is held within 25 days of May 18, 2022, we must receive notice of intention to nominate a director no earlier than January 18, 2022 and no later than February 17, 2022. If the meeting is not held within 25 days before or after the first anniversary of the preceding year’s annual meeting, we must receive notice of a shareholder’s intention to nominate a director (or to introduce an item of business) no later than the close of business on the tenth day following the day on which we send notice of the annual meeting or otherwise publicly disclose such date, whichever first occurs.

Certain Transactions with Directors and Officers

The Board has adopted a written policy that governs the approval of transactions with related parties, including, among others, officers, directors and their immediate family members. The Related Party Transaction Policy applies to any potential related party transaction other than a transaction involving less than $5,000 or involving compensation by the Company of a related party who is a director or officer. Under the Company’s related party transaction policy, directors and officers are required to bring any possible related party transaction to the attention of the Company’s General Counsel. The Board has determined that the Audit Committee is best suited to review such transactions. At the first regularly scheduled Audit Committee meeting in each calendar year, executive leadership recommends transactions to be entered into by the Company for that calendar year with related parties, including the proposed aggregate value of such transactions, if applicable. After review, the Audit Committee approves or disapproves such transactions. At each subsequently scheduled meeting, executive leadership updates the Audit Committee as to any

material change to those proposed transactions. In the event executive leadership recommends any additional transactions subsequent to the first calendar year meeting, such transactions may be presented to the Audit Committee for approval or preliminarily entered into by executive leadership subject to ratification by the Audit Committee; and if the transaction is not so ratified, the transaction must be cancelled.

Pursuant to the policy, the Audit Committee has reviewed and established a standing pre-approval for each of the following types of transactions:

•

Any employment by the Company of an executive officer of the Company or any of its subsidiaries if: the related compensation is required to be reported in the Company’s proxy statement under Item 402 of Regulation S-K promulgated by the SEC regarding compensation disclosure requirements (generally applicable to “named executive officers”) and is approved (or recommended

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to the Board for approval) by the Company’s Compensation Committee; or the executive officer is not an immediate family member of another executive officer or director of the Company, the related compensation would be reported in the Company’s proxy statement under Item 402 if the executive officer was a “named executive officer,” and the Company’s Compensation Committee approved (or recommended that the Board approve) such compensation;

•

Any compensation paid to a director if the compensation is required to be reported in the Company’s proxy statement under Item 402 of Regulation S-K;

•

Any transaction with another company at which a related party’s only relationship is as an employee (other than an executive officer or director) or beneficial owner of less than ten percent of that company’s equity, if the aggregate amount involved does not exceed the greater of $1,000,000, or two percent of that company’s total annual revenues;

•

Any charitable contribution, grant or endowment by the Company to a charitable organization, foundation or university at which a related party’s only relationship is as an employee (other than an executive officer or director), if the aggregate amount involved does not exceed the lesser of $1,000,000, or two percent of the charitable organization’s total annual receipts;

•

Any transaction where the related party’s interest arises solely from the ownership of the Company’s common stock and all holders of the Company’s common stock received the same benefit on a pro rata basis (e.g., dividends);

•

Reimbursement or payment of expenses of a related party who is an officer or director pursuant to the Company’s travel and business expense reimbursement policies;

•

Transactions available to all employees generally; or

•

Transactions in the ordinary course of business that do not exceed $120,000 in any fiscal year.

Certain Transactions

The Company employs our director Greg Kerley’s son-in-law, James Durant, as a Senior Production Engineer. He received total compensation of less than $175,000 in fiscal year 2020. Mr. Durant was a full-time employee of the Company before his marriage to Mr. Kerley’s daughter. The Company also employed our former Chief

Financial Officer’s sister, Kate Bott, as Senior Marketing Analysis Manager. She received total compensation of less than $360,000 in fiscal year 2020, which includes separation benefits consistent with benefits provided to other employees. Ms. Bott’s employment with the Company ended on May 31, 2020.

Compensation Risk Assessment

The Company believes that our compensation policies and practices appropriately balance near-term performance improvement with sustainable long-term value creation, consistent with our corporate philosophy, and, based on a determination by the Compensation Committee’s independent compensation consultant, that they do not encourage unnecessary or excessive risk taking. In addition to the Audit Committee’s oversight role in evaluating enterprise risk issues, the Compensation Committee evaluates the design of all our compensation policies and practices, including our incentive plans, to assess whether they create appropriate incentives for employees to perform and to remain at the Company and to take appropriate risks and to discourage taking inappropriate risks.

Compensation for our employees generally is structured similarly to our executive compensation program: a base salary, performance-based annual bonus, post-employment benefit plans, and, for certain senior employees, equity incentive compensation in the form of stock options, restricted stock, restricted stock units payable in cash or common stock, and/or performance units payable in common stock or cash. The less senior the employee, the more that pay is weighted toward annual compensation, with non-salaried, hourly employees receiving solely wages and a comparatively smaller bonus. Performance-based annual bonus and long-term incentives have features paralleling those for our named executive officers and thus

are designed to encourage intelligent risk-taking and risk mitigation. Business unit performance comprises a significant portion of the individual performance component. The formulaic component of the annual bonus is tied not only to operating metrics but also to health, safety and environmental factors. Our Compensation Committee oversees all long-term incentive awards and reviews them to assure they do not promote excess risk-taking. We believe our balanced use of short- and long-term incentives, mix of cash and equity incentives, metric diversification and alignment to our business strategy, capped payouts, and stock ownership guidelines promote responsible decision making, attract and retain good performers, and do not encourage unreasonable risk-taking related to the Company’s business.

As a producer of natural gas, oil and related hydrocarbons, we acknowledge that there is a certain level of risk involved in all aspects of our activities, but our compensation is structured to encourage levels of risk taken by our employees that are appropriate and socially responsible, reflecting our commitment to conducting our operations in a safe, resource-efficient manner, protecting the environment and being a good corporate citizen of the communities in which we operate. Based on the Compensation Committee’s review and assessment, the Company believes that our compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.

SOUTHWESTERN ENERGY COMPANY | 27

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Director Compensation

Directors who are not also Southwestern Energy employees were compensated during 2020 for their service as a director. For 2020, each non-employee director received the following compensation:

•

annual cash retainer of $75,000

•

annual long-term incentive compensation with a value of $200,000

•

additional annual compensation to the Chairman of the Board in the amount of $120,000, payable in cash or common stock at her election

•

$20,000 for chairing the Audit Committee; $15,000 for chairing the Compensation Committee; and $10,000 for chairing the Health, Safety, Environment and Corporate Responsibility Committee or the Nominating and Governance Committee

We reimburse all directors for travel and other necessary business expenses incurred in the performance of their services for us and extend coverage to them under our directors’ and officers’ indemnity insurance policies. Directors are also eligible to participate in our gift matching program. The maximum gift total for a director participant in the gift matching program is $15,000 in any calendar year.

The total annual compensation (i.e., total cash compensation plus long-term incentive compensation) paid to each outside director is determined based on a peer review performed by Meridian, an independent compensation consultant that also advised the Board’s Compensation Committee, to evaluate the competitiveness and reasonableness of our director compensation. The total compensation paid to each outside director in 2020 was below the median of our peer group as determined by Meridian.

The directors’ long-term incentive compensation, granted once a year on the date of the annual meeting, took the form of restricted stock that vests in full on the earlier of (i) the first anniversary of the grant date or (ii) the date of the next annual meeting of shareholders, except that if a director age 65 or older with at least three years of service retires from the Board before that anniversary, the shares will vest on retirement. All of the restricted stock grants will immediately fully vest upon a “change in control” or the death or disability of a director, or if the Board otherwise decides, and a prorated portion will vest if the director leaves the Board prior to the vesting date for any other reason. The Chairman of the Board elected to receive her compensation for serving as Chairman in fully vest common stock, which was issued quarterly in arrears on January 1, April 1, July 1, and October 1, 2020.

Deferred Compensation Plan

The Company maintains a Nonemployee Director Deferred Compensation Plan, effective as of June 1, 2019 (“Directors Deferred Compensation Plan”), which enables nonemployee directors, at their election, to defer all or a portion of their annual fees, committee chair fees and/or annual equity awards until (i) the later of the seventh month following the director’s separation from service or the January immediately following the calendar year in which the director incurs a separation from service (or the director’s death or disability, if earlier), and will be paid in the form of a lump sum or annual installments of up to ten years at the director’s election, or (ii) a fixed distribution date or a series of annual installment payments for a period of up to five years which will not begin until one full year has elapsed following the

end of the plan year in which the deferral is made. Director fees are deferred into a cash account that remains subject to the claims of the Company’s creditors and invested per the director’s instructions into one or more investment funds. If deferred, the annual equity award is issued as a restricted stock unit and held in an account providing for the credit of one restricted stock unit for each share of restricted stock deferred. Restricted stock unit accounts will also be credited with dividend equivalents in the form of additional restricted stock units. Restricted stock units are subject to the same vesting terms that apply to restricted stock, as described above, and are payable in the form of one share of the Company’s common stock for each restricted stock unit.

Total Director Compensation for Year Ended December 31, 2020

(a)	(b)	(c)	(d)	(e)
Name	Fees Earned or Paid in Cash ($)(1)	Stock Awards ($)(2)(3)	All Other Compensation ($)(4)	Total ($)
John D. Gass	90,000	200,002	15,000	305,002
S. P. “Chip” Johnson IV*	21,976	151,231	–	173,207
Catherine A. Kehr	85,000	320,004	–	405,004
Greg D. Kerley	75,000	200,002	15,000	290,002
Jon A. Marshall	85,000	200,002	–	285,002
Patrick M. Prevost	95,030	200,002	–	295,032
Anne Taylor	75,000	200,002	–	275,002
Denis J. Walsh III	75,145	200,002	–	275,147

Mr. Johnson was appointed to the Board on August 16, 2020.

(1)

Included in this column are an annual retainer fee and committee chairman fees, as applicable. Additional details regarding these payments can be found in the narrative above.

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(2)

Ms. Kehr receives her compensation for serving as the Chairman of the Board in the form of fully-vested shares of our common stock. In May 2020, each non-employee director received an annual restricted stock award that will vest on the earlier of (i) the first anniversary of the grant date or (ii) the date of the next annual meeting of shareholders, except that if a director age 65 or older with at least three years of service retires from the Board before that anniversary, the shares will vest on retirement. The restricted stock award for Mr. Johnson was granted on August 25, 2020, prorated to exclude the period from the 2020 Annual Meeting to the date of his election, and includes the same vesting term as stated above for the annual awards to the other directors.

(3)

The dollar amounts stated for all awards reflect the grant date fair value of the award as computed in accordance with FASB ASC Topic 718. The grant date fair value for the common stock issued to Ms. Kehr on January 1, 2020, April 1, 2020, July 1, 2020, and October 1, 2020 was determined using the closing price of the Company’s common stock on the NYSE of $2.42, $1.63, $2.52 and $2.27, respectively. The grant date fair value of the restricted stock issued to all directors on May 19, 2020 was determined by using the closing stock price of the Company’s common stock on the NYSE of $2.94. The grant date fair value of the restricted stock issued to Mr. Johnson on August 25, 2020, was determined by using the closing stock price of the Company’s common stock on the NYSE of $2.94. Messrs. Gass, Prevost and Walsh, and Ms. Taylor elected to defer their annual equity awards into the Directors Deferred Compensation Plan.

(4)

The amounts indicated in this column include amounts paid under the Company’s charitable gift matching program. The charitable gift matches for Mr. Gass and Mr. Kerley, total $15,000 each. The charitable gift matches for all other participants (i.e., employees) in 2020 total $425,257.

The following table shows the number of option awards and unvested stock awards outstanding for each nonemployee Director as of December 31, 2020:

Name	Number of Securities Underlying Unexercised Options Exercisable (#)	Number of Deferred Restricted Stock Units that Have Not Vested (#)(1)	Number of Shares of Restricted Stock that Have Not Vested (#)
John D. Gass	24,135	133,388	–
S. P. “Chip” Johnson IV*	–	–	51,439
Catherine A. Kehr	24,135	–	68,028
Greg D. Kerley	24,135	–	68,028
Jon A. Marshall	–	–	68,028
Patrick M. Prevost	–	133,388	–
Anne Taylor	–	133,388	–
Denis J. Walsh, III	–	127,941	–

Mr. Johnson was appointed to the Board on August 16, 2020.

(1)

Represents RSUs received on account of grants that otherwise would have been received as restricted stock (see page 28, “Deferred Compensation Plan”)

SOUTHWESTERN ENERGY COMPANY | 29

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Stock Ownership Information

Share Ownership of Officers and Directors

The following table sets forth information as of March 19, 2021, with respect to the beneficial ownership of the Company’s common stock by each executive officer named in the Summary Compensation Table, whom we collectively refer to as our named executive officers, or NEOs, by each director and nominee, and by all executive officers, directors and nominees as a group.

Amount and Nature of Beneficial Ownership

Name of Beneficial Owner

Shares Owned
Directly

Shares Owned
401(k)

Restricted Stock
Outstanding
(Voting Power)

Options
Exercisable

Total Number of
Shares of Common
Stock

Percent of
Class

Named Executive Officers:

William J. Way

1,855,791

–

879,715

2,735,506

Julian M. Bott(1)

130,192

–

130,192

Clay A. Carrell

551,582

–

551,582

Jennifer N. McCauley(2)

34,592

–

77,440

112,032

John P. Kelly

–

J. David Cecil(3)

218,690

–

218,690

John C. Ale(4)

634,154

–

257,430

891,584

Directors:

John D. Gass

108,810

–

24,135

132,945

S. P. “Chip” Johnson, IV

–

51,439

–

51,439

Catherine A. Kehr

364,782

–

68,028

24,135

456,945

Greg D. Kerley

544,808

–

68,028

24,135

636,971

Jon A. Marshall

143,267

–

68,028

–

211,295

Patrick M. Prevost

74,178

–

74,178

Anne Taylor

25,199

–

25,199

Denis J. Walsh III

–

All directors and executive officers as a group(5)(6)

4,989,995

25,511

255,523

1,409,943

6,680,972

0.99%

Less than one percent of class.

(1)

Mr. Bott passed away on January 3, 2021 due to a sudden, non-COVID related medical condition. The “Shares Owned Directly” are as reported in Mr. Bott’s last Form 4 filing on February 28, 2020.

(2)

Ms. McCauley retired on December 31, 2020. The “Shares Owned Directly” are as reported in Ms. McCauley’s last Form 4 filing on February 28, 2020.

(3)

Mr. Cecil resigned on June 8, 2020. The “Shares Owned Directly” are as reported in Mr. Cecil’s last Form 4 filing on February 28, 2020.

(4)

Mr. Ale retired on June 30, 2020. The “Shares Owned Directly” are as reported in Mr. Ale’s last Form 4 filing on July 2, 2020.

(5)

All directors and executive officers as a group, 23 persons total.

(6)

The table above does not include outstanding restricted stock units for each active NEO and non-employee Director as set out below:

William J. Way	2,763,395
Clayton A. Carrell	1,314,329
John P. Kelly	287,527
John D. Gass	133,388
Patrick M. Prevost	133,388
Anne Taylor	133,388
Denis J. Walsh, III	127,941

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Stock Ownership Information

Equity Compensation Plans

The following table sets forth certain information as of December 31, 2020, concerning outstanding awards under the Company’s equity compensation plan, which has been approved by shareholders, the weighted average exercise price of the outstanding options and the number of shares available for future issuance under the plan:

Plan Category		(a) Number of Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1)		(b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights		(c) Number of Shares Remaining Available for Future Issuance (2)
Equity compensation plans approved by shareholders(3)		20,995,443		$13.39		28,586,257

(1)

Includes 3,849,667 stock options and 8,741,703 performance units at target level performance (of which 4,619,353 are cash-settled performance units), and 12,377,124 restricted stock units (including 133,547 awards assumed in connection with the Montage acquisition) outstanding as of December 31, 2020. Performance units and restricted stock units granted in 2018, 2019 and 2020 may be settled in cash if the Company does not have a sufficient number of shares available to be delivered under the amended 2013 Plan. Performance units granted in 2020 are cash settled only.

(2)

Reflects the number of shares of our common stock available for issuance under the 2013 Plan, giving effect to the fungible share ratio and assuming that target performance is achieved with respect to outstanding Performance Units.

(3)

Consists of the amended Southwestern Energy Company 2013 Incentive Plan (the “2013 Plan”) and the awards assumed in connection with the Montage acquisition. Shares remaining available for issuance may be issued only under the 2013 Plan, which permits grants of awards in the form of stock options, shares of restricted stock, performance units and restricted stock units, as well as other forms of incentive awards.

Security Ownership of Principal Shareholders

The following persons were known by the Company to own beneficially more than 5% of the Company’s common stock as of December 31, 2020.

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership			Percent of Class
Common Stock	BlackRock, Inc. 55 East 52nd Street New York, NY 10055		100,016,916	(1)		14.90	%
Common Stock	FMR LLC 245 Summer Street Boston, MA 02210		87,019,359	(2)		12.93	%
Common Stock	The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355		72,528,442	(3)		10.78	%
Common Stock	State Street Corporation State Street Financial Center One Lincoln Street Boston, MA 02111		35,864,393	(4)		5.33	%
Common Stock	Dimensional Fund Advisors LP Building One 6300 Bee Cave Road Austin, TX 78746		35,415,485	(5)		5.30	%

(1)

Based on the 13G/A filed on January 26, 2021 with the SEC with respect to Company securities held as of December 31, 2020, BlackRock, Inc. had sole power to vote or to direct the vote of 98,881,909 shares, and sole power to dispose or to direct the disposition of 100,016,916 shares.

(2)

Based on the 13G/A filed on February 8, 2021 with the SEC with respect to Company securities held as of December 31, 2020, FMR LLC had sole power to vote or to direct the vote of 4,748,684 shares, and sole power to dispose or to direct the disposition of 87,019,359 shares.

(3)

Based on the 13G/A filed on February 10, 2021 with the SEC with respect to Company securities held as of December 31, 2020, The Vanguard Group had shared power to vote or direct to vote 647,198 shares, sole power to dispose of or to direct the disposition of 71,356,536 shares, and shared power to dispose or to direct the disposition of 1,171,906 shares.

(4)

Based on the 13G filed on February 11, 2021 with the SEC with respect to Company securities held as of December 31, 2020, State Street Corporation had shared power to vote or to direct the vote of 33,673,922 shares, and shared power to dispose or to direct the disposition of 35,864,393 shares.

(5)

Based on the 13G/A filed on February 16, 2021 with the SEC with respect to Company securities held as of December 31, 2020, Dimensional Fund Advisors LP had sole power to vote or direct to vote 34,903,532 shares, and sole power to dispose of or to direct the disposition of 35,415,485 shares.

SOUTHWESTERN ENERGY COMPANY | 31

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Stock Ownership Information

Stock Ownership Guidelines

The Company maintains stock ownership guidelines for directors and executive officers. Each director must own common stock with a market value equal to five times the annual cash retainer that was in effect on December 6, 2013 (the date the stock ownership guidelines were last amended) or the date the director joined the Board, whichever date is later. This ownership threshold must be met within five years of December 6, 2013 or five years of the date the director joined the Board, whichever date is later. Until such time as the director reaches his or her share ownership requirement, the director will be required to hold 50% of the shares of common stock received in the form of restricted stock and upon exercise of stock options (net of any shares utilized to pay for the exercise price of the option). Once achieved, the required ownership threshold must be maintained as long as the director retains his or her seat on the Board.

Stock that counts toward satisfaction of these guidelines includes common stock purchased on the open market, stock obtained through stock option exercises, restricted stock, and stock beneficially owned in a trust, by a spouse and/or minor children. In instances where these stock ownership guidelines would place a severe hardship on a director, the Board will make the final decision as to developing an alternative stock ownership guideline for a director that reflects the intention of these guidelines and his or her personal circumstances. As of December 31, 2020, directors in office for more than twelve months held common stock in excess of the levels required in the guidelines.

Guidelines for the ownership requirements for executive officers are discussed on page 47 in the Compensation Discussion and Analysis section of this proxy statement.

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Proposal No. 2: Non-Binding Advisory Vote to Approve the Compensation of our Named Executive Officers

We are asking our shareholders to approve, on a non-binding and advisory basis, the compensation paid to our named executive officers (“NEOs”) as described in the Compensation Discussion and Analysis (“CD&A”) and the Executive Compensation section of this proxy statement. This proposal and the discussion that follows relate to 2020 compensation decisions made before the rise of COVID-19. The Company did not lower or adjust performance metrics or goals as a result of the COVID-19 pandemic.

The Company believes that its executive compensation program, which emphasizes equity-based awards and performance-based cash incentives, is strongly aligned with the interests of its shareholders. Highlights of the program include the following:

	•	A significant stock ownership requirement.
	•	A maximum payout that limits annual incentive bonuses or performance units.
	•	CEO salary constitutes no more than 11% of the target compensation package, with the remainder generally being equity-based or otherwise contingent upon Company and individual performance.
	•	Long-term incentive compensation aligns executive and shareholder interests to achieve long-term performance objectives and constitutes the major component of at-risk compensation.
	•	Each of the NEOs is employed at-will and is expected to demonstrate exceptional personal performance to continue serving as a member of the executive team.

•

No re-pricing of stock options without shareholder approval, or pledging or hedging of Company securities.

We are asking shareholders to vote in favor of the following resolution, which will be submitted for approval by shareholders at the 2021 Annual Meeting:

“RESOLVED, that the shareholders of Southwestern Energy Company approve, on an advisory basis, the compensation of Southwestern’s executive officers named in the Summary Compensation Table as disclosed, pursuant to the SEC’s compensation disclosure rules, in the Compensation Discussion and Analysis, compensation tables and other narrative compensation disclosure in the proxy statement.”

As an advisory vote, this proposal is not binding upon the Company. However, the Compensation Committee, which is responsible for designing and administering the Company’s executive compensation program, values the opinions expressed by shareholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for NEOs. Unless the Board modifies its determination on the frequency of future Say-on-Pay advisory votes, the next Say-on-Pay advisory vote will be held at our 2022 Annual Meeting.

RECOMMENDATION OF THE BOARD

The Board recommends that the shareholders vote “FOR” approval of the compensation of the Company’s NEOs.

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Compensation Discussion and Analysis

2020 Highlights

OUR COMPENSATION PHILOSOPHY IS LINKED TO OUR LONG-TERM STRATEGY

The E&P industry witnessed unprecedented low commodity prices in 2020 driven by the COVID-19 global pandemic. Protected by our early and swift response to the pandemic (summarized on page 4 of this proxy), the Company performed well. Our stock price was up 23% during the year and was the third best performing stock in our performance peer group. Over the three-year period ending on December 31, 2020, our Total Shareholder Return (“TSR”) ranked second when compared to the companies in our performance peer group.

We attribute the performance in our stock to recognition of our long-term strategy, which we implemented prior to 2020 and supported with our compensation philosophy. Our strategy is based upon the four pillars set out below and offers resilience during years like 2020. An important objective of the strategy is to produce free cash flow, with a strong balance sheet, and to position the company to enhance long-term shareholder value. Below are a few of the highlights from 2020 that demonstrate how we executed on each pillar of our strategy.


		CREATE SUSTAINABLE VALUE
			Stock price up 23%
			Reported lowest GHG intensity among AXPC peers in annual EHS Survey
			Year-end reserves included 2.2 TCFe of upward performance revisions and additions
			Fresh water neutral for the fifth year in a row; 100% of fresh water usage offset through recycling and conservation projects

		PROTECT FINANCIAL STRENGTH
			$362 million of cash settled gains in 2020, resulting from a robust hedging program
			$90 million in additional expense reductions after achieving $122 million in savings in 2019
			G&A per MCFE decreased 33% compared to 2019
			Repurchased $107 million of notes at 33% discount to par

		INCREASE SCALE
			Completed acquisition of Montage Resources
			- Became third largest producer in Appalachia, expect over 1TCFe of production in 2021
			- Accretive to key financial metrics and maintained balance sheet strength through associated capital market transactions
			- Delivered over $30 million in G&A synergies

		PROGRESS BEST-IN-CLASS EXECUTION
			Achieved average well costs of $670 per lateral foot, a 19% reduction from 2019
			Lateral length increased 21% year over year to more than 12,000 ft
			Leveraged asset flexibility and operational agility to pivot investment activity to highest return projects in response to decreased liquids prices
			Record safety and environmental performance

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Compensation Discussion and Analysis

2020 Compensation Program Changes


	•	No increase in base salary from 2019 to 2020

	•	Reduced 2020 long-term incentive (LTI) value by 10% from 2019 grant values

	•	Applied a 50% adjustment to any stock price appreciation or depreciation for equity-based long-term incentive awards (see “Adjusted Stock Price” under 2020 Long-Term Incentive Awards on page 41)

What We Do

Alignment with Shareholders. Long-term incentive awards vest over periods of several years to reward sustained Company performance over time.

Double-Trigger Severance. Cash severance in connection with a change in control is paid only if an actual or constructive termination of employment also occurs.

Annual Risk Assessments. The Compensation Committee evaluates the influence of executive compensation on corporate risk.

Peer Group Comparison. With the help of independent compensation consultants, we compare executive compensation against industry compensation practices.

Independent Compensation Consultant. The Compensation Committee retains its own independent consultant to advise on compensation matters.

What We Don’t Do

No Tax Gross-Ups in Change in Control Agreements. Our severance agreements apply only in case of termination following a change in control and contain no tax gross-ups for NEOs.

No Hedging and Pledging of Company Stock. Our policies prohibit the hedging and pledging of our stock by our executives and directors.

No Repricing of Stock Options. We do not permit the repricing of stock options without shareholder approval.

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Compensation Discussion and Analysis

OUR CEO’S COMPENSATION ALIGNS WITH THE SHAREHOLDER’S EXPERIENCE

Over the past three years, our share price decreased 47% from December 29, 2017 ($5.58) to December 31, 2020 ($2.98), in parallel with the broader energy industry. As set out below, Mr. Way’s three-year average realized pay (“Actual W-2”) was 64% less than the three-year average total compensation reported in the Summary Compensation Table (“SCT Reported”) and 63% less than his three-year average realizable pay (“Realizable Pay”). In 2020, however, our stock performed well, up 23% from December 31, 2019 to December 31, 2020. Mr. Way’s realizable pay was likewise up, although the vast majority of that value lies in long-term incentives that will not vest for up to two years.

(1)	Actual W-2 refers to taxable wages reported in accordance with IRS requirements. For Mr. Way, these amounts include salary, vacation, annual incentive compensation paid to him during the year before the subtraction of his elective deferrals into the Company’s defined contribution plans, contributions made into those plans by the Company, income achieved from the vesting of restricted stock, restricted stock units, performance units, and other reportable compensation.
(2)	Realizable Pay includes base salary and annual incentive bonus paid during the year, the value of the unvested time-based restricted stock unit awards, and an estimated value of the unvested performance awards (scheduled to vest in 2021, 2022, and 2023) based on the Company’s closing stock price on December 31, 2020, of $2.98.
(3)	SCT Reported refers to the total reported compensation amount in column j of the Summary Compensation Table on page 49.

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Compensation Discussion and Analysis

MANAGEMENT AND THE BOARD LISTEN AND RESPOND TO SHAREHOLDERS

Shareholders have supported the Company’s compensation program with an average of 85% of votes cast in favor of say-on-pay over the past five years. Even though we received strong support of 92% in 2019, we were disappointed to receive only 76% of votes cast in favor in 2020. As a result, in addition to our routine shareholder engagement with large institutional shareholders, in 2020 we reached out to every shareholder for whom we were able to identify contact information, whom combined held approximately 83% of outstanding shares. Shareholders holding 38% of outstanding shares accepted our invitation to speak. The others either declined or did not respond to our request.

2021 Compensation Changes in Response to Shareholder Feedback


Annual Salary:
	•	No increases for the second consecutive year

Annual Bonus:

SEC Form DEF 14A filed by Southwestern Energy Company