SM ENERGY (SM)
Sector: Energy
2026 Annual Meeting Analysis
SM ENERGY · Meeting: May 21, 2026
Directors FOR
7
Directors AGAINST
4
Say on Pay
FOR
Auditor
FOR
Director Elections
Election of the 11 directors named in this Proxy Statement
Against Analysis
Brookman has served since February 2024 (over 24 months), so the TSR exemption does not apply; SM's 3-year stock return of -1% trails the compensation peer group median of +51.1% by 52.1 percentage points, well above the 20-percentage-point trigger for negative absolute TSR, and the 5-year peer gap of -94.4pp also exceeds the applicable 20pp threshold so the 5-year mitigant does not rescue the vote.
Peru has served since 2014 and his tenure fully overlaps the underperformance period; SM's 3-year return of -1% trails the peer median of +51.1% by 52.1 percentage points, far exceeding the 20pp trigger threshold, and the 5-year peer gap of -94.4pp also exceeds the threshold so no 5-year mitigant applies; he also serves on two other public company boards (Calumet and Newmont) but that does not exceed the four-board overboarding threshold.
Quintana has served since 2006 as a long-tenured director and Chairman, his tenure fully overlaps the underperformance period; SM's 3-year return of -1% trails the peer median by 52.1 percentage points (threshold: 20pp), and the 5-year gap of -94.4pp also exceeds the threshold so no 5-year mitigant applies; he holds two other public company board seats (Newmont and Calumet as disclosed for Peru — Quintana's own boards are not listed as exceeding three), which does not trigger the overboarding rule.
Robeson has served since 2014 and her tenure fully overlaps the underperformance period; SM's 3-year stock return of -1% trails the peer median of +51.1% by 52.1 percentage points, well above the 20pp trigger, and the 5-year peer gap of -94.4pp also exceeds the threshold so no 5-year mitigant applies; she serves on two other public company boards (NPK International and Williams Companies) which does not exceed the overboarding threshold.
For Analysis
Clark joined the board in January 2026, less than 24 months ago, so he is fully exempt from the TSR underperformance trigger under our policy, and no other disqualifying factors (overboarding, attendance, independence) are present.
Fox joined the board in January 2026, less than 24 months ago, so she is fully exempt from the TSR underperformance trigger, and no other disqualifying factors are present.
Helms joined the board in January 2026, less than 24 months ago, so he is fully exempt from the TSR underperformance trigger, and no other disqualifying factors are present.
McDonald joined the board in January 2026 as the incoming CEO, less than 24 months ago, so she is fully exempt from the TSR underperformance trigger; no overboarding, attendance, or independence concerns are present.
Venkatraman joined the board in November 2024, which is less than 24 months before the meeting date, so he qualifies for the new-director exemption from the TSR underperformance trigger, and no other disqualifying factors are present.
Van Kempen joined the board in January 2026, less than 24 months ago, so he is fully exempt from the TSR underperformance trigger, and no other disqualifying factors are present.
Willard joined the board in January 2026, less than 24 months ago, so he is fully exempt from the TSR underperformance trigger, and no other disqualifying factors are present.
The board TSR trigger fires against four long-tenured directors (Brookman, Peru, Quintana, Robeson) whose service fully overlaps SM Energy's significant 3-year underperformance versus its compensation peer group — a gap of 52.1 percentage points against a 20pp threshold. The 5-year record does not provide a mitigant as the 5-year peer gap of -94.4pp also exceeds the threshold. The six directors who joined in January 2026 or late 2024 are exempt as new directors, and all nominees pass the independence, overboarding, and attendance screens.
Say on Pay
✓ FORCEO
Elizabeth A. McDonald
Total Comp
$4,475,172
Prior Support
93%%
The new CEO Elizabeth McDonald's total compensation of $4,475,172 for 2025 reflects her mid-year transition into the top role from COO and is reasonable for a mid-cap energy company CEO, with the majority of pay structured as variable and performance-linked equity (RSUs and performance stock awards). The pay structure is heavily weighted toward at-risk compensation — 88% variable for the prior CEO and 80% for other named executives — with performance stock awards tied to absolute and relative total shareholder return over a three-year period, and the LTIP payout for the completed 2022-2025 cycle was only 28% of target reflecting genuine alignment with poor shareholder outcomes. Prior say-on-pay support was 93% at the 2025 annual meeting, no policy thresholds are breached, and the compensation committee demonstrated appropriate rigor by allowing the TSR modifier to reduce bonus payouts when the stock fell.
Auditor Ratification
✓ FORAuditor
Deloitte & Touche LLP
Tenure
N/A
Audit Fees
N/A
Non-Audit Fees
N/A
The auditor fee table provided does not contain the actual fee figures (the extracted text contains director compensation and other unrelated data rather than auditor fee line items), so the non-audit fee ratio trigger cannot be evaluated; per policy, when fee or tenure data cannot be confirmed, the default FOR vote applies and the absence of data is noted as a minor negative but does not trigger a No vote. Deloitte & Touche is a Big Four firm appropriate for SM Energy's $6.7 billion market cap, satisfying the auditor adequacy standard.
Overall Assessment
SM Energy's 2026 annual meeting ballot contains three standard proposals; the most significant concern is the company's substantial 3-year stock underperformance relative to its compensation peer group (trailing by over 52 percentage points), which triggers AGAINST votes for the four long-tenured directors while six newer directors added in connection with the Civitas merger receive FOR votes under the new-director exemption. The Say on Pay program earns a FOR vote based on its genuinely performance-linked structure and evidence that payouts were reduced when shareholder returns were poor, and the auditor ratification defaults to FOR given that fee data was not available in the extracted text.
Compensation Peer Group
17 companies disclosed in 2026 proxy filing