Baker Hughes Co

This advisory proposal asks shareholders to approve the Company’s executive compensation disclosure (the Compensation Discussion & Analysis and accompanying tables and narrative) on a non‑binding basis. Management is seeking an affirmative advisory vote to confirm investor support for the design and outcomes of its pay programs, which emphasize a high proportion of at‑risk compensation, multi‑year performance share units tied to FCF conversion, ROIC and TSR, and shorter‑term incentives tied to formulaic financial targets and strategic priorities. The Board highlights governance features intended to align pay and performance, including clawback/recoupment policies, double‑trigger change‑in‑control protections, stock ownership guidelines, and independent consultant review. The company cites prior strong shareholder support (92.9% in 2025) as validation but still invites the advisory vote annually to maintain alignment and responsiveness to investors. Voting FOR does not change pay arrangements directly but signals investor acceptance of management’s compensation philosophy and implementation. A vote AGAINST would be a signal of dissatisfaction and would typically prompt additional shareholder engagement and possible program adjustments by the Human Capital and Compensation Committee. Relevant context includes strong 2025 financial results (adjusted EBITDA, free cash flow) that drove above‑target payouts on certain metrics, and a continued emphasis on long‑term incentives to drive multi‑year performance. The Board’s recommendation reflects its view that the current program appropriately balances retention, market competitiveness, and alignment with shareholder returns while containing governance protections.

This proposal requests shareholder approval of a new formal equity plan (the 2026 LTIP) that will replace the 2021 LTIP for future grants and make available a fixed pool of shares (the Plan Share Reserve) for use in granting options, SARs, RSUs, performance awards, cash awards and other stock‑based awards. Management is seeking this authority to ensure ongoing capacity to grant competitive long‑term incentives used for retention and to align executives and employees with long‑term shareholder value creation. The Board frames the plan with multiple governance safeguards — a fixed ten‑year term with no evergreen feature, anti‑repricing without shareholder approval, per‑director compensation limits, no single‑trigger acceleration on change in control, and application of the Company’s clawback policy — to limit perceived governance risk. The plan’s share reserve and share‑counting rules were calibrated with reference to historical grant volumes and a modest burn‑rate (three‑year average ~0.69%), and the Board considered potential dilution when setting the reserve. The LTIP also preserves flexibility for delivering a mix of time‑vesting and performance‑vesting awards (PSUs tied to FCF conversion, ROIC, and TSR modifiers), reflecting the company’s preference for pay‑for‑performance mechanics and multi‑year metrics. Approving the plan permits the company to continue awarding equity that management argues is necessary to compete for talent across industrial and energy technology sectors while retaining alignment to multi‑year performance goals. Risks from dilution and perceived overly‑generous equity awards are mitigated in the Board’s view by plan features and by continued shareholder oversight, but shareholders should evaluate the size of the reserve, counting rules, and historical burn and grant practices when deciding whether to support the plan. The Board recommends FOR because it regards these awards as essential to the Company’s strategy and because the plan incorporates governance protections designed to protect shareholder interests.

This proposal asks shareholders to authorize an increase in the share reserve for the company’s broad‑based Employee Stock Purchase Plan by 9.5 million shares to replenish the plan’s available capacity. Management presents the ESPP as a broad participation program intended to foster employee ownership and alignment with shareholder interests by allowing employees to buy company stock at a discount (typically 85% of market) on a periodic offering basis. The Board argues that expanding the authorization is necessary to ensure sufficient shares to operate the ESPP over the next several years given expected participation, and that the plan has wide eligibility (approximately 46,700 employees) and conservative per‑participant limits (1,275 shares or defined dollar caps), limiting concentration risk. Approving the amendment will dilute existing shareholders by increasing shares outstanding, but management frames this as a modest and deliberate trade‑off to support workforce engagement and retention. The ESPP includes administrative and legal guardrails (adjustments for corporate transactions, change‑in‑control provisions, and compliance with applicable laws) and the Committee retains discretion to manage offerings and participation. Investors evaluating the proposal should weigh the potential dilutive impact of the additional shares against the benefits of broader employee alignment, the program’s discount level and participation limits, and historical utilization. The Board recommends FOR because it views the ESPP as a valuable tool to incentivize and retain talent while preserving reasonable structural limits on grants and purchases.