Seadrill Ltd

This proposal asks shareholders to approve fixing the Board size at up to nine directors and to vest the Board with authority to fill vacancies between meetings. Management advances this as a housekeeping and governance measure: the Company currently has nine directors and the Board has nominated those nine for re-election, so approval formalizes the current structure and preserves flexibility to fill unforeseen vacancies. From a governance perspective, the resolution is routine for a Bermuda company governed by bye-laws and allows the Board to maintain continuity and respond promptly to resignations or vacancies without convening an interim general meeting. The Board’s recommendation to vote FOR reflects its view that the current nine-member composition provides an effective mix of skills and experience for oversight of strategic and operational priorities. Approving the measure ensures there is no ambiguity about the Board’s authority to act under the bye-laws, which can be important for timely succession planning and committee assignments. Investors should view this as non-controversial and consistent with standard corporate governance practice for maintaining an appropriate board size. The principal governance risk is dilution of oversight if the Board expanded without clear rationale, but the proposal merely formalizes the existing composition and includes the usual nomination processes overseen by the Joint Nomination and Remuneration Committee. In the context of Seadrill’s recent operational performance and transition in executive leadership, the Board emphasizes stability and continuity as a reason to support the proposal.

This proposal requests shareholder approval to ratify and update non-employee director compensation following an independent benchmarking review. Management is asking shareholders to approve increases to the non-Executive Chairman retainer (to $280,000 effective March 16, 2026) and to confirm the annual cash retainers ($140,000 for other directors) and equity award values (approximately $150,000 for the Chair, $120,000 for other directors), plus committee chair and meeting fees. The Committee engaged LB&Co. to benchmark pay against a selected peer group and concluded the adjustments are reasonable to attract and retain experienced directors. The structure continues to use TRSUs (time-vested restricted stock units) for equity compensation with a one-year minimum vesting or vesting at the next annual meeting (subject to the 50-week rule), which tightens alignment of director interests with shareholders and provides relatively short-term refresh cycles. From a governance standpoint, the proposal balances market competitiveness with shareholder protection features (limited per-director caps and typical vesting and withholding rules). The Board’s recommendation to vote FOR flows from its view that competitive and externally benchmarked compensation is necessary to retain the caliber of oversight required as the Company executes commercial and operational objectives. A potential shareholder concern is that increasing cash retainers raises fixed board costs, but the board notes the changes are modest, time-limited through the end of 2026/2027 meeting, and were arrived at using an independent advisor. Overall, the proposal is a routine governance item to maintain market-competitive director pay and support board stability.

This advisory (non-binding) 'say-on-pay' asks shareholders to approve the Company’s 2025 executive compensation disclosures and the design and outcomes described in the CD&A. The program in 2025 combined base salary, an annual cash STIP tied to Adjusted EBITDA, free cash flow, safety and utilization metrics, and long-term incentives split between time-vested RSUs (TRSUs) and performance RSUs (PRSUs) tied to relative/absolute TSR and cumulative free cash flow over multi-year performance periods. The Joint Nomination and Remuneration Committee used independent benchmarking data and an external consultant (LB&Co.) to set targets and long-term incentive mix; payouts shown in the proxy reflect both achieved operational outcomes (safety outperformance) and challenging cash flow metrics (some PRSU tranches earned at 0%). The vote is advisory — it does not compel action — but the Board states it will carefully consider the result, consistent with investor engagement practices. For sophisticated investors evaluating the proposal, relevant considerations include the linkage of short-term and long-term incentives to measurable operational and financial KPIs, the capped payout ranges for PRSUs (0-200%), and the use of both absolute and relative TSR to align pay with shareholder returns. Also material is recent CEO transition (March 2026) which may shape future compensation decisions; the Board has explained compensation continuity and retention arrangements including severance protections and share ownership guidelines. Given the program’s emphasis on performance metrics, independent benchmarking, and clawback/share ownership protections, the Board recommends supporting the advisory vote while noting the result is to be used for shareholder feedback rather than binding action.

Proposal 6 asks shareholders to increase the share reserve under the MIP by 1.4 million shares to ensure the Company can continue granting long-term equity awards to attract, retain and motivate management. Management says the existing reserve (2.91 million) had only 1.17 million shares remaining as of March 25, 2026; the increase would raise the total to 4.31 million shares and, based on the Company’s historical burn rate (0.88%), is estimated to provide approximately five additional years of grant capacity. The Company discloses the anticipated dilution would rise from ~4.5% to ~6.5% on approval, and highlights plan design features intended to protect shareholders — no evergreen, limited recycling, no repricing, minimum one-year vesting, no dividends on unvested awards, and clawback/forfeiture provisions. From a compensation governance perspective, these safeguards mitigate typical shareholder concerns about excessive dilution and recycling, while allowing the Company to maintain an equity program aligned with shareholder returns via PRSUs that use relative and absolute TSR and cumulative free cash flow metrics. The Board’s recommendation to vote FOR is grounded in the need for continued long-term incentive capacity to align management with long-term performance while preserving anti-dilution and anti-abuse protections. Investors should weigh the incremental dilution against the program’s stated alignment mechanisms, the historical low burn rate relative to industry benchmarks, and the absence of an automatic evergreen feature. Given Seadrill’s transition to growth in dayrates and backlog visibility, management argues that an adequately funded equity program is necessary to retain key talent and capture shareholder value during a cyclical improvement in the offshore drilling market.