Governance
Two-thirds of Hilcorp employees are field employees—well beyond industry averages. Every employee has a direct stake in the company’s performance and goals. Our model aims to have all over 3,400+ Hilcorp employees focused on acting like an owner which fosters strong corporate governance every day.
Corporate structure
Open Book Management
Our open book management model provides unparalleled consistency, clarity, and transparency. Everyone in the company receives the same information on our financial results, production metrics, safety, and environmental performance. Each employee knows the goals, is aligned on how we intend to meet them, and is given the information and autonomy necessary to meet those goals. Because employees are expected and empowered to make sound decisions in alignment with the objectives of the company, openness and transparency are critical.
Asset Team Model
There will never be more than five levels between a front-line employee and the CEO. Our flat organization removes barriers in the decision-making process and grants greater autonomy to those who know the assets best. Innovation and Urgency—two of Hilcorp’s Core Values—come from the intimate understanding of the assets. Our asset teams are multidisciplinary teams who have the necessary autonomy and accountability for creating value from our assets. The asset teams drive goal-setting for production, cost management, capital investment, environmental protection, safety, and local community engagement.
Team transparency through monthly reporting to management and the entire workforce ensures adherence to our values and a focus on objectives. With the information, skills, and authority to act, every employee is aligned and is expected to “Be an Owner”.
Accountability and Incentives
Alignment is an essential element of the “Hilcorp Magic”. The open book management and asset team model drive a bottom-up approach to goal-setting that promotes sustainable practices and result in long-term value creation. This alignment gives clarity, focus, and motivation to all employees to act like owners and work together toward our common goals, including delivering on our agreed upon environmental and safety goals, involving emission reduction targets.
Our commitment to transparency ensures that every employee knows the company’s values and objectives. They hold themselves and others accountable, and everyone is rewarded equitably when goals are reached. From the CEO to the pumper, our performance-based pay is based on the same company metrics. Everyone receives the same bonus percentage. This alignment is critical to our collective success.
Hilcorp’s Buy-In program gives every employee a stake in the company. Our employees act like owners because they truly are owners. The long-term value creation generated by both employees and the company builds engagement and immersion with the communities in which we operate.
Sustainability Oversight
Hilcorp’s Sustainability Oversight Committee is composed of the CEO, a cross-functional executive team, and employees with diverse perspectives. The Sustainability Oversight Committee, operations, and employees at-large are in a continuous information and execution loop.
Our unique asset-based structure empowers teams to establish the goals and priorities that suit the assets under their management. Ownership and alignment with sustainability objectives are pushed down to the field level enabling us to achieve sustainability goals, including tangible emissions reductions. Our business model is to acquire mature late-life properties and then optimize those properties. Assets vary in terms of the production type (natural gas or oil), conventional or non-conventional, age of infrastructure, and operating conditions. Every asset requires a unique approach with dedicated professionals who can find the right solutions to optimize production while reducing environmental impact.
Oversight’s Use of Open Book Management
The Sustainability Oversight Committee and the asset teams utilize Hilcorp’s commitment to open book management to set and measure meaningful goals. Emissions and financial data are broken down and distributed to each asset team. Every member of the asset team has access to and is expected to have a comprehensive understanding of the data. By sharing data with every member of the company, each employee is empowered to identify and execute improvement opportunities.
Meaningful Goal-Setting
During each annual planning cycle, each asset team sets production, investment, costs, value creation, and emissions reduction targets. Everyone is included in this process—both field and office employees. The bottom-up approach to goal setting ensures full ownership, understanding, and alignment of our goals. Teams are assessed on their progress toward reaching goals on a daily, monthly, and quarterly basis. Employees are measured on their performance and their compensation is directly tied to reaching the targets.
