{
  "docId": "019dd923-5ca1-7489-b633-ed30207fe34d",
  "docSlug": "01932b757118df5b",
  "documentTitle": "Oil and Gas EP Incentive Plan Design",
  "authorId": "AlvarezMarsal",
  "authorName": "Alvarez & Marsal",
  "documentKindSlug": "consulting-deck",
  "documentKindLabel": "Consulting deck",
  "sourceTypeSlug": "strategy_consulting",
  "sourceTypeLabel": "Strategy consulting",
  "presentationDate": null,
  "orientation": "portrait",
  "aspectRatio": 0.773,
  "pageNumber": 7,
  "pageCount": 20,
  "prevPage": 6,
  "nextPage": 8,
  "slideType": "industry_trends",
  "function": "analyze_data",
  "density": "overcrowded",
  "nDataPoints": 12,
  "notes": "The chart shows a clear trend where larger companies shift from discretionary to formulaic incentive plans.",
  "elementsJson": [
    "headline_text",
    "paragraph",
    "bar_chart_grouped"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-5ca1-7489-b633-ed30207fe34d/7",
  "deckHref": "/decks/019dd923-5ca1-7489-b633-ed30207fe34d",
  "deckJsonHref": "/decks/019dd923-5ca1-7489-b633-ed30207fe34d.json",
  "deckAnchorHref": "/decks/019dd923-5ca1-7489-b633-ed30207fe34d#slide-7",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "the majority of E&P companies maintain some form of discretion with respect to their AIP. However, these companies tend to move away from purely discretionary plans as market capitalization increases",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd951-a671-77dc-a368-83dab1b42db2",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.23,
        "w": 0.68,
        "x": 0.07,
        "y": 0.27
      },
      "kind": "chart",
      "text": "Discretionary vs. Formulaic by Market Capitalization",
      "attrs": null,
      "subkind": "bar-stacked-100pct",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "7acc51e3-c9ff-4801-a0f1-e31d25e42273",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "Share of companies using Discretionary AIP (Under $500M cap): 77%",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd951-a671-77dc-a368-856a9b5ff0f9",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.04,
        "w": 0.63,
        "x": 0.07,
        "y": 0.65
      },
      "kind": "paragraph",
      "text": "However, when properly structured, performance-based compensation, including payouts under a formulaic AIP, are exempt from the $1 million limit.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "11e0eaed-e00c-4911-b268-c4b613340f6a",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.11,
        "w": 0.63,
        "x": 0.07,
        "y": 0.52
      },
      "kind": "paragraph",
      "text": "Companies may utilize formulaic compensation programs to provide clarity to executives and shareholders on how compensation will be determined and to benefit from favorable tax treatment under the “performance-based compensation” exemption under Internal Revenue Code (IRC) section 162(m). IRC section 162(m) generally disallows a tax deduction for compensation paid in excess of $1 million.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "12188a2f-0cf4-4055-ab1f-431752f8c7ce",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.07,
        "w": 0.55,
        "x": 0.07,
        "y": 0.18
      },
      "kind": "paragraph",
      "text": "As shown in the chart below, the majority of E&P companies maintain some form of discretion with respect to their AIP. However, these companies tend to move away from purely discretionary plans as market capitalization increases, as shown below:",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "60fae119-0e9b-405f-ade3-8783a765a232",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.63,
        "x": 0.07,
        "y": 0.73
      },
      "kind": "paragraph",
      "text": "Notwithstanding the favorable tax treatment afforded to formulaic AIPs, some companies maintain discretion over the payout of annual bonus plans in order adjust for events that are unforeseen and / or out of the executive’s control.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "e9ac2cf1-0ea8-41d0-94a1-9a5893b6b39f",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.25,
        "x": 0.66,
        "y": 0.11
      },
      "kind": "title",
      "text": "ANNUAL INCENTIVE PLANS",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "5ae0df4d-8702-43ee-80c0-2b80d9b9926d",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [
    {
      "metricRaw": "Share of companies using Discretionary AIP (Under $500M cap)",
      "numberRaw": "77%",
      "numberKind": "percent",
      "actionTitle": null,
      "calloutText": "the majority of E&P companies maintain some form of discretion with respect to their AIP. However, these companies tend to move away from purely discretionary plans as market capitalization increases",
      "numberScale": null,
      "numberValue": 77,
      "metricFamily": "survey_sentiment",
      "numberCurrency": null
    }
  ],
  "tools": [
    {
      "name": "2x2 matrix",
      "slug": "matrix-2x2",
      "agent": null,
      "layer": "slide",
      "matchId": "af4df154-58c5-42ad-9efb-1f0f1c069735",
      "evidence": "Discretionary vs. Formulaic by Market Capitalization",
      "confidence": 0.8
    },
    {
      "name": "Action Titles",
      "slug": "action-titles",
      "agent": "Architect",
      "layer": "slide",
      "matchId": "019dd95a-10d4-718b-9f59-887b9a5fff10",
      "evidence": "Callout: 'companies tend to move away from purely discretionary plans as market cap increases.'",
      "confidence": 82
    },
    {
      "name": "Annotation",
      "slug": "annotation",
      "agent": "Designer",
      "layer": "slide",
      "matchId": "019dd95a-10d4-718b-9f59-903cfa94fd53",
      "evidence": "Every bar segment carries % data label.",
      "confidence": 75
    },
    {
      "name": "Chart Selection Guide",
      "slug": "chart-selection-guide",
      "agent": "Designer",
      "layer": "slide",
      "matchId": "019dd95a-10d4-718b-9f59-8d6183f34b27",
      "evidence": "Stacked horizontal bars compare Discretionary/Part/Formulaic across 4 market-cap bands.",
      "confidence": 80
    },
    {
      "name": "So What? Test",
      "slug": "so-what-test",
      "agent": "Architect",
      "layer": "slide",
      "matchId": "019dd95a-10d4-718b-9f59-97d323facc67",
      "evidence": "Body explicitly draws the trend (size -> less discretion) under the chart.",
      "confidence": 70
    }
  ],
  "frameworks": [],
  "arcBeats": [
    {
      "to": 8,
      "from": 3,
      "beatId": "019dd95a-0682-776c-8e36-dadd74b41723",
      "arcName": "The Triple Take",
      "arcSlug": "triple-take",
      "beatName": "The Facts (What)",
      "beatSlug": "triple-take-the-facts-what",
      "evidence": "Intro, methodology, AIP prevalence and metrics — pure descriptive findings.",
      "position": 1,
      "confidence": 65,
      "parentBeatName": "Setup",
      "parentBeatSlug": "setup"
    }
  ],
  "loops": [
    {
      "to": 8,
      "from": 6,
      "name": "Pattern Hunter",
      "slug": "02-pattern-hunter",
      "bestFor": "Time-pressed audiences, building consensus, when data is strong",
      "matchId": "019dd95a-07fe-70ce-8d3f-6e42bb2b7ed0",
      "evidence": "Three sequential AIP exhibits (definition, discretionary mix, metric ranking) build to '87% use production' conclusion.",
      "position": 1,
      "objective": "Stack AIP evidence (overview, discretion-vs-formulaic, metric prevalence) into a market pattern",
      "structure": "Evidence A -> Evidence B -> Evidence C -> Pattern/Conclusion",
      "confidence": 78,
      "description": "Group multiple pieces of evidence that together point to a pattern or conclusion"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}