Executive Compensation Information

Compensation Discussion and Analysis

Introduction

Our Compensation Committee strives to design executive compensation programs that are aligned with our business goals and culture, and that serve the long-term interests of our shareholders. We believe that attracting and retaining superior talent through a compensation program that is largely performance-based is important to delivering long-term shareholder returns.

This Compensation Discussion and Analysis (“CD&A”) section of the Proxy Statement is designed to provide our shareholders with an explanation of CNX’s executive compensation philosophy and objectives, our 2023 executive compensation program, and the compensation paid by CNX to the following named executive officers (“named executives”)⁽¹⁾:

Nicholas J. DeIuliis	Alan K. Shepard	Navneet Behl	Hayley F. Scott	Ravi Srivastava
President and Chief Executive Officer	Chief Financial Officer	Chief Operating Officer	Chief Risk Officer	President — New Technologies

This CD&A contains references to one or more financial measures that have not been calculated in accordance with generally accepted accounting principles (“GAAP”). A reconciliation of each disclosed non-GAAP financial measure to the most directly comparable GAAP financial measure is provided in Appendix A to this Proxy Statement.

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Summary

Our executive compensation program is designed to attract, motivate, and retain key executives who will promote both the short- and long-term growth of CNX and create sustained shareholder value. To this end, we tie a significant portion of named executive compensation to stock price, operational performance and ESG performance. Outlined below are some significant best practices we have implemented in our executive compensation program.

EXECUTIVE COMPENSATION BEST PRACTICES

 

What We Do			What We Don’t Do
	Pay for Performance A substantial portion of our named executives’ compensation is at-risk and dependent upon the performance of our stock price.			No Hedging or Pledging of CNX Securities Directors, officers and employees are generally prohibited from engaging in hedging or pledging transactions with respect to our securities.
	Meaningful Stock Retention Requirements We maintain robust stock retention requirements that align the interests of our executive officers with those of our shareholders.			No Catch-Up Provisions or Carryover We eliminated catch-up provisions under our LTIC plan and carryover rights from our STIC plan.
	Mix of Performance Metrics We rely on a mix of financial and non-financial goals, including ESG metrics, for both short-term and long-term performance-based awards to prevent over-emphasis on any single metric.			No Repricing or Replacing of Underwater Stock Options The Equity and Incentive Compensation Plan prohibits repricing or replacing underwater stock options without shareholder approval.
	Independent Compensation Committee Each member of the Compensation Committee meets the independence requirements under SEC rules and NYSE listing standards.			No Excessive Risk-Taking We regularly assess risks to confirm that our compensation policies do not encourage excessive or unnecessary risk-taking.
	Clawback Policy In accordance with the requirements of the NYSE listing standards, we maintain a clawback policy that empowers the Corporation to recover certain incentive compensation erroneously awarded to a current or former executive officer in the event of an accounting restatement.			Prohibit Tax Gross-Ups for Named Executives Our policy prohibits tax gross-ups for our named executives (except for Mr. DeIuliis’ change in control agreement, which was entered into prior to 2009).
	Value Shareholder Feedback We are responsive to shareholder concerns in developing changes to enhance our executive compensation plans.			No Employment Agreements with Named Executives We do not have employment agreements with any of our named executives.

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Pay for Performance

We consistently place at-risk a substantial portion of our named executives’ compensation, much of which is dependent upon the performance of our stock price. As demonstrated in the following charts for both the CEO and the other named executives, the vast majority of 2023 compensation was in the form of short-term and long-term incentive-based compensation. 

2023 CEO Target Pay Mix		2023 Avg. Other NEO Target Pay Mix

The above charts demonstrate a strong alignment between the named executives’ compensation and the long-term interests of our shareholders. In short, our named executives’ compensation is highly correlated with stock price and financial performance — if value is not delivered to our shareholders, as measured by stock price and financial performance, then the named executives’ compensation will be adversely affected.

Compensation Setting Process

Compensation Philosophy and Objectives

CNX’s compensation philosophy is to provide a total compensation package—that is, base salary, short-term (annual) incentive compensation, long-term (equity-based) compensation (generally, in the form of RSUs and/or PSUs), retirement compensation (401(k) contributions), and benefits (such as health insurance, vacation, etc.) that will attract and retain employees with the education, experience, values (Responsibility, Ownership and Excellence), initiative and drive necessary to execute CNX’s business plan and achieve CNX’s long-term strategic goals, including, without limitation, continued focus on optimizing intrinsic value per share.

Each named executive’s total compensation opportunity has been generally targeted within a reasonable range of similarly situated executives at peer group companies (based on the review of publicly available information) after consideration of the following items for 2023: (i) the nature and scope of an executive’s responsibilities; (ii) an executive’s performance (including contribution to CNX’s financial results, operational results, and environmental goals); and (iii) the overall financial performance of the Corporation.

Results of 2023 Shareholder Vote on Named Executive Compensation

CNX values shareholder input and regularly engages in discussions with our major shareholders on various topics, including the compensation of our named executives. The insight these discussions have provided over the years is helpful to the Compensation Committee as it considers and adopts compensation policies relating to our named executives.

At our 2023 Annual Meeting of Shareholders, a significant majority (approximately 96%) of the shares voted approved our 2022 executive compensation program. We were pleased with this outcome, which indicated to the Compensation Committee that shareholders were generally comfortable with our executive compensation program and supportive of the changes we have made over time to advance the program. In the future, we will continue to shape our executive compensation programs to align with our goals while also accounting for shareholder feedback.

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Process for Evaluating Compensation

Generally, for each upcoming year, the Compensation Committee meets to establish the base salaries, incentive opportunities, and related performance goals of CNX’s incentive compensation programs, including the STIC and LTIC. To establish compensation for a particular named executive (other than our CEO), CNX’s Human Resources personnel make initial assessments that are submitted to our CEO for review. This assessment considers relevant industry salary practices, the complexity and level of responsibility associated with the particular named executive’s position, the position’s overall importance to CNX in relation to other executive positions, and the competitiveness of the named executive’s total compensation. Our CEO may make appropriate changes to this qualitative assessment based on his determination of such named executive’s past performance.

The Compensation Committee then reviews: (i) our CEO’s compensation recommendations for each named executive (other than himself) and (ii) our CEO’s evaluation of each named executive’s performance and internal value. After considering the factors described above, and in consultation with the CEO, the Compensation Committee approved the named executives’ 2023 compensation packages.

To establish compensation for our CEO, the Compensation Committee reviews: (i) the CEO’s self-evaluation of his annual performance and (ii) the Board’s evaluation of his annual performance. After considering these factors, the Compensation Committee reviews, approves, and recommends that the Board approve, the compensation of our CEO. Our CEO does not participate in, and is not present for, any approvals relating to his compensation.

Compensation Decisions for 2023

Elements of Executive Compensation Program

In 2023, we continued to compensate our named executives through the following:

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2023 STIC

The STIC program is designed to deliver annual cash awards when CNX and our named executives are successful in meeting or exceeding established performance targets and to pay less, or nothing at all, when CNX and/or our executives fall short of these targets. The STIC program provides incentive compensation (measured at target) that is comparable to compensation provided by companies with which CNX competes for executive talent. The description of the 2023 STIC program established by the Compensation Committee applied to all the named executives for the January 1, 2023 –December 31, 2023 performance period.

The Compensation Committee determined to base the 2023 STIC applicable to the January 1, 2023 – December 31, 2023 performance period on the achievement of (i) Adjusted FCF per share and (ii) pre-established individual performance goals for our executive officers. See the “Grants of Plan-Based Awards -2023” table for a description of the named executives’ opportunities to earn 2023 STIC payments.

Adjusted FCF per share was assigned a score ranging from 0 — 200%, with a score of 100% indicating target performance and a higher score (up to a maximum of 200%) indicating above-target performance as follows:

If the threshold, or minimum, score of 70% had not been achieved, a score of zero would have been assigned, with no payout. If the Adjusted FCF per share performance level equaled or exceeded the threshold, the Adjusted FCF Per Share Score was assigned with total payout potentially modified by an individual performance factor.

The “Adjusted FCF Per Share Score” was applied to the following formula:

With Adjusted FCF of $1.98/share⁽¹⁾, the threshold performance level was not achieved, resulting in a score of zero. Accordingly, no payouts were made to executive officers under the 2023 STIC program.

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LTIC

Our LTIC program is designed to create a strong incentive for our named executives to achieve the longer-term performance objectives in CNX’s strategic plan and to align management’s interests with those of our shareholders. The Compensation Committee determined that each named executive would receive his or her entire regular-cycle 2023 long-term incentive opportunity in the form of PSUs, ESG PSUs, and RSUs, with 40% of each named executive’s target long-term incentive opportunity in the form of PSUs, 10% in the form of ESG PSUs, and 50% in the form of time-based RSUs. The Compensation Committee believes that our PSU awards align the interests of our named executives with those of our shareholders because the vesting of such awards is tied to the achievement of pre-approved, long-term performance goals related to our stock price and ESG initiatives.

A. 2023 PSU Grants

The Committee approved 2023 PSU awards that vest based on performance over a three-year period with payouts, if earned, capped at 100% of the award:

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The target awards for the 2023 PSU Program are as follows:

B. 2023 ESG PSU Grants

The Committee approved 2023 ESG PSU awards that vest ratably over three years based on performance with respect to the following environmental goals, both of which must be met each year for the ESG PSUs to vest:

The target awards for the 2023 ESG PSU Program⁽²⁾ are as follows:

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C. 2023 RSU Grants

To provide competitive compensation, retain key executive talent, and align management’s interests with shareholders, time-based, three-year ratable vesting RSU awards were granted in the following amounts to all the named executives, subject to continued employment with CNX:

D. 2023 PSU Tranches and 2021 PSUs: Metrics and Performance

In January 2019, the Compensation Committee granted PSUs that vest, if earned, ratably over a five-year period. The performance period for the 2019 PSU Program was for the calendar years 2019 through 2023. In January 2021, the Compensation Committee granted PSUs that cliff vest, if earned, at the end of a three-year performance period, which for the 2021 PSU Program ended on December 31, 2023.

The vesting of the prior year PSU awards was calculated based on the following pre-established, equally weighted goals, with the aggregate payout capped at 200% for the 2019 awards and 100% for the 2021 awards.

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For the 2019 PSU Program, if a tranche fails to pay out at the end of any annual tranche period with respect to the absolute stock price measure (a “Missed Year”), the unvested PSUs attributable to the Missed Year may still become fully vested, capped at the target level, if the Corporation achieves target performance (or greater) as determined after the end of the performance period of a future tranche. The opportunity to recoup any missed payouts can occur for any prior tranche, but only up to target performance level for that prior period. This is, in fact, a long-term feature of the program that was designed to incentivize employees to take actions that result in stock price appreciation in future years and not disincentivize participants in the event one component is not achieved in one year.

The Missed Year provision described above only applies to 50% of the PSUs granted under the 2019 PSU Program (i.e., only the absolute stock price goal), and are not applicable for 2020 PSUs and beyond.

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The performance results for 2023 are shown in the below chart.

As a result of the achievement of the above performance factors, the named executives who held PSUs at the end of 2023 earned the following payout amounts under the 2023 tranche of the 2019 PSU Program, the Missed Year provision of the 2019 PSU Program for the 2020, 2021, 2022, and 2023 tranches of such award, and the cliff-vest amount for the entire performance period under the 2021 PSU Program:

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Special PSUs

On August 1, 2023, the Compensation Committee approved the grant of 383,334 Special PSUs to each of Alan Shepard, Navneet Behl, and Ravi Srivastava, effective and made on such date (with potential payout from 0-100%). The Compensation Committee believes that the granting of this one-time award opportunity incentivizes these executives to achieve significant long-term per share value creation for our shareholders. This Special PSU award was structured to drive the realization of that value through an incentive structure focused solely on long-term share price performance. Based on the Corporation’s stock price on the grant date, the full achievement of these Special PSU awards represents an annualized seven-year rate of return of no less than approximately 23%.

The Special PSUs have a seven-year performance period running from August 1, 2023 through July 31, 2030 and are subject to achievement of the 90 business day volume-weighted average common stock prices per share as follows:

If the applicable target stock price is not obtained in a particular tranche, there is no catch-up opportunity if such stock price is later obtained. If during a particular tranche, a target stock price for a later tranche is obtained early, both the Special PSUs for the current tranche and such later tranche will be deemed earned by the Compensation Committee and provided, further, that if the third tranche target stock price of $86.75 is achieved at any point during the performance period, the payment date with respect to 100% of the Special  PSUs (to the extent not previously settled) will be settled and paid immediately following the Compensation Committee’s certification. Notwithstanding the foregoing, no Special PSUs will be settled or paid earlier than the first anniversary of the grant date of the Special PSUs. In the event of a “change in control” (as defined in CNX’s Equity and Incentive Compensation Plan), the stock price will be calculated based on the value of a share of the Corporation’s common stock on the date of such change in control as determined by the applicable transaction documentation. Each grantee is also required to hold, and not sell, transfer or otherwise dispose of shares relating to the Special PSUs (except in connection with applicable taxes associated with the vesting of the Special PSUs) until at least July 31, 2030. The Special PSUs are generally conditioned on the grantee’s continued employment with the Corporation through the applicable payment date.

Cash Bonuses

The Compensation Committee approved the payment of discretionary cash bonus awards to certain of the Corporation’s executive officers in recognition of their individual contributions to the Corporation’s achievement of significant strategic initiatives in fiscal year 2023, including, but not limited to: (a) enhancing the Corporation’s intrinsic value per share by continuously improving operational efficiencies in both core Marcellus and the Utica development; (b) achieving material incremental FCF from New Technologies efforts; (c) leading the industry on ESG efforts through Radical Transparency, the Corporation’s collaboration with the Pennsylvania Department of Environmental Protection, and significant continued reductions in methane intensity; and (d) returning substantial capital to shareholders through our share repurchase program. The bonuses were in the following amounts: Mr. DeIuliis ($960,000), Mr. Shepard ($135,000), Mr. Behl ($300,000), Ms. Scott ($153,000), and Mr. Srivastava ($148,500).

Other Compensation Policies and Information

Retirement Benefit Plans

During 2023, CNX maintained retirement benefit plans, which were intended to attract and retain key talent. CNX continues to move toward a single qualified defined contribution plan to deliver retirement benefits to its employees, as in 2018 it froze a nonqualified supplemental defined contribution plan in which employees participated. This action left only one supplemental (not frozen) plan in place, which is the CNX Supplemental Retirement Plan (the “SERP”) in which Mr. DeIuliis is the only remaining active participant.

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Change in Control Agreements

We have CIC Agreements with each of our named executives who are currently employed by us. The CIC Agreements provide for a “double trigger” requirement, in that each named executive will receive cash severance benefits only if such named executive’s employment is terminated or constructively terminated after, or in connection with, a change in control (as defined in the respective CIC Agreements) and such named executive enters into a general release of claims reasonably satisfactory to us. Under these circumstances, the currently employed named executives would be entitled to receive a lump sum cash severance payment equal to a multiple of base pay, plus a multiple of incentive pay (as defined in each named executive’s respective CIC Agreement) as follows:

Additionally, benefits would be continued for 18 to 30 months (as set forth in the applicable CIC Agreement) and equity grants would accelerate and vest in connection with a change in control alone. Mr. DeIuliis’ CIC agreement was entered prior to 2009 and includes a tax gross-up provision in the event of a change in control consistent with market practice at that time (the CIC Agreements of Messrs. Shepard, Behl, and Srivastava, and Ms. Scott, which were entered into more recently, do not contain change in control tax gross-ups). If it is determined that any payment or distribution would constitute an “excess parachute payment,” we will pay a gross-up payment to Mr. DeIuliis, subject to certain limitations, such that the net amount retained by him after deduction of any excise tax imposed under Section 4999, and any tax imposed upon the gross-up payment, will be equal to the excise tax on such payments or distributions. See “Understanding Our Change in Control and Employment Termination Tables and Information.”

Agreements with Former Named Executives  

Effective June 30, 2023, Olayemi Akinkugbe, CNX’s former Chief Excellence Officer, was terminated without cause from the Corporation. In connection with Mr. Akinkugbe’s separation, Mr. Akinkugbe and the Corporation entered into a severance agreement. Pursuant to this agreement, Mr. Akinkugbe agreed to consult and cooperate with the Corporation through December 31, 2023 on matters related to his past employment and be reasonably available to CNX for the purpose of responding to requests for information and documents and/or to meet with Company representatives. In consideration for his execution (and non-revocation) of a release of claims against the Corporation, Mr. Akinkugbe received (i) a lump sum payment of $340,000 and an accrued vacation payout of $30,077; (ii) vesting of his 118,474 outstanding RSUs; (iii) continued vesting of previously granted unvested PSUs and ESG PSUs (233,807 units, in the aggregate, with an aggregate value of $4,676,140), subject to attainment of the applicable performance goals as determined by the Compensation Committee after the end of the applicable performance period; and (iv) payment by CNX of his COBRA health insurance, if he elects such coverage, until the earlier of June 30, 2024 or the date upon which he becomes eligible for medical benefits from a new employer, in the aggregate amount of $17,853.10. Mr. Akinkugbe was not entitled to any 2023 STIC payout. In addition, Mr. Akinkugbe agreed to comply with confidentiality, non-competition and non-disclosure covenants in favor of the Corporation.

Effective December 22, 2023, Alexander J. Reyes, CNX’s former Executive Vice President, General Counsel and Secretary, was terminated without cause from the Corporation. In connection with Mr. Reyes’s separation, Mr. Reyes and the Corporation entered into a severance agreement. Pursuant to this agreement, Mr. Reyes agreed to consult and cooperate with the Corporation through December 31, 2023 on matters related to his past employment and be reasonably available to CNX for the purpose of responding to requests for information and documents and/or to meet with Company representatives. In consideration for his execution (and non-revocation) of a release of claims against the Corporation, Mr. Reyes received (i) a lump sum payment of $440,000 and an accrued vacation payout of $30,731; (ii) vesting of his 51,989 outstanding RSUs; (iii) continued vesting of previously granted unvested PSUs and ESG PSUs (91,568 units, in the aggregate, with an aggregate value of $1,831,360), subject to attainment of the applicable performance goals as determined by the Compensation Committee after the end of the applicable performance period; and (iv) payment by CNX of his COBRA health insurance, if he elects such coverage, until the earlier of December 31, 2024 or the date upon which he becomes eligible for medical benefits from a new employer, in the aggregate amount of $21,423.72. Mr. Reyes was not entitled to any 2023 STIC payout. In addition, Mr. Reyes agreed to comply with confidentiality, non-competition and non-disclosure covenants in favor of the Corporation.

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Clawback and Other Recoupment Policies

In accordance with the requirements of the NYSE listing standards, we maintain an executive officer clawback policy (the “Clawback Policy”) that empowers the Corporation to recover certain incentive compensation erroneously awarded to a current or former “Section 16 officer” of the Corporation, as defined in Rule 16a-1(f) under the Exchange Act (a “Covered Officer”), in the event of an accounting restatement. Unless an exception applies, the Corporation will recover reasonably promptly from each Covered Officer the covered compensation received by such Covered Officer in the event that the Corporation is required to prepare an accounting restatement due to the material noncompliance of the Corporation with any financial reporting requirement under the securities laws as provided in the Clawback Policy.

The terms of certain CNX employee equity awards provide for their forfeiture in the event of a termination for cause (including for misconduct that could result in material loss, damage or injury to the Corporation) with any shares issued thereunder returned to the Corporation. To the extent that the employee has sold any of his or her shares issued under an award within the six-month period ending with the date of such person’s termination of employment for cause, the employee will be required to repay to the Corporation within ten days after receipt of written demand from the Company, the cash proceeds that such person received upon such sales.

Stock Ownership Guidelines for Executives

The stock ownership guidelines provide that all employees designated as officers for purposes of the policy should own shares of CNX stock, the value of which is a multiple of base salary. The guidelines provide each officer with a five-year period from their appointment as an officer to achieve the applicable ownership level. Shares issuable upon the exercise of stock options or settlement of PSUs held by an individual are not counted for purposes of determining whether an individual has satisfied the ownership guideline requirement, which is as follows for the currently employed named executives.

Our stock ownership guidelines were implemented by the Compensation Committee to further align our named executives’ interests with those of our shareholders and to comply with what we believe are best practices. CNX reviews named executives’ compliance with the stock ownership guidelines annually.

No Hedging/Pledging Policy⁽¹⁾

Our Insider Trading Policy prohibits directors, officers (including named executives who are currently employed with CNX) and employees from engaging in any of the following activities with respect to securities of CNX (except as otherwise may be approved in writing by the General Counsel): (i) purchases of CNX stock on margin; (ii) short sales; (iii) buying or selling options (other than the grant and exercise of compensatory stock options by CNX to directors, officers and employees), including buying or selling puts or calls or other hedging transactions with CNX securities (including, without limitation, to purchase financial instruments (such as prepaid variable forward contracts, equity swaps, collars, and exchange funds), or otherwise engage in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of registrant equity securities); or (iv) pledging CNX stock (provided, however, that brokerage account agreements may grant security interests in securities held at the broker to secure payment and performance obligations of the brokerage account holder in the ordinary course).

Stock Retention Requirements

The Compensation Committee has implemented stock retention requirements applicable to our named executives who are currently employed with CNX and certain of our other employees for regular annual cycle PSU, ESG PSU and RSU awards in which 50% of vested shares (after tax) must be held until the earlier of: (i) 10 years from the Board determined grant date or (ii) the participant reaching age 62.

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Perquisites

We provide our named executives who are currently employed with CNX and other senior officers with perquisites that we believe are reasonable, competitive and consistent with CNX’s compensation program. Our principal perquisite programs currently include such benefits as de minimis personal usage of company purchased event tickets and a vehicle allowance. These programs are more fully described in the footnotes to the SCT. We do not provide tax gross-ups on CNX-provided perquisite programs for our named executives.