2018 Guide to Effective Proxies

2.17.4 Compensation mix | 319 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES Compensation Discussion and Analysis Track Record of Good Governance Practices. Through our commitment to good governance, including our continued stockholder engagement efforts, we have implemented the following practices over the past several years: What We Do What We Don’t Do Structure our executive officer compensation so that more than 85% of pay is at risk No employment contracts with our executive officers Emphasize long-term performance in our equity-based incentive awards No tax gross-ups on perquisites except with respect to the Company’s standard relocation program available to all employees Require double-trigger for equity acceleration upon a change of control No excise tax gross-ups in key employee change-of-control contracts entered into by newly appointed and/or newly hired executive officers, irrespective of an existing agreement Maintain a competitive compensation package No pledging of Company securities Require strong stock ownership for executive officers and directors No short sales or derivative transactions in Company stock, including hedges Provide for clawback provisions No current payment of dividends on unvested awards and no repricing of stock options unless approved by stockholders 2017 COMPENSATION FRAMEWORK EMPHASIZES PERFORMANCE-BASED PAY Our executive compensation programs include direct and indirect compensation elements. We believe that a majority of an executive officer’s total compensation opportunity should be performance-based; however, we do not have a specified formula that dictates the overall weighting of each element. As illustrated in the charts below, 79% of the CEO’s and on average 76% of the other NEOs’ current target total compensation opportunity is provided through equity-based incentive awards that are dependent upon long-term corporate performance and stock-price appreciation. Any value ultimately realized for these long-term equity-based incentive awards is directly tied to Anadarko’s absolute and relative stock-price performance and will fluctuate in-line with stockholder returns. 20% Stock Options 39% Performance Units 12% Target Bonus 20% Restricted Stock Units CEO 9% Base Salary Percent of total direct compensation: At-Risk 91%, Long-Term 79% At-Risk Compensation 38% Performance Units 19% Stock Options 19% Restricted Stock Units 12% Target Bonus Other Named Executive Officers 12% Base Salary Percent of total direct compensation: At-Risk 88%, Long-Term 76% At-Risk Compensation The charts above are based on the following: current base salaries, as discussed on page 39; target bonus opportunities approved by the Committee in 2017, as discussed on page 42; and the grant date value for the 2017 annual equity awards, as discussed on page 44. 38 ANADARKOPETROLEUMCORPORATION 2018PROXYSTATEMENT ANADARKO PETROLEUM CORPORATION