Freeport-McMoRan (FCX) DEF 14ADefinitive proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

LETTER TO STOCKHOLDERS

Dear Fellow Stockholders,

Our board of directors has remained steadfast in prioritizing the health and well-being of our workforce, supporting our communities, serving our customers, and positioning Freeport-McMoRan for long-term success in the midst of the global pandemic and economic uncertainty. Our global team responded to the challenges of this past year and delivered exceptional performance, outperforming all of our peers on a stockholder return basis and finishing the year as the eighth best-performing stock in the S&P 500.

Early in 2020, we proactively implemented protective health protocols throughout our global operations that followed international and local guidelines and continued to enhance those protocols throughout the year. We also took various steps to support our local host communities and indigenous neighbors to help them navigate the pandemic. Our board remains actively engaged with management in guiding these initiatives and is regularly updated on the company’s actions to address the ongoing impacts of the pandemic on our business and stakeholders.

Freeport-McMoRan also achieved significant environmental, social and governance (ESG) related milestones in 2020. We published new climate and water reports, established a 2030 greenhouse gas (GHG) emissions reduction target for the Americas and committed to aligning our climate strategy and related disclosures with the Task Force on Climate-related Financial Disclosures (TCFD). We also committed to the Copper Mark, a new comprehensive industry-specific assurance framework that promotes responsible production practices in alignment with the United Nations Sustainable Development Goals. We continue to focus on human capital management, with progress made on strengthening inclusion and diversity initiatives across our workforce. Finally, we have committed to reporting in line with the Sustainability Accounting Standards Board (SASB) framework. Our board understands that robust ESG practices, transparency, and reporting are integral components of producing sustainable long-term value for all of our stakeholders.

In February 2021, in connection with the retirement of our non-executive chairman, Gerald J. Ford, our board elected our chief executive officer, Richard C. Adkerson, as chairman, and me as lead independent director. We are immensely thankful to Mr. Ford for his leadership, legacy of service, and leading independent oversight by our board. Mr. Adkerson has decades of industry and operational experience, a vision for the company’s long-term strategy, connectivity to our global workforce, and strong relationships with our stakeholders. My fellow independent directors and I will continue to provide Mr. Adkerson and the rest of the management team with independent counsel and oversight to drive sustainable, long-term value creation.

As part of our ongoing review of our board’s composition, we remained committed to recruiting additional independent directors who would expand our board’s skillsets, perspectives and capabilities. Following a robust search process, we recently welcomed David P. Abney, retired Chairman and Chief Executive Officer of United Parcel Service, Inc., and Robert W. Dudley, retired Group Chief Executive of BP, p.l.c., to our board. Messrs. Abney and Dudley both bring exceptional track records of leadership and experience in a wide range of matters relevant to the company, including global business, corporate governance, and sustainability. The addition of these directors is consistent with our objectives of having a board with expansive and diverse experience, a deep understanding of the challenges and opportunities associated with our global business and a focus on value and sustainability for the benefit of all stakeholders. Our director recruitment efforts are ongoing and further additions to the board are anticipated.

I look forward to continuing to engage with our stockholders as part of the company’s ongoing engagement program. I have valued the opportunities to hear your feedback on topics important to you over the past few years. On behalf of the board, thank you for your continued trust and investment in our company.

NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS

TABLE OF CONTENTS

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Cautionary Statement Regarding Forward-Looking Statements

This proxy statement contains forward-looking statements, which are all statements other than statements of historical facts. We caution readers that forward-looking statements are not guarantees of future performance and actual results may differ materially from those anticipated, expected, projected or assumed in the forward-looking statements. Important factors that can cause our actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to, those described in more detail under the heading “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2020 (2020 Form 10-K), filed with the U.S. Securities and Exchange Commission. We undertake no obligation to update any forward-looking statements. This proxy statement also contains certain financial measures that are not recognized under generally accepted accounting principles (GAAP) in the United States, including adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), net debt and consolidated unit net cash costs. Please refer to Annex A to this proxy statement for a reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP financial measure, and other information regarding our calculations for net debt and consolidated unit net cash costs.

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Our director nominees represent a range of tenures and overall experience, which contributes to a variety of perspectives and facilitates transition of institutional knowledge from longer-serving members to newer members of our board. We believe this balanced composition is in the best interest of our company and our stockholders, as our industry and strategic initiatives often have prolonged lifecycles, and it is therefore helpful to have seasoned directors who are familiar with our company and can draw on past experience and expertise balanced with newer directors who bring fresh perspectives. Our governance committee remains committed to an ongoing review of the board’s composition to ensure that we continue to have the right mix of skills, background, diversity and tenure to position the company for long-term success.

 

The above statistics are calculated as of the record date, April 12, 2021 with respect to our director nominees.

 

Diverse Experience, Qualifications, Attributes and Skills
✓		Senior Leadership Experience		✓		Natural Resources, Mining, Metals Industry Experience		✓		International Business/Global Affairs
✓		Sustainability		✓		Operational Management/Risk Management		✓		Accounting/Financial Expertise
✓		Government, Legal and/or Regulatory Compliance		✓		Public Company Board Experience		✓		Capital Markets/Banking

Executive Compensation Highlights (page 28)

 

• In response to the COVID-19 pandemic, our two most senior executives voluntarily agreed to reduce their 2020 base salaries by 25% and further agreed to take 90% of the reduced salaries in the form of restricted stock units (RSUs) instead of cash to help preserve liquidity.   • A majority of our executive officers’ target direct compensation is at risk and requires measurable performance and increases in stock price under our annual incentive (AIP) and long-term incentive (LTIP) programs.   o   No adjustments to our AIP or LTIP performance targets or results; AIP awards for 2020 earned at 143.9% of target based on performance metrics, but management recommended and the compensation committee exercised negative discretion to reduce the payouts to 125% of target in part due to our COVID-19 related cost reductions.
o   Payout of 2018 performance share units (PSUs) in early 2021 at 116% of target based on achievement of long-term performance metrics.   • AIP uses financial, operational and ESG metrics to measure performance.   • 100% of our CEO’s 2020 LTIP award was performance-based: 67% PSUs (with payout based on achievement of return on investment (ROI) metrics with a total stockholder return (TSR) modifier) and 33% stock options (with ultimate value dependent on increases in stock price).

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STAKEHOLDER ENGAGEMENT

We maintain an ongoing, proactive and expansive stakeholder engagement program. Direct engagement with our stockholders is a critical pillar of this program. Our board and management have a history of engaging with stockholders and incorporating feedback into their decision-making processes. We also maintain dialogue and gather input from our broader group of stakeholders including governmental organizations and NGOs, customers and the communities in which we operate. The board’s corporate responsibility committee and management’s sustainability development leadership team provide oversight of our engagement efforts.

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SUSTAINABILITY   Freeport-McMoRan is a leading responsible copper producer. We are committed to meeting the highest standards of environmental stewardship across our operations, respecting human rights in all of our business practices and prioritizing the health, safety and well-being of our workforce and host communities where we operate. We recognize that the long-term success of the company and sustainable value creation are dependent on effective management, integration and governance of key ESG matters.   Our focus on responsible copper production is visible in everything we do, driven by our core values of safety, respect, integrity, excellence and commitment. Our values represent who we are and how we work – everyone, everywhere and every day.
By supplying responsibly produced copper, we are proud to be a positive contributor to the world well beyond our own operational boundaries.

Board Oversight and Management of Sustainability

The corporate responsibility committee (CRC), on behalf of the board, is responsible for providing advice, recommendations and oversight to the company’s management team on environmental and social matters. The CRC regularly reviews the effectiveness of management’s strategies, programs and policy implementation with respect to safety and health, responsible production frameworks, tailings management and stewardship, climate change, water stewardship, biodiversity, waste management, human capital management (including inclusion and diversity initiatives), human rights, stakeholder relations, social performance and Indigenous Peoples, responsible sourcing, and political activity and spending practices. During 2020, the CRC met three times and a member of the CRC participated directly in several stockholder engagement calls to solicit feedback on our sustainability programs and practices. Additionally, the audit committee and the governance committee conduct oversight of certain key ESG matters. The audit committee conducts oversight of global compliance, information technology security and cybersecurity. The governance committee conducts oversight of corporate governance practices and procedures.

Our chairman and CEO has ultimate responsibility for the company’s sustainability performance. Executive officers are held accountable for the company’s sustainability performance through the company’s performance-based AIP. In 2020, ESG metrics collectively accounted for 25% of the AIP (15% safety and 10% sustainability). See “Executive Compensation – Compensation Discussion and Analysis – Principal Components of Executive Compensation” for more information.

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2020 Sustainability Highlights

Sustainability Program Aligns with International Best Practices

In 2020, we continued to focus on enhanced ESG transparency with the publication of an expanded sustainability report including more comprehensive five-year data and our inaugural climate report, a new water report and a new Organisation for Economic Co-operation and Development (OECD) Step 5 Report. We further enhanced our disclosures by preparing our 2020 Annual Report on Sustainability in accordance with the SASB standards for our industry, as well as the Global Reporting Initiative (GRI) Standards Core option and the G4 Mining and Metals Sector supplement. We also accelerated the timing of the publication of our 2020 Annual Report on Sustainability to align with the publication of this proxy statement to provide the latest available ESG disclosures. Our 2020 Annual Report on Sustainability, which we have published annually since 2001, is available on our website at fcx.com under “Sustainability – Reports and Documents” and is independently assured. Our 2019 Climate Report, 2019 Water Report and OECD Step 5 Reports are also available on our website at fcx.com under “Sustainability – Reports and Documents.”

In 2020, we also committed to the Copper Mark, a new, comprehensive assurance framework that promotes responsible production practices and demonstrates the industry’s contribution to the United Nations Sustainable Development Goals. It is the first and only framework developed specifically for the copper industry and enables each site to demonstrate to customers, investors, final manufacturers and other stakeholders their responsible production performance. To date, six of our sites have been validated by the Copper Mark including our Cerro Verde mine in Peru, El Abra mine in Chile, Atlantic Copper smelter and refinery in Spain, Morenci mine and Miami smelter in Arizona and El Paso refinery in Texas. We have plans to validate all of our copper producing sites against the Copper Mark requirements.

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Climate Change

In 2020, we published our inaugural climate report, established our first GHG emissions reduction target for the Americas and committed to aligning our climate strategy and related disclosures with the recommendations of the TCFD in the coming years. We formalized our climate change strategy, founded on three pillars:

Later in 2021, we plan to publish an updated climate report that will include a summary of the results and recommendations from our global climate scenario analysis, which is currently underway and in line with recommendations from TCFD. We also plan to provide an update on the progress on our climate strategy. To learn more about our climate change efforts in 2020 and our plans moving forward, please refer to our 2020 Annual Report on Sustainability and our 2019 Climate Report available on our website at fcx.com under “Sustainability – Reports and Documents.”

Inclusion and Diversity

To support our workforce transformation, engagement and ongoing talent development, we strengthened our Human Resources department in 2020 and established two new positions: chief human resources officer and vice president – transformation and organizational development, which maintain specific responsibility for inclusion and diversity efforts.

We are committed to fostering a culture that is inclusive and representative of the communities where we operate. In 2020, as part of our broader organizational development efforts, we made several advancements aimed at refocusing and strengthening the governance, resourcing and strategic direction of our global inclusion and diversity program, including the following:

As part of ongoing efforts to support our understanding, tracking, and transparency of inclusion and diversity within our employee population, we disclosed additional metrics in our 2020 Annual Report on Sustainability. Our 2020 consolidated North America diversity metrics are in line with the categories set forth by the United States Equal Employment Opportunity Commission.

To learn more about our inclusion and diversity efforts in 2020 and our plans moving forward, please refer to our 2020 Annual Report on Sustainability available on our website at fcx.com under “Sustainability – Reports and Documents.”

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CORPORATE GOVERNANCE

Corporate Governance Guidelines; Principles of Business Conduct

We are committed to effective corporate governance that is informed by our stockholders, promotes the long-term interests of our stockholders, strengthens board and management accountability, and engenders public trust in our company. Our corporate governance guidelines, along with the charters of our principal board committees, provide the framework for the governance of our company and reflect the board’s commitment to monitor the effectiveness of policy and decision-making at both the board and management levels.

We are committed to the highest level of ethical and legal conduct in all of our business operations. Our principles of business conduct highlight the core values on which our company has built its reputation – safety, respect, integrity, excellence and commitment. Our principles of business conduct provide guidance for the application of these values to our business and define the expected behavior of all of our employees and our board.

Board Leadership Structure

The board believes it is important to retain flexibility to determine its leadership structure based on the composition of the board, management team and business conditions at the time, recognizing that the needs and opportunities of the company may change over time. While our by-laws and corporate governance guidelines do not require our chairman of the board and CEO positions to be separate, these positions were separate at our company from 2003 until recently. In February of 2021, our former non-executive chairman, Mr. Ford, announced his intention to retire as a director effective upon the expiration of his current term at the annual meeting. In connection with his announcement, Mr. Ford also stepped down from his position as non-executive chairman of the board.

With Mr. Ford’s planned retirement, our board considered the relative benefits of combining the chairman and CEO positions versus retaining separate roles with an independent chairman in our current environment. After considering the perspectives of our independent directors, views of our stockholders and recent governance trends, the board unanimously concluded that Richard C. Adkerson, our current CEO and a recognized business leader in the mining industry, would be best positioned to serve as our chairman of the board with Dustan E. McCoy serving as lead independent director, with clearly defined responsibilities.

Mr. Adkerson brings to the chairman role his decades of industry and operational experience, vision for the company’s long-term strategy, connectivity to our global workforce and strong relationships with our stakeholders, all of which are important in light of the ongoing COVID-19 pandemic, the continued ramp-up of underground mining at PT Freeport Indonesia (PT-FI) and the prioritization of the company’s long-term development opportunities during 2021. Mr. McCoy’s appointment as lead independent director enhances the strong independent oversight function of the board, which is composed exclusively of independent directors (other than Mr. Adkerson), all of whom are highly qualified and experienced.

The board believes this governance structure provides an effective balance between strong company leadership and appropriate safeguards and oversight by independent directors and is in the best interest of the company and its stockholders at this time.

(*) At all times during which the chairman of the board is an executive chairman, these responsibilities will be carried out with the input and concurrence of the lead independent director.

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Board Refreshment

In accordance with our corporate governance guidelines, the governance committee reviews annually the composition and size of the board, recognizing the importance of refreshment to maintain a balance of tenure, diversity, skill sets and experience on our board. Our board currently consists of eight members, seven of whom the board has affirmatively determined are independent. Each of our current directors has been nominated to stand for re-election at our 2021 annual meeting, except for Mr. Ford who has expressed his intention to retire as a director effective upon the expiration of his current term at the annual meeting. Since 2019, we have added three new independent directors to the board.

In 2019, our governance committee initiated a robust director search process in response to feedback obtained during our annual board evaluation process. To facilitate this process, the governance committee engaged an independent global search firm to assist with identifying, evaluating and recruiting a diverse pool of potential director candidates. This search process has resulted in the appointment of three new independent directors to the board since 2019: John J. Stephens in October 2019 and, most recently, David P. Abney and Robert W. Dudley in April 2021. Our two newest directors, Messrs. Abney and Dudley, are exceptional leaders with proven track records and experience in complex global business, including corporate governance, sustainability, extractives industry experience, supply chain resilience and logistics, and a wide range of other matters relevant to the company. These additions to our board are consistent with our objective to have a board with expansive and diverse experience, a deep understanding of the challenges and opportunities associated with our global business and a focus on value and sustainability for the benefit of all stakeholders. Our director recruitment efforts are ongoing with the assistance of the search firm and further additions to the board are anticipated. The committee continues to emphasize the importance of diversity and in accordance with our board diversity policy, has instructed the firm to include women and persons of ethnic and racial diversity in the pool of candidates.

Director Nominations and Qualifications

The governance committee seeks to have a board that represents a diverse range of perspectives and experiences relevant to our company. In evaluating the suitability of potential director nominees, the governance committee applies the board membership criteria set forth in our corporate governance guidelines. Under these criteria, the committee takes into account many factors, including the following:

The governance committee also evaluates each individual in the context of the board as a whole, with the objective of recommending nominees who can best advance the long-term success of the business, be effective directors in conjunction with the full board and represent stockholder interests through the exercise of sound judgment using their diversity of experience in these various areas.

The board recognizes and embraces diversity and is actively committed to inclusion and diversity in the boardroom. Our board diversity policy is set forth in our corporate governance guidelines. When evaluating the diversity of potential director nominees, the governance committee considers a broad range of diversity, including diversity in terms of professional experience, skills and background, as well as diversity of gender, race and ethnicity. Further, as set forth in the corporate governance guidelines, when conducting searches for new directors, the governance committee includes qualified female and racially and/or ethnically diverse individuals in the pool of candidates.

In the event that vacancies on our board are anticipated or otherwise arise, the governance committee will consider various potential candidates who may come to the attention of the committee through current board members, professional search firms, stockholders or other persons. Each candidate brought to the attention of the committee, regardless of who recommended such candidate, will be equally considered on the basis of the criteria set forth above.

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Succession Planning for Senior Executives

The board is focused on ensuring that the company has emergency and long-term succession plans in place for key senior executive positions. The independent directors of the board are responsible for overseeing the company’s succession planning process for our CEO and other key senior executives and annually review the company’s succession plans for all key senior executives with input from the CEO.

Emergency Succession Plan

Long-Term Succession Plan

In 2020, all of the directors met in executive session to review the company’s emergency and long-term succession plans. In the event that the succession plan is triggered for any key senior executives, the full board would participate in the discussion and consideration of any action with a final decision to be made by the independent directors of the board.

Board’s Role in Oversight of Strategy and Risk Management

The board is deeply engaged and involved in overseeing our strategy and takes an active role in risk oversight.

The board believes that full and open communication between senior management and the directors is essential to effective risk oversight. Our lead independent director regularly meets and discusses with our chairman and CEO on a variety of matters, including business strategies, opportunities, key challenges and risks facing the company, as well as management’s risk mitigation strategies. Senior management attends all regularly-scheduled board meetings where they conduct presentations on various strategic matters involving our operations and are available to address any questions or concerns raised by the board on risk management-related or other matters.

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The chart below provides an overview of the allocation of risk management responsibilities among the board committees.

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Board Committees

The board has four standing committees: audit, compensation, governance and corporate responsibility, each of which is composed entirely of independent directors and regularly reports to the full board. Each committee also operates under a written charter adopted by the board. See “Corporate Governance – Availability of Corporate Governance Documents” for more information.

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(*) As previously disclosed, Mr. Ford will retire as a director effective as of the date of our 2021 annual meeting. Messrs. Abney and Dudley have not yet been assigned to any committees as our board is currently in the process of reviewing committee assignments.

2020 Board Meetings and Attendance

Directors are invited, but not required, to attend annual meetings of our stockholders. Ms. Townsend and Messrs. Adkerson and Stephens attended our 2020 annual meeting of stockholders.

Board and Committee Independence; Audit Committee Financial Experts

On the basis of information solicited from each director, and upon the advice and recommendation of the governance committee, our board annually determines the independence of each of our directors in connection with the nomination process. Further, in connection with the appointment of any new director to the board during the year, our board makes the same determination. In making its recommendation to the board, the governance committee, with assistance from the company’s legal counsel, evaluates responses to a questionnaire completed by each director regarding relationships and possible conflicts of interest between such director, the company, management, the independent registered public accounting firm and the internal audit firm. In its review of director independence, the governance committee considers the commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships any director may have with the company, management, the independent registered public accounting firm and the internal audit firm.

Our board has affirmatively determined that all current directors (other than Mr. Adkerson) have no material relationship with the company and are independent according to the New York Stock Exchange (NYSE) listing standards and within the meaning of our director independence standards, which meet, and in some instances exceed, the independence requirements of the NYSE. The board also has determined that each of the members of the audit, compensation, governance, and corporate responsibility committees has no material relationship with the company and satisfies the independence criteria (including the enhanced qualifications with respect to members of the audit committee and compensation committee) set forth in the applicable NYSE listing standards and U.S. Securities and Exchange Commission (SEC) rules. In addition, the board has determined that each of Messrs. Ford and Stephens qualify as an “audit committee financial expert,” as such term is defined by the rules of the SEC.

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Compensation Committee Procedures

The compensation committee has the sole authority to set compensation for our executive officers, including annual compensation amounts and AIP and LTIP criteria, evaluate the performance of our executive officers, and make awards to our executive officers under our stock incentive plan. The compensation committee also reviews, approves and recommends to the board any proposed plan or arrangement providing for incentive, retirement or other compensation to our executive officers and oversees our assessment of whether our compensation practices are likely to expose the company to material risks. In addition, the compensation committee annually recommends to the board the slate of officers for the company, periodically reviews the functions of our executive officers and makes recommendations to the board concerning those functions.

The compensation committee engages an independent compensation consultant to advise it on matters related to executive and director compensation. Please refer to the section titled “Executive Officer Compensation – Compensation Discussion and Analysis” for more information related to the independent compensation consultant. In addition, the board has its own independent legal counsel, with whom the compensation committee consults on an as needed basis.

Limitation on Additional Board and Committee Service

It is the expectation of the board that every member devotes the significant time and attention necessary to fulfill their duties as a director. Our corporate governance guidelines establish the following limits on our directors serving on public company boards and audit committees:

The governance committee may approve exceptions to these limitations under certain circumstances. Service on boards or committees of other organizations should be consistent with the company’s conflict of interest standards. Additionally, directors are expected to advise the chairman of the board, the lead independent director and the chair of the governance committee prior to accepting any other public company directorship or any assignment to the audit committee or compensation committee of the board of directors of any public company of which such director is a member.

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Board and Committee Evaluation Process

Our board and each of its committees have a robust annual self-evaluation process to ensure that they are performing effectively and in the best interests of the company and its stockholders. The governance committee oversees this annual performance evaluation process. The governance committee periodically reviews the evaluation process and revises as appropriate. In 2020, like in previous years, the multi-step evaluation process was conducted using written board and committee self-assessment questionnaires. However, in March 2021, following a review of the evaluation process by the lead independent director and the new chair of the governance committee, the format of the evaluation process was changed from written board and committee self-assessment questionnaires to one-on-one director discussions conducted by the lead independent director. The board will use the revised multi-step process as summarized in the chart below for the 2021 evaluation process.

Director Candidates Submitted by Stockholders

Non-Proxy Access Nominations

The governance committee will consider candidates proposed for nomination by our stockholders. Stockholders may propose candidates by submitting the names and supporting information to: Corporate Secretary, Freeport-McMoRan Inc., 333 North Central Avenue, Phoenix, Arizona 85004. Supporting information should include (a) the name and address of the candidate and the proposing stockholder; (b) a comprehensive biography of the candidate and an explanation of why the candidate is qualified to serve as a director taking into account the criteria identified in our corporate governance guidelines; (c) proof of ownership, the class and number of shares, and the length of time that the shares of our voting securities have been beneficially owned by each of the candidate and the proposing stockholder; and (d) a letter from the candidate stating his or her willingness to serve, if elected.

In addition, our by-laws permit stockholders to nominate candidates directly for consideration at next year’s annual meeting of stockholders. Any non-proxy access nomination must be in writing and received by our corporate secretary at our principal executive office no later than March 10, 2022. If the date of next year’s annual meeting is moved to a date more than 90 days after or more than 30 days before the anniversary of this year’s annual meeting, the nomination must be received no later than the later of 90 days prior to the date of the 2022 annual meeting or 10 days following the public announcement of the date of the 2022 annual meeting. Any stockholder submitting a non-proxy access nomination under our by-law procedures must include (a) all information relating to the nominee that is required to be disclosed in solicitations of proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such nominee’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), (b) the name and address (as they appear on the company’s books) of the nominating stockholder and number of shares directly or indirectly beneficially owned by such stockholder, and (c) all other information required by our by-laws. Nominations should be addressed to: Corporate Secretary, Freeport-McMoRan Inc., 333 North Central Avenue, Phoenix, Arizona 85004.

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Proxy Access Nominations

Our by-laws also contain a proxy access provision approved by our stockholders in 2016 that permits the following:

A stockholder, or a group of up to 20 stockholders, owning 3% or more of our outstanding common stock continuously for the three years prior to the date of submission of a notice nominating a candidate for director and continuing up to the date of the annual meeting				Can nominate and include in the company’s proxy materials stockholder nominees for election to the board constituting the greater of (a) two stockholder nominees or (b) 20% of the total number of directors in office as of the last day nominations of stockholder nominees may be submitted, rounded down to the nearest whole number, provided that the nominating stockholder(s) and the nominee(s) satisfy the requirements specified in our by-laws

Any director nomination pursuant to our proxy access by-law must be in writing and received by our corporate secretary at our principal executive office no later than December 23, 2021. If the date of next year’s annual meeting is moved to a date more than 30 days after or 30 days before the anniversary of this year’s annual meeting, the nomination must be received no later than the later of 180 days prior to the date of the 2022 annual meeting or 10 days following the public announcement of the date of the 2022 annual meeting. Any stockholder submitting a nomination under our proxy access by-law procedures must comply with the procedure, notice and information requirements in Article IV, Section 12 of our by-laws. Nominations made pursuant to our proxy access by-law should be addressed to: Corporate Secretary, Freeport-McMoRan Inc., 333 North Central Avenue, Phoenix, Arizona 85004.

Communications with the Board

The board believes that senior management speaks for the company. Individual board members may, from time to time, meet or otherwise communicate with the company’s stakeholders at the request of the board or senior management in compliance with applicable policies. Stockholders or other interested parties may communicate directly with one or more members of the board including the lead independent director, or the independent directors as a group, by writing to the director or directors at the following address: Freeport-McMoRan Inc., Attn: Board of Directors (or the name of the individual director or directors), 333 North Central Avenue, Phoenix, Arizona 85004. The communication will be forwarded to the lead independent director of the board or the appropriate director or directors for response.

Availability of Corporate Governance Documents

Stockholders may view our audit, compensation, governance and corporate responsibility committee charters on our website at fcx.com under “About Us – Corporate Governance – Board Committees and Charters.” Stockholders may view our corporate governance guidelines (including our director independence standards set forth in Appendix A to our corporate governance guidelines) and principles of business conduct on our website at fcx.com under “About Us – Corporate Governance – Governance Documents.” These documents are available in print upon request. Amendments to or waivers of our principles of business conduct granted to any of our directors or executive officers will be published promptly on our website. Information on our website is not and should not be considered a part of this proxy statement.

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STOCK OWNERSHIP

Director and Executive Officer Stock Ownership Guidelines

To promote greater alignment with our stockholders and reinforce the importance of stock ownership and long-term focus, we have stock ownership guidelines applicable to our non-management directors and executive officers.

The value of the stock ownership is calculated based on the three-year trailing average month-end stock price. Shares of our common stock currently owned and not pledged, including shares issuable upon the vesting of outstanding time-vested RSUs and shares held in employee benefit plans and individual retirement accounts, count as stock owned for purposes of the stock ownership guidelines. Shares held in trust may also be included; however, due to the complexities of the trust laws, the decision to include the shares is made on a case-by-case basis after reviewing the nature of the specific trust involved and considering whether the individual has maintained a pecuniary interest in the shares. Common stock underlying PSUs and other performance-based equity awards will not be counted towards the target ownership level until such shares are earned and issued, nor will shares owned on behalf of a spouse or children.

Until the target ownership level is met, executive officers shall retain 50% of the net, after-tax shares of FCX common stock received in connection with any equity-based awards granted by FCX, and non-management directors shall retain 100% of the shares of FCX common stock they receive in connection with any equity-based awards granted by FCX. Once the target ownership level is met, such executive officers and non-management directors are free to sell FCX shares in accordance with the requirements of FCX’s Insider Trading Policy, as applicable, provided their holdings do not fall below the target ownership level. If, after achieving the applicable target level of ownership, an executive officer or non-management director subsequently falls out of compliance with these guidelines (including as a result of a decline in our stock price), the applicable retention requirement described above will once again apply. As of the record date, our executive officers and all of our non-management directors, except for our newest directors, Messrs. Abney and Dudley, who joined the board in April 2021, and Mr. Ford, who will retire as a director effective as of the date of our 2021 annual meeting, exceeded their target ownership levels.

Stock Ownership of Directors and Executive Officers

We believe that it is important for our directors and executive officers to align their interests with the long-term interests of our stockholders. We encourage stock accumulation through the grant of equity incentives to our directors and executive officers and through stock ownership guidelines applicable to our directors and executive officers.

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The table below shows the amount of our common stock beneficially owned as of April 12, 2021, by each of our current directors, our director nominees, our named executive officers (NEOs), and our current executive officers and directors as a group. Unless otherwise indicated, all shares shown in the table below are held with sole voting and investment power.

*         Ownership is less than 1%.

**       Recently appointed to the board in April 2021.

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Hedging and Pledging Policies

Our insider trading policy prohibits our executives and directors from entering into any hedging arrangements with respect to our securities and limits the ability of our executives and directors to pledge our securities. See “Executive Officer Compensation – Compensation Discussion and Analysis” for more information.

Stock Ownership of Certain Beneficial Owners

The table below shows persons known to us to be the beneficial owner of more than 5% of our outstanding shares of common stock as of April 12, 2021.

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PROPOSAL NO. 1:    ELECTION OF DIRECTORS

In February of 2021, our former non-executive chairman, Mr. Ford, announced his intention to retire as a director effective upon the expiration of his current term at the annual meeting, at which time the size of the board will decrease to seven directors. We are immensely thankful to Mr. Ford for his leadership, legacy of service, and leading independent oversight by our board.

Upon the recommendation of the governance committee, the board has nominated seven directors for election at our 2021 annual meeting to hold office until our next annual meeting and the election of their successors. All of the nominees currently serve as directors of the company. Each nominee has consented to being named as a nominee in this proxy statement and to serve as a director if elected. The persons named as proxies on the proxy card intend to vote your proxy for the election of each such nominee, unless otherwise directed. If, contrary to our expectations, any nominee is unable to serve or for good cause will not serve, your proxy will be voted for a substitute nominee designated by the board or the board may reduce its size.

Our director nominees represent a range of tenures and overall experience, which contributes to a variety of perspectives and facilitates transition of institutional knowledge from longer-serving members to newer members of our board. We believe this balanced composition is in the best interests of our company and our stockholders, as our industry and strategic initiatives often have prolonged lifecycles, and it is therefore helpful to have seasoned directors who are familiar with our company and can draw on past experience and expertise balanced with newer directors who bring fresh perspectives. The experience, qualifications, attributes and skills that led the board to conclude that each of the nominees should serve as a director for the company are set forth in the table and bios on the following pages.

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Experience, Qualifications, Attributes and Skills

Why is this important to FCX?

Senior leadership experience

Broad experience in senior leadership positions, including managing a global business, provides informed and practical insights in developing and implementing business strategy, maintaining effective, sustainable and safe operations, and driving growth in order to achieve our strategic goals.

✓

✓

✓

✓

✓

✓

Accounting/ financial expertise

Experience as an accountant, auditor, financial advisor or other similar experience is critical to oversight of the preparation and audit of our financial statements and compliance with various related regulatory requirements and standards.

✓

✓

✓

Public company board experience

Directors who serve or have served on the boards and board committees of other public companies demonstrate a deep understanding of risk oversight, corporate governance standards and best practices of public company boards and board committees.

✓

✓

✓

✓

✓

✓

Operational management/risk management

Experience in operational matters and requirements assists the board in understanding the issues that the company may face in its global activities and operations, environmental management, risk management, strategic planning, cybersecurity and labor relations.

✓

✓

✓

✓

✓

✓

International business/global affairs

Experience in international business/global affairs or experience related to global economic trends yields an understanding of geographically diverse business environments, regulatory matters, economic conditions and cultural perspectives that informs our global business and strategy and enhances our international operations.

✓

✓

✓

✓

✓

✓

Natural resources, mining, metals industry experience

Natural resources, mining, metals or other extractives industry experience assists in understanding our business drivers, operations, key performance indicators and competitive environment.

✓

✓

✓

Capital markets/ banking

Experience overseeing capital markets and banking transactions provides the knowledge and skills necessary to evaluate and oversee the company’s design and implementation of financing and capital allocation strategies.

✓

✓

✓

✓

Sustainability

Sustainability experience supports our commitment to meeting the highest standards of environmental stewardship across our operations, respecting human rights in all of our business practices, and prioritizing the health, safety and well-being of our workforce and host communities where we operate.

✓

✓

✓

✓

✓

✓

Government, legal and/or regulatory compliance

Government, legal and regulatory compliance experience offers valuable insight into the impact of laws, rules, regulations, and other governmental actions and decisions on our company and our industry.

✓

✓

✓

✓

✓

Demographics

Tenure (Years)

0.0

14.5

0.0

7.3

14.0

1.5

7.3

Age (Years)

65

74

65

66

71

61

59

Gender (Male/Female)

M

M

M

F

M

M

F

Race/Ethnicity

African American/Black (Not Hispanic or Latino)

✓

White (Not Hispanic or Latino)

✓

✓

✓

✓

✓

✓

All information current as of the record date, April 12, 2021.

See “Corporate Governance – Director Nominations and Qualifications” for more information.

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Vote Required to Elect Director Nominees

Under our by-laws, in uncontested elections, directors are elected by a majority of the votes cast, meaning a candidate for director is elected if the votes in favor of his or her election exceed the votes against his or her election. In contested elections where the number of nominees exceeds the number of directors to be elected, directors are elected by a plurality vote, meaning that the director nominees who receive the most votes will be elected.

In an uncontested election, any nominee for director who receives a greater number of votes “against” his or her election than votes “for” such election will be required to promptly tender his or her resignation to the board. The governance committee will recommend to the board whether to accept or reject the tendered resignation. The board will act on the governance committee’s recommendation and publicly disclose its decision within 90 days from the date of the annual meeting of stockholders. Any director who tenders his or her resignation will not participate in the committee’s recommendation or the board action regarding whether to accept or reject the tendered resignation.

In addition, if each member of the governance committee fails to be elected at the same election, the independent directors who were elected will appoint a committee to consider the tendered resignations and recommend to the board whether to accept or reject them. Any vacancies on the board may be filled by a majority of the directors then in office. Each director elected in this manner will hold office until his or her successor is elected and duly qualified. See “Questions and Answers About the Proxy Materials, Annual Meeting and Voting” for more information.

Board of Directors’ Recommendation on Proposal No. 1

Information About Director Nominees

Included below is certain information current as of the record date, April 12, 2021, with respect to the director nominees, including information regarding business experience, director positions with other public companies held currently or at any time during the last five years, and the experiences, qualifications, attributes and skills that led the governance committee and the board to determine that such person should be nominated at our 2021 annual meeting of stockholders to serve as a director of the company. Unless otherwise indicated, each person has been engaged in the principal occupation shown for the past five years.

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EXECUTIVE OFFICER COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis, or CD&A, describes and analyzes our executive compensation philosophy and program in the context of the compensation paid during the last fiscal year to our CEO, our CFO, and our one other executive officer during 2020 (collectively referred to as our NEOs), namely:

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Executive Summary

2020 Performance Highlights

COVID-19 Response

We are deeply committed to supporting the health, safety and well-being of our people, which was further emphasized as the COVID-19 pandemic created unprecedented challenges for our workforce and their families, our host communities and indigenous neighbors, and for society at large. Our global team responded to these challenges in an exceptional fashion, safeguarding our people, communities and assets as we executed and delivered on our clearly defined strategy. Further, our COVID-19 response included the following actions in connection with our executive compensation program:

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2020 Changes to Executive Compensation Program

Stockholder Engagement and Say-on-Pay

Our board has a long history of seeking our stockholders’ feedback regarding our practices, including our executive compensation program, and highly values the insights we receive through this open dialogue. Annually, members of our board, including the chair of the committee, and senior management conduct a multi-stage stockholder engagement program to ensure we understand the perspectives and expectations of our stockholders.

During 2020, we sought meetings with 30 stockholders representing 52% of our outstanding common stock, and engaged with 19 stockholders representing 42% of our outstanding common stock. In these meetings, the key compensation-related topics we discussed with stockholders included our compensation program structure and practices, the company’s compensation actions in response to the COVID-19 pandemic, and how ESG is considered in compensation. During these meetings, we received feedback in support of our executive compensation programs.

See “Stakeholder Engagement” on page 6 for a full description of our comprehensive engagement efforts.

Our stockholders also have the opportunity each year to cast an advisory “say-on-pay” vote on our NEO’s compensation. At our 2020 annual meeting, a majority of our stockholders (87%) expressed support for our executive compensation programs.

Stockholder engagement and the outcome of our annual say-on-pay vote will continue to inform our compensation decisions. Our stockholders have the opportunity to vote on our executive compensation at the annual meeting (see Proposal No. 3 on page 58 for more information).

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2020 Target Direct Compensation

Our executive compensation program is significantly performance-based – linking executive pay, company performance and results for stockholders – and is appropriately balanced with short- and long-term measures. The primary components of our executive compensation program are (1) base salary, (2) annual incentive awards and (3) long-term incentive awards (which we collectively refer to as our executives’ “direct compensation”). The annual incentive awards and long-term incentive awards, which comprise 88% of our CEO’s target direct compensation, are at-risk and based on measurable performance objectives and increases in our stock price.

2021 Senior Management and Compensation Structure

In February 2021, in connection with Mr. Ford’s announcement of his upcoming retirement from our board and the position of non-executive chairman, the board appointed Mr. Adkerson chairman of the board and CEO, and Ms. Quirk assumed the role of president in addition to her CFO responsibilities. In connection with these new appointments and the expanded duties and responsibilities for each executive, the committee increased the target compensation for Mr. Adkerson and Ms. Quirk for 2021, and determined that a greater percentage of Mr. Adkerson’s target compensation should be allocated to performance-based compensation, as follows:

Compensation Governance and Best Practices

Our executive compensation program is designed and managed by the independent compensation committee of our board. Structuring a compensation program is a complex process that includes weighing various possible incentives and associated risks, assessing the competitive environment for executive talent, and understanding the views and perspectives of various constituencies. In addition to seeking input from stockholders as noted above, the committee also seeks input from its independent compensation consultant and strives to incorporate compensation “best practices” into our program design.

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We Are Committed To:

We Reject:

Executive Compensation Philosophy

The fundamental principles of our company’s executive compensation philosophy are to:

In order to achieve these goals, our committee believes that not only should a significant portion of the executive officers’ compensation be performance-based, but also that such compensation should correspond to the key measures used by our stockholders in assessing our company’s value and driving future growth.

Under our executive compensation program, the primary elements of the performance-based pay are (a) awards under our AIP, which uses three categories of performance metrics: (1) financial, (2) operational, and (3) ESG, and (b) awards under our LTIP, which focus on our achievements with respect to ROI, a key financial metric, as well as relative and absolute TSR and stock price appreciation.

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Principal Components of Executive Compensation

The principal components of executive officer compensation for 2020 are summarized below: