UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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:
	Preliminary Proxy Statement
	Confidential, for Use of the Commission Only (as permitted by Rule 14A-6(E)(2))
	Definitive Proxy Statement
	Definitive Additional Materials
	Soliciting Material under §240.14a-12

KBR, INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):
	No fee required.
	Fee paid previously with preliminary materials.
	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

People. Passion. Progress.

 

The story of KBR is one about people using their passion and turning it into progress.

 

People are the beating heart of KBR.

 

Every day, around the world, our people go above and beyond to help solve the most important challenges of our time and to help our customers accomplish their most critical objectives.

 

It takes a commitment — a commitment driven by our passion.

 

You can see that passion in everything we do, from the solutions we provide, to the work we do serving our communities, to the way we work together to be a safer and more inclusive, diverse and sustainable company.

 

The result is progress you can see and touch.

 

We’re delivering science, technology and engineering solutions that are changing the world. We’re making good on our ESG commitments and helping our customers do the same. We’re building a culture where every voice is heard and where every person can feel like they belong.

 

It’s a story we’ve been telling for more than a hundred years now.

 

And it’s only just begun.

STUART J. B. BRADIE President and Chief Executive Officer     I’m proud to report we were carbon neutral for the second consecutive year.   $7.3B IN REVENUE (27% revenue growth over 2020)   32% OF REVENUE WAS FOCUSED ON SUSTAINABILITY

April 4, 2022   Dear KBR, Inc. Stockholders,   The word “unprecedented” has been often used to describe global events of the past two years. As I write this, a stunned world watches as the situation unfolds in the wake of the Russian invasion of Ukraine. All of us at KBR join with millions of people praying for a swift and peaceful conclusion to that conflict.   Of course, previously, it was COVID-19 that controlled our collective narrative and changed our lives in so many ways. In May 2020, I wrote to our employees that I believed the enduring lessons that all of us at KBR would take away from the pandemic would be lessons of community and adaptability. Two years on, I’m proud and humbled that they have proved me right. Day after day, our people have moved in lockstep as one team of teams. They have executed on our mission of delivering solutions that are helping solve some of the greatest challenges of our time and helping customers achieve their most critical objectives, and ultimately creating value for our stakeholders. And they have driven our strategic evolution into an agile, forward-leaning, sustainability focused business.   It is therefore my pleasure to share with you this Proxy Statement that is a record of our people, their passion and the progress that would not be possible without them.   Last year, that progress was evident across every area of our business. Our people once again delivered outstanding financial and operational performance, with significant increases in gross profit, operating income, adjusted EBITDA and adjusted EPS compared to 2020. We recorded $7.3 billion in revenue, a 27% increase over the previous year. And we delivered 1.2x book to bill across the business, with more work to come in the pipeline. Some of the highlights contributing to these numbers were the more than $800 million in task orders under the United States Department of Defense’s (DoD) Information Analysis Center Multiple Award Contract vehicle and our support of the DoD’s historic humanitarian effort, Operation Allies Welcome. It was our privilege to be called upon by the DoD to help facilitate the rapid development of vital infrastructure needed to accommodate tens of thousands of displaced Afghans who had endured so much, including many who worked alongside us in theatre. We recorded $7.3 billion in revenue, a 27% increase over the previous year   I’m proud to report we were carbon neutral for the second consecutive year   Last year, approximately 32% of our revenue was focused on sustainability   Our aim is to be a magnet for diverse talent that is known for a culture of belonging and equality   KBR was one of 333 global companies to appear on Fortune magazine’s list of the World’s Most Admired Companies   Thanks to our people’s commitment to our Zero Harm culture, we recorded another consecutive year of industry-leading health, safety, security and environment (HSSE) performance, with a record of incident-free days (324 for 89%) and a total recordable incident rate of 0.11. And we made tremendous strides on our sustainability agenda, which is driven by our deep commitment to environmental, social and governance (ESG) principles. I’m proud to report we were carbon neutral for the second consecutive year, and we’ve made significant progress in our Net-Zero Project, which focuses on reducing KBR’s emissions through science-based targets related to areas such as our supply chain, carbon management at our facilities, energy efficiency in travel, and much more.   In addition to meeting our own sustainability objectives, we’re using our technology and expertise to help our customers meet their goals. Last year, approximately 32% of our revenue was focused on sustainability, with $1 billion directed at improving or mitigating environmental impact and $0.8 billion directed at reducing climate change. This included multiple contract and study awards for our groundbreaking, disruptive Hydro-PRT™ plastics recycling technology, which effectively closes the loop on plastic waste and creates a true plastics circular economy. We won a contract for an innovative project that will combine our proprietary K-GreeN® green ammonia process with renewable solar to deliver the world’s first commercial-scale

Notice of Annual Meeting of Stockholders

We invite you to attend KBR’s virtual annual stockholders’ meeting and act upon the following matters:
1. Elect as directors the ten nominees named in the attached proxy statement. 2. Consider and act upon an advisory vote to approve the named executive officer compensation as described in the Compensation Discussion and Analysis. 3. Ratify the appointment of KPMG LLP as the independent registered public accounting firm to audit KBR’s consolidated financial statements for the year ending December 31, 2022. 4. Transact any other business that properly comes before the meeting or any adjournment or postponement of the meeting.   The Proxy Statement that follows describes these items.	Place The Annual Meeting will be completely virtual and only conducted via live webcast at virtualshareholdermeeting.com/KBR2022. There will be no physical meeting location.
	When Wednesday May 18, 2022
	Time 9:00 a.m. Central Daylight Time

By Order of the Board of Directors, April 4, 2022

Adam Kramer

Vice President, Corporate Secretary & Sustainability

The record date for determining which stockholders are entitled to cast votes at the virtual Annual Meeting and at any adjournment or postponement of the meeting is Friday, March 25, 2022.

How to Vote

Via the Internet at proxyvote.com(1)		Call toll-free (US/Canada) at 1-800-690-6903(1)		CHECK OUT OUR 2022 NOTICE OF ANNUAL STOCKHOLDER MEETING, ONLINE PROXY STATEMENT, ANNUAL REPORT AND SUSTAINABILITY REPORT AT:   proxyvote.com   kbr.com/proxy   kbr.com/annualreport   kbr.com/ sustainabilityreport
Mail your signed proxy card.		Virtually during the Annual Meeting through virtualshareholdermeeting.com/KBR2022. See page 92 for instructions.

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Proposals Requiring Your Vote

	Election of Directors to the Board	Board Recommends	FOR EACH NOMINEE		P.18
	Advisory Vote to Approve the Named Executive Officer Compensation	Board Recommends	FOR		P.48
	Ratify KPMG LLP as the Independent Registered Public Accounting Firm	Board Recommends	FOR		P.90

About KBR

www.kbr.com

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Business Highlights

Stuart Bradie, President and CEO of KBR, remarked, “KBR had a stellar 2021 delivering significant progress toward our 2025 growth strategy. Throughout the year, our Team of Teams posted outstanding performance across all key metrics: organic revenue growth, earnings expansion, cash generation, new program wins, and Zero Harm. We extended our high-end capabilities in attractive, growing end markets across international defense and renewable energy with the acquisition of Frazer-Nash Consultancy, and we formed important alliances to advance groundbreaking technology to close the circular plastics loop and make carbon-free energy a reality.”

Stuart Bradie, President and CEO

Completed Strategic Frazer-Nash Consultancy Acquisition Enhances highly differentiated capabilities internationally. Compelling renewable energy suite fits nicely with KBR’s commitment to help our customers achieve their own ESG and sustainability objectives.		Operation Allies Welcome (“OAW”) Supported OAW, a historic humanitarian effort for the U.S. Department of Defense, by helping develop vital, temporary infrastructure at military bases in the U.S. and abroad to accommodate thousands of displaced Afghans.
Achieved Carbon Neutrality for a Second Consecutive Year On path toward net zero carbon by 2030. KBR's commitment to sustainability includes leveraging our expertise to help others achieve their sustainability goals, thus creating value for all stakeholders.		One of The Word's Most Admired Companies 2022 Fortune Magazine KBR is one of 333 global companies to receive this prestigious award. KBR scored particularly well in areas of innovativeness and social responsibility to the community and environment.

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Financial Highlights

“We saw significant increases in gross profit, operating income, adjusted EBITDA, and adjusted EPS,” noted Mr. Bradie. “We delivered a 1.2x book-to-bill across the business in Q4, and I’m pleased to say there is more work in the pipeline than ever.”

DIVIDENDS PAID OUT IN 2021		TSR PEER GROUP 1-YEAR RANKING		QUARTERLY DIVIDEND INCREASE IN 2021
		2021
$61MM		1ST		10%

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Sustainability Highlights

As the global pandemic persisted throughout the year, KBR’s robust safety protocols, founded on our Zero Harm culture, provided our people with a safe environment so they could continue to deliver exceptional service to our customers. The success of Zero Harm in 2021 is reflected in our total recordable incident rate, which dropped to 0.11, and continuous improvement in our Zero Harm Days achieved.

2021 was also the year we ramped up our carbon reduction planning and established a Net Zero Emissions team to develop our Net Zero Roadmap in line with the criteria and recommendations of the Science-Based Targets Initiative. We have invested to remain carbon-neutral as we continue our journey towards net zero by 2030.

As our sustainability status matures, we continue to invest in, innovate, and develop our customer-facing sustainable solutions and technologies, which have generated increased sustainability-focused revenue. Some of these solutions include blue and green ammonia; carbon capture utilization and storage; hydrogen expertise; decarbonization planning; technology to support the plastics circular economy; renewables and renewable biofuels; digitalization and sustainability; sustainable defense planning; clean and green process technologies; and environmental and sustainability services.

Although our community outreach activities remained challenging over the COVID-19 months, we continued to support schools in Singapore and the U.K. via our sustainability education outreach program, One Ocean, and our KBR Charity Golf Tournament, which raised $710,000.

More information on Sustainability and KBR is provided on page 38.

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Information About the Board of Directors

The KBR Board of Directors is currently composed of ten directors with an extensive variety of skills, expertise and experience who guide and support our strategy to create long-term value for our stockholders and other stakeholders. All of our directors are independent except Mr. Bradie, our CEO.

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	Board and Committee Meeting Attendance Rate	Other Public Company Boards	Age	Director Since	Audit Committee	Compensation Committee	Cybersecurity Committee	Nominating and Corporate Governance Committee	Sustainability and Corporate Responsibility Committee
Mark E. Baldwin	97%	2	68	2014
Stuart J. B. Bradie	97%	0	55	2014
Lynn A. Dugle	97%	3	62	2020
Lester L. Lyles	100%	0	75	2007
Wendy M. Masiello	100%	0	63	2017
Jack B. Moore	82%	2	68	2012
Ann D. Pickard	100%	2	66	2015
Carlos A. Sabater	100%	1	63	2021
Umberto della Sala	97%	0	73	2015
Vincent R. Stewart	100%	1	63	2021
Number of Meetings					9	6	1	5	2
Director Attendance					97%	100%	100%	94%	95%
Committee Member Attendance					100%	100%	100%	100%	100%

Chairman of the Board

Chairperson

Member

Audit Committee Financial Expert

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Governance Highlights

Our Board of Directors believes that good corporate governance and transparent communication with our stockholders and other stakeholders are essential for KBR’s long-term success.

Focus on Accountability

Independent and Engaged Board

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Compensation Highlights

Our compensation program links pay to performance to align our senior executives’ interests with those of our stockholders. Consistent with our business strategy, our senior executives’ individual Key Performance Indicators (“KPIs”) are focused on growth and expansion, reducing costs, and increasing efficiencies and cash flow performance. The Compensation Committee set rigorous targets for 2021 for both the short-term incentive (“STI”) and long-term incentive (“LTI”) plans.

To emphasize the link between pay and KBR's financial and ESG performance, our Compensation Committee made changes in 2020 and 2021 to the metrics of our STI plan. These metrics remained a strong reflection of our pay-for-performance strategy this year.

The changes in 2020 were to:

The change in 2021 was to:

In response to our stockholders’ comments, our Compensation Committee:

Aligned with our rigorous Executive Compensation program, our CEO’s base salary has increased only three times since he was appointed in 2014 to reward him for his demonstrated success at:

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Proposal No. 1 — Election of Directors

At our 2022 Annual Meeting of Stockholders, ten directors are to be elected to hold office until the 2023 Annual Meeting of Stockholders. All directors are elected annually, with each nominee standing for election to a one-year term. The members of our Board of Directors hold office until their successors are elected and qualified or until their earlier resignation or removal. Mr. Umberto della Sala has elected to retire and is not standing for re-election. To fill the vacancy created by Mr. della Sala’s retirement, our Board of Directors nominated Sir John A. Manzoni KCB for election at our 2022 Annual Meeting of Stockholders. Sir John was identified as a qualified director candidate by an independent executive search firm engaged by our Nominating and Corporate Governance Committee. For more information on how KBR selects and recommends director candidates, see “Process for Selecting New Directors.”

Each nominee has indicated a willingness to serve, if elected. If any nominee declines to serve or becomes unavailable for any reason, or if a vacancy occurs before the election, the proxies may be voted for such substitute nominee as the Board of Directors may designate. We have no reason to believe that any of the nominees will be unable to serve if elected. Directors are elected by a majority of votes cast (the number of shares voted “For” a candidate must exceed the number of shares voted “Against” the candidate). Shares present but not voting on the election of directors will be disregarded, except for quorum purposes, and will have no effect on the outcome of the vote.

Our Board

A top priority of our Board and Nominating and Corporate Governance Committee is ensuring that our Board of Directors is composed of directors who:

As shown below, the incumbent directors have a wide range of skills and experience that enable the Board to effectively oversee management and the business of KBR.

9	10	10
FINANCIAL EXPERIENCE	LEADERSHIP	RISK MANAGEMENT
An understanding of finance, financial statements and financial reporting processes is an important skill set that enables our directors to better understand what drives KBR’s performance and foresee the likely strategic outcomes of Board decisions.	Experience in significant executive leadership positions is essential to guide and direct our leaders and strategically help move KBR forward.	Risk management is an integral component of our strategy, culture and business operations. Directors with this experience help to ensure that our policies and procedures are consistent with our risk appetite.
10	5	10
INDUSTRY EXPERIENCE	GOVERNMENT	GLOBAL EXPERIENCE
Directors with significant industry experience understand KBR’s risks and opportunities, the regulatory environment, and key industry players, which helps them effectively shape and advance our strategy.	Directors with government contracting and operational experience play a significant role in supporting our strategic shift to diversifying and expanding our government business.	Directors with diverse global experience can help KBR strategically leverage our global footprint and respond quickly to changes in global markets.

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The Board of Directors recommends that you VOTE FOR the election of all the director nominees listed below. Properly dated and signed proxies, and proxies properly submitted over the Internet and by telephone, will be so voted unless stockholders specify otherwise.

The following biographical information about the director nominees is as of March 25, 2022.

Nominees for Director

	MARK E. BALDWIN
	Age: 68 | Director since: 2014 | Independent
	Board Committees: Audit Committee (Chair) and Sustainability and Corporate Responsibility Committee	Other Public Company Boards: Nine Energy Service, Inc. (Audit Chair) and TETRA Technologies, Inc. (Audit Chair)
Key Qualifications and Skills:
Prior Business Experience		Education
• Executive Vice President and Chief Financial Officer of Dresser-Rand Group, Inc. • Executive Vice President, Chief Financial Officer, and Treasurer of Veritas DGC Inc. • Operating Partner at First Reserve Corporation • Executive Vice President and Chief Financial Officer for NextiraOne • Chairman of the Board and Chief Executive Officer for Pentacon Inc. • Variety of finance and operations positions with Keystone International Inc., including Treasurer, Chief Financial Officer, and President of the Industrial Valves and Controls Group		• B.S. (Mechanical Engineering), Duke University • M.B.A., Tulane University • Graduate of the Stanford Executive Program

	STUART J. B. BRADIE
	Age: 55 | Director since: 2014	Other Public Company Boards: None
	Board Committees: None
Key Qualifications and Skills:
Current Business Experience		Education
• President and Chief Executive Officer, KBR, Inc. (since 2014) Prior Business Experience • Group Managing Director — Operations and Delivery for WorleyParsons • Managing Director across Europe, Africa, Asia and the Middle East for WorleyParsons • Managing Director for PT Kvaerner Indonesia • Country Manager for Kvaerner Philippines • Global experience across over 40 countries in the hydrocarbons, mining and chemicals, power and infrastructure sectors		• B.S. (Mechanical Engineering), Aberdeen University • M.B.A., Edinburgh Business School, Heriot-Watt University

Finance

Leadership

Risk Management

Industry /Market

Government

Global

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	LYNN A. DUGLE
	Age: 62 | Director since: 2020 | Independent
	Board Committees: Nominating and Corporate Governance Committee (Chair), Compensation Committee, and Cybersecurity Committee   Other Public Company Boards: First Light Acquisition Group, Inc. (Advisor Partner); Micron Technology, Inc. (Finance); and TE Connectivity Ltd. (Audit)	Current Affiliations: Avantus Federal (Member), The Board on Army Research and Development of the National Academy of Sciences (Member), and ZOE Empowers (Member)   Previous Affiliations: The B2B Project (Member) and Intelligence and National Security Alliance (Member)
Key Qualifications and Skills:
Prior Business Experience		Education
• Chairman, President and Chief Executive Officer at Engility Holdings Inc. • Corporate Vice President and President of Intelligence, Information and Services at Raytheon Company • Vice President, Engineering, Technology and Quality, Network Centric Systems at Raytheon Company • Vice President and General Manager, Product, Systems Software Division at ADC Telecommunications, Inc. • General Manager, Cable Systems Division at ADC Telecommunications, Inc. • Vice President, Support Engineering and Quality for the Defense Systems and Electronics Group at Texas Instruments, Inc.		• B.A. (Spanish), Purdue University • B.S. (Technical Management), Purdue University • M.B.A., University of Texas at Dallas

	GENERAL LESTER L. LYLES, USAF (RET.)
	Age: 75 | Director since: 2007 | Chairman of the Board since: 2019 | Independent
	Board Committees: Cybersecurity Committee and Nominating and Corporate Governance Committee	Current Affiliations: American Institute of Aeronautics and Astronautics (Fellow); Frontier Technology Inc. (Director); National Air and Space Museum Board (Member); National Space Council Users’ Advisory Group administered by NASA (Chairman); JobsOhio (Director); and National Academy of Engineering (Inducted Member)
	Other Public Company Boards: None	Previous Affiliations: Battelle Memorial Institute (Director); Defense Science Board in the Pentagon (Member); General Dynamics Corporation (Director); International Security Advisory Board at the U.S. Department of State (Member); Precision Castparts Corp. (Director); President’s Intelligence Advisory Board in the White House (Member); and United Services Automobile Association (Chair)
Key Qualifications and Skills:
Current Business Experience		Education
• Independent Consultant (since 2003) Prior Business Experience • Retired Four-Star General of the U.S. Air Force • Commander of the U.S. Air Force Materiel Command • Vice Chief of Staff of the Headquarters of the U.S. Air Force • Director of the Ballistic Missile Defense Organization • Commander of the Space and Missile Systems Center		• B.S. (Mechanical Engineering), Howard University • M.S. (Mechanical and Nuclear Engineering), Air Force Institute of Technology Program, New Mexico State University • Defense Systems Management College, Fort Belvoir, Virginia • Armed Forces Staff College, Norfolk, Virginia • National War College, Fort Lesley J. McNair, Washington, D.C. • National and International Security Management Course at Harvard University • Honorary Doctor of Laws degrees from New Mexico State University and Urbana University

Finance

Leadership

Risk Management

Industry /Market

Government

Global

www.kbr.com

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	SIR JOHN A. MANZONI KCB
	Age: 62 | Director Nominee: 2022 | Independent
	Board Committees: Audit Committee and Cybersecurity Committee   Other Public Company Boards: Diageo plc and SSE plc (Chair)	Current Affiliations: Atomic Weapons Establishment (Chair); Chairman Mentors International (Mentor); Saïd Business School at the University of Oxford (Global Leadership Council Member); and World Economic Forum (Global Leader of Tomorrow)
		Previous Affiliations: Accenture Energy (Advisor); Adamant Ventures (Advisor); Aspen Institute Corporate Values Group (Advisor); BP plc (Director); Leyshon Energy Ltd (Chair); SABMiller plc (Director); and Stanford University Graduate School of Business (Advisor)
Key Qualifications and Skills:
Prior Business Experience		Education
• Permanent Secretary for the Cabinet Office, U.K. Government • Chief Executive of the Civil Service, U.K. Government • Chief Executive of the Major Projects Authority, U.K. Government • President and Chief Executive Officer at Talisman Energy Inc. • Chief Executive, Refining and Marketing at BP plc • Chief Executive, Gas and Power at BP plc		• B.S. (Civil Engineering), Imperial College London • M.S. (Petroleum Engineering), Imperial College London • M.S. (Management), Sloan Fellow, Stanford University • Honorary Doctorate, Aberdeen University

	LT. GENERAL WENDY M. MASIELLO, USAF (RET.)
	Age: 63 | Director since: 2017 | Independent
	Board Committees: Audit Committee and Sustainability and Corporate Responsibility Committee   Other Public Company Boards: None	Current Affiliations: Acquisition Innovation and Research Center Advisory Panel to the Office of the Under Secretary of Defense for Acquisition and Sustainment (Advisor); Air Force Studies Board of the National Academy of Sciences (Member); EURPAC Service, Inc. (Director); National Contract Management Association (Director); Procurement Round Table (Director); Public Spend Forum (Advisory Council); Rawls College, Texas Tech University (Advisory Council Chair); Rebuilding Together (Director); StandardAero (Director); and Tlingit Haida Tribal Business Corporation (Director)
Key Qualifications and Skills:
Current Business Experience		Education
• Independent Consultant (since 2017) Prior Business Experience • Retired Three-Star General of the U.S. Air Force • Director of the Defense Contract Management Agency • Deputy Assistant Secretary (Contracting), Office of the Assistant Secretary of the Air Force for Acquisition • Program Executive Officer for the Air Force’s $65 billion Service Acquisition portfolio • Deployment to Iraq to lead contracting support for military forces in Iraq and Afghanistan		• B.B.A. (Marketing), Texas Tech University • M.S. (Logistics Management), Air Force Institute of Technology • Defense Systems Management College, Fort Belvoir, Virginia • M.S. (National Resource Strategy), Industrial College of the Armed Forces, Fort Lesley J. McNair, Washington, D.C. • Senior Acquisition Course, Industrial College of the Armed Forces, Fort Lesley J. McNair, Washington, D.C. • Joint and Combined Warfighting School, Joint Forces Staff College, Norfolk, Virginia • Harvard Kennedy School’s Senior Managers in Government

Finance

Leadership

Risk Management

Industry /Market

Government

Global

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	JACK B. MOORE
	Age: 68 | Director since: 2012 | Independent
	Board Committees: Compensation Committee (Chair), Cybersecurity Committee, and Nominating and Corporate Governance Committee	Current Affiliations: American Heart Association (Member); MAM (Memorial Assistance Ministries) (Director); and University of Houston System Board of Regents (Member)
	Other Public Company Boards: Occidental Petroleum Corporation (Independent Vice Chairman; Executive Compensation Chair; Advisory Member; and Corporate Governance and Nominating Member) and ProPetro Holding Corp. (Nominating and Corporate Governance Chair; Audit Member; and Compensation Member)	Previous Affiliations: American Petroleum Institute (Director); Cameron International Corporation (Chair); Rowan Companies plc (Director); United Way of Greater Houston (Executive Committee); and University of Houston’s Board of Visitors (Director)
Key Qualifications and Skills:
Prior Business Experience		Education
• Chairman, President and Chief Executive Officer for Cameron International Corporation • President and Chief Operating Officer for Cameron International Corporation • President, Western Hemisphere of Drilling & Production Systems group for Cameron International Corporation • Vice President and General Manager, Western Hemisphere of Drilling & Production Systems group for Cameron International Corporation • Various management positions at Baker Hughes Incorporated		• B.B.A., University of Houston • Graduate of the Advanced Management Program at Harvard Business School

	ANN D. PICKARD
	Age: 66 | Director since: 2015 | Independent
	Board Committees: Sustainability and Corporate Responsibility Committee (Chair) and Compensation Committee	Current Affiliations: The University of Wyoming Foundation (Budget/Audit) and Chief Executive Women (Member)
	Other Public Company Boards: Noble Corporation plc (Sustainability Chair) and Woodside Petroleum Ltd. (Compensation Member and Sustainability Chair)	Previous Affiliations: Advisory Council of the Eurasia Foundation (Member); Catalyst (Board of Advisors); Global Agenda Council on the Arctic for the World Economic Forum (Member); and Westpac Banking Corporation (Director)
Key Qualifications and Skills:
Prior Business Experience		Education
• Executive Vice President, Arctic for Royal Dutch Shell plc • Executive Vice President and Country Chair, Australia, for Royal Dutch Shell plc • Regional Executive Vice President, Sub Saharan Africa, for Royal Dutch Shell plc • Director, Global Businesses and Strategy and a member of the Shell Gas & Power Executive Committee for Royal Dutch Shell plc • 11-year tenure with Mobil prior to its merger with Exxon • Significant business experience throughout South America, Australia, the countries of the former Soviet Union, the Middle East, and Africa		• B.A., University of California San Diego • M.A., University of Pennsylvania

Finance

Leadership

Risk Management

Industry /Market

Government

Global

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	CARLOS A. SABATER
	Age: 63 | Director since: 2021 | Independent
	Board Committees: Audit Committee and Nominating and Corporate Governance Committee Other Public Company Boards: PDC Energy, Inc. (Audit and Compensation Member)	Current Affiliations: DACF Ltd. (Director) and FIU Foundation (Director) Previous Affiliations: Chamber of Commerce (Director); Florida International University (Director); Kiwanis Club (Director); and YMCA (Director)
Key Qualifications and Skills:
Prior Business Experience		Education
• Senior Global Partner for Deloitte Touche Tohmatsu Limited (“Deloitte”) • Managing Principal, Americas Region for Deloitte • Global Managing Director Audit and Enterprise Risk Services for Deloitte • Various senior leadership and operational roles over the course of a nearly 40-year career with Deloitte		• B.B.A. (Accounting and Finance), Florida International University

	LT. GENERAL VINCENT R. STEWART, USMC (RET.)
	Age: 63 | Director since: 2021 | Independent
	Board Committees: Cybersecurity Committee (Chair) and Audit Committee	Current Affiliations: The Aerospace Corporation (Trustee); Ankura Consulting Group, LLC (Chief Innovation and Business Intelligence Officer); Pine Island Capital Partners (Partner); ShoulderUp Technology Acquisition Corp. (Director); and Stewart Global Solutions, LLC (Chief Executive Officer)
	Other Public Company Boards: American Public Education, Inc. (Audit Chair)	Previous Affiliations:
Key Qualifications and Skills:
Current Business Experience		Education
• Independent Consultant (since 2019) Prior Business Experience • Retired Three-Star General of the U.S. Marine Corps • Deputy Commander at United States Cyber Command • Director of the Defense Intelligence Agency • Commanding General of the U.S. Marine Corps Forces Cyberspace • Director of Intelligence of Marine Corps Intelligence		• B.A. (History), Western Illinois University • M.A. (National Security and Strategic Studies), Naval War College • M.S. (National Resource Strategy), Industrial College of the Armed Forces, National Defense University • Graduate of Executive Development Programs at Harvard University

Finance

Leadership

Risk Management

Industry /Market

Government

Global

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The Following Director with a Term Ending in 2022 is Retiring and Elected Not to Stand for Re-Election

	UMBERTO DELLA SALA
	Age: 73 | Director since: 2015 | Independent
	Board Committees: Compensation Committee and Sustainability and Corporate Responsibility Committee	Current Affiliations: FSI SpA (Chair)
	Other Public Company Boards: None	Previous Affiliations: Ansaldo Energia SpA (Chair and Director); Foster Wheeler AG (Director); Kedrion SpA (Director); Stork Technical Services (Supervisory Board); and Trevi Finanziaria Industriale SpA (Director)
Key Qualifications and Skills:
Prior Business Experience		Education
• President and Chief Operating Officer for Foster Wheeler AG • Interim Chief Executive Officer for Foster Wheeler AG • Various positions of increasing responsibility following start of career as a process engineer in Foster Wheeler’s environmental division		• Laurea in Chemical Engineering from Politecnico di Milano

Finance

Leadership

Risk Management

Industry /Market

Government

Global

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Board and Governance Structure

We are committed to good corporate governance and to effective communication with our stockholders. This section describes our governance policies and practices, and the roles, duties, and responsibilities of the Board of Directors and each of its committees. See the section titled “Corporate Governance Materials” to learn how to find our policies, practices, and committee charters.

Role of the Board of Directors

The Board of Directors represents the interests of our stockholders in maintaining a successful business. Specifically, the Board of Directors oversees the effectiveness of management’s policies and decisions, including the execution of KBR's strategies, with a commitment to enhancing stockholder value over the long term. To this end, Board members are expected to act in the best interests of all stockholders, to be knowledgeable about our businesses, to exercise informed and independent judgment, and to understand general economic trends and conditions, as well as trends in corporate governance.

Our Board Leadership Structure

	General Lester L. Lyles, USAF (Ret.)			Stuart J. B. Bradie
	Chairman of the Board			CEO
	• Oversees CEO succession • Oversees the board evaluation process • Calls meetings of the Board and independent directors • Provides management with feedback regarding the information that is necessary for the independent directors to effectively and responsibly perform their duties • Acts as a liaison between the independent directors and the CEO on sensitive / critical issues			• Sets the strategic direction for KBR • Provides day-to-day leadership over KBR's operations • Focuses on execution of KBR’s business strategy, growth, and development • Sets the tone-at-the-top for the ONE KBR culture • Develops and oversees enterprise-wide initiatives

Our Board is led by a Chairman who is recommended by the Nominating and Corporate Governance Committee and appointed by the full Board. If the Chairman is independent, KBR’s Corporate Governance Guidelines provide for that individual to perform a strong role in Board leadership. An independent (or non-executive) Chairman of the Board is responsible for:

If the Chairman of the Board is not independent, the Board elects an Independent Lead Director, who will have the same authority and responsibilities an independent Chairman would have had.

General Lester Lyles has served as independent, non-executive Chairman of the Board since May 15, 2019. General Lyles has significant board experience, both at KBR and at other public companies. He has served on every one of the Board’s standing committees and has in-depth knowledge of KBR’s history and current business. During General Lyles’s service on the Board, KBR has undergone significant changes, including reorganizing into more strategically-aligned business groups and evolving from a wholly-owned subsidiary with significant support from its former parent company into an independent operating company. The Board believes that General Lyles is well positioned to facilitate communications between the Board of Directors and KBR stockholders.

Our CEO is responsible for the overall management and functioning of the Company. KBR’s Corporate Governance Guidelines provide for two important checks on the CEO’s authority:

KBR’s Board of Directors has determined that its current leadership structure is appropriate at this time.

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Director Independence

Our Corporate Governance Guidelines provide that at least two-thirds of the Board must be independent directors. Directors are considered independent if they are not involved in any material relationships with KBR, either directly or indirectly. Our Corporate Governance Guidelines set forth specific independence standards that are consistent with the requirements of the U.S. Securities and Exchange Commission (“SEC”) and the New York Stock Exchange (“NYSE”).

The Nominating and Corporate Governance Committee periodically reviews KBR’s definition of independence and the Board’s compliance with our independence standards.

All of our directors complete independence questionnaires at least annually. Our Board determines the independence of its members generally, and also considers whether various committee members meet the heightened independence or other requirements prescribed by the NYSE and the SEC. Our Board has determined that all of our current directors are independent except Mr. Bradie, our President and Chief Executive Officer.

Our Board believes that its membership should include no more than two directors who are also employees of KBR, though this number is not an absolute limitation. We believe the Chief Executive Officer should at all times be a member of the Board. Our CEO has been the only executive director since KBR became an independent public company.

Committees of the Board

A substantial portion of the analysis and work of KBR’s Board is done by its five standing committees: the Audit Committee; the Compensation Committee; the Cybersecurity Committee; the Nominating and Corporate Governance Committee; and the Sustainability and Corporate Responsibility Committee. Each of the standing committees is composed entirely of independent directors.

Our Board established the Cybersecurity Committee in August 2021 because of the growing importance of cybersecurity both internally and externally with KBR's clients. The Cybersecurity Committee is chaired by Lt. General Vincent Stewart, USMC (Ret.), who has more than 30 years’ experience in all aspects of cyberspace operations, intelligence, and counterintelligence.

The Board of Directors has approved charters for each of the standing committees that set forth the committees’ respective duties and responsibilities and govern the committees’ actions. These charters are available on KBR’s website, kbr.com, by choosing “Our Company” under the “Who We Are” menu, then selecting “Corporate Governance” and “Board Committees.” Each committee reviews its charter annually and recommends changes, as necessary, to the Board.

The composition, purpose, duties, and responsibilities of each committee are summarized below.

AUDIT COMMITTEE

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COMPENSATION COMMITTEE

CYBERSECURITY COMMITTEE

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NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

SUSTAINABILITY AND CORPORATE RESPONSIBILITY COMMITTEE

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Enterprise Risk Management

ERM Framework

We have a fully integrated, enterprise-wide enterprise risk management (“ERM”) framework. The framework, facilitated by our ERM Lead (who reports to the General Counsel), enhances business resilience by encouraging uncertainty anticipation and resolution at all levels — from project to enterprise, across all business units, globally — in real time, and enables risk-based strategy decisions and value adding communications to stakeholders.

This inter-connected approach is a consistent, scalable, and auditable means for us to identify and manage existing and emerging risks and opportunities, both internal and external, for KBR’s current and future operations, at project, business unit, corporate function, and enterprise levels.

The KBR ERM Framework comprises six phases: Identification, Assessment, Analysis, Mitigation, Monitoring, and Evaluation. This approach helps leadership see KBR’s changing risk profile and enables informed strategy decisions and adjustments, better communications to stakeholders, and a common focus based on consistent and reliable data.

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ERM Program

Risk Management, as one of KBR’s Ten Sustainability Pillars (pictured below and described in the section titled “Our Sustainability Focus”), is key to driving KBR to sustainable business growth. Our resilience, success, and continued evolution depends on our ability to anticipate and respond to the constantly changing risks in our existing and future operating environments. By entrenching ERM principles and practices in our culture and across our operations, we can consistently visualize the entire risk landscape, mitigate threats, capitalize on opportunities, and create value and predictable outcomes.

Every employee is empowered to identify risks and opportunities. Under KBR’s ERM Policy, every risk and opportunity is assigned to an owner, who is accountable for the ongoing management, including the development and implementation of mitigation plans through to successful conclusion.

Risks and opportunities are identified and assessed consistently at the project, business unit, and enterprise levels:

All risks and opportunities are managed on our cloud-based platform, which drives a consistent approach throughout the global business and provides a single source of truth with reporting and data analytics, including ranking and trending available in real time.

KBR’s Executive Leadership Team (“ELT”) convenes for dedicated risk and opportunity reviews at least three times per year. The outputs are reported to our Board of Directors twice per year, and to individual business units and projects on a regular basis. This flow of information facilitates management of risks and opportunities, on an ongoing basis, using the ERM process and tools to provide real time risk-based data.

The ELT review of enterprise risks and opportunities is carried out in the context of the changing risk and opportunity landscape and KBR’s strategy, which is embedded in the process such that strategy and the interconnected risks and opportunities are aligned.

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Board Oversight of ERM

Risk oversight is an integral part of KBR’s Board of Directors’ role; the Board holds discussions regarding risks faced by KBR throughout the year.

The outputs from the ERM Program are formally presented to our Board twice per year. The ERM report includes strategic, operational, HSSE, information technology and cybersecurity, financial, geopolitical, and ESG risks and opportunities, as well as management’s assessment of their likelihood and impact, the perceived trend for each (whether increasing, decreasing, or stable), and the measures being taken to monitor and manage those risks and opportunities.

While our Board has overall oversight responsibility for KBR’s ERM Program, various committees of the Board also have the following responsibilities for risk oversight:

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Management Succession Planning

As required by our Corporate Governance Guidelines, the Board of Directors, with input from the Nominating and Corporate Governance Committee, the Chairman of the Board, and the CEO, regularly reviews KBR’s succession plan and management development programs for all senior management positions. One of the elements that the CEO is evaluated on each year is the robustness of the executive succession plan, including assessment and development of internal candidates for the CEO and top-level executive positions.

The entire Board addresses issues relating to CEO succession planning regularly, and no less than annually, facilitated by the non-executive Chairman of the Board. While the Nominating and Corporate Governance Committee performs the initial review of KBR’s succession plans and makes recommendations to the Board as necessary, the entire Board has primary responsibility for CEO succession planning, and develops both long-term and contingency plans for this purpose. This process necessarily involves developing and reviewing criteria for the CEO position that reflect KBR’s business strategy, and identifying and developing internal candidates or recognizing the need for external candidates, as appropriate.

Board and Committee Evaluations

At the direction of our Nominating and Corporate Governance Committee, our non-executive directors complete annual questionnaires regarding the performance of our Board of Directors as a group and the performance of the Board committees they serve on. The Nominating and Corporate Governance Committee presents the results of the questionnaires, which are compiled anonymously, to our Board at regularly scheduled meetings. These annual performance reviews are intended to enhance the overall effectiveness of our Board and its standing committees.

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Board Refreshment

Process for Selecting New Directors

The Board has delegated to the Nominating and Corporate Governance Committee the duty of selecting and recommending prospective nominees to the Board for approval. The Nominating and Corporate Governance Committee considers suggestions of candidates made by current committee and Board members, KBR management, and stockholders. The Committee also may retain an independent executive search firm to identify candidates for consideration. Stockholders may suggest candidates for nomination by contacting the Nominating and Corporate Governance Committee in the manner provided below under “Contact the Board.”

1	The Committee considers suggestions of candidates made by current committee and Board members, KBR management, and stockholders.
IDENTIFY CANDIDATE
2	The Committee reviews information provided by the person recommending the candidate and the committee’s (and other Board members’) knowledge of the candidate to determine whether to carry out a full evaluation. This preliminary determination is based on the need for additional Board members (or for directors with particular skills or experience) and assesses the likelihood that the candidate will meet the Board membership criteria listed below.
PRELIMINARY REVIEW CANDIDATE INFORMATION
3	If a candidate warrants additional consideration, the Nominating and Corporate Governance Committee may request an independent executive search firm to gather information about the candidate’s background, experience, and reputation, and to report its findings to the committee. After reviewing that report, the committee then determines whether to interview the candidate.
EXTERNAL REPORT BY EXECUTIVE SEARCH FIRM
4	Interviews are carried out by one or more members of the committee and others as appropriate.
INTERVIEW WITH CANDIDATE
5	Once the evaluation and interview are completed, the committee provides feedback and recommendations to the Board. The Board makes a determination of nominees after reviewing that input.
COMMITTEE RECOMMENDATION

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Director Qualifications

Candidates nominated for election or re-election to the Board of Directors should possess the following qualifications:

The Nominating and Corporate Governance Committee is responsible for assessing the appropriate mix of skills and characteristics required of Board members in the context of the needs of the Board at a given point in time. These criteria are periodically reviewed and updated. The Nominating and Corporate Governance Committee may consider diversity in personal background, race, gender, age and nationality when evaluating individual candidates, but KBR does not have a formal policy with regard to any particular aspect of diversity.

Stockholder Engagement

We actively engage with our investors throughout the year. Senior executives met virtually with analysts and investors at our annual Investor Day in March 2021, and our Corporate Secretary reaches out to our largest 25 investors bi-annually.

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Director Orientation and Education

During director orientation, our new directors typically meet with the rest of our Board and senior executives before attending their first Board and committee meetings. These preliminary meetings ensure that our new directors are well-informed about KBR’s current matters in addition to the broad scope of our businesses. Our new directors also visit project sites and attend town hall meetings to gain more in-depth knowledge of our business practices, including Zero Harm.

Continuing education for our directors is both important and necessary due to the fast pace at which business and technology are evolving. Generally, every quarter our Board is presented with an educational program. Recent topics have included cybersecurity, data protection, data privacy, digitalization, internal controls, governance, sustainability, and workplace culture. In addition, our directors participate in continuing education outside KBR (at KBR’s expense) covering a wide range of topics, such as audit matters, board effectiveness, cybersecurity board governance, finance, and strategy and innovation.

Board Practices and Procedures

Attendance at Meetings

Board members are expected to make every effort to attend the meetings of the Board and the committees of the Board on which they serve, as well as annual stockholder meetings. KBR’s directors attended 97% of the aggregate of all meetings of the Board and all meetings of each of the five standing committees during 2021. All of our directors attended our 2021 Annual Meeting of Stockholders.

The Board of Directors meets each year immediately following the Annual Meeting of Stockholders and at least four other times per year. Additional regular meetings are scheduled as needed, and special meetings may be called by the Chairman of the Board, the Chief Executive Officer, the President, the Corporate Secretary, or a majority of the directors in office. KBR’s Bylaws permit action to be taken without a meeting if all members of the Board consent to such action in writing or by electronic transmission. During 2021, the Board of Directors held nine regular meetings and two ad hoc meetings, nine of which were conducted virtually. The Chairman of the Board presides at all Board meetings.

During regular Board meetings, KBR’s independent non-executive directors meet in scheduled executive sessions, presided over by our independent, non-executive Chairman of the Board. During 2021, the non-executive directors met without management five times.

Retirement Policy

Non-management directors may not seek re-election once they reach the age of 75; however, this retirement age may be extended under special circumstances if the Board deems it to be in the best interest of KBR. In 2021, the Board approved the recommendation of the Nominating and Corporate Governance Committee to grant a second 12-month extension to the mandatory retirement age for General Lester Lyles, our independent, non-executive Chairman of the Board, who turned 75 on April 20, 2021. With the second 12-month extension, General Lyles’s retirement from the Board will be effective immediately prior to the KBR annual meeting of stockholders following his 77th birthday; provided, however, that if agreed to by mutual consent, General Lyles may continue to serve on the Board for an additional extended period of time past KBR’s 2023 annual meeting of stockholders. The Board determined in 2020 that it was in the best interest of KBR to delay General Lyles’s mandatory retirement due to the volatile times created by COVID-19, which caused a global health crisis, severely disrupted the economy, and compounded the downturn of the energy market. In addition, the Board believed it was crucial to maintain General Lyles’s leadership and benefit from his incredible knowledge, skills and industry experience in the government and space fields following KBR’s October 2020 acquisition of Centauri, LLC, a leading independent provider of space, directed energy, and other advanced technology solutions to the United States intelligence community and Department of Defense.

Management directors must retire from the Board at the same time they leave employment with KBR unless the Board approves continued service as a director.

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Service on Other Boards

KBR directors may not serve on the boards of directors of more than four other publicly held companies or investment companies. In addition, directors serving on the KBR Audit Committee may not serve on the audit committees of more than two other public companies. Directors must advise the chairman of the Nominating and Corporate Governance Committee before accepting an invitation to serve on another board.

Anti-Hedging Policy

Our anti-hedging policy prohibits all directors, employees, and agents from speculative trading in our securities; engaging in hedging transactions using our securities; “short selling” our securities; and trading derivative securities, such as put options, call options, swaps, or collars related to our securities.

Corporate Governance Materials

To ensure that our stockholders have access to our governing documents, we provide copies of our Code of Business Conduct, Corporate Governance Guidelines, and the charters of each of our standing Board committees on our website at kbr.com under “Who We Are,” “Our Company,” “Corporate Governance.” Copies will be provided to any stockholder who requests them by writing to our Investor Relations Department at: 601 Jefferson Street, Suite 3400, Houston, Texas 77002.

Our Code of Business Conduct applies to all directors, officers, and employees of KBR, and all employees of KBR’s agents. KBR intends to satisfy SEC disclosure requirements regarding amendments to, or waivers from, any provision of the Code of Business Conduct by posting such information on our website.

How to Contact the Board

KBR invites stockholders and other interested parties to communicate with the Audit Committee and the Board of Directors. Concerns may be reported anonymously or confidentially via the KBR Ethics Hotline at ethics.kbr.com or 1-800-461-9330 (instructions for dialing internationally are provided on the ethics.kbr.com homepage).

You may communicate with our Board of Directors, the non-executive directors, or any Board committee by mail (Board of Directors c/o Director of Business Conduct, KBR, Inc., P.O. Box 3406, Houston, Texas 77253-3406) or e-mail (fhoukbrbod@kbr.com).

Our Director of Business Conduct reviews all communications directed to the Audit Committee and the Board of Directors. The Chairman of the Audit Committee is promptly notified of any significant communication involving accounting, internal controls, auditing matters, or similar issues. Communications addressed to a named director are promptly sent to the director. Communications directed to the non-executive directors are promptly sent to the non-executive Chairman of the Board. A report summarizing the significant communications is sent to each director quarterly, and copies of communications are available for review by any director, except that those items addressed to the non-executive directors are not available to executive directors.

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Sustainability and KBR

Vision: to create a better, safer, and more sustainable world.

Building on our strong 100-year legacy as leaders in science, technology, and engineering, we are uniquely positioned to deliver world-class solutions that help our customers accomplish their sustainability objectives, contributing to a better, safer, and more sustainable world.

That mission is underpinned by our own robust sustainability practices that align with our core company values and guide our governance, operations, business methods, and behavior.

Our Global Sustainability Policy defines our intentions for preserving our planet and advancing society while pursuing business growth. We acknowledge there is a safe and equitable space between social foundations and planetary boundaries in which humanity can thrive, and we are committed to working within these boundaries in all that we do.

Our Sustainability Pillars — ten key areas of focus across our company — are the foundation of our sustainability efforts and closely correspond with the United Nations’ Sustainable Development Goals (SDGs), as outlined in the UN Decade of Action plan. As signatories to the UN Global Compact, we are committed to ensuring that our business is firmly aligned with SDG principles and that they serve as the benchmark for pursuing our sustainability goals.

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Our Sustainability Pillars and Key ESG Topics

 

Measuring our Impact

We measure and monitor our progress by setting Sustainability Key Performance Indicators in each of these key ESG topic areas. Our top-line KPIs—Net Zero Roadmap and Inclusion & Diversity—are incentivized via our short-term incentive plans. We publicly report our sustainability performance via universally recognized frameworks and standards, and we regularly engage with our key stakeholder groups as part of our materiality assessment and for continuous improvement.

Environmental Impact

Our Global Environmental Policy guides our business activities and service offerings to ensure they have the maximum positive and sustainable impact on the environment. We measure, manage, and monitor our use of natural resources, including energy, water, and materials, and seek to reduce and recycle waste throughout our project work. We also proactively protect and regenerate biodiversity and natural habitat in the areas where we conduct our business.

KBR’s Climate Action Plan and Net-Zero Roadmap

Our Sustainability and Corporate Responsibility Board Committee has made climate change one of KBR’s top strategic business priorities. Outcomes from all four of our Planet-related sustainability pillars contribute to our impact on climate change.

We have a global team of carbon emissions experts to guide the development of our roadmap to Net Zero. To ensure our Net-Zero roadmap is aligned with the Paris Agreement’s goals of limiting the increase of global average temperatures to 1.5 degrees Celsius, KBR has committed to setting emissions reduction targets based on the criteria and recommendations of the Science-Based Targets Initiative, an independent and globally recognized verifier.

Defining global, national, and local reduction plans, our roadmap sets out ways to improve energy efficiency, procure clean energy where possible, and proactively reduce emissions at owned and leased facilities. Further, the roadmap defines ways to work collaboratively with suppliers to set clear expectations for emissions reduction and to help them find ways to reduce emissions through their own products, services, and business activities.

We have been a carbon-neutral company since 2019, achieving carbon neutrality across Scopes 1 and 2 and business travel by offsetting our corporate carbon footprint of 2019 and 2020. Each year we continue to invest in carbon neutrality while we focus our attention on absolute reductions over time.

Social Impact

KBR’s extensive policies, procedures, and codes of conduct are designed and implemented to maximize social value and impact for all our stakeholder groups. Our key areas of social impact and human capital development are reflected in our People Strategy, as outlined below.

People Strategy

Human Capital Management

Across KBR, 2021 has been known as ‘the year of our people.’ We entered the year with ambitious plans to build on our empowering culture, enhance our employee experience, and ensure we continue to deserve our reputation as an employer of choice. Through the combined efforts of our employees and leadership team, this bold program has already resulted in tangible benefits for our people and the business, helping us realize our vision to bring together the best and brightest to deliver technology and solutions that help our customers accomplish their most critical missions and objectives.

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Culture & Values

Having refreshed our One KBR Values in late 2020, we brought these values to life early in 2021 with a cascade of conversations between managers and their teams in every business and market. Our aim was to lift our values off the page and inject them into our employees’ local experience, identifying any areas for improvement and building on our existing strengths. This concerted effort was underpinned by a review of our people processes to ensure these reflect our culture and values. That review resulted in updates to our selection and exit interviews, job descriptions, and training collateral. We then tested how embedded the values are through our global ‘People Perspectives’ employee survey, achieving high scores in each area:

This positive feedback about our organization culture is particularly encouraging when so many of our employees are working remotely. Nevertheless, we are not complacent. Leaders across KBR continue to consciously reinforce our values through their everyday behavior and to proactively engage and communicate with their teams as hybrid working arrangements become the new normal.

Employee Health & Safety

The central pillar of our global Zero Harm culture is Health Safety & Security. This pillar is supported by the key Zero Harm principle of “Courage to Care,” which we define as the willingness to intervene when one observes something that does not meet acceptable standards. We believe our Zero Harm culture has resulted in a work environment that promotes employee engagement and ownership, leading to significant improvements in our safety performance indicators.

COVID-19

As the ebbs and flows of the pandemic continued to affect all businesses and markets throughout 2021, the employees of KBR have been reassured by our robust safety protocols, which are founded on our Zero Harm culture. Our people are resilient, and while personal and operational challenges have persisted, they continued to provide excellent service to our customers. During 2021 we introduced a requirement for all people attending KBR sites to be fully vaccinated, or by exception to undertake daily testing, to safeguard the health of visitors and colleagues. Safety protocols, such as social distancing and wearing masks, remained in place as well. This safe environment has enabled large numbers of employees previously working from home to return to KBR facilities when consistent with local pandemic guidance. By the end of 2021, 95% of our employees who were covered by the Executive Order for Federal Contractors were either vaccinated or had approved accommodations in place and underway.

Mental Health & Fitness

During 2021, our focus on employee well-being to enable peak performance continued, and our Mental Health & Well-being Committee and Employee Resource Group, OK NoW, took significant strides implementing our well-being strategy. We have created an environment where employees can thrive and perform at their best by introducing a structured communication program, offering training to over 700 managers worldwide, and expanding our Well-being Ambassadors program to over 9,000 employees. We also provide all employees and their families with free 24/7 access to a first-rate employee support program and a mental fitness app to help track and support their mental health and resilience. This supportive environment showed clearly in our People Perspectives survey results, where we achieved a Well-being Index score of 81%.

Organizational Agility

KBR continues to grow organically and through acquisition, while remaining agile and restructuring where required to support our long-term strategy. At the end of 2021, we employed 28,010 people, who perform diverse, complex, and mission-critical roles in approximately 40 countries. With a fundamental focus on our customers, our working practices adapt to their projects and priorities. At the same time, we empower our employees to balance personal and work commitments by adopting flexible working practices. This agile working approach has also supported our Inclusion & Diversity journey, allowing us to recruit from global, diverse talent pools. Responses to our People Perspectives survey demonstrated that this modern approach resonates with our employees: 78% of responding employees say they are able to balance their work and personal lives, and 85% say they have the flexibility to take time off while still meeting the needs of our fast-paced, customer-focused organization.

Talent Acquisition

In 2021, we hired almost 6,000 employees. While some markets found candidates in shorter supply, we maintained a strong applicant flow by clearly articulating our employee value proposition, running social media campaigns highlighting KBR’s unique culture and values, and showcasing the important work our employees perform across the world. Teams of experts from across KBR reviewed our onboarding and hiring processes to ensure best practices are adopted in all business areas, and we expanded our use of digital talent platforms to monitor candidate supply and demand in real time. During the year we instituted unconscious bias training for all new recruiters and managers, undertook a concerted program of outreach to diverse candidates through targeted colleges/universities and hiring events, and tracked the progress of candidates through our HRIS, which showed that 30% of our new hires were women and 49% were from under-represented racial/ethnic groups.

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Inclusion & Diversity

The leadership team in KBR fundamentally believes that Inclusion & Diversity (I&D) is good for business. It helps us innovate, helps our teams perform, and creates an environment where everyone can belong and contribute. Diversity is embedded in KBR; we have employees from over 120 countries, and our particular attention on gender and race/ethnicity is increasingly showing in our demographics.

Our I&D Council helps shape our strategic priorities. In 2021 the Council provided recommendations related to working practices, target setting, supporting racial and ethnic diversity, and sustainability in the supply chain. Each area of the business also developed and implemented a tailored I&D improvement plan, which was directly linked to payout under our short-term incentive program. With increased visibility of I&D data—from the candidate pipeline to pay equity—and enhancements such as the introduction of supplementary childcare/elder-care benefits and expansion of floating holidays, we are confident that KBR will continue to see improvements in this area. We are proud that our efforts have been recognized externally with our ranking in the top 100 of Forbes’ list of The World’s Top Female-Friendly Companies.

Employee Resource Groups

For many years, KBR has encouraged employees to participate in Employee Resource Groups (“ERGs”) to take advantage of the networking, advocacy, and educational opportunities they offer. In addition to OK NoW, our ERG focused on mental health and well-being, we have expanded our ERGs in the I&D arena, with the addition of the Armed Forces Community, the globalization of our Pride & Allies ERG, and plans to launch MERGE, an ERG focused on minority groups. Together with ASPIRE, our ERG focused on the promotion of gender diversity, these I&D-focused ERGs come together in the ‘All In’ community, which was launched in 2021 and held a series of high-impact events on topics ranging from neurodiversity to understanding disabilities in the workplace. Our ERGs are rounded out with IMPACT, the community for early career professionals, which also expanded globally in 2021 to host a series of fireside chats with the CEO, as well as virtual networking events to connect colleagues across KBR. The Team of Teams value is embedded in these ERGs, giving employees a strong voice across KBR, and providing inspiring insight for leaders and colleagues across the globe.

Talent & Succession

In addition to our focus on developing early career professionals, which includes established intern and graduate programs, KBR offers a suite of world-class courses for employees in management and leadership roles. Together with the extension of our formal talent review processes in 2021, they help strengthen succession planning at all levels, supplementing the Board’s continued oversight of CEO and ELT succession. During the year we also introduced a formal Front Line Leaders program, designed to support employees newly transitioning into this critical role, and began implementing a new approach to performance management, with frequent, real-time feedback conversations replacing traditional backward-looking performance reviews. Our other focus area was technical talent; in 2021 we welcomed 12 distinguished technical leaders to the inaugural One KBR Technical Fellows program. This important program fosters our culture of innovation, fuels collaboration across diverse disciplines, and helps us attract, mentor, and inspire the next generation of talent.

Employee Engagement

In line with the labor market tightening across the globe, in 2021 we saw an increase in voluntary turnover in some countries, when pent-up demand from early in the pandemic was released as economies rebounded. Our agile hiring practices allowed us to keep pace with the demand for talent, with applicant flow and staffing levels remaining at previous strong levels. This resilience was helped by our continued focus on our employees, evidenced by the results of our People Perspectives survey, in which 80% of employees said KBR is a great place to work.

With remote working commonplace, we modernized our communications programs. The KBR podcast ‘In Orbit,’ was introduced, we continued to develop our Communities of Interest, collaborative forums that connect global company experts and interested employees on specialized topics, and we broadcast our ‘People First’ video series, in which leaders discuss how our people strategy is supporting KBR employees across the world. Our employees’ high level of engagement is deep-rooted, with 83% of respondents in our People Perspectives survey saying they feel proud of what they accomplish. We believe this result is a credit to KBR’s managers, who scored 83% in the survey’s Manager Effectiveness Index. Each business area has developed a plan to build on this positive response and address any areas of concern, as we continue to put our people at the heart of KBR.

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Security Ownership of Certain Beneficial Owners and Management

The table below sets forth certain information, as of March 1, 2022, regarding the beneficial ownership of KBR’s common stock by persons known by KBR to beneficially own more than five percent of its outstanding common stock, each director or nominee, each of the named executive officers referenced in the Summary Compensation Table contained in this proxy statement, and all directors and executive officers as a group. Information regarding five percent stockholders in the table and footnotes is based on the most recent Statement on Schedule 13G or 13D or amendment thereto filed by each such person with the SEC, except as otherwise known to KBR. To our knowledge, except as otherwise noted in the footnotes to this table or as provided by applicable community property laws, each individual has sole voting and investment power with respect to the shares of common stock listed in the second column below as beneficially owned by the individual.

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Executive Officers

The following biographical information with respect to each of KBR’s executive officers is current as of March 25, 2022.

	ANDREW J. BARRIE
	Age: 54 | Joined KBR in: 1990 | President, Government Solutions — EMEA
	Current Position since: May 2019

Prior Business Experience	Education
• KBR Senior Vice President, Business Acquisition • KBR Vice President, Commercial • Has over 30 years of experience in business development, commercial management and leadership across the government, infrastructure and energy markets.	• B.A. (Business), Kingston University London • Diploma in Company Direction from the Institute of Directors

	W. BYRON BRIGHT, JR.
	Age: 48 | Joined KBR in: 2010 | President, Government Solutions
	Current Position since: June 2020

Prior Business Experience

Education

• KBR President, Government Solutions — U.S. • KBR President, KBRwyle • KBR Senior Vice President of Operations for U.S. Government Services • KBR Vice President of Business Development for U.S. Government Services • Supported the government services business at Jacobs Engineering Group Inc. • Officer in the U.S. Air Force, primarily working in Developmental Test and Engineering, supporting weapons development and rotary wing aircraft flight testing

• B.S. (Engineering and Mechanics), distinguished graduate, U.S. Air Force Academy • M.S. (Mechanical Engineering), Georgia Institute of Technology • Graduated from the U.S. Air Force Test Pilot School and has flown in over 25 different aircraft as a flight test engineer

	GREGORY S. CONLON
	Age: 53 | Joined KBR in: 2016 | Chief Digital and Development Officer
	Current Position since: January 2019

Prior Business Experience

Education

• KBR Executive Vice President and Chief Development Officer responsible for Strategy, Global Business Development, Marketing, and Mergers & Acquisitions • KBR President, Asia-Pacific (“APAC”) responsible for Engineering & Construction (“E&C”) and Government Services (“GS”) in this region • KBR President, E&C APAC • Executive Vice President leading business development globally for the WorleyParsons Services business line, the largest business within WorleyParsons • Has over 25 years of experience in the E&C business, with global experience across a range of subsectors from hydrocarbons to specialist infrastructure. • Various positions in the energy and resources sectors in Australia, Canada, China, Indonesia, Singapore, Thailand, and the United Kingdom.

• B.S. (Mechanical Engineering), Royal Melbourne Institute of Technology

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	SHAD E. EVANS
	Age: 44 | Joined KBR in: 2018 | Senior Vice President of Finance Operations and Chief Accounting Officer
	Current Position since: August 2020 (Interim CAO since October 30, 2020, and CAO since July 29, 2021)

Prior Business Experience	Education
• KBR Chief Financial Officer of Technology Solutions • Vice President, Finance and Business Operations Security Detection and Automation at Leidos Holdings, Inc.	• B.S. (Accounting), San Diego State University-California State University • M.B.A. (Finance), University of San Diego

	SONIA GALINDO
	Age: 53 | Joined KBR in: 2021 | Executive Vice President and General Counsel
	Current Position since: November 2021

Prior Business Experience

Education

• Senior Vice President, General Counsel, Secretary, and Chief Ethics and Compliance Officer at FLIR Systems, Inc. (now, Teledyne F LLC, a subsidiary of Teledyne Technologies) • General Counsel and Corporate Secretary at Rosetta Stone Inc. • Various positions in the public and private sector including at the U.S. Securities and Exchange Commission, the Bill & Melinda Gates Foundation, Keurig Green Mountain, Inc., and McCormick & Company, Inc.

• B.A. (Economics and Management), Hood College for Women • J.D., University of Illinois Chicago School of Law (formerly John Marshall Law School)

	J. JAY IBRAHIM
	Age: 61 | Joined KBR in: 2015 | President, Sustainable Technology Solutions
	Current Position since: June 2020

Prior Business Experience

Education

• KBR President, Energy Solutions — Services • KBR President, Europe, Middle East and Africa (“EMEA”) and APAC responsible for E&C and GS in these regions • KBR President, EMEA responsible for E&C and GS in this region • KBR President, E&C EMEA • Has over 25 years of E&C and GS experience across the globe, having served in a variety of engineering, project management, business development, and business management roles for Parsons E&C/WorleyParsons. • Has a wealth of senior project and construction management experience within the hydrocarbon, infrastructure, and government services sectors, as well as broad experience in complex contract negotiations, business analysis, and long-range strategic planning in both domestic and international markets.

• B.S. (Mechanical Engineering), Wichita State University • M.S. (Mechanical Engineering), Wichita State University • Diploma in Advanced Management, Harvard University

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	DOUGLAS N. KELLY
	Age: 58 | Joined KBR in: 2010 | President, Technology
	Current Position since: September 2019

Prior Business Experience	Education
• KBR Senior Vice President, Business Development and Marketing Technology Solutions • KBR Vice President, Refining Technology Solutions • Chief Operating Officer at ZEEP • Vice President at Invensys (now AVEVA) • Vice President at Aspen Technology	• B.S. (Chemical Engineering), University of Oklahoma • Licensed Professional Engineer (Texas)

	JENNI C. MYLES
	Age: 54 | Joined KBR in: 2020 | Executive Vice President, Chief People Officer
	Current Position since: May 2020

Prior Business Experience	Education
• Group HR Director and core member of the Group Executive Committee at G4S • Chief HR Officer, Americas Region at G4S • Director of HR & Employee Engagement at G4S • Various employee relations and human resources management roles at KPMG, Northern Foods, and Ford Motor Company	• L.L.B. (Hons), University of Glasgow • Fellow of the Chartered Institute of Personnel & Development

	MARK W. SOPP
	Age: 56 | Joined KBR in: 2017 | Executive Vice President and Chief Financial Officer
	Current Position since: February 2017

Prior Business Experience

Education

• Chief Financial Officer and Executive Vice President for Leidos Holdings, Inc., previously Science Applications International Corporation, one of the largest publicly-traded government contractors in the U.S. with significant technically-focused commercial professional services operations, including serving energy markets • Various executive positions with Titan Corporation, also involved in government contracting and commercial business areas

• B.S. (Accounting), New Mexico State University • Completed the Executive Program at UCLA Anderson School

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Proposal No. 2 — Advisory Vote to Approve Named Executive Officer Compensation

The Board of Directors recommends that you vote FOR the advisory vote to approve our NEOs’ compensation as disclosed in this proxy statement. Properly dated and signed proxies, and proxies properly submitted over the Internet and by telephone, will be so voted unless stockholders specify otherwise.

The Board of Directors is providing our stockholders with the opportunity to cast a non-binding advisory vote to approve the compensation of our Named Executive Officers (“NEOs”) as disclosed in this proxy statement.

Our Compensation Committee establishes, recommends, and governs all the compensation and benefits policies and actions for KBR’s NEOs, as discussed in the “Compensation Discussion and Analysis” section of this proxy statement. Consistent with our compensation philosophy, our executive compensation program was designed to achieve the following primary objectives:

In light of these objectives, KBR provides pay that is highly dependent on performance. We continually review best practices in governance and executive compensation. Consistent with such best practices, KBR:

For the reasons discussed above, the Board of Directors unanimously recommends that stockholders vote in favor of the following resolution:

“RESOLVED, that the compensation paid to KBR’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”

While the resolution is non-binding, the Board of Directors values your opinion and will consider the outcome of the vote when making future compensation decisions.

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Compensation Discussion and Analysis

Executive Summary

NAMED EXECUTIVE OFFICERS

This Compensation Discussion and Analysis provides a detailed description of our compensation philosophy, objectives, policies, and practices in place during 2021, and it explains the factors considered by our Compensation Committee in making compensation decisions for the following Named Executive Officers, or NEOs:

Stuart Bradie President and Chief Executive Officer

Mark Sopp Executive Vice President and Chief Financial Officer

Byron Bright President, Government Solutions

Jay Ibrahim President, Sustainable Technology Solutions

Doug Kelly President, Technology

Eileen Akerson* Former Executive Vice President and General Counsel

These NEOs, together with the other members of our executive management team whose compensation is determined by our Compensation Committee and our Board of Directors, are referred to as our “Senior Executive Management.”

COMPENSATION HIGHLIGHTS

Changes Made to KBR’s Compensation Program for 2021

Our Compensation Committee made a few changes to KBR’s compensation program for 2021.

Our Compensation Committee believes all our compensation programs strongly reflect our pay-for-performance strategy. Changes made to our compensation program for 2022 are disclosed on pages 60 and 64.

Advisory Vote on Compensation and Stockholder Engagement

We believe we have a well-designed executive compensation program, and KBR’s stockholders seem to agree. Our most recent say-on-pay proposal, presented during the 2021 annual meeting, garnered the support of approximately 99% of the votes cast. The Compensation Committee was gratified by this result.

Our most recent say-on-pay proposal, presented during the 2021 annual meeting, garnered the support of approximately 99% of the votes cast.

Regardless of the outcome of our say-on-pay proposal, our Corporate Secretary reaches out to our largest investors bi-annually to maintain an open dialogue about our compensation policies, practices, and structure, and to receive feedback on elements that could be changed to better align with stockholders’ interests. In 2021, our Corporate Secretary reached out to all of KBR’s top 25 investors, which collectively represented more than 70% of our outstanding stock, and had calls with or heard from investors representing approximately 20% of our outstanding stock. A majority of these investors did not mention any major concerns about our executive compensation program.

We will continue to consider the outcome of our say-on-pay proposal and other stockholder feedback when determining future compensation policies and decisions for our NEOs.

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Pay for Performance in 2021

Our CEO’s strategic actions positioned KBR for long-term growth, and we have continued to see these actions deliver strong results and improved stockholder value. Our adjusted EPS increased by 40% from 2020, and our adjusted EBITDA increased by 31% from 2020 (see reconciliation under the section titled “Non-GAAP Reconciliation: Adjusted EBITDA, Adjusted EPS and Adjusted Operating Cash Flow” at the end of this proxy statement).

The alignment of our CEO’s compensation with KBR's performance and stockholder value during the past five years is summarized below.

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Overview of Executive Compensation Philosophy, Policies and Practices

KEY CONSIDERATIONS IN DETERMINING EXECUTIVE COMPENSATION

Our Compensation Committee regularly reviews the elements of the individual compensation packages for our NEOs, with a goal of ensuring that:

Our executive compensation program is regularly reviewed to ensure that it remains consistent with these objectives and is administered in accordance with established compensation policies.

POLICIES AND PRACTICES

Below is a summary of our compensation policies and practices in place during 2021.

ROLE OF THE BOARD AND THE COMPENSATION COMMITTEE

Each December our non-executive directors meet in executive session to evaluate the performance of our Chief Executive Officer, considering qualitative and quantitative elements of the CEO’s performance, including:

The CEO’s evaluation and compensation for the next full year, including an evaluation of whether the CEO has created adequate management succession and development programs, are communicated to the CEO by the non-executive Chairman of the Board after review and approval by our Compensation Committee and the full Board of Directors (other than the CEO).

Based on the CEO’s recommendations and in concert with him, our Compensation Committee annually reviews and approves the compensation and incentive awards for our Senior Executive Management.

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ROLE OF THE CEO

During 2021, our CEO made recommendations to our Compensation Committee regarding the compensation and incentives for our NEOs other than himself. Our CEO also:

THIRD-PARTY CONSULTANTS

Under its charter, our Compensation Committee is authorized to retain a compensation consultant and has the sole authority to approve the consultant’s fees and other retention terms. While we believe that retaining third-party consultants is an efficient way to remain informed about competitive compensation practices, the advice of outside professionals is just one of many factors the Compensation Committee considers. Most importantly, we design and adjust our compensation program to address the program’s intended objectives.

In 2021, our Compensation Committee used the services of one compensation consulting firm, Meridian Compensation Partners, LLC (“Meridian”). Our Compensation Committee engaged and managed its relationship with Meridian directly, and Meridian reported directly to our Compensation Committee. Outside providing advisory services to our Compensation Committee, Meridian provided no other services to KBR or our affiliates.

Meridian’s work for KBR included advising our Compensation Committee, as requested, with respect to all executive compensation matters and various director compensation matters. Meridian was engaged to provide the following:

In May 2021, our Compensation Committee reviewed the independence factors prescribed by the SEC (as well as other factors identified by the NYSE) as affecting the independence of a consultant or adviser, including the following:

Based on the results of this review, our Compensation Committee confirmed Meridian’s independence and lack of a conflict of interest in 2021 and approved the continued retention of Meridian.

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PEER GROUPS

In the design and administration of our 2021 executive compensation programs for our Named Executive Officers, our Compensation Committee considered competitive market data from two distinct peer groups: our “Core Peer Group” and our “Diversified Peer Group.” As discussed below under “Elements of Compensation—KBR Long-Term Performance Cash and Stock Awards,” the Compensation Committee also refers to a “TSR Peer Group” for limited purposes related to the NEOs’ long-term incentive awards.

The Core Peer Group is composed of ten companies whose primary operations involve providing highly technical and professional services to the U.S. government and the engineering, construction, and services industry. We believe these are the companies against which KBR most competes for employees and business. The Core Peer Group used for 2021 compensation decisions consisted of the following companies:

The compensation data for our Core Peer Group was obtained from publicly available sources, including proxy statements and Form 4 and 8-K disclosures, and was not adjusted.

In addition to reviewing publicly available data for the Core Peer Group, our Compensation Committee also assesses the competitiveness and reasonableness of our executive compensation programs against data from a supplemental group of 18 companies that were participants in the Equilar Executive Compensation Survey (which Meridian used to analyze peer company compensation data that was not publicly available). The companies in the Diversified Peer Group were generally selected based on revenue, size, complexity, performance, and the nature of their principal business operations, with specific emphasis on engineering and construction, information technology consulting, manufacturing, and government services. Our Compensation Committee believes the Diversified Peer Group appropriately represents both the local Houston and the broader market for key management and technical talent.

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The Diversified Peer Group used for 2021 compensation decisions consisted of the following companies:

During 2021, our Compensation Committee asked Meridian to review the appropriateness of the Core and Diversified Peer Groups for assessing the competitiveness of our executive compensation programs considering the Company’s two segments — Government Solutions and Sustainable Technology Solutions. The review considered several factors relating to the constituent companies, including an analysis of certain financial metrics (such as revenue, net assets, market capitalization, enterprise value, and number of employees) drawn from the Equilar Executive Compensation Survey, business strategies, the effects of corporate transactions, and the availability of market data. As a result of this review, our Compensation Committee updated our Core Peer Group for 2022 compensation decisions by removing two companies. Specifically, Perspecta Inc. was removed because it was acquired by Peraton in May 2021, and Unisys Corporation was removed because it divested its federal information technologies business segment and is no longer in the same business as KBR. Our Compensation Committee removed Unisys from the Diversified Peer Group for the same reason.

Summary of 2021 Target Compensation of Named Executive Officers

The table below reflects target annual compensation and is not intended to replace the more detailed information provided in the Summary Compensation Table. The target dollar amounts for restricted stock units are rounded to the next whole share upon grant.

Elements of Compensation

Our executive compensation program has been designed to ensure that KBR can attract and retain talented executives who are motivated to pursue KBR’s strategies, focus employees’ efforts, and achieve business success. The compensation program also must align executives’ interests with stockholders’ interests. There is no pre-established formula for the allocation between cash and non-cash compensation or between short-term and long-term compensation. Instead, each year our Compensation Committee determines, in its discretion and business judgment, the appropriate level and mix of compensation to reward our NEOs for near-term superior performance and to encourage commitment to our long-range strategic business goals. When making these decisions, our Compensation Committee is always mindful of our philosophy that the majority of Named Executive Officer compensation should vary with KBR’s performance.

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As shown below, a significant portion of our NEOs’ target annual compensation in 2021 was performance-based.

Our 2021 executive compensation program consisted of three core elements of direct compensation: base salary, short-term (annual) incentives, and long-term incentives. Each of these elements is described below.

BASE SALARY

We pay our NEOs market-competitive base salaries for the skills and experience they bring to their respective roles. To arrive at base salary amounts, our Compensation Committee uses its discretion to adjust market-based amounts to reflect:

The table below shows the base salaries for our Named Executive Officers, effective January 1, 2021.

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SHORT-TERM INCENTIVES (ANNUAL)

Our Compensation Committee established the KBR Senior Executive Performance Pay Plan (the “Performance Pay Plan”) to reward Senior Executive Management for improving financial results for our stockholders and to provide a means to link cash compensation to KBR’s short-term performance compared to annual goals. The Performance Pay Plan was created under the stockholder-approved KBR Stock and Incentive Plan, which is described in more detail below.

Incentive Award Opportunities

In December 2020, our Compensation Committee met to determine the 2021 target awards for our Named Executive Officers under the Performance Pay Plan. These target STI awards, which are expressed as percentages of base salary, were generally set to be consistent with the median target awards for executives in similar positions within our Core and Diversified Peer Groups. The STI award opportunities for 2021 are shown below.

2021 STI Performance Metrics

The performance metrics we used for 2021 STI awards focus our NEOs on the key measures of success in connection with the execution of our strategic plan. In 2021, our Compensation Committee made one change to our STI plan to directly link pay and KBR’s sustainability performance. Specifically, the two safety performance metrics in the 2020 STI plan, which were each weighted 5%, were removed and replaced with one sustainability performance metric that is weighted 10% and is based on an assessment of the continued progress in KBR's Zero Harm social and environmental sustainability pillars including, but not limited to: KBR consolidated safety, inclusion and diversity initiatives, community engagement, and environment goals. This change reflects KBR’s continued focus on sustainability. Our Compensation Committee also updated the specific goals for each metric to ensure they remained challenging and competitive.

The table below summarizes the 2021 performance metrics and weightings for our CEO and other NEOs. We believe these are the most important metrics for measuring our NEOs’ efforts to drive KBR’s growth and create value for our stockholders.

Performance Metric	Weighting		Rationale
KBR Adjusted EPS Measures net income divided by the weighted average number of fully diluted shares of KBR common stock outstanding.			This metric helps to align our NEOs with the interests of our stockholders because strong EPS generally increases the value of our stock. We consider buybacks when reviewing EPS achievement to provide for an accurate comparison against the pre-established target.
KBR Adjusted Consolidated Operating Cash Flow (“OCF”) KBR OCF measures the amount of cash generated by KBR’s operations.			Our OCF target is based on KBR’s 2021 budgeted Cash Flow from Operations and is aligned with our capital deployment strategy. This metric ensures that our NEOs focus on cash management.
KPIs KPIs are individual performance metrics typically specific to each NEO. The KPIs are described on pages 59 and 60.			KPIs allow us to reward individual contributions to KBR’s key strategy focus areas.
KBR Sustainability Measures continued progress in KBR’s Zero Harm social and environmental sustainability pillars, including KBR consolidated safety, inclusion and diversity, community engagement, and environment.			Emphasizing this metric promotes continued progress in KBR’s Zero Harm social and environmental sustainability pillars, including KBR consolidated safety, inclusion and diversity, community engagement, and environment, all of which promote a sustainable business.

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Target Performance Goals

When establishing target performance goals for the STI awards for 2021, our Compensation Committee considered, among other things, projected company performance and general business and industry conditions, as well as our strategic business objectives. At the time the target goals are established, the outcomes are intended to be substantially uncertain but achievable with better than expected performance from our NEOs. Our Compensation Committee adopted target performance goals for our STI metrics that maintained the same rigor as the performance goals from the prior year, especially in light of our strategic goal to position KBR for long-term growth.

For KBR Adjusted EPS, our Compensation Committee set the threshold and maximum level at the bottom and top of our adjusted EPS guidance of $2.00 to $2.20. KBR’s 2021 adjusted EPS was $2.42 (see reconciliation under the section titled “Non-GAAP Reconciliation: Adjusted EBITDA, Adjusted EPS and Adjusted Operating Cash Flow” at the end of this proxy statement).

For KBR’s Adjusted Consolidated Operating Cash Flow (“OCF”), our Compensation Committee set the threshold and maximum level at the bottom and top of our adjusted OCF guidance of $280MM to $320MM. KBR’s 2021 adjusted OCF was approximately $319MM (see reconciliation under the section titled “Non-GAAP Reconciliation: Adjusted EBITDA, Adjusted EPS and Adjusted Operating Cash Flow” at the end of this proxy statement).

For KBR’s Sustainability performance metric, which was a combination of several key environmental and social metrics, our Compensation Committee set the threshold and maximum level at the bottom and top of a discretionary rating system (ME = Meets Expectations; SE= Surpasses Expectations; EE= Exceeds Expectations) to measure qualitative progress. Our Compensation Committee determined that KBR’s 2021 sustainability performance achieved a target result or “Surpassed Expectations” because of KBR’s carbon neutrality, the 32% of sustainable project revenue, the maturation of the I&D program, and the implementation of I&D throughout the succession plans.

Our Compensation Committee established the 2021 target performance goals shown below. The results and payouts were certified in February 2022.

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KPIs and STI Payout for Mr. Bradie

Our Board of Directors determined that Mr. Bradie earned a 100% metric result—target level achievement—of his 2021 KPIs, which equaled a 20% KPI payout. The determination was based on qualitative analysis of Mr. Bradie’s progress on his 2021 KPIs: successful integration of KBR’s Centauri acquisition; talent management and succession planning; performance in line with $1B in revenue and margin in the teens for KBR’s Sustainable Technology Solutions business; and critical asset management.

KPIs and STI Payout for Mr. Sopp