UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

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CALIFORNIA RESOURCES CORPORATION

(Name of Registrant as Specified In Its Charter)

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

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Proxy Statement 2023 and Notice of Annual Meeting A Different Kind of Energy Company California Resources Corporation
 

Letter to Shareholders from the Chair of the Board

Dear Shareholders,

I am proud of the progress we have made this year at CRC. Thanks to the dedication of our employees and leadership of our senior executives and Board of Directors, CRC continues to make important strides on our Full Scope 2045 Net Zero goal to lead in the energy transition. Our Full Scope 2045 Net Zero Goal for Scope 1, 2 and 3 GHG emissions places us among a select few industry peers to include Scope 3 GHG emissions in our Net Zero goals.

In 2022, CRC demonstrated significant progress on our carbon capture and storage (CCS) business, Carbon TerraVault. Our team worked diligently to advance discussions and partnerships with various stakeholders. We showcased our competitive advantage through the submission of numerous EPA Class VI permit applications and through the announcement of a landmark joint venture with Brookfield Renewable. We also expanded Carbon TerraVault’s carbon storage projects by announcing a carbon dioxide management agreement with Lone Cypress Energy Services, LLC, in December 2022, and another with Grannus, LLC, in January 2023.

In addition to our focus on energy transition, the company’s oil and gas operations delivered strong cash flows and demonstrated commitment to shareholder returns. CRC recorded the highest operating cash flow and margin since its inception and provided returns through an expanded share repurchase program and increased quarterly dividend. In 2023, CRC will not only remain dedicated to enhancing its sustainability initiatives and advancing its Carbon TerraVault business, but also continuing to unlock value from our asset base to deliver even higher free cash flow.

Lastly, CRC also took steps to update and expand the company’s ESG goals, with the Board unanimously approving enhanced targets, including maintaining at least 20% of ethnically and racially diverse professionals in leadership positions, increasing gender diverse professionals in leadership positions to 30% or greater and maintaining current board composition with at least 30% ethnically, racially and gender diverse board members. We are also aiming to further reduce CRC’s methane emissions by 30% from our 2020 baseline by 2030, reduce freshwater usage in our low carbon intensity fuel production by 30% from our 2022 baseline by 2025, and continue to target charitable giving to support local non-profits and community organizations across California. The company’s Sustainability Committee remains dedicated to supporting and guiding CRC down the path to reach these goals, and now 30% of executive annual incentive pay related to company performance is tied to ESG metrics.

As previously announced, Francisco J. Leon, who currently serves as our Executive Vice President and Chief Financial Officer, will succeed Mark A. (Mac) McFarland as our President and Chief Executive Officer, effective at the Annual Meeting, and, once elected, will join our Board as its newest member. Mr. McFarland will continue to serve on our Board if his re-election is approved by shareholders at the Annual Meeting, and will also continue to serve as non-executive Chair of the board of our Carbon TerraVault subsidiary. The Company has also been conducting an ongoing search for a new Chief Financial Officer. Our leadership transition will not affect our steadfast commitment to generating the most value for our shareholders and helping meet ambitious climate goals. To ensure good collaboration and alignment, we frequently review best practices, conduct outreach and engage with our large shareholders, major proxy advisory firms and ESG ratings and data providers and encourage feedback from our stakeholders.

On behalf of the entire Board, I thank you for your support, engagement, continued investment and confidence in CRC. We believe that CRC is well-positioned to drive sustainable growth, build a stronger, more resilient company and create long-term value for all of our shareholders and other critical stakeholders. We thank you for the opportunity to continue serving you and the company.

Tiffany (TJ) Thom Cepak

Independent Chair of the Board

California Resources Corporation

_________________________________________________________________________________________________

PLEASE NOTE: This letter and the Proxy Statement contain forward-looking statements that involve risks and uncertainties that could materially affect our expected results of operations, liquidity, cash flows and business prospects. For a discussion of these risks and uncertainties, please refer to the “Risk Factors” and “Forward-Looking Statements” described in our Annual Report on Form 10-K. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “project,” “seek,” “should,” “target,” “will” or “would” and similar words that reflect the prospective nature of events or outcomes typically identify forward-looking statements. Such statements are based on management's expectations as of the date of this filing, unless an earlier date is specified, and involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in our Form 10-K and in other documents we file from time to time with the SEC that disclose risks and uncertainties that may affect our business. Any forward-looking statement speaks only as of the date on which such statement is made and we undertake no obligation and expressly disclaim any duty to correct or update any forward-looking statement, except as required by applicable law.

We have included in this letter and the Proxy Statement certain voluntary disclosures regarding our Sustainability Goals, Sustainability Reports and related matters because we believe these matters are of interest to our investors; however, we do not believe these disclosures are “material” as that concept is defined by or construed in accordance with the securities laws or any other laws of the U.S. or any other jurisdiction, or as that concept is used in the context of financial statements and financial reporting. These disclosures speak only as of the date on which they are made, and we undertake no obligation and expressly disclaim any duty to correct or update such disclosures, whether as a result of new information, future events or otherwise, except as required by applicable law.

Notice of the 2023 Annual Meeting of Stockholders

Purposes of the 2023 annual meeting of stockholders:

Information relevant to these matters is set forth in the accompanying proxy statement.

The close of business on March 7, 2023, was fixed as the record date for the determination of stockholders entitled to receive notice of and to vote at the annual meeting or any adjournment or postponement thereof. Only our stockholders of record or their legal proxy holders as of the record date or our invited guests may attend the annual meeting in person.

The annual meeting will be held in a virtual meeting format only at https://www.virtualshareholdermeeting.com/CRC2023. You will not be able to attend the annual meeting physically. If you wish to attend the annual meeting, you must follow the instructions under “Attending the Annual Meeting” on page 64 of the proxy statement. We have also provided information regarding how stockholders can engage during the Annual Meeting, including how they can vote, ask questions, request technical support and access information following the Annual Meeting within this proxy statement.

Beginning on March 16, 2023, we mailed a Notice of Internet Availability of Proxy Materials to our stockholders containing instructions on how to access the proxy statement and vote online and made our proxy materials available to our stockholders over the Internet.

By Order of the Board of Directors,

Michael L. Preston

Executive Vice President, Chief Strategy Officer and General Counsel
Corporate Secretary

IMPORTANT VOTING INFORMATION

If you owned shares of our common stock at the close of business on March 7, 2023, you are entitled to one vote per share upon each matter presented at our 2023 annual meeting of stockholders to be held on April 28, 2023. In order for stockholders whose shares were held in an account at a brokerage firm, bank or other nominee (i.e., in “street name”) as of March 7, 2023, to vote their shares at the 2023 annual meeting, they will need to obtain a legal proxy from the broker, bank or other nominee that holds their shares authorizing them to vote in person at the annual meeting.

If you hold shares in “street name,” unless you provide specific instructions by completing and returning the voting instruction form or following the instructions provided to you to vote your shares via telephone or the Internet, your broker is only permitted to vote on your behalf on ratification of the appointment of KPMG LLP as our independent registered public accounting firm for fiscal year 2023, and may not vote on the election of directors and other matters to be considered at the annual meeting. For your vote to be recognized, you will need to communicate your voting decisions to your broker, bank or other nominee before the date of the annual meeting.

YOUR VOTE IS IMPORTANT

Your vote is important. Our Board of Directors strongly encourages you to exercise your right to vote. Voting early helps ensure that we receive a quorum of shares necessary to hold the annual meeting.

QUESTIONS

If you have any questions about the proxy voting process, please contact Broadridge at (800) 579-1639. The Securities and Exchange Commission also has a website (https://www.sec.gov/spotlight/proxymatters) with more information about your rights as a stockholder. You also may contact our Investor Relations Department by phone at (818) 661-3731 or by e-mail at IR@crc.com.

ATTENDING THE ANNUAL MEETING

The annual meeting will be held in a virtual meeting format only at https://www.virtualshareholdermeeting.com/CRC2023. You will not be able to attend the annual meeting physically. If you wish to attend the annual meeting, you must follow the instructions under “Attending the Annual Meeting” on page 64 of the proxy statement.

IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF

PROXY MATERIALS FOR THE STOCKHOLDER MEETING

TO BE HELD ON APRIL 28, 2023

The Notice of the 2023 Annual Meeting of Stockholders, the Proxy Statement for the 2023 Annual Meeting of Stockholders and the 2022 Annual Report to Stockholders (which includes the Annual Report on Form 10-K for the fiscal year ended December 31, 2022) of California Resources Corporation are available at http://www.proxyvote.com. You will need the 16-digit control number included on the Notice that was mailed to you, on your proxy card or on the instructions that accompanied your proxy materials.

Table Of Contents

Table of Contents

CALIFORNIA RESOURCES CORPORATION i

Table Of Contents

CALIFORNIA RESOURCES CORPORATION ii

Proxy Statement Summary

Proxy Statement Summary

This summary highlights information contained in the proxy statement. This summary does not contain all of the information you should consider, and you should read the entire proxy statement carefully before voting. California Resources Corporation, together with its subsidiaries, is referred to herein as “we,” “our,” “us,” the “Company” or “CRC.” The 2023 annual meeting of stockholders described below is referred to herein as the “Annual Meeting.”

2023 Annual Meeting of Stockholders

The Annual Meeting will be held in a virtual meeting format only at https://www.virtualshareholdermeeting.com/CRC2023. You will not be able to attend the Annual Meeting physically. If you wish to attend the Annual Meeting, you must follow the instructions under “Attending the Annual Meeting” below.

A Notice of Internet Availability of Proxy Materials, which contains instructions on how to access the proxy statement and vote online, was mailed to our stockholders beginning on March 16, 2023, and also made available to our stockholders over the Internet on the same date.

Agenda and the Board’s Recommendation on Voting Matters

The following table summarizes the items that will be brought for a vote of our stockholders at the annual meeting, along with the recommendation of our Board of Directors as to how stockholders should vote on each item.

Voting: Stockholders as of the record date are entitled to vote. Each share of common stock entitles its holder to one vote for each director nominee and one vote for each of the proposals to be voted on.

CALIFORNIA RESOURCES CORPORATION 1

Proxy Statement Summary

Directors

The Board of Directors is currently comprised of eight independent directors, plus Mr. McFarland. Each of our independent directors, other than Mr. Brooks, and Mr. McFarland will stand for re-election at our Annual Meeting. Mr. Leon will also stand for election at the Annual Meeting. Assuming each of our nominees is elected, the Board of Directors will be comprised of seven independent directors, plus Mr. McFarland and Mr. Leon, following the Annual Meeting. Mr. McFarland is currently serving, and following the Annual Meeting Mr. Leon will serve, as our President and Chief Executive Officer (“CEO”). The following table provides summary information about each of our current directors and director nominees and whether the Board of Directors considers each of them to be independent under the New York Stock Exchange’s (“NYSE”) independence standards.

*Mr. Brooks is not standing for reelection at the Annual Meeting.

Corporate Governance Highlights

CALIFORNIA RESOURCES CORPORATION 2

Proxy Statement Summary

Compensation Program Highlights

Our Compensation Committee initiated a new compensation program in 2021 immediately following our emergence from the bankruptcy process, setting a new course for our post-emergence compensation program. We did not grant any long-term incentives in 2022, since our 2021 program included multi-year emergence grants to immediately align our executives’ interests with stockholders.

Compensation Program Practices

Our executive compensation program is designed to motivate our executives to take actions that are aligned with our short- and long-term strategic objectives, appropriately balancing risk versus potential reward. It is designed to incorporate compensation best practices and is governed by our Compensation Committee. Our annual incentive awards and long-term incentive plans are performance-based and intended to align with the long-term best interests of stockholders and to retain our management team.

The Compensation Committee has engaged in best practices to align executive pay with Company performance and to ensure good governance in the following ways:

WHAT WE DO √ We pay for performance. A significant portion of the compensation of our named executive officers is directly linked to the Company’s performance, by way of a compensation structure that includes performance-based annual and long-term incentive awards. √ We are stockholder aligned. Annual and long-term incentive awards are based on performance measures that are aligned with the creation of value for our stockholders. All of the outstanding long-term incentive awards for our named executives are stock-based. √ We have “double trigger” change in control provisions. Our change in control arrangements for named executive officers require both the occurrence of a change in control event and termination of employment before applicable vesting of awards occurs. √ We solicit feedback from stockholders. We regularly reach out to our largest stockholders for feedback on our governance and executive compensation. √ We provide market-competitive compensation. Our compensation program is competitive within our industry and recognizes evolving governance practices, which allows us to attract and retain key talent. √ We have stock ownership requirements. We maintain stock ownership guidelines for our named executive officers and stock grant delivery mechanics for our directors that require meaningful stock ownership in the Company. √ We have a clawback policy. Our Compensation Recoupment and Clawback Policy allows the Company to require reimbursement of incentive compensation in certain circumstances. √ We seek independent advice. The Compensation Committee retains an independent advisor to review executive compensation and provide advice to the Compensation Committee.

CALIFORNIA RESOURCES CORPORATION 3

Proxy Statement Summary

WHAT WE DON’T DO. X We do not allow hedging or pledging. Our Insider Trading Policy prohibits certain transactions involving our stock, including hedging and pledging. X We do not allow the repricing of stock options. Our equity incentive plan prohibits the repricing or backdating of stock options. X We do not offer enhanced retirement benefits. Our nonqualified defined compensation plan provides restorative, but not enhanced, retirement benefits for our executives. X We do not encourage excessive risk or inappropriate risk taking through our incentive programs. Our plans do not motivate executives to engage in activities that create excessive or inappropriate risk for the Company.

CALIFORNIA RESOURCES CORPORATION 4

Board of Directors and Corporate Governance

Board of Directors and Corporate Governance

Our Board of Directors and Director Nominees

Our Board values and exhibits an effective mix of diversity, perspective, skills and experience. Currently one-third of the Board are women and one-third of the Board are diverse from a race/ethnicity standpoint.

Assuming each of our nominees is elected, one-third of the Board will be women and 44% of the Board will be diverse from a race/ethnicity standpoint following the Annual Meeting, as shown in the following charts:

GENDER 33% female 67% male AGE 11.0% 30s 22.2% 40s 33.4% 50s 33.4% 60s RACE/ETHNICITY 44% racially/ethnically diverse

NCE 10% 90% independent non-independent GENDER 20% 80% male female AGE 10% 40% 50% 50s 60s 70s

Independence 10% non-independent 90% independent Gender 20% female 80% male AGE 10% 50s 50% 60s 40% 70s

CALIFORNIA RESOURCES CORPORATION 5

Board of Directors and Corporate Governance

Set forth below is a chart that summarizes the specific experience, qualifications, attributes and skills of our directors and director nominees and biographical information regarding each of our directors and director nominees. Each of the individuals below is standing for reelection at the Annual Meeting except for Mr. Brooks. There are no family relationships between any of our directors, director nominees and executive officers. There are no ongoing arrangements or understandings between any of our executive officers, directors or director nominees and any other person pursuant to which any person will be selected as a director or an executive officer.

Director and Director Nominee Skills and Qualifications

CALIFORNIA RESOURCES CORPORATION 6

Board of Directors and Corporate Governance

• Member of the Compensation Committee

• Member of the Sustainability Committee

• Member of the Special Committee on Finance

Mr. Bremner, 32, has served as a member of California Resources Corporation's Board of Directors since May 2021. Since 2019, Mr. Bremner has served as a partner of JB Energy Partners, LP (JBEP) and is the Vice President of Oil & Gas for Jaco Oil Company. In these roles Mr. Bremner leads the acquisition and management of a substantial portfolio of U.S. onshore energy assets, including development of carbon capture and storage projects. From 2013 to 2019, Mr. Bremner worked for California Resources Corporation in various engineering roles, and most recently in Portfolio Management & Strategic Planning. Mr. Bremner earned his M.B.A. from the University of California, Los Angeles, and has a Bachelor of Science degree in Mechanical Engineering from California Polytechnic State University San Luis Obispo.

• Member of the Audit Committee

• Member of the Special Committee on Finance

Mr. Brooks, 64, has served as a member of California Resources Corporation’s Board of Directors since October 2020. Mr. Brooks is a private investor. He currently serves as the Lead Independent Director of Chord Energy Corporation and was formerly the Board Chair of its predecessor Oasis Petroleum Inc., an oil and natural gas company, and served as its Chief Executive Officer from December 2020 to April 2021. Mr. Brooks also previously served as the Board Chair of OMP GP LLC, the general partner of Oasis Midstream Partners LP. He previously served on the Board of Directors of Chaparral Energy, Inc. from 2017 to October 2020 and also served on the Board of Directors of Madalena Energy Inc. (now Centaurus Energy, Inc.) in Canada. From April 2017 he served as President and Chief Executive Officer as well as a member of

CALIFORNIA RESOURCES CORPORATION 7

Board of Directors and Corporate Governance

the Board of Directors of Energy XXI Gulf Coast, Inc., an offshore Gulf of Mexico exploration and production company, until it was acquired by an affiliate of Cox Oil LLC in October 2018. From 2015 to 2016, he served as President and Chief Executive Officer and a member of the Board of Directors of Yates Petroleum Corporation, a privately owned exploration and production company, which merged with EOG Resources. From 2012 to 2014, he served as Chief Executive Officer as well as a member of the Board of Directors of Aurora Oil & Gas Limited until it merged with Baytex Energy Corp. In 2012, he served as a senior vice president at Forest Oil Corporation. From 2006 to 2012, Mr. Brooks also built two private equity sponsored firms focused on unconventional resource projects in the western U.S. In addition, he spent 24 years with Marathon Oil Company in roles of increasing responsibility, lastly as the director of upstream mergers and acquisitions and business development for the Americas. He holds a Bachelor of Science degree in business management from the University of Wyoming – Casper and a Master of Business Administration, Finance from Our Lady of the Lake University in Texas.

Ms. Cepak, 50, is the Independent Chair of California Resources Corporation’s Board of Directors and has served as a member since October 2020. Ms. Cepak has 29 years of energy industry experience, including both financial and operational appointments. She has served as a director of Patterson-UTI, a company that provides land drilling and pressure pumping services, directional drilling, rental equipment and technology, since August 2014 and as a director of Ranger Oil Corporation, an independent oil and gas company, since September 2019. Most recently, Ms. Cepak joined the Board of Directors of EnLink Midstream, LLC, in December 2021. Ms. Cepak served as the Chief Financial Officer of Energy XXI Gulf Coast Inc. from August 2017 to October 2018. Ms. Cepak served as the Chief Financial Officer of KLR Energy (and, subsequent to its business combination, Rosehill Resources Inc.) from January 2015 to June 2017. Ms. Cepak served as a director of Yates Petroleum Corporation from October 2015 to October 2016. Ms. Cepak served four years as the Chief Financial Officer of EPL Oil & Gas, Inc., and was further appointed Executive Vice President in January 2014, and she served in those roles until June 2014, when EPL was sold. Ms. Cepak originally joined EPL as a Senior Asset Management Engineer, a position she held until she was appointed Director of Corporate Reserves in September 2001. Ms. Cepak was named EPL’s Director of Investor Relations in April 2006 and Vice President, Treasurer and Investor Relations in July 2008. In July 2009, Ms. Cepak was designated as EPL’s Principal Financial Officer and, in September 2009, she was appointed Senior Vice President. Prior to joining EPL, she was a Senior Reservoir Engineer with Exxon Production Company and ExxonMobil Company with operational roles including reservoir engineering and subsurface completion engineering for numerous offshore Gulf of Mexico properties. Ms. Cepak holds a B.S. in Engineering from the University of Illinois and an M.B.A. in Management with a concentration in Finance from Tulane University.

CALIFORNIA RESOURCES CORPORATION 8

Board of Directors and Corporate Governance

• Chair of the Compensation Committee

• Member of the Nominating and Governance Committee

• Chair of the Special Committee on Finance

Mr. Chapman, 60, has served as a member of California Resources Corporation’s Board of Directors since October 2020. Mr. Chapman serves as a non-executive Advisory Director of SkyWorks Capital, LLC, an aviation and aerospace management consulting services company based in Greenwich, Connecticut, which he joined in December 2004. Prior to SkyWorks, he was associated with Regiment Capital Advisors, LP, an investment advisor based in Boston specializing in high yield investments, which he joined in January 2003. Prior to Regiment, Mr. Chapman acted as a capital markets and strategic planning consultant with private and public companies, as well as investment advisers and hedge funds (including Regiment), across a range of industries. Prior to establishing an independent consulting practice, Mr. Chapman worked for The Renco Group, Inc. (a multi-billion dollar private corporation with diverse investment holdings located throughout the world) from December 1996 to December 2001. Prior to Renco, he was a founding principal of Fieldstone Private Capital Group, Inc. in August 1990 where he headed the Corporate Finance and High Yield Finance Groups. Prior to joining Fieldstone, Mr. Chapman worked for Bankers Trust Company from July 1985 to August 1990, most recently in the BT Securities capital markets area. Mr. Chapman has over 35 years of investment banking experience in a wide range of industries including aviation/airlines, metals/mining, natural resources/energy, automotive/general manufacturing, financial services, real estate and healthcare. Mr. Chapman has served on the Board of Directors of Denbury, Inc. since September 2020. In addition, Mr. Chapman has served on the Board of Directors of Arch Resources, Inc. since 2016, and as its Lead Independent Director since April 2020. Mr. Chapman received an M.B.A. degree with distinction from Dartmouth College in 1985 and was elected an Edward Tuck Scholar. He received his BA degree, with distinction, magna cum laude, at Dartmouth College in 1984 and was elected to Phi Beta Kappa, in addition to being a Rufus Choate Scholar.

CALIFORNIA RESOURCES CORPORATION 9

Board of Directors and Corporate Governance

Mr. Leon, 46, has served as the Executive Vice President and Chief Financial Officer of California Resources Corporation since August 2020. Mr. Leon originally joined CRC in 2014 during the spin-off from Occidental Petroleum as Vice President of Portfolio Management and Strategic Planning. In 2018, Mr. Leon was named Vice President of Corporate Development where he oversaw all acquisition and divestiture activities for the company. Prior to joining CRC, Mr. Leon worked at Occidental Petroleum Corporation where he held various roles in Finance, Planning and U.S. and International Business Development areas. Mr. Leon started his career with Petrie Parkman & Co., Inc. an energy-focused boutique investment banking firm. Mr. Leon holds an M.B.A. from the University of Texas, Austin and a Bachelor of Arts in International Business from San Diego State University and CETYS Universidad in Mexico. From 2019 to 2022, he served on the Board of the Union Rescue Mission of Los Angeles which is one of the largest privately run homeless shelters in the U.S.

Mr. McFarland, 53, is the President and Chief Executive Officer of California Resources Corporation and has served on its Board of Directors since October 2020. Mr. McFarland is the former Executive Chairman of GenOn Energy, an independent power producer. From April 2017 to December 2018, he was the President and Chief Executive Officer of GenOn and served on its Board until September 2022. From 2013 to 2016, he served as Chief Executive Officer of Luminant Holding Company LLC, a subsidiary of Energy Future Holdings Corporation, and a large independent power producer. From 2008 to 2013, he served as both Chief Commercial Officer of Luminant and Executive Vice President, Corporate Development and Strategy of Energy Future Holdings. From 1999 to 2008, Mr. McFarland served in various roles at Exelon Corporation, including as Senior Vice President, Corporate Development. He previously served on the Boards of Bruin E&P Partners (an independent company), TerraForm Power, and Chaparral Energy. Mr. McFarland earned his Masters of Business Administration from the University of Delaware and a Bachelor of Science degree in Civil Engineering (Environmental Concentration) from Virginia Polytechnic Institute and State University. He received his professional engineer license in 1995.

CALIFORNIA RESOURCES CORPORATION 10

Board of Directors and Corporate Governance

• Member of the Compensation Committee

• Member of the Sustainability Committee

Ms. Neeman Brady, 42, has served as a member of California Resources Corporation’s Board of Directors since August 2021. Ms. Neeman Brady currently serves as the Chief Executive Officer and a director of Sustainable Development Acquisition Corp. and since 2017 has been in various leadership roles at Renewable Resources Group. From 2015 to 2017 she was the President of Edison Water Resources and an officer of Edison International. In 2015, she was the Director, Strategic Planning of Edison International. From 2008 until 2015, Ms. Neeman Brady served in several roles at Southern California Edison, including Director, Energy Procurement, Power Supply from 2014 to 2015; Director, Asset Optimization and Trading, Power Supply from 2013 to 2014; Director, Contracts, Renewable and Alternative Power from 2011 to 2013. Prior to that, Ms. Neeman Brady held various finance and strategic planning positions for McKinsey and Company (2007), Twentieth Century Fox (2005-2006) and Goldman Sachs (2001-2004). Ms. Neeman Brady holds a Bachelor’s degree in Economics and History of Architecture from Brown University and an MBA from Harvard University. Ms. Neeman Brady currently serves on the Boards of Directors of Sustainable Development Acquisition Corp, Blue Ocean Mariculture and the Library Foundation of Los Angeles, is an independent board member of Mitigation Investment Holdings, and is a Commissioner of the Los Angeles Department of Water and Power. She previously served as Chair of the Board of Fishpeople, a Board Alternate for CalBio Energy, a Board Observer of Enbala Networks, and a Board Member of Emrgy and the Colorado River Board of California.

• Chair of the Nominating and Governance Committee

• Member of the Audit Committee

Mr. Quintana, 63, has served as a member of California Resources Corporation’s Board of Directors since October 2020. Mr. Quintana served as the President and Chief Executive Officer of Tesco Corporation, an oilfield services company, from 2005 until his retirement in January 2015, and was a member of Tesco’s

CALIFORNIA RESOURCES CORPORATION 11

Board of Directors and Corporate Governance

Board of Directors from September 2004 to May 2015. Prior to his appointment as President and Chief Executive Officer, Mr. Quintana served as Executive Vice President and Chief Operating Officer at Tesco beginning in September 2004. Prior to his tenure at Tesco, Mr. Quintana worked for Schlumberger Corporation as Vice President of Integrated Project Management and Vice President of Marketing for the Americas from November 1999 to September 2004. Prior to Schlumberger, Mr. Quintana worked from June 1980 to November 1999 for Unocal Corporation, an integrated E&P company. Mr. Quintana held various operational and managerial roles in production, drilling and asset management. His last roles at Unocal were Asset Manager for the MidContinent Region and Asset Manager for Deepwater Gulf of Mexico. Mr. Quintana brings 42 years of experience in various aspects of the oil and gas exploration and production industry, including strong experience in upstream operations, a deep understanding of drilling and asset management technologies, and broad human resources management skills and experience. He is a member of the Board of Directors of SM Energy since July 2006 and a member of the Board of Directors of Newmont Mining since October 2015. He previously served as Chairman of the Board of Basic Energy Services and as a member of its Board of Directors from December 2016 until October 2021. Mr. Quintana has a degree in Mechanical Engineering from the University of Southern California and is a Licensed Petroleum Engineer in California.

• Chair of the Sustainability Committee

• Member of the Audit Committee

Mr. Roby, 63, has served as a member of California Resources Corporation’s Board of Directors since October 2020. Since 2015, Mr. Roby has served as the Chief Executive Officer of Shepherd Energy, LLC, Mr. Roby’s consulting company. From 2013 to 2014, he acted as Chief Operating Officer of Sheridan Production Company, LLC. From 2000 to 2013, he held a number of U.S. and international management positions with Occidental Petroleum Corporation, most recently as Senior Vice President, Worldwide Operations and Production/Facility Engineering. Prior to his work at Occidental, he was Vice President of Operations of Altura Energy Ltd., a joint venture between Shell Oil Company and Amoco Corporation in the Permian Basin, following 15 years of various managerial and engineering roles with Shell Oil. Mr. Roby has served as a member of the Board of Directors of the international E&P firm Vermilion Energy Inc. since 2017. He has a bachelor’s degree in mechanical engineering from Louisiana State University.

CALIFORNIA RESOURCES CORPORATION 12

Board of Directors and Corporate Governance

• Chair of the Audit Committee

• Member of the Nominating and Governance Committee

Ms. Veltmann, 54, has served as a member of California Resources Corporation's Board of Directors since December 2021. Ms. Veltmann has 31 years of experience that includes financial leadership of publicly-listed entities, private entrepreneurial companies and global auditing firms. Since 2018, she has served as founder, CEO and sole director of ESG Lynk, a leading sustainability reporting company. From 2015 to 2018, she was the Vice President and Chief Accounting Officer of Paragon Offshore Plc., an offshore drilling company. From 2010 to 2015, she worked in various roles including Corporate Controller and Vice President and Chief Accounting Officer at Geokinetics, Inc., formerly one of the world’s largest independent land and seafloor geophysical companies. She also worked in various auditor capacities at KPMG LLP from 1995 to 2002 and before that at Arthur Andersen LLP from 1992 to 1995. From 2021 to its acquisition in 2022, she served as a director and chair of the Audit Committee for Structural Integrity Associates, a private company that provides life cycle engineering solutions. She served as a Board member of the University of New Mexico Robert O. Anderson School of Management from 2018 to 2022, and as an Advisory Council member of the K.B. Hutchison Center for Energy, Law & Business at the University of Texas at Austin from 2019 to 2021. Ms. Veltmann is a certified public accountant and holds the FSA Credential from the Sustainability Accounting Standards Board (SASB). She has a BBA degree in Accounting from the University of New Mexico, and is an alumna of the Advanced Management Program at Harvard Business School.

CALIFORNIA RESOURCES CORPORATION 13

Board of Directors and Corporate Governance

Board Refreshment and Evaluation

Identifying and Evaluating Nominees for Director

Our Nominating and Governance Committee is responsible for leading the search for individuals qualified to serve as directors and for recommending to the Board nominees as directors to be presented for election at meetings of the stockholders or of the Board of Directors. Our Nominating and Governance Committee evaluates candidates for nomination to the Board of Directors, including those recommended by stockholders, and conducts appropriate inquiries into the backgrounds and qualifications of possible candidates. The Board values having unique and complementary backgrounds and perspectives in the boardroom and considers candidates who can provide diverse perspectives and add unique value through skills highly relevant to our corporate strategy.

The Nominating and Governance Committee may retain outside consultants to assist in identifying director candidates in its sole discretion, but it did not engage any outside consultants in connection with selecting the nominees for election at the Annual Meeting.

Director Criteria, Qualifications and Experience

Our Corporate Governance Guidelines contain qualifications that apply to director nominees recommended by our Nominating and Governance Committee. In the event that a vacancy on the Board of Directors arises, the Nominating and Governance Committee will consider and review the candidate’s following qualifications, relevant skills, qualifications and experience:

Board Diversity

The Board recognizes the value of having directors from a wide variety of backgrounds who bring diverse opinions, perspectives, skills, experiences, backgrounds and orientations to its discussions and its decision-making processes. A diverse board enables a more balanced, wide-ranging discussion in the boardroom, and is also important to the Company’s stockholders, its management and employees. For these reasons, the Nominating and Governance Committee also will consider the diversity of, and the optimal enhancement of the current mix of talent and experience on, the Board of Directors. Currently, one-third of the Board are women and one-third of the Board are diverse from a race/ethnicity standpoint. Additionally, one-third of our director nominees are women and 44% of our director nominees are diverse from a race/ethnicity standpoint.

Board Evaluations and Incumbent Directors

Our Board believes that a robust annual evaluation process is an important part of its governance practices. For this reason, the Nominating and Governance Committee oversees an annual evaluation of the performance of the Board. The committee distributes written evaluation surveys to each director. The Chair shares the results of the surveys and interviews with the full Board for consideration with respect to director nominees, and Board and committee structure, composition and effectiveness.

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Board of Directors and Corporate Governance

With respect to the reelection of an existing director, the Nominating and Governance Committee will consider the results of the evaluation process and review the director’s:

Board Education

The Board of Directors engages in various activities to obtain additional insight into our business and industry, beneficial perspectives on the performance of the Company, the Board and our management, and on the Company’s strategic direction. From time to time, the full Board receives presentations from its committees, and internal and external advisors, regarding current topics of interest. The Company also makes resources available to individual directors, including access to director education from third party providers.

Director Independence Determinations

Majority independent directors 11% non-independent 89% independent

To qualify as “independent” under the NYSE listing standards, the Board of Directors must affirmatively determine that the director has no material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us) that would interfere with his or her exercise of independent judgment in carrying out his or her responsibilities as a director. The NYSE independent director criteria include, among other things, that the director not be our employee and not have engaged in various types of business dealings with us.

The Board of Directors has reviewed all direct or indirect business relationships of which it is aware between each director or director nominee (including his or her immediate family) and us, as well as each director’s or director nominee’s relationships with charitable organizations, to assess director (or director nominee) independence as defined in the listing standards of the NYSE. Based on this evaluation, the Board of Directors has determined that Messrs. Bremner, Brooks, Chapman, Quintana and Roby and Mmes. Cepak, Neeman Brady and Veltmann are independent directors as that term is defined in the listing standards of the NYSE. In its review of Mr. Bremner’s independence, the Board considered his prior employment with the Company and his association with entities that own real property interests in certain assets in which the Company owns interests. Mr. McFarland, our current President and Chief Executive Officer, and Mr. Leon, our current Executive Vice President and Chief Financial Officer and future President and Chief Executive Officer, are not considered by the Board of Directors to be independent because of their employment relationships with CRC.

Board Leadership Structure and Committees

Chair

The Board of Directors’ leadership structure currently separates the CEO and Chair of the Board positions. Mr. McFarland currently serves as our President and CEO, and Ms. Cepak serves as our independent Chair. Our Chair of the Board presides over all meetings of the Board, including executive sessions.

The Board of Directors believes that there is no single, generally accepted approach to providing board leadership and that each of the possible leadership structures for a board must be considered in the context of the individuals involved and the specific circumstances facing a company, as the right leadership structure may vary as circumstances change. The Board of Directors believes it is in the best interest of the Company and its stockholders at this time to have separate CEO and Chair positions. The Board of Directors has found

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Board of Directors and Corporate Governance

that this structure enables the CEO to focus on operation of the Company’s business, while the Chair focuses on leading the Board of Directors in its oversight role.

Following the Annual Meeting, Mr. Leon is expected to succeed Mr. McFarland as our President and CEO. Mr. Leon has also been nominated for election as director at the Annual Meeting. Pursuant to our bylaws, a person who serves as our CEO shall also serve as a director. The expected CEO transition will not affect our leadership structure of separating the CEO and Chair of the Board positions.

Board Meetings and Attendance

During 2022, the Board of Directors held 12 meetings. Each of the standing and special committees held the number of meetings included in the description of the committees set forth below in 2022. Each director attended at least 75% of the meetings of the Board of Directors and the committees on which he or she served that occurred during such directors’ terms in 2022.

Pursuant to our Corporate Governance Guidelines, directors are encouraged to attend our annual meetings of stockholders. All of the directors of our Board attended the virtual annual meeting in May 2022.

Executive Sessions of the Board

The Board of Directors holds meetings of independent directors in executive session without management present on a regular basis. In addition to regularly scheduled Board meetings, executive sessions may be called upon the request of any independent director. In 2022, the Board held four executive sessions.

Committees of the Board

As of the date of this proxy statement, our Board of Directors has four separately designated standing committees. The membership and purposes of each of the standing and special committees are described below. Each of the standing committees operates under a written charter adopted by the Board. The Board of Directors and each committee has the power to hire independent legal, financial or other experts and advisors as it may deem necessary, without consulting or obtaining the approval of any officers of the Company in advance.

In addition, on November 9, 2020, the Board also established the Finance special committee. This special committee continues to operate and assists the Board in fulfilling its oversight responsibilities for matters relating to the Company’s financial strategy, capital allocation, liquidity position and financial policies and activities.

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Board of Directors and Corporate Governance

Standing Committees of the Board

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Board of Directors and Corporate Governance

CALIFORNIA RESOURCES CORPORATION 18

Board of Directors and Corporate Governance

Special Committees of the Board

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Board of Directors and Corporate Governance

The Board’s Role in Risk Oversight

BOARD OF DIRECTORS Informed through committee reports and by the President and CEO about known risks to the Company’s strategy and business. Regularly reviews information regarding the Company’s credit, liquidity and operations, including the risks associated with each. COMPENSATION COMMITTEE Oversees the management of risks relating to the Company’s executive compensation plans and arrangements. AUDIT COMMITTEE Oversees financial risks and the ethical conduct of the Company’s business, including the steps the Company has taken to monitor and mitigate these risks, and reviews material related party transactions. NOMINATING AND GOVERNANCE COMMITTEE Manages risks associated with the independence of the Board of Directors and potential conflicts of interest. SUSTAINABILITY COMMITTEE Responsible for overseeing the management of risks relating to sustainability and health, safety and environment.

While the Company’s management is responsible for the day-to-day risk management process, the Board has ultimate responsibility for the oversight of the Company’s risk management, shaping effective corporate governance, and setting the right tone for integrity, ethics and culture, for the benefit of the Company’s stakeholders, including shareholders, and employees. The Board exercises direct oversight of strategic risks to the Company and the risk management process to ensure that it is properly designed, well-functioning and consistent with our overall corporate strategy, and also delegates certain risk areas to each of the Board committees.

BOARD OF DIRECTORS Informed through committee reports and by the President and CEO about known risks to the Company's strategy and business. Regularly reviews information regarding the Company's credit, liquidity and operations, including the risks associated with each. COMPENSATION COMMITTEE Oversees the management of risks relating to the Company's executive compensation plans and arrangements. AUDIT COMMITTEE Oversees finanacial risks, cybersecurity risks, and the ethical conduct of the Company's business, including the steps the Company has taken to monitor and mitigate these risks, and reviews material party transactions. NOMINATING AND GOVERNANCE COMMITTEE Manages risks associated with the independence of the Board of Directors and potential conflicts of interest. SUSTAINABILITY COMMITTEE Responsible for overseeing the management of risks relating to sustainability and health, safety and environment, including climate change.

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Board of Directors and Corporate Governance

Compensation Committee Interlocks and Insider Participation

No member of our Compensation Committee is now, or at any time since the beginning of 2022 has been, employed by or served as an officer of CRC or any of its subsidiaries or had any business relationship requiring disclosure with CRC or any of its subsidiaries. None of our executive officers is now, or at any time has been, since the beginning of 2022, a member of the compensation committee or board of directors of another entity one of whose executive officers has been a member of our Board of Directors or Compensation Committee.

Communications with Directors

Our Board of Directors welcomes communications from our stockholders and other interested parties. Communications to our Board of Directors, to any committee of our Board, or to any director in particular, should be sent to:

Board of Directors, committee name or director’s name, as appropriate

California Resources Corporation

Attention: Corporate Secretary

1 World Trade Center, Suite 1500

Long Beach, California 90831

We will forward all correspondence directly to the committee or individual director, as appropriate. Our independent directors approved our process for collecting and organizing stockholder communications to the Board of Directors.

If any stockholder or third party has a complaint or concern regarding accounting, internal controls over financial reporting or audit matters at CRC, they should send their complaint in writing to Ms. Veltmann, the Chair of the Audit Committee, at the address listed above.

Availability of Corporate Governance Documents

We are committed to good corporate governance. In furtherance thereof, the Board of Directors has adopted governance documents to guide the operation and direction of the Board and its committees, which include Corporate Governance Guidelines, a Business Ethics Policy (which applies to all directors and employees, including the Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer) and charters for the Audit, Compensation, Nominating and Governance and Sustainability Committees. Each of these documents is available on our website (www.crc.com), and stockholders may obtain a printed copy, free of charge, by sending a written request to California Resources Corporation, Attention: Corporate Secretary, 1 World Trade Center, Suite 1500, Long Beach, California 90831. We will also promptly post on our website any material amendments to these documents and any waivers from the Business Ethics Policy for our directors and principal executive, financial and accounting officers.

Certain Relationships and Related Transactions

Policies and Procedures

Our Board of Directors adopted written policies regarding related party transactions. We review all relationships and transactions in which we and our directors and executive officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest. Our Corporate Secretary’s office implements procedures to obtain information from the directors and executive officers with respect to related party transactions. The Audit Committee reviews and discusses with management and the independent registered public accounting firm any material related party transactions as defined by, and required to be disclosed under, the rules of the Securities and Exchange Commission (“SEC”) and the NYSE. Agreements that embody transactions that are material in amount or significance are filed with the SEC as required.

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Board of Directors and Corporate Governance

Our Business Ethics and Corporate Policies prohibit significant conflicts of interest. Any waivers of these policies require approval by the compliance officer, or in the case of conflicts of our executive officers or directors, the Board of Directors. Under our Business Ethics and Corporate Policies, conflicts of interest generally are deemed to occur when private or family interests do not appear impartial, interfere or compete with the interests of our Company.

We have multiple processes for reporting conflicts of interests and related party transactions. Under our Business Ethics and Corporate Policies, all of our directors and employees are required to report any known or apparent conflict of interest, or potential conflict of interest, to their supervisors, the compliance officer, a member of the corporate compliance committee, our legal counsel, human resources, or the Board of Directors, as appropriate. As part of any review of any conflict of interest, potential conflict of interest or related party transaction, the following factors are generally considered:

We also have other policies and procedures to prevent conflicts of interest and related person transactions. For example, the charter of our Nominating and Governance Committee requires that the committee members assess the independence of the non-management directors at least annually, including a requirement that it determine whether any such directors have a material relationship with us, either directly or indirectly, as defined therein and as further described above under “Director Independence Determinations.”

Related Party Transactions

There are no transactions or relationships with related persons since the beginning of our most recently completed fiscal year that are required to be disclosed.

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Environment, Social and Governance Goals

Environment, Social and Governance Goals

ENVIRONMENT

Carbon Management

CRC is committed to the transition in the energy sector. CRC adopted a Full-Scope 2045 Net Zero goal for Scope 1, 2 and 3 GHG emissions. This goal places CRC among a select few industry peers to include Scope 3 GHG emissions in their Net Zero goal. In addition, CRC’s 2045 goal targets a timeframe five years sooner than many other companies’ Net Zero goals and aligns CRC with the State of California’s 2045 net zero ambitions and is sooner than the 2050 goal set out by the Paris Agreement.

Sustainability Goals

In addition to our carbon management goal, CRC continues to advance our 2030 goals relating to water sustainability, methane reductions, and integrating renewables in our operations in order to reduce our Scope 1 and 2 GHG emissions. Finally, in addition to our carbon management goal and other sustainability goals, CRC continues to have internal targets for oil spill prevention rate and asset retirement obligation reductions.

SOCIAL

We view our workforce as an asset and the Board provides oversight over significant aspects of our human capital. Safety is a key value at CRC. As a result, CRC has adopted a 2023 Incident and Injury Rate internal target and a specific Diversity, Equity and Inclusion objective.

GOVERNANCE

The full Board, in addition to its committees, is responsible for overseeing our sustainability strategy, risk management and goals, including those related to carbon management, environmental stewardship, worker safety, and diversity, equity and inclusion in our oil and gas operations as well as our carbon management business. The Sustainability Committee assists the Board in fulfilling its oversight responsibilities relating to sustainability and climate-related matters pertaining to the Company’s business, strategy, operations, performance or reputation and is responsible for reviewing and discussing the status of ESG goals, risks, and regulations with management.

Compensation

We are proud to note that CRC’s ESG goals continue to be directly tied to the performance-based compensation of our employees, including executives and senior managers, further highlighting our standing commitment and dedication to a cleaner and more sustainable future for California. In fact, the Board has further emphasized the importance of achieving ESG goals by tying 30% of our management team’s annual incentive related to company performance to ESG related metrics.

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Audit Committee Report

Audit Committee Report

The Audit Committee of the Board of Directors of California Resources Corporation assists the Board in its oversight of corporate governance by overseeing the quality and integrity of the accounting, auditing, and financial reporting practices of the Company. The Audit Committee approves the appointment and services of the independent registered public accounting firm, and monitors (1) the integrity of the financial statements of CRC; (2) the independent registered public accounting firm’s qualifications, independence and performance; (3) the effectiveness and performance of CRC’s internal audit function; (4) CRC’s system of disclosure controls and procedures, internal control structure over financial reporting and compliance with ethical standards; and (5) the compliance by CRC with legal and regulatory requirements related to financial statements.

The Board of Directors has determined that each of the members of the Audit Committee satisfies the standards of independence established under the SEC’s rules and regulations and listing standards of the NYSE. The Board of Directors has further determined that each of the members of the Audit Committee is financially literate and that Ms. Veltmann is an “audit committee financial expert” as defined by the rules and regulations of the SEC.

In connection with our financial statements for the year ended December 31, 2022, the Audit Committee has:

Based on the review and discussions with CRC’s management, independent registered public accounting firm and independent reserves audit firms, as set forth above, the Audit Committee recommended to CRC’s Board of Directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, for filing with the SEC.

Audit Committee,

Alejandra (Ale) Veltmann, Chair

Douglas E. Brooks

Julio M. Quintana

William B. Roby

February 22, 2023

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Compensation Discussion and Analysis

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) provides a description of the elements and key features of our compensation program, as well as context and rationale for decisions made with respect to the compensation for our “named executive officers” or “NEOs” for the year ended December 31, 2022, who are identified below:

In accordance with SEC rules, our NEOs were determined as of December 31, 2022 and are listed above with the titles that they held as of that date. After the end of the 2022 year, we announced that Mr. Leon would become our President and Chief Executive Officer, effective at the Annual Meeting. We are currently in an ongoing search for a Chief Financial Officer to succeed Mr. Leon. Information regarding 2023 compensation decisions that will be made for Mr. Leon and the eventual new Chief Financial Officer will be detailed within our CD&A within the proxy statement for our 2024 Annual Meeting of Stockholders.

Table of Contents

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Compensation Discussion and Analysis

Compensation Objectives and Process

The purpose of our executive compensation program is to allow us to attract, retain, motivate and reward high-performing executives to maximize returns to our stockholders.

Executive Compensation Objectives

Our executive compensation objectives are to:

Compensation Program Best Practices

Our executive compensation program is designed to incorporate compensation and governance best practices and is overseen by our Compensation Committee. Our short-term and long-term incentive plans are primarily performance-based and are intended to align with the short- and long-term best interests of stockholders. The Compensation Committee has engaged in best practices to further align executive pay with Company performance and to ensure good governance in the following ways:

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Compensation Discussion and Analysis

WHAT WE DO We pay for performance. A significant portion of the compensation of our named executive officers is directly linked to the Company’s performance, by way of a compensation structure that includes performance-based annual and long-term incentive awards. We are stockholder-aligned. Annual and long-term incentive awards are based on performance measures that are aligned with the creation of value for our stockholders. All of the outstanding long-term incentive awards for our named executive officers are stock-based. We have “double trigger” change in control provisions. Our change in control arrangements for named executive officers require both the occurrence of a change in control event and termination of employment before applicable vesting of awards occurs. We provide market-competitive compensation. Our compensation program is competitive within our industry and recognizes evolving governance practices, which allows us to attract and retain key talent. We have stock ownership requirements. We maintain stock ownership guidelines for our named executive officers and stock grant delivery mechanics for our directors that require meaningful stock ownership in the Company. We have a clawback policy. Our Compensation Recoupment and Clawback Policy allows the Company to require reimbursement of incentive compensation in certain circumstances. We seek independent advice. The Compensation Committee retains an independent advisor to review executive compensation and provide advice to the Compensation Committee.

WHAT WE DON'T DO We do not allow hedging or pledging. Our Insider Trading Policy prohibits certain transactions involving our stock, including hedging and pledging. We do not allow the repricing of stock options. Our equity incentive plan prohibits the repricing or backdating of stock options. We do not offer enhanced retirement benefits. Our nonqualified defined compensation plan provides resotrative, but not enhanced, retirement benefits for executives. We do not encourage excessive risk or inappropriate risk taking through our incentive programs. Our plans do not motive executives to engage in activities that create excessive or inappropriate risk for the Company.

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Compensation Discussion and Analysis

Role of Compensation Committee

Our executive compensation program is overseen by our Compensation Committee, with input from our management and outside compensation consultants. In its oversight role, the Compensation Committee is responsible for making compensation decisions involving our CEO and other executive officers and evaluating performance for compensatory purposes.

Role of Management

Members of our executive management team, including our President and CEO and our Vice President of Compensation and Benefits, provided input to the Compensation Committee with respect to executive compensation, key job responsibilities, achievement of performance objectives and compensation program design. We believe these individuals provide helpful support to the Compensation Committee in these areas given their understanding of our business and personnel, compensation programs and competitive environment. The Compensation Committee is not obligated to accept management’s recommendations with respect to executive compensation matters and meets in executive session to discuss such matters outside of the presence of our management. During 2022, the Compensation Committee held five executive sessions.

Role of Independent Compensation Consultants

The Compensation Committee retained Lyons Benenson & Company Inc. (“LB&Co”), after considering all factors relevant to LB&Co’s independence from our management and members of our Compensation Committee and determining that it was independent and without conflicts of interest under the Securities and Exchange Commission rules and the NYSE Listed Company Manual standards. LB&Co advised the Compensation Committee beginning immediately following our emergence from bankruptcy in 2020.

Use of Compensation Data

During 2022, our Compensation Committee analyzed the comparative total compensation of our executive officers. To facilitate this analysis, LB&Co provided the Compensation Committee with comparative Peer Group compensation data that included base salaries, annual incentive opportunities, and long-term incentive opportunities. This information reflected recent publicly available information and other market data for our selected peer companies listed below, which are within the same Global Industry Classification Standard (GICS) Sub-Industry classification and are of similar size and/or have similar geographic operating locations as the Company. We believe that it provided our Compensation Committee with a sufficient basis to analyze the comparative total compensation of our executive officers.

We adjusted our Compensation Peer Group down to 15 companies in 2022 due primarily to mergers among our 20 Peer Group companies from 2021. Devon Energy Corporation and WPX Energy, Inc. merged, resulting in a company that is much larger than CRC, so we removed them from the Peer Group. Cabot Oil & Gas Corporation and Cimarex Energy Co. merged to form Coterra Energy Inc. QEP Resources merged with Diamondback Energy, Inc. We removed Berry Corporation due to its smaller size than CRC.

2014 SPIN-OFF √ Occidental determines executive compensation in effect at Spin-off 2015 √ CRC Compensation Committee selects new peer group and designs compensation program 2016 √ Compensation Committee reduces base salaries by 10% during severe downturn √ Compensation Committee applies negative discretion and reduces annual incentive payouts due to severe business conditions √ Compensation Committee reduces long-term incentive grant date values in anticipation of market movement during severe downturn 2017 √ Compensation Committee changes long-term incentive to address retention concerns and equity burn rate with cash-based performance award 2018 √ Compensation Committee selects expanded peer group for 2018 √ Compensation Committee reduces qualitative portion of annual incentive √ Compensation Committee changes long-term performance award to equity-based 2019 √ Compensation Committee reduces number of metrics under Annual Incentive to provide greater focus on key objectives √ Compensation Committee changes long-term performance award metrics to include a relative Total Shareholder Return metric

Stockholder Outreach

We value feedback regarding our governance and executive compensation practices and reached out to shareholders holding a substantial majority of our shares in 2022 to solicit any feedback on our governance and compensation programs. We sought to learn, in particular, any stockholder concerns regarding the

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Compensation Discussion and Analysis

significant changes we made to our compensation program in 2021 to ensure that we share this feedback with the Compensation Committee and consider those concerns in designing our compensation programs going forward. Stockholders who participated in our engagement efforts in 2022 were invited to meet with members of our senior management and, in some cases, the Chair of our Board.

Feedback from stockholders who engaged was positive regarding the changes we made with our 2022 compensation program, particularly with the majority of the program comprised of performance-based incentives. Stockholders offered suggestions regarding the structure of short and long-term incentives and metrics the Company should consider, including absolute total shareholder return ("TSR") modified by TSR relative to an index like the XOP index. Stockholders also expressed their preference for rigorous quantitative, rather than qualitative incentive goals. Feedback gathered at these meetings was shared with Board and specifically taken into consideration by the Compensation Committee in the formulation of the Company’s 2023 compensation program, as discussed in the 2023 Compensation Program Actions section below.

We intend to continue engaging with stockholders in 2023 to solicit feedback to ensure that our governance and executive compensation practices align with stockholders’ expectations.

Stockholder Approval of Executive Compensation

Our stockholder advisory vote in 2022 on our 2021 executive compensation program resulted in a 93% approval of such compensation by stockholders.

In developing our executive compensation programs, the Compensation Committee considers the results of the advisory vote on executive compensation, feedback gathered from shareholder outreach meetings and many other factors, including the Compensation Committee's assessment of the interaction of our compensation programs with our corporate business objectives, evaluations of our programs by LB&Co, and review of data relating to pay practices of our compensation peer group. However, no specific changes were made to our 2022 executive compensation program due solely to the last positive stockholder approval vote we received in 2022.

2022 Compensation Program

Continuation of the Program Initiated in 2021

The Compensation Committee initiated a new compensation program in 2021, following our emergence from bankruptcy in late 2020. With consultation from LB&Co, the Compensation Committee created a market competitive compensation structure for 2021 consisting of base salaries, annual incentives and long-term incentives to motivate and retain our executives. The new compensation program included long-term incentive emergence grants which were multi-year sized to immediately align our executives’ compensation with shareholder interests in a meaningful way, recognizing that all of their prior equity of the Company was eliminated by the bankruptcy.

For 2022, the Compensation Committee continued the compensation program initiated in 2021 by keeping salaries and annual incentive targets at the 2021 levels. In addition, the NEOs were not granted long-term incentive awards during 2022, since they received the multi-year emergence grants in 2021.

Recent Financial Measures as of 11/24/2020 ($ Millions) Company Reported 12 Months Revenues Market Cap Total Assets Total Economic Value Antero Resources Corporation $3,255.0 $1,179.5 $13,349.7 $7,315.1 Berry Corporation $468.7 $344.5 $1,446.5 $690.1 Cabot Oil & Gas Corporation $1,455.6 $7,186.4 $4,419.3 $8,382.6 Callon Petroleum Company $891.8 $402.7 $4,937.3 $3,631.7 Cimarex Energy Co. $1,817.0 $3,865.8 $4,606.0 $5,866.0 CNX Resources Corporation $1,121.9 $2,243.0 $8,129.2 $4,837.7 Continental Resources, Inc. $2,750.8 $6,307.1 $14,728.2 $12,298.8 Denbury Inc. $864.3 $1,012.5 $1,677.9 $1,167.8 Devon Energy Corporation $4,335.0 $5,852.5 $10,326.0 $8,820.5 Diamondback Energy, Inc. $2,992.0 $7,446.8 $18,760.0 $14,331.8 Marathon Oil Corporation $3,532.0 $5,091.6 $18,663.0 $10,039.6 Matador Resources Company $841.2 $1,362.3 $3,786.2 $3,443.0 Murphy Oil Corporation $2,081.2 $1,755.6 $10,469.4 $5,480.3 PDC Energy, Inc. $1,091.0 $1,876.2 $5,332.5 $3,610.3 QEP Resources, Inc. $846.1 $428.7 $5,236.7 $2,067.6 Range Resources Corporation $1,854.7 $1,885.5 $6,012.9 $5,004.7SM Energy Company $1,205.3 $527.0 $5,122.3 $2,906.8 Southwestern Energy Company $2,274.0 $2,256.9 $4,157.0 $4,751.9 Whiting Petroleum Corporation $900.7 $822.7 $2,098.5 $1,227.0 WPX Energy, Inc. $2,096.0 $4,409.8 $9,501.0 $7,439.8 Peer Companies 20 Prior Peers 14 Median $1,636.3 $1,880.8 $5,284.6 $4,921.2 Mean $1,832.0 $2,812.9 $7,638.0 $5,665.7 Minimum $468.7 $344.5 $1,446.5 $690.1 Maximum $4,335.0 $7,446.8 $18,760.0 $14,331.9 California Resources Corporation $1,821.0 $1,527.3 $4,856.0 $2,940.3 Percentile 53.1% 39.0% 35.5% 21.3% Percent to Median 111.3% 81.2% 91.9% 59.7%

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Compensation Discussion and Analysis

Base Salaries

The Compensation Committee made no changes to the base salaries of the NEOs during 2022. The NEO’s salaries were initially set by the Compensation Committee in 2021 based on the scope of job responsibilities, internal alignment and position relative to peer group compensation data.

Annual Incentive Program ("AIP")

AnnuaI Incentive Targets

The annual incentive targets for our NEOs were initially set in 2021, based on the Compensation Committee’s review of the 2021 Peer Group market data with further consideration given to internal alignment. The following 2022 annual incentive targets approved by the Compensation Committee in February 2022 continued the program initiated in 2021:

Payouts under the AIP can range from 0% to 200% of the annual incentive target for an individual. Payout of 80% of the annual incentive target amount is based on the AIP Scorecard metrics and 20% is based on the Committee’s assessment of an NEO’s individual performance.

AIP Scorecard Metrics

In February 2022, the Compensation Committee established the scorecard for the 2022 AIP to incentivize the AIP participants to undertake actions and invest capital to achieve sustainable long-term value for CRC. The construct of the AIP recognized the material impact that fluctuations in commodity prices have on CRC’s financial measures including adjusted EBITDAX and before-tax free cash flow. As such, while any AIP program cannot eliminate the impact of such fluctuations, the AIP includes metrics related to capital efficiency and cost controls, as well as the Company’s asset retirement obligations. Further, the importance of ESG-related metrics was highlighted by increasing that portion of the AIP scorecard opportunity to 30%.

The Compensation Committee has adopted a policy whereby management’s ability to achieve a maximum payout under the AIP should be due to the achievement of extraordinary results, whether via financial performance or the other non-financial metrics incorporated into the AIP, with a goal to lessen the impact of commodity price volatility on AIP payouts.

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Compensation Discussion and Analysis

2021 Annual Incentive Program Scorecard Actual 2021 Results Performance Measure (1) Weight Threshold (50% Payout) Target (100% Payout) Maximum (200% Payout) Measure Outcome Unweighted Measure Payout Weighted Bonus Payout Cost Savings 25% $50 MM $75 MM $100 MM $53 MM 56% 14.0% Adjusted EBITDAX 25% 488 MM $528 MM $750 MM $880 MM 200% 50.0% Free Cash Flow 25% $115 MM $165 MM $370 MM $458 MM 200% 50.0% Capital Efficiency 10% $22,670 $19,269 $14,918 $14,851 200% 20.0% ARO Strategy Approval 7.5% ByQ4 ByQ3 by!3 (with PV savings identified of >$50 MM) Completed Q3 (with PV savings) 200% 15.0% HSE/ESG: Combined IIR 2.5% 0.60 0.50 0.40 0.43 170% 4.25% Spill Prevention Rate 2.5% 99.9994% 99.9996% 99.9998% 99.9997% 150% 3.75% Strategic ESG Initiative Milestones 2.5% 2 of 4 3 of 4 4 of 4 4 of 4 200% 5.0% Total Scorecard Result 162.00%

2022 Annual Incentive Program Scorecard Actual 2022 Results Performance Measure (1) Weight Threshold (50% Payout) Target (100% Payout) Maximum (200% Payout) Measure Outcome Unweighted Measure Payout Weighted Measure Payout Financial Results Adjusted EBITDAX 25% $720 MM $834 MM $948 MM $871 MM 133% 31.1% Before-Tax Free Cash Flow 25% $275 MM $336 MM $397 MM $360 MM 139% 34.8% E&P Cost Management E&P Capital Efficiency 10% $27,031 $22,977 $19,980 $28,811 0% 0% E&P Controllable Costs 10% $909 MM $894 MM $879 MM $1,003 MM 0% 0% ESG Carbon Management—EPA Permit Applications 2.5% 50 MT of new EPA permit applications submitted 80 MT of new EPA permit applications submitted 110 MT of new EPA permit applications submitted 100 MT 167% 4.2% Carbon Management–DOE Funding Request .2.5% Prepare DOE funding request Submit DOE funding request by year end Submit DOE funding request by Q3 Maximum 200% 5.0% Carbon Management–Emissions Deals 5% 1 deal with agreed terms & conditions and minimum 250,000 TPA 1 deal with agreed terms & conditions and minimum 500,000 TPA 2 deals with agreed terms & conditions or minimum 750,000 TPA Maximum 200% 10% Environmental–Scope 1 & 2 Emissions 2.5% Develop plan for 0.7 MTPA reduction of Scope 1 & 2 emissions from 2020 baseline by 2045 Plan for 0.7 MTPA reduction of Scope 1 & 2 emissions from 2020 baseline by 2045 approved by Senior Management by year end Plan for 0.7 MTPA reduction of Scope 1 & 2 emissions from 2020 baseline by 2045 approved by Senior Management by Q3 Maximum 200% 5.0% Environmental–Methane Emissions 2.5% Plan for 30% reduction from 2020 baseline by 2030 approved by Senior Management Plan for 30% reduction from 2020 baseline by 2030 approved by Senior Management and Install 5 pilot reduction devices Plan for 30% reduction from 2020 baseline by 2030 approved by Senior Management and Install 5 pilot reduction devices and Develop multi-year execution plan with cost estimates approved by Senior Management for implementation in 2023 Maximum 200% 5.0% Environmental-Freshwater Usage 2.5% Identify freshwater metering and reporting improvements, or Install required metering and develop action plan Identify freshwater metering and reporting improvements, and Install required metering by Q3 and develop action plan, and Develop reporting system to track freshwater usage Identify freshwater metering and reporting improvements, and Install required metering by Q3 and develop action plan, and Contract for and initiate survey of water lines and Complete estimate for conversion to air cooling for EHP Maximum 200% 5.0% Environmental-ARO Efficiency 5% 10% reduction of average P&A well costs vs. 2021 15% reduction of average P&A well costs vs 2021 20% reduction of average P&A well costs vs. 2021 18.7% 174% 8.7% Environmental-Spill Prevention Rate 2.5% 99.9994% prevention (<250 bbls unrecovered) 99.9998% prevention (<80 bbls unrecovered) 99.9999% 200% 5.0% Safety-Combined IIR 2.5% 0.55 0.45 0.40 0.62 0% 0.0% Social-Diversity, Equity & Inclusion 2.5% n/a Complete diversity training for entire employee population before year-end Complete diversity training for entire employee population before year-end, establish DEI Executive Council by Q2, and review and update recruiting and advancement processes to support our long-term DE&I goals by Q3 Maximum 200% 5.0% Total Scorecard Result 120.8%

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Compensation Discussion and Analysis

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Compensation Discussion and Analysis

Individual NEO Payout Considerations

The Compensation Committee considered the contributions of the management team and assessed the overall performance to be exceptional. The Compensation Committee considered the contributions of each NEO and determined payouts ranging from 115% to 175% for the individual portions of the AIP were appropriate for the NEOs’ contributions to the Company’s overall performance in 2022.

Highlights of the 2022 performance achieved and considered for Mr. McFarland included:

In addition to their contributions to the strong financial results, the following performance highlights were considered by the Compensation Committee in determining the individual portion of the AIP:

For Mr. Leon –

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Compensation Discussion and Analysis

For Mr. Bys –

For Mr. Kerns –

For Mr. Preston –

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Compensation Discussion and Analysis

AIP Payouts

The following table shows the calculation of the 2022 AIP payouts, based on the AIP scorecard result of 120.8% and the individual portion result described above:

Approved Payouts 80% Scorecard Portion 20% Individual Performance Portion Total Payout Name Base Salary Target Bonus % Target Bonus $ Scorecard Payout 120.8% Individual Payout Percent Individual Portion Payout Approved Payout Name Mark A. (Mac) McFarland $850,000 120% $1,020,000 $958,728 148% $301,920 $1,287648 Francisco J. Leon $500,000 100% $500,000 $483,200 175% $175,000 $658,200 Jay A. Bys $500,000 100% $500,000 $483,200 140% $140,000 $623,200 Shawn M. Kerns $500,000 100% $500,000 $483,200 115% $115,000 $598,200 Michael L. Preston $500,000 100% $500,000 $483,200 150% $150,000 $633,200

Long-Term Incentive Grants

We did not grant any long-term incentives to our NEOs in 2022. Please see the table below titled “Outstanding Equity Awards at December 31, 2022” for a description of the outstanding equity-based awards that were held by our NEOs during the 2022 year, and the table below titled “Option Exercises and Stock Vested in 2022” for a description of the NEO equity-based awards that vested during the 2022 year.

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Compensation Discussion and Analysis

Linkage Between Pay and Performance

Our 2022 Compensation Program consisted of base salary and an annual incentive opportunity. Although we did not grant long-term incentives during 2022, the performance-based portion of our multi-year emergence equity grants covered the three-year period that began in 2021. The program for 2022 was designed to link the pay realized by our executives to the performance against AIP scorecard metrics designed to enhance the performance of CRC and the returns to our stockholders.

The pay mix at target values for our CEO and other NEOs under the 2022 Compensation Program was substantially performance-based.

2022 PAY MIX OF CEO 45% salary 55% annual incentive 46% 55% at risk 2022 AVERAGE PAY MIX OF NEOs OTHER THAN CEO 50% salary 50% annual incentive 50% at risk

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Compensation Discussion and Analysis

Employment Agreements

In 2021, the Company entered into various employment agreements with the CEO and other NEOs, as summarized below. The Compensation Committee believes it is the best interests of stockholders to have agreements in place to help retain the CEO and other NEOs. These agreements also protect Company interests and ensure that covered executives can execute their duties in the best interests of stockholders without personal bias by providing change in control protections in the event a transaction that is in the best interests of stockholders would result in their termination of their employment.

CEO

Mr. McFarland was named Interim CEO following the departure of our prior CEO on December 31, 2020. We entered an agreement with Mr. McFarland (the “Interim CEO Agreement”) that provided for a fee of $175,000 per month for his services as an independent contractor while he served as our Interim CEO. During the period he served as Interim CEO, he did not receive cash retainer fees for serving on our Board.

Effective March 22, 2021, the Board named Mr. McFarland President and CEO, removing his previous interim title. In connection with Mr. McFarland’s appointment, the Company and Mr. McFarland entered into an Employment Agreement (the “CEO Employment Agreement”). The CEO Employment Agreement provided for a two-year term, during which either the Company or Mr. McFarland may terminate the employment relationship for any or no reason (such two-year or earlier period, the “Term”). The parties may mutually agree to extend the Term for additional one-year periods, but if the parties do not make such an agreement the CEO Employment Agreement will terminate pursuant to its terms on March 22, 2023. As previously announced, Mr. McFarland will step down as CEO effective at the Annual Meeting in 2023. Therefore, the CEO Employment Agreement will not be renewed and will terminate according to its terms on March 22, 2023. Pursuant to the CEO Employment Agreement, during the Term, Mr. McFarland will receive an annualized base salary of $850,000, will be covered under the Company’s directors and officers liability insurance and will be eligible (i) to receive an annual cash bonus with a target value of 120% of his base salary (reduced for 2021 by the difference, if any, between the amount of fees earned by Mr. McFarland from January 1, 2021 to March 21, 2021 for his service during such period as Interim Chief Executive Officer and the amount of base salary that would have been paid to Mr. McFarland during such period pursuant to the CEO Employment Agreement had such agreement been in effect January 1, 2021), (ii) to participate in those benefit plans and programs of the Company available to similarly situated executives and (iii) commencing in 2023, to receive annual long-term incentive awards under the Company’s 2021 Long Term Incentive Plan (the “LTIP”) with a grant target value of not less than 588% of his base salary as in effect on the applicable grant date. Mr. McFarland also received an initial long-term incentive award consisting of PSUs with a grant target value of $7,993,870 (the “Initial PSUs”) and RSUs with a grant date value of $6,291,692 (the “Initial RSUs”), in each case, under the LTIP in connection with his appointment as President and Chief Executive Officer of the Company.

The CEO Employment Agreement also provides for certain severance payments and benefits to be provided to Mr. McFarland upon his termination of employment by the Company under various scenarios as further detailed in the Potential Payments upon Termination or Change in Control section of the Executive Compensation Tables which follow. However, under the terms of the CEO Employment Agreement, Mr. McFarland will not receive any severance payments as a result of the non-renewal and termination of the CEO Employment Agreement on March 22, 2023, described above.

Other NEOs

On June 8, 2021, the Company entered into employment agreements with each of Messrs. Leon, Bys, Kerns and Preston (each an “Employment Agreement”) that was effective for the 2022 year. Each Employment Agreement provides for an initial one-year term and will automatically renew for an additional one-year term on each anniversary unless the Company or the executive provides 90 days’ written notice to the other that no such automatic renewal shall occur. However, either the Company or the executive may terminate the employment relationship for any or no reason at any time during the initial one-year term or any renewal term. Pursuant to each Employment Agreement, each executive will receive an annualized base salary of $500,000, will be covered under the Company’s directors and officers liability insurance and will be eligible (i) to receive an annual cash bonus with a target value of 100% of his base salary, (ii) to participate in those benefit plans and programs of the Company available to similarly situated executives and (iii) commencing in 2023, to receive annual long-term incentive awards under the LTIP with a grant target value of not less than 220% of his base salary as in effect on the applicable grant date. As noted within the 2023 Compensation Program Actions section below, we amended Mr. Leon’s employment agreement to reflect his promotion to President and Chief Executive Officer.

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Compensation Discussion and Analysis

Each Employment Agreement also provides for certain severance payments and benefits to be provided to the executive upon his termination of employment by the Company under various scenarios as further detailed in the Potential Payments upon Termination or Change in Control section of the Executive Compensation Tables which follow.

2023 Compensation Program Actions

Base Salaries

The Compensation Committee expects to provide base salary adjustments for the NEOs in 2023 based on updated peer market data and changes in internal alignment and responsibilities.

Annual Incentive Program

In February 2023, the Compensation Committee approved the scorecard metrics for the 2023 Annual Incentive Program. In addition to metrics related to financial performance and cost management, 30% of the 2022 scorecard weighting relates to ESG-related carbon management, environmental stewardship, and worker safety goals.

Long-Term Incentive Grants

There were no long-term incentive awards granted to the NEOs in 2022 since they were granted multi-year sized long-term incentive awards in 2021 to immediately align the NEOs compensation opportunities with our new shareholder interests and establish the retention value of multi-year equity grants. The Compensation Committee resumed granting long-term incentive awards to the NEOs in 2023, consisting of 40% time-based restricted stock units and 60% performance stock units with payouts subject to absolute TSR and relative TSR goals compared to the XOP Index, as suggested in feedback from our stockholder outreach.

2023 Employment Agreement

Mr. Leon’s employment agreement was amended in the 2023 year to reflect his promotion to President and Chief Executive Officer (the “2023 Agreement”). Information regarding the 2023 Agreement with respect to Mr. Leon's new position has been summarized within our Annual Report, including base salary, incentive compensation opportunities, and potential severance and change in control provisions.

Other Compensation and Benefits

In addition to the components of the executive compensation program described above, we provided the following programs to our NEOs during the 2022 year.

Qualified Defined Contribution Plan – All of our employees, including our NEOs, were eligible to participate in a tax-qualified, defined contribution plan. The defined contribution plan provided for periodic cash contributions by us based on annual employee cash compensation and employee-elected deferrals. Employees were permitted to contribute into the plan a percentage of their annual salary and bonus up to the annual limit set by the Internal Revenue Service (“IRS”). Employees were able to direct their account balances to a variety of investments.

Nonqualified Defined Contribution Plans – All employees, including our NEOs, whose participation in our qualified defined contribution plan was limited by applicable tax laws were eligible to participate in our supplemental savings plan (the “SSP”), a nonqualified defined contribution plan, which provided additional retirement benefits outside of those limitations.

Annual allocations for each participant were generally intended to restore the amounts that would have been contributed to our qualified defined contribution plan but for certain tax law limitations, and certain employer allocations were subject to a vesting schedule that required the completion of three years of service. Vested account balances will be payable following separation from service.

Interest on SSP account balances was allocated monthly to each participant’s account based on the yield on five-year U.S. Treasury Constant Maturities plus 2% converted to a monthly allocation factor.

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Compensation Discussion and Analysis

In addition, we sponsored a supplemental retirement plan (the “SRP II”), which was established for purposes of the assumption by us of certain liabilities under the Occidental Petroleum Corporation Supplemental Retirement Plan II, including those for Messrs. Leon, Kerns and Preston. All account balances under the SRP II were fully vested at all times and are credited with interest on a monthly basis based on the yield on five-year U.S. Treasury Constant Maturities plus 2% converted to a monthly allocation factor. No additional allocations were made under the SRP II other than the crediting of interest.

In order to provide greater financial planning flexibility to participants while not increasing costs under the plan, the SRP II allowed in-service distribution of a participant’s account at a specified age, but not earlier than age 60, as elected by the participant when initially participating in the plan. After a participant receives a specified age distribution, future allocations under the SRP II and earnings on those allocations are to be distributed in the first 70 days of each following year.

Nonqualified Deferred Compensation Plan – Certain management and other highly compensated employees (including each of our NEOs) were eligible to participate in our nonqualified deferred compensation plan (the “DCP”). Under the DCP, participants were able to elect to defer a portion of their base salary and annual bonus for a given year. For the year of deferral, we allocated an additional amount to a participant’s account equal to the sum of 6% (which is immediately vested) and 2% (which is subject to a vesting schedule that required the completion of three years of service) of the compensation deferred by the participant under the DCP to restore amounts that were not contributed to the qualified and nonqualified defined contribution plans due to such deferral of compensation under the DCP. Deferred amounts earned interest based on the yield on five-year U.S. Treasury Constant Maturities based on a monthly frequency plus 2%, converted to a monthly allocation factor. Vested account balances will be payable following separation from service, or upon attainment of a specified age elected by the participant.

Tax Preparation and Financial Planning – Our executives, including each of the NEOs, were eligible to receive reimbursement, up to certain annual limits, for income tax preparation, financial planning and investment advice, including legal advice related to tax and financial matters.

Insurance – We offered a variety of health coverage options to all employees. NEOs participated in these plans on the same terms as other employees. In addition, for executives, including the NEOs, we paid for an annual comprehensive physical examination. We provided all employees with life insurance equal to twice the employee’s base salary.

Employee Stock Purchase Plan – We adopted a new California Resources Corporation Employee Stock Purchase Plan (the “ESPP”), effective in July 2022, which was approved by shareholders in May 2022 at the 2022 Annual Meeting. The ESPP provides our employees (including our NEOs) the ability to purchase shares of our common stock at a price equal to 85% of the closing price of a share of our common stock as of either the first day of each offering period or the last day of each offering period, whichever amount is less.

The maximum number of shares of our common stock authorized to be issued pursuant to the ESPP is 1.25 million, subject to adjustment pursuant to the terms of the ESPP. In addition, participants in the ESPP will be subject to certain limits on the number of shares that can be purchased in any given year and during any given offering period (a calendar quarter) under the ESPP.

Other Compensation Matters

Stock Ownership Guidelines

We have minimum stock ownership guidelines for senior executives. The target direct and indirect ownership level for the CEO is six times annual base salary, and for the other NEOs, is three times annual base salary. Executives are expected to reach their guideline ownership levels within five years of assuming their senior executive role. Due to the cancellation of the Company’s stock upon emergence from bankruptcy in October 2020, executives at emergence will have five years from the emergence date to attain the minimum stock holdings.

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Compensation Discussion and Analysis

Clawback Policy

Under the Company’s Compensation Recoupment and Clawback Policy, in the event the Company is required to restate its financial statements or in the event of misconduct by a named executive officer or any Section 16 reporting officer, the Company has the right to require in certain circumstances, and to the extent permitted by applicable law, the reimbursement of incentive compensation received by a named executive officer. Such incentive compensation generally includes any cash, equity, equity-based or other award under our long-term incentive plan, or an annual bonus or annual incentive plan of the Company.

We are aware that new rules regarding clawback policies were recently introduced and we intend to review and update our current policy, if and as needed, to be compliant with these new rules.

Anti-Hedging and Anti-Pledging Policy

Under the Company’s Insider Trading Policy, all directors, officers and employees are prohibited from hedging, buying or selling options, engaging in short sales, or trading prepaid variable forwards, equity swaps, exchange funds, forward-sale contracts, collars or other derivatives or monetizations on Company securities. In addition, all directors, officers and employees may not pledge or mortgage Company securities as collateral for a loan, or hold Company securities in a margin account.

Compensation Risk Management

Our compensation programs are designed to motivate and reward our employees for their performance during the current year and over the long term, and for taking appropriate business risks to enhance CRC’s business performance. The Compensation Committee has analyzed CRC’s employee compensation programs and policies and believes that they are not reasonably likely to have a material adverse effect on CRC. CRC’s compensation programs do not encourage unnecessary or excessive risk-taking and any potential risk that the executive compensation program could influence behavior that would be inconsistent with the overall interests of CRC and its stockholders is mitigated by several factors:

Tax Considerations

Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), limits a company’s ability to deduct compensation paid in excess of $1 million during any fiscal year to each of certain NEOs. The Compensation Committee believes it is in the best interest of the Company and our stockholders to provide compensation that is necessary to retain and motivate our executive officers, even if that is not fully deductible.

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Compensation Committee Report

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement with management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s proxy statement relating to the 2023 Annual Meeting of Stockholders.

Compensation Committee,

James N. Chapman, Chair

Andrew B. Bremner

Nicole Neeman Brady

March 1, 2023

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Executive Compensation Tables

Executive Compensation Tables

Summary Compensation Table ("SCT")