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Form 6-K PEMBINA PIPELINE CORP For: Mar 31

March 31, 2022 5:05 PM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-

16 OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of March 2022

Commission File Number: 001-35563

 

 

Pembina Pipeline Corporation

(Translation of registrant’s name into English)

4000, 585 – 8th Avenue S.W.

Calgary, Alberta, Canada T2P 1G1

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F ☐                            Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1)  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7)  ☐

 

 

 


INCORPORATION BY REFERENCE

Exhibit 99.1 to this Report on Form 6-K is hereby incorporated by reference as an exhibit to the Registration Statement on Form F-10 (File No. 333-261207) of Pembina Pipeline Corporation.

DOCUMENTS FILED AS PART OF THIS FORM 6-K

 

Exhibit    Description
 99.1    Notices of Meeting and Management Information Circular for Annual Meeting of Shareholders, to be held on May 6, 2022

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 31, 2022.

 

PEMBINA PIPELINE CORPORATION
By:  

/s/ Janet C. Loduca

Name:   Janet C. Loduca
Title:   Senior Vice President, External Affairs & Chief Legal and Sustainability Officer


EXHIBIT INDEX

 

Exhibit    Description
99.1    Notice of Meeting and Management Information Circular for Annual Meeting of Shareholders, to be held on May 6, 2022

LOGO

MANAGEMENT INFORMATION CIRCULAR Notice of 2022 annual meeting of shareholders March 18, 2022 WHAT’S INSIDE Message form the Chair 2 Notice of our 2022 annual meeting of shareholders 4 Management information circular 5 About voting 6 Business of the meeting 11 About the nominated directors 15 Governance 28 Compensation discussion and analysis 53 Other information 102 PEMBINA


Message from the Chair

Dear Fellow Shareholders,

 

I am pleased to invite you to the 2022 annual meeting of shareholders of Pembina Pipeline Corporation (Pembina or the company) to be held on Friday, May 6, 2022 at 2:00 p.m. (Mountain time). To mitigate the risks to the health and safety of our communities, shareholders, employees and other stakeholders in light of the COVID-19 pandemic, we are holding a virtual-only meeting. The meeting will be held by live audio webcast. Every shareholder and duly appointed proxyholder, regardless

   

 

During another year of global economic and health uncertainties and challenges, Pembina once again proved resilient and disciplined while delivering on its commitments.

of geographic location and ownership, will have an equal opportunity to participate at the meeting and vote on the matters to be considered at the meeting. Information about how to join, vote, and ask questions at the meeting can be found in this document.

During another year of global economic and health uncertainties and challenges, Pembina once again proved resilient and disciplined while delivering on its commitments. The board of directors of the company (board) continues to provide sound strategic oversight and remains confident that Pembina’s diversified and integrated asset base, low-risk business model and enduring focus on all stakeholders, will allow it to sustain its track record of strong performance and capitalize on longer-term growth opportunities, including contributing to the longer-term transition to a lower carbon economy.

Leadership

In November, Pembina announced a leadership transition with the departure of its President and Chief Executive Officer, Mick Dilger. I want to thank Mick for his service and contribution to Pembina. During his tenure, Pembina accelerated its impressive history of innovation and growth, becoming a truly differentiated, integrated leader in the midstream industry, with a strong core business and is well positioned for the future. I am truly proud to have worked with Mick.

Selecting a CEO is one of the most important tasks a board can undertake. We approached this task thoughtfully, recognizing Pembina’s strong capabilities and future opportunities. Ultimately, the board was pleased to appoint Scott Burrows as Pembina’s new President and Chief Executive Officer.

Scott has a deep understanding of the company and the industry, with 11 years of experience at Pembina and over 18 years in energy. In his roles with Pembina in corporate development and as Chief Financial Officer, Scott has been a key architect of the company’s growth and a strong proponent of financial discipline. He has overseen over $20 billion in successful strategic acquisitions and growth investments that have reshaped Pembina over the last decade.

Scott, along with the rest of Pembina’s senior management team, has been instrumental in defining and executing the strategy that has created what Pembina is today. They have the board’s full support in continuing to advance Pembina’s strategy, driving new initiatives forward and seizing opportunities to enhance value as they present themselves.

Governance and purpose

Pembina is committed to providing responsible energy transportation and midstream services that deliver much needed oil and gas products to market.

   

 

Over the past few years, Pembina has actively advanced its overall ESG strategy, including integrating ESG considerations into its long-term business planning, organizational structure and corporate policies and practices, and significantly enhancing its ESG disclosure.

 

 

The company has also committed to being in business for all stakeholders: employees, customers, communities, and investors – that is its purpose. Strong stewardship by the board, and high standards of governance and ethics throughout the business, are essential to helping Pembina achieve its purpose and operate the business effectively.

 

Over the past few years, the board has overseen Pembina as it has actively advanced its overall environmental, social and governance (ESG) strategy, including integrating ESG considerations into its long-term business planning, organizational structure and corporate policies and practices, and significantly enhancing its ESG disclosure.

 

Pembina Pipeline Corporation 2022 Management Information Circular    2


In 2021, the board was involved in the following important areas, which you can read more about beginning on page 33 of this circular:

 

We approved Pembina’s commitment to a 30% greenhouse gas (GHG) emission intensity reduction target by 2030, relative to baseline 2019 emissions. The GHG reduction target will help guide business decisions and improve overall emissions intensity performance while increasing Pembina’s long-term value and ensuring Canadian energy is developed and delivered responsibly.

 

We oversaw the creation of two transformational Indigenous-led partnerships, both of which are truly equal partnerships that advance meaningful Indigenous community participation in the development of Canada’s energy industry: Pembina’s partnership with the Haisla Nation to develop the proposed Cedar LNG Project, the largest First Nation-owned infrastructure project in Canada, with one of the cleanest environmental profiles in the world, and Chinook Pathways, a partnership with Western Indigenous Pipeline Group to pursue ownership of the Trans Mountain Pipeline, following completion of construction of the Trans Mountain Expansion project. Pembina was honoured to be invited as a partner on both of these exciting projects.

 

We continued to advance Pembina’s equity, diversity and inclusion (EDI) strategy, including by extending our diversity focus from the board to the company overall through overseeing and approving Pembina’s new employee EDI targets. These targets support the work being done across the organization to advance ESG priorities, including to increase the representation of women and other underrepresented groups at all levels of the organization.

 

We amended the company’s code of ethics to include human rights, adopted new anti-bribery and community relations policies, and updated Pembina’s Indigenous and tribal relations policy.

 

We incorporated ESG performance into Pembina’s annual corporate incentive compensation for all employees.

The board is pleased to see that these efforts are being recognized as Pembina has successfully improved or maintained its ESG scores or rankings from globally recognized agencies including Sustainalytics, MSCI, and ISS.

Looking ahead

The board remains confident in Pembina’s strategy for the long-term. The core tenets of the strategy that has underpinned Pembina’s success remain intact, and Pembina is in an excellent position to continue building on its base business and supporting long-term growth opportunities, while being a leading participant in the energy industry’s evolution to a more sustainable future. Pembina has many exciting opportunities to pursue, and the strength it needs to tackle challenges while continuing to differentiate itself as an industry leader. The board is excited about what lies ahead for the company and the energy industry.

Last year I said I would retire in 2022, but after careful consideration, the board has asked me to continue on as Chair for one more year, to oversee and facilitate the company’s leadership transition. I am honoured to continue working with a board and management team that have such a deep and unwavering commitment to values and ethics, and a company with a long-standing reputation as a reliable and responsible energy services provider. The board continues its focus on succession planning and ensuring the next Chair has the right characteristics to lead the board as Pembina evolves in the coming years.

I want to thank my fellow directors for their ongoing stewardship of Pembina. I also want to acknowledge the strong leadership of our experienced management team and their dedication to creating a leading North American energy company by continuing to execute Pembina’s strategy during a leadership transition. To Pembina’s employees, thank you for your commitment, resilience and hard work over the course of another challenging year.

Finally, thank you to all of our shareholders for your ongoing support. The board is committed to continuing to work diligently on your behalf.

Sincerely,

(signed) “Randall (Randy) Findlay”

Randall (Randy) Findlay

 

Pembina Pipeline Corporation 2022 Management Information Circular    3


Notice of our 2022 annual meeting

of common shareholders

 

You are invited to our 2022 annual meeting (the meeting) of common shareholders:

 

When  May 6, 2022

2:00 p.m. (Mountain time)

 

Where  Virtual-only meeting

live audio webcast online at

https://web.lumiagm.com/431537915

 

We will cover six items of business – see Business of the meeting in our 2022 management information circular:

1.  Receive our 2021 audited consolidated financial statements and the auditors’ report thereon.

2.  Vote on electing the directors.

3.  Vote on appointing the auditors.

4.  Vote on the continuation of the shareholder rights plan.

5.  Vote on our approach to executive compensation.

6.  Vote on any other business that properly comes before the meeting.

 

Your vote is important

 

Our 2022 management information circular includes important information about the meeting and the voting process. Please read it carefully before you vote.

 

We mailed you a copy of our 2021 audited consolidated financial statements and the auditors’ report if you asked us to (in accordance with applicable corporate and securities laws). You can also find a copy of our financial statements on our website (www.pembina.com), on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov).

 

To mitigate the risks to the health and safety of our communities, shareholders, employees and other stakeholders in light of the COVID-19 pandemic, we are holding a virtual-only meeting. The meeting will be held by live audio webcast. Every shareholder and duly appointed proxyholder, regardless of geographic location and ownership, will have an equal opportunity to participate at the meeting and vote on the matters to be considered at the meeting. You will find detailed instructions about how to participate in the meeting in this notice and in the management information circular starting on page 6. There are different processes if you are a registered shareholder or a beneficial shareholder. Most of our shareholders are beneficial shareholders, meaning that they hold their shares through a bank, broker or other such institution. Closely follow the applicable instructions in this notice, the management information circular and in your voting information form or form of proxy.

 

By order of the board,

 

(signed) “Jason Metcalf”

 

Jason Metcalf

Deputy General Counsel & Corporate Secretary

Pembina Pipeline Corporation

 

Calgary, Alberta

March 18, 2022

  

 

Where to get a copy of the 2022 management information circular

 

If you are a registered common shareholder or you have given us instructions to send you printed documents, your management information circular is attached to this notice.

 

We use the notice and access procedures to deliver meeting materials (this notice and the management information circular) to beneficial holders of our common shares. Notice and access are a set of rules developed by the Canadian Securities Administrators that allows companies to post meeting materials online, reducing paper and mailing costs.

 

If you are a beneficial common shareholder, you can view the management information circular at: www.sedar.com or

https://www.pembina.com/investors/invest or-documents-filings/

 

If you would like us to mail you a paper copy of the management information circular instead, please contact us:

 

  online:        www.pembina.com/lnvestor-

                Centre/Shareholder-information

  by phone:  1-855-880-7404

  by email:    [email protected]

 

We will send it free of charge, but we need your request at least five days before the proxy deposit date listed on the enclosed voting instruction form, and within one year of filing the management information circular on SEDAR.

 

How to vote

If you are a beneficial common shareholder, complete and return your voting instruction form at least one business day before the proxy deposit date of May 4, 2022 at 2:00 p.m. (Mountain time), or as listed on the attached voting instruction form. You cannot vote by returning this notice. If you want to attend the virtual meeting and vote your shares, you must appoint yourself as a proxyholder.

 

Send your voting instructions to us:

 

  online:            www.proxyvote.com

  by phone:      1-800-474-7493 (English)

                     1-800-474-7501 (French)                      1-800-454-8683 (United States)

  by fax:            905-507-7793

  by mail:          Data Processing Centre

                    PO Box 2800 STN LCD Malton                     Mississauga, Ontario L5T 2T7

 

If you have questions about notice and access, call us toll-free at 1-855-880-7404.

 

Pembina Pipeline Corporation 2022 Management Information Circular    4


Management information circular

 

You have received this document because you owned Pembina shares on March 18, 2022 (the record date) and are entitled to vote at our 2022 annual meeting of common shareholders, which will be held at 2:00 p.m. (Mountain time) on May 6, 2022, or at a reconvened meeting if the meeting is postponed or adjourned. The meeting will be held in a virtual-only format, by live audio webcast. All shareholders and duly appointed proxyholders can participate. You cannot attend the meeting in person.

 

The full webcast of the meeting will be available on our website after the event, including any questions we receive during the meeting and our answers.

 

All information in this circular is provided as of March 18, 2022 and all dollar amounts are in Canadian dollars, unless we note otherwise.

 

You will find financial information about Pembina in our annual audited consolidated financial statements and management’s discussion and analysis of our financial and operating results (MD&A) for the year ended December 31, 2021. Contact us for a copy of these documents. You can also find these documents and other important information about Pembina on our website (www.pembina.com), on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov).

 

 

In this document

 

·

  

meeting means the annual meeting of common shareholders to be held as a virtual-only meeting on May 6, 2022

 

·

  

you, your, common shareholders and shareholders mean holders of Pembina shares

 

·

  

we, us, our, Pembina and the company mean Pembina Pipeline Corporation and our consolidated subsidiaries

 

·

  

common shares, shares and Pembina shares mean common shares in the capital of Pembina

 

·

  

circular means this management information circular

 

·

  

board means Pembina’s board of directors

 

 

Our principal corporate and registered office

Pembina Pipeline Corporation

4000, 585 – 8th Avenue S.W.

Calgary, Alberta

T2P 1G1

T. 403-231-7500

F. 403-237-0254

 

 

This circular contains forward-looking statements that are based on our current expectations, estimates, projections and assumptions in light of our experience and perception of historic trends. These forward-looking statements include statements about succession plans, our compensation programs, expected financial performance, ESG strategy and related targets, corporate strategy, operations and projects. Forward-looking statements involve known and unknown risks and actual results may differ materially from those expressed or implied by these forward-looking statements. Please see Forward-Looking Statements & Information in the MD&A for more information about the assumptions and risks involved in making the forward-looking statements. These forward-looking statements are made only as of the date of this circular. Pembina does not undertake any obligation to publicly update or revise the forward-looking statements contained in this document, except as required by law.

 

In this circular, we also use certain financial measures and ratios that are not defined by generally accepted accounting practices (GAAP). Please see About non-GAAP

 

 

2021 awards and achievements

 

·

  

2021 Canada’s Top 100 Employers

 

·

  

2021 Alberta’s Top 70 Employers

 

·

  

Awarded with the Disability Employment Awareness Month (DEAM) Award

 

·

  

$5.4 million invested in our communities through charitable contributions, including a flagship partnership with Breakfast Club of Canada

 

·

  

$1.9 million invested in Indigenous community investments across our operating areas.

 

·

  

$3.2 million for United Way and other charitable organizations across our organization through employee donations and company matching

 

measures on page 102 for more information about these measures and why they are used.

 

Pembina Pipeline Corporation 2022 Management Information Circular    5


About voting

Who can vote?

 

You can vote at our annual meeting of common shareholders if you held our common shares at the close of business on the record date of March 18, 2022, even if you sold your common shares after this date.

 

You are not allowed to vote at the meeting if you acquired your shares after the record date, unless you ask us to include your name in the list of voting shareholders at least two days before the meeting and provide adequate evidence that you own the shares.

 

Common shares

 

We are authorized to issue an unlimited number of common shares. As at March 17, 2022, we had 552,007,278 common shares issued and outstanding. Our common shares are listed and trade on the Toronto Stock Exchange (TSX) (TSX: PPL) and the New York Stock Exchange (NYSE) (NYSE: PBA).

 

  

 

 

 

  

 

Quorum

 

According to our articles and by-laws, at least two persons holding or representing at least 25% of our outstanding common shares must be present for the annual meeting to take place, or the meeting will be adjourned to a set time and place and no business will be transacted until the adjourned meeting.

 

About voting results

 

We will post the voting results on our website (www.pembina.com) and file them on SEDAR (www.sedar.com) and EDGAR (www.sec.gov) as soon as possible following the meeting.

 

To the best of the knowledge of the company’s directors and officers, no person beneficially owns, or controls or directs, directly or indirectly, more than 10% of our common shares.

 

 

Proxy solicitation

 

  

 

 

  

 

Where to go with questions

If you have any questions about the meeting or need help voting your shares, please contact our investor relations group at:

 

· 1-855-880-7404

·[email protected]

 

Management is soliciting your proxy for the meeting. Management may use the service of external proxy solicitors and you may be contacted by Pembina employees or Kingsdale Advisors, our strategic shareholder advisor and proxy solicitation agent, by mail, by telephone or by personal interview. This year, Kingsdale Advisors is providing governance, strategic shareholder advisory services to the company and may also provide proxy solicitation services in connection with the meeting. We have paid them approximately $45,000 for this work and we may also pay them customary fees for contacting shareholders in connection with voting at the meeting. Pembina pays all costs related to producing and mailing this circular and other meeting materials, and for soliciting your proxy.

About the virtual meeting

To continue to mitigate the risks to the health and safety of our communities, shareholders, employees and other stakeholders in light of the COVID-19 pandemic, we are holding a virtual-only meeting this year as a live audio webcast. Every shareholder and duly appointed proxyholder, regardless of geographic location and ownership, will have an equal opportunity to participate at the meeting and vote on the matters to be considered at the meeting. You cannot attend the meeting in person. The full webcast will be available on our website after the event, including any questions we receive from shareholders and their answers.

Attending as a guest

All shareholders can attend the meeting as a guest by logging in online at https://web.lumiagm.com/431537915, selecting “I am a guest” and completing the required form. If you attend the meeting as a guest, you will not be permitted to vote during the meeting. Guests can, however, ask questions after the formal part of the meeting is over, during the live question and answer session.

Asking questions at the virtual meeting

Questions may be submitted at any time through the chat thread on the live webcast; however, during the formal part of the meeting, only questions from registered shareholders and duly appointed proxyholders that relate to the business of the meeting will be addressed.

Pembina will host a live question and answer session after the meeting, where we will answer other questions submitted during the meeting. Registered shareholders, duly appointed proxyholders (including beneficial shareholders that have duly appointed themselves as proxyholders) and guests can submit questions during the live question and answer session.

 

Pembina Pipeline Corporation 2022 Management Information Circular    6


To make sure we can answer as many questions as possible, please keep your questions brief and concise, and make each question addresses only one topic. If there are questions from several shareholders or proxyholders on the same topic or that are otherwise related, we may group, summarize and answer them together. While all shareholder questions are welcome, we do not intend to address questions that are not related to the business of the meeting or Pembina’s operations, are repetitive or have been asked by another shareholder, are personal in nature or in furtherance of a shareholder’s personal or business interest, are related to material non-public information, are considered derogatory or otherwise offensive or are out of order or otherwise not appropriate.

To ensure the meeting is conducted in a way that is fair to all shareholders, the chair of the meeting may exercise discretion in responding to questions, including the order the questions are answered in, the grouping or editing of questions and the amount of time devoted to any question.

Technical difficulties

If you participate in the virtual meeting, it is important that you stay connected to the internet at all times during the meeting in order to vote. It is your responsibility to ensure connectivity for the duration of the virtual meeting. You should allow ample time to log into the virtual meeting and complete the above procedure.

All meeting participants must use the latest versions of Chrome, Safari, Microsoft Edge, or Firefox. Please do not use Internet Explorer. We recommend that you log in at least 30-60 minutes before the meeting starts as this will allow you to check compatibility and complete the related procedures required to log in to the meeting.

Caution: Internal network security protocols including firewalls and virtual private network (VPN) connections may block your access to the meeting. If you are experiencing any difficulty connecting to or watching the meeting, ensure your VPN setting is disabled or use a computer or other device on a network that is not restricted by any particular security settings.

If you have any questions about the virtual meeting portal or requiring assistance accessing the meeting website, please go to https://www.lumiglobal.com/faq for information.

How to vote

You can vote your shares by proxy (by appointing someone – a proxyholder – to represent you), or by attending the virtual meeting and voting. The rules for voting depend on whether you are a registered shareholder or a beneficial shareholder.

Beneficial shareholders

You are a beneficial shareholder if your shares are registered in the name of a nominee, such as a bank, trust company, securities broker, trustee or other institution. The majority of our shares are held by beneficial shareholders. Beneficial shareholders can vote their shares during the virtual meeting, or by proxy before the meeting:

Vote during the virtual meeting:

Before the meeting:

1.

Appoint yourself as the duly appointed proxyholder by printing your own name in the blank space provided for the proxyholder on the proxy or voting instruction form. Then return the form in the envelope provided (or by following the instruction on the form). Do not complete the rest of the form or mark your voting instructions on the form, because your vote will be taken at the meeting.

2.

Register online with Computershare Trust Company of Canada (Computershare) online by going to www.computershare.com/pembina before 2:00 p.m. (Mountain time) on May 4, 2022 and input your name and contact information.

Computershare will email you a username. You will need it to log in to the meeting and vote. Without a username, you will not be able to vote at the meeting but will be able to participate as a guest.

On the day of the meeting:

1.

Log in online at https://web.lumiagm.com/431537915. We recommend visiting the site before the meeting starts to make sure it works on your computer or device. You must stay connected to the internet for the entire meeting.

2.

Select “I have a Control Number/Username” and enter the username Computershare provided by email.

3.

Enter the password (case sensitive): pembina2022

4.

Complete the ballot online during the meeting.

 

Pembina Pipeline Corporation 2022 Management Information Circular    7


Beneficial shareholders who have not appointed themselves as proxyholder will not be able to vote online during the virtual meeting but will be able to participate as a guest.

Vote by proxy before the meeting by following the instructions on your proxy or voting instruction form

If you are a beneficial shareholder, you must send your voting instructions to your nominee who will vote for you. You will receive a request for voting instructions for the number of shares held for your benefit. Follow the instructions on the voting instruction form and send your voting instructions to your nominee. You likely have an earlier deadline for returning your voting instruction form to your nominee, so be sure to send the form early, to allow enough time for your nominee to receive your voting instructions and then send them to Pembina before the proxy cut-off time.

Most nominees delegate responsibility for obtaining voting instructions from their clients to Broadridge Financial Solutions Inc. (Broadridge). Broad ridge usually mails a scanable voting instruction form that is to be completed and returned to them by mail or fax. You can also call a toll-free phone number or access Broad ridge’s dedicated voting website to submit your voting instructions. Broadridge tabulates the results of all the instructions it receives and presents this information at the meeting. Kingsdale Advisors may contact beneficial shareholders to help you vote your shares directly over the phone, using the Broadridge QuickVote service, if available.

If you received voting materials from a company other than Broadridge, you need to complete and return the form following the instructions they have provided.

We use Broad ridge to send proxy-related materials to non-objecting beneficial owners of our shares. We intend to pay for intermediaries to deliver proxy-related materials to objecting beneficial owners of our shares.

Beneficial shareholders located in the United States

If you are a beneficial shareholder located in the United States and wish to vote at the meeting or, if permitted, appoint a third party as your proxyholder, in addition to the steps described above, you must obtain a valid legal proxy from your intermediary. Follow the instructions from your intermediary included with the legal proxy form or contact your intermediary to request a legal proxy form if you have not received one. After obtaining a valid legal proxy from your intermediary, you must then submit such legal proxy to Computershare. Requests for registration from beneficial located in the United States that wish to vote at the meeting or, if permitted, appoint third parties as their proxyholders must be sent by e-mail or by courier to: [email protected] (if by e-mail); or Computershare Trust Company of Canada, Attention: Proxy Department, 8th Floor, 100 University Avenue, Toronto, ON M5J 2Y1, Canada (if by courier), and in both cases, must be labeled “Legal Proxy” and received before 2:00 p.m. (Mountain time) on May 4, 2022. You will receive a confirmation of your registration by email once Computershare receives your registration materials.

Registered shareholders

You are a registered shareholder if you hold your shares in certificate form through the Direct Registration System. Registered holders can vote their shares during the virtual meeting, or by proxy before the meeting.

Vote during the virtual meeting

On the day of the meeting:

1.

Log in online at https://web.lumiagm.com/431537915. We recommend visiting the site before the meeting starts to make sure it works on your computer or device. You must stay connected to the internet during the meeting.

2.

Select “I have a Control Number/Username” and enter your 15-digit control number (this is your username and you will find it on the bottom left corner of the first page of the enclosed proxy form).

3.

Enter the password (case sensitive): pembina2022

4.

Complete the ballot online during the meeting.

Vote by proxy before the meeting in one of the following three ways

1.

Online: Go to www.investorvote.com. You will need to enter your 15-digit control number (located on the bottom left corner of the first page of the enclosed proxy form) to identify yourself as a shareholder on the voting website;

2.

By phone: Call 1-866-732-VOTE (8683) toll-free and follow the instructions. You will need to enter your 15-digit control number (located on the bottom left corner of the first page of the enclosed proxy form) to identify yourself as a shareholder on the telephone voting system; or

3.

By mail: Complete the enclosed proxy form, sign and date it and return it in the enclosed envelope.

 

Pembina Pipeline Corporation 2022 Management Information Circular    8


Computershare is our transfer agent. Computershare must receive your completed proxy form at least 48 hours before the meeting (not including Saturdays, Sundays or holidays). The chair of the meeting can waive or extend the time limit for receiving proxy forms without notice, at his or her discretion.

About your proxyholder

The officers named on the proxy form and voting instruction form have agreed to serve as your proxyholder and will vote your shares according to your instructions. If you do not specify your voting instructions, they will vote your shares for each item of business at the meeting. If there are changes to the items of business or other matters that are properly brought before the meeting, your proxyholder can use their discretion and vote as they see fit. As of the date of this circular, we do not anticipate any changes to the items of business or other matters to be brought before the meeting.

Choosing someone else to be your proxyholder

You have the right to appoint someone else to be your proxyholder and act on your behalf at the virtual meeting. The person you appoint does not have to be a Pembina shareholder. Make sure this person knows he or she has been appointed to attend the virtual meeting and vote on your behalf. Your proxyholder must vote (or withhold from voting) your shares according to your instructions. If you appoint someone else to be your proxyholder and do not give them specific voting instructions, your proxyholder has the discretion to vote as they see fit.

To nominate someone other than the officers named in the form as your proxyholder:

1.

Appoint your proxyholder as a duly appointed proxyholder by printing his or her name in the blank space provided on your proxy or voting instruction form. Then return the form in the envelope provided (or by following the instructions on the form).

2.

Register your proxyholder online with Computershare by going to www.computershare.com/pembina before 2:00 p.m. (Mountain time) on May 4, 2022 and inputting their name and contact information.

Computershare will email your proxyholder a username, which they will need to log in to the meeting and vote. Without a username, your proxyholder will not be able to vote at the meeting but will be able to participate as a guest.

On the day of the meeting, your proxyholder will:

1.

Log in online at https://web.lumiagm.com/431537915. We recommend visiting the site before the meeting starts to make sure it works on the computer or device the proxyholder is using. Your proxyholder must stay connected to the internet for the entire meeting.

2.

Select “I have a Control Number/Username” and enter the username Computershare provided by email.

3.

Enter the password (case sensitive): pembina2022

4.

Complete the ballot online during the meeting.

Changing your vote

If you are a registered shareholder, you can revoke a proxy form you previously submitted by:

·  

voting again at the meeting;

·  

voting again by internet, telephone or fax before 4:30 p.m. (Mountain time) on the last business day before the meeting;

·  

delivering a revocation notice in writing executed by the registered shareholder or by an authorized officer or attorney (duly authorized in writing) to: (i) our head office before 4:30 p.m. (Mountain time) on the last business day before the meeting; or (ii) with the chair of the meeting prior to the start time of the meeting; or

·  

in any other manner permitted by law.

If you are a beneficial shareholder, you can revoke voting instructions you previously submitted by contacting your nominee.

 

Pembina Pipeline Corporation 2022 Management Information Circular    9


 

Shareholder proposals

If you want to present a shareholder proposal at our 2023 annual meeting, you must submit it by February 6, 2023 to be considered for inclusion in next year’s management information circular.

 

Send your shareholder proposals to:

Corporate Secretary

Pembina Pipeline Corporation

4000, 585-8 Avenue SW

Calgary, AB T2P 1G1

 

 

Pembina Pipeline Corporation 2022 Management Information Circular    10


Business of the meeting

Our 2022 annual meeting of common shareholders will cover the six items of business listed below.

1. Receive our 2021 audited consolidated financial statements and auditors’ report

You have received our audited consolidated financial statements for the year ended December 31, 2021 and the auditors’ report thereon, which are included in our 2021 annual report, if you requested a copy. Copies are available on our website (www.pembina.com), on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov), or you can request a copy from our Investor Relations department.

2. Elect the directors

 

Our articles state that the board must have between five and 13 directors. In accordance with our by-laws, the board has fixed the number of directors to be elected at the meeting at 12.

 

The following 12 directors are nominated for election to the board:

 

· Randall J. Findlay (chair)         ·  Maureen E. Howe

· Anne-Marie N. Ainsworth         ·  Gordon J. Kerr

· J. Scott Burrows                       ·  David M.B. LeGresley

· Cynthia Carroll                         ·  Leslie A ..O’ Donoghue

· Ana Dutra                                 ·  Bruce D. Rubin

· Robert G. Gwin                        ·  Henry W. Sykes

 

11 of the nominated directors currently serve on our board, while Ms. Dutra is being nominated for the first time. Turn to the director profiles starting on page 15 for detailed information about each director.

 

Directors will serve until the next annual meeting of common shareholders, or until their successors are elected or appointed.

 

The proxy form allows you to vote for all the nominated directors, vote for some of them and withhold your vote for others, or withhold your vote for all of them. Unless instructed otherwise, the Pembina officers named in the proxy form will vote for all our nominated directors.

  

 

Our policy on majority voting

 

Each director must receive a majority of the votes cast for their election, or they must resign immediately following the meeting.

 

The governance, nominating and corporate social responsibility committee will consider the resignation and recommend to the board the action to be taken. The director who resigned does not participate in these discussions.

 

The board will consider the committee’s recommendation and, within 90 days of the meeting, will accept the resignation unless there are exceptional circumstances. The resignation will be effective when it is accepted by the board. The board will announce its decision in a news release.

 

If the board accepts the resignation, it can appoint a new director, call a meeting of shareholders to vote for other candidates or leave the position vacant until the next annual meeting.

 

Our majority voting policy does not apply if a director election is contested.

3. Appoint our auditors

You will vote on appointing our external auditors. The audit committee and the board propose that KPMG LLP (KPMG), Chartered Professional Accountants, be appointed as auditors and serve until the next annual meeting of common shareholders. The audit committee will recommend KPMG’s compensation to the board for its review and approval.

KPMG have been Pembina’s auditors since September 1997. Pembina’s audit committee and management conduct a comprehensive review of the external auditor at least every five years. A comprehensive review was last completed in 2020 for the five-year period from 2015 to 2019. The results of this review supported the continuation of the audit engagement. The following table shows the fees paid or payable to KPMG for the fiscal years ended December 31, 2020 and 2021.

 

Pembina Pipeline Corporation 2022 Management Information Circular    11


 

  Fee category

  

 

2020

($)

 

    

2021

($)

 

 

 

Audit fees

Fees for auditing our annual financial statements, reviewing our quarterly financial statements, and services related to statutory and regulatory filings or engagements.

· 2021 fees also include expenses for: the short form base shelf prospectus related to the offer and issue from time to time of common shares, preferred shares, warrants, debt securities, subscriptions receipts and units, the short form base shelf prospectus related to the offer and issue from time to time of medium-term notes, pricing supplements in relation to the sale and issue of medium-term notes, series 17 and series 18 in December 2021 and the restatement of Pembina’s financial statements, MD&A and annual information form for the year ended December 31, 2020.

· 2020 fees also include expenses for: pricing supplements related to the issue and sale of the medium-term notes, series 7 and series 16 in May 2020, the short form base shelf prospectus related to the offer and issue from time to time of debt securities and Class A preferred shares and prospectus supplements relating to the issue and sale of 4.80% Fixed-to-Fixed Rate Subordinated Notes, Series 1 in January 2021.

 

  

 

 

 

2,197,500

 

 

  

 

 

 

2,724,500

 

 

 

Audit-related fees

Fees for assurance and related services, including French translations in connection with statutory and regulatory filings, reasonably related to the performance of the audit or review of Pembina’s financial statements and not reported under Audit fees above.

· In 2021, these fees included audit fees for the pension plan and Younger facility pension plan audits of $25,000 and $18,000, respectively.

· In 2020, these fees included audit fees for the pension plan and Younger facility pension plan audits of $30,000 and $30,000, respectively.

 

  

 

 

 

128,500

 

 

  

 

 

 

119,000

 

 

 

Tax fees

Fees for non-audit tax services provided by KPMG’s tax division, including $2,850 (2020: $2,700) for tax compliance and $47,650 (2020: $92,300) for tax advice and tax planning. Fees in both years also include tax consultation and compliance fees for preparing and filing tax returns for our subsidiaries.

 

  

 

 

 

95,000

 

 

  

 

 

 

120,305

 

 

 

All other fees

Fees for other products and services provided by the auditors not described above, which included fees related to advice and assistance with assurance and advisory services over GHG emissions and ESG sustainability reporting.

 

  

 

 

 

31,750

 

 

  

 

 

 

199,250

 

 

 

Total fees

     2,452,750        3,163,055  

The board recommends you vote for appointing KPMG as our auditors until the close of our next annual meeting of common shareholders. Unless instructed otherwise, the Pembina officers named in the proxy form will vote for the appointment of KPMG as our auditors.

4. Approve our shareholder rights plan

You will vote on continuing our shareholder rights plan agreement.

As described in more detail below, our shareholder rights plan (rights plan) is designed to make sure shareholders are treated fairly if there is a takeover bid for a controlling position of the company by a shareholder or a group of shareholders acting together. The purpose of the rights plan is to give the board more time to find an alternative value enhancing transaction and to ensure the equal treatment of all shareholders.

See Appendix A for a summary of our rights plan. You can also find the full text of our rights plan on our website (www.pembina.com), on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov).

Background

When we converted from an income trust to a corporation on October 1, 2010, we adopted a rights plan in the form of a shareholder rights plan agreement with Computershare as rights agent.

Unitholders of Pembina Pipeline Income Fund approved the rights plan when they approved the corporate conversion on May 7, 2010, and it became effective October 1, 2010. Our rights plan must be approved by shareholders every three years. Shareholders last approved the rights plan on May 3, 2019, which means the rights plan will expire at the end of this year’s meeting unless shareholders ratify its continuance.

 

Pembina Pipeline Corporation 2022 Management Information Circular    12


On February 24, 2022, the board unanimously determined that it was appropriate and in the best interests of shareholders that the rights plan be approved to continue for another three years.

At the meeting, common shareholders will vote on ratifying the continuance of the rights plan for another three-year period.

Why we have a shareholder rights plan

Takeover bids can be discriminatory. Exemptions to takeover bid legislation can allow a shareholder (or shareholders) to gain control of a company without making a formal takeover bid to all of the shareholders (for example, through transactions outside Canada, by making private agreements with a small group of shareholders or by slowly accumulating shares over time through stock exchange trading). This could result in a shareholder or group of shareholders acquiring control without paying fair value to all shareholders (this is sometimes called a creeping bid).

Our rights plan is designed to discourage this kind of takeover bid. When there is a takeover bid that is not a permitted bid (as described below), our rights plan gives shareholders contingent rights to acquire common shares at a significant discount to the prevailing market price. In certain circumstances, these rights become exercisable by all shareholders except the offeror in a takeover bid (and its associates, affiliates and joint actors), with the potential to significantly dilute the value of the offeror’s shares.

The rights plan does not prevent or discourage takeover bids but rather it addresses the concerns noted above by requiring offerors to:

 

·  

make permitted bids under the rights plan, which give shareholders an opportunity to participate in the transaction – a permitted bid meets specific conditions, including that it must be made to all shareholders and remain open for acceptance for at least 105 days or the minimum period that a formal take-over bid is required to remain open for in the relevant circumstances under Canadian law, if less than 105 days; or

 

·  

negotiate an offer directly with the board, giving the board the opportunity to bargain for terms it believes will be in the best interests of shareholders.

If the offeror does not take either of these approaches, they could trigger the dilution provisions in our rights plan, which are described above.

Management has reviewed the terms of our rights plan and confirmed that they continue to comply with current Canadian securities laws and to conform in all material respects to the shareholder rights plans of other public corporations in Canada.

We may amend the rights plan before shareholders approve it based on comments we may receive from regulatory authorities, or as any of our executive officers or directors consider necessary.

Resolution

Common shareholders will be asked to consider and, if deemed advisable, approve the following binding resolution:

RESOLVED, as an ordinary resolution, that:

 

1.

the shareholder rights plan of Pembina Pipeline Corporation (Pembina) be continued and the amended and restated shareholder rights plan agreement made as of May 12, 2016 between Pembina and Computershare Trust Company of Canada, as rights agent, which amended and restated the shareholder rights plan agreement dated effective October 1, 2010, as amended and restated May 10, 2013, and continued the rights issued thereunder, be and is hereby ratified, confirmed and approved; and

 

2.

any one director or officer of Pembina is hereby authorized to execute and deliver, whether under corporate seal or otherwise, the agreement referred to above and any other agreements, instruments, notices, consents, acknowledgements, certificates and other documents (including any documents required under applicable laws or regulatory policies) and to perform and do all such other acts and things, as such director or officer may consider to be necessary or advisable from time to time in order to give effect to this resolution.

 

Pembina Pipeline Corporation 2022 Management Information Circular    13


To be approved, this resolution must be passed by at least 50 percent plus one of the votes cast by:

·  

the independent shareholders (as defined in the rights plan, but generally meaning any shareholder other than an acquiring person as defined in the rights plan, or a person making a takeover bid for Pembina and their associates and affiliates); and

·  

all common shareholders present in person or by proxy at the meeting.

This resolution is not in response to, or in anticipation of, any pending, threatened or proposed acquisition or takeover bid, and is not intended as a means to prevent a takeover of Pembina, as a strategy to retain management or the board, or to deter fair offers for Pembina shares.

We are not aware of any shareholder whose votes would not be eligible to be counted for this resolution, or of any shareholders who would not qualify as independent shareholders.

The board recommends common shareholders vote for this ordinary resolution. Unless instructed otherwise, the Pembina officers named in the proxy form will vote for the ordinary resolution authorizing the continuation of our rights plan.

5. Vote on our approach to executive compensation

You will vote on our approach to executive compensation.

A key principle underlying executive compensation at Pembina is ‘pay for performance’. We believe that linking compensation to strategy and corporate performance helps us attract and retain excellent people and motivates them to focus on our success. You will find a detailed discussion of our executive compensation program beginning on page 66 of this circular.

   

 

Say on pay votes

In 2021, our executive compensation approach was supported by 93.75% of shareholder votes for our say on pay resolution.

 

The board gives common shareholders the opportunity every year to vote for or against our approach to executive compensation (to have a say on pay). This is an advisory vote, so the results will not be binding on the board. The board will, however, consider the outcome of the vote as part of its ongoing review of executive compensation. If a significant number of shareholders oppose the “say on pay” resolution, the board will consult with shareholders to understand their concerns, and then review our approach to executive compensation with their concerns in mind.

You will be asked to consider and, if deemed advisable, approve the following non-binding resolution:

RESOLVED, on an advisory basis and not to diminish the role and responsibilities of the board of directors of Pembina Pipeline Corporation (Pembina), that the common shareholders of Pembina (shareholders) accept the approach to executive compensation disclosed in Pembina’s management information circular delivered in advance of the 2022 annual meeting of shareholders.

This resolution conforms to the language of the resolution recommended by the Canadian Coalition for Good Governance. The board recommends you vote for this resolution. Unless instructed otherwise, the Pembina officers named in the proxy form will vote for our approach to executive compensation as described in this circular.

6. Other business

You will vote on any other items of business that may be properly brought before the meeting. As of the date of this circular, we are not aware of any other matters to be brought before the meeting.

 

Pembina Pipeline Corporation 2022 Management Information Circular    14


About the nominated directors

To ensure strong stewardship, the board needs to operate independently, have a prudent mix of relevant skills and experience, including industry knowledge and experience, a mix of age ranges and tenure, sufficiently diverse backgrounds and opinions to support balanced discussion and debate, and a manageable board size to facilitate productive discussion and decision-making. We believe this year’s group of 12 nominated directors meets all of these requirements.

The profiles on the following pages tell you about each nominated director’s background and experience, independence, meeting attendance, share ownership, other public company boards they serve on and voting results from our 2021 annual meeting (as applicable). All director information is provided as of March 18, 2022, unless indicated otherwise. Each of the nominated directors is willing and able to serve on the board until the next annual meeting of common shareholders.

All of the nominated directors are independent except Mr. Burrows, who is our President and Chief Executive Officer (CEO). The board has reviewed the independence and qualifications of the non-management directors and has recommended their nomination.

An overview of the nominated directors

 

LOGO

 

Pembina Pipeline Corporation 2022 Management Information Circular    15


LOGO

 

Chair

 

Director since March 2007

 

Calgary, Alberta

Canada

 

Randall J. Findlay (71) | Independent3

2021 voting results: 97.22% for, 2.78% withheld

 

Mr. Findlay was the President of Provident Energy Trust (Provident) from 2001 until his retirement in 2006. He was a director of Provident from 2001 to 2012. Before that he held various executive positions in the oil and gas industry over 30 years, including senior positions at NOVA Corporation and TransCanada Pipelines Limited.

 

Mr. Findlay has been a director of over 15 public and private companies. He has also chaired the board of a number of not-for-profit organizations and campaigns. He is the past chair of the Alberta Children’s Hospital Foundation and the current chair of the Alberta Children’s Hospital Research Institute Strategic Advisory Board.

 

Mr. Findlay is a professional engineer and has a Bachelor of Applied Science in chemical engineering from the University of British Columbia. He is a graduate of the Institute of Corporate Directors Education Program and holds the ICD.D designation.

 

 
    Board and committee membership and attendance
    Board of directors (chair)            14 of 14 meetings    100%
    Governance, nominating and corporate social responsibility committee            4 of 4 meetings    100%
               
    Other public company boards and committee memberships 1
   
    Superior Plus Corp. | TSX    Governance and nominating; audit
 

 

 1 Mr. Findlay was a director of Spyglass Resources Corp. (a TSX listed company) from March 2013 until May 13, 2015. Spyglass Resources Corp., an intermediate oil and gas exploration and production company, was placed into receivership by a syndicate of its lenders on November 26, 2015.

 

 
  Securities held as of March 18, 2022

  Common          

 

  shares

    

Deferred share

 

units        

     Total value2               

Meets share ownership guidelines

 

(including 50% common shares)

  138,321      37,178      $8,022,063      yes      

 2 Based on $45.71, the closing price of our common shares on the TSX on March 18, 2022. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 63 for more information).

 

  3

Directors ordinarily retire from our board and do not stand for re-election once they have turned 72. Mr. Findlay will turn 72 between the date of mailing the circular and the meeting date. After careful consideration, the board has determined, following a recommendation by the governance, nominating and corporate social responsibility committee, that it is in the best interests of the company for Mr. Findlay to remain on the board for one more year, as chair, to provide assistance and guidance to the board in overseeing the leadership transition and has asked him to stand for re-election at the meeting – see page 41.

 

Pembina Pipeline Corporation 2022 Management Information Circular    16


LOGO

 

Director since October 2014

 

Houston, Texas

U.S.

 

Anne-Marie N. Ainsworth (65) | Independent

2021 voting results: 90.61% for, 9.39% withheld

 

Ms. Ainsworth served as President and Chief Executive Officer of Oiltanking Partners, L.P. and Oiltanking Holding Americas, Inc. from November 2012 to March 2014. She is currently on the boards of Kirby Corporation, HollyFrontier Corporation and Archrock, Inc. Ms. Ainsworth has extensive experience in the oil industry and has held several senior management positions throughout her career.

 

Ms. Ainsworth was Senior Vice President of Refining at Sunoco Inc. (2009 to 2012) and previously was the General Manager of the Motiva Enterprises, LLC (Motiva) refinery in Norco, Louisiana (2006 to 2009). Before she joined Motiva, Ms. Ainsworth was director of process safety management systems and business improvement leader at Shell Oil Products U.S. (2003 to 2006) and Vice President of Technical Assurance at Shell Deer Park Refining Company (2000 to 2003).

 

 

Ms. Ainsworth graduated cum laude from the University of Toledo with a Bachelor of Science in chemical engineering. She holds a Master of Business Administration from Rice University, where she also served as an adjunct professor (2000 to 2009). She is a graduate of the Institute of Corporate Directors Education Program and holds the ICD.D designation.

 

 
  Board and committee membership and attendance
  Board of directors        14 of 14 meetings                100%                
  Human resources, health and compensation committee        4 of 4 meetings    100%                
  Safety, environment and operational excellence committee        5 of 5 meetings    100%                
     
 
    Other public company boards and committee memberships
    Archrock, Inc. | NYSE    Governance and nominating (chair); audit
                     HollyFrontier Corporation | NYSE    Health, safety and environment (chair);finance
    Kirby Corporation | NYSE    Audit; nominating and corporate governance
         
 
  Securities held as of March 18, 2022
  Common shares              Deferred

 

share units        

     Total value1              

Meets share ownership guidelines

 

(including 50% common shares)

  23,830      25,214      $2,243,151   yes

 

1  Based on US$36.21, the closing price of our common shares on the NYSE on March 17, 2022 and the Reuters noon U.S. Canadian dollar foreign exchange rate of 1.2639 as at March 17, 2022. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 63 for more information) and their value is based on $45.71, the closing price of our common shares on the TSX on March 17, 2022.

 

Pembina Pipeline Corporation 2022 Management Information Circular    17


LOGO

 

Director since February 2022

 

Calgary, Alberta

Canada

 

Scott Burrows (42) | Non-independent
2021 voting results: n/a

 

Mr. Burrows was appointed President and Chief Executive Officer in February 2022. Mr. Burrows is responsible to all Pembina stakeholders for delivering on Pembina’s overall purpose: to be the leader in delivering integrated infrastructure solutions connecting global markets.

 

Prior to his current role, Mr. Burrows was named interim President and Chief Executive Officer in November 2021. Prior thereto, he served as Senior Vice President and Chief Financial Officer, where he oversaw Pembina’s financial, treasury, accounting, tax, risk, investor relations, capital markets, corporate development and planning functions. In his prior role, he was a trusted and highly valued advisor to the CEO to help drive the strategic growth agenda and ensure continued profitability and a conservative balance sheet.

 

Mr. Burrows joined Pembina in November 2010 and held various leadership positions until January 1, 2015, when he was appointed Vice President, Finance and Chief Financial Officer. On July 1, 2017, he was appointed Senior Vice President and Chief Financial Officer and held that position until he was appointed interim President and Chief Executive Officer in November 2021.

 

Before joining Pembina, Mr. Burrows spent seven years in energy-focused investment banking where he provided advice related to mergers and acquisitions, dispositions, joint ventures and equity and debt financings. He has considerable experience in most aspects of the energy industry, including petroleum, natural gas and other product pipelines and related infrastructure facilities.

 

Mr. Burrows has a Bachelor of Commerce from the University of British Columbia, is a CFA Charterholder and was named one of Canada’s top 40 under 40. Mr. Burrows also sits on the Board of Rundle College Society.

 

    Board and committee membership and attendance
   

Board of directors

 

  

                                     n/a                 n/a

 

    Other public company boards and committee memberships
    None               
      
   
                                                  Securities held as of March 18, 2022    
    Common        

 

shares

     Restricted and        

 

performance

 

share units

     Total value1              

Meets share ownership guidelines

 

(including 50% common shares) 2

    20,022      259,080      $12,757,745  

On track3

   

1  Based on $45.71, the closing price of our common shares on the TSX on March 17, 2022. Mr. Burrows is not entitled to deferred share units issued under our deferred share unit plan. Restricted and performance share units include units issued under our share unit plan and units accrued as dividend equivalents (see Executive compensation on page 66 for more information).

 

2  Not including the value of PSUs.

 

3  Mr.  Burrows has five years from the date of his appointment on February 22, 2022 to meet the share ownership guidelines.

 

Pembina Pipeline Corporation 2022 Management Information Circular    18


LOGO

 

Director since May 2020

 

Naples, Florida

U.S.

 

Cynthia Carroll (65) | Independent

2021 voting results: 98.11% for, 1.89% withheld

 

Ms. Carroll began her career as an exploration geologist at Amoco Production Company in Denver, Colorado before joining Alcan Aluminum Corporation (Alcan). She held various executive roles at Alcan including President of Bauxite, Alumina and Specialty Chemicals and Chief Executive Officer of the Primary Metal Group, Alcan’s core business. From 2007 to 2013, Ms. Carroll served as the Chief Executive Officer of Anglo American plc, which was, at the time, one of the largest and most diversified mining companies in the world.

 

Ms. Carroll is currently a non-executive director of Hitachi Ltd., Baker Hughes Company, Glencore plc and of Prince International Corporation, a subsidiary of American Securities LLC, where she sits on the Advisory Board. She previously chaired the boards of Anglo American Platinum Ltd., De Beers Société Anonyme, Vedanta Resources Holdings Ltd., and the World Economic Forum, Mining and Metals Industry group. She has also served on the boards of BP, the International Council on Mining and Metals, the International Aluminum Institute, The American Aluminum Association, Sara Lee Corporation and Century Aluminum Company.

 

Ms. Carroll holds a bachelor’s degree in Geology from Skidmore College, a Master of Science degree in Geology from the University of Kansas, and a Master of Business Administration from Harvard University. She was awarded an Honorary Doctorate of Science from the University of Exeter, Honorary Doctorate of Laws from Skidmore College and an Honorary Doctorate of Economics from the University of Limerick. She is a fellow of the Royal Academy of Engineers and a Fellow of the Institute of Materials, Minerals and Mining. Ms. Carroll is a member of the Institute of Corporate Directors.

 

     
    Board and committee membership and attendance

 

         
    Board of directors

 

   14 of 14 meetings    100%
    Human resources, health and compensation committee

 

   4 of 4 meetings    100%
    Safety, environment and operational excellence committee (chair)

 

   5 of 5 meeting    100%
               
   
  Other public company boards and committee memberships     
  Baker Hughes Company | NYSE    Audit; compensation   
 
  Hitachi Ltd. | TYO    Nominations     
  Glencore plc | LON   

Remuneration (chair); nomination; safety, environment and communities

    
     
     
         Securities held as of March 18, 2022         
                                     Common        

 

shares

     Deferred share        

 

units

     Total value1              

Meets share ownership guidelines

(including 50% common shares)

    -      4,871      $222,647   On track2
 

 

1  Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 63 for more information) and their value is based on $45.71, the closing price of our common shares on the TSX on March 17, 2022.

 

 

2 Ms. Carroll has five years from the date of her appointment on May 8, 2020 to meet the share ownership guidelines.

 

Pembina Pipeline Corporation 2022 Management Information Circular    19


LOGO

 

Director nominee

 

Chicago, Illinois

U.S.

 

Ana Dutra (57) | Independent

2021 voting results: N/A

 

Ms. Dutra is an experienced corporate director and executive with over 30 years of global experience in profit and loss management, technology, business growth and C-Level business advisory. She has held various executive positions and board memberships with a number of public and private corporations across numerous industries, including fin-tech, renewable energy, banking, and healthcare. She has expertise in many areas, including ESG, mergers and acquisitions, technology, executive compensation and corporate governance. Most recently, Ms. Dutra was the President and Chief Executive Officer of The Executives’ Club of Chicago (2014 – 2018) and was previously the Proxy Officer and Chief Executive Officer of Korn Ferry Consulting (2008 – 2013). In her role as Global Senior Managing Partner at Accenture, she oversaw the creation and growth of Accenture’s organization strategy consulting business line, including the innovation, mergers and acquisitions and culture transformation practices.

 

Ms. Dutra is currently a non-executive director of CME Group, First Internet Bankcorp, Amyris Inc., Carparts, Inc., and the M. Holland Company (a private corporation).

 

Ms. Dutra has a Bachelor in Economics from the Universidade Federal do Rio de Janeiro, a Juris Doctor from the Universidade do Estado do Rio de Janeiro and a Master in Economics from Pontificia Universidade Catolica do Rio de Janeiro. In addition, Ms. Dutra also holds a Master of Business Administration from Kellogg School of Management at Northwestern University, where she continues to serve as a lecturer in the areas of strategy and innovation, leadership development and globalization.

 

 
    Board and committee membership and attendance
    n/a          
               
  Other public company boards and committee memberships1
  CME Group Inc. | Nasdaq    Compensation; risk; market regulation oversight; diversity
  First Internet Bankcorp | Nasdaq    Audit; nominating and governance
  Amyris, Inc. | Nasdaq     
  Carparts, Inc. | Nasdaq          

1  If elected, Ms. Dutra will have until the end of 2022 to meet the recommended number of outside directorships under our governance guidelines – see page 44 for details.

 

 
  Securities held as of March 18, 2022
  Common

 

shares        

     Deferred share

 

units        

     Total value2              

Meets share ownership guidelines

 

(including 50% common shares)

  -      -      -   n/a3

 

2  Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 63 for more information).

 

3  If elected, Ms. Dutra will have five years from the date of her election to meet the share ownership guidelines.

 

Pembina Pipeline Corporation 2022 Management Information Circular    20


LOGO

 

Director since May 2020

 

Houston, Texas

U.S.

 

Robert G. Gwin (58) | Independent

2021 voting results: 98.72% for, 1.28% withheld

 

Mr. Gwin was President of Anadarko Petroleum Corporation (Anadarko), one of the world’s largest independent oil and natural gas exploration and production companies, until its acquisition by Occidental Petroleum Corporation in late 2019. He previously was Executive Vice President, Finance and Chief Financial Officer of Anadarko from 2009 to 2018. Mr. Gwin joined Anadarko in 2006 and was a member of Anadarko’s executive committee since 2008. Concurrently, he also served as Chairman of the Board of Western Gas Partners, LP (WES), a large U.S. oil and natural gas midstream company, from 2010 to 2018, and previously as WES’s President and CEO from 2007 to 2010.

 

Earlier in his career, Mr. Gwin held various positions in corporate finance and executive management.

 

Mr. Gwin currently is also on the board of directors of Crescent Energy Company.

 

Mr. Gwin served as a director of WES from 2007 to 2019, as a director of LyondellBasell Industries, N.V. from 2011 to 2018, including serving as its Chairman from 2013 to 2018, and as a director of Enable Midstream Partners, LP from 2020 through 2021, including serving as its Chairman. He has also served as a director of several non-public entities throughout his career. He holds a Bachelor of Science degree from the University of Southern California and a Master of Business Administration degree from the Fuqua School of Business at Duke University. He also earned the Chartered Financial Analyst (CFA) designation from the CFA Institute. He is a member of the Institute of Corporate Directors.

 

 
  Board and committee membership and attendance
  Board of directors    14 of 14 meetings                            100%                      
  Human resources, health and compensation committee    4 of 4 meetings    100%
  Governance, nominating and corporate social responsibility
  committee (chair)
   4 of 4 meetings    100%
                
 
Other public company boards and committee memberships

Crescent Energy Company | NYSE                                    -

    
 
                                                             Securities held as of March 18, 2022
    Common

 

shares

     Deferred share

 

units

     Total value1     

Meets share ownership guidelines

 

(including 50% common shares)

    -      4,871      $222,647      On track2
 

 

  1Deferred share units include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 63 for more information) and their value is based on $45.71, the closing price of our common shares on the TSX on March 17, 2022.

 

 2 Mr.  Gwin has five years from the date of his appointment to the board on May 8, 2020 to meet the guidelines.

 

Pembina Pipeline Corporation 2022 Management Information Circular    21


LOGO

 

Director since October 2017

 

Vancouver, British Columbia

Canada

 

Maureen E. Howe (64) | Independent

2021 voting results: 99.07% for, 0.93% withheld

 

Ms. Howe was a Research Analyst and Managing Director at RBC Capital Markets in equity research from 1996 until 2008. She specialized in the area of energy infrastructure, which included power generation, transmission and distribution, oil and gas transmission and distribution, gas processing, and alternative energy. Prior to joining RBC Capital Markets, Ms. Howe held various positions in the area of capital markets, including investment banking, portfolio management, and corporate finance.

 

Ms. Howe is a director of Methanex Corporation and Freehold Royalties Ltd. She is also the Chairperson of the University of British Columbia Phillips, Hager & North Centre for Financial Research.

 

Ms. Howe has a Bachelor of Commerce (Honours) from the University of Manitoba and a Ph.D. in Finance from the University of British Columbia. She is a member of the Institute of Corporate Directors.

 

 
  Board and committee membership and attendance
  Board of directors    14 of 14 meetings                    100%                
  Audit committee (chair)    6 of 6 meetings    100%                
  Governance, nominating and corporate social responsibility
  committee
   4 of 4 meetings    100%                
           
 
  Other public company boards and committee memberships
  Methanex Corporation | TSX, NASDAQ                    Governance (chair); audit
  Freehold Royalties Ltd. | TSX                                    Audit
 
 
  Securities held as of March 18, 2022

  Common          

 

  shares

  

Deferred share              

 

units

   Total value1                      

Meets share ownership guidelines

 

(including 50% common shares)

  25,000    13,048    $1,739,190   

yes

1  Based on $45.71, the closing price of our common shares on the TSX on March 17, 2022. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 63 for more information).

 

Pembina Pipeline Corporation 2022 Management Information Circular    22


LOGO

 

Director since January 2015

 

Calgary, Alberta

Canada

 

Gordon J. Kerr (68) | Independent

2021 voting results: 98.11% for, 1.89% withheld

 

Mr. Kerr was President and Chief Executive Officer and director of Enerplus Corporation (a TSX and NYSE-listed company) from May 2001 until July 2013. He is a past Chairman of the Canadian Association of Petroleum Producers, a former director of Deer Creek Energy Limited and Laricina Energy Ltd., a past member of the Canadian Council of Chief Executives and of the Management Advisory Council of the Haskayne School of Business at the University of Calgary.

 

He has gained extensive management experience in leadership positions at various oil and gas companies since launching his career in 1979. He started his employment with Enerplus Corporation and its predecessor firms in 1996, and held positions of increasing responsibility, including the positions of Chief Financial Officer and Executive Vice President.

 

 

He has a Bachelor of Commerce from the University of Calgary. Mr. Kerr received his Chartered Accountant designation in 1979 and is a fellow of the Institute of Chartered Accountants of Alberta. Mr. Kerr is a graduate of the Institute of Corporate Directors Education Program and holds the ICD.D designation and is a member of the executive of the Calgary Chapter of the Institute of Corporate Directors.

 

  Board and committee membership and attendance
  Board of directors    14 of 14 meetings                        100%                
  Audit committee    6 of 6 meetings    100%                
  Governance, nominating and corporate social responsibility
  committee
   4 of 4 meetings    100%                

    

 
  Other public company boards and committee memberships1
  None

1 Mr. Kerr was a director of Laricina Energy Ltd., a private company, until February 5, 2016. Laricina Energy Ltd. was subject to proceedings under the CompaniesCreditors Arrangement Act (Canada) in 2015. On February 1, 2016, the proceedings were conditionally discharged.

 
  Securities held as of March 18, 2022

  Common          

 

  shares

   Deferred

 

share units              

   Total value2                      

Meets share ownership guidelines

 

(including 50% common shares)

  10,400    37,851    $2,205,563   yes     

 

  Class A preferred shares           
  Series 7    6,000                      

2 Based on $45.71, the closing price of our common shares on the TSX on March 17, 2022. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 63 for more information).

 

Pembina Pipeline Corporation 2022 Management Information Circular    23


LOGO

 

Director since August 2010

 

Toronto, Ontario

Canada

 

 

David M.B. LeGresley (63) | Independent

2021 voting results: 98.45% for, 1.55% withheld

 

Mr. LeGresley is an experienced Canadian corporate director having served on a number of public and private boards, both large and small cap since 2008. He has extensive experience in the financial services industry, including as a senior executive at National Bank Financial for 12 years, in several roles, including Head of Corporate and Investment Banking, and most recently Vice Chair. Before that, he held investment banking positions at Salomon Brothers Canada and CIBC Wood Gundy.

 

Mr. LeGresley currently chairs the board of directors of Equitable Group Inc. (and subsidiary Equitable Bank Inc.).

 

He received a Bachelor of Applied Science in Engineering from the University of Toronto and a Master of Business Administration from Harvard Business School. Mr. LeGresley is a graduate of the Institute of Corporate Directors Education Program and holds the designation ICD.D.

 

 
  Board and committee membership and attendance
  Board of directors    14 of 14 meetings                    100%                
  Governance, nominating and corporate social responsibility
  committee
   4 of 4 meetings    100%        
  Human resources, health and compensation committee    4 of 4 meetings    100%        

    

 
  Other public company boards and committee memberships
  Equitable Group Inc. |  TSX                         Board chair          

 

 
  Securities held as of March 18, 2022

  Common          

 

  shares

  

Deferred               

 

share units

   Total value1                 

Meets share ownership guidelines

 

(including 50% common shares)

  59,789    40,697    $4,593,237   

yes

 

1  Based on $45.71, the closing price of our common shares on the TSX on March 17, 2022. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 63 for more information).

 

Pembina Pipeline Corporation 2022 Management Information Circular    24


LOGO

 

Director since December 2008

 

Calgary, Alberta

Canada

 

Leslie A. O’Donoghue (59) | Independent

2021 voting results: 98.82% for, 1.18% withheld

 

Ms. O’Donoghue spent over 20 years at Nutrien Ltd. and predecessor Agrium Inc. in various executive leadership roles. Her most recent position was Executive Vice President & Chief Strategy & Corporate Development Officer and Executive Advisor to the CEO. While at Agrium Inc., Ms. O’Donoghue held a number of roles including, Executive Vice President, Corporate Development & Strategy & Chief Risk Officer, Executive Vice President, Operations and Chief Legal Officer. Ms. O’Donoghue currently sits on the board of directors of Methanex Corporation and Richardson International Limited (a private company).

 

Before joining Agrium Inc. in 1999, Ms. O’Donoghue was a partner in the national law firm of Blake, Cassels & Graydon LLP.

 

She has a Bachelor of Economics from the University of Calgary and Bachelor of Laws from Queen’s University. She was admitted to the Alberta Bar in 1989. Ms. O’Donoghue is a member of the Institute of Corporate Directors.

 

  Board and committee membership and attendance
  Board of directors    14 of 14 meetings                    100%                
  Audit committee    6 of 6 meetings    100%        
  Safety, environment and operational excellence committee    5 of 5 meetings    100%        

 

    

 
  Other public company boards and committee memberships
  Methanex Corporation |  TSX, NASDAQ                 Audit; responsible care

 

 
  Securities held as of March 18, 2022

  Common          

 

  shares

  

Deferred               

 

share units

   Total value1                 

Meets share ownership guidelines

 

(including 50% common shares)

  35,588   

41,305

  

$3,514,794

  

yes

 

1  Based on $45.71, the closing price of our common shares on the TSX on March 17, 2022. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 63 for more information).

 

Pembina Pipeline Corporation 2022 Management Information Circular    25


LOGO

 

Director since May 2017

 

Swarthmore, Pennsylvania

U.S.

 

Bruce D. Rubin (65) | Independent

2021 voting results: 99.75% for, 0.25% withheld

 

Mr. Rubin has over 40 years of experience, including various executive and advisory positions and board memberships in the energy, refining and petrochemical sectors. He was CEO of Sunoco Chemicals Inc. (Sunoco Chemicals) and a Senior Vice President of Sunoco Inc. (2008 to 2010) and held various other executive positions during a 32-year career with that company. Mr. Rubin was the first CEO of Braskem America, Inc. (Braskem America), and he served with Braskem America in an executive capacity from 2010 until 2013. He oversaw the successful transition of Sunoco Chemicals to Braskem America and supported the successful acquisition by Braskem America of the polypropylene business of The Dow Chemical Company. Mr. Rubin was an advisor and director for Braskem America from 2014 to 2017.

 

Mr. Rubin serves on the board of DISA Global Solutions (a Court Square Capital Partners company) and the M. Holland Company (a private company). He served on the board of directors of Sylvatex Inc. from 2012 to 2016 and is currently an advisor to the company. He was an Executive Advisor for Court Square Capital Partners (2013 to 2015) and was an Operating Advisor for The Carlyle Group (2015 to 2017).

 

Mr. Rubin has a Master of Business Administration from Widener University and a Bachelor of Science in chemical engineering from the University of Pennsylvania. He is a member of the Institute of Corporate Directors.

 

 
  Board and committee membership and attendance
  Board of directors    14 of 14 meetings                        100%                    
  Audit committee    6 of 6 meetings    100%        
  Safety, environment and operational excellence committee    5 of 5 meetings    100%        
           
 
  Other public company boards and committee memberships
  None
 
 
  Securities held as of March 18, 2022

  Common          

 

  shares

  

Deferred share    

 

units                  

   Total value1                       

Meets share ownership guidelines

 

(including 50% common shares)

  20,000    19,389    $1,801,587    yes     

 

1  Based on US$36.21, the closing price of our common shares on the NYSE on March 17, 2022 and the Reuters noon U.S. Canadian dollar foreign exchange rate of 1.2639 as at March 17, 2022. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 63 for more information) and their value is based on $45.71, the closing price of our common shares on the TSX on March 17, 2022.

 

Pembina Pipeline Corporation 2022 Management Information Circular    26


LOGO

 

Director since October 2017

 

 

Calgary, Alberta

Canada

 

Henry W. Sykes (63) | Independent

2021 voting results: 98.88% for, 1.12% withheld

 

Mr. Sykes is the former President and director of MGM Energy Corp., a Canadian public energy company focused on the acquisition and development of hydrocarbon resources in Canada’s Northwest Territories and Arctic regions (January 2007 to June 2014). He was President of ConocoPhillips Canada (2001 to 2006) and Executive Vice-President, Business Development of Gulf Canada Resources Ltd. before that.

 

Mr. Sykes began his career as a lawyer and specialized in mergers and acquisitions, securities and corporate law. He is past Chair and member of the boards of Arts Commons and The Arctic Institute of North America, and a director of several private companies involved in the oil and gas industry.

 

He has a Bachelor of Arts in economics from McGill University, a law degree from the University of Toronto and a Master of Law degree from the London School of Economics. He is a member of the Institute of Corporate Directors.

 

 
 
  Board and committee membership and attendance
  Board of directors       14 of 14 meetings    100%
  Audit committee       6 of 6 meetings    100%
  Human resources, health and compensation committee (chair)    4 of 4 meetings    100%
          
 
  Other public company boards and committee memberships1
  None
 

1  Mr.  Sykes was a director of Parallel Energy Trust (a TSX listed company) from March 2011 to February 2016. On November 9, 2015, Parallel Energy Trust filed an application in the Court of Queen’s Bench of Alberta for creditor protection under the Companies’ Creditors Arrangement Act (Canada), and on November 9, 2015 filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. In the Chapter 11 proceedings, the U.S. Bankruptcy Court approved the sale of the assets of Parallel Energy Trust and the sale closed on January 28, 2016. On March 3, 2016, the Canadian entities of Parallel Energy Trust filed for bankruptcy under the Bankruptcy and Insolvency Act (Canada) and a notice to creditors was sent by the trustee on March 4, 2016.

 
 
   Securities held as of March 18, 2022
   Common shares   

Deferred

 

share units

   Total value2   

Meets share ownership guidelines

 

(including 50% common shares)

   13,306    12,937    $1,199,575    yes
 

2 Based on $45.71, the closing price of our common shares on the TSX on March 17, 2022. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 63 for more information).

 

Pembina Pipeline Corporation 2022 Management Information Circular    27


Governance

 

Good governance is important for all our stakeholders – our customers, our investors, our employees and the communities where we operate. Strong stewardship by the board, and high standards of governance and ethics throughout our business, are essential for achieving our purpose and operating our business effectively.

 

Our governance practices meet or exceed legal and stock exchange requirements that apply to us. We also regularly benchmark ourselves against our peers to ensure we are following best practices. We continue to focus on ensuring our practices are aligned with our TSX 60 peer group.

 

Governance guidelines

 

Our board and management operate under governance guidelines that outline our emphasis on:

· enhancing and preserving value;

· protecting dividends;

· meeting our commitment to our purpose and our four stakeholder groups: customers, investors, employees and communities; and

· operating in a safe, reliable and environmentally responsible way.

 

    

 

 

 

  

 

Our purpose

 

Pembina’s objective is to be the leader in delivering integrated infrastructure solutions connecting global markets. We believe we can achieve this vision if:

 

·Customers choose us first for reliable and value-added services;

 

·Investors receive sustainable industry leading total returns;

 

·Employees say we are the ‘employer of choice’ and value our safe, respectful, collaborative and inclusive work culture; and

 

·Communities welcome us and recognize the net positive impact of our social and environmental commitment.

 

Our purpose shapes our corporate strategy, our approach to sustainability, and our compensation program.

 

 

Our governance guidelines set out our commitment to principles of good governance.

 

     

Board independence

     

an independent chair of the board

       

audit committee, human resources, health and compensation committee and governance, nominating
and corporate social responsibility committee are 100% independent

       

majority of the board must be independent

       

regular in camera meetings held without management and without non-independent directors

     

 

Board diversity

     

commitment to diversity by gender, age, skills and geographic location

       

commitment to diversity of tenure through reasonable board turnover and renewal

       

specific targets for women and overall diversity, including Indigenous peoples, persons with disabilities,
and members of other racial, ethnic and/or visible minorities

     

 

Board effectiveness

     

formal process for nominating directors and succession planning

       

ongoing director orientation and director education program

       

clearly established and distinct roles of board members and senior management

       

commitment to maintaining dialogue between management and directors

       

ability of the board and board committees to seek independent advice as appropriate

       

formal board assessment and peer review process, including engaging a third-party independent advisor
at least every three years

     

 

Integrity and ethical conduct

     

commitment to ensuring the integrity of internal controls and public disclosure

  

 

  

 

monitoring of overboarding, board interlocks, and other potential conflicts of interest

       

established equity ownership requirements for directors

       

formal policy on majority voting

     

 

Organizational effectiveness

     

requirement of board to oversee corporate strategy and manage organizational risks

 

Pembina Pipeline Corporation 2022 Management Information Circular    28


The board’s mandate

The board of directors oversees our business, provides guidance to management, monitors management’s activities and sets corporate policy. The board is also responsible for developing our approach to corporate governance, including policies, standards and practices that ensure we operate ethically and meet or exceed the laws and regulations that apply to us.

 

The board’s charter sets out specific matters that must be approved by the full board. All significant operational, governance, financial decisions, risk management decisions, and strategies that could affect our shareholders are reviewed by the board.

 

The board’s charter includes:

 

· ensuring an ethical culture;

 

· strategic planning;

 

· enterprise risk management, including insurable risks;

 

· financial management and reporting;

 

· succession planning and diversity; and

 

· officer compensation.

 

The board fulfils its mandated duties directly and by delegating certain responsibilities to its four standing committees (see page 46 for information about the committees).

    

 

You can find a copy of the board’s charter on our website (www.pembina.com).

 

The board’s oversight of sustainability and ESG crosses many of the responsibilities in its charter, including ensuring an ethical culture, overseeing strategy and risk, increasing diversity, approving reporting and overseeing compensation design. You can read about the board’s efforts throughout this section.

 

The board’s approach to governing sustainability and ESG is discussed on page 33. Pembina’s sustainability report and performance data are available on our website at https://www.pembina.com/sustainability/.

Ensuring an ethical culture

One of our most valuable assets is our reputation as a reliable and responsible energy transportation and midstream service provider, with consistent financial performance and long-term financial stability. Fostering and ensuring a culture that promotes integrity and ethical conduct is key to maintaining our reputation.

 

Our commitment to respecting human rights extends to all contractors and subcontractors working at our sites and includes, among other things:

 

· eliminating unlawful discrimination and harassment in the workplace;

 

· recognizing the legal rights of all individuals and communities, including women, Indigenous peoples, persons with disabilities, members of other racial, ethnic and/or visible minorities, and the economically disadvantaged;

 

· respecting the importance of the environment in the communities where we operate;

 

    

 

2021 highlights

 

In 2021, the board:

 

· approved amendments to the company’s code of ethics to explicitly confirm our commitment to operating our business in a way that respects human rights, regardless of geographical location;

 

· adopted a new anti-bribery policy and community relations policy; and

 

· updated its Indigenous and tribal relations policy.

 

 

    

· respecting personnel’s rights related to freedom of association and collective bargaining;

 

· recognizing the right to water as a fundamental human right; and

 

· addressing risks of modern slavery, forced labour and child labour (as applicable, recognizing that the risk of these human rights violations is low because of the primary geography of Pembina’s operations).

    

 

Ethics policies

 

Pembina maintains the following policies:

 

· Anti-bribery policy

 

· Whistleblower policy

 

· Community relations policy

 

· Indigenous and tribal relations policy

 

Our commitment to respecting human rights is informed by the principles of the Universal Bill of Human Rights, the United Nations Universal Declaration of Human Rights, the United Nations Guiding Principles on Business and Human Rights, the International Labor Organization’s Declaration of Fundamental Principles and Rights at Work and the Organization for Economic Development Guidelines for Multinational Enterprises.

All executives and employees must acknowledge every year that they have read and understand our code of ethics (the code), anti-bribery policy, whistleblower policy and other policies, will review all updates, and will comply with them at all times. You can find these and other policies on our website (www.pembina.com).

 

Pembina Pipeline Corporation 2022 Management Information Circular    29


Code of ethics

All directors, executives and employees of Pembina are governed by our code, which sets out principles for ethical conduct in the following areas:

  ·  

conflicts of interest;

  ·  

business relationships and fair dealing;

  ·  

compliance with the law;

  ·  

human rights;

  ·  

government relations;

  ·  

health, safety and environmental matters;

  ·  

integrity of financial information;

  ·  

disclosure and insider trading;

  ·  

stakeholder and public relations;

  ·  

Privacy and confidentiality;

  ·  

Protecting our assets and records;

  ·  

gifts, meals, hospitality, entertainment, travel and other benefits;

  ·  

workplace environment and relationships; and

  ·  

reporting responsibilities and procedures.

 

 

Compliance is mandatory and everyone has a responsibility to report violations of the code. Violations can result in disciplinary action, including dismissal.

The board is responsible for establishing procedures for monitoring compliance with the code and does so through a combination of periodic reports from management, our annual certification process, as well as through our whistleblower policy (see below). No aspect of the code can be waived unless it is approved by the board and properly disclosed, as required by applicable laws and regulations. The board has not waived any aspect of the code since it was implemented in 2005, and no material change reports related to the conduct of any director or officer have been filed (which would generally be required for conduct that would constitute a material departure from the code). The code was last updated and approved by the board in August 2021.

Conflicts of interests and related party transactions

The directors and officers of Pembina may be directors or officers of entities that we are in competition with or are customers or suppliers of Pembina or certain entities in which Pembina holds an equity investment. This may give rise to a conflict of interest in the administration of their duties for Pembina. Directors and officers of Pembina are required to disclose the existence of potential conflicts in accordance with the code and other corporate governance policies and in accordance with the Business Corporations Act (Alberta).

The audit committee has oversight of related party transactions. Under our code, a director who has a material interest in a transaction or agreement involving Pembina must disclose the interest to the CEO and the chair of the audit committee immediately and may not participate in any discussions or votes on the matter. All directors and corporate officers also complete an annual questionnaire disclosing any related party transactions. The oversight process is managed by the financial services team in cooperation with the governance team, who maintain a list of all affiliations and run a process quarterly to ensure that related party transactions are reported and disclosed as required. See Note 28 in our audited consolidated financial statements for the year ended December 31, 2021 for further discussion on related party transactions.

Related party in this context means: (a) individuals who are considered key management personnel, including certain key officers and the directors of Pembina, and close members of the individual’s family; (b) any entities that the above individuals control, jointly control, have significant influence over, or serve as key management personnel or directors; (c) joint ventures held by Pembina; and (d) pension plans that benefit employees. A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged.

Whistleblower policy

Pembina has built its reputation over 65 years because of our strong record of safe, reliable and environmentally responsible operations. Our whistleblower policy is designed to help us uphold our reputation and maintain public confidence by encouraging employees, consultants, contractors, agents and other stakeholders to act responsibly and report possible unethical practices without fear of discrimination, retaliation or harassment. The policy includes examples of activities that should be reported, and the process whistleblowers should follow to file a confidential report, including a whistleblower line that allows people to report anonymously by telephone or the internet, or through our external legal counsel addressed as confidential for direct delivery to the chair of the audit committee, at any time. Each whistleblower complaint is treated confidentially and thoroughly investigated.

 

Pembina Pipeline Corporation 2022 Management Information Circular    30


Anti-bribery policy

The board adopted an anti-bribery policy in 2021, to formalize and record Pembina’s procedures to ensure the company and its directors, officers and employees conduct business in an honest and ethical manner when dealing with government officials and all other parties and comply with anti-corruption laws. The anti-bribery policy also reflects the standards Pembina expects its contractors, agents and other third-party representatives to adhere to when acting on Pembina’s behalf.

Community relations policy

As part of Pembina’s approach to community relations, Pembina seeks to develop enduring relationships based on mutual trust with stakeholders that could potentially be affected by Pembina’s current or future operations. By committing to being recognized as a leader in its relationships with communities, where Pembina is welcomed as a safe and responsible partner whose positive social impact carries significant value for all of its stakeholders, Pembina employees, consultants, contractors and directors will recognize and respond to the needs of its community, while addressing broader social issues by: understanding what communities value and what is important to them; making measurable commitments and delivering on them; minimizing potential impacts of Pembina’s projects and operating by conducting early, meaningful and ongoing engagement; and identifying partnership opportunities in support of community and economic development for mutual benefit.

Indigenous and tribal relations policy

As part of Pembina’s approach to Indigenous relations, Pembina seeks to enter into lasting and mutually-beneficial relationships with all Indigenous peoples affected by its operations. By striving for positive and mutually-beneficial relationships with Indigenous leadership and communities, Pembina employees, consultants and contractors will help build continued success for Pembina’s existing and expanding systems and other businesses. In 2021, we amended our Indigenous and tribal relations policy to reflect specific actions Pembina will take to build these relationships. The amendments also include Pembina’s commitment to the Truth and Reconciliation Commission of Canada Call to Action Number 92(ii), which calls on the corporate sector to support equitable access to jobs, training, and education opportunities, and to work with Indigenous communities to gain long-term sustainable benefits from economic development projects.

 

Strategic planning oversight     

The board oversees the development and execution of our long-term strategic plan and shorter-term objectives and initiatives. Pembina is committed to growing shareholder value through strategic project development and acquisitions that support the long-term success of both our company and our customers.

 

The board holds two dedicated strategy sessions every year. At these sessions, the board meets with management to review Pembina’s current activities, long-range financial forecast and future growth opportunities, including input from third-party advisors from time to time about industry or other trends and developments that may benefit us or pose a risk. The board approves our annual strategic plan and monitors

 

  

  

 

2021 highlights

 

Key areas of focus this year were our ESG strategy, business diversification, energy transition and our continued management of the COVID-19 pandemic and its impact on our employees, customers and investors.

 

See page 33 for more about Pembina’s ESG initiatives in 2021.

 

    

performance against it throughout the year, based on quarterly updates and reports from management.

The board assesses the potential impact of significant projects against Pembina’s financial guardrails:

 

·  

maintain target of 80% fee-based contribution to adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA);

·  

target <100% payout of fee-based distributable cash flow;

·  

maintain a strong “BBB” credit rating; and

·  

target dividend payout of <100% of fee-for-service cash flow.

 

Pembina Pipeline Corporation 2022 Management Information Circular    31


Risk management oversight

The board is responsible for overseeing risk management at Pembina. The board ensures it understands the principal risks of our business and assesses the balance between risk and potential return for Pembina and our shareholders to ensure our viability over the long-term.

 

As part of its responsibility, the board makes sure we have:

 

· an enterprise risk management (ERM) process, designed to identify and assess potential risks that may affect our business, operations or results, and to manage risk factors within our risk appetite;

 

· a risk management infrastructure to respond to identified risks, and critical risk management policies and procedures, including risk response, controls, monitoring, mitigation and reporting to the board; and

 

· specific management processes for addressing corporate, regulatory, securities and other compliance requirements.

 

  

  

Risk management policies

 

Pembina maintains the following policies:

 

· Enterprise risk management policy

 

· Market risk mitigation policy

 

· Counterparty risk management policy

 

· Acceptable use of information assets policy

 

· Information management policy

 

· Security management policy

To facilitate our risk review, we have an enterprise risk committee (ERC) made up of members of senior management. The ERC meets at least quarterly to review the performance, appropriateness and the current business environment surrounding our risk management activities. The ERC requests each division’s leadership team to identify the top risks for their businesses.

The ERC conducts roundtable discussions and divides Pembina’s top risks into three categories:

·  

New action required: risks where mitigation will require a new approach or strategy;

 

·  

Mitigated with ongoing diligence: risks where there is mitigation strategy in place, but may require some further adaptation or adjustments; and

 

·  

Black swan: risks that are remote, and no current mitigation is in place or contemplated.

For these top risks, the ERC identified potential impacts, mitigation strategies currently in place, emerging risks, and proposed additional mitigation approaches. A senior officer is assigned to every risk that requires new action or that has a mitigation strategy in place but may need adaptation or adjustment.

Management reports periodically to the board about the risks that have been identified and, at least once per year, presents to the board a summary of the ERC’s review of risk identification, management and reporting, and any deficiencies identified. The governance, nominating and corporate social responsibility committee reviews the risk oversight functions of the board and board committees to confirm that identified risk oversight is appropriately allocated.

The ERM process also guides our materiality and disclosure decisions in relation to risks, based on the overriding principle that risks must be disclosed if they would most likely influence an investor’s decision to purchase securities of the company, and weighing both the probability of an outcome as well as the potential financial impact to the company. You can find a complete listing and explanation of our risk factors under the heading Risk Factors in our annual information form (AIF) on our website (www.pembina.com), on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov).

Cyber security

We have a robust program for identifying and mitigating information and cyber security risks, enhancing the skills of our people, our processes and technological capabilities.

Three components form the core of our approach to cyber security and are an integral part of our operating management system:

 

·  

Governance includes guidance to measure success and adhere to cyber practices and requirements; and keeping the workforce trained on cyber risks and appropriate behaviors by requiring the workforce to sign-off on our cybersecurity policy on an annual basis.

 

·  

Security Operations includes 24/7/365 monitoring to identify potential anomalous activities; threat intelligence feeds that are automatically ingested into technical platforms for instant protection on known threats and ongoing cyber attacks; maintenance and health of the cyber technological platforms; and incident response to cyber events within Pembina.

 

·  

Risk and Compliance – includes regulatory and membership requirements; continuous monitoring for vulnerabilities; cyber risk management of Pembina’s third parties and supply chain risks; and assurance that the architecture, processes, and controls are in place within Pembina’s operational and information services assets.

 

Pembina Pipeline Corporation 2022 Management Information Circular    32


Pembina’s cyber security program aligns to the National Institute of Standards and Technologies Cyber Security Framework (NIST CSF), a world recognized framework for managing cyber security, and we engage third parties to perform a NIST CSF maturity assessment to identify potential areas for improvement.

We have information security risk insurance and have not experienced an information security breach in the last three years.

Sustainability and ESG

The board oversees Pembina’s overall ESG strategy, including the integration of ESG considerations into our long-term business planning, organizational structure and corporate policies and practices. The board also approves our sustainability report and other ESG disclosure.

The board has delegated the following ESG related responsibilities to its four standing committees.

 

  Committee    ESG related responsibilities

Audit Committee

  

· Maintains oversight of the integrity of Pembina’s financial statements, the reporting process, and the internal audit function.

Human Resources,

Health and

Compensation

Committee

  

· Provides oversight over Pembina’s approach to director compensation, employee health and wellness, employee compensation, executive performance and compensation, executive succession planning and corporate equity, diversity and inclusion.

· Focuses on sustainability by including ESG metrics in incentive plan design and compensation decisions for executives.

Governance,

Nominating and

Corporate Social Responsibility Committee

  

· Oversees sustainability matters, including sustainable development, public awareness and consultation, issues management, environmental stewardship, external communications and government relations, Indigenous relations, community investments and human rights.

· Oversees the development of Pembina’s Sustainability Report and facilitates and provides education of the board, including education and information on ESG matters.

Safety, Environment

and Operational

Excellence Committee

  

· Oversees development, implementation and monitoring of risks and policies related to safety, environment, operational excellence, asset integrity management and corporate securities matters.

Management’s role

In 2021, Janet Loduca was appointed Senior Vice President, External Affairs & Chief Legal and Sustainability Officer. Ms. Loduca is responsible for Pembina’s long-term sustainability strategy and manages Pembina’s reporting and disclosure of ESG performance. Ms. Loduca provides regular ESG updates to the governance, nominating and corporate social responsibility committee and full board, as well as the ERC.

 

 

2021 ESG initiatives

 

The following is a summary of Pembina’s key ESG initiatives in 2021. Please see our website for more about Pembina’s ESG strategy and activities.

 

GHG emissions targets

 

In 2021, Pembina committed to a 30% greenhouse gas (GHG) emission intensity reduction target by 2030, relative to baseline 2019 emissions. The GHG reduction target will help guide business decisions and improve overall emissions intensity performance while increasing Pembina’s long-term value and ensuring Canadian energy is developed and delivered responsibly. To meet this target, Pembina will focus initially on operational opportunities, greater use of renewable and lower emission energy sources and investments in a lower carbon economy.

 

Pembina is pursuing initiatives that will lower both emissions and operating costs in its operations. Through a lens of continuous improvement, the company is taking further steps to reduce its environmental footprint while utilizing its assets more efficiently.

 

 

    

  

 

ESG reporting

 

Pembina has published a sustainability report every two years, as well as an annual data update.

 

You can find our 2021 data update on our website at www.pembina.com/sustainability/.

 

In 2021, we enhanced our disclosure by completing our inaugural Carbon Disclosure Project submission and obtaining independent third-party limited assurance of Pembina’s 2020 Scope 1 and Scope 2 GHG emissions.

 

        
    
    

 

ESG initiatives in 2021

 

· Announced new GHG emission reduction targets

 

· Set new employee EDI targets

 

· Established transformational Indigenous partnerships

 

· Updated corporate governance policies

 

· Refined executive compensation

 

 

Pembina Pipeline Corporation 2022 Management Information Circular    33


The company is investing in a lower carbon economy, increasing the use of renewable energy through efforts such as the long-term 100 megawatt power purchase agreement with TransAlta Corporation on the Garden Plain Wind Power Project. Pembina continues to explore other potential renewable power purchase agreements across its business.

Pembina has also partnered with TC Energy Corporation (TC Energy) to jointly develop the Alberta Carbon Grid (ACG), a world-scale carbon transportation and sequestration system. Developing the ACG will allow Pembina to play a vital role in helping Alberta-based industries effectively manage emissions. Pembina and TC Energy are uniquely positioned to take a leadership role in the transportation of carbon emissions given their collective skills and extensive network of existing pipeline infrastructure.

Equity, diversity and inclusion targets

The board approved an EDI strategy, which included the following targets to increase representation of women and other underrepresented groups across Pembina over the next three years:

 

·  

35% women overall in the workforce by 2025;

 

·  

30% women in executive leadership by 2022;

 

·  

45% overall workforce diversity by 2025; and

 

·  

40% overall diversity in executive leadership by 2025.

Transformational Indigenous partnerships

Pembina announced two significant and transformational partnerships that combine strong business opportunities with compelling ESG attributes. The first is a partnership with the Haisla Nation to develop the proposed Cedar LNG Project, which would be the largest First Nation-owned infrastructure project in Canada with one of the cleanest environmental profiles in the world. The second is Chinook Pathways, a partnership with Western Indigenous Pipeline Group to pursue ownership of the Trans Mountain Pipeline, following completion of the construction of the Trans Mountain Expansion project.

Corporate governance and executive compensation

The board approved updates to the code to include a human rights policy, adopted new anti-bribery and community relations policies, and updated Pembina’s Indigenous and tribal relations policy (see page 31). We also introduced a closer alignment between compensation design and Pembina’s purpose and strategy (see page 56), established a supplier code of conduct and joined the 30% Club of Canada.

Financial management and reporting

The board is responsible for:

 

·  

approving our financial statements, accompanying MD&A and earnings press releases;

 

·  

reviewing and overseeing compliance with the audit, accounting and financial reporting requirements that apply to our business;

 

·  

approving our annual operating and capital budgets and financing plans and strategies; and

 

·  

approving decisions to participate in the capital markets and all significant changes to our accounting policies and practices.

The board also makes sure we have a robust system for tracking internal controls over financial reporting, compliance with the U.S. Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act), internal audit, fraud and auditing matters and responding to complaints, including anonymous complaints we may receive from employees or others. You can read about the audit committee’s role in compliance and internal audit on page 47 and our whistleblower policy on page 30.

Compensation

Director compensation

The board is responsible for:

 

·  

approving director compensation;

 

·  

making sure director compensation is aligned with shareholder interests and adequately reflects the time commitment, scope of responsibilities, risks involved in being a director and market trends in director compensation;

 

·  

working with the human resources, health and compensation committee to review from time to time the competitiveness of the compensation of our board members, board chair and committee chairs; and

 

·  

working with independent external advisors that review director compensation and provide objective advice.

 

 

Pembina Pipeline Corporation 2022 Management Information Circular    34


Executive compensation     

All decisions about compensation of the CEO and senior vice presidents must be approved by the board.

 

The board works with the human resources, health and compensation committee and independent external advisors retained by the committee, to determine compensation for our CEO and senior vice presidents, including variable compensation.

 

You can read more about our approach to compensation governance and how we compensate our directors and executives beginning on page 53, and the role and responsibilities of the human resources, health and compensation committee on page 50.

 

    

  

 

The human resources, health and compensation committee reviews and recommends compensation for directors, the CEO and senior vice presidents. You will find a full list of that committee’s activities in 2021 starting on page 50.

 

Key executive compensation changes this year include assessing corporate performance in four categories linked to our four stakeholder groups, in line with our purpose and strategy, and reducing the weighting of options to be more in line with our peers and reduce stock dilution (see page 56).

 

Executive succession planning and diversity

Executive succession planning

The board has developed position descriptions for the CEO, the CFO and the other senior vice presidents, outlining the scope and responsibilities of each role.

The board is responsible for evaluating and appointing the CEO, the CFO and the senior vice presidents, and for approving the management succession process for other executives. It reviews succession plans for the CEO, the senior vice presidents and other executives, taking into consideration recommendations by the human resources, health and compensation committee. There is also a development plan process in place for employees who are potential successors to senior vice presidents and other executives. An assessment of readiness includes a thorough review of each individual’s leadership and technical competencies.

The executive team has formed a talent management committee that regularly reviews succession plans, identifies employees with high potential and ensures employee development is progressing as planned. The CEO meets with the human resources, health and compensation committee at least once per year to discuss the succession plan, review succession candidates for the CEO position, as well as senior management and other strategic positions, and review development plans for possible successors. Emergency successors for business continuity are identified for each executive position and are reviewed every year.

See page 55 for a description of the board’s process for finding a new CEO and appointing Scott Burrows as President and CEO.

 

Leadership development

 

Pembina is developing a community of extraordinary leaders to realize the company’s vision, and our Leadership Competency Framework is an essential part of this process, including succession planning. The framework has three graduated components: leading self, leading others and leading the business, and focuses on Pembina’s 10 core competencies. The competencies are used in employee and leader feedback, leadership programs and the annual performance cycle, complementing on-the-job experience with formal and informal learning opportunities.

 

    

  

 

Pembina’s 10 core competencies

 

· Demonstrates accountability & commitment

 

· Acts courageously

 

· Exhibits self-awareness

 

· Communicates effectively

 

· Works collaboratively

 

· Empowers & develops others

 

· Thinks & acts strategically

 

· Leads positive change

 

· Drives results

 

· Applies business acumen

 

 

Pembina Pipeline Corporation 2022 Management Information Circular    35


Diversity

 

Pembina is committed to equity, diversity and inclusion (EDI), and we are ensuring it is a priority across all services and business areas.

 

EDI strategy

 

Pembina introduced a new EDI stand in 2021, and the following employee EDI outcomes:

 

· A workforce that has the skills and knowledge to promote and lead an inclusive and diverse culture.

 

· A diverse workforce that is innovative, collaborative and agile.

 

· A workplace that has systems and processes that advance equity for all employees.

   

 

2021 highlights

 

In 2021, Pembina introduced:

 

· a revised EDI stand

 

· new employee EDI outcomes

 

· EDI targets for underrepresented groups across the organization

 

   
   

 

Pembina’s EDI stand

 

We are committed to diversity, equal opportunity and ensuring that our employees can thrive in an inclusive environment.

Increasing representation of employment equity designated groups

Increasing representation of Indigenous peoples, women, people with disabilities, and people who are visible minorities is foundational to our EDI strategy. In 2021, we introduced new EDI targets, to increase representation of these underrepresented groups over the next three years – see page 34 for details. We also completed a companywide EDI census to refresh our baseline data.

Executive officer appointments are considered based on merit with regard to the benefits of diversity within the executive leadership team, as represented by Pembina’s consideration of the specified target when considering appointments.

Education and inclusion

In 2021 we focused on increasing awareness and commitment to EDI across the company. Key initiatives that supported this include:

 

·  

Conversations for Change (C4C): a panel-style lunch hour conversation with Pembina employees to explore specific EDI-related topic areas and their impact on the personal and professional lives of colleagues. In 2021, 1,800 employees overall attended the live sessions virtually through Microsoft Teams, and there were a further 1,006 views of recorded sessions as of December 31, 2021.

 

·  

Inclusion Networks: are a key strategy in creating a sense of workplace community, belonging, and contribute to innovative and inclusive business strategies and practices. The forming of these networks began in the latter half of 2021, and they were formally approved in 2022:

 

  ·  

Pembina Pride (LBGTQ2S+ employees and allies).

 

  ·  

Women’s Inclusion Network, which includes Women in Field, Women in Commercial and Women in Finance.

 

  ·  

Multicultural Resource Network.

 

·  

EDI Foundations Series: was developed and piloted in 2021 and is comprised of three levels of EDI learning sessions to advance fundamental EDI concepts with Pembina employees. The learning sessions are designed to increase understanding of Pembina’s commitment to EDI, the core concepts of EDI, explore the dynamics of inclusion and exclusion, and create a culture of allyship. The formal EDI Foundations Series will be rolled out to all leaders in 2022.

Looking ahead to 2022

In 2022, we will continue to invest in education, recruitment and retention strategies, specifically for Indigenous peoples and women in field and leadership roles. Some key focus areas include partnering with community investment and Indigenous relations to further our EDI impact with our community stakeholders, integrating EDI into our supply chain code of conduct and data collection, and launching an EDI dashboard.

 

Pembina Pipeline Corporation 2022 Management Information Circular    36


Employee engagement

 

We believe an engaged workforce increases company productivity, improves results and ultimately adds value to our shareholders. We began tracking employee engagement scores in 2013 and have evolved our strategy to a more frequent, pulse-style survey.

 

In 2018, we conducted a full engagement survey, and achieved a score of 66%, with a 98% response rate. Our response rate far exceeded AON’s global average response rate of 80% and our 66% score was consistent with other TSX 60 companies in the survey at the time.

 

In 2020, we conducted an Employee Engagement Pulse Survey, using MacLean and Co. Our overall engagement score was 86%. We had a response rate of 88% and showcased improvements in key categories of focus since the 2018 survey.

 

In 2021, we worked to sustain and improve upon our engagement with a goal of maintaining a 70% engagement score. We conducted a pulse survey in January 2022 to measure employee engagement and identify improvement areas for Pembina with respect to the employee experience. The response rate on our pulse survey was an impressive 93%, and we had 1,435 open text responses. Specifically, the survey revealed that:

 

· 83% of respondents are proud of the work they do;

    

 

2021 highlights

 

· Established a new technical career stream, providing a non-management career path for individuals while leveraging their technical knowledge/expertise.

 

· Completed a company-wide organizational design review that includes consistent layers and spans of control.

 

· Undertook a transformation of the human resources function, which is mid-flight, including a new target operating model and the related human capital management technology implementation.

 

· Implemented a flexible work policy that supports in-office collaboration on core days each week and optional work from home days.

 

 
 
 
 
    
    

 

Human resources policies

 

Pembina maintains the following policies:

 

· Respectful workplace policy

 

· Alcohol and drug policy

 

· Privacy policy

 

· 81% felt their contributions are important to the success of their department;

 

· 80% feel positive about their coworker relationship; and

 

· 75% feel positive about their work environments.

    

We are committed to continuing to listen to employee feedback and create the actions and focus areas required to continue to make Pembina a great place to work.

Through dealing with the COVID-19 pandemic, we recognize that our employees’ working practices have evolved and adapted. We have leveraged technology to work with greater agility and recognize there is a benefit for all of us in continuing some of the working practices that have served us well through the pandemic. We also know that organizationally we benefit from in-person collaboration, team building and mentoring when we are able to have people working in the office. This is why in 2021 we began the development of a flexible work standard that was enacted on March 1, 2022 once jurisdictional COVID-19 protocols allowed, establishing core days in the office and providing the opportunity for staff to work from home on non-core days if they choose. We believe this new standard addresses the needs of our business and safeguards the physical and mental wellbeing of our employees, all while supporting our employees’ ongoing work/life balance.

Employee health and wellness

Ensuring business continuity and protecting the health and wellness of our employees were strong focus areas for Pembina in 2021, particularly as we entered the second year of the COVID-19 pandemic. We continued to ensure we had the necessary plans and protocols in place to prevent the spread of the COVID-19 virus in our offices and field operations, limit the risk of workplace transmission, and protect those staff required at our critical infrastructure. A dedicated cross-functional management team and working group were established to monitor the situation and deal with changing regulations and government restrictions. Finally, to support the mental health of employees during this time we worked closely with our benefits providers to increase available coverage. Since the start of the COVID-19 pandemic, Pembina has not had any operational closures as a result of the pandemic, despite having to adjust return to office plans as a result of COVID-19 variants.

 

Pembina Pipeline Corporation 2022 Management Information Circular    37


Shareholder engagement and communicating with the board

 

The board engages with shareholders through accurate and consistent public reporting, as well as open dialogue about our strategy, performance and business activities. We provide ongoing information to our shareholders in our annual report, management information circular, annual information form, quarterly reports, news releases, sustainability report, website, corporate presentations, earnings calls and at industry conferences and other meetings. We host earnings calls every quarter that are open to all, with a live webcast and question and answer period. Our annual meetings are webcast live (this year’s meeting is virtual-only), and all shareholders and duly appointed proxyholders have an equal opportunity to participate. Guests have an opportunity to ask questions during the live question and answer sessions held following our annual meetings.

 

Our shareholder engagement program is formally set every year, and follows a consistent pattern of investor conferences, management road shows, industry-specific conferences, one-on-one meetings, and site tours. We endeavor to host an investor day every year during which our management team provides in-depth information about our strategy, operations, growth projects and financing plans. To comply with social distancing and travel restrictions related to the COVID-19 pandemic, in lieu of hosting an investor day in 2021, we held an in-depth market update call. We look forward to continuing our investor day tradition in the future.

    

 

2021 highlights

 

Participated in 24 investor conferences and management road shows, 22 of which were held virtually.

 

    
    

 

Disclosure policy

 

Pembina is committed to providing material information to shareholders and the public in a timely, accurate and balanced fashion. We have a disclosure policy that applies to all directors, executives, employees and any other person authorized to speak on our behalf, that sets out our procedures for timely dissemination of material information to the public. We also have a disclosure committee made up of the CEO and senior vice presidents who are responsible for reviewing and approving all material disclosure before it is released publicly. We regularly review our disclosure policy and update it as appropriate.

 

 

We also ask investors for feedback at all engagement opportunities, as well as by email and by telephone, and our investor relations group has formal and informal interactions with shareholders about specific questions. Occasionally, members of the board, including the chair, will participate in these activities with management. Management regularly provides the board with feedback from our shareholders, both about our company and about more general themes related to our industry.

Contacting the board

Our directors are available to meet directly with shareholders, as appropriate. Interested parties can contact our board members through the corporate secretary at the address below. Board members also attend our annual shareholders’ meeting and are available to respond to questions and receive feedback from investors.

Chair of the board of directors

c/o Corporate Secretary

Pembina Pipeline Corporation

4000, 585 – 8th Avenue S.W.

Calgary, Alberta T2P 1G1

Shareholders can also contact our investor relations department any time, by email ([email protected]), phone (1-855-880-7404) or letter at the address below.

Investor Relations Department

Pembina Pipeline Corporation

4000, 585 – 8th Avenue S.W.

Calgary, Alberta T2P 1G1

 

Pembina Pipeline Corporation 2022 Management Information Circular    38


About the board of directors

We expect our directors to demonstrate the highest personal and professional ethics, integrity and values, and to represent the long-term interests of our stakeholders.

 

Independence

 

The board assesses the independence of directors annually using independence criteria that meet or exceed the following standards:

 

· National Policy 58-201 – Corporate Governance Guidelines;

 

· National lnstrument 52-110 – Audit Committees;

 

  

 

Independent board

 

11 of the 12 nominated directors are independent. Mr. Burrows is not independent because he is Pembina’s President and CEO.

 

· U.S. Securities and Exchange Commission rules and regulations;

 

  

· Sarbanes-Oxley Act; and

 

  

· TSX and NYSE rules.

  

This is described in detail in our Director Independence Guidelines, which you can find on our website (www.pembina.com).

We require all directors who sit on the audit committee, human resources, health and compensation committee, and governance, nominating and corporate social responsibility committee, to be independent directors.

In camera sessions

The board meets in camera at each meeting to facilitate regular, open and candid discussion among the independent directors without non-independent directors and management present.

In 2021, our independent directors met separately in camera at every board meeting.

About the chair of the board

The chair of the board is appointed by the directors for a term of one year. The board, in conjunction with the governance, nominating and corporate social responsibility committee, selects the chair of each board committee.

The board’s intent is to have an independent chair unless it is in the best interests of the company to appoint a chair who is not independent. The current board chair is independent. The roles of chair of the board and CEO have been separate since we went public in 1997.

The board has written position descriptions for the chair of the board and the committee chairs, outlining the scope and responsibilities of those roles. Committee chairs lead their committee and report to the board. The chair reports to the board and our shareholders and works with the CEO to make sure we fulfill our responsibilities to shareholders, employees, partners, governments and the public.

The chair is expected to provide leadership to the board and foster effective, responsible decision-making, including overseeing board direction and administration, and board and individual director effectiveness.

Nomination of new directors

The board reviews its composition annually, considering diversity, specific skills, tenure and the experience required on the board. The board looks at director nomination dynamically, recognizing that the skills the board needs will change over time as the company and the industry evolve. The goal is a board that is effective, experienced and well-balanced.

The board considers new director candidates based on merit with regard to the benefits of diversity on the board, and with a view to the specific targets set out in Board diversity (below). The board also considers diversity of age, geography, skills, knowledge and experience in its selection process.

The governance, nominating and corporate social responsibility committee looks to several sources to identify new candidates, including outside search firms, and recommends new director candidates to the board for approval. The board proposes the final list of nominated directors to shareholders at each annual meeting.

 

Pembina Pipeline Corporation 2022 Management Information Circular    39


The governance, nominating and corporate social responsibility committee and the board look for director candidates who are inquisitive and objective, have practical wisdom and mature judgment. Potential candidates are identified based on competencies, skills, education, communication and interpersonal skills, and relevant business, government and civic experience. The committee and the board also consider the board’s skills matrix, to make sure board composition and diversity remain balanced. To make sure the process is impartial, the board takes into consideration any potential conflicts of interest and relationships between candidates and existing directors. It also considers whether the candidates can devote enough time to their duties as a director and reviews and consults with the chair of the board and the CEO to gather their input before proposing the nominated directors to shareholders.

Potential candidates are interviewed extensively by members of the governance, nominating and corporate social responsibility committee, and other members of the board. In addition to Scott Burrows, our President and CEO, we are excited this year to recommend Ana Dutra for election to the board. Scott and Ana are nominated as they possess a mix of skills, experience and qualifications that will enhance those of the board at this time. With 11 years of experience at Pembina, Mr. Burrows has a deep understanding of the company and the industry. He brings substantial experience in the Canadian midstream and energy sector, all areas of finance, capital markets and mergers and acquisitions. Ms. Dutra will bring a wealth of relevant leadership experience and expertise in many areas, including ESG, leadership development, corporate governance and systems.

 

Board diversity

 

The board recognizes the importance of director diversity and has a written diversity policy that serves as a framework for promoting diversity of all kinds. In 2020, the board amended its board diversity policy to add specific targets for women and overall diversity, including Indigenous peoples, persons with disabilities, and members of other racial, ethnic and/or visible minorities. These targets are in addition to the employee EDI targets we announced in 2021 – see page 34.

 

Five of the director nominees are women and one nominee self identifies as an Indigenous person and as a member of a visible minority. We have also improved the board’s geographic, educational, experience, and age diversity over time.

 

In line with the objectives of the board diversity policy, the governance, nominating and corporate social responsibility committee aims to achieve diversity on the board when identifying, selecting and recommending nominees for election, while balancing the professional qualifications required of our directors. In its annual assessment of board composition and mix of skills, the governance, nominating and corporate social responsibility committee also looks at how effective our board diversity policy is at building board diversity, considering the skills required on the board at that time.

 

The governance, nominating and corporate social responsibility committee and the board are specifically committed to identifying candidates who will advance the board’s diversity targets. While we do not have specific timelines for reaching our targets, we are confident that diversity is being addressed on an ongoing basis by the governance, nominating and corporate social responsibility committee and the board. We have successfully added three women to the board since the implementation of our board diversity policy.

    

 

Board diversity targets

 

The board has adopted diversity targets as part of its board diversity policy. It will consider new director candidates based on merit with regard to the benefits of diversity on the board, and with a view to the following diversity targets:

 

· female and male genders to each represent at least 30% of the independent directors on the board; and

 

· the board aspires to have at least 40% of independent directors represented by women, Indigenous peoples, persons with disabilities, or members of racial, ethnic and/or visible minorities.

 

In 2021, Pembina introduced equity, diversity and inclusion targets for employees. See page 34.

 

    
    

 

Representation

 

 

·42% of the nominated directors self-identify as women.

 

·8% of the nominated directors self-identify as an Indigenous person and as a member of a visible minority.

 

 

Pembina Pipeline Corporation 2022 Management Information Circular    40


Age and tenure

 

We do not have a formal policy imposing term limits on directors. Our priority is to assemble a board that has the right mix of skills and experience to provide strong stewardship. While the board recognizes that a longer serving director can make a growing contribution to the board over time, it balances experience with some turnover to generate fresh ideas and perspectives on various issues and our business in general. However, directors ordinarily retire from our board and do not stand for re-election once they have turned 72. The board may, however, deviate from this practice if it determines it is in the best interests of the company.

 

    

  

 

62

 

average age of our directors

 

6.5 years

 

average tenure of our independent directors

 

 

After careful consideration, the board has determined, following a recommendation by the governance, nominating and corporate social responsibility committee, that it is in the best interests of the company for Mr. Findlay to remain on the board, as chair, and has asked him to stand for re-election at the meeting. The board has requested for Mr. Findlay to remain on the board in order to oversee and facilitate the leadership transition (see page 55). In addition, due to board refreshment over the past five years, with six new directors joining the board since 2017, the board believes that the continuity and experience provided by keeping Mr. Findlay on the board for one more year will be valuable to the company.

Location

Pembina operates in Canada and the U.S., so it is important to have directors with experience in these markets. Seven of our director nominees are located in Canada, and five are located in the U.S. Aside from geographical location, we have several directors with relevant experience in both markets as well as internationally.

Skills and experience

The board regularly evaluates the competencies and skills of the directors against what it needs for proper oversight, effective decision-making and fulfilling its mandate.

It is our goal to ensure the board has a prudent mix of relevant skills and experience, sufficiently diverse opinions to support balanced discussion and debate, and a manageable number of directors to facilitate productive discussion and decision-making. The board uses a skills matrix to identify and evaluate the experience and knowledge of the directors, and to identify potential areas to focus on when recruiting new director candidates. The governance, nominating and corporate social responsibility committee maintains the matrix and reviews it regularly.

The tables on the next page show the mix of experience and knowledge of our nominated directors. We include each director’s self-assessment of their previous experience and functional expertise, which they rank at one of three levels based on criteria specific to each category. In addition to the skills and experience noted in the table below, each of the directors also has other relevant board experience.

 

Pembina Pipeline Corporation 2022 Management Information Circular    41


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  LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO
                         

Previous experience

                                               
                         

Other public company board experience1

  l   l   O   l   l   l   l   l   LOGO   LOGO   O   l
                         

Public company senior leadership experience2

  l   l   l   l   l   l   O   l   LOGO   LOGO   LOGO   l
                         

Industry experience – Oil & Gas3

  l   l   l   l   LOGO   l   LOGO   l   LOGO   O   l   l
                         

Sector experience – Midstream

  l   l   l   LOGO   O   l   l   O   O   O   LOGO   LOGO
                         

Sector experience - Petrochemical/LNG

  O   l   LOGO   LOGO   LOGO   l   LOGO   O   O   O   l   O
                         

Areas of functional expertise4

                                               
                         

Operational excellence

  l   l   LOGO   l   O   LOGO   O   O   O   l   l   LOGO
                         

Financial/Accounting management5

  l   LOGO   l   LOGO   LOGO   l   l   l   l   LOGO   LOGO   LOGO
                         

Capital allocation

  l   l   l   l   LOGO   l   l   l   LOGO   l   LOGO   l
                         

Engineering/Technology/Research/Academia    

  LOGO   l   LOGO   LOGO   LOGO   O   O   O   l   O   l   O
                         

Safety, health and environmental

  LOGO   l   LOGO   l   O   LOGO   O   LOGO   O   l   l   l
                         

Social and corporate governance

  LOGO   LOGO   LOGO   l   l   LOGO   LOGO   l   LOGO   l   LOGO   l
                         

Human resources and compensation

  l   LOGO   LOGO   l   l   l   O   l   l   LOGO   O   l
                         

Capital markets

  l   O   l   LOGO   LOGO   l   l   l   l   LOGO   LOGO   LOGO
                         

Global business activity

  O   LOGO   O   l   l   l   O   l   O   LOGO   l   LOGO
                         

Enterprise risk management

  LOGO   LOGO   l   LOGO   l   LOGO   LOGO   l   LOGO   l   LOGO   LOGO
                         

Technology/Systems/Data management

  O   LOGO   O   LOGO   l   LOGO   O   O   O   O   LOGO   O
                         

Legal and regulatory

  O   LOGO   O   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   l   LOGO   l
                         

Government relations

  O   O   LOGO   l   LOGO   l   LOGO   l   LOGO   LOGO   l   l

 

1 

l = two or more other boards          LOGO  = one other board                             O = no other boards

2 

l = CEO/President          LOGO  = other C-suite level experience             O = other public executive or private leadership

3 

l = material work experience              LOGO  = work experience or significant knowledge             O = familiarity or limited prior work experience

4 

l = material work experience              LOGO  = work experience or significant knowledge             O = familiarity or limited prior work experience

5 

l = eligible to be audit committee financial expert              LOGO  = material education/work experience     O = familiarity or limited prior work experience

 

Pembina Pipeline Corporation 2022 Management Information Circular    42


Attendance and active participation

    

We have a very committed group of directors and are proud to report that in 2021 our directors attended all board meetings and all of their respective committee meetings. Directors are expected to attend all board meetings and all of their respective committee meetings unless there is an unavoidable conflict or other extenuating circumstance. Attendance is monitored by

    

100%

meeting attendance in 2021

    

the governance, nominating and corporate social responsibility committee and is managed by the chair of the board.

We expect all board and committee meetings to be conducted in a way that promotes open communication, meaningful participation and timely resolution of issues. Currently, directors can serve on a maximum of three committees so they can fully participate and meet their obligations to the board. All of our independent directors serve on one or two committees.

The table below includes details of director meeting attendance in 2021.

 

                  Committee meetings  
                   

Governance,

nominating and

corporate social    

  

Human

resources,

health and

  

Safety,

environment and

operational

   Total committee  
      Board meetings     Audit    responsibility    compensation      excellence    meetings  

R. Findlay1

   14 of 14

(chair)

    100 %             4 of 4    4 of 4      100 %     
                 

A. Ainsworth

   14 of 14     100             4 of 4    5 of 5    9 of 9      100
                 

C. Carroll2

   14 of 14     100             4 of 4    5 of 5 (chair)    9 of 9      100

R. Gwin3

   14 of 14     100        4 of 4 (chair)    4 of 4    8 of 8      100

M. Howe4

   14 of 14     100   6 of 6 (chair)    4 of 4    10 of 10      100
               

G. Kerr

   14 of 14     100   6 of 6    4 of 4         10 of 10      100
               

D. LeGresley

   14 of 14     100        4 of 4    4 of 4    8 of 8      100

L. O’Donoghue

   14 of 14     100   6 of 6              5 of 5    11 of 11      100

B. Rubin

   14 of 14     100   6 of 6              5 of 5    11 of 11      100
               

H. Sykes

   14 of 14     100   6 of 6         4 of 4 (chair)    10 of 10      100

 

1

Mr. Findlay typically attends all committee meetings in his capacity as chair of the board.

2

Ms. Carroll was appointed chair of the safety, environment and operational excellence committee on May 7, 2021, replacing Ms. Ainsworth as chair.

3

Mr. Gwin was appointed chair of the governance, nominating and corporate social responsibility committee on May 7, 2021, replacing Ms. Howe as chair.

4

Ms. Howe was appointed chair of the audit committee on May 7, 2021, replacing Mr. Kerr as chair.

Orientation and continuing education

The governance, nominating and corporate social responsibility committee is responsible for overseeing the director orientation process and for director education and development.

Orientation

Our orientation manual for new directors includes the following items:

·  

corporate governance guidelines;

·  

board mandate;

·  

committee charters;

·  

terms of reference for directors;

·  

written position descriptions for the board chair, committee chairs, CEO and the senior vice presidents;

·  

key corporate policies;

·  

recent disclosure and investor materials;

·  

strategic plan; and

·  

other relevant corporate and board information.

New directors attend orientation sessions and one-on-one meetings with key officers to familiarize themselves with our business, significant risks and mitigation measures, our expectations, our corporate goals and objectives, and current business issues and opportunities.

 

Pembina Pipeline Corporation 2022 Management Information Circular    43


Continuing education

Directors have ongoing opportunities to increase their knowledge and understanding of our business. All of our directors are members of the Institute of Corporate Directors and the company pays the cost of this membership. The board also encourages individual directors to attend continuing education sessions and contributes to the cost of attending these courses. We also periodically provide educational sessions about our business, our industry and emerging trends and issues. These are presented at scheduled board and committee meetings, and include:

·  

Annual briefings, which typically include reviews of the competitive environment, our five-year or ten-year financial outlook, our performance relative to our peers, significant risks and mitigation measures and other developments that could materially affect our business. Annual briefings may include presentations by third-party consultants, such as financial advisors, pension experts and outside legal counsel as needed;

·  

Regular briefings on corporate governance developments and emerging best practices; and

·  

Presentations from time to time by external consultants about general industry trends, other issues or other topics of interest.

The corporate secretary maintains a list of all skill development of, and continuing education taken by, the directors, which the governance, nominating and corporate social responsibility committee reviews when building each year’s director education plan. The table below shows the education sessions our directors attended in 2021 that were facilitated by Pembina. Individual directors may also attend other independent education sessions or sessions sponsored by other companies where they serve as a director.

 

  Date

   Description   Presented by    Attendees

  February 23

   Top Risks 2021   Eurasia Group    All directors

  February 23

   Pembina’s Digital Progress & its Impact on Operations Excellence   Pembina Information Services and Operating Services    All directors    

  May 5

   SEC Guidance on ESG Reporting   KPMG    All directors

  August 4

   Cybersecurity   Pembina Information Services and PwC    All directors    

  November 30

   Long-Run Global Demands Prospects: Oil, Gas, NGLs   Tudor Pickering Hold & Co.    All directors        

  November 30

   North American Producer Activity   Peters & Co. Limited    All directors        

  November 30

   Adding Carbon to the Pembina Store   National Bank of Canada    All directors        

 

Serving on other boards     

We recognize the significant commitment involved in serving on a board and the value and experience gained from serving on other boards.

 

    

The governance, nominating and corporate social responsibility committee has reviewed the outside boards our director nominees currently serve on, and has determined that they do not affect the board’s independence or its ability to operate effectively.

Our governance guidelines limit the number of public company boards our directors can serve on. Any directors who hold executive positions with public companies, can serve on one public company board in addition to Pembina’s. All other directors can serve on up to four public company boards in total (including Pembina’s).

 

 

The board can allow a director to serve on additional boards if it determines that this would not impair the director’s independence or ability to effectively serve on the board, and will disclose it in the circular and AIF. Directors who want to serve on the board, or as an executive, of another publicly traded company must notify the chair of our governance, nominating and corporate social responsibility committee before accepting the nomination or appointment. The chair of that committee, together with the board chair, will determine whether accepting the nomination or appointment would compromise the director’s availability or capacity, or result in an actual or perceived conflict of interest.

None of our current directors serve on more than three other public company boards. As of the date of this circular, Ms. Dutra (a first-time director nominee who does not currently serve on the board) serves on four public boards and, if elected, would exceed the recommended number of outside directorships under our governance guidelines. If elected, Ms. Dutra will have until the end of 2022 to meet the directorship limit requirements under our governance guidelines.

The board regularly reviews the other directorships of its directors in accordance with our governance guidelines, including looking at board interlocks – when two or more directors serve together on another public company board. When there is an interlock, the board, together with the governance, nominating and corporate social responsibility committee, will review the situation and decide whether a director should continue to serve on our board. There is currently one public board

 

Pembina Pipeline Corporation 2022 Management Information Circular    44


interlock: Ms. Howe and Ms. O’Donoghue each sit on the board and audit committee of another public company, Methanex Corporation. There is also one private company board interlock: Ms. Dutra and Mr. Rubin both sit on the board of the M. Holland Company, a private company. The board has determined that the ability of these directors to act independently is not affected by serving together on these boards.

Board and committee evaluation

Regular board assessments are important to confirm that the board, its committees and individual directors are performing effectively, based on the expectations set out in the board and committee charters, and to encourage continuous improvement.

We complete an assessment of the board once per year and, in 2020, updated our governance guidelines to make this a formal requirement. We also amended the guidelines to require the board to engage a third-party advisor to assist in the evaluation and assessment of the board, its committees, the board chair and the committee chairs at least once every three years. An external advisor was engaged in 2021 to help facilitate the board effectiveness evaluation and peer reviews.

Annual process

The chair of the board leads the assessment, with input from all directors. Each director completes a formal questionnaire every year, which is currently divided into four categories: board responsibility, board operations, board effectiveness and committee matters. Each director also evaluates the effectiveness and performance of the board chair and fellow directors.

The chair meets with each director individually to discuss the results of the questionnaires and conduct an individual assessment. The chair also seeks input on board effectiveness, risk management, strategic oversight and other relevant topics. After the results of the questionnaires and meetings are compiled, the governance, nominating and corporate social responsibility committee and the board discuss the results, in camera, if appropriate.

In-depth review

To ensure that the board, its committees and individual directors are equipped to evolve with the business given its transformative changes in recent years, the board retained an independent outside consultant in 2021 to conduct an evaluation of the board and management. The governance, nominating and corporate social responsibility committee considered this evaluation as part of its discussions on board, committee and director effectiveness in 2022.

The governance, nominating and corporate social responsibility committee and the board also recognize the important role that self-evaluation plays in the overall assessment of board effectiveness. In 2021, the chair of the board conducted one-on-one interviews with each director and sought feedback on: board effectiveness and culture; Pembina’s response to the COVID-19 pandemic and the resulting volatility in global energy prices; current and upcoming challenges; future strategy and talent needs; and board chair succession.

 

Pembina Pipeline Corporation 2022 Management Information Circular    45


Board committees

The board has four standing committees to help carry out its duties and meet the statutory and policy requirements that apply to our business:

 

·  

audit committee;

 

·  

governance, nominating and corporate social responsibility committee;

 

·  

human resources, health and compensation committee; and

 

·  

safety, environment and operational excellence committee.

Each committee is governed by a written charter that is approved by the board and reviewed and assessed by the committees themselves and the board every year. All of the directors that serve on the board committees must be independent, except for our safety, environment and operational excellence committee, which must have a majority of independent directors.

Each committee updates the board regularly on its activities by providing a report to the board after each committee meeting and submits any recommendations that require board approval for discussion and review. Each committee is responsible for sharing information of mutual interest with other committees.

The board reviews the composition of its committees each year and adjusts committee membership periodically. The board can remove members of each committee by resolution when needed and fill vacancies if a committee has less than the minimum number of members.

The board may also, from time to time, establish ad hoc committees to address specific issues that emerge or assume tasks not covered by the standing committees and for a specific period of time. In response to Mr. Dilger’s departure in November 2021, the board established the CEO succession committee, an ad hoc committee of the board, to assist the board in appointing a permanent CEO and ancillary matters related thereto. The CEO succession committee provided advice, guidance and recommendations directly to the board regarding the appointment of the permanent CEO consistent with the mission, values, strategic direction and operational requirements of Pembina. The CEO succession committee completed its mandate with the board’s appointment of Mr. Burrows as President and CEO of Pembina on February 22, 2022 – see page 55.

You can find the committee charters for our standing committees online at our website (www.pembina.com) and read about the nominated directors starting on page 15.

 

Pembina Pipeline Corporation 2022 Management Information Circular    46


Audit committee

The audit committee is responsible for overseeing:

 

·  

the integrity of Pembina’s financial statements, the reporting process and internal controls over financial reporting;

 

·  

the relationship, reports, qualifications, independence and performance of the external auditor;

 

·  

the internal audit function;

 

·  

financial risk management with respect to areas outlined in the audit committee charter;

 

·  

compliance with legal and regulatory requirements;

 

·  

management information technology related to financial reporting and financial controls; and

 

·  

maintenance of open lines of communication between management, the external auditors, the internal auditors and the board.

The audit committee meets quarterly with management, the internal auditors, and the external auditors together, as well as separately with the internal auditors and the external auditors without management present. The audit committee met six times in 2021. All meetings included the internal and external auditors and time without management present.

 

 Members

  

Maureen Howe (chair)                                     Bruce Rubin

Gordon Kerr                                                      Henry Sykes

Leslie O’Donoghue

 

Gordon Kerr and Maureen Howe are financial experts and all of the members are financially literate under U.S. and Canadian securities laws.

 Independence

  

100%

 

Each of the five directors met the independence criteria as of March 18, 2022, within the meaning of National Instrument 52-110 - Audit Committees, Rule 10A-3 under the U.S. Securities Act of 1934, as amended, and the corporate governance standards of the TSX and the NYSE.

 Qualifications

  

Committee members must:

 

· be an accountant or have financial experience or accreditation, or both

 

· be able to read and understand a set of financial statements that are comparable in scope and complexity to our financial statements

 Key

 responsibilities        

  

Financial statements, reporting process and internal controls over financial reporting

 

· reviewing annual and quarterly consolidated financial statements, MD&A, the earnings press releases and other financial disclosure, and recommending them to the board for approval

 

· reviewing significant financial reporting issues, changes in accounting policies, key estimates and judgments, significant deficiencies identified and compensating or mitigating controls, unresolved issues between management and the external auditor, material correspondence with regulators or government agencies, and whistleblower complaints

 

External auditor

 

· overseeing the relationship, reports, qualifications, independence and performance of the external auditors and audit services by other registered public accounting firms Pembina has engaged

 

Internal audit

 

· overseeing the internal audit function including the audit charter, activities, staffing and organizational structure

 

· approving the annual audit plan

 

· assessing performance and ensuring there are no unjustified restrictions or limitations

 

· meeting separately as appropriate, to discuss matters that should be discussed privately

 

· reviewing our internal controls over financial reporting under the Sarbanes-Oxley Act

 

· compliance

 

· reviewing our disclosure controls and procedures with the CEO and CFO

 

· overseeing, investigating and reporting on whistleblower complaints

 

Financial risk management

 

· discussing governance guidelines and policies for risk assessment and management of areas outlined in the audit committee charter

 

· developing or overseeing the development of these guidelines and policies

 

Pembina Pipeline Corporation 2022 Management Information Circular    47


   

 2021 Highlights

  

Committee charter and education

  

· reviewed and updated the audit committee charter

  

· attended professional development sessions on topics including valuations, insurance, non-GAAP measure legislation and hedge accounting

  

· assessed ongoing professional development requirements

  

Financial reporting and tax

  

· reviewed changes in accounting policies and significant financial reporting considerations including, but not limited to, contingencies, estimates and judgments applied and significant provisions for consolidated financial statements and non-GAAP measures

  

· reviewed annual, quarterly and restated consolidated financial statements, MD&A, earnings press releases and other financial disclosures

  

· reviewed and approved various accounting and governance related board policies

  

External auditor oversight

  

· approved the 2021 external auditor audit engagements, audit plans and fees

  

· reviewed and approved non-audit services to be provided by the external auditor

  

· reviewed the quarterly audit findings reports provided by the external auditors

  

Internal audit functional oversight

  

· reviewed and approved the internal audit charter

  

· reviewed and approved the whistleblower policy and procedures

  

· approved the annual internal audit plan and any changes made during the year

  

· reviewed executive summaries of internal audit reports issued

  

· monitored internal controls over financial reporting program progress

  

· assessed and remediated material weakness

  

· held in camera discussions with VP, Internal Audit

  

· made recommendations relating to the annual remuneration of the VP, Internal Audit

  

Compliance, financial risk and other oversight

  

· reviewed the ERC’s hedging recommendations

  

· approved the following reports and annual updates:

  

   update to market risk policy

  

   update to counterparty risk management policy

  

· monitored the status of our counterparty risk and market risk against established limits

  

· reviewed corporate insurance program and coverage

    

· monitored funding exposure and oversight of the pension plans

You can find more information about the audit committee under the heading Audit Committee Information in our AIF on our website (www.pembina.com), on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov).

 

Pembina Pipeline Corporation 2022 Management Information Circular    48


Governance, nominating and corporate social responsibility committee

The governance, nominating and corporate social responsibility committee is primarily responsible for helping the board develop, implement and monitor Pembina’s corporate governance practices.

The committee is expected to work with management and others throughout the company to make sure we have a healthy governance culture. This includes reporting and making recommendations to the board and management about corporate governance issues, best practices, compliance and the effectiveness of our governance processes and systems.

The committee met four times in 2021. All meetings included time without management present.

 

   

 Members

  

Robert Gwin (chair)                                              Gordon Kerr

Maureen Howe                                                     David LeGresley

Randall Findlay

 Independence

   100%

 Qualifications

  

 

· governance committee of other public companies

 

· legal, compliance or regulatory background

 

· CEO or senior executive experience

 Key

 responsibilities        

  

Board governance

 

· board size and composition

 

· director orientation, education and training

 

· monitoring potential conflicts of interest and other board appointments

 

· eligibility and selection criteria, including independence, financial literacy and diversity

 

· recommending director candidates for election to the board and appointment to chair of the board

 

· conducting and reviewing annual board, director and committee assessments

 

Compliance and disclosure

 

· corporate social responsibility/ESG oversight

 

· monitoring best governance practices and our compliance with governance related laws and regulations

 

· approving our disclosure policy and overseeing our policies, procedures and the disclosure committee

 

· assisting the board in establishing appropriate risk oversight functions at the board and committee levels

 

· reviewing and approving the corporate social responsibility report

 2021 highlights

  

Director and chair succession

 

·reviewed and updated the director succession planning process and skills matrix

 

·reviewed and approved changes to committee membership for 2021

 

·retained external advisors to facilitate the 2021 board effectiveness evaluation, peer reviews and board chair succession discussion

 

·led the director recruitment and selection process for adding a new director nominee

 

·reviewed outside board appointments

 

·recommended asking the chair to extend his service for one more year

 

Corporate governance best practices

 

·reviewed and recommended:

 

   amendments to corporate policies and board and committee charters

 

   adoption of 2021 director education plan

 

·reviewed the activities of the company’s disclosure committee

 

·assessed relationships between Pembina and each director and determined that 11 out of the 12 nominated directors are independent

 

·reviewed proxy advisor reports on 2021 information circular

 

·reviewed proposed GHG emission reduction targets

 

·reviewed the director onboarding process and continuing education program for the directors

 

·monitored recent developments, emerging trends and best practices in ESG, corporate governance and disclosure practices, including shareholder engagement trends, cybersecurity, improving shareholder voting participation and activist shareholder developments and trends

 

·reviewed director and officer insurance coverage

 

Evaluation of the board, board committees, chairs and individual directors

 

·assessed director independence and reviewed director relationships, commitments and interlocks

 

Public disclosure

·reviewed the information related to corporate governance in this circular

 

Pembina Pipeline Corporation 2022 Management Information Circular    49


Human resources, health and compensation committee

The human resources, health and compensation committee assists the board by providing oversight and direction on human resources strategy, policies and programs, including EDI, staff attraction and retention, health and wellness, and compensation.

The committee reviews and recommends to the board approval of our general compensation philosophy, oversees the development and administration of our compensation programs, and oversees executive succession planning. The committee is also responsible for overseeing the risk associated with our compensation, succession and resource planning programs, and ensuring that appropriate actions are taken to mitigate those risks.

The committee reviews and recommends director compensation for approval by the board, recommends approval by the board of compensation for the CEO and senior vice presidents, and oversees compensation of the other executives.

The committee is responsible for assessing the fairness and effectiveness of our retirement, savings and incentive plans, and for ensuring all plans and health and benefit programs are administered according to applicable laws and regulations, stock exchange policies and stated compensation objectives that govern our business. It conducts thorough competitive evaluations each year and may consult external independent advisors for assistance in assessing the competitiveness of our director and executive compensation programs.

You can read about how we compensate our directors starting on page 63 and our executives on page 66. You can find more information about compensation governance on page 59.

The human resources, health and compensation committee met four times in 2021. All meetings included time without management present.

 

   

 Members

  

Henry Sykes (Chair)                                             Robert Gwin

 

Anne-Marie Ainsworth                                         David LeGresley

Cynthia Carroll

 

 Independence

   100%

 Qualifications

  

· executive or CEO experience

 

· human resources or compensation experience

 

· compensation committees of other public companies

 

· industry or sector experience

 

· financial or legal expertise

 Key

 responsibilities        

  

Compensation philosophy and approach

 

· reviewing and recommending compensation philosophy

 

· reviewing and recommending executive compensation program and incentive plans

 

· reviewing and recommending director compensation

 

Program oversight

 

· reviewing compensation design, corporate objectives and executive performance targets

 

· reviewing employment agreements and severance and change of control arrangements for the CEO and senior vice presidents

 

· assisting the board in establishing and overseeing officer succession plans

 

· overseeing the defined benefit and defined contribution pension plan and supplementary pension plan

 

· overseeing the employee health and wellness program

 

Annual performance and compensation

 

· recommending individual elements of total compensation for the CEO and senior vice presidents

 

· reviewing and recommending the annual report on executive compensation and public disclosure

 

· reviewing and recommending performance goals for the short-term and long-term incentive plans

 

Compensation risk oversight

 

· ensuring executive compensation is aligned with our short-, medium- and long-term goals

 

· monitoring legal and stock exchange compliance

 

Pembina Pipeline Corporation 2022 Management Information Circular    50


   

 2021 highlights

  

Program oversight

  

· reviewed short-term and long-term incentive plans in detail

  

· reviewed and approved external advisor engagement, services and work plan

  

· reviewed and recommended for approval:

  

   the compensation and performance peer groups

  

   director compensation for 2022

  

   changes to organizational design and senior officers

  

· reviewed status of the occupational health program

  

· reviewed new flexible benefits program

  

· reviewed and approved the 5-year EDI strategy and targets

  

Succession planning

  

· reviewed the executive succession plan and the executive development plan process

  

Annual performance and compensation

  

· recommended for approval:

  

   2021 performance goals for the short-term incentive plan

 

   2022 interim CEO and senior vice president compensation

 

   2021 CEO objectives

 

   2021 restricted share unit (RSU)/performance share unit (PSU) awards along with PSU performance measures

 

   2021 and 2022 stock option awards

 

   March 2021 grant of retention stock options

  

· reviewed and recommended for approval 2020 corporate and business unit performance to determine 2020 short-term incentive payouts (paid in 2021)

  

· reviewed and recommended for approval the 2018 PSU multiplier for long-term incentive payouts (paid in 2021)

  

· reviewed and recommended for approval the budget for salary increases

  

Public disclosure

  

· reviewed and recommended for approval the information related to compensation in this circular

  

Education

  

· received an overview of:

    

   compensation trends and executive compensation market analysis

 

   the company’s employment equity narrative report for 2020

 

   the company’s pension and benefits program

 

   the company’s health and wellness program

 

   the company’s EDI program

 

   received human resources updates

 

Pembina Pipeline Corporation 2022 Management Information Circular    51


Safety, environment and operational excellence committee

The safety, environment and operational excellence committee is primarily responsible for helping the board oversee the development, implementation and monitoring of our environmental, safety and system integrity policies and systems, especially as they relate to accountability and compliance and cyber security.

The safety, environment and operational excellence committee met five times in 2021. All meetings included time without management present.

 

Members

  

Cynthia Carroll (chair)                    Leslie O’Donoghue

Anne-Marie Ainsworth                    Bruce Rubin

 

Independence

  

100%

Qualifications

  

 

· engineering or operations background

 

· legal, compliance or regulatory experience

 

· CEO or senior executive experience

Key

responsibilities

  

Program and strategy development

 

· overseeing the development, implementation and auditing of our safety and environmental management policies, programs, systems and practices

 

· reviewing our safety and environmental strategy

 

Risk management

 

· identifying safety and environmental risks and recommending appropriate programs to manage and reduce risk

 

· monitoring current, pending or threatened regulatory action by or against us

 

Regulatory compliance and public disclosure

 

· reviewing and monitoring our incident reporting policies and practices, and reports about significant incidents, emerging issues, inspections, audits and actions taken to correct deficiencies

 

· reviewing and approving our annual internal sustainability report

2021 highlights

  

Safety and environment measures

 

· reviewed and approved the 2021 safety and environment performance measures to be used across all divisions, incorporating both leading and lagging indicators

 

· reviewed 2020 performance against targets and recommended for approval the safety and environment performance multiplier for the 2020 short-term incentive plan award to the human resources, health and compensation committee

 

· reviewed management’s 2021 environment work plan

 

Safety

 

· reviewed the results of management’s incident review panel related to all significant events

 

· monitored emerging and material issues in safety, security and environment, including process safety, and security program requirements

 

· reviewed and monitored corporate and cyber security programs in 2021

 

· monitored 2021 asset integrity programs

 

· reviewed management’s 2021 work plans for asset integrity inspection and repairs

 

· monitored progress of the company’s implementation of the Operation management System (OMS)

 

· monitored progress of Pembina’s process safety five-year vision plan designed to enhance process safety performance

 

 

Pembina Pipeline Corporation 2022 Management Information Circular    52


Compensation discussion and analysis

This section of our circular describes how we pay our directors and the named executives.

We have grouped it into four sections:

 

54

Letter from the chair of the human resources, health and compensation committee

 

  

Summarizes our human resources performance and compensation decisions this year and changes we have made to our compensation plans.

 

 

59

Compensation governance

 

  

Describes how we oversee compensation and manage risk. It also tells you about our independent consultants.

 

 

63

Director compensation

 

  

Describes our approach to compensating directors, our expectations for share ownership and what we paid our directors in 2021.

 

 

66

Executive compensation

 

 

A thorough discussion of what we pay the named executives at Pembina and why, along with a discussion of this year’s company performance and our 2021 compensation decisions.

 

 

Pembina Pipeline Corporation 2022 Management Information Circular    53


Letter from the chair of the human resources, health and compensation committee

Pembina is a leading transportation and midstream service provider that has been serving North America’s energy industry for over 65 years. We believe in staged, carefully managed growth that respects the interests and concerns of all our stakeholders while providing the energy services our growing economy demands. We have a strong record of community engagement, environmental stewardship and safe, reliable operations. Our goal is to provide highly competitive and reliable returns through regular dividends while enhancing the long-term value of our shares.

The human resources, health and compensation committee oversees Pembina’s human resources strategy, policies and programs, including EDI, staff attraction and retention, health and wellness and compensation – all of which are essential in achieving Pembina’s goals.

An overview of 2021

In 2021, amidst the backdrop of a recovering economy and strengthening commodity prices, Pembina delivered strong financial and operational results, progressed a number of new initiatives, advanced our ESG strategy and positioned ourselves for continued growth and future success.

Pembina delivered record adjusted EBITDA in 2021, exceeding the top end of our annual guidance range and representing a five percent increase over 2020. Our strong financial results reflected much improved commodity prices across all products within Pembina’s value chain – crude oil, natural gas and natural gas liquids – and higher volumes on most systems. This financial performance allowed Pembina to exit 2021 in an excellent financial position with a stronger balance sheet and improved liquidity, all while having maintained or strengthened our financial guardrails.

Our total shareholder return (TSR) in 2021 was 36% (including dividends), ranking us third among our peer group for the year.

On the operational side, we placed over $500 million of new projects into service in 2021. The highlight of the year was the placement into service of Pembina’s first propane marine export facility, Prince Rupert Terminal (PRT) on Watson Island, British Columbia. The start-up of PRT represents the first project executed in support of our strategy to access global markets and is a major step forward in providing market diversity and adding incremental value to our customers’ hydrocarbons. Importantly, we also created two mutually beneficial transformational Indigenous partnerships: with the Haisla Nation to develop the proposed Cedar LNG Project, which is expected to be the largest First Nation-owned infrastructure project in Canada, and with Western Indigenous Pipeline Group to pursue ownership of the Trans Mountain Pipeline, following completion of construction of the Trans Mountain Expansion project.

We committed to reducing our GHG emission intensity by 30% by 2030, relative to baseline 2019 emissions. This will help guide our business decisions and improve our overall emissions intensity performance while increasing our long-term value, all while ensuring Canadian energy is developed and delivered responsibly. We also partnered with TC Energy to jointly develop the Alberta Carbon Grid, a world-scale carbon transportation and sequestration system, which will allow Pembina to play a vital role in helping Alberta-based industries effectively manage emissions.

On a more sombre note, the committee and the board are deeply saddened this year to report the fatality of one of our subcontractors, which occurred at a Peace Pipeline construction site. This news hit all of us very hard, and our thoughts continue to be with the individual’s family, friends and co-workers. This incident is a stark reminder of the need to remain ever diligent, and we are doing everything we can to learn from this incident. We believe that all incidents are preventable, and nothing is more important than the safety of employees, contractors and communities. As a result of this unfortunate event, 2021 short-term incentive awards were reduced from where they would otherwise have been (see pages 75 to 76).

Human resources strategy and leadership changes

The human resources, health and compensation committee and the board approved and oversaw several improvements to our human resources strategy in 2021, including new employee EDI targets, a new technical career stream (a non- management career path for employees that leverages their technical knowledge/expertise), a company-wide organizational design review, transformation of the human resources function, including a new target operating model and the related human capital management technology implementation, a flexible work policy and benefits program, and changes to the pension plan.

 

Pembina Pipeline Corporation 2022 Management Information Circular    54


The human resources, health and compensation committee and the board also oversaw several important leadership changes in 2021 and 2022.

In March 2021, two senior executives, Paul Murphy, Pembina’s former Senior Vice President & Corporate Services Officer, and Jason Wiun, Pembina’s former Senior Vice President & Chief Operating Officer, Pipelines, retired. As a result of their retirements, Janet Loduca, our former General Counsel & Vice President, Legal and Sustainability, was promoted to the position of Senior Vice President, External Affairs & Chief Legal and Sustainability Officer and Harold Andersen was appointed Senior Vice President & Chief Operating Officer, Pipelines.

In November, 2021, Mick Dilger, Pembina’s former President and CEO, left the company. The board appointed Scott Burrows, Pembina’s former Senior Vice President and CFO, as interim President and CEO and Cameron Goldade, Pembina’s former Vice President, Capital Markets, as interim CFO to replace Mr. Burrows.

You will see that the board approved grants of equity compensation for Mr. Burrows and Mr. Goldade at the time they assumed their new and greater responsibilities. These were new positions for both of them and, as a result, both were entitled to compensation packages commensurate with their new responsibilities and market benchmarks. The equity grants were part of those new compensation packages, just as they would have been if we had hired external candidates. It is important to note in connection with these appointments that the total compensation packages agreed to for the interim positions were below industry benchmarks for these (permanent) positions.

Following Mr. Dilger’s departure, the board established a CEO succession committee, an ad hoc committee of the board, to help it select a permanent CEO. The CEO succession committee provided advice, guidance and recommendations directly to the board, working with a leading search firm to identify and evaluate internal and external candidates for a new permanent CEO to lead Pembina in its next chapter. In addition to retaining a leading search firm to support the CEO succession process, the board retained an external international third-party consultant to conduct key stakeholder interviews to develop a clear role profile and criteria to support the CEO search process. The CEO succession committee carried out a diligent review of a diverse group of candidates, taking into consideration Pembina’s mission, values, strategic direction and operational requirements, and completed its mandate by recommending to the board the appointment of Mr. Burrows. The board appointed Mr. Burrows to the position of President and CEO on February 22, 2022.

When Mr. Burrows’ position was made permanent in February 2022, he received a salary in line with industry benchmarks, but he did not receive any additional grants of equity incentives in connection with his appointment to the permanent role. Mr. Burrows will, however, receive equity incentives as a component of his regular compensation for 2022, as determined by the board, based on the recommendation of the human resources, health and compensation committee. With respect to equity incentives, he was therefore treated no more favourably than we would have treated someone from outside the company, had we hired them for this position.

As a further update, on February 22, 2022, we announced that Mr. Andersen left the company to pursue other opportunities; Jaret Sprott was appointed Senior Vice President and Chief Operating Officer, Pipelines and Facilities; and Eva Bishop was appointed Senior Vice President, Corporate Services, joining Pembina from BP Europa SE. Ms. Bishop’s appointment is effective upon her relocation from London, United Kingdom to Calgary, Alberta in April 2022.

Executive compensation overview

Our executive compensation program is designed to link strategy, performance and compensation while building equity ownership. This approach motivates our executives to keep the focus on long-term success and aligns compensation awards with our shareholders’ interests. You can read more about our compensation strategy starting on page 66.

Our key results and initiatives had a direct impact on the compensation approved for the named executives for 2021. While overall executive compensation was higher in 2021 than 2020, this year-over-year increase is primarily attributable to certain payments made in connection with leadership changes in 2021, including one-time payments to Mr. Dilger pursuant to his separation agreement (see pages 89 and 90) and payments to Mr. Burrows and Mr. Goldade in recognition of their increased responsibilities and market benchmarks in their interim roles, as described above. The company is and remains committed to offering market rate compensation that is both fair and competitive.

 

Pembina Pipeline Corporation 2022 Management Information Circular    55


In addition, in 2021 we also granted retention stock options to certain of our senior leaders. Two unusual events had an impact on our senior leaders in 2021 which prompted us to make these grants:

 

·  

As I noted above, two of our most senior officers left the company in early 2021, requiring both searches for new officers as well as a redistribution of responsibilities among the officers of the company. While one of those positions was filled relatively quickly, the other has only just been filled. This required many of our officers to carry an additional workload and responsibilities for much of the year (without additional cash compensation); and

 

·  

In early 2021, a takeover bid was made for one of our competitors. This event and its impact on the industry resulted in a significant concern about retaining some of our most critical and valuable employees.

The human resources, health and compensation committee carefully considered these factors, and the risks of potentially losing some of our most valued employees, many of whom were among those most critical to our future success, as well as the considerable difficulties associated with trying to fill senior positions that might become vacant given the market conditions prevailing at that time. After carefully considering available alternatives, and weighing the potential risks of doing nothing, the human resources, health and compensation committee advised the board that it would be in the best interests of the company to offer a retention incentive to certain key employees. The board considered that recommendation and ultimately agreed with it and, as a result, stock options were granted to a limited number of senior employees. Unlike our regular stock options, which vest one-third in each of the three years following the grant, these options were intended to serve as a longer-term retention tool and thus only vest on the fourth anniversary of the grant (requiring the employee to remain with the company for at least that period of time) and extend for seven years. Note that our CEO at the time did not receive any of these stock options, as the board did not consider that he was at risk of leaving the company.

Lastly, we also made changes to our short-term incentive plan to align short-term incentive awards more closely with Pembina’s purpose and strategy, including performance goals related to ESG. You can read about the specific measures we used to assess performance in 2021 starting on page 75.

Compensation program

We review Pembina’s executive and director compensation philosophy and practices every year with assistance from Mercer, an independent external consultant. This review helps make sure executive compensation continues to be effective, remains competitive amongst our peers, is fair and reasonable, motivates the management team, retains talent, and attracts and supports new talent when needed.

We worked with Mercer in 2021 to carry out a comprehensive review of the executive compensation program and approved the following changes for 2021 and 2022.

2021

Short-term incentive plan – We began evaluating corporate performance based on performance in four categories linked to our four stakeholder groups: Investors, Customers, Communities, and Employees. This change directly aligns short-term incentive awards with Pembina’s purpose and strategy (see page 75 for details).

Medium- and long-term incentives – We reduced the weighting of options (proportionately increasing the weighting of RSUs) as part of a company-wide initiative to align better with our peers and to reduce stock dilution. As a result, we issued approximately 70% fewer options across the company in 2021 compared to 2020. Target pay at risk remains the same (see page 78 for details).

Performance peer group – We modified the 2021 performance peer group to focus on pipeline and midstream companies to better reflect Pembina’s operations, and to improve the relevance of the information – see pages 67 and 68 for details.

2022

Compensation peer group – We retained Mercer in 2021 to review our compensation peer group. As a result of mergers and acquisitions involving certain peer group companies, our compensation peer group had shrunk to nine companies, with the result that the loss of any one company could (and did) have a material impact on median compensation levels. We also determined that we should include U.S. companies in our compensation peer group, both because we now have material operations in the U.S., and also to ensure that the peer group contained a meaningful number of companies that approximate our size and complexity of operations (see pages 67 and 68 for details).

 

Pembina Pipeline Corporation 2022 Management Information Circular    56


Incentive plans – We are increasing the 2022 short-, and medium- and long-term incentive compensation targets to align more closely with the new compensation peer group.

Benefits – All eligible Canadian permanent employees moved from a standard set of benefits to a new flexible benefits program, where employees can choose from health, wellness and lifestyle benefits that are important to them. This program was rolled out in 2021 with an effective date of January 1, 2022.

CEO compensation: five-year look-back

One way the committee assesses how effectively the executive compensation program is aligning compensation with corporate strategy and performance is by comparing what the CEO was awarded in each of the past five years with what those amounts are worth over time. Over the past five years, more than 84% of the CEO’s target compensation was at risk, tied to our share price, and paid out over performance periods ranging from one to seven years (see page 66 for more information about our executive compensation program).

The graph below shows our former CEO’s target compensation for each of the last five years, and the realized and realizable value of awards granted as of December 31, 2021.

It shows that a significant portion of the compensation the former CEO earned over the past five years has been the direct result of our performance on the value of medium- and long-term incentives. It also tells us that our executive compensation program is meeting a key objective: to drive long-term performance while aligning executives with the interests of our shareholders.

 

 

LOGO

 

Target total direct compensation includes target base salary tor the year, target annual incentive award (1.0x) and grant value of the medium- and long- term incentive awards for the calendar year, calculated on the date of grant.

Realized/realizable total direct compensation includes:

 

 

base salary, annual incentive award paid for the year, realized medium- and long-term incentive awards (the payout of vested RSUs and PSUs, including RSUs and PSUs accrued as dividend equivalents to the payment date, and the value of stock options exercised, if any, during the period for the respective grant years); and

 

 

the value at December 31, 2021 of unrealized medium- and long-term incentive awards (RSUs and PSUs outstanding, RSUs and PSUs accrued as dividend equivalents to the end of the year, and in-the-money stock options for the respective grant years), including vested and unvested securities. We have estimated the realizable value of the 2020 and 2021 PSU grants assuming PSUs vest at target.

 

Pembina Pipeline Corporation 2022 Management Information Circular    57


The board welcomes your feedback

This section of our circular is designed to help you understand the committee’s approach to human resources and compensation at Pembina. Last year, shareholders approved our approach to executive compensation with approximately 93.75 percent of votes cast in favour. We welcome your feedback on our decisions this year, and your vote at Pembina’s 2022 annual meeting of shareholders.

(signed) “Henry Sykes”

Henry Sykes

Chair, human resources, health and compensation committee

 

Pembina Pipeline Corporation 2022 Management Information Circular    58


Compensation governance

The board of directors has ultimate responsibility for compensation at Pembina. The human resources, health and compensation committee assists the board in establishing and overseeing director and executive compensation, pension and benefit plan design, CEO performance goals and assessment and succession planning. See page 50 for information about the committee, its responsibilities and its activities in 2021.

 

Here’s where you can read about the key elements of our compensation program:

     page  

   Oversight by qualified, independent directors      59     

   Compensation aligned with risk management      60     

   Equity ownership and retention requirements      61     

   Advice from independent compensation experts      61     

   Compensation linked to performance and strategy      66     

   Compensation in line with peers      63, 67     

   A significant portion of compensation is deferred and at risk, encouraging a long-term view of shareholder value      71     

   Incentive plan funding based on performance against targets linked to strategy and performance compared to our peers      75, 80     

   Cap on cash bonus      73     

   A disciplined process for making annual compensation decisions      69     

   An extensive risk-assessment before compensation is finalized, including stress testing      70     

   Clawback policy      61     

   Anti-hedging policy      61     

The human resources, health and compensation committee includes five directors, all of whom are independent. Each member has worked in leadership roles and has broad industry knowledge. They also have a mix of experience in operations, corporate strategy, executive compensation and financial matters. Together, they have the experience, skills and qualities necessary to make sure the committee carries out its mandate effectively.

The table below shows the experience of the current members of the human resources, health and compensation committee. The governance, nominating and corporate social responsibility committee looks at the mix of skills and experience every year to make sure it remains appropriate.

 

     
  Director    Areas of functional expertise    Key biographical details

Henry Sykes (Chair)
(see his biography on page 27)

  

  Public company senior leadership experience

  Financial/Accounting management

  Social and corporate governance

  Human resources and compensation

  Enterprise risk management

  Legal and regulatory

 

  

  Former energy industry president and director

  Past Chair and member of the boards of Arts Common and the Arctic Institute of North America

  Has a Bachelor of Economics, Bachelor of Laws and Master of Laws

  Director and member of the compensation committees of a number of private companies active in the energy industry

  Member of the committee since October 2, 2017

 

Anne-Marie

Ainsworth

(see her biography on page 17)

  

  Public company senior leadership experience

  Financial/Accounting management

  Social and corporate governance

  Human resources and compensation

  Enterprise risk management

  Legal and regulatory

 

  

  Former energy industry president and CEO

  Serves as a director for a number of public companies

  Has a Bachelor of Science in chemical engineering and a Master of Business Administration from Rice University

  Member of the committee since April 1, 2019

 

Pembina Pipeline Corporation 2022 Management Information Circular    59


Cynthia Carroll

(see her biography on page 19)

  

  Public company senior leadership experience

  Financial/Accounting management

  Social and corporate governance

  Human resources and compensation

  Enterprise risk management

  

  Former CEO of a major mining company

  Held numerous leadership roles with global organizations

  Serves as a director for a number of public companies

  Holds a Bachelor degree and Master of Science degree in Geology, a Master of Business Administration from Harvard University, an Honorary Doctorate of Science from the University of Exeter, an Honorary Doctorate of Laws from Skidmore College and an Honorary Doctorate of Economics from the University of Limerick

  Member of the committee since May 8, 2020

 

Robert Gwin

(see his biography on page 21)

  

  Public company senior leadership experience

  Financial/Accounting management

  Social and corporate governance

  Human resources and compensation

  Enterprise risk management

  Legal and regulatory

 

  

  Former energy industry president and executive

  Breadth of leadership roles across organizations

  Holds a Bachelor of Science degree from the University of Southern California; a Master of Business Administration from the Fuqua School of Business at Duke University and earned his CFA from the CFA institute

  Member of the committee since May 8, 2020

David LeGresley

(see his biography on page 24)

  

  Public company senior leadership experience

  Financial/Accounting management

  Social and corporate governance

  Human resources and compensation

  Enterprise risk management

  Legal and regulatory

 

  

  Senior executive level leadership experience

  Current chair of the board of directors of Equitable Group Inc.

  Holds a Bachelor of Applied Science in Engineering from the University of Toronto and a Master of Business Administration from Harvard Business School

  Member of the committee since May 5, 2017

Managing compensation risk

The board is responsible for understanding the principal risks of our business and assessing the balance between risk and potential return to ensure we promote shareholder value over the long-term. We use a broad-based, systematic approach to identifying, assessing, reporting and managing the significant risks we face in our business and operations.

Within this context, the human resources, health and compensation committee reviews and recommends to the board our compensation program and practices to:

 

·  

align executive compensation with our short- and long-term goals;

·  

reflect financial, operating and share performance, dividend payments and individual accomplishments; and

·  

ensure that compensation aligns with the interest of our shareholders and encourages the right behaviour.

This includes, among other things:

 

·  

understanding the impact of operating and share price performance over a five-year period to assess the effect of different performance scenarios on future incentive payouts;

·  

using balanced measures, including qualitative and quantitative goals, to determine annual incentive compensation;

·  

incorporating time and performance vesting features in medium- and long-term incentives;

·  

using target ranges for the annual and long-term incentive plans to ensure grants are effectively linked to actual performance and not unduly influenced by one-time events;

·  

capping the amount executives can receive under the short-term incentive plan and share unit plan; and

·  

having a balanced mix of short-, medium- and long-term compensation components to eliminate reliance on a single or a limited number of factors to determine potential awards and diversify potential reward scenarios.

The human resources, health and compensation committee also takes measures to prevent risks that could have a material adverse effect on our company, through appropriate compensation governance measures, which include:

 

·  

building a strong governance culture and ensuring effective oversight;

·  

implementing share ownership guidelines and retention periods;

·  

prohibiting executives and directors from hedging equity awards and building in safeguards against insider trading;

·  

applying a consistent compensation structure for the CEO, executives and employees;

·  

implementing a clawback policy that aligns with legislative and regulatory requirements;

·  

requiring the full board to review and approve compensation recommendations for the CEO and the senior vice presidents; and

 

Pembina Pipeline Corporation 2022 Management Information Circular    60


·  

engaging an independent compensation consultant to complete a compensation risk assessment, looking at pay mix, incentive plan funding, leverage and caps, performance measures, pay for performance, quantum of incentives, plan governance and risk mitigation.

The human resources, health and compensation committee also makes sure our compensation plans and employee benefit programs are administered according to the laws and regulations and stock exchange policies which govern us, as well as our compensation objectives. The board has not identified any material risks in our compensation program or practices that might reasonably be expected to have a material adverse impact on the company.

Clawback policy

We recognize the importance of clawback provisions in promoting ethical conduct and strong compensation governance practices and introduced a clawback policy in 2015.

The policy applies to the CEO and all senior vice presidents and requires repayment of:

·  

any incentive or equity-based compensation awarded based on incorrect data where we are required to restate our financial statements because of material non-compliance with any financial reporting requirement under any applicable securities laws; and

·  

incentive or equity-based compensation if the board finds a senior officer has committed fraud, a breach of fiduciary duty or willful or reckless misconduct.

The board can, at its sole discretion, use reasonable efforts to recover compensation paid or granted to the officer, including cancelling unvested equity compensation awards, recovering the after-tax amount of incentive compensation paid and recovering profits realized from trading Pembina securities.

Building equity ownership and retention

The human resources, health and compensation committee believes officers and directors should show their commitment to Pembina by owning equity in the company. The human resources, health and compensation committee introduced share ownership guidelines in 2010. The guidelines require the CEO, senior vice presidents and directors to own a certain multiple of their base salary or retainer in common shares, RSUs or DSUs. See page 63 to read about our guidelines for directors and page 66 for our guidelines for the named executives. The employment agreements we have with the named executives require them to maintain their minimum share ownership for one year after termination of the agreement, except if termination occurs as a result of a change of control or a constructive dismissal.

Anti-hedging

To keep executives and directors motivated to continue to build shareholder value, our insider trading and reporting policy prohibits them from speculating in Pembina securities to reduce the price risk associated with any Pembina shares or other securities they hold (including buying securities on margin, short selling, selling call options or buying put options).

Continuous improvement

The human resources, health and compensation committee reviewed a number of regulatory developments and emerging best practices about executive compensation in 2021, as part of its commitment to compensation best practices, and is once again providing shareholders with a say on pay advisory vote (see page 38 for information about our shareholder engagement and page 14 for more information on the say on pay advisory vote).

Independent advice

The human resources, health and compensation committee has been working with Mercer since 2002 as its independent compensation consultant and retains Mercer to review executive compensation and benefit programs and provide objective advice. Mercer reports directly and exclusively to the committee, but may, at the committee’s direction, work cooperatively with management to review or prepare material for the committee to review.

The human resources, health and compensation committee takes Mercer’s information and recommendations into consideration, but the committee’s decisions are its own responsibility. Mercer has completed an independence test and demonstrated their independence to the human resources, health and compensation committee’s satisfaction.

 

Pembina Pipeline Corporation 2022 Management Information Circular    61


Mercer’s mandate in 2021 included a comprehensive review of director and executive compensation, including:

·  

preparing information about market trends and issues;

·  

preparing benchmark market data for director and officer compensation;

·  

assessing the competitiveness of our compensation;

·  

reviewing the design of our short- and long-term incentive plans;

·  

attending each human resources, health and compensation committee meeting including an in-camera portion at each meeting; and

·  

preparing officer tally sheets and assessing the pay and performance relationship.

Mercer was paid the following fees for professional services in 2020 and 2021:

 

  ($ thousands)   

2020

($)

    

2021

($)

 

  Executive compensation-related fees

     403        231  

  Fees for services related to determining compensation for our directors and officers

                 

  All other fees

     696        1,203  

Fees for pension administration, actuarial valuation of our defined benefit pension plan and general advice related to compensation and benefits, annual compensation surveys for Canada and the U.S. and miscellaneous consulting services related to employee compensation and human resources matters1

     

  Total

     1,099        1,434  

 

1 

The committee does not pre-approve these services.

The human resources, health and compensation committee reviewed Mercer against the following six factors and confirmed its independence for 2021:

 

·  

the other services Mercer provides to Pembina;

·  

Mercer’s bills to Pembina as a percentage of Mercer’s total revenues;

·  

Mercer’s policies and procedures to prevent conflicts of interest;

·  

whether the Mercer advisor has any business or personal relationships with a member of the human resources, health and compensation committee;

·  

whether the Mercer advisor, and his or her immediate family, own any Pembina shares; and

·  

whether Mercer or its advisor has any business or personal relationships with a Pembina executive.

Management may retain other advisors from time to time, if necessary.

 

Pembina Pipeline Corporation 2022 Management Information Circular    62


Director compensation

We pay non-executive directors an annual retainer (in cash and equity) and additional amounts for committee memberships and chairing committees. This compensation package:

·  

acknowledges the expertise, time, due diligence and counsel that each director contributes to the board;

·  

aligns the near- and long-term interests of directors with those of our shareholders; and

·  

is competitive with the market.

The CEO is compensated in the role of President and CEO and does not receive director compensation.

Director compensation package

The table below shows our director fee schedule for 2021 and 2022. Director fees did not increase from 2020 to 2021. In 2021, the human resources, health and compensation committee recommended to the board an increase in the annual retainer for the chair and members of the board for 2022 to more closely align director compensation to our director compensation peer group.

 

       
  Retainers          2021      2022  

Board chair

   Annual retainer      400,000        460,000  

Board member

   Annual retainer      205,000        235,750  

Committees

   Audit committee chair retainer      28,500        28,500  
  

CEO succession committee chair retainer

     -        25,000  
  

Human resources, health and compensation committee chair retainer

     22,500        22,500  
  

Other committee chair retainer

     17,500        17,500  
  

Audit committee member retainer

     15,000        15,000  
  

CEO succession committee member retainer

     -        15,000  
    

Other committee member retainer

     12,500        12,500  

To help ensure they can meet their share ownership guideline within five years of joining the board, directors are required to take at least 50% of total director compensation as equity until they have met their share ownership guidelines. Directors may elect to take up to 100% of their compensation as equity. The rest of the compensation is paid in cash, quarterly in arrears.

The equity portion of the retainer is paid in deferred share units (DSUs) under our deferred share unit plan. A DSU is a notional share that has the same value as one common share. Its value changes with our share price. DSUs do not have voting rights but they accrue dividends as additional DSUs, at the same rate as dividends paid on our common shares. DSUs vest when they are credited to the director’s account but are paid out only after the director retires from the board (and must be redeemed within a year of retirement). The amount the director receives on redemption is calculated by multiplying the number of DSUs he or she holds (including credited dividend equivalents) by the weighted average trading price of common shares on the TSX for the last five trading days before the redemption date.

Compensation in line with our peers

To ensure we can attract and retain talented directors, we compensate them in a way that is fair and competitive, targeting compensation at the median offered by our director compensation peer group.

The human resources, health and compensation committee engages outside consultants every year to compare our director compensation practices and levels with companies with which we compete for talent. The 2021 director compensation peer group includes 10 publicly listed companies from the oil and gas and energy utility sectors. These are the same companies that make up the named executive compensation peer group for 2021 (see page 67 for a listing and a discussion of the selection process). To increase the compensation peer group’s focus on pipeline and midstream companies to better reflect Pembina’s operations and increase the relevance of the information, Keyera Cop., Kinder Morgan Inc., Magellan Midstream Partners L.P., Targa Resources Corp and The Williams Companies Inc. have been added to the group for 2022 among others.

 

Pembina Pipeline Corporation 2022 Management Information Circular    63


Building equity ownership

We believe directors should be aligned with the interests of shareholders and show their commitment to Pembina by owning equity, so we introduced share ownership guidelines in 2010.

Non-management directors must own three times their annual board retainer in Pembina equity. Common shares and DSUs (including the DSUs they accrue as dividend equivalents) can be used to meet the guideline, but at least 50% of the equity must be in common shares.

New directors must meet the guidelines within five years from the date of their appointment. The table below shows the equity holdings of the nominated directors as of March 18, 2022. As of that date, all current directors were in compliance with the guidelines or, in the case of Ms. Carroll and Mr. Gwin, had time from their date of appointment or election, as applicable, to meet the guidelines.

As at March 18, 2022, non-management directors as a group beneficially owned, directed or controlled 326,234 common shares and 237,363 DSUs with a combined value as of March 17, 2022 of $25,764,454.

 

     

Number of

common

shares

    

Value of common

shares1

($)

    

Value of DSUs2

($)

    

Estimated

total value of equity
holdings

($)

    

Share ownership

guideline

($)

    

Meets

share

ownership

guidelines

 

Randall Findlay

     138,321        6,322,653        1,699,410        8,022,063        1,380,000        yes  

Anne-Marie Ainsworth3

     23,830        1,090,599        1,152,552        2,243,151        893,893        yes  

Cynthia Carroll3

     0        0        222,647        222,647        893,893        on track 4 

Maureen Howe

     25,000        1,142,750        596,440        1,739,190        707,250        yes  

Robert Gwin3

     0        0        222,647        222,647        893,893        on track 4 

Gordon Kerr

     10,400        475,384        1,730,179        2,205,563        707,250        yes  

David LeGresley

     59,789        2,732,955        1,860,282        4,593,237        707,250        yes  

Leslie O’Donoghue

     35,588        1,626,727        1,888,067        3,514,794        707,250        yes  

Bruce Rubin3

     20,000        915,316        886,271        1,801,587        893,893        yes  

Henry Sykes

     13,306        608,217        591,358        1,199,575        707,250        yes  

 

1 

Calculated using $45.71 per share (the closing price of our common shares on the TSX on March 17, 2022).

 

2 

DSU value is estimated at $45.71 per share (the closing price of our common shares on the TSX on March 17, 2022). Includes DSUs that accrue as dividend equivalents. As of the date of this circular, the DSUs to which the directors are entitled in respect of 2022 fees have been accrued but not yet granted.

 

3 

Ms. Ainsworth, Ms. Carroll, Mr. Gwin and Mr. Rubin are U.S. residents and their fees are paid in U.S. dollars. To be consistent with the guidelines, Ms. Ainsworth’s, Ms. Carroll’s, Mr. Gwin’s and Mr. Rubin’s equity ownership requirements are also in U.S. dollars and converted to Canadian dollars using the Reuters noon U.S. Canadian dollar foreign exchange rate of 1.2639 on March 17, 2022. The value of their common shares is calculated using US$36.21 per share (the closing price of our common shares on the NYSE on March 17, 2022) and converted to Canadian dollars using the Reuters noon U.S. Canadian dollar foreign exchange rate of 1.2639 on March 17, 2022.

 

4 

Ms. Carroll and Mr. Gwin have five years from the date of their appointment to the board on May 8, 2020 to meet the share ownership guidelines. They received their initial grants of DSUs in January 2021.

 

Pembina Pipeline Corporation 2022 Management Information Circular    64


Director summary compensation table

The table below shows the value of all compensation paid to directors in 2021. Mr. Dilger did not receive director compensation while he was CEO because he was compensated in his role as CEO.

 

      2021 fees ($)     

All other
compensation

($)

    

Total
compensation

($)

     Allocation of 2021 fees ($)4  
      Annual
retainer
     Committee chair/
member retainer
     Cash      DSUs2  

Randall Findlay (chair)

     400,000        12,500               412,500        206,250        206,265  

Anne-Marie Ainsworth3

     259,284        33,803               293,087        144,473        149,526  

Cynthia Carroll3

     259,284        35,761               295,045        149,593        146,326  

Maureen Howe

     205,000        38,066