Edgar Filing: FREEPORT-MCMORAN INC

DEF14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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LOGO

LETTER TO STOCKHOLDERS FROM OUR NON-EXECUTIVE CHAIRMAN OF THE BOARD

Dear Fellow Stockholders,

The past year has been a time of significant change for our company and our board. We collaborated with our stockholders as we redefined our strategy, addressed a volatile market environment, and reorganized our board. We faced significant challenges in 2015: copper and oil prices plummeted, hitting six-year and fifteen-year lows, respectively, in early 2016, and slowing growth rates in China and concerns of global oversupply of oil sparked intense reaction in the credit and equity markets that were particularly adverse for natural resource companies. At the board level, our goal has been to position the company to address near-term challenges and still take advantage of the long-term opportunities our assets provide.

Redefining Our Strategy. Our restructured board has adopted a clearly defined strategy of focusing on our leading global position in the copper industry. We have a proven ability to develop and safely operate properties around the world, producing large volumes of low-cost copper that enable the copper business to be cash-flow positive even when the price of copper nears six-year lows. In light of this strategy and market conditions, we have changed the organizational structure of our oil and gas business to reduce costs, streamline functions, and enhance capital allocation across our global business in a manner consistent with our debt reduction initiatives. Further steps will be taken to reduce costs and capital expenditures.

Making Tough Decisions. Adverse economic conditions demand that senior leaders make tough decisions. During 2015, we took aggressive actions to enhance our financial position in response to market conditions, including significant reductions in capital spending, production curtailments at certain North and South America mines and actions to reduce operating, exploration and administrative costs. Our board recognized that in order to protect our balance sheet and repay debt, the significant cost reductions the business was achieving in operations needed to be paired with a suspension of our common stock dividend, supplemental equity issuances, and the sale of targeted assets. Our board also assessed itself, and determined that we would sharpen our focus and increase accountability by reorganizing and reducing the size of our board and streamlining our executive management. We downsized the board from sixteen directors to nine, appointed a non-executive Chairman, and eliminated the Office of the Chairman structure.

Listening to Our Stockholders. Our board values the open communication that we have established with our stockholders. The full scope of investor perspectives that we gather through discussions with investors is integrated into the board’s decision-making processes on issues ranging from strategy to governance. Many of the changes that we implemented this year are consistent with themes identified in our conversations with stockholders. On this year’s ballot is a board-supported proposal to adopt a proxy access by-law, which was authored with the thoughtful perspectives of many of our largest stockholders and is consistent with the stockholder proposal on the same topic that was presented for your consideration in 2015.

We are optimistic about our company’s long-term future, underpinned by a portfolio of exceptional assets and a highly motivated management team and workforce focused on executing our strategy. Thank you for your continued confidence in us.

Respectfully yours,

LOGO

GERALD J. FORD

Non-Executive Chairman of the Board

April 28, 2016

LOGO

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Date:

Wednesday, June 8, 2016

Time:

10:00 a.m., Eastern Time

Place:

Hotel du Pont, 11th and Market Streets, Wilmington, Delaware 19801. You can obtain directions to the Hotel du Pont on the hotel’s website at www.hoteldupont.com/map-and-directions-en.html.

Purpose:

•

Elect eight directors;

•

Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2016;

•

Approve, on an advisory basis, the compensation of our named executive officers;

•

Approve a proposed amendment to our amended and restated by-laws to implement stockholder proxy access;

•

Approve a proposed amendment to our amended and restated certificate of incorporation to increase the number of authorized shares of common stock to 3,000,000,000;

•

Approve a proposed amendment to our amended and restated certificate of incorporation to clarify that any director may be removed with or without cause;

•

Approve the adoption of the proposed 2016 Stock Incentive Plan;

•

Vote on one stockholder proposal requesting a report on the company’s enhanced oil recovery operations, if presented at the annual meeting; and

•

Transact such other business as may properly come before the annual meeting.

Record Date:

Only stockholders of record as of the close of business on April 12, 2016 are entitled to notice of and to attend or vote at the annual meeting.

Identification:

If you plan to attend the annual meeting in person, please bring proper identification and, if your shares of our common stock are held in “street name,” meaning a bank, broker, trustee or other nominee is the stockholder of record of your shares, please bring acceptable proof of ownership, which is either an account statement or a letter from your bank, broker, trustee or other nominee confirming that you beneficially owned shares of Freeport-McMoRan Inc. common stock on the record date.

Proxy Voting:

Your vote is very important. Whether or not you plan to attend the annual meeting in person, please promptly submit your proxy and voting instructions via the internet or sign, date and return a proxy card. Your cooperation is appreciated.

By Order of the Board of Directors.

LOGO

DOUGLAS N. CURRAULT II

Deputy General Counsel and Corporate Secretary

April 28, 2016

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 8, 2016.

This proxy statement and the company’s 2015 annual report to stockholders are available at

www.eproxyaccess.com/fcx2016

TABLE OF CONTENTS


Proxy Summary			1
2016 Annual Meeting of Stockholders			1
2015 Performance Highlights			1
Executive Compensation Highlights			1
Corporate Governance Highlights			2
Stockholder Engagement			2
Agenda and Voting Recommendations			2
Director Nominee Highlights			3


Stockholder Engagement			4
Independent Board Members Lead the Process			4
Capturing Stockholder Perspectives on Proxy Access Nuances			4
Recent Engagements by the Board and Management			5
Ongoing Dialogue Regarding Social and Environmental Sustainability			5


Corporate Governance			7
Corporate Governance Guidelines; Principles of Business Conduct			7
Board Composition			7
Board Leadership Structure			8
Board and Committee Meeting Attendance			8
Board Committees			8
Board and Committee Independence; Audit Committee Financial Experts			10
Compensation Committee Procedures			10
Compensation Committee Independence – No Interlocks or Insider Participation			11
Board Evaluation Process			11
Director Nominations and Qualifications			12
Director Candidates Submitted by Stockholders			12
Succession Planning for Senior Executives			13
Board’s Role in Oversight of Risk Management			13
Director and Executive Officer Stock Ownership Guidelines			14
Communications with the Board			15


Proposal No. 1: Election of Directors			16
Information About Director Nominees			17


Stock Ownership of Directors and Executive Officers			22


Section 16(a) Beneficial Ownership Reporting Compliance			24


Stock Ownership of Certain Beneficial Owners			24

Freeport-McMoRan 2016 Proxy Statement i


Executive Officer Compensation			25
Compensation Discussion and Analysis			25
Executive Summary			26
Executive Compensation Philosophy			30
Overview of Principal Components of Executive Compensation			31
Post-Termination Compensation			37
Compensation Processes and Policies			39
Compensation Committee Report			41
Executive Compensation Tables			42
Summary Compensation Table			42
2015 Grants of Plan-Based Awards			44
Outstanding Equity Awards at December 31, 2015			45
2015 Option Exercises and Stock Vested			47
Retirement Benefit Programs			48
Potential Payments Upon Termination or Change of Control			50


Audit Committee Report			56


Independent Registered Public Accounting Firm			57


Proposal No. 2: Ratification of the Appointment of Ernst & Young LLP as our Independent Registered Public Accounting Firm for 2016			58


Proposal No. 3: Advisory Vote on the Compensation of Our Named Executive Officers			59


Proposal No. 4: Approval of an Amendment to our Amended and Restated By-Laws to Implement Stockholder Proxy Access			60


Proposal No. 5: Approval of an Amendment to our Amended and Restated Certificate of Incorporation to Increase the Number of Authorized Shares of Common Stock			63


Proposal No. 6: Approval of an Amendment to our Amended and Restated Certificate of Incorporation to Clarify That Any Director May Be Removed With or Without Cause			65


Proposal No. 7: Approval of the Adoption of the Proposed 2016 Stock Incentive Plan			66


Proposal No. 8: Stockholder Proposal Requesting a Report on the Company’s Enhanced Oil Recovery Operations			77


Certain Transactions			80

ii Freeport-McMoRan 2016 Proxy Statement


Director Compensation			80
Director Compensation Philosophy			80
Process of Setting Director Compensation			80
Cash Compensation			81
Equity-Based Compensation			81
Frozen and Terminated Retirement Plan			82
Director Compensation Table			83


Questions and Answers About the Proxy Materials, Annual Meeting and Voting			86


2017 Stockholder Proposals			91


Annex A – Freeport-McMoRan Inc. Proposed Proxy Access By-Law			A-1


Annex B – Freeport-McMoRan Inc. 2016 Stock Incentive Plan			B-1

Freeport-McMoRan 2016 Proxy Statement iii

PROXY SUMMARY

This summary highlights selected information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting. For more complete information regarding our 2015 performance, please review our 2015 Annual Report on Form 10-K. The 2015 annual report to stockholders, including financial statements, is being made available to stockholders together with these proxy materials on or about April 28, 2016.

2016 Annual Meeting of Stockholders

Time and Date:

10:00 a.m. Eastern Time, Wednesday, June 8, 2016

Place:

Hotel du Pont, 11th and Market Streets, Wilmington, Delaware 19801

Record Date:

Tuesday, April 12, 2016

Voting:

Stockholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each director position and one vote for each of the other proposals to be considered at our annual meeting.

2015 Performance Highlights (page 27)

During 2015, we took aggressive actions to reduce costs and capital expenditures. We achieved significant cost reductions and structured our mining operations to generate free cash flow at copper prices near six-year lows.

In addition, we achieved a number of important milestones:

•

In Arizona, the new concentrating facility at Morenci reached full rates.

•

In Peru, we completed the construction of the world’s largest concentrating facility at Cerro Verde, positioning the mine to be a major large-scale producer for decades.

•

In Indonesia, we received important assurances from the Government of Indonesia regarding our long-term operating rights.

•

In Africa, exploration results at our Tenke Fungurume mine continue to indicate opportunities for significant future reserve additions.

•

Drilled 10 successful wells at our three 100-percent-owned production platforms in the Deepwater Gulf of Mexico.

Our mining assets are characterized by high volumes of low-cost current production, with large mineral reserves and resources available for future development and growth. We are positive and optimistic about our company’s long-term future, underpinned by a portfolio of exceptional assets and a highly motivated management team and workforce focused on executing our strategy.

Executive Compensation Highlights (page 26)

•

Majority of our executives’ target direct compensation is at risk and based on measurable performance and increases in stock price under our annual and long-term incentive programs.

•

No payouts under the annual incentive plan for 2015.

•

No increases to base salaries of executives.

•

Forfeiture of 20% of the 2013-2015 restricted stock unit award for failure to satisfy performance conditions.

•

Consistent with our goals of reducing debt and costs, and continuing to safely and effectively operate our business, we adopted a new structure for 2016 performance share unit awards, incorporating financial and operational metrics in addition to relative TSR performance metric.

•

Streamlined executive management structure and discontinued paying three executives at the highest level.

Freeport-McMoRan 2016 Proxy Statement 1

Corporate Governance Highlights (page 7)

We implemented several significant corporate governance enhancements in 2015, including the following:

•

Reduced the size of the board from 16 to 9 while adding two new members, significantly reducing average director tenure.

•

Appointed a non-executive chairman of the board.

•

Streamlined our executive management by eliminating the Office of the Chairman structure.

These changes reflect the changing needs of the company, evolving governance practices and feedback from our stockholders. We believe that these changes will streamline decision making processes while also increasing accountability for the board and management. We are committed to strong and effective governance practices that are responsive to our stockholders.

Stockholder Engagement (page 4)

We have an extensive stockholder outreach program through which we seek ongoing input from our largest institutional investors and other stockholders regarding our executive compensation and governance practices, and implement changes based on this input. We value stockholder views and insights and believe that constructive and meaningful dialogue builds informed relationships that promote transparency and accountability. One of the key topics we discussed with our stockholders in 2015 was proxy access. We are presenting for stockholder approval at our annual meeting a proxy access proposal that is designed to reflect feedback gathered in those discussions as well as the company’s specific ownership and governance structures.

Agenda and Voting Recommendations


Item	Description	Board Vote Recommendation	Page
1	Election of eight directors	FOR each nominee	16
2	Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2016	FOR	58
3	Approval, on an advisory basis, of the compensation of our named executive officers	FOR	59
4	Approval of an amendment to our amended and restated by-laws to implement stockholder proxy access	FOR	60
5	Approval of an amendment to our amended and restated certificate of incorporation to increase the number of authorized shares of common stock	FOR	63
6	Approval of an amendment to our amended and restated certificate of incorporation to clarify that any director may be removed with or without cause	FOR	65
7	Approval of the adoption of the proposed 2016 Stock Incentive Plan	FOR	66
8	Stockholder proposal requesting a report on the company’s enhanced oil recovery operations	AGAINST	77

2 Freeport-McMoRan 2016 Proxy Statement

Director Nominee Highlights (page 17)


Name	Age	Director Since	Principal Occupation	Independent	Board Committees
Richard C. Adkerson	69	2006	Vice Chairman, President and Chief Executive Officer Freeport-McMoRan Inc.
Gerald J. Ford Non-Executive Chairman of the Board	71	2000	Chairman of the Board Hilltop Holdings, Inc.	ü	• Audit • Executive (Chair) • Nominating and Corporate Governance (Chair)
Lydia H. Kennard	61	2013	President and Chief Executive Officer KDG Construction Consulting	ü	• Corporate Responsibility (Vice Chair) • Nominating and Corporate Governance
Andrew Langham	43	2015	General Counsel Icahn Enterprises L.P.	ü	• Compensation • Nominating and Corporate Governance
Jon C. Madonna	72	2007	Retired Chairman and Chief Executive Officer KPMG LLP	ü	• Audit (Vice Chair) • Compensation (Vice Chair) • Nominating and Corporate Governance
Courtney Mather	39	2015	Managing Director Icahn Capital LP	ü	• Audit • Executive
Dustan E. McCoy	66	2007	Retired Chairman and Chief Executive Officer Brunswick Corporation	ü	• Compensation (Chair) • Corporate Responsibility • Executive
Frances Fragos Townsend	54	2013	Executive Vice President of Worldwide Government, Legal and Business Affairs MacAndrews & Forbes Holdings Inc.	ü	• Corporate Responsibility (Chair) • Compensation • Executive

Freeport-McMoRan 2016 Proxy Statement 3

STOCKHOLDER ENGAGEMENT

Independent Board Members Lead the Process

Since being appointed lead independent director by the independent directors of the board in 2013, Gerald J. Ford, now the non-executive chairman of the board, has conducted a series of engagements on behalf of the board collecting feedback from stockholders on various governance-related topics, including our compensation program and governance practices. The board has historically used the feedback Mr. Ford gathered when evaluating potential changes to governance and compensation structures, resulting in decisions that were better informed and more likely to be supported by stockholders.

Capturing Stockholder Perspectives on Proxy Access Nuances

In late 2014, we received a non-binding stockholder proposal requesting that the board adopt and submit to stockholders for their approval a “proxy access” amendment to our by-laws. Under the direction of Mr. Ford, we conducted outreach with our stockholders in order to implement a thoughtful approach to proxy access. We found that many of our stockholders view proxy access as an important right. We recognized, based on discussions with some of our significant stockholders and our review of the voting guidelines of and public commentary by investors, that proxy access was an evolving governance topic on which our stockholders had a diverse range of views, including with regards to some of the details of how a proxy access right should be structured. In recognition of developing trends regarding proxy access, the board committed to present a proxy access proposal designed to reflect the company’s specific ownership and governance structures for stockholder approval at our 2016 annual meeting after careful consideration and stockholder engagement. During early 2015, Mr. Ford offered to meet with 15 of our largest institutional stockholders and with representatives from institutional investors collectively representing over 20% of our outstanding shares. At the 2015 stockholder meeting a majority of shares cast were in support of the stockholder proposal, validating the board’s perception that there was broad based support for a proxy access right.

For several months last year, we took a transparent and inclusive approach in developing a proxy access by-law. During the fall and winter of 2015, Mr. Ford and our deputy general counsel and corporate secretary met in person and by telephone with several of our largest institutional stockholders. Following those meetings, our deputy general counsel and corporate secretary, under the direction of Mr. Ford and on behalf of the board, continued engagement efforts by telephone with about 15 of our institutional stockholders, including the stockholder who submitted the proxy access proposal presented at our 2015 stockholder meeting. These stockholders collectively represented approximately 30% of our outstanding shares. While each discussion was tailored to reflect the interests of the stockholder, management generally:

•

Discussed recent business developments, including announced capital and operating initiatives, review of strategic alternatives for oil and gas business and status of operations in Indonesia

•

Reviewed changes to board composition, board leadership structure and board practices

•

Solicited feedback on the addition of a supplemental performance metric to the long-term compensation program

•

Gathered views on proxy access, including preferred structure and approach to implementation

•

Listened to any other stockholder concerns

Insights gathered in these discussions were reported to the board and discussed at relevant board and committee meetings. The proxy access proposal that we are presenting for stockholder approval at this year’s annual meeting was guided by that stockholder input. The board believes it is the right one for our company. For more information, see our proxy access proposal, beginning on page 60.

4 Freeport-McMoRan 2016 Proxy Statement

Recent Engagements by the Board and Management


Engagement Period	Topics of Discussion	Engagement Outcomes

2015	• Business strategy • Leadership structure • Executive compensation program • Board composition and refreshment • Succession planning • Proxy access	• We reported all of the feedback and suggestions to the compensation committee and the board of directors for consideration • Streamlined executive management by eliminating Office of the Chairman structure • We received positive feedback on the executive compensation program and corporate governance changes we implemented in 2014 • Reconstituted and reduced the size of the board • Appointed non-executive chairman of the board • Revised director compensation program to eliminate meeting attendance fees and reduce the value of annual equity awards from $270,000 to $170,000, with the awards vesting after one year; reduced fee of lead independent director/non-executive chairman from $100,000 to $50,000 (paid in shares of our common stock) • Conducted outreach in order to develop a proxy access right for presentation to stockholders at the 2016 annual meeting

December 2015- First Quarter 2016	• Proxy access • Board composition and refreshment • Leadership structure • Business strategy	• Continued outreach and developed a proxy access right for presentation to stockholders at this year’s annual meeting • We further improved the executive compensation program, incorporating financial and operational metrics in addition to total stockholder return into our 2016 long-term incentive program • Investors were supportive of the board’s actions to restructure executive and board leadership roles • Investors signaled support for the business strategy while raising concerns about the significant challenges faced by the business

Ongoing Dialogue Regarding Social and Environmental Sustainability

In addition to engagement regarding proxy access, governance and compensation, we have a robust stakeholder communication program addressing corporate social responsibility. As part of this program, we regularly work with our stockholders and other stakeholders via in-person meetings and site visits, teleconferences, inquiries via email and related conferences. Through these engagement and outreach efforts, our corporate sustainable development team and senior personnel address key industry topics, including:

•

Health, safety and fatality prevention

•

Community development

•

Human rights

•

Transparency of government payments

•

Environmental management

•

Water resources

Freeport-McMoRan 2016 Proxy Statement 5

In 2015, our corporate team engaged with over 50 investor organizations, sustainability analyst firms, banking institutions and non-governmental organizations regarding our sustainability programs and performance. In addition, our operational-level teams regularly engage locally with community stakeholders, development institutions and non-governmental organizations. Our corporate team also works closely with our sales departments to engage both downstream customers and international governmental agencies on sustainability programs and address specific environmental and public health areas of interest that affect access to markets for our various products within the value chain. We believe that effective stakeholder engagement can help reduce sustainability-related risks and enable us to continue to deliver positive contributions to society.

6 Freeport-McMoRan 2016 Proxy Statement

CORPORATE GOVERNANCE

Corporate Governance Guidelines; Principles of Business Conduct

Corporate governance is a long-standing priority at our company. We believe effective corporate governance promotes the long-term interests of our stockholders, maintains internal checks and balances, strengthens management accountability, engenders public trust and fosters responsible decision-making and accountability. Our corporate governance guidelines, along with the charters of our principal board committees, provide the framework for the governance of our company and reflect the board’s commitment to monitor the effectiveness of policy and decision-making both at the board and management levels.

We are also proud of our commitment to the highest level of ethical and legal conduct in all of our business operations. Our principles of business conduct are a reaffirmation of our commitment to integrity and define the expected behavior of all of our employees and our board. Amendments to or waivers of our principles of business conduct granted to any of our directors or executive officers will be published promptly on our website.

Our corporate governance guidelines and principles of business conduct are available at www.fcx.com under “Investor Center – Corporate Governance” and are available in print to any stockholder who requests a copy.

Board Composition

We recognize the importance of board refreshment to achieve the right blend of institutional knowledge and fresh perspectives. Following constructive discussions with many of our largest stockholders, the board discussed the proper and most effective size and make-up consistent with the needs of the company as we navigated challenging market conditions and refocused the business on our leading global position in the copper industry. During the fourth quarter of 2015 we reconstituted and reduced the size of the board from sixteen to nine. Our newly reconstituted board, which includes two new directors in addition to seven continuing directors, brings diverse and extensive professional, financial and business experience while balancing independence and tenure. The board represents a strong blend of institutional knowledge and fresh perspectives that will benefit stockholders as we address market challenges and position the company for long-term success.

Effective as of our 2016 annual meeting, Mr. Day’s term will expire and he will no longer serve as a member of the board. The board wishes to thank Mr. Day for his many years of service as a director of the company. As a result, immediately following our annual meeting, the board will decrease from nine to eight members. The board has affirmatively determined that seven of the eight director nominees have no material relationship with the company and are independent within the meaning of our director independence standards, which meet, and in some respects exceed, the independence requirements of the New York Stock Exchange (NYSE).

After our 2016 annual meeting, if all of the director nominees are elected, independent directors will comprise 87.5% of the board, the average age of our directors will be 59.4, and the average tenure of our directors will be 5.8 years, compared to an average age of 63.1 and an average tenure of 8.5 years for all directors at the companies in the S&P 500 index according to the 2015 Spencer Stuart Board Index. We remain committed to an ongoing review of the board’s composition to ensure we continue to have the right mix of skills, background and tenure.

Freeport-McMoRan 2016 Proxy Statement 7

Board Leadership Structure

The board believes that the decision to combine or separate the positions of chairman and chief executive officer is highly dependent on the strengths and personalities of the individuals involved and must take into account current business conditions and the environment in which the company operates. The positions of chairman and chief executive officer have been separate at our company since 2003. While our by-laws and corporate governance guidelines do not require our chairman and chief executive officer positions to be separate, the board believes that having separate positions continues to be the appropriate leadership structure for the company at this time. The board’s leadership structure changed significantly during 2015 and early 2016:

•

Our co-founder, former chairman of the board and long-time executive James R. Moffett resigned and entered into a consulting arrangement with us.

•

The Board appointed our former lead independent director, Mr. Ford, as non-executive chairman of the board, with responsibilities that include: (a) presiding at meetings of the Board and meetings of stockholders; (b) overseeing the management, development and functioning of the Board; and (c) in consultation with the chief executive officer, planning and organizing the schedule and establishing the agendas for board meetings. Consistent with our Corporate Governance Guidelines, the board does not have a lead independent director because the chairman is an independent director.

•

James C. Flores resigned from our board in 2015, and departed the company in 2016.

Elimination of Office of the Chairman Structure

Following completion of our acquisition of Plains Exploration & Production Company (Plains Exploration) in 2013, we established the Office of the Chairman, which was comprised of our then top three executives – James R. Moffett, Executive Chairman, Richard C. Adkerson, Vice Chairman, President and Chief Executive Officer of the company and James C. Flores, Vice Chairman of the company and President and Chief Executive Officer of Freeport-McMoRan Oil & Gas LLC. In connection with the reconstitution of the board, we also streamlined our executive management by eliminating the Office of the Chairman structure, re-designating responsibilities and electing a non-executive chairman. The board believes this structure provides an effective balance between strong company leadership and appropriate safeguards and oversight by independent directors. These changes are also consistent with feedback from our stockholders, which was considered as part of the board’s deliberation on the issue.

Board and Committee Meeting Attendance

The board had five regular meetings and six special meetings during 2015. During 2015, each of our directors participated in more than 75% of the total number of meetings of the board and meetings held by each committee of the board on which each director served. Directors are invited but not required to attend annual meetings of our stockholders. Mr. Adkerson attended our last annual meeting of stockholders.

Board Committees

The board has five standing committees: an audit committee, a compensation committee, a nominating and corporate governance committee, a corporate responsibility committee and an executive committee, each of which is composed entirely of independent directors. Each committee operates under a written charter adopted by the board. All of the committee charters are available on our website at www.fcx.com under “Investor Center – Corporate Governance” and are available in print upon request. The following table identifies the current committee members.

8 Freeport-McMoRan 2016 Proxy Statement


Name of Director	Audit Committee	Compensation Committee	Nominating and Corporate Governance Committee	Corporate Responsibility Committee	Executive Committee
Richard C. Adkerson
Robert A. Day*	Chairman		Vice Chairman		ü
Gerald J. Ford	ü		Chairman		Chairman
Lydia H. Kennard			ü	Vice Chairman
Andrew Langham		ü	ü
Jon C. Madonna	Vice Chairman	Vice Chairman	ü
Courtney Mather	ü				ü
Dustan E. McCoy		Chairman		ü	ü
Frances Fragos Townsend		ü		Chairman	ü

*	Effective as of our 2016 annual meeting, Mr. Day will no longer serve as a member of the board of directors or the audit, nominating and corporate governance or executive committees. The board will address committee assignments at its next regularly scheduled meeting in May 2016.

Audit Committee. The audit committee assists the board in fulfilling its oversight responsibilities relating to (1) the effectiveness of the company’s internal control over financial reporting; (2) the integrity of the company’s financial statements; (3) the company’s compliance with legal and regulatory requirements; (4) the qualifications and independence of the company’s independent registered public accounting firm; and (5) the performance of the company’s independent registered public accounting firm and internal audit firm. For more information on the audit committee, see the section titled “Audit Committee Report.” The audit committee held four meetings in 2015.

Compensation Committee. The compensation committee assists the board in fulfilling its oversight responsibilities by (1) discharging the board’s responsibilities relating to compensation of the company’s executive officers, and (2) administering the company’s cash-based and equity-based incentive compensation plans. For more information on the compensation committee, see the section titled “Corporate Governance – Compensation Committee Procedures.” The compensation committee held three meetings in 2015.

Nominating and Corporate Governance Committee. The nominating and corporate governance committee assists the board in fulfilling its oversight responsibilities by (1) identifying and formally considering and recommending to the board candidates to be nominated for election or re-election to the board at each annual meeting of stockholders or as necessary to fill vacancies and newly-created directorships; (2) monitoring the composition of the board and its committees and making formal recommendations to the board on membership of the committees; (3) maintaining the company’s corporate governance guidelines and recommending to the board any desirable changes; (4) evaluating the effectiveness of the board, its committees and management; and (5) overseeing the form and amount of director compensation. The nominating and corporate governance committee held two regular meetings and two special meetings in 2015.

Corporate Responsibility Committee. The corporate responsibility committee assists the board in fulfilling its oversight responsibilities with respect to the company’s (1) environmental policy and implementation programs; (2) human rights policy and practices; (3) safety and health policies and programs; (4) community health programs and related public health and medical matters; (5) community policy and practices, governmental and stakeholder relations, and social investment and sustainable development programs; (6) charitable contributions; and (7) political activity and spending practices. The corporate responsibility committee held three meetings in 2015.

Executive Committee. The executive committee assists the board in fulfilling its oversight responsibilities by acting on behalf of the board during periods between meetings of the board in order to enhance the board’s ability to respond to time-sensitive matters. The members of the executive committee are the lead independent director or non-executive chairman, as applicable, who is chairman of the executive committee, and the chairmen of the other standing committees of the board, who are all independent directors, and any other independent director as appointed by the board.

The executive committee has all of the powers of the board except as limited by law. The executive committee held two meetings in 2015.

Freeport-McMoRan 2016 Proxy Statement 9

Board and Committee Independence; Audit Committee Financial Experts

In accordance with the rules of the NYSE, the board must make an affirmative determination that a director has no material relationship with the company and management for such director to be deemed independent. To assist the board in making determinations of independence, the nominating and corporate governance committee established director independence standards, which meet, and in some respects exceed, the independence requirements of the NYSE. In addition, members of the audit and compensation committees must meet heightened standards of independence in accordance with the requirements of the NYSE corporate governance listing standards and U.S. Securities and Exchange Commission (SEC) rules and regulations. The director independence standards are part of our corporate governance guidelines, which are available at www.fcx.com under “Investor Center – Corporate Governance.”

On the basis of information solicited from each director, and upon the advice and recommendation of the nominating and corporate governance committee, the board has affirmatively determined that each of Messrs. Day, Ford, Langham, Madonna, Mather and McCoy, and each of Mses. Kennard and Townsend has no material relationship with the company and is independent within the meaning of our director independence standards. In making this determination, the nominating and corporate governance committee, with assistance from the company’s legal counsel, evaluated responses to a questionnaire completed annually by each director regarding relationships and possible conflicts of interest between each director, the company and management. In its review of director independence, the committee considered the commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships any director may have with the company or management. The nominating and corporate governance committee recommended to the board that the eight directors named above be considered independent, which the board approved.

The board also has determined that each of the members of the audit, compensation, nominating and corporate governance, and corporate responsibility committees has no material relationship with the company and satisfies the independence criteria (including the enhanced criteria with respect to members of the audit committee and compensation committee) set forth in the applicable NYSE listing standards and SEC rules. In addition, the board has determined that each of Messrs. Day, Ford, Madonna and Mather qualify as an “audit committee financial expert,” as such term is defined by the rules of the SEC. Effective as of our 2016 annual meeting, Mr. Day will no longer serve as a director or as a member of the audit, nominating and corporate governance or executive committees. As a result, the size of the board will decrease to eight members.

Compensation Committee Procedures

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

To the extent stock options or other equity awards are granted in a given year, the compensation committee’s historical practice has been to grant such awards at its first meeting of that year, which is usually held in January or February. Each July or August, the board establishes a meeting schedule for itself and its committees for the next calendar year. Thus, the first meeting of each year is scheduled approximately six months in advance and is scheduled to fall within the window period following the release of the company’s earnings for the fourth quarter of the previous year. The compensation committee has a written policy stating that it will approve all regular annual equity awards at its first or second meeting of each fiscal year, and that to the extent the committee approves any out-of-cycle awards at other times during the year, such awards will be made during an open window period during which our executive officers and directors are permitted to trade.

10 Freeport-McMoRan 2016 Proxy Statement

The terms of our stock incentive plans provide that the exercise price of each stock option cannot be less than the fair market value of a share of our common stock on the grant date. Pursuant to the compensation committee’s policies, for purposes of our stock incentive plans, the fair market value of our common stock will be determined by reference to the closing quoted per share sale price of our common stock on the composite tape for NYSE-listed stocks on the grant date. In addition, our stock incentive plans permit the committee to delegate to appropriate personnel its authority to make awards to employees other than those subject to Section 16 of the Securities Exchange Act of 1934, as amended.

Our current equity grant policy provides that each of our chairman of the board and our chief executive officer of the company has authority to make or modify grants to such employees, subject to the following conditions:

•

No grant may relate to more than 20,000 shares of our common stock;

•

Such grants must be approved during an open window period and must be approved in writing by such officer, the grant date being the date of such written approval or such later date set forth in the grant instrument;

•

The exercise price of any options granted may not be less than the fair market value of our common stock on the date of grant; and

•

The officer must report any such grants to the committee at its next meeting.

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

Compensation Committee Independence – No Interlocks or Insider Participation

The current members of our compensation committee are Messrs. McCoy, Madonna and Langham and Ms. Townsend. In 2015, none of our executive officers served as a member of the compensation committee of another entity, or as a director of another entity, one of whose executive officers served on our compensation committee or as one of our directors.

Our insider trading policy prohibits our executives and directors from entering into any hedging arrangements with respect to our securities and limits the ability of our executives and directors to pledge our securities. For more information, see the section titled “Executive Officer Compensation – Compensation Discussion and Analysis” beginning on page 25.

Board Evaluation Process

The nominating and corporate governance committee is responsible for overseeing the annual performance evaluation of the board as a whole and each committee of the board. Annually, each director completes an evaluation of the full board and of each committee on which the director serves. The evaluations are intended to provide the board and each committee with an opportunity to evaluate performance for the purpose of improving board and committee processes and effectiveness. The detailed questionnaires seek quantitative ratings and subjective comments in key areas of board practices, and ask each director to evaluate how well the board and committees operate and to make suggestions for improvements. The nominating and corporate governance committee reviews the results and the assessment of board performance is presented to the full board. The results of each committee evaluation are delivered to the respective chairman of each committee. The results can then be leveraged by the board or relevant committee when considering issues such as board refreshment, committee operations, or board procedures.

Freeport-McMoRan 2016 Proxy Statement 11

Director Nominations and Qualifications

In evaluating nominees for membership on the board, our nominating and corporate governance committee applies the board membership criteria set forth in our corporate governance guidelines. Under these criteria, the committee takes into account many factors, including personal and professional integrity, general understanding of our industry, corporate finance and other matters relevant to the successful management of a large publicly traded company in today’s business environment, educational and professional background, independence, and the ability and willingness to work cooperatively with other members of the board and with senior management. In selecting nominees, the committee seeks to have a board that represents a diverse range of perspectives and experience relevant to the company. The committee also evaluates each individual in the context of the board as a whole, with the objective of recommending nominees who can best perpetuate the success of the business, be effective directors in conjunction with the full board, and represent stockholder interests through the exercise of sound judgment using their diversity of experience in these various areas. For more information regarding the experience, qualifications, attributes and skills of director nominees considered by the board through the nominating and corporate governance committee, see the section titled “Proposal No. 1: Election of Directors” on page 16.

Our nominating and corporate governance committee regularly assesses the appropriate size of the board, and whether any vacancies on the board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the committee will consider various potential candidates who may come to the attention of the committee through current board members, professional search firms, stockholders or other persons. Each candidate brought to the attention of the committee, regardless of who recommended such candidate, is considered on the basis of the criteria set forth in our corporate governance guidelines.

Director Candidates Submitted by Stockholders

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

In addition, our by-laws permit stockholders to nominate candidates directly for consideration at next year’s annual meeting of stockholders. Any nomination must be in writing and received by our corporate secretary at our principal executive office no later than April 9, 2017. If the date of next year’s annual meeting is moved to a date more than 90 days after or 30 days before the anniversary of this year’s annual meeting, the nomination must be received no later than the later of 60 days prior to the date of the 2017 annual meeting or 10 days following the public announcement of the date of the 2017 annual meeting. Any stockholder submitting a nomination under our by-law procedures must include (a) all information relating to the nominee that is required to be disclosed in solicitations of proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such nominee’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), and (b) the name and address (as they appear on the company’s books) of the nominating stockholder and the class and number of shares beneficially owned by such stockholder. Nominations should be addressed to: Corporate Secretary, Freeport-McMoRan Inc., 333 North Central Avenue, Phoenix, Arizona 85004.

If the proposal to implement stockholder proxy access is approved at our 2016 annual meeting, it will become effective immediately and proxy access will be available for the next annual meeting of stockholders, and stockholders will be able to nominate candidates as described in the section titled “Proposal No. 4: Approval of an Amendment to Our Amended and Restated By-Laws to Implement Stockholder Proxy Access” on page 60.

12 Freeport-McMoRan 2016 Proxy Statement

Succession Planning for Senior Executives

The board is focused on ensuring that the company has a robust emergency and long-term succession plan in place for key senior executive positions. In the event of an unexpected executive departure, the emergency succession plan allows for smooth transfer of responsibilities to an individual who may or may not be permanently tasked with the new role. In the event of a senior executive’s departure, both internal and external candidates may be considered for permanent appointment to a given role.

The long-term succession plan is intended to develop a pipeline of qualified talent for key roles. The planning process includes a discussion of succession candidates, assessment of relevant skills and planning for professional development where necessary. The company’s short and long-term business strategy will be considered when evaluating candidates and their skills. Multiple succession candidates may be identified for an individual role and provided with relevant growth opportunities. Where possible, the board gains insight through direct exposure to internal succession candidates from their presentations to the board, work with individual directors or board committees, and participation in board activities.

The board has tasked the executive committee, which is fully independent, with the responsibility of overseeing the succession planning process. In past years, the lead independent director and other members of the executive committee partnered with the members of the Office of the Chairman to review the company’s succession plan for all key senior executives. Following the recent changes to our leadership structure, the executive committee, which includes our non-executive chairman, will continue to review the company’s succession plan for all key senior executives as in prior years with input from the chief executive officer. Succession planning for the chief executive officer of the company is overseen by the independent executive committee and is formally discussed at least once annually by the independent directors. In the event that the succession plan is triggered for any of these roles, the full board would participate in the discussion and consideration of any action with a final decision to be made by the independent directors of the board.

Board’s Role in Oversight of Risk Management

The board as a whole is responsible for risk oversight, with reviews of certain areas being conducted by the relevant board committees that report to the full board. In its risk oversight role, the board reviews, evaluates and discusses with appropriate members of management whether the risk management processes designed and implemented by management are adequate in identifying, assessing, managing and mitigating material risks facing the company. In addition, as reflected in our principles of business conduct, the board seeks to establish a “tone at the top” communicating the board’s strong commitment to ethical behavior and compliance with the law.

The board believes that full and open communication between senior management and the board is essential to effective risk oversight. Our non-executive chairman regularly meets and discusses with our chief executive officer a variety of matters including business strategies, opportunities, key challenges and risks facing the company, as well as management’s risk mitigation strategies. Senior management attends all regularly scheduled board meetings where they conduct presentations on various strategic matters involving our operations and are available to address any questions or concerns raised by the board on risk management-related or any other matters. The board oversees the strategic direction of the company, and in doing so considers the potential rewards and risks of our business opportunities and challenges, and monitors the development and management of risks that impact our strategic goals. The chart below provides an overview of the allocation of risk management responsibilities among the board committees.

Freeport-McMoRan 2016 Proxy Statement 13

LOGO

Director and Executive Officer Stock Ownership Guidelines

The nominating and corporate governance committee adopted stock ownership guidelines applicable to our non-management directors and the compensation committee adopted stock ownership guidelines applicable to our executive officers. Under the guidelines, each non-management director is expected to maintain ownership of company stock valued at five times his or her annual retainer, which retainer is currently $75,000. Mr. Adkerson is expected to maintain ownership of company stock valued at five times his base salary and each of our other executive officers is expected to maintain ownership of company stock valued at three times his or her base salary. The value of the stock ownership is calculated based on the one-year and five-year trailing average monthly stock price. Shares of our common stock currently owned and not pledged, including restricted stock units, count as stock owned for purposes of the stock ownership guidelines. Shares held in trust may also be included; however, due to the complexities of the trust laws, the decision to include the shares is made on a case-by-case basis after reviewing the nature of the specific trust involved and considering whether the individual has maintained a pecuniary interest in the shares. Newly-appointed directors are expected to comply with the stock ownership target within four years. As of December 31, 2015, all of our non-management directors and all of our executive officers exceeded their target ownership levels.

14 Freeport-McMoRan 2016 Proxy Statement

Communications with the Board

Stockholders or other interested parties may communicate directly with one or more members of the board, or the non-management directors as a group, by writing to the director or directors at the following address: Freeport-McMoRan Inc., Attn: Board of Directors or the name of the individual director or directors, 333 North Central Avenue, Phoenix, Arizona 85004. The communication will be forwarded to the appropriate directors.

Freeport-McMoRan 2016 Proxy Statement 15

PROPOSAL NO. 1: ELECTION OF DIRECTORS

The board currently consists of nine members. As previously disclosed, effective as of our 2016 annual meeting, Mr. Day’s term will expire and he will no longer serve as a member of the board. As a result, the size of the board will decrease to eight.

Upon the recommendation of our nominating and corporate governance committee, the board has nominated eight directors for election at our 2016 annual meeting to hold office until the next annual meeting and the election of their successors. All of the nominees are currently directors. Each agreed to be named in this proxy statement and to serve if elected. The persons named as proxies on the proxy card intend to vote your proxy for the election of each such nominee, unless otherwise directed. If, contrary to our expectations, a nominee should become unavailable for any reason, your proxy will be voted for a substitute nominee designated by the board or the board may reduce its size.

The board, through the nominating and corporate governance committee, considers the following experience, qualifications, attributes and skills of both director candidates as well as existing members of the board when determining the director nominees:

LOGO

For more information regarding director nominations and qualifications, see the sections titled “Corporate Governance – Director Nominations and Qualifications” and “Corporate Governance – Director Candidates Submitted by Stockholders” beginning on page 12.

Vote Required to Elect Director Nominees

Under our by-laws, in uncontested elections, directors are elected by a majority of the votes cast. In contested elections where the number of nominees exceeds the number of directors to be elected, directors are elected by a plurality vote, with the director nominees who receive the most votes being elected.

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

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

Board of Directors’ Recommendation on Proposal No. 1

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR ALL OF THE DIRECTOR NOMINEES LISTED BELOW.

16 Freeport-McMoRan 2016 Proxy Statement

Information About Director Nominees

The following table provides certain information as of April 12, 2016, with respect to each director nominee, including information regarding business experience, director positions with other public companies held currently or at any time during the last five years, and the experiences, qualifications, attributes or skills that led our nominating and corporate governance committee and the board to determine that such person should be nominated at our 2016 annual meeting of stockholders to serve as a director of the company. Unless otherwise indicated, each person has been engaged in the principal occupation shown for the past five years. Former public company directorships reflect positions held in the last five years.

Richard C. Adkerson

LOGO

Vice Chairman, President and Chief Executive Officer of Freeport-McMoRan Inc.

Age: 69

Director since: 2006

Business Experience: Chief Executive Officer of the company since December 2003. President of the company since January 2008 and from April 1997 to March 2007. Chief Financial Officer of the company from October 2000 to December 2003. Vice Chairman of the Board of the company since May 2013. Co-Chairman of the Board of McMoRan Exploration Co. from 1998 until acquired by the company in 2013. President and Chief Executive Officer of McMoRan Exploration Co. from 1998 to 2004. Vice Chairman of our former parent company from 1995 to 1997. Partner in Arthur Andersen & Co. from 1978 to 1989 where he served as a Managing Director and head of the firm’s global oil and gas industry services. Professional Accounting Fellow with the Securities and Exchange Commission and Presidential Exchange Executive from 1976 to 1978.

Skills and Qualifications: Mr. Adkerson is a recognized business leader with experience in both the mining and the oil and gas industries, making him highly qualified to serve as a Vice Chairman of the Board of the company. As President and Chief Executive Officer of our company, he has demonstrated exceptional leadership abilities in developing and executing a financial strategy that has benefited our stockholders and building an operational, financial and administrative organization that efficiently supports our business. Mr. Adkerson is recognized as a mining industry leader, having served as past Chairman of the International Council on Mining and Metals and on the Executive Board of the International Copper Association. In addition, Mr. Adkerson’s experience as an oil and gas industry executive and as a managing director of an international accounting firm, where he headed the firm’s worldwide oil and gas industry practice, provide him with detailed knowledge and perspective regarding financial, accounting, regulatory and operational opportunities and challenges, particularly as they relate to the oil and gas industry. Mr. Adkerson’s strong leadership skills and executive management experiences are instrumental in fostering strong relationships with business partners, key customers, suppliers and host governments, thereby enabling him to guide the company’s business strategy. He holds a B.S. in Accounting with highest honors and an M.B.A. from Mississippi State University and completed the Advanced Management Program at Harvard Business School.

Former Public Company Directorships: McMoRan Exploration Co.

Freeport-McMoRan 2016 Proxy Statement 17

Gerald J. Ford

LOGO

Non-Executive Chairman of

the Board of Freeport-McMoRan Inc.; Chairman of the Board of Hilltop Holdings Inc.

Age: 71

Director since: 2000

Independent

Business Experience: Non-Executive Chairman of the Board from January 2016 to present. Principal stockholder and Chairman of the Board of Hilltop Holdings, Inc., a Texas-based, publicly traded, diversified financial holding company, since 2007, and a director of Hilltop Holdings Inc. since 2005. General Partner of Ford Financial Fund, L.P. and Ford Financial II, L.P., private equity firms, from 2010 to present. Chairman of the Board and Chief Executive Officer of Golden State Bancorp, Inc. and its wholly owned subsidiary, California Federal Bank, FSB, a Federal Savings Bank, from 1998 through its 2002 merger with Citigroup Inc. Chairman of the Board of First Acceptance Corporation from 1996 to 2010 and Chief Executive Officer of First Acceptance Corporation from 1996 to 2002.

Skills and Qualifications: Mr. Ford is a banking and financial institutions entrepreneur who has been involved in numerous mergers and acquisitions of private and public sector financial institutions over the past 35 years. In that capacity, he acquired and consolidated 30 commercial banks from 1975 to 1993, forming First United Bank Group, Inc., a multi-bank holding company for which he served as Chairman of the Board and Chief Executive Officer until its sale in 1994. During this period, he also led investment consortiums that acquired numerous financial institutions, forming in succession, First Gibraltar Bank, FSB, First Madison Bank, FSB and First Nationwide Bank. His extensive banking industry experience and educational background provide him with expertise in financial, accounting and regulatory matters, making him a valuable member of the board of directors. In addition, Mr. Ford’s service on the board of directors and audit and corporate governance committees of a variety of public companies gives him a deep understanding of the role of the board and positions him well to serve as our Non-Executive Chairman of the Board, chairman of our executive and nominating and corporate governance committees and as a member of our audit committee. He holds a B.A. in Economics and a J.D. from Southern Methodist University.

Current Public Company Directorships: Hilltop Holdings Inc. and Scientific Games Corporation

Former Public Company Directorships: First Acceptance Corporation, Pacific Capital Bancorp, McMoRan Exploration Co. and SWS Group, Inc.

Lydia H. Kennard

LOGO

President and Chief

Executive Officer of KDG

Construction Consulting

Age: 61

Director since: 2013

Independent

Business Experience: President and Chief Executive Officer of KDG Construction Consulting, a construction and program management firm, from 2009 to present. Principal of Airport Property Ventures, LLC, a developer and operator of aviation facilities, from 2007 to present. Executive Director of Los Angeles World Airports, from 1999 to 2003, and again from 2005 to 2007. Member of the California Air Resources Board from 2004 to 2011.

Skills and Qualifications: Ms. Kennard’s over 30 years of executive and operational experience in aviation, construction management and real estate development enables her to contribute to the board her leadership skills and her critical insights into the operational requirements of a large public company. As a result of her former involvement with the California Air Resources Board, she is able to share her understanding of environmental management and pollution control matters, which is valuable in enhancing the board’s insight with respect to our company’s environmental policies and practices. She holds a B.A. in Urban Planning and Management from Stanford University, a Masters in City Planning from Massachusetts Institute of Technology and a J.D. from Harvard Law School.

Current Public Company Directorships: Prologis, Inc.

Former Public Company Directorships: Intermec, Inc. and URS Corporation

18 Freeport-McMoRan 2016 Proxy Statement

Andrew Langham

LOGO

General Counsel of

Icahn Enterprises L.P.

Age: 43

Director since: 2015

Independent

Business Experience: General Counsel of Icahn Enterprises L.P., a diversified holding company engaged in a variety of businesses, including investment, automotive, energy, gaming, railcar, food packaging, metals, real estate and home fashion, from 2014 to present. Assistant General Counsel of Icahn Enterprises L.P. from 2005 to 2014. Associate at Latham & Watkins LLP from 2000 to 2005, focusing on corporate finance, mergers and acquisitions, and general corporate matters.

Skills and Qualifications: Based on Mr. Langham’s extensive corporate and public company experience, we believe that Mr. Langham has the requisite set of skills to serve as a member of the board. Mr. Langham received a B.A. from Whitman College, and a J.D. from the University of Washington.

Mr. Langham was appointed to the board of directors in October 2015, and has been nominated for election to the board at our 2016 annual meeting of stockholders in accordance with the terms of the Nomination and Standstill Agreement with Carl C. Icahn, High River Limited Partnership, Hopper Investments LLC, Barberry Corp., Icahn Partners Master Fund LP, Icahn Offshore LP, Icahn Partners LP, Icahn Onshore LP, Icahn Capital LP, IPH GP LLC, Icahn Enterprises Holdings L.P., Icahn Enterprises G.P. Inc., Beckton Corp., Andrew Langham and Courtney Mather.

Current Public Company Directorships: CVR Partners LP, CVR Refining, LP and CVR Energy, Inc., each of which is indirectly controlled by Carl C. Icahn, and Manitowoc Foodservice, Inc.

Jon C. Madonna

LOGO

Retired Chairman and Chief Executive Officer of KPMG LLP

Age: 72

Director since: 2007

Independent

Business Experience: Retired Chairman and Chief Executive Officer of KPMG LLP, an international accounting and consulting firm. Retired from KPMG LLP in 1996 having held numerous senior leadership positions throughout his 28-year career with KPMG LLP. Chairman of DigitalThink, Inc. from 2002 to 2004 and Chief Executive Officer of DigitalThink, Inc. from 2001 to 2002. President and Chief Executive Officer of Carlson Wagonlit Corporate Travel, Inc. from 1999 to 2000 and Vice Chairman of Travelers Group, Inc. from 1997 to 1998.

Skills and Qualifications: Mr. Madonna’s long career in public accounting with an international accounting firm and his service as an executive and a director for several publicly traded companies provides him with extensive experience in addressing strategic, operational, financial, accounting, and regulatory matters at the board level. His depth of experience enables him to provide valuable insight to the board of directors. He holds a B.S. in Accounting from The University of San Francisco.

Current Public Company Directorships: AT&T Inc.

Former Public Company Directorships: Tidewater, Inc.

Freeport-McMoRan 2016 Proxy Statement 19

Courtney Mather

LOGO

Managing Director of

Icahn Capital LP

Age: 39

Director since: 2015

Independent

Business Experience: Managing Director of Icahn Capital LP, the entity through which Carl C. Icahn manages investment funds, from April 2014 to present. Served in various investment roles, including managing director, at Goldman Sachs & Co. from 1998 to 2012. Director of Loan Syndications and Trading Association, an organization that develops market policies with firms transacting in debt, in 2011.

Skills and Qualifications: Mr. Mather’s significant business and financial experience and leadership roles in various companies provide him with the requisite set of skills to serve as a member of the board. Mr. Mather received a B.A. from Rutgers College and attended the United States Naval Academy.

Mr. Mather was appointed to the board of directors in October 2015, and has been nominated for election to the board at our 2016 annual meeting of stockholders in accordance with the terms of the Nomination and Standstill Agreement with Carl C. Icahn, High River Limited Partnership, Hopper Investments LLC, Barberry Corp., Icahn Partners Master Fund LP, Icahn Offshore LP, Icahn Partners LP, Icahn Onshore LP, Icahn Capital LP, IPH GP LLC, Icahn Enterprises Holdings L.P., Icahn Enterprises G.P. Inc., Beckton Corp., Andrew Langham and Courtney Mather.

Current Public Company Directorships: Federal-Mogul Holdings Corporation, which is indirectly controlled by Carl C. Icahn.

Former Public Company Directorships: Viskase Companies, Inc., American Railcar Industries, Inc., CVR Refining, LP and CVR Energy, Inc., each of which is indirectly controlled by Carl C. Icahn.

Dustan E. McCoy

LOGO

Retired Chairman and Chief Executive Officer of Brunswick Corporation

Age: 66

Director since: 2007

Independent

Business Experience: Retired Chairman and Chief Executive Officer of Brunswick Corporation, a leading, publicly traded, global manufacturer and marketer of recreation products including marine engines, boats, fitness equipment and billiards equipment, having held such positions from December 2005 to February 2016. President of the Brunswick Boat Group from 2000 until 2005. Joined Brunswick in 1999 as Vice President, General Counsel and Corporate Secretary. Prior to joining Brunswick, served as Executive Vice President for Witco Corporation, a publicly traded specialty chemical products company, with operating responsibility for a variety of global businesses and functions and served as Senior Vice President, General Counsel and Corporate Secretary.

Skills and Qualifications: Mr. McCoy’s extensive experience in legal and compliance matters generally, and more specifically his experience in corporate governance and disclosure matters for publicly traded companies makes him well-suited to serve on the board of directors. Mr. McCoy’s executive management experience provides him with a broad understanding of the operational, financial and strategic issues facing large global companies, enabling him to provide valuable strategic advice to the board and management in advancing the company’s interests. He holds a B.A. in Political Science from Eastern Kentucky University and a J.D. from Salmon P. Chase College of Law at Northern Kentucky University.

Current Public Company Directorships: Louisiana-Pacific Corporation

20 Freeport-McMoRan 2016 Proxy Statement

Frances Fragos Townsend

LOGO

Executive Vice President of Worldwide Government, Legal and Business Affairs at MacAndrews & Forbes Holdings Inc.

Age: 54

Director since: 2013

Independent

Business Experience: Executive Vice President of Worldwide Government, Legal and Business Affairs at MacAndrews & Forbes Holdings Inc. from 2013 to present and Senior Vice President from 2010 to 2013. Partner at Baker Botts L.L.P. from 2009 to 2010. Homeland Security and Counterterrorism Advisor to President George W. Bush from 2005 until 2008 and Chair of the Homeland Security Council from 2004 to 2008. Deputy Assistant to President George W. Bush and Deputy National Security Advisor for Combatting Terrorism from 2003 until 2004. Prior to serving the President, Ms. Townsend was the first Assistant Commandant for Intelligence for the U.S. Coast Guard. Before that, Ms. Townsend spent 13 years at the U.S. Department of Justice under the administrations of President George H.W. Bush, President William J. Clinton and President George W. Bush. Ms. Townsend is a member of the Council on Foreign Relations and the Trilateral Commission.

Skills and Qualifications: Ms. Townsend brings to the board over 25 years of domestic and international experience in legal, law enforcement and security. Her extensive public policy, government and regulatory experience enables her to provide valuable insight with respect to complex international and regulatory matters addressed at the board level. She holds a B.A. in Political Science and a B.S. in Psychology from American University and a J.D. from the University of San Diego School of Law.

Current Public Company Directorships: Scientific Games Corporation and The Western Union Company

Former Public Company Directorships: SIGA Technologies, Inc.

Freeport-McMoRan 2016 Proxy Statement 21

STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

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

The table below shows the amount of our common stock beneficially owned as of April 4, 2016 by each of our directors, director nominees, our named executive officers and our executive officers and directors as a group. Unless otherwise indicated, all shares shown in the table below are held with sole voting and investment power.


Name of Beneficial Owner	Number of Shares Not Subject to Exercisable Options or Vesting of RSUs or PSUs		Number of Shares Subject to Exercisable Options (1)		Number of Shares Subject to Vesting of RSUs (1)		Total Number of Shares Beneficially Owned (2)			Percent of Class (3)
Richard C. Adkerson		1,851,308		6,760,500		1,000,000		9,611,808	(4)		*
Michael J. Arnold		298,737		1,613,750		—		1,912,487	(5)		*
Robert A. Day		299,275		137,414		8,100		444,789	(6)		*
James C. Flores		10,847,615		927,150		—		11,774,765	(7)		*
Gerald J. Ford		2,229,633		142,680		8,100		2,380,413	(8)		*
Lydia H. Kennard		3,875		—		5,450		9,325			*
Andrew Langham		2,825		—		—		—			*
Jon C. Madonna		22,155		100,000		20,400		142,555			*
Courtney Mather		5,346		—		—		5,346			*
Dustan E. McCoy		16,000		110,000		19,875		145,875			*
James R. Moffett		3,338,996		5,214,000		—		8,552,996	(9)		*
Kathleen L. Quirk		399,088		2,420,500		—		2,819,588			*
Frances Fragos Townsend		4,945		—		5,450		10,395			*

Directors and executive officers as a group (12 persons) (10)		5,159,294		11,671,603		1,067,375		17,889,645			1.4%

*	Ownership is less than 1%.

(1)	Reflects our common stock that could be acquired within sixty days of the record date upon the exercise of options, vesting of restricted stock units (RSUs), and the termination of deferrals on previously vested RSUs.

22 Freeport-McMoRan 2016 Proxy Statement

(2)

In addition to the RSUs included in “Number of Shares Subject to Vesting of RSUs,” each beneficial owner holds the following unvested RSUs and unvested performance share units (PSUs), which are not included in the table above because they do not vest within sixty days of the record date. The amount for Mr. Flores reflects RSUs subject to a mandatory six-month delay in payment.


Name of Beneficial Owner	Number of Shares Subject to Unvested RSUs	Number of Shares Subject to Unvested PSUs
Richard C. Adkerson	—	862,000
Michael J. Arnold	—	475,000
Robert A. Day	16,525	—
James C. Flores	41,832	262,000
Gerald J. Ford	16,525	—
Lydia H. Kennard	16,275	—
Andrew Langham	15,200	—
Jon C. Madonna	16,525	—
Courtney Mather	15,200	—
Dustan E. McCoy	16,525	—
James R. Moffett	—	262,000
Kathleen L. Quirk	—	558,000
Frances Fragos Townsend	16,275	—

Directors and executive officers as a group (12 persons)	144,050	2,065,000

For more information regarding the RSUs and PSUs, see the sections titled “Director Compensation” and “Executive Officer Compensation – Compensation Discussion and Analysis,” and the “2015 Grants of Plan-Based Awards” table.

(3)	Based on 1,251,856,720 shares of our common stock outstanding as of April 4, 2016.

(4)

Includes (a) 20,330 shares held in his individual retirement account (IRA); (b) 793,000 shares held in a trust and (c) 131,686 shares held in a foundation with respect to which Mr. Adkerson, as a member of the board of trustees, shares voting and investment power, but as to which he disclaims beneficial ownership. Total number of shares beneficially owned includes the 1,000,000 shares underlying the RSUs awarded in connection with the termination of Mr. Adkerson’s employment agreement in December 2013, which Mr. Adkerson will receive six months after his retirement; these RSUs were vested at grant.

(5)	Includes 6,186 shares held through our Employee Capital Accumulation Program (ECAP), which is the company’s tax-qualified defined contribution plan.

(6)	Mr. Day, who will cease serving as a director at our 2016 annual meeting, has pledged, in accordance with the company’s policy, 256,000 shares to secure a line of credit.

(7)

Includes (a) 2,086,041 shares held by Sable Management, L.P.; (b) 1,550,458 shares held by Flores Family Limited Partnership; (c) 2,850,000 shares held by Flores No. 2 Family Limited Partnership; (d) 20,000 shares held by JCF Partnership, L.P.; (e) 20,000 shares held by Mer.FF Partnership, L.P.; (f) 20,000 shares held by Ala.GF Partnership, L.P.; (g) 325 shares held through our ECAP and (h) 17,350 shares held by OLF Partnership, L.P.

(8)	Includes (a) 20,000 shares held as trustee of a trust and (b) 2,000,000 shares held by Diamond Family Investments LP.

Freeport-McMoRan 2016 Proxy Statement 23

(9)

Includes (a) 2,165,818 shares held by a limited liability company with respect to which Mr. Moffett, as a member shares voting and investment power; (b) 1,000,000 shares with respect to which Mr. Moffett has sole voting power but does not have a pecuniary interest; (c) 65,626 shares held through our ECAP and (d) 107,552 shares held by his spouse, as to which he disclaims beneficial ownership.

(10)	Excludes shares beneficially owned by Mr. Moffett, who ceased serving as a director and executive officer effective as of December 31, 2015, and shares beneficially owned by Mr. Flores, who departed from the company effective as of April 4, 2016.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers and persons who own more than 10% of our common stock to file reports of their ownership and changes in ownership of our common stock with the SEC. Based solely upon our review of such reports and amendments thereto furnished to us during 2015 and written representations from our directors and executive officers, we believe that during 2015, all required reports were timely filed with the SEC.

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The table below shows persons known to us, as of April 4, 2016, to be the beneficial owner of more than 5% of our outstanding shares of common stock.


Name and Address of Beneficial Owner	Number of Shares Beneficially Owned			Percent of Outstanding Shares (1)
Carl C. Icahn and affiliates c/o Icahn Associates Holding LLC 767 Fifth Avenue, Suite 4700 New York, NY 10153		104,000,000	(2)		8.31	%
The Vanguard Group 100 Vanguard Boulevard Malvern, PA 19355		98,557,392	(3)		7.87	%
BlackRock, Inc. 40 East 52nd Street New York, NY 10022		83,848,561	(4)		6.70	%

(1)	Based on 1,251,856,720 shares of our common stock outstanding as of April 4, 2016.

(2)

Based on a Schedule 13D filed with the SEC on August 27, 2015, as amended by Amendment No. 1 to the Schedule 13D filed with the SEC on September 18, 2015, Amendment No. 2 to the Schedule 13D filed with the SEC on September 23, 2015, and Amendment No. 3 to the Schedule 13D filed with the SEC on October 7, 2015, by Carl C. Icahn and affiliates. Also based on Schedule 13F filed with the SEC on February 16, 2016, filed by Carl C. Icahn.

(3)

Based on a Schedule 13G filed with the SEC on February 10, 2015, as amended by Amendment No. 1 to Schedule 13G filed with the SEC on February 10, 2016 by The Vanguard Group on its own behalf and on behalf of its subsidiaries identified therein, reflecting beneficial ownership as of December 31, 2015. The Schedule 13G/A reflects 96,378,816 shares held with sole dispositive power, 2,178,576 shares held with shared dispositive power, 2,070,741 shares held with sole voting power, and 99,500 shares held with shared voting power.

(4)

Based on Amendment No. 6 to Schedule 13G filed with the SEC on January 26, 2016, by BlackRock, Inc. on its own behalf and on behalf of its subsidiaries identified therein, reflecting beneficial ownership as of December 31, 2015. The Schedule 13G/A reflects 83,848,561 shares held with sole dispositive power and 72,898,408 shares held with sole voting power.

24 Freeport-McMoRan 2016 Proxy Statement

EXECUTIVE OFFICER COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis, or CD&A, describes and analyzes our executive compensation philosophy and program in the context of the compensation paid during the last fiscal year to our chief executive officer, our chief financial officer, and each of our three other executive officers during 2015 (collectively referred to as our named executive officers or NEOs). Our named executive officers for 2015 are:



Name		Title

Richard C. Adkerson		Vice Chairman, President and Chief Executive Officer

Kathleen L. Quirk		Executive Vice President, Chief Financial Officer and Treasurer

Michael J. Arnold		Executive Vice President and Chief Administrative Officer

James C. Flores		Former Chief Executive Officer of Freeport-McMoRan Oil & Gas LLC

James R. Moffett		Former Chairman of the Board

This CD&A is organized into five sections:

•

Executive Summary (page 26)

•

Executive Compensation Philosophy (page 30)

•

Overview of Principal Components of Executive Compensation (page 31)

•

Post-Termination Compensation (page 37)

•

Compensation Processes and Policies (page 39)

Freeport-McMoRan 2016 Proxy Statement 25

Executive Summary

Recent Management Changes

2015 was a year of significant management changes for us. Following completion of our acquisitions of Plains Exploration and McMoRan Exploration Co. in 2013, we established the Office of the Chairman, comprised of our top three executives – Mr. Moffett, Executive Chairman; Mr. Adkerson, Vice Chairman, President and Chief Executive Officer; and Mr. Flores, Vice Chairman of the company and President and Chief Executive Officer of Freeport-McMoRan Oil & Gas LLC.

In October 2015, consistent with feedback from our stockholders and in connection with our strategic review of our oil and gas business, we streamlined our executive management structure by eliminating the Office of the Chairman. As a result of this reorganization, Mr. Moffett remained chairman of our board, Mr. Adkerson became the sole vice chairman of the board and Mr. Flores resigned from the board. See the discussion under “Corporate Governance – Board Leadership Structure” for more information regarding the changes to our leadership structure and the reasons behind the board’s elimination of the Office of the Chairman.

In December 2015, Mr. Moffett, our co-founder, chairman of our board and long-time executive, stepped down from his position as an executive and director and entered into a consulting arrangement with us. In addition, effective April 4, 2016, Mr. Flores departed from the company and his role as chief executive officer of our oil and gas subsidiary.

Stockholder Engagement and Transformation of Our Executive Compensation Program

Since 2013, our compensation committee (the committee) has engaged in extensive stockholder outreach efforts, and made significant changes to our executive compensation program in response to the feedback received from stockholders. These changes culminated in a comprehensive restructuring of the executive compensation program in 2014 for our three top executives, who previously formed the Office of the Chairman. This included a significant reduction in the target and actual compensation for these executives. Additionally, the committee more closely aligned our program with the long-term interests of our stockholders and furthered our long-term business strategy by refining the performance metrics used in our annual and long-term incentive programs. During meetings with stockholders over the last few years, we have received positive feedback on the restructured program. In addition, we have also noted the increased positive results received in connection with the advisory vote on our executive compensation program, with approximately 29% of votes cast in favor of the program at the 2013 annual meeting increasing to approximately 62% of votes cast in favor of the program in 2014, and to approximately 88% of votes cast in favor of the program at our 2015 annual meeting. See “Stockholder Engagement” on pages 4-6 for a thorough discussion of our extensive stockholder engagement efforts.

Recent Executive Compensation Actions

• No payouts under annual incentive plan for 2015

• No increases to base salaries

• Forfeiture of 20% of the 2013-2015 restricted stock unit award for failure to satisfy performance conditions

• Consistent with our goals of reducing debt and costs, and continuing to safely and effectively operate our business, we adopted a new structure for 2016 performance share unit awards, incorporating financial and operational metrics in addition to relative TSR performance metric

• Streamlined executive management structure and discontinued paying three executives at the highest level

26 Freeport-McMoRan 2016 Proxy Statement

Business Overview and 2015 Company Performance Highlights

We are a premier United States-based natural resources company with an industry-leading global portfolio of mineral assets, significant oil and natural gas resources, and a growing production profile. Our portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world’s largest copper and gold deposits, significant mining operations in North and South America, the Tenke Fungurume minerals district in the Democratic Republic of Congo in Africa, and significant oil and natural gas assets in the United States.

In addition, we achieved a number of important milestones:

•

In Arizona, the new concentrating facility at Morenci reached full rates.

•

In Peru, we completed the construction of the world’s largest concentrating facility at Cerro Verde, positioning the mine to be a major large-scale producer for decades.

•

In Indonesia, we received important assurances from the Government of Indonesia regarding our long-term operating rights.

•

In Africa, exploration results at our Tenke Fungurume mine continue to indicate opportunities for significant future reserve additions.

•

Drilled 10 successful wells at our three 100-percent-owned production platforms in the Deepwater Gulf of Mexico.

Target 2015 Direct Compensation

Our executive compensation program is significantly performance-based, linking executive pay, company performance and results for stockholders, and is appropriately balanced with short- and long-term measures. The primary components of our executive compensation program are base salary, annual incentive awards and long-term incentive awards (which we collectively refer to as our executive’s “direct compensation”). The annual incentive awards and long-term incentive awards, which comprise the majority of our executive’s target direct compensation, are at-risk, with a significant percentage of the compensation (79% for our CEO and an average of 80% for our other named executive officers for 2015) based on measureable performance objectives, both annual and long-term (the PSUs), and increases in our stock price (stock options). The following charts illustrate the target mix of direct compensation elements for our CEO and our other named executive officers (an average) during 2015, as compared to the actual amounts granted as reflected in the “Summary Compensation Table.”

LOGO

Freeport-McMoRan 2016 Proxy Statement 27

The target and actual direct compensation above does not include the value of perquisites, personal benefits, severance payments or other post-employment compensation for the NEOs, which amounts are included in the “Summary Compensation Table” and the supplementary tables beginning on page 42.

Realizable Pay

2013 – 2015 Realizable Pay

In addition to reviewing total direct compensation, the committee also believes that it is important to review and assess “realizable” compensation over the last three years for our CEO and for our executive officers as a group. Realizable compensation differs from the amounts shown in the “Summary Compensation Table” required by the SEC, which appears on page 42, and provides an additional representation of executive compensation, but is not a substitute for that table. Realizable compensation includes the following elements of compensation found in the “Summary Compensation Table”; however, the valuation methodology of certain of these elements differs, as noted below:

•

Base salary for the three-year period

this value is equivalent to the aggregate value in the “Summary Compensation Table”

•

Cash awards under the Annual Incentive Program (AIP) for the three-year period

this value is equivalent to the aggregate value in the “Summary Compensation Table”

•

For performance-based RSUs and PSUs that were granted during the three-year period:

–

the value of such awards at vesting; or

–

for unvested awards, the value as of December 31, 2015

this value differs from the aggregate value reported in the “Summary Compensation Table,” which reports the grant date fair value of the performance-based RSUs granted during the three-year period

•

For stock options that were granted during the three-year period:

–

the value received upon exercise of such awards; or

–

for unexercised stock options, the Black-Scholes-Merton value as of December 31, 2015

this value differs from the aggregate value reported in the “Summary Compensation Table,” which reports the grant date fair value of the stock options granted during the three-year period.

As shown in the graph below, realizable compensation for our executive officers as a group and for our CEO for the three-year period was lower than the aggregate reported compensation in the “Summary Compensation Table,” primarily resulting from our actual stock price performance over the three-year period. Specifically, the decline in our stock price during the three-year period impacted the value of outstanding awards at the end of the period. In contrast, the values included in the “Summary Compensation Table” for these awards are the grant date fair values and thus do not reflect the impact of future stock price performance.

LOGO

28 Freeport-McMoRan 2016 Proxy Statement

Realizable compensation for all named executive officers does not include the value of the severance benefits accrued for Mr. Moffett in 2015. See “Executive Officer Compensation – Executive Compensation Tables – Potential Payments Upon Termination or Change of Control” starting on page 50 for information regarding his severance payments and benefits.

Compensation Governance and Best Practices

Our executive compensation program is designed and managed by the independent compensation committee of our board. Structuring a compensation program is a complex process that includes weighing various possible incentives and associated risks, assessing the competitive environment for executive talent, and understanding various constituencies. The committee values stockholder perspectives as an element of the review process. The committee is aware of stockholder views both through the broad feedback mechanism of our annual say-on-pay vote on executive compensation, and through direct conversations with investors that allow us to gather more actionable insights. The committee also seeks input from its independent compensation consultant and strives to incorporate compensation “best practices” into our program design.

Below we outline the compensation governance practices to which we are committed and which we believe enhance the performance of the company and the long-term value for stockholders, and those practices that we reject.

We Are Committed To:

ü Paying for Performance – a significant portion of target direct compensation for our executive officers (79% for our CEO in 2015) is tied to performance of our company and our stock price.

ü Limiting Total Target Incentive Compensation – we currently limit the total target incentive awards under our AIP and LTI programs that may be received in any one year by our chief executive officer to no more than 5x base salary.

ü Clawback Policies – we may recover incentive awards paid based on restated financial statements under certain circumstances.

ü Responding to Stockholder Feedback – in addition to the extensive transformation of our executive compensation program in 2014, the committee, with input from its independent consultant, reviewed our LTI program to incorporate additional performance metrics in our 2016 performance share awards in response to recent stockholder perspectives and in accordance with our goals of reducing debt and costs, and continuing to safely and effectively operate our business.

ü Requiring Stock Ownership – we require our executive officers and directors to maintain ownership of our securities through our use of equity-based compensation elements and our stock ownership guidelines.

Freeport-McMoRan 2016 Proxy Statement 29

We Reject:

x Excise Tax Gross-Ups – we have eliminated all excise tax gross-up provisions from our change in control arrangements with our executive officers.

x Single Trigger Cash Payments – our change of control arrangements only provide for cash payments related to a change of control if the executive also experiences an actual or constructive termination of employment within one year of the change of control.

x Single Trigger Vesting of Equity – equity-based awards granted by the company since February 2012 will not accelerate upon a change in control, and will only accelerate upon the recipient’s actual or constructive termination of employment within one year of the change of control.

x Hedging of Company Stock – our insider trading policy prohibits our executives and directors from entering into hedging arrangements with respect to our securities.

x Excessive Pledging of Company Stock – our insider trading policy provides the following limits on the ability of our executives and directors to pledge our securities:

• our securities may not be pledged as collateral for a margin loan,

• the executive or director must notify the company prior to execution of the pledge,

• the executive or director must establish that he or she has the financial capacity to repay the loan without resorting to the pledged securities, and

• any shares pledged will not be considered as owned for purposes of the stock ownership guidelines applicable to the executive or the director.

Executive Compensation Philosophy

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

•

Pay for performance by emphasizing performance-based compensation that balances rewards for both short- and long-term results,

•

Align compensation with the interests of stockholders and the strategy of our business, and

•

Provide a competitive level of compensation to retain talent.

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

Under our executive compensation program, the primary elements of the performance-based pay are (1) the awards under our AIP, which uses financial, operational, safety, environmental and social responsibility metrics to measure performance, and (2) awards under our LTI program, which in 2015 focused on stock price appreciation and total stockholder return, and in 2016 will incorporate certain financial and operational metrics as well as we respond to market conditions and strategic considerations.

30 Freeport-McMoRan 2016 Proxy Statement

Overview of Principal Components of Executive Compensation

The principal components of executive officer compensation for 2015 were base salaries, annual incentive awards and long-term incentive awards in the form of PSUs and stock options. In addition, we provide our executives with certain personal benefits and perquisites, as well as post-employment compensation. The principal components are summarized as follows:

2015 Executive Compensation Program

Compensation
Element

Characteristics

Base Salary

• Fixed cash compensation

• Used to calculate other compensation elements

Annual Incentive

Program (AIP)

• Annual variable cash compensation based on pre-established performance metrics

• Formula-driven plan using the following metrics (weighted as indicated) to determine target and earned awards:

Financial

(operating cash flow net of working capital)

50%

Operational

(copper and oil equivalent production volumes)

25%

Safety

15%

Environmental & Social Responsibility

10%

• Annual cash awards capped at a multiple of base salary (for former members of the Office of the Chairman, target – 1x base salary; maximum – 2x base salary).

Long-Term

Incentive

Program

(LTI Program)

• PSU award (50% of LTI program awards) – payable in shares of stock after a three-year performance period, all of which is at risk based on performance measured by total stockholder return.

- Range of payout of the PSUs is 0% to 200% depending on our total stockholder return compared to our peers; if our total stockholder return is equal to or less than 0%, maximum possible payout is capped at 100%.

• Stock options (50% of LTI program awards) – vest over a four-year period from date of grant.

Freeport-McMoRan 2016 Proxy Statement 31

Base Salaries

How base salaries support our compensation philosophy and objectives:

• Base salaries help us meet the objective of attracting and retaining the key talent and executive officers needed to manage our business successfully.

• Fixed compensation in the form of base salary represents a small portion of our executive officers’ target compensation, reflecting our goal to allocate more compensation to the performance-dependent elements of the total compensation package.

• Individual base salary amounts reflect our committee’s judgment with respect to each executive officer’s responsibility, performance, work experience and the individual’s historical salary level; we have not increased the base salaries of our executive officers since May 2007; as part of the redesign of our executive compensation program in 2014, we reduced the base salaries of our three top executives by 50%, from $2.5 million to $1.25 million.

• As of the end of 2015, the base salaries of Mr. Flores and Ms. Quirk were contractually set pursuant to their employment agreements.

2015 Highlights: Base Salaries

There were no increases to our executives’ base salaries in 2015.

Annual Incentive Awards

How the overall design of the 2015 AIP supports our compensation philosophy and objectives:

• Our AIP is designed to provide performance-based cash awards to our executive officers, each of whose performance has a significant impact on our financial stability, profitability and future growth.

• It encourages the alignment of executive management with stockholder objectives.

• Its focus on operating cash flow and copper and oil equivalent production volumes reflects our business goals and objectives, including long-term returns for our stockholders, while its inclusion of safety and environmental and social responsibility metrics promote the goals of operating the business in a responsible manner.

• The variability of cash flows associated with changes in commodity prices, fluctuations in production volumes, cost management and other business conditions, closely aligns management and stockholder interests.

• Its cap on awards to 2x the executives’ base salary for the former members of the Office of the Chairman limits the value of awards while providing significant compensation opportunities if the company’s performance warrants high payouts.

32 Freeport-McMoRan 2016 Proxy Statement

General Structure of the AIP for 2015. For 2015, the committee established target performance goals in three categories that it believes effectively measure the performance of the company, with each category accounting for a specific percentage of the target award. In these categories, the committee chose the following metrics to measure performance:



Performance Category	Performance Metrics	Purpose

Financial	Operating Cash Flow Excluding Working Capital Changes	Directly reflects focus on cash generated from our businesses

Operational	Copper Production Volumes	A meaningful indicator of our operational performance
Operational	Oil Equivalents Production Volumes	A meaningful indicator of our operational performance

Safety and Environmental/Social Responsibility	Safety	Alignment of our highest priority – safety of our people
	Environmental & Social Responsibility	Supports our significant focus on working toward sustainable development

Following the end of the year, each performance metric is evaluated against the target goal, with payout levels defined for threshold (70% of the target goal), target and maximum (130% of the target goal) levels of performance. If performance falls within these levels, a sliding scale is used to determine the appropriate payout.

2015 Highlights: Annual Incentive Program

• Under the 2015 program, each executive had a target award based on a multiple of salary, and was eligible to earn an annual cash award based on the company’s performance relative to defined goals established by the committee.

o The target annual incentive award for each of Messrs. Adkerson, Flores and Moffett was 100% of base salary, or $1.25 million.

o The target for each of Ms. Quirk and Mr. Arnold was 175% of base salary.

o Annual cash incentive payments for threshold performance started at 50% of target with maximum performance earning 200% of target, although the committee retained the right to reduce the payment to 0% of target.

• Despite achievement of a payout amount equal to 88.5% of the target award based on the company’s performance relative to the pre-established goals, in consideration of our total stockholder return in 2015 and other factors and based on management’s recommendation, the committee exercised its discretion and did not award any AIP payouts for 2015.

Freeport-McMoRan 2016 Proxy Statement 33

Review of 2015 AIP Results. In February 2016, the committee evaluated the company’s performance against the AIP targets, which were as follows:


Performance Category	Performance Metrics	Weighting			Target (+/-5%)	2015 Results
Financial	Operating Cash Flow Excluding Working Capital Changes (in billions)		50.0	%	$3.2	$2.85
Operational	Copper Production Volumes (in billions of pounds)		17.5	%	4.3	4.0
Operational	Oil Equivalents Production Volumes (MMBOE)		7.5	%	55.5	52.6
Safety and Environmental/Social Responsibility	Safety (TRIR)		15.0	%	0.56	0.56
	Environmental & Social Responsibility		10.0	%	3	3

Upon establishment of the financial and operational performance metrics in February 2015, the committee approved target goals that were consistent with the company’s budget for the year, and also approved the method for calculating results under each metric. In connection with the committee’s review of our results in early 2016, no adjustments were taken and the committee determined that the company performed just below the target level for each of the financial and operational metrics and at target for the safety metric.

With regard to the environmental and social responsibility metric, the committee evaluated the company’s performance relative to a scorecard it approved in early 2015. The committee considered the environmental performance with respect to environmental penalties, reportable spills and releases, and notices of violation. With regard to the social responsibility category, the committee considered a corporate-level human rights impact assessment to further integrate the UN Guiding Principles on Business and Human Rights into our programs, investment in community programs, and third-party feedback and recognition of sustainability programs. As a result of its assessment, the committee determined that the executives had earned 100% of the target level of this metric as well.

Based on the company’s overall performance relative to the metrics, the executives earned 88.5% of the target payout under the 2015 AIP. However, given the weak commodity price environment and the significant decrease in our stock price, management recommended and the committee agreed to exercise its negative discretion under the plan and did not award any cash incentive payments to the executive officers for 2015.

Establishment of 2016 AIP Goals. In March 2016, the committee established target performance goals for the 2016 AIP. The committee used the same three categories as it used in 2015, although the committee set different financial and operational metrics to reflect the company’s current focus. Specifically, the committee established financial and operational performance targets for 2016 based on debt reduction, capital expenditures and consolidated net unit cash costs per pound of copper. The safety and environmental and social responsibility metrics remained the same as those used in 2015.

34 Freeport-McMoRan 2016 Proxy Statement

Long-Term Incentive Awards

How our long-term incentive awards support our compensation philosophy and objectives:

• Long-term incentives are a variable component of compensation intended to reward our executives for the company’s success in achieving sustained, long-term profitability and increases in stock value.

• Performance share units payout is based on our relative stockholder return compared to our peers over a three-year performance period, thus directly linking our executives’ earnings to our stockholders’ returns.

• Stock options align our executives’ interests with those of our stockholders as the stock option’s value is dependent on the performance of our stock price. Based on the past experience of our company, our committee believes that stock options continue to be an excellent performance-based compensation vehicle that links executive compensation to stockholder return.

• Equity-based long-term incentives also strengthen focus on stock price performance and encourage executive ownership of our stock.

2015 Highlights: LTI Program

In 2015, our executive officers received grants of performance share units (PSUs) and stock options as follows:

• For Messrs. Adkerson, Flores and Moffett, the aggregate grant date value of the target PSUs and stock options awarded was equal to approximately 4x base salary.

• For Ms. Quirk and Mr. Arnold, the aggregate grant date value of the target PSUs and stock options awarded was equal to approximately 5x base salary.

• On the grant date, the target award values were equally split between PSUs and stock options, with the grant levels determined based on estimates of the grant date fair values of the two awards at the time. As of the grant date, the PSUs had an estimated grant date fair value of $13.86 per PSU, although the final valuation resulted in a lower grant date fair value of $11.9195 per PSU.

Under the LTI program, the stock options vest ratably over a four-year period, and the future value of the stock options will be solely dependent on the performance of the company’s stock price from the grant date. The PSUs vest and pay out in shares of common stock following the end of a three-year performance period based on the company’s total stockholder return compared to the total stockholder return of our peer group (see page 39 for information about the companies in the peer group applicable to the 2015 PSUs). The executives will earn between 0% and 200% of the target PSU award based on the company’s rank compared to the peer companies; provided, however, that if the company’s total stockholder return is equal to or less than 0%, the maximum that can be earned is 100% of the target award. Earned awards will be determined as specified in the following table:

Freeport-McMoRan 2016 Proxy Statement 35


FCX Rank	FCX TSR >0% Performance Share Payout %	FCX TSR </=0% Performance Share Payout %
1-2 (>87^th percentile)	200%	100%
3	180%	100%
4	160%	100%
5	140%	100%
6	120%	100%
7-8 (50^th-56^th percentile)	100%	100%
9	80%	80%
10	60%	60%
11	40%	40%
12-16 (<25^th percentile)	0%	0%

New Approach for 2016 PSUs. As noted in the Executive Summary on page 26, in response to recurring feedback from our investors and to promote actions we must take in response to low commodity prices and market conditions, the committee and its independent consultant reviewed the structure of our PSU program during 2015 and early 2016, with the goal of including one or more additional performance metrics for performance periods beginning in 2016. The committee believes that while total stockholder return, or TSR, is an effective metric to align executive pay with stockholder returns, other metrics better emphasize execution and performance in areas that are expected to drive improvements in future stockholder returns. In addition, the committee recognized that as commodity prices and market conditions evolve beyond 2016, additional or different metrics may be more relevant in the second or third year of the performance cycle, thus it was important to retain flexibility to appropriately set the applicable metrics as the cycle unfolds. In March 2016, as part of the long-term incentive program, the committee granted PSUs to our executive officers for the 2016-2018 performance cycle with the following terms:

•

Instead of a “TSR-only” design, the PSUs are based on the financial and operational performance objectives of our annual incentive plan for each of the three years in the performance cycle, with the results of each year averaged at the end of the performance cycle to determine the preliminary payout amount, which amount is subject to a “TSR modifier.”

•

The financial and operational performance objectives applicable to 2016 are targets based on debt reduction, capital expenditures and consolidated net unit cash costs per pound of copper.

•

Under the “TSR modifier,” the preliminary payout amount can be increased or decreased by up to 25% of the target award based on our total stockholder return over the performance cycle compared to the total stockholder return of an eight-company peer group (consisting of the eight mining company peers listed on page 40), as follows:


FCX TSR Rank		Impact on Preliminary Earned PSUs
1-2		+25%
3-4		+12.5%
5		No Change
6-7		-12.5%
8-9		-25%

36 Freeport-McMoRan 2016 Proxy Statement

Forfeiture of a Portion of 2013 Restricted Stock Unit (RSU) Award

In February 2016, the committee certified the results of the performance-based RSUs granted in 2013 to our executive officers. These RSUs had a three-year performance period ending December 31, 2015, and were subject to two performance metrics – return on investment and total stockholder return. Although the return on investment goal was achieved, because our total stockholder return fell below the median of the applicable peer group, the executives forfeited 20% of the RSUs that were originally granted. The table below details the RSUs that were forfeited in 2016, including the amounts reflected in the Summary Compensation Table for 2013 compared to the amount actually realized.


Executive	Performance- Based RSUs Granted in 2013	Performance- Based RSUs Forfeited in February 2016	Performance- Based RSUs Earned in February 2016	Value of Grant Reflected for 2013 in Summary Compensation Table (in millions)	Realized Value of Earned Shares in February 2016 (in millions)
Mr. Adkerson	300,000	60,000	240,000	$9.86	$1.33
Ms. Quirk	100,000	20,000	80,000	$3.29	$0.44
Mr. Arnold	50,000	10,000	40,000	$1.64	$0.22
Mr. Flores	n/a	n/a	n/a	n/a	n/a
Mr. Moffett	300,000	60,000	240,000	$9.86	$1.33
Totals	750,000	150,000	600,000	$24.65	$3.32

Personal Benefits and Perquisites

In addition to the primary elements of our compensation program discussed above, we also provide certain personal benefits and perquisites to our executive officers. In recent years we have revised this program to discontinue certain benefits, and we will continue to monitor this program and adjust it as we deem appropriate. The personal benefits and perquisites currently offered are reflected in the “Summary Compensation Table.” Many of these benefits are designed to provide an added level of security to our executives and increase travel efficiencies, thus ensuring the executives’ ready availability on short notice and enabling the executives to focus more time and energy on company matters and driving performance. Our committee also recognizes the high degree of integration between the personal and professional lives of these executive officers, and that these benefits ensure the security of the company’s proprietary information by enabling our officers to conduct business while traveling without concern that company information will be compromised.

Post-Termination Compensation

In addition to the compensation received by the executive officers during 2015 and benefits under our tax-qualified defined contribution plans, which we provide to all qualified employees, we also provide certain post-employment benefits to our executive officers, including a nonqualified defined contribution plan, as well as a supplemental executive retirement plan and change of control and severance benefits to certain executives.

Nonqualified Defined Contribution Plan

We maintain an unfunded nonqualified defined contribution plan for the benefit of our executive officers, as well as other employees. The plan provides those employees whose earnings in a prior year were in excess of the dollar limit under Section 401(a)(17) of the Internal Revenue Code the ability to defer up to 20% of their base salary after deferrals to the ECAP (the 401(k) plan) have ceased due to qualified plan limits. The company makes a matching contribution (up to 5% of the participant’s base salary) equal to each participant’s deferrals in this plan and the ECAP. In addition, in 2015 the company also made enhanced contributions equal to 5% of eligible compensation (base salary plus 50% of bonus) in excess of qualified plan limits for each eligible employee, with employees who met certain age and service requirements in 2000 (including Messrs. Moffett and Adkerson) receiving an additional 5% contribution. The purpose of the nonqualified plan is to make total retirement benefits for our employees who earn over the qualified plan limits commensurate with those available to other employees as a percentage of pay.

Freeport-McMoRan 2016 Proxy Statement 37

Supplemental Executive Retirement Plan

We established an unfunded supplemental executive retirement plan (SERP) for Messrs. Moffett and Adkerson in February 2004. Our committee, advised by its independent compensation consultant at the time, approved the SERP, which was then recommended to and approved by our board. The SERP provides for benefits payable in the form of a 100% joint and survivor annuity, life annuity or an equivalent lump sum. The annuity will equal a percentage of the executive’s highest base pay for any three of the five years immediately preceding the earlier of the executive’s retirement or the completion of 25 years of credited service, plus his average bonus for those years, provided that the average bonus cannot exceed 200% of average base pay. The percentage used in this calculation is equal to 2% for each year of credited service up to 25 years. Income associated with option exercises or the vesting of RSUs is not considered in determining the benefits payable under the SERP.

The SERP benefit will be reduced by the value of all benefits received under all other retirement plans (qualified and nonqualified), sponsored by the company, by FM Services Company, one of our wholly owned subsidiaries, or by any predecessor employer (including our former parent company), except for benefits produced by accounts funded exclusively by deductions from the participant’s pay. As of December 31, 2015, Messrs. Moffett and Adkerson were both 100% vested under the SERP.

Change of Control and Severance Benefits

During 2015, we provided Messrs. Moffett and Flores and Ms. Quirk with contractual protections in the event of certain terminations of employment outside of the change of control context, as well as in connection with a change of control. We believe that severance protections, particularly in connection with a change of control transaction, can play a valuable role in attracting and retaining key executive officers by providing protections commonly provided in the market. In addition, we believe these benefits also serve the company’s interest by promoting a continuity of management in the context of an actual or threatened change of control transaction. The existence of these arrangements does not impact our decisions regarding other components of our executive compensation program, although we consider these severance protections an important part of our executives’ compensation packages.

We believe that the occurrence, or potential occurrence, of a change of control transaction will create uncertainty regarding the continued employment of our executive officers. This uncertainty results from the fact that many change of control transactions result in significant organizational changes, particularly at the senior executive level. In order to encourage certain executive officers to remain employed with the company during an important time when their prospects for continued employment following the transaction are often uncertain, we provide certain executive officers with enhanced severance benefits if their employment is terminated by the company without cause or, in certain cases, by the executive in connection with a change of control. Because we believe that a termination by the executive for good reason may be conceptually the same as a termination by the company without cause, and because we believe that in the context of a change of control, potential acquirors would otherwise have an incentive to constructively terminate the executive’s employment to avoid paying severance, we believe it is appropriate to provide severance benefits in these circumstances. We do not provide excise tax gross-up protections under any change of control arrangements with our executive officers.

We also do not believe that our executive officers should be entitled to receive cash severance benefits merely because a change of control transaction occurs. The payment of cash severance benefits is only triggered by an actual or constructive termination of employment following a change of control (i.e. a “double trigger”). In addition, beginning with the awards we granted in early 2012, our long-term incentive awards, including the stock options, RSUs and PSUs granted to the executives, provide for accelerated vesting of the award following a change of control only if the recipient also experiences an actual or constructive termination of employment within one year after the change of control.

During 2015, Messrs. Moffett and Flores and Ms. Quirk were also entitled to severance benefits in the event of a termination of employment by the company without cause or by the executive for good reason. Our committee determined that it is appropriate to provide these executives with severance benefits under these circumstances in light of their positions with the company and as part of their overall compensation package. For more information regarding these benefits, see the section titled “Executive Officer Compensation – Executive Compensation Tables – Potential Payments Upon Termination or Change of Control” starting on page 50.

38 Freeport-McMoRan 2016 Proxy Statement

Separation of Certain Executive Officers

As discussed previously, James R. Moffett, our co-founder and former chairman of the board, stepped down from his role as chairman of the board of the company effective December 31, 2015. As a result of his departure, Mr. Moffett was entitled to receive the payments and benefits due to him upon a termination of employment without cause under his employment agreement with the company, and also was eligible to receive retirement treatment under outstanding PSU awards. In addition, Mr. Moffett received certain benefits that were vested prior to his termination of employment under the company’s retirement plans, including the nonqualified defined contribution plan, the SERP, and other benefit arrangements in which he was a participant.

Effective April 4, 2016, Mr. Flores departed from the company. As a result of his departure, Mr. Flores was entitled to receive the payments and benefits due to him upon a termination of employment without cause under his employment agreement with the company. In addition, Mr. Flores received certain benefits that were vested prior to his termination of employment under the company’s retirement plans, including the nonqualified defined contribution plan, and other benefit arrangements in which he was a participant.

The payments and benefits received by Messrs. Moffett and Flores in connection with their separations from the company are described in detail under “Executive Officer Compensation – Executive Compensation Tables – Potential Payments Upon Termination or Change of Control” starting on page 50.

Compensation Processes and Policies

Role of Advisors

Our committee has engaged Pay Governance LLC (Pay Governance) as its independent executive compensation consultant since February 2010. Consistent with our committee’s longstanding policy, Pay Governance will not provide, and has not provided, any services to the company’s management. As required by SEC rules, the committee has assessed the independence of Pay Governance and concluded that Pay Governance’s work did not raise any conflicts of interest. A representative of Pay Governance attends meetings of our committee and communicates with our committee chair between meetings; however, our committee makes all decisions regarding the compensation of our executive officers. Pay Governance provides various executive compensation services to our committee, including advising our committee on the principal aspects of our executive compensation program and evolving industry practices and providing market information and analysis regarding the competitiveness of our program design, as discussed in more detail below.

Peer Group

Following our acquisitions of oil and gas companies in mid-2013, Pay Governance worked with the committee and management to structure a new peer group that would better align with the company’s transformation to a natural resources company. The committee sought to identify peers engaged in international mining activities or oil and gas exploration and production activities. The committee recognized that there are a limited number of international public mining companies of a similar size, scale and complexity as the company. The committee also considered the appropriate mix of mining and oil and gas companies and concluded that two-thirds mining and one-third oil and gas was the appropriate balance. In addition, the committee considered key business competitors that the company has internally tracked for performance and other purposes. The committee determined that the following companies were appropriate peers for us to compare both our executive compensation programs and our performance: Anglo American plc, Antofagasta plc, Barrick Gold Corporation, BHP Billiton Limited, Glencore plc, Newmont Mining Corporation, Rio Tinto plc, Southern Copper Corporation, Teck Resources Limited, Vale S.A., Anadarko Petroleum Corporation, Apache Corporation, ConocoPhillips, Devon Energy Corporation, and Occidental Petroleum Corporation.

Freeport-McMoRan 2016 Proxy Statement 39

In March 2016, the committee, with input from Pay Governance, developed a new group of peer companies that we will use going forward to compare our executive compensation programs and performance. This new group of peers consists solely of mining companies and is set forth below:

Anglo American plc

Antofagasta plc

BHP Billiton Limited

Glencore Xstrata plc

Rio Tinto plc

Southern Copper Corporation

Teck Resources Limited

Vale S.A.

Stock Ownership

We believe that it is important for our executive officers to align their interests with the long-term interests of our stockholders. With that philosophy in mind, we have structured our compensation program to ensure that a portion of our executive officers’ compensation is delivered in the form of equity, such as stock options, RSUs and PSUs.

Under our stock ownership guidelines, each of our executive officers is required to maintain ownership of company stock valued at a certain multiple of base salary. Shares that the executive has pledged, shares held by a spouse or children, and shares due upon the vesting of PSUs are not counted as shares “owned” for purposes of the guidelines. As of December 31, 2015, all of our named executive officers had exceeded their target ownership level.


Executive	Ownership Requirement	Actual Ownership Level as of December 31, 2015 (Using 1-year trailing average stock price)
Mr. Adkerson	5x base salary	33x base salary
Ms. Quirk	3x base salary	10x base salary
Mr. Arnold	3x base salary	8x base salary
Mr. Flores	5x base salary	129x base salary
Mr. Moffett	5x base salary	19x base salary

These ownership levels reflect their individual commitments to align their interests with those of our stockholders and provide our executives with an incentive to maximize the value of our stock over the long term. For more information regarding the current stock holdings of our executive officers, please see the section titled “Stock Ownership of Directors and Executive Officers.”

Compensation Clawback Policy

Our committee has adopted an incentive compensation clawback policy that would enable the company to clawback all or a portion of incentive compensation in the event an executive’s misconduct causes the company to have to issue a restatement of its financial statements, to the extent that such executive’s incentive compensation was based on the misstated financials. Our committee will amend the clawback policy, as needed, once the SEC adopts the final implementing rules regarding compensation clawbacks mandated by Dodd-Frank.

40 Freeport-McMoRan 2016 Proxy Statement

Risks Arising from Compensation Policies and Practices

After reviewing the company’s significant compensation programs, management and our committee believe that the risks arising from our compensation policies and practices for our employees, including our executive officers, are not reasonably likely to have a material adverse effect on the company. In reaching this conclusion, we have taken into account the purpose and structure of these programs and the following design elements of our compensation programs and policies: our balance and amount of annual and long-term compensation elements at the executive and management levels; our use of operating cash flow and copper and oil equivalent production volumes as performance metrics for executives and management level employees, which we believe are meaningful indicators of our performance; the multi-year vesting of equity awards and three-year performance period of our PSUs that promote focus on the long-term operational and financial performance of our company; and bonus arrangements for most employees that are not guaranteed and are ultimately at the discretion of either our committee (for our executive officers and senior management) or senior management (for other employees). These features, as well as the stock ownership requirements for our executive officers, result in a compensation program that aligns our executives’ interests with those of our stockholders and does not promote excessive risk-taking on the part of our executives or other employees.

Section 162(m)

Section 162(m) of the Internal Revenue Code (Section 162(m)) limits to $1 million a public company’s annual tax deduction for compensation paid to certain highly compensated executive officers. Qualified performance-based compensation is excluded from this deduction limitation if certain requirements are met. The committee’s policy is to structure compensation awards that will be deductible where doing so will further the purposes of our executive compensation programs. The committee also considers it important to retain flexibility to design compensation programs that recognize a full range of criteria important to our success, even where compensation payable under the programs may not be fully deductible. As such, the committee may implement revised or additional compensation programs in the future as it deems necessary to appropriately compensate our executive team.

The 2015 AIP was structured under our annual incentive plan, which was approved by our stockholders in 2014. This plan provides the committee the ability to structure annual incentive awards that are designed to qualify as performance-based compensation under Section 162(m), although the committee retains the discretion to structure compensation arrangements outside of the new plan that may not be deductible under Section 162(m). With respect to the LTI awards granted in 2015, the stock options and the PSUs were also designed to qualify for the exclusion from the deduction limitation under Section 162(m).

Compensation Committee Report

The compensation committee of the board has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K, and based on such review and discussion, the compensation committee recommended to the board that the Compensation Discussion and Analysis be included in this proxy statement.

Submitted by the Compensation
Committee on April 15, 2016:

Dustan E. McCoy, Chairman

Jon C. Madonna, Vice Chairman

Andrew Langham

Frances Fragos Townsend

Freeport-McMoRan 2016 Proxy Statement 41

Executive Compensation Tables

The table below shows the total compensation paid to or earned by our named executive officers. For a more detailed discussion of our executive compensation program, including recent changes to our program, see the section titled “Executive Officer Compensation – Compensation Discussion and Analysis” beginning on page 25.

Summary Compensation Table

Name and

Principal Position

Year

Salary

Bonus

Stock
Awards

(1)

Option
Awards

(2)

Non-Equity
Incentive Plan
Compensation
(3)

Change

in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings

(4)

All Other
Compensation
(5)

Total

Richard C. Adkerson

Vice Chairman,

President and Chief

Executive Officer

2015

2014

2013

1,250,000

1,354,167

2,500,000

—

125,000

—

2,145,510

2,556,265

9,860,216

$2,494,000

2,489,050

4,941,000

$ —

1,125,000

1,250,000

$1,874,626

1,735,332

—

$ 806,655

738,221

36,709,323

8,570,791

10,123,035

55,260,539

Kathleen L. Quirk

Executive Vice President,

Chief Financial Officer

and Treasurer

2015

2014

2013

650,000

—

113,750

—

1,370,743

1,652,220

3,286,739

1,634,000

1,634,600

1,647,000

—

1,023,750

1,100,000

—

109,089

93,472

159,822

3,763,832

5,167,792

6,843,561

Michael J. Arnold

Executive Vice President

and Chief Administrative

Officer

2015

2014

2013

550,000

—

96,250

—

1,191,950

1,402,828

1,643,369

1,376,000

1,374,550

1,482,300

—

866,250

1,000,000

—

105,934

97,143

156,706

3,223,884

4,387,021

4,832,375

James C. Flores (6)

Former Chief Executive Officer of Freeport-

McMoRan Oil & Gas LLC

2015

2014

2013

1,250,000

1,354,167

1,461,795

—

125,000

—

2,145,510

2,556,265

—

2,494,000

2,489,050

—

1,125,000

1,250,000

—

483,719
624,346

353,190

6,373,229

8,273,828

3,064,985

James R. Moffett (7)

Former Chairman of the Board

2015

2014

2013

1,250,000

1,354,167

2,500,000

—

125,000

—

2,145,510

2,556,265

9,860,216

2,494,000

2,489,050

4,941,000

—

1,125,000

1,250,000

2,038,884

1,825,857

1,644,729

16,891,557

1,102,537

1,644,603

24,819,951

10,577,876

21,840,548

(1)

The amounts reported for 2015 reflect the aggregate grant date fair value of the performance share units (PSUs) awarded on February 3, 2015, computed in accordance with FASB ASC Topic 718, without taking into account estimated forfeitures. A Monte-Carlo valuation model was used to estimate the grant date fair value of the PSUs. The Monte-Carlo model utilizes multiple inputs to produce distributions of total stockholder return for the company and each of applicable peer companies to calculate the fair value of each award. Specifically, for the 2015 awards, the simulation model applied a risk-free interest rate of 0.82% and an expected volatility assumption for the company of 32.18%. The risk-free rate is assumed to equal the yield on an approximate three-year treasury bond on the grant date. Volatility is based on historical volatility for the approximate three-year period preceding the grant date. Using these assumptions, the PSUs were valued at $11.9195 per unit, which is the per unit value reflected in the table. The maximum aggregate grant date value of the 2015 stock awards for each of the named executive officers assuming maximum payout of the PSUs, and based on the stock price at the date of grant, is as follows: for each of Messrs. Adkerson, Flores and Moffett—$6,832,800, for Ms. Quirk—$4,365,400 and for Mr. Arnold—$3,796,000. For more information regarding PSUs granted to the named executive officers, see the section titled “Executive Officer Compensation – Compensation Discussion and Analysis” beginning on page 25 and footnote (2) to the “2015 Grants of Plan-Based Awards” table on page 44.

(2)

Reflects the aggregate grant date fair value of the options granted to the named executive officers in the year reflected, determined using the Black-Scholes-Merton option valuation model. For information relating to the assumptions made by us in valuing the option awards made to our named executive officers, refer to Notes 1 and 10 of our financial statements in our 2015 Annual Report on Form 10-K for the year ended December 31, 2015. For more information regarding options granted to the named executive officers, see the section titled “Executive Officer Compensation – Compensation Discussion and Analysis” beginning on page 25.

(3)	Reflects the annual incentive award payments received under our annual incentive program based on the achievement of pre-established goals. See the section titled “Executive Officer Compensation – Compensation Discussion and Analysis” beginning on page 25 for more information.

42 Freeport-McMoRan 2016 Proxy Statement

(4)	Includes the aggregate change in actuarial present value of our supplemental executive retirement plan for Messrs. Moffett and Adkerson. See the section titled “Executive Officer Compensation – Executive Compensation Tables – Retirement Benefit Programs” beginning on page 48 for more information.

(5)

The amounts reported for 2015 are shown in the table below and reflect all perquisites and other personal benefits and (A) amounts contributed by the company to defined contribution plans, which include amounts contributed to the ECAP and the nonqualified defined contribution plan; (B) the dollar value of life insurance premiums paid by the company; and (C) the dollar value of interest credited on dividend equivalents on outstanding restricted stock units (RSUs).

For Mr. Moffett, the amount reported also includes the $16,110,216 severance payment accrued in connection with the termination of his employment in December 2015. For more information, see the section titled “Executive Officer Compensation – Compensation Discussion and Analysis” beginning on page 25 and the section titled “Executive Officer Compensation – Executive Compensation Tables – Potential Payments Upon Termination or Change of Control” beginning on page 50.

The perquisites and other personal benefits reported in the table below include (a) personal financial and tax advice under the company’s executive services program, (b) for Messrs. Moffett and Adkerson, personal use of fractionally owned company aircraft, which includes the hourly operating rate, fuel costs and incidental fees directly related to the flight, and for Mr. Flores, personal use of company owned aircraft, which includes maintenance expenses, fuel costs, crew travel expenses, in-flight food and beverage services, parking, ramp and landing fees, airport taxes and similar fees directly related to the flight, (c) personal use of company facilities and personnel, (d) personal and business use of company cars and security services, which includes annual driver compensation and repair, maintenance, and fuel costs, and (e) our premium payments for personal excess liability insurance. The amounts reflect the incremental cost to the company.

2015 All Other Compensation


	Perquisites and Other Personal Benefits										Additional All Other Compensation
Name	Financial and Tax Advice		Aircraft Usage		Facilities and Personnel		Security and Cars		Personal Excess Liability Insurance Premiums		Plan Contributions		Life Insurance Premiums		Interest Credited on Dividend Equivalents		Severance Payment
Mr. Adkerson		$17,810	$	240,459		$53,180	$	131,089		$5,126		$240,525	$	24,713		$93,753		—
Ms. Quirk		2,300		—		—		—		2,528		91,388		—		12,873		—
Mr. Arnold		18,381		—		—		780		2,458		77,650		—		6,665		—
Mr. Flores		20,000		281,520		—		—		6,151		152,013		—		24,035		—
Mr. Moffett		20,000		96,973		310,287		69,760		5,126		240,525		—		38,670	$	16,110,216

The aggregate incremental cost to the company of Messrs. Adkerson, Flores and Moffett’s personal use of aircraft does not include the lost tax deduction for expenses that exceeded the amounts reported as income for each executive, which for fiscal year 2015 was approximately $140,448 for Mr. Adkerson and $171,803 for Mr. Moffett with respect to their personal use of fractionally owned company aircraft, and $778,316 for Mr. Flores with respect to his personal use of company owned aircraft. Expenses subject to disallowance of deductions in 2015 in connection with the personal use of company owned aircraft include fixed costs such as depreciation, some of which may be recovered by the company in future years upon sale of the aircraft.

(6)	Effective April 4, 2016, Mr. Flores departed from the company. See the section titled, “Executive Officer Compensation – Executive Compensation Tables – Potential Payments Upon Termination or Change of Control” for information regarding the severance-related payments and benefits he received.

(7)

Effective December 31, 2015, Mr. Moffett ceased serving as a director and executive officer and entered into a consulting agreement with us. See the section titled, “Executive Officer Compensation – Executive Compensation Tables – Potential Payments Upon Termination or Change of Control” for information regarding the severance-related payments and benefits he received.

Freeport-McMoRan 2016 Proxy Statement 43

2015 Grants of Plan-Based Awards


Name	Grant Date		Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)						Estimated Future Payouts Under Equity Incentive Plan Awards (2)						All Other Option Awards: Number of Securities Underlying Options (3)		Exercise or Base Price of Option Awards (4)		Grant Date Fair Value of Stock and Option Awards
Name	Grant Date		Threshold		Target		Maximum		Threshold		Target		Maximum				Exercise or Base Price of Option Awards (4)		Grant Date Fair Value of Stock and Option Awards
Richard C. Adkerson AIP LTIP – PSUs LTIP – Options		— 02/03/15 02/03/15		$625,000 — —	$	1,250,000 — —	$	2,500,000 — —		— 72,000 —		— 180,000 —		— 360,000 —		— — 580,000		— — $18.98	$	— 2,145,510 2,494,000
Kathleen L. Quirk AIP LTIP – PSUs LTIP – Options		— 02/03/15 02/03/15		568,750 — —		1,137,500 — —		2,275,000 — —		— 46,000 —		— 115,000 —		— 230,000 —		— — 380,000		— — 18.98		— 1,370,743 1,634,000
Michael J. Arnold AIP LTIP – PSUs LTIP – Options		— 02/03/15 02/03/15		481,250 — —		962,500 — —		1,925,000 — —		— 40,000 —		— 100,000 —		— 200,000 —		— — 320,000		— — 18.98		— 1,191,950 1,376,000
James C. Flores AIP LTIP – PSUs LTIP – Options		— 02/03/15 02/03/15		625,000 — —		1,250,000 — —		2,500,000 — —		— 72,000 —		— 180,000 —		— 360,000 —		— — 580,000		— — 18.98		— 2,145,510 2,494,000
James R. Moffett AIP LTIP – PSUs LTIP – Options		— 02/03/15 02/03/15		625,000 — —		1,250,000 — —		2,500,000 — —		— 72,000 —		— 180,000 —		— 360,000 —		— — 580,000		— — 18.98		— 2,145,510 2,494,000

(1)

For 2015, under the annual incentive program, each executive had a target award based on a multiple of salary, with the amount to be earned based on the company’s performance relative to defined goals established by the compensation committee. The amounts reported represent the estimated threshold, target and maximum possible annual cash incentive payments that could have been received by each named executive officer pursuant to the annual incentive program for 2015. The estimated amounts in the “Target” column were approved by the compensation committee and reflect 100% of base salary for each of Messrs. Adkerson, Flores and Moffett and 175% of base salary for each of Ms. Quirk and Mr. Arnold. Achievement of the threshold level of performance would result in a payout of 50% of the target award, and a maximum performance would result in 200% of target. For more information, see the section titled “Executive Officer Compensation – Compensation Discussion and Analysis” beginning on page 25.

(2)

These awards represent PSUs awarded to the executive officers as part of the 2015 long-term incentive program. Each of the named executive officers received 50% of their 2015 target long-term incentive program award in the form of PSUs based on estimated grant date fair values, although following the grant date, the final grant date fair value for the PSU award (as reflected in the table above) was 14% less than the estimated value used by the committee to determine the award amount. Each PSU granted in 2015 represents a contingent right to receive one share of our common stock, with the final number of shares to be issued to our named executive officers based on our total stockholder return (TSR) compared to the TSR of our peer group during the three-year period ending on December 31, 2017. The executives will earn between 0% and 200% of the target PSU award based on the company’s rank compared to the peer companies; threshold performance will result in an award of 40% of the target award. For more information regarding PSUs granted to the named executive officers, see the section titled “Executive Officer Compensation – Compensation Discussion and Analysis” beginning on page 25.

(3)	Each of the named executive officers received 50% of their 2014 long-term incentive program award in the form of options.

(4)	The exercise price of each stock option reflected in this table was determined by reference to the closing quoted per share sale price of our common stock on the composite tape for NYSE-listed stocks on the grant date.

44 Freeport-McMoRan 2016 Proxy Statement

Outstanding Equity Awards at December 31, 2015


	Option Awards (1)											Stock Awards (2)
Name	Option Grant Date			Number of Securities Underlying Unexercised Options Exercisable		Number of Securities Underlying Unexercised Options Unexercisable		Option Exercise Price (3)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested		Market Value of Shares or Units of Stock That Have Not Vested (4)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (4)
Richard C. Adkerson		01/30/06 01/29/07 01/28/08 02/02/09 02/01/10 02/07/11 02/06/12 05/11/07 02/02/09 02/02/10 02/08/11 02/06/12 01/29/13 02/04/14 02/03/15	* * * * * * *		189,000 162,000 162,000 162,000 162,000 135,000 135,000 3,000,000 250,000 1,000,000 500,000 330,000 450,000 83,750 —		— — — — — — — — — — — — — 251,250 580,000		$36.760 22.650 27.860 11.930 29.130 31.950 24.080 36.460 12.295 36.255 55.640 46.730 35.010 30.940 18.980		01/30/16 01/29/17 01/28/18 02/02/19 02/01/20 02/07/21 02/06/22 05/11/17 02/02/19 02/02/20 02/08/21 02/06/22 01/29/23 02/04/24 02/03/25		—		—		404,800	$	2,740,496
Kathleen L. Quirk		01/30/06 01/29/07 01/28/08 02/02/09 02/01/10 02/07/11 02/06/12 05/11/07 02/02/09 02/02/10 02/08/11 02/06/12 01/29/13 02/04/14 02/03/15	* * * * * * *		16,200 40,500 40,500 40,500 40,500 40,500 36,450 1,000,000 300,000 300,000 150,000 82,500 75,000 55,000 —		— — — — — — 4,050 — — — — 27,500 75,000 165,000 380,000		36.760 22.650 27.860 11.930 29.130 31.950 24.080 36.460 12.295 36.255 55.640 46.730 35.010 30.940 18.980		01/30/16 01/29/17 01/28/18 02/02/19 02/01/20 02/07/21 02/06/22 05/11/17 02/02/19 02/02/20 02/08/21 02/06/22 01/29/23 02/04/24 02/03/25		—		—		167,200		1,131,944
Michael J. Arnold		05/11/07 02/02/09 02/02/10 02/08/11 02/06/12 01/29/13 02/04/14 02/03/15			700,000 180,000 240,000 120,000 75,000 67,500 46,250 —		— — — — 25,000 67,500 138,750 320,000		36.460 12.295 36.255 55.640 46.730 35.010 30.940 18.980		05/11/17 02/02/19 02/02/20 02/08/21 02/06/22 01/29/23 02/04/24 02/03/25		—		—		108,000		731,160
James C. Flores		12/30/10 06/01/11 06/01/12 02/04/14 02/03/15	* * *		1,350 5,400 5,400 83,750 —		— — — 251,250 580,000		31.820 32.600 16.340 30.940 18.980		12/30/20 06/01/21 06/01/22 02/04/24 02/03/25		113,700	$	769,749		104,800		709,496
James R. Moffett		01/30/06 01/29/07 01/28/08 02/01/10 02/07/11 02/06/12 05/11/07 02/02/10 02/08/11 02/06/12 01/29/13 02/04/14 02/03/15	* * * * * *		270,000 243,000 243,000 243,000 270,000 270,000 750,000 1,000,000 500,000 330,000 450,000 335,000 580,000		— — — — — — — — — — — — —		36.760 22.650 27.860 29.130 31.950 24.080 36.460 36.255 55.640 46.730 35.010 30.940 18.980		01/30/16 01/29/17 01/28/18 02/01/20 02/07/21 02/06/22 05/11/17 02/02/20 02/08/21 02/06/22 01/29/23 02/04/24 02/03/25		—		—		404,800		2,740,496

Freeport-McMoRan 2016 Proxy Statement 45

*	Represents stock options granted by McMoRan Exploration Co. that converted to company stock options in connection with our acquisition of McMoRan Exploration Co. on June 3, 2013.

(1)

Unless otherwise noted, the stock options become exercisable in 25% annual increments on each of the first four anniversaries of the date of grant and have a term of 10 years. The stock options granted by the company prior to 2012 will become immediately exercisable in the event of a change in control of the company (as defined in the applicable agreement), and stock options granted by the company beginning in 2012 will only become immediately exercisable if there is a qualifying termination of employment following a change in control.

(2)

Represents RSUs and PSUs held by the named executive officers, as set forth in the tables below. The RSUs will vest and be paid out in shares of our common stock as set forth in the table below, provided that, with respect to the RSUs held by each named executive officer other than Mr. Flores, the average return on investment for the five calendar years preceding the year of vesting is at least 6%. In addition, the RSUs vesting on February 15, 2016 are subject to a 20% reduction if our total TSR for the three-year period ending on December 31, 2015 is below the median TSR of a peer group. In accordance with this provision, 20% of the RSUs vesting on February 15, 2016 were forfeited. The full amounts of the RSU grants are reflected in the table below.


Name	RSUs			Vesting Date
Mr. Adkerson		300,000			02/15/16
Ms. Quirk		100,000			02/15/16
Mr. Arnold		50,000			02/15/16
Mr. Flores		28,962 20,916 20,916	* * *		03/31/16 03/31/17 03/31/18
Mr. Moffett		300,000			02/15/16

Represents RSUs granted by Plains Exploration that converted to company RSUs in connection with our acquisition of Plains Exploration on May 31, 2013.

In addition to the 70,794 stock-settled RSUs described above, Mr. Flores holds 42,906 RSUs that will vest and be paid out in cash as follows.


Name	RSUs			Vesting Date
Mr. Flores		42,906	*		03/31/16

Represents RSUs granted by Plains Exploration that converted to company RSUs in connection with our acquisition of Plains Exploration on May 31, 2013.

46 Freeport-McMoRan 2016 Proxy Statement

The PSUs will vest as of the end of the applicable performance period and be paid out in shares of our common stock based on satisfaction of the performance goals as set forth in the table below. The amounts reported in the table above are based on achieving threshold performance goals, resulting in an award of 40% of the target PSU award. The executives will earn between 0% and 200% of the target PSU award based on the company’s TSR compared to the TSR of the company’s peer group.


	PSUs						Last Day of Performance Period
Name	Threshold		Target		Maximum		Last Day of Performance Period
Mr. Adkerson		32,800 72,000		82,000 180,000		164,000 360,000		12/31/16 12/31/17
Ms. Quirk		21,200 46,000		53,000 115,000		106,000 230,000		12/31/16 12/31/17
Mr. Arnold		18,000 40,000		45,000 100,000		90,000 200,000		12/31/16 12/31/17
Mr. Flores		32,800 72,000		82,000 180,000		164,000 360,000		12/31/16 12/31/17
Mr. Moffett		32,800 72,000		82,000 180,000		164,000 360,000		12/31/16 12/31/17

(3)	The exercise price of the stock options granted by the company was determined by reference to the closing price of our common stock on the grant date.

(4)	The market value of the unvested RSUs and PSUs reflected in this table was based on the $6.77 closing market price per share of our common stock on December 31, 2015.

2015 Option Exercises and Stock Vested (1)


	Stock Awards
Name	Number of Shares Acquired on Vesting		Value Realized on Vesting (2)
Richard C. Adkerson		85,598		$1,736,783
Kathleen L. Quirk		27,819		564,448
Michael J. Arnold		23,539		477,606
James C. Flores		71,868(3)		1,361,899
James R. Moffett		85,598		1,736,783

(1)	None of the named executive officers exercised options during 2015.

(2)	The value realized on vesting of RSUs is based on the closing sale price on the date of vesting of the RSUs or, if there were no reported sales on such date, on the last preceding date on which any reported sale occurred.

(3)	Includes 28,962 stock-settled RSUs and 42,906 cash-settled RSUs that vested in 2015.

Freeport-McMoRan 2016 Proxy Statement 47

Retirement Benefit Programs

Nonqualified Defined Contribution Plan. We maintain an unfunded nonqualified defined contribution plan (NQDC plan) for the benefit of our executive officers, as well as others. The NQDC plan provides those employees whose earnings in a prior year were in excess of the dollar limit under Section 401(a)(17) of the Internal Revenue Code the ability to defer up to 20% of their base salary after deferrals to the ECAP (our tax-qualified defined contribution plan) have ceased due to qualified plan limits. The company makes a matching contribution equal to each participant’s deferrals in this NQDC plan and the ECAP limited to 5% of the participant’s base salary. In addition, in 2015, the company also made enhanced contributions equal to 5% of eligible compensation (base salary plus 50% of bonus) in excess of qualified plan limits for each eligible employee, with employees who met certain age and service requirements in 2000 (including Messrs. Moffett and Adkerson) receiving an additional 5% contribution. Distribution is made in a lump sum as soon as practicable or if timely elected by the participant, on January 1st of the year following retirement, but no earlier than the date allowable under law following separation from service. The table below sets forth the balances under our NQDC plan as of December 31, 2015 for each named executive officer.

Deferred Restricted Stock Units. In connection with the termination of his employment agreement in December 2013, Mr. Adkerson received 1,000,000 RSUs. These RSUs represent the right to receive an equivalent number of shares of our common stock. The RSUs were vested at grant but payout of shares of our common stock is deferred until six months after Mr. Adkerson’s retirement.

Nonqualified Deferred Compensation


Name	Plan	Executive Contributions in Last Fiscal Year (1)		Registrant Contributions in Last Fiscal Year (2)		Aggregate Earnings in Last Fiscal Year (3)			Aggregate Withdrawals/ Distributions	Aggregate Balance at Last Fiscal Year End (4)
Richard C. Adkerson	NQDC plan		$94,750		$205,525		$808,185		—		$25,577,285
	Deferred RSUs		—		—		(16,590,000	)	—		6,770,000
Kathleen L. Quirk	NQDC plan		41,000		64,888		50,688		—		1,649,696
Michael J. Arnold	NQDC plan		28,250		51,150		121,941		—		3,880,602
James C. Flores	NQDC plan		94,750		125,013		3,437		—		223,199
James R. Moffett	NQDC plan		94,750		205,525		1,104,273		—		34,897,710

(1)	The amounts reflected in this column are included in the “Salary” column for each named executive officer for 2015 reported in the “Summary Compensation Table.”

(2)	The amounts reflected in this column are included in the “All Other Compensation” column for each named executive officer for 2015 in the “Summary Compensation Table,” although the “Plan Contributions” reflected in footnote (7) to that table also include contributions to the company’s ECAP.

(3)

The assets in the NQDC plan are treated as if invested to produce a rate of interest equal to the prime rate, as published in the Federal Reserve Statistical Report at the beginning of each month. For 2015, that rate of interest was equal to 3.25% during the period from January 1, 2015 to December 16, 2015 and 3.50% during the period from December 17, 2015 to December 31, 2015 and none of the earnings were considered preferential. With respect to Mr. Adkerson’s deferred RSUs, the amount represents the number of deferred RSUs multiplied by the change in the price of our common stock from December 31, 2014 ($23.36) to December 31, 2015 ($6.77).

(4)

The following amounts reflected in this column were included in the 2014 “total” compensation for each named executive officer in the “Summary Compensation Table”: Mr. Adkerson – $320,113, Ms. Quirk – $159,820, Mr. Arnold – $71,540 and Mr. Moffett – $320,113. The following amounts reflected in this column were included in the 2013 “total” compensation for each named executive officer in the “Summary Compensation Table”: Mr. Adkerson – $1,016,356, Ms. Quirk – $204,005, Mr. Arnold – $108,905 and Mr. Moffett – $1,016,356.

48 Freeport-McMoRan 2016 Proxy Statement

Supplemental Executive Retirement Plan – Messrs. Moffett and Adkerson. In February 2004, we established an unfunded Supplemental Executive Retirement Plan (SERP) for Messrs. Moffett and Adkerson. The compensation committee, advised by its independent compensation consultant at that time, approved the SERP, which was then recommended to and approved by the board. The SERP provides for benefits payable in the form of a 100% joint and survivor annuity, life annuity or an equivalent lump sum. The annuity will equal a percentage of the executive’s highest average base pay for any three of the five calendar years immediately preceding the executive’s retirement, plus his average bonus for the same three years; provided that the average bonus cannot exceed 200% of the average base pay. The percentage used in this calculation is 2% for each year of credited service for the company and its predecessor beginning in 1981, but capped at 25 years. For Messrs. Moffett and Adkerson, who have attained 25 years of credited service, the annuity was fixed as of January 1st of the year in which the executive completed 25 years of credited service, and will only increase at retirement as a result of mortality and interest adjustments.

The SERP benefit is reduced by the value of all benefits from current and former retirement plans (qualified and nonqualified), sponsored by the company, by FM Services Company or by any predecessor employer (including our former parent company), except for benefits produced by accounts funded exclusively by deductions from the participant’s pay. The amounts provided in the table below reflect these reductions. As of December 31, 2015, Messrs. Moffett and Adkerson were both 100% vested under the SERP, and each has elected to receive his SERP benefit in a lump sum.

Pension Benefits


Name	Plan Name	Number of Years Credited Service (1)	Present Value of Accumulated Benefit (2)
Richard C. Adkerson	Supplemental Executive Retirement Plan	25		$30,603,682
James R. Moffett	Supplemental Executive Retirement Plan	25		27,551,021

(1)	The years of credited service under the SERP is the participant’s years of service with the company and its predecessor beginning in 1981, but capped at 25 years.

(2)	The actuarial present value of the accumulated benefit at the normal retirement date is calculated using the following assumptions: the mortality table described in Revenue Ruling 2001-62 of the IRS, and a 6% interest rate.

Freeport-McMoRan 2016 Proxy Statement 49

Potential Payments Upon Termination or Change of Control

Employment Agreements—Messrs. Moffett and Flores and Ms. Quirk. As of December 31, 2015, we had employment agreements with each of Messrs. Moffett and Flores and Ms. Quirk, which were approved by our compensation committee and the board. The following describes the general terms of the employment agreements as of December 31, 2015. A description of Mr. Moffett’s employment agreement effective during 2015 is included below. However, Mr. Moffett is not included in the table below titled “Potential Payments Upon Termination of Change of Control.” Instead, for Mr. Moffett, who terminated employment effective December 31, 2015, we have provided information regarding the payments and benefits due to him as a result of his termination after such table. For additional information, see the section titled “Executive Officer Compensation – Compensation Discussion and Analysis” beginning on page 25.

Mr. Moffett. The employment agreement with Mr. Moffett provided for a base salary of $1,250,000 per year and continued eligibility for all other benefits and compensation generally provided to our most senior executives. Mr. Moffett’s agreement also contained non-competition, non-disclosure and other provisions intended to protect our interests if he ceases to be employed by us.

Mr. Flores. We assumed the employment agreement between Plains Exploration and Mr. Flores in connection with our acquisition of Plains Exploration on May 31, 2013. Effective February 1, 2014, we amended Mr. Flores’ employment agreement to reduce his base salary to $1,250,000 per year. Mr. Flores’ employment agreement was also amended to eliminate all tax gross-ups and to eliminate the provision providing for a payout of three times the sum of salary and target annual bonus upon death or disability. Mr. Flores continues to be eligible for all other benefits and compensation generally provided to our most senior executives. The term of the amended agreement continues through February 2019, with automatic one-year extensions thereafter unless prior written notice is given by the compensation committee that it does not wish to extend the agreement. In the event of a change of control, the amended agreement will expire three years following the change of control. Mr. Flores’ amended agreement also contains non-competition, non-disclosure and other provisions intended to protect our interests if he ceases to be employed by us.

Ms. Quirk. The employment agreement with Ms. Quirk reflects a current base salary of $650,000, and provides that she is eligible to participate in our annual incentive plan. Ms. Quirk continues to be eligible for all other benefits and compensation generally provided to our most senior executives. The term of the agreement continues through January 1st, with automatic one-year extensions unless prior written notice is given by the compensation committee that it does not wish to extend the agreement. In the event of a change of control, the agreement will expire three years following the change of control. The agreement also contains non-competition, non-disclosure and other provisions intended to protect our interests if Ms. Quirk ceases to be employed by us.

In addition to the post-employment benefits provided under the company’s retirement benefit programs described above, we provided the following additional benefits to our named executive officers.

Severance Benefits—Mr. Moffett and Ms. Quirk. As of December 31, 2015, the employment agreements for Mr. Moffett and Ms. Quirk provide that if we terminate the executive’s employment without cause or the executive terminates employment for good reason, we will make certain payments and provide certain benefits to the executive, including:

•

payment of a pro rata bonus for the year in which the termination of employment occurs;

•

a cash payment equal to three times the sum of (a) the executive’s base salary plus (b) the average of the bonuses paid to the executive for the immediately preceding three years;

•

continuation of insurance and welfare benefits for three years or until the executive accepts new employment, if earlier;

•

acceleration of the vesting and payout of all outstanding stock options and RSUs; and

•

under the PSU agreements, in the case of termination without cause, retention of outstanding PSUs, which will vest after the end of the applicable performance period based on the company’s achievement of the performance goal.

50 Freeport-McMoRan 2016 Proxy Statement

Under the employment agreements with Mr. Moffett and Ms. Quirk, “cause” is generally defined as the executive’s (a) failure to perform substantially the executive’s duties with the company, (b) breach of the agreement, (c) felony conviction, (d) unauthorized acts resulting in harm to the company or (e) falsification of financial records. “Good reason” is generally defined as (a) any failure by the company to materially comply with any of the provisions of the agreement or (b) the assignment to the executive of any duties inconsistent in any material respect with the executive’s position, authority, duties or responsibilities under the agreement.

If the executive’s employment terminates as a result of death, disability or retirement, benefits to the executive or the executive’s estate include the payment of a pro rata bonus for the year of termination and, in the case of retirement, the continuation of insurance and welfare benefits for three years or until the executive accepts new employment, if earlier. The executive will also receive an additional year’s vesting on unvested stock options and the vesting and retention of certain outstanding RSUs and PSUs, all as described in footnotes (1), (2), (3) and (5) to the table below.

As a condition to receipt of these severance benefits, the executive must retain in confidence all confidential information known to him or her concerning our business. Further, Mr. Moffett has agreed not to compete with us for a period of two years after termination of employment. Ms. Quirk has agreed not to compete with us for a period of six months after termination of employment.

Severance Benefits—Mr. Flores. The employment agreement with Mr. Flores provides that if we terminate Mr. Flores’ employment without cause or Mr. Flores terminates employment for good reason, we will make certain payments and provide certain benefits to Mr. Flores, including:

•

a cash payment equal to three times the sum of (a) his base salary plus (b) his target annual bonus;

•

continuation of insurance and welfare benefits for three years or until he accepts new employment, if earlier;

•

acceleration of the vesting and payout of all outstanding stock options and RSUs; and

•

retention of outstanding PSUs, which will vest after the end of the applicable performance period based on the company’s achievement of the performance goal.

Under the employment agreement with Mr. Flores, “cause” is generally defined as his (a) failure to perform his reasonably assigned duties with the company, (b) conduct which is injurious to the company, (c) conviction of certain crimes or (d) failure to notify the company of certain conflicts of interest. “Good reason” is defined as (a) the assignment to Mr. Flores of any duties that materially adversely alter the nature or status of Mr. Flores’ office; (b) the failure by the company to continue in effect any compensation plan that is material to Mr. Flores’ total compensation; (c) the taking of any action by the company which would materially reduce or deprive Mr. Flores of any material pension, welfare or fringe benefit then enjoyed by Mr. Flores; (d) the relocation of the principal executive offices of Freeport-McMoRan Oil & Gas LLC outside the greater Houston, Texas metropolitan area; (e) the failure to nominate Mr. Flores as a director of the company or (f) the failure by the company to obtain a satisfactory agreement from any successor company to assume the agreement.

If Mr. Flores’ employment terminates as a result of death, disability or retirement, benefits to Mr. Flores or his estate include the payment of a pro rata bonus for the year of termination and, in the case of retirement, the continuation of insurance and welfare benefits for three years or until Mr. Flores accepts new employment, if earlier. Pursuant to the terms of the award agreements, Mr. Flores will also receive an additional year’s vesting on unvested stock options and the vesting of certain outstanding RSUs and PSUs as described in footnotes (1), (2), (3) and (5) to the table below.

As a condition to receipt of these severance benefits, Mr. Flores must retain in confidence all confidential information known to him concerning our business. Further, Mr. Flores has agreed not to compete with us for a period of one year after termination of employment (unless his employment is terminated without cause or he terminates with good reason).

Freeport-McMoRan 2016 Proxy Statement 51

Change of Control Benefits—Messrs. Moffett and Flores and Ms. Quirk. As of December 31, 2015, the change of control agreement for Mr. Moffett and the employment agreement for each of Mr. Flores and Ms. Quirk provided generally that the terms and conditions of the executive’s employment (including position, compensation and benefits) will not be adversely changed until the third anniversary of the change of control.

Under the agreements, if the executive is terminated without “cause,” as generally defined above, or if the executive terminates for “good reason” during the three-year period after a change of control, the executive is generally entitled to receive the same payments and benefits that he or she would receive in the event of a similar termination under the employment agreements, described above, except that the executive would receive a cash payment calculated as follows:

•

Mr. Moffett and Ms. Quirk would receive a cash payment equal to three times the sum of the executive’s base salary plus the highest bonus paid to the executive (rather than the average bonus paid to the executive) for the immediately preceding three fiscal years, and

•

Mr. Flores would receive a cash payment equal to three times the sum of Mr. Flores’ base salary plus the greater of (a) his target annual bonus or (b) the highest bonus paid to Mr. Flores for the immediately preceding three fiscal years.

In addition, in the event of a change of control, outstanding PSUs would convert into an equivalent number of RSUs based on the target amount, which would vest on the earlier of the last day of the applicable performance period or the date the executive is terminated without cause or terminates for good reason.

These agreements provide “double trigger” benefits meaning that the executives do not receive benefits unless (1) a change of control occurs and (2) employment is terminated. For Mr. Moffett and Ms. Quirk, the term “good reason” includes the failure of the acquiror to provide the executive with substantially the same position, authority, duties and responsibilities held prior to the change of control, in addition to the reasons generally provided above. For Mr. Flores, the term “good reason” includes the failure of the company to obtain a satisfactory agreement from any acquiror to assume and perform Mr. Flores’ employment agreement, provided that Mr. Flores resigns within one year of the change of control.

If employment terminates as a result of death, disability or retirement following a change of control, the executive will receive the same benefits described above under “Severance Benefits—Mr. Moffett and Ms. Quirk” and “Severance Benefits—Mr. Flores” in the event of death, disability or retirement.

We do not provide excise tax gross-up protections in any of our change of control arrangements with our executive officers. If any part of the payments or benefits received by Messrs. Moffett or Flores or Ms. Quirk in connection with a termination following a change of control constitutes an excess parachute payment under Section 4999 of the Internal Revenue Code, the executive will receive the greater of (a) the amount of such payments and benefits reduced so that none of the amount constitutes an excess parachute payment, net of income taxes, or (b) the amount of such payments and benefits, net of income taxes and net of excise taxes under Section 4999 of the Internal Revenue Code.

The confidentiality and non-competition provisions of the executives’ employment agreements continue to apply after a change of control.

Change of Control Benefits—Messrs. Adkerson and Arnold. We currently do not have severance or change of control agreements with either of Messrs. Adkerson or Arnold. For Messrs. Adkerson and Arnold, the following table shows only accelerated vesting of stock options, RSUs and PSUs upon certain terminations of employment and upon a change of control. For Mr. Arnold, this benefit is a term of the stock option, RSU or PSU grant, and applies to all stock option, RSU or PSU recipients, not just our executives. For Mr. Adkerson, the terms of the award agreements were impacted by his December 2013 letter agreement with the company, which provides that he will receive retirement treatment on these awards as set forth in the applicable award agreement following any termination, except a termination due to death or termination by the company for cause. For additional information regarding the impact of retirement on the various awards, see the footnotes to the “Potential Payments Upon Termination or Change of Control” table on page 53.

Except for certain restrictive covenants that continue to apply following termination of employment, the above described agreements with Mr. Moffett terminated as of December 31, 2015, and the above described agreement with Mr. Flores terminated effective April 4, 2016.

52 Freeport-McMoRan 2016 Proxy Statement

The following table quantifies the potential payments to our named executive officers under the contracts, arrangements or plans discussed above for various scenarios involving a change of control or termination of employment of each of our named executive officers, other than Mr. Moffett. In addition to these benefits, our named executive officers would be entitled to receive the retirement and pension benefits described above under “Executive Officer Compensation – Executive Compensation Tables – Retirement Benefit Programs,” and outstanding vested stock options, which amounts are reflected in the “Walk-Away Value” column.

In accordance with SEC rules, the information below assumes a termination date of December 31, 2015 and reflects the arrangements in effect at that time. We have used the closing price of our common stock of $6.77 on December 31, 2015, as reported on the NYSE, for purposes of calculating the value of the unvested and accelerated options, RSUs and PSUs. For Mr. Moffett, who terminated employment effective December 31, 2015, we have provided information following the table regarding the payments and benefits due him as a result of his termination. In addition, for Mr. Flores, we have provided information regarding the actual payments and benefits due him as a result of his termination on April 4, 2016.

Potential Payments Upon Termination or Change of Control


Name	Lump Sum Payment		Options (Unvested and Accelerated) (1)	Restricted Stock Units (Unvested and Accelerated) (2)		Accumulated Dividends and Interest Payable on Accelerated RSUs		Performance Share Units (Unvested and Accelerated) (3)		Accumulated Dividends Payable on Accelerated PSUs		Health and Welfare Benefits		Total		Walk-Away Value (Including Value of Vested Benefits) (4)
Richard C. Adkerson
• Retirement (5)		n/a	—		$1,624,800		$959,678		$1,773,740		$170,751		n/a	$	4,528,969		$65,192,936
• Death/Disability (5)		n/a	—		1,624,800		959,678		1,773,740		170,751		n/a		4,528,969		65,192,936
• Termination – No Cause		n/a	—		1,624,800		959,678		1,773,740		170,751		n/a		4,528,969		65,192,936
• Termination after Change of Control (6)		n/a	—		1,624,800		959,678		1,773,740		170,751		n/a		4,528,969		65,192,936
Kathleen L. Quirk
• Retirement (5)		n/a	—		541,600		319,893		1,137,360		110,014		37,195		2,146,062		3,795,758
• Death/Disability (5)		n/a	—		541,600		319,893		1,137,360		110,014		n/a		2,108,867		3,758,563
• Termination – Good Reason	$	9,504,179	—		541,600		319,893		n/a		n/a		37,195		10,402,867		12,052,563
• Termination – No Cause		9,504,179	—		541,600		319,893		1,137,360		110,014		37,195		11,650,241		13,299,937
• Termination after Change of Control (6)(7)		11,810,217	—		541,600		319,893		1,137,360		110,014		37,195		13,956,279		15,605,975
Michael J. Arnold
• Retirement (5)		n/a	—		270,800		159,946		981,650		94,022		n/a		1,506,418		5,387,020
• Death/Disability (5)		n/a	—		270,800		159,946		981,650		94,022		n/a		1,506,418		5,387,020
• Termination – No Cause (8)		n/a	n/a		n/a		n/a		n/a		n/a		n/a		n/a		3,880,602
• Termination after Change of Control (6)(9)		n/a	—		270,800		159,946		981,650		94,022		n/a		1,506,418		5,387,020
James C. Flores
• Retirement (5)		n/a	—		769,749		675,276		1,773,740		170,751		85,780		3,475,296		3,698,495
• Death/Disability (5)		n/a	—		769,749		675,276		1,773,740		170,751		n/a		3,389,516		3,612,715
• Termination – Good Reason/No Cause		7,500,000	—		769,749		675,276		1,773,740		170,751		85,780		10,975,296		11,198,495
• Termination after Change of Control (6)(7)		7,500,000	—		769,749		675,276		1,773,740		170,751		85,780		10,975,296		11,198,495

*	“n/a” means that the benefit is not provided to the executive.

(1)

Vesting of outstanding stock options may be accelerated under certain termination scenarios pursuant to the employment agreements as discussed above. The value of the accelerated options is determined by multiplying (a) the difference between the December 31, 2015 closing price of our common stock and the applicable exercise price of each option, by (b) the number of unvested and accelerated options. All outstanding stock options held by the executives were out-of-the-money as of December 31, 2015.

(2)	The values of the RSUs were determined by multiplying the December 31, 2015 closing price of our common stock by the number of RSUs to be vested or retained under each scenario. For additional information, see footnote (5) below.

(3)	The values of the PSUs were determined by multiplying the December 31, 2015 closing price of our common stock by the number of PSUs to be vested or retained under each scenario. For additional information, see footnote (5) below.

(4)

Includes the value of the following benefits as of December 31, 2015: outstanding, in-the-money vested stock options, the aggregate balance of the NQDC plan (as reflected on page 48), and the present value of the SERP (as reflected on page 49). These amounts do not include benefits under our ECAP or life insurance policies. In addition to the standard life insurance policy generally available to employees, Mr. Adkerson has an executive life insurance policy providing for a death benefit of $1.5 million.

Freeport-McMoRan 2016 Proxy Statement 53

(5)	Generally, pursuant to the terms of the stock option agreements, upon termination of the executive’s employment as a result of death, disability or retirement, the unvested portion of any outstanding stock option that would have vested within one year of the date of termination will vest.

Pursuant to the terms of the performance-based RSU agreements outstanding as of December 31, 2015, termination of the executive’s employment as a result of death, disability or retirement will not result in acceleration of vesting of outstanding RSUs and the related dividend equivalent credits. Instead, such grants will not be forfeited and will remain outstanding and vest on the regularly scheduled vesting dates, provided the applicable performance condition is met. The RSUs granted in 2013 are subject to a 20% reduction if our total TSR for the three-year period ending on December 31, 2015, is below the median TSR of a peer group. Because our total TSR for the three-year period ending on December 31, 2015 was below the median TSR of the peer group, 20% of the RSUs granted in 2013 were forfeited. Accordingly, 80% of RSUs granted in 2013 have been included in the table above. Mr. Flores’ RSUs that were assumed in connection with the company’s acquisition of Plains Exploration would vest in full upon termination of employment as a result of death or disability.

Pursuant to the terms of the PSU agreements outstanding as of December 31, 2015, termination of the executive’s employment as a result of death will result in acceleration of vesting of the number of outstanding PSUs represented by the target award and the related dividend equivalent credits. Termination of the executive’s employment as a result of disability or retirement will not result in acceleration of vesting of outstanding PSUs and the related dividend equivalent credits. Instead, such grants will not be forfeited and will remain outstanding and vest on the regularly scheduled vesting dates, provided the applicable performance condition is met. The target award of PSUs granted in 2015 has been included in the table above.

(6)

Certain of the benefits described in the table would be achieved in the event of a change of control alone, and would not require a termination of the executive’s employment. In particular, pursuant to the terms of our stock incentive plans and the individual award agreements outstanding as of December 31, 2012, upon a change of control as defined in the plans, all outstanding stock options would immediately vest. In addition, in the event of a change of control, all restrictions on Mr. Flores’ outstanding RSUs that were assumed in connection with the company’s acquisition of Plains Exploration would lapse. However, with respect to the stock options, RSUs and PSUs granted by the company in 2013, 2014 and 2015, the agreements provide for the benefits described in the table following a change of control only if the recipient also experiences an actual or constructive termination of employment within one year after the change of control. The amounts stated in the rows titled “Termination after Change of Control” assume the full vesting of options granted in 2012, 2013, 2014 and 2015 and PSUs granted in 2014 and 2015. As noted previously, 20% of the RSUs granted in 2013 were forfeited due to our TSR performance during the performance period ended December 31, 2015. Accordingly, 80% of the RSUs granted in 2013 have been included in the rows titled “Termination after Change of Control.”

(7)	Pursuant to the terms of the executive’s employment agreement, the total payments may be subject to reduction if such payments result in the imposition of an excise tax under Section 280G of the Internal Revenue Code.

(8)	Mr. Arnold is entitled to certain severance benefits in the event of his termination without cause under the company’s severance plan, which is generally available to certain eligible employees.

(9)	Mr. Arnold is entitled to certain benefits in the event of his termination following a change of control under the company’s change of control plan, which is generally available to certain eligible employees.

54 Freeport-McMoRan 2016 Proxy Statement

Termination Payments to Mr. Moffett. As previously discussed in the section titled “Executive Officer Compensation – Compensation Discussion and Analysis” on page 25, Mr. Moffett stepped down as an executive of the company and from the board effective December 31, 2015. In connection with Mr. Moffett’s departure, he and the company entered into a separation and consulting letter agreement (the letter agreement) dated as of December 24, 2015. Pursuant to the letter agreement, Mr. Moffett received the payments and benefits due to him (1) upon a termination of employment without cause under his Amended and Restated Executive Employment Agreement with the company dated December 2, 2008, as amended by letter agreement dated February 27, 2014, and (ii) upon a retirement under his performance share unit award agreements. These benefits include (a) a severance payment of $16,110,216, to be paid on July 1, 2016, (b) vesting of 1,165,750 unvested options, which options had no intrinsic value as of December 31, 2015, (c) retention of vesting of 300,000 performance-based RSUs, which awards remained subject to the performance condition and resulted in the payout of 240,000 shares of common stock (80% of the award), and related accumulated dividend equivalents of $963,807 on February 15, 2016, (d) retention of 262,000 PSUs, which remain subject to the applicable performance conditions, and (e) continued health and welfare benefits for up to three years. In addition, Mr. Moffett received certain benefits that were vested prior to his termination of employment under the company’s retirement plans and other benefit arrangements in which he participated in accordance with the terms thereof. For more information on the other terms of the letter agreement, see the section titled “Certain Transactions.”

Termination Payments to Mr. Flores. As previously discussed in the section titled “Executive Officer Compensation – Compensation Discussion and Analysis” on page 25, Mr. Flores departed from the company effective April 4, 2016. In connection with Mr. Flores’ departure, he became entitled to receive the payments and benefits due to him upon a termination of employment without cause under his Amended and Restated Employment Agreement with the company dated February 27, 2014. These benefits include (a) a severance payment of $7,500,000, to be paid within 30 days following the required six-month delay under Section 409A of the Code, (b) vesting of 602,500 unvested options, which options had no intrinsic value as of April 4, 2016, (c) vesting of 41,832 stock-settled restricted stock units and related accumulated dividend equivalents of $251,131 as of March 31, 2016, (d) retention of 262,000 PSUs, which remain subject to the applicable performance conditions, and (e) continued health and welfare benefits for up to three years. In addition, Mr. Flores received certain benefits that were vested prior to his termination of employment under the company’s retirement plans and other benefit arrangements in which he participated in accordance with the terms thereof.

Freeport-McMoRan 2016 Proxy Statement 55

AUDIT COMMITTEE REPORT

The audit committee is currently comprised of four directors. The board has determined that each member of the audit committee has no material relationship with the company and that each is independent and financially literate under the listing standards of the NYSE and under the SEC’s standards relating to independence of audit committees.

We, the audit committee, operate under a written charter approved by the committee and adopted by the board. Our primary function is to assist the board in fulfilling the board’s oversight responsibilities relating to (1) the effectiveness of the company’s internal control over financial reporting, (2) the integrity of the company’s financial statements, (3) the company’s compliance with legal and regulatory requirements, (4) the qualifications and independence of the company’s independent registered public accounting firm, and (5) the performance of the company’s independent registered public accounting firm and internal audit firm.

We oversee the company’s financial reporting process on behalf of the board. Our responsibility is to monitor this process, but we are not responsible for (1) developing and consistently applying the company’s accounting principles and practices, preparing and maintaining the integrity of the company’s financial statements and maintaining an appropriate system of internal controls; or (2) auditing the company’s financial statements and the effectiveness of internal control over financial reporting, and reviewing the company’s unaudited interim financial statements. Those are the responsibilities of management and the company’s independent registered public accounting firm, respectively.

During 2015, management assessed the effectiveness of the company’s system of internal control over financial reporting in connection with the company’s compliance with Section 404 of the Sarbanes-Oxley Act of 2002. We reviewed and discussed with management, Deloitte & Touche LLP, the company’s internal audit firm (Deloitte & Touche) and Ernst & Young, LLP, the company’s independent registered public accounting firm (Ernst & Young), management’s report on internal control over financial reporting and Ernst & Young’s report on their audit of the company’s internal control over financial reporting as of December 31, 2015, both of which are included in our 2015 Annual Report on Form 10-K for the year ended December 31, 2015.

Appointment of Independent Registered Public Accounting Firm; Financial Statement Review

In February 2015, in accordance with our charter, we appointed Ernst & Young as the company’s independent registered public accounting firm for 2015. We have reviewed and discussed the company’s audited financial statements for the year 2015 with management and Ernst & Young. Management represented to us that the audited financial statements fairly present, in all material respects, the financial condition, results of operations and cash flows of the company as of and for the periods presented in the financial statements in accordance with accounting principles generally accepted in the United States, and Ernst & Young provided an audit opinion to the same effect.

We have received from Ernst & Young the written disclosures required by the Public Company Accounting Oversight Board Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, regarding the company’s independent registered public accounting firm’s independence, and we have discussed with them their independence from the company and management. We have also discussed with Ernst & Young the matters required to be discussed by PCAOB Auditing Standard Nos. 16 and 18 – Communication with Audit Committees (PCAOB Rel. No. 2012-004, August 15, 2012), effective pursuant to SEC Release No. 34-68453 (December 17, 2012).

In addition, we have discussed with Ernst & Young the overall scope and plans for their audit, and have met with them and management to discuss the results of their examination, their understanding and evaluation of the company’s internal controls as they considered necessary to support their opinions on the financial statements and on the internal control over financial reporting for the year 2015, and various factors affecting the overall quality of accounting principles applied in the company’s financial reporting. Ernst & Young also met with us without management being present to discuss these matters.

In reliance on these reviews and discussions, we recommended to the board, and the board approved, the inclusion of the audited financial statements referred to above in our 2015 Annual Report on Form 10-K for the year ended December 31, 2015.

56 Freeport-McMoRan 2016 Proxy Statement

Internal Audit

We also review the company’s internal audit function, including the selection and compensation of the company’s internal audit firm. In February 2015, in accordance with our charter, we appointed Deloitte & Touche as the company’s internal audit firm for 2015. We have discussed with Deloitte & Touche the scope of their audit plan, and have met with them to discuss the results of their reviews, their review of management’s documentation, testing and evaluation of the company’s system of internal control over financial reporting, any difficulties or disputes with management encountered during the course of their reviews and other matters relating to the internal audit process. The internal audit firm also met with us without management being present to discuss these matters.

Dated: April 15, 2016

Robert A. Day, Chairman

Jon C. Madonna, Vice Chairman

Gerald J. Ford

Courtney Mather

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Fees and Related Disclosures for Accounting Services

The following table discloses the fees for professional services provided by Ernst & Young in each of the last two fiscal years:



	2015		2014
Audit Fees (1)		$16,828,000		$16,936,000
Audit-Related Fees (2)		158,000		1,580,000
Tax Fees (3)		290,000		569,000
All Other Fees		—		—

(1)

Audit Fees were primarily for professional services rendered for the audits of the consolidated financial statements and internal controls over financial reporting in compliance with Section 404 of the Sarbanes-Oxley Act of 2002, the review of documents filed with the SEC, consents, comfort letters and financial accounting and reporting consultations. Amounts related to oil and gas operations were approximately $4.9 million and $3.7 million of the total amounts reported for 2015 and 2014, respectively. Of the total amount reported for 2015, approximately $685,000 is pending audit committee approval.

(2)	Audit-Related Fees were primarily for professional services rendered for the audits of disposed businesses and other attest services.

(3)	Tax Fees were for professional services related to general tax consultation, transfer pricing, tax compliance and international tax matters.

The audit committee has determined that the provision of the services described above is compatible with maintaining the independence of our independent registered public accounting firm.

Freeport-McMoRan 2016 Proxy Statement 57

Audit Committee Pre-Approval Policies and Procedures

The audit committee’s policy is to pre-approve all audit, audit-related, tax and permitted non-audit services to be provided by our independent registered public accounting firm. In accordance with that policy, the committee annually pre-approves a list of specific services and categories of services, including audit, audit-related and other services, for the upcoming or current fiscal year, subject to specified cost levels. Any service that is not included in the approved list of services must be separately pre-approved by the audit committee. In addition, if fees for any service exceed the amount that has been pre-approved, then payment of additional fees for such service must be specifically pre-approved by the audit committee; however, any proposed service that has an anticipated or additional cost of no more than $30,000 may be pre-approved by the chairman of the audit committee, provided that the total anticipated costs of all such projects pre-approved by the chairman during any fiscal quarter does not exceed $60,000.

At each regularly-scheduled audit committee meeting, management updates the committee on (1) the scope and anticipated cost of any service pre-approved by the chairman since the last meeting of the committee and (2) the pre-approved fees for each service or group of services being provided by our independent registered public accounting firm. Each service provided by our independent registered public accounting firm has been approved in advance by the audit committee, and none of those services required use of the de minimis exception to pre-approval contained in the SEC’s rules.

PROPOSAL NO. 2: RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2016

The audit committee is responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm retained to audit the company’s financial statements. In February 2016, the audit committee appointed Ernst & Young to serve as the company’s independent registered public accounting firm for 2016. This appointment is being submitted to the stockholders for ratification. A representative of Ernst & Young is expected to be present at our 2016 annual meeting and will have an opportunity to make a statement if he or she so desires and will be available to respond to appropriate questions.

The audit committee pre-approves the scope of all audit, audit-related, tax and permitted non-audit services to be provided by Ernst & Young during the ensuing year and determines the appropriate funding to be provided by the company for payment of such services. Ernst & Young has been retained as the company’s independent registered public accounting firm continuously since 2002. The audit committee and the board believe that the continued retention of Ernst & Young to serve as the company’s independent registered public accounting firm is in the best interests of the company and its stockholders. If stockholders do not ratify this appointment, the audit committee will reconsider the appointment although it may determine the independent registered public accounting firm should continue. Even if stockholders ratify the appointment, the audit committee retains its discretion to change the company’s independent registered public accounting firm.

Vote Required to Ratify the Appointment of Ernst & Young LLP as our Independent Registered Public Accounting Firm For 2016

Approval of this proposal requires the affirmative vote of a majority of the common stock present in person or by proxy and entitled to vote. For more information on the voting requirements, see “Questions and Answers About the Proxy Materials, Annual Meeting and Voting.”

Board of Directors’ Recommendation on Proposal No. 2

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2016.

58 Freeport-McMoRan 2016 Proxy Statement

PROPOSAL NO. 3: ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

The board is committed to excellence in governance and recognizes the interest our stockholders have in our executive compensation program. As part of that commitment and in accordance with Section 14A of the Securities Exchange Act of 1934, our stockholders are being asked to approve an advisory resolution on the compensation of our named executive officers, as reported in this proxy statement.

This proposal, commonly known as the “say-on-pay” proposal, is advisory, which means that the vote on executive compensation is not binding on the company, the board or the compensation committee of the board. Nonetheless, the board takes this vote and the opinions of our stockholders seriously and the compensation committee will evaluate the outcome of this vote in making future compensation decisions with respect to our named executive officers. The vote on this resolution is intended to address the company’s overall compensation of our named executive officers and our compensation philosophy and practices, as described in this proxy statement.

We are asking our stockholders to indicate their support for the compensation of our named executive officers as described in this proxy statement by voting in favor of the following resolution:

RESOLVED, That the stockholders of Freeport-McMoRan Inc. (the Company) approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Company’s proxy statement for our 2016 annual meeting of stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosures provided in this proxy statement.

Based on input from our investors regarding the company’s executive compensation program since 2013, the compensation committee transformed our executive compensation program, and at our 2015 annual meeting, our stockholders approved the company’s “say-on-pay” proposal. Some highlights of our executive compensation program and recent compensation committee actions include the following:

•

Majority of our executives’ target direct compensation is at risk and based on measurable performance and increases in stock price under our annual and long-term incentive programs.

•

No payouts under the annual incentive plan for 2015.

•

No increases to base salaries of executives.

•

Forfeiture of 20% of the 2013-2015 restricted stock unit award for failure to satisfy performance conditions.

•

Consistent with our goals of reducing debt and costs, and continuing to safely and effectively operate our business, we adopted a new structure for 2016 performance share unit awards, incorporating financial and operational metrics in addition to relative TSR performance metric.

•

Streamlined executive management structure and discontinued paying three executives at the highest level.

In considering how to vote on this proposal, we urge you to review the relevant disclosures in this proxy statement, especially the section titled “Executive Officer Compensation – Compensation Discussion and Analysis,” which contains detailed information about the recent changes to our executive compensation program.

We currently hold our “say-on-pay” advisory vote every year. Accordingly, the next “say-on-pay” vote will occur at our 2017 annual meeting of stockholders.

Vote Required to Approve, on an Advisory Basis, the Compensation of Our Named Executive Officers

Board of Directors’ Recommendation on Proposal No. 3

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.

Freeport-McMoRan 2016 Proxy Statement 59

PROPOSAL NO. 4: APPROVAL OF AN AMENDMENT TO OUR AMENDED AND RESTATED BY-LAWS TO IMPLEMENT STOCKHOLDER PROXY ACCESS

At our 2015 annual meeting, a non-binding stockholder proposal requested that the board adopt and submit to stockholders for their approval a “proxy access” amendment to our by-laws. In recognition of developing trends regarding proxy access, the board committed to present a proxy access proposal designed to reflect the company’s specific ownership and governance structures for stockholder approval at our 2016 annual meeting after careful consideration and stockholder engagement. The proposal received majority support at our 2015 annual meeting. As a result of our stockholder outreach efforts in the fall of 2015 and early 2016, the board has developed and is presenting to stockholders for approval at our 2016 annual meeting a proxy access proposal designed to implement a proxy access right consistent with the request expressed by our stockholders, while reflecting the company’s specific ownership and governance structures.

The proposed amendment is summarized below and attached as Annex A to this proxy statement. This summary of the proposed amendment may not contain all the information that is important to you and you should read Annex A carefully before you decide how to vote.

Purpose and Effect of the Proposal

The purpose of this proposal is to recommend that our stockholders approve an amendment to our amended and restated by-laws to implement proxy access. Implementation of a proxy access by-law would permit a stockholder or stockholder group meeting the criteria set forth in the amended and restated by-laws to include in the company’s proxy materials for an annual meeting of stockholders at which directors are to be elected certain eligible stockholder-nominated candidates (stockholder nominees) for election to the board. Based on our stockholder outreach efforts and discussions with institutional investors, the board developed the proposed proxy access provisions described below.

Summary of the Proposed Amendment

Stockholder Eligibility to Nominate Directors. Under the proposed amendment, any stockholder, or group of up to 20 stockholders, who has owned 3% or more shares of our common stock continuously for the three years prior to the date of submission of a notice nominating a candidate for director and continuing up to the date of the annual meeting would be eligible to include in the company’s proxy materials stockholder nominees for election to the board at an annual meeting of stockholders. Each stockholder may only belong to one nominating group. A group of funds in the same complex is considered as one stockholder.

Number of Stockholder Nominees. Eligible stockholders would be permitted to nominate the greater of (a) two stockholder nominees or (b) 20% of the total number of directors in office as of the last day nominations of stockholder nominees may be submitted, rounded down to the nearest whole number. If one or more vacancies occurs on the board after the deadline to nominate stockholder nominees and the board reduces the size of the board accordingly, the reduced board size will be used in calculating the maximum number of stockholder nominees. Based on our board size of eight following the annual meeting, the maximum number of stockholder nominees that could be included in the proxy materials for an annual meeting is two. If the number of stockholder nominees for any annual meeting of stockholders exceeds the maximum number, then such stockholder nominees would be selected, one by one, for inclusion in the proxy materials in order of the number of shares of our common stock (largest to smallest) held by each nominating stockholder or group of nominating stockholders until the maximum is reached. The maximum number would be reduced by:

•

stockholder nominees whose nominations are subsequently withdrawn;

•

stockholder nominees who the board itself decides to nominate for election at such annual meeting; and

•

the number of incumbent directors who had been stockholder nominees at any of the preceding two annual meetings and whose reelection at the upcoming annual meeting is being recommended by the board.

Calculation of Qualifying Ownership. To ensure that the interests of stockholders seeking to nominate a stockholder nominee are aligned with those of our other stockholders, a nominating stockholder would only be

60 Freeport-McMoRan 2016 Proxy Statement

considered to own shares of our common stock if such stockholder possesses both (a) full voting and investment rights pertaining to the shares and (b) the full economic interest in (including the opportunity for profit from and the risk of loss on) such shares. Borrowed or hedged shares would not be deemed to be owned shares, but loaned shares would be considered owned if they are recalled by the nominating stockholder within five business days of the nominating stockholder being notified that its stockholder nominee will be included in the proxy materials and are held by the nominating stockholder through the annual meeting. A nominating stockholder would be deemed to own shares held in the name of a nominee or other intermediary so long as such stockholder retains economic and voting rights over the shares. If any stockholder withdraws before the annual meeting from a group of stockholders submitting a stockholder nomination, the calculation of the ownership of the group would include only the remaining stockholders.

Nominating Procedures. In order to provide adequate time to assess stockholder nominees, nominations of stockholder nominees must be received by our corporate secretary not later than the close of business on the 120^th nor earlier than the close of business on the 150^th day prior to the first anniversary of the mailing date of the prior year’s definitive proxy statement.

Information Required of Nominating Stockholders. Each stockholder or group of stockholders seeking to include a stockholder nominee in the company’s proxy materials must provide certain information to the company, including the following:

•

verification of qualifying stock ownership for the requisite period and an agreement to provide immediate notice if stock ownership falls below the minimum requirements;

•

a copy of the Schedule 14N filed by the nominating stockholder;

•

the written consent of each stockholder nominee to being named in the proxy materials as a nominee and to serving as a director if elected;

•

representations and undertakings regarding, among other things, the nominating stockholder’s compliance with applicable law and such stockholder’s intent, including a lack of intent to change or influence control of the company; and

•

an undertaking to assume liability arising out of the nominating stockholder’s and its stockholder nominee’s communications in connection with the nomination or election of directors and to indemnify the company for any breach by the nominating stockholder or the stockholder nominee of such person’s respective applicable obligations, agreements or representations under the proxy access provisions of the by-laws.

Information Required of Stockholder Nominees. Each stockholder nominee must provide certain information to the company, including representations and undertakings regarding, among other things:

•

the stockholder nominee’s compliance with the policies, guidelines and principles of business conduct applicable to the company’s directors;

•

disclosure of any compensation or other financial arrangements in connection with the nominee’s candidacy for or service as a director;

•

disclosure of any voting commitments; and

•

delivery of such other information, including a director nominee questionnaire, as the board or its designee may request.

Independence of Stockholder Nominees. A stockholder nominee would not be eligible for inclusion in the company’s proxy materials if the board or its designee determines that he or she is not independent under the company’s corporate governance guidelines or the applicable stock exchange requirements.

Supporting Statement. The nominating stockholder or group of stockholders would be permitted to include in the proxy statement a statement not exceeding 500 words in support of a stockholder nominee’s election to the board, so long as the statement fully complies with all applicable rules and regulations. The company may omit, supplement or correct any information, including all or a portion of such statement, if the board or its designee determines that such information or statement (or portion thereof) is not true in all material respects, omits a material statement, impugns the character, integrity or personal reputation of or makes charges concerning improper illegal or immoral conduct or associations, without factual foundation with respect to any individual, entity or government authority, would impose a material risk of liability on the company, or would violate any applicable law, rule or regulation.

Freeport-McMoRan 2016 Proxy Statement 61

Exclusion of Stockholder Nominees. The company would not be required to include a stockholder nominee in the proxy materials for any annual meeting of stockholders if:

•

the company has received a notice indicating that a stockholder intends to nominate a candidate for director pursuant to the advance notice provisions of our by-laws, unless the notice expressly elects to have the candidate included in the proxy statement pursuant to the proxy access provision of the by-laws;

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the nominating stockholder or a qualified representative for the nominating stockholder does not appear at the annual meeting to present the nomination or withdraws its nomination;

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the board or its designee determines that the stockholder nominee’s nomination or election would result in a violation of our by-laws, certificate of incorporation, or any applicable law, rule or regulation;

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a stockholder nominee who was nominated at one of the company’s two preceding annual meetings of stockholders subsequently withdrew or became ineligible or unavailable for election at such annual meeting or received a vote of less than 15% of the shares of common stock entitled to vote for such stockholder nominee;

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the stockholder nominee has been, within the past three years, an officer or director of a competitor;

•

the nominating stockholder no longer satisfies the eligibility requirements;

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any representations or warranties in the notice nominating the stockholder nominee cease to be materially true and accurate;

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the stockholder nominee becomes unwilling or unable to serve on the board; or

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the nominating stockholder or stockholder nominee has materially violated or breached any of such person’s respective applicable obligations, agreements, representations or warranties.

Vote Required to Approve the Amendment to Our Amended and Restated By-Laws

Approval of this proposal requires the affirmative vote of a majority of the common stock present in person or by proxy and entitled to vote. If the proposed amendment is approved, it will become effective immediately and proxy access will be available for the next annual meeting of stockholders. For more information on the voting requirements, see “Questions and Answers About the Proxy Materials, Annual Meeting and Voting.”

Board of Directors’ Recommendation on Proposal No. 4

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE AMENDMENT TO OUR AMENDED AND RESTATED BY-LAWS TO IMPLEMENT STOCKHOLDER PROXY ACCESS.

62 Freeport-McMoRan 2016 Proxy Statement

PROPOSAL NO. 5: APPROVAL OF AN AMENDMENT TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK

We are currently authorized to issue an aggregate of 1.85 billion shares of capital stock, consisting of 1.8 billion shares of common stock, $0.10 par value per share, and 50 million shares of preferred stock, $0.10 par value per share. The board of directors unanimously approved, and recommends that our stockholders approve, an amendment to section (a) of Article FOURTH of our amended and restated certificate of incorporation (certificate of incorporation) to increase the number of authorized shares of common stock from 1.8 billion to 3.0 billion. The authorized preferred stock would remain 50 million shares. This will increase the aggregate number of shares of all classes of stock that the company may issue to 3.05 billion.

Shares that have already been issued are referred to as “issued” or “issued and outstanding.” The difference between the total number of authorized shares and the number of issued shares is the number of shares that we may issue in the future without amending the certificate of incorporation. Delaware law and the rules and regulations of the NYSE may require stockholder approval of issuances under certain circumstances.

As of March 31, 2016, our total number of shares of common stock outstanding on a fully diluted basis (assuming that all outstanding options were exercised, all restricted stock units were vested, and all performance share units were vested) is 1.3 billion as reflected in the table below:


		Number of Shares (In millions)
Common shares outstanding		1,251.8
Common shares issuable upon exercise of outstanding options		53.7
Common shares issuable upon vesting of outstanding RSUs		3.8
Common shares issuable upon vesting of outstanding PSUs		5.2
Common shares available for future issuance under stock plans		3.4
Fully Diluted		1,317.9

Accordingly, as of March 31, 2016, the total number of shares of common stock that were authorized, but not outstanding or reserved for issuance was approximately 482 million. In addition, we are proposing that our stockholders approve a new stock incentive plan at our 2016 annual meeting (see “Proposal No. 7: Approval of the Adoption of the Proposed 2016 Stock Incentive Plan”). Because only approximately 27% of the authorized shares currently remain available for issuance (23% if the 2016 Stock Incentive Plan is adopted), the board believes it is in the best interests of the company and our stockholders to increase our authorized shares of common stock in order to have additional shares available for use as the board deems appropriate or necessary for future corporate needs.

Purpose and Effect of the Proposal

The purpose of the proposal to increase the number of authorized shares of common stock is to provide the company with greater flexibility in considering and planning for future business and financial needs. We believe that it is advantageous for us to have the ability to act promptly with respect to potential opportunities and that the proposed increase in the number of authorized shares of common stock is desirable in order to have the additional shares available, as needed, for possible financing transactions, future stock splits, strategic transactions or other general corporate purposes that are determined by the board to be in the best interest of our stockholders. Having such additional authorized shares available for issuance in the future would better position us to take timely advantage of market conditions and would enable us to issue shares of common stock or other securities exercisable, exchangeable or convertible into common stock, without the expense and delay of a stockholders’ meeting, except as may be required by applicable law or regulations. The board of directors will determine the terms of any issuance of the additional shares of common stock.

Freeport-McMoRan 2016 Proxy Statement 63

The proposed amendment to section (a) of Article FOURTH of the certificate of incorporation, if approved by stockholders, would replace section (a) of the article with the following:

(a) Authorized Stock. The total number of shares of capital stock that the corporation shall have authority to issue is 3,050,000,000 shares, consisting of 50,000,000 shares of Preferred Stock, par value $0.10 per share, and 3,000,000,000 shares of Common Stock, par value $0.10 per share.

At present, we have no definitive plans, understandings, agreements or arrangements to issue additional shares of newly authorized common stock for any purpose, other than pursuant to our outstanding stock incentive plans; however, we believe that the adoption of this proposal will enable us to promptly and appropriately respond to business opportunities, to raise additional equity capital or to declare stock splits and stock dividends. Given the number of shares currently available for issuance, the company may not be able to effect these business opportunities without first obtaining stockholder approval for an increase in the number of authorized shares of common stock. The cost, prior notice requirements and delay involved in obtaining stockholder approval at the time that corporate action may become necessary could eliminate the opportunity to effect the action or reduce the expected benefits.

The proposed amendment will not have any immediate effect on the rights of existing stockholders. If the amendment is approved, except as may be required by applicable law or by the rules of NYSE or of any stock exchange on which our securities may be listed, the additional shares of common stock proposed to be authorized, together with existing authorized and unissued shares of common stock, generally will be available for issuance without any requirement for further stockholder approval. Future issuances of shares of common stock or securities convertible into or exchangeable for common stock could have a dilutive effect on our earnings per share, book value per share and the voting power and interest of current stockholders. The board of directors has no current plans to do so; however, shares of common stock could be issued in various transactions that would make a change in control of the company more difficult or costly and, therefore, less likely. Although we could theoretically use the additional shares to make more difficult or to discourage an attempt to acquire control of the company, the proposed amendment is not the result of any specific effort to obtain control of the company by a tender offer, proxy contest or otherwise, and we have no present intention to use the increased shares of authorized common stock for anti-takeover purposes.

If the stockholders approve the proposed amendment, it will become effective upon the filing of a certificate of amendment setting forth the amendment with the Secretary of State of the State of Delaware. The additional shares of common stock authorized by the proposed amendment, if and when issued, would have the same rights and privileges as the shares of common stock currently authorized. The common stock has no preemptive rights to purchase common stock or other securities. In addition, Delaware law does not provide dissenters’ or appraisal rights to our stockholders in connection with the proposed increase in the number of authorized shares of common stock. The board reserves the right to abandon or delay the filing of the amendment even if it is approved by our stockholders.

Vote Required to Approve the Amendment to Our Certificate of Incorporation

Approval of this proposal requires the affirmative vote of the holders of a majority of the outstanding shares of common stock of the company. For more information on the voting requirements, see “Questions and Answers About the Proxy Materials, Annual Meeting and Voting.”

Board of Directors’ Recommendation on Proposal No. 5

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF OUR COMMON STOCK.

64 Freeport-McMoRan 2016 Proxy Statement

PROPOSAL NO. 6: APPROVAL OF AN AMENDMENT TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO CLARIFY THAT ANY DIRECTOR MAY BE REMOVED WITH OR WITHOUT CAUSE

In a recent decision involving an unrelated company, the Delaware Court of Chancery invalidated a certificate of incorporation provision that purported to limit the removal of the company’s directors by stockholders only for cause. The company’s directors served non-staggered, one-year terms, and the court held that, under Section 141(k) of the Delaware General Corporation Law (DGCL), directors serving non-staggered, one-year terms are removable by stockholders either with or without cause. Currently, section (b)(2)(B) of Article FOURTH of our company’s certificate of incorporation provides that “any director may be removed, with cause, by a vote of the holders of Common Stock and the holders of Voting Preferred Stock, voting together.”

Purpose and Effect of the Proposal

We received a letter from counsel for a purported stockholder demanding that we amend section (b)(2)(B) of Article FOURTH of our certificate of incorporation. The stockholder, through counsel, asserted that because our directors serve non-staggered, one-year terms, the provision conflicts with Section 141(k) of the DGCL and is therefore invalid. Section (b)(2)(B) of Article FOURTH of our certificate of incorporation does not provide that directors may be removed “exclusively” or “only” for cause. Accordingly, we do not interpret that section of our certificate of incorporation as negating the provisions of Section 141(k) of the DGCL that permit the removal of directors without cause. However, in connection with its review of our certificate of incorporation, the board has determined that it is advisable and in the best interests of the company and its stockholders to amend section (b)(2)(B) of Article FOURTH to expressly reference the stockholders’ power to remove directors without cause. As a result, the board has approved, adopted and declared advisable, and recommends that the stockholders approve and adopt, the proposed amendment to the certificate of incorporation.

The proposed amendment to section (b)(2)(B) of Article FOURTH of the certificate of incorporation, if approved by stockholders, would replace section (b)(2)(B) of the article with the following (new language underlined for reference):

(B) Any director may be removed, with or without cause, by a vote of the holders of Common Stock and the holders of Voting Preferred Stock, voting together.

If the stockholders approve the proposed amendment, it will become effective upon the filing of a certificate of amendment setting forth the amendment with the Secretary of State of the State of Delaware. The board reserves the right to abandon or delay the filing of the amendment even if it is approved by our stockholders.

Vote Required to Approve the Amendment to Our Certificate of Incorporation

Approval of this proposal requires the affirmative vote of a majority of the outstanding shares of common stock of the company. For more information on the voting requirements, see “Questions and Answers About the Proxy Materials, Annual Meeting and Voting.”

Board of Directors’ Recommendation on Proposal No. 6

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO CLARIFY THAT ANY DIRECTOR MAY BE REMOVED WITH OR WITHOUT CAUSE.

Freeport-McMoRan 2016 Proxy Statement 65

PROPOSAL NO. 7: APPROVAL OF THE ADOPTION OF THE PROPOSED 2016 STOCK INCENTIVE PLAN

We are seeking stockholder approval of the company’s 2016 Stock Incentive Plan (the “plan”). The plan will become effective on the day of our 2016 annual meeting, assuming approval of this proposal by our stockholders.

The board, following a recommendation from the compensation committee (the “committee”), has adopted the plan for our employees, directors and consultants, subject to stockholder approval. The board is seeking approval of the plan as the successor to the company’s Amended and Restated 2006 Stock Incentive Plan (the “2006 plan”), the company’s only equity plan with shares available for grant. If the plan is approved by the stockholders, no future awards will be granted under the 2006 plan, however, the terms and conditions of any prior plans will continue to govern any outstanding awards thereunder. If the stockholders do not approve the plan, the plan will not become effective.

The following description of the plan is qualified in its entirety by reference to the full text of the plan, which is attached hereto as Annex B.

Why Stockholders Should Vote to Approve the Plan

Equity Incentive Awards Are An Important Part Of Our Compensation Philosophy

The company believes that the adoption of the plan is essential to our success. Equity awards are intended to motivate high levels of performance, align the interests of the company’s employees, directors and consultants with those of its stockholders by giving them the perspective of an owner with an equity stake in the company and providing a means of recognizing their contributions to the success of the company. The board and company management believe that equity awards are necessary to remain competitive in the industry and are essential to recruiting and retaining the highly qualified individuals who help the company meet its goals.

Our 2006 Plan Will No Longer Have Shares Available For Grant

Under the company’s current forecasts, our 2006 plan will run out of shares available for grant within the next 12 months, and the company will not be able to continue to issue equity to its employees, directors and consultants unless its stockholders approve the plan. This assumes the company continues to grant awards consistent with its historical usage and current practices, as reflected in its historical burn rate discussed below, and noting that future circumstances may require the company to change its current equity grant practices. While the company could increase cash compensation if it is unable to grant equity incentives, the company anticipates that it will have difficulty attracting, retaining and motivating its employees and directors if it is unable to make equity grants to them.

Outstanding Awards Under Prior Plans And Determination Of Share Reserve For The Plan

The table below presents information about the number of shares that were subject to various outstanding stock-settled awards under all prior plans and the shares remaining available for issuance under our 2006 plan, each at April 12, 2016.


	Number of Shares		As a % of Shares Outstanding (1)	Market Value ($ in Millions)(2)
Options outstanding		53,539,294	4.3%	$558.4
Weighted-average exercise price of outstanding options		$30.26
Weighted-average remaining term of outstanding options		5.3 years
Restricted stock units outstanding (3)		3,815,935	0.3%	$39.8
Performance share units outstanding (4)		5,178,000	0.4%	$54.0
Shares available for grant		3,550,402	0.3%	$37.0

(1)	Based on 1,252,026,029 shares of company common stock outstanding as of April 12, 2016.

(2)	Based on the closing price of company common stock on April 12, 2016, of $10.43 per share.

(3)	Includes unvested RSUs and vested but deferred RSUs.

(4)	Represents maximum shares that could be delivered under outstanding PSUs.

66 Freeport-McMoRan 2016 Proxy Statement

In determining whether to approve the plan, including the share reserve under the plan, the board and committee considered the following:

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Share Reserve. The board has approved the reservation of 72 million shares under the plan. If the plan is approved by our stockholders, it will represent the only equity plan under which the company will be able to grant future equity awards and the company will no longer grant awards under the 2006 plan. Analysis by the committee’s independent compensation consultant, which was based on generally accepted evaluation methodologies used by proxy advisory firms, confirmed that the number of shares to be reserved under the plan is within generally accepted standards as measured by an analysis of the plan cost relative to industry standards.

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Burn Rate. In calendar years 2013, 2014 and 2015, the company’s annual equity burn rates (calculated by dividing (1) the number of shares subject to equity awards granted during the year by (2) the weighted-average number of shares outstanding at the end of the applicable year) under the prior plans were 0.80%, 0.52% and 0.76%, respectively, for a three-year average of 0.69%.

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Expected Duration of the Plan. The company expects the share reserve under the plan to provide the company with enough shares for awards for approximately five or more years, assuming the company continues to grant awards consistent with its current practices and historical usage, as reflected in its historical burn rate, and further dependent on the price of the company common stock and hiring activity during the next few years, forfeitures of outstanding awards under the prior plans, and noting that future circumstances may require the company to change its current equity grant practices. The company cannot predict its future equity grant practices, the future price of its common stock or future hiring activity with any degree of certainty at this time, and the share reserve under the plan could last for a shorter or longer time.

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Dilution. In calendar years 2013, 2014 and 2015, the end of year overhang rate (calculated by dividing (1) the sum of the number of shares issuable pursuant to equity awards outstanding at the end of the calendar year plus shares remaining available for issuance for future awards at the end of the calendar year by (2) the sum of the number of shares outstanding at the end of the calendar year plus the sum from (1) above) was 6.7%, 6.3% and 5.8%, respectively. Upon approval of the plan, the company expects its overhang to be approximately 9.5%.

In light of the factors described above, and the fact that the ability to continue to grant equity compensation is vital to the company’s ability to continue to attract and retain highly qualified individuals in the extremely competitive labor markets in which it competes, the board has determined that the size of the share reserve under the plan is reasonable and appropriate at this time.

Equity Compensation Best Practices Reflected in the Plan

The plan contains a number of provisions that the company believes are consistent with best practices in equity compensation and that protect our stockholders’ interests.

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Continued Broad-Based Eligibility for Equity Awards. The company grants equity awards to its directors, a significant number of its employees, and certain consultants. By doing so, the company links their interests with stockholder interests throughout the organization and motivates these individuals to act as owners of the business. As of April 12, 2016, 2,036 of the company’s active employees and consultants and its eight current non-management directors held outstanding equity awards.

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Stockholder Approval is Required for Additional Shares and Other Material Amendments. The plan does not contain an annual “evergreen” provision. The plan authorizes a limited number of shares, so that stockholder approval is required to increase the maximum number of shares of common stock which may be issued under the plan. In addition, other material amendments to the plan require stockholder approval.

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No Discount Stock Options or Stock Appreciation Rights. All stock options and stock appreciation rights will have an exercise price equal to or greater than the fair market value of the company’s common stock on the date the stock option or stock appreciation right is granted; although discount stock options and SARs may be granted in the event such awards are assumed or substituted in connection with certain corporate transactions. The committee generally defines fair market value as the closing sale price of a share of our common stock on the stock exchange or national market system on which our common stock is listed on such date or, if no sale occurred on the date in question, the closing sale price for a share of our common stock on the last preceding date for which such quotation exists. The closing sale price for a share of our common stock on the New York Stock Exchange, or the NYSE, on April 12, 2016 was $10.43.

Freeport-McMoRan 2016 Proxy Statement 67

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No Automatic Single-Trigger Vesting of Awards. The plan does not provide for automatic “single-trigger” accelerated vesting upon a change in control.

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Limitations on Dividend Payments. Dividends and dividend equivalents may be paid on awards subject to performance vesting conditions only to the extent such conditions are met. Further, participants holding stock option or stock appreciation rights do not receive dividend equivalents for any period prior to the exercise of the award.

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Limitations on Grants. Individual limits on awards granted to any participant pursuant to the plan during any calendar apply as follows: (a) a maximum of 3.75 million shares of common stock may be subject to all options and stock appreciation rights granted to a participant; (b) a maximum of 2 million shares of common stock may be earned subject to all restricted stock, restricted stock units, other stock-based awards granted to a participant that are intended to qualify as “performance-based compensation” under Section 162(m) of the Internal Revenue Code; and (c) a maximum of $5 million may become payable pursuant to other stock-based awards denominated in dollars or cash-based performance awards granted to a participant that are intended to qualify as “performance-based compensation” under Section 162(m) of the Internal Revenue Code; provided that, these numbers may be adjusted to take into account equity restructurings and certain other corporate transactions as described below and will be multiplied by two with respect to awards granted to a participant during the calendar year in which the participant commences employment with the company or its subsidiaries. Notwithstanding the foregoing, in no event will more than the authorized number of shares available for issuance under the plan be granted to any one person during any calendar year with respect to one or more awards denominated in shares. For purposes of these limits, each share subject to an award (including a full value award) will count as one share against the specified limit.

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Limitations on Non-Management Director Compensation. An annual limit of $750,000 per calendar year applies to the sum of all cash, equity-based awards (with the value determined as of the grant date) and other compensation granted to a non-management director for services as a member of the board, although no more than $500,000 of such annual amount may be awarded in the form of equity-based awards.

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Reasonable Limit on Full Value Awards. For purposes of calculating the shares that remain available for issuance under the plan, grants of options and stock appreciation rights will be counted as the grant of one share for each one share actually granted, as described above. However, to protect stockholders from potentially greater dilutive effect of full value awards, all grants of full value awards will be deducted from the plan’s share reserve as 2.07 shares for every one share actually granted.

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No Repricing of Awards. Awards may not be repriced, replaced or regranted through cancellation or modification without stockholder approval if the effect would be to reduce the exercise price for the shares under the award.

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No Tax Gross-Ups. The plan does not provide for any tax gross-ups.

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No Liberal Share Counting. Shares of common stock delivered or withheld in payment of the exercise price of a stock option, delivered or withheld to satisfy tax obligations in respect of an award, or repurchased with the proceeds of an option exercise may not be re-issued under the plan.