• 3 hours Wintershall And LetterOne In Talks For $12B Oil, Gas Merger
  • 5 hours India Exempts State Oil Firms Mergers From Competition Approval
  • 7 hours Turkey Targets $5B Investment In Wind Energy By End-2017
  • 9 hours Weatherford Looks To Sell Assets To Ease Some Of $8B Debt
  • 10 hours OPEC Set To Move Fast On Cut Extension Decision
  • 12 hours Nigeria Makes First Step Away From Oil
  • 24 hours Russia Approves Profit-Based Oil Tax For 2019
  • 1 day French Strike Disrupts Exxon And Total’s Oil Product Shipments
  • 1 day Kurdistan’s Oil Exports Still Below Pre-Conflict Levels
  • 1 day Oil Production Cuts Taking A Toll On Russia’s Economy
  • 1 day Aramco In Talks With Chinese Petrochemical Producers
  • 1 day Federal Judge Grants Go-Ahead On Keystone XL Lawsuit
  • 2 days Maduro Names Chavez’ Cousin As Citgo Boss
  • 2 days Bidding Action Heats Up In UK’s Continental Shelf
  • 2 days Keystone Pipeline Restart Still Unknown
  • 2 days UK Offers North Sea Oil Producers Tax Relief To Boost Investment
  • 2 days Iraq Wants To Build Gas Pipeline To Kuwait In Blow To Shell
  • 2 days Trader Trafigura Raises Share Of Oil Purchases From State Firms
  • 2 days German Energy Group Uniper Rejects $9B Finnish Takeover Bid
  • 2 days Total Could Lose Big If It Pulls Out Of South Pars Deal
  • 3 days Dakota Watchdog Warns It Could Revoke Keystone XL Approval
  • 3 days Oil Prices Rise After API Reports Major Crude Draw
  • 3 days Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 3 days Gazprom Speaks Out Against OPEC Production Cut Extension
  • 3 days Statoil Looks To Lighter Oil To Boost Profitability
  • 3 days Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 3 days Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 3 days Whitefish Energy Suspends Work In Puerto Rico
  • 3 days U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 4 days Thanksgiving Gas Prices At 3-Year High
  • 4 days Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 4 days South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 4 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 4 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 4 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 5 days ConocoPhillips Sets Price Ceiling For New Projects
  • 7 days Shell Oil Trading Head Steps Down After 29 Years
  • 7 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 7 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 7 days $1.6 Billion Canadian-US Hydropower Project Approved
Alt Text

Energy Majors Hit Hard By Climate Regulations

Siemens and General Electric have…

Alt Text

GE Looks To Divest Energy Assets As Turmoil Continues

General Electric’s turmoil continues as…

Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

More Info

Bankrupt Oil Companies Pay Huge Bonuses To CEOs

Oil Barrels

The oil price rout that sent several hundred U.S. oil and gas companies under seems to be largely over, and in a somewhat surprising turn of events, some chief executives of companies that filed for bankruptcy protection in the last two years are doing better than they did when oil traded at over $100 a barrel.

A Wall Street Journal analysis cites the CEO of Ultra Petroleum, for example, who received a portion of 7.5 percent of new shares, to be issued after the company emerges from bankruptcy protection. In absolute terms, this translates into about $35 million – a tenfold jump on Michael Watford’s annual salary in the pre-crisis years.

Another chief executive, Seventy Seven Energy’s Jerry Winchester, got a stock package of 440,000 shares that were worth $6.6 million when the company emerged from bankruptcy last August, which have now swelled to $16 million, thanks to the $1.76-billion acquisition of Seventy Seven by Patterson-UTI Energy.

According to analysts, the post-bankruptcy treatment of CEOs in the U.S. energy industry is not unusual. What’s unusual is the size of some of their compensations, clearly demonstrating the revitalizing effect that higher oil and gas prices have had on some industry players. Both those that filed for bankruptcy protection when the time was right, and those that missed the bankruptcy protection train, trying to hang on for as long as possible.

By the same token, the CEOs of Big Oil and those independent energy companies that survived without having to resort to bankruptcy filings are still doing very well. Some of them are even having their salaries increased thanks to the better price environment. Related: U.S. Threatens OPEC As Oil Exports Hit Record High

The chief executives of Anadarko, EOG Resources, Noble Energy, and Cabot Oil & Gas received a combined salary increase of $2.7 million last year. That’s despite the sub-$30 lows that West Texas Intermediate hit early in the year, reflecting the growing optimism throughout the rest of the year, supported by a gradual recovery in prices.

All in all, the senior management of most big oil and gas companies emerged from the price crisis not just unscathed, but also richer in many cases. Except BP’s Bob Dudley, that is.

Last year, amid oil prices of around $40 per barrel, close to two-thirds of BP’s shareholders voted against the remuneration report suggested by the company for its board. The vote surprised many given that it happened at one of the biggest oil companies in the world, but it clearly signaled that investors are not always too happy about CEO salaries, especially when the company is not doing as well as it could.

Another case in point was Schlumberger’s Paal Kibsgaard’s paycheck for 2015: he received total compensation of $18.3 million, down by just $200,000 from the previous year while Schlumberger laid off 25,000 employees and its share price shed 18 percent. But now, Schlumberger is recovering nicely with Kibsgaard at the helm, thanks to renewed demand for oilfield services in the U.S. and abroad. Related: Did The Banks Just Give U.S. Shale A Carte Blanche?

BP, apparently, is not doing so well. Sky News recently reported that in a bid to avoid another shareholder revolt at this year’s general meeting, the company decided to shave off around $6.24 million (GBP 5 million) from Dudley’s total compensation for the next three years. From now until 2019, he will be able to only earn 112.5 percent of his basic salary per year if the company’s performance targets are met, down from 150 percent.

So, even if oil and gas prices are nowhere near the highs from three or four years ago, it’s still good to be an energy CEO. For some, it’s even better than before.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News