Elsewhere in shareholder-unfriendly compensation structures:
Large U.S. energy producers base as much as 75% of executives’ bonuses on production and reserve growth goals, with most companies pegging between 15% and 40% of potential incentive pay to such targets, based on a Wall Street Journal analysis of proxy filings at large U.S. oil and gas companies. Payments for hitting those targets generally range from a couple of hundred thousand dollars to well over a million for individual executives, the filings show. In many cases the bonus calculations extend to employees ranking well below top executives.
Hess Corp.’s CEO, John Hess, earned more than $1 million in 2014, which was more than a third of his bonus, because the company topped production and reserve targets. Anadarko Petroleum Corp. CEO R.A. Walker earned about $1.5 million because the company’s output rose about 8%, or the equivalent of 23.4 million barrels of oil, from 2013 and it exceeded goals for finding new oil and gas deposits. Spokesmen for Hess and Anadarko declined to comment.
Photo: Paul Lowry