Jim Mulva is best paid oil and gas CEO
By Sheila
McNulty in Houston
Yahoo
Energy News
When it comes to executive
compensation in the oil and gas industry, a bigger company does not always mean
a better package.
Indeed, ExxonMobil, the world's
biggest oil and gas company, last year paid Lee Raymond, its chief executive
officer, less than ConocoPhillips paid its CEO, Jim Mulva.
"How much is too much? It
wasn't even a close race," said Bruce Lanni, senior analyst at AG Edwards,
in a report entitled Judgment Day, which ranks compensation packages in the
industry. Mr Mulva received $27.5m - more than any CEO in the industry. This
was "despite witnessing his company's share price decline 20 per cent last
year and generating the lowest return on capital employed over the last three
years - 9 per cent", said Mr Lanni.
ConocoPhillips is the third-largest
integrated oil and gas group in the US, behind ExxonMobil and ChevronTexaco. It
is the world's sixth-largest energy company and fifth-largest global refiner.
Mr Lanni took no issue with Mr
Raymond's package, of $25.8m: "His company's consistently strong
performance speaks for itself."
Among the other two largest
companies, Royal Dutch/Shell and BP, the former paid Philip Watts $2.7m and
Jeroen van der Veer $2.4m, and BP rewarded Lord Browne with $8.4m.
In addition to ConocoPhillips, Mr
Lanni said Amerada Hess appeared to be overpaying its top executive, John Hess,
with $7m. "Mr Hess' 2002 compensation package and large year-on-year
increase, up 110 per cent, appears lofty given the company's poor operational
performance and sub-par financial returns."
In calculating compensation, the
survey took into account salary increases, annual bonuses, long-term compensation
and stock option programmes. In analysing if they were justified, Mr Lanni
focused on earnings, pay-out ratios and other market data.