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.