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The Calgary Herald: Oilpatch CEOs’ salaries rising but increases losing some energy

EXTRACT: Shell Canada Ltd., chief executive Clive Mather’s salary rose about nine per cent to $978,750 and his bonus increased about six per cent to $800,000. He also received 330,000 options.

THE ARTICLE

Bonuses, options trimmed as companies show mixed results
Lisa Schmidt, The Calgary Herald
Published: Tuesday, March 20, 2007

CALGARY – CEO salaries and bonuses in the oilpatch continued to rise in 2006, but there are signs the pay parade is starting to slow.

Many top executives of Canada’s largest energy companies have been receiving unprecedented compensation packages over the past couple of years as oil and natural gas prices soared, leading to big increases in cash flows, profits and market value.

But according to recent company filings, the mixed results showing up on the balance sheets of oil and gas firms are beginning to flow through to the corner offices.

At Talisman Energy Inc., chief executive Jim Buckee saw his bonus drop from $2 million in 2005 to $1.2 million last year. His salary rose about seven per cent to almost $1.2 million and Mr. Buckee was granted 687,000 stock options in a year that saw the oil and gas producer post a record $2 billion in profits, but its stock performance largely trailed its competitors.

Mr. Buckee’s total compensation rose to $6.5 million after he cashed in about $4 million worth of stock options in 2006.That was down from $23.3 million in 2005, when he made over $20 million on options.

Nexen Inc.’s chief executive Charlie Fischer received a raise of almost 20 per cent, earning $1.15 million in salary in 2006. However, his $1.8-million bonus stayed the same in a year the company saw a 16-per-cent gain in its share price, but posted lower annual profits and production fell short of targets.

Mr. Fischer was also granted 275,000 options in 2006 and cashed in about $7.2 million worth of Nexen shares last year.

At Imperial Oil Ltd., chief executive Tim Hearn’s salary rose four per cent to $1.14 million, and his bonus rose 11 per cent $1 million as the company posted $3 billion in earnings in 2006, its highest annual profit. He was also granted 130,000 options last year and exercised none.

At Shell Canada Ltd., chief executive Clive Mather’s salary rose about nine per cent to $978,750 and his bonus increased about six per cent to $800,000. He also received 330,000 options. In 2006, Shell’s earnings fell 15 per cent to $1.7 billion, and the company said it would proceed with its expansion of the Athabasca Oil Sands Project despite a 75-per-cent rise in costs.

The rise in oilpatch executive salaries had raised eyebrows among some investors as energy companies reaped billions in profits over the past couple of years amid record-breaking prices for oil and gas. “It’s still high by anyone’s standards,” said one fund manager who didn’t want to be identified.

© The Ottawa Citizen 2007

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