Chevron 'Cuts' CEO's Pay
Chevron Corporation has cut the bonuses and other benefits of its Chief Executive Officer (CEO) and two other top officials over accidents involving the company’s facilities in 2012, including underwater oil leaks in Brazil, a deadly rig fire in Nigeria and a blaze at a refinery in Richmond, California.
KS Endeavor, a drilling rig, operated by FODE Drilling Nigeria Limited, was drilling a natural gas exploration well in Chevron Nigeria Limited’s Funiwa Field in Block 86 in Bayelsa State, when it caught fire on January 6, 2012.
Following these incidents, the oil giant reduced the bonus for Chief Executive Officer, Mr. John S. Watson by 13 per cent, or $520,000, to $3.5 million.
Chevron also cut bonuses by 15 per cent and 16 per cent, respectively, for George L. Kirkland and Michael K. Wirth, both executive vice presidents, according to a filing with the Securities and Exchange Commission. The Wall Street Journal reported last week that Chevron’s board decided to cut the pay of Watson and other top executives in response to a string of accidents over the past year, including the deadly rig fire in Nigeria.
The company said recently that directors “took into account certain 2012 operating incidents” in awarding compensation packages to Messrs. Watson, Kirkland and Wirth.
The company nevertheless recorded its second-highest profit ever last year resulting in an increase in executive.
Despite the cut in his bonus the company awarded Watson a total compensation package of $32.2 million last year. That was up 30 percent from a total pay package of $24.7 million in fiscal 2011, a proxy filing ahead of the company’s annual meeting showed. Watson’s pay included a base salary of $1.7 million and a bonus of $3.5 million. His increase was fueled primarily by bumps in stock option awards and stock grants, which together totaled $16.9 million.
He also received $9.9 million in pension and other benefits.