Oil and Gas Industry Compensation Report Shows Continued Rise in Board and Executive Compensation, Progress Needed in Executive Diversity
Some CEO compensation grew by 75 per cent year-over-year, only 3 per cent of CEO roles are occupied by women
CALGARY, AB, Jan. 17, 2024 /CNW/ - Bedford Group/TRANSEARCH has released the 2023 Report on Board and Executive Compensation and Governance for the oil and gas industry. This is the second annual iteration of the Company's report, presenting good governance practices, as well as board and executive retainers, salaries, incentive compensation and pay practices from 143 Canadian and U.S. upstream, midstream, downstream and integrated oil and gas operators.
"Economic factors and forecasts have worked to drive compensation up which is reflected in our report," says Frank Galati, Managing Partner with Bedford Consulting Group. "CEO and CFO compensation has grown significantly in almost all asset tiers year-over-year, representative of the strong position oil and gas currently finds itself in after a lengthy downturn from 2014 through 2021."
CEO total compensation ranged from $425,255 for companies with total assets under $100 million, to $16,622,169 for those with total assets over $30 billion. Increases to CEO compensation were as high as 75 per cent over last year. Total compensation also grew in most asset classes for CFOs and COOs year over year.
Producers can expect the TMX pipeline to add over half a million barrels per day for export beginning in 2024. Specifically in western Canada, access to west coast shipping ports will narrow the WCS differential and bolster corporate revenue. As a result, Bedford expects to see further increases in executive and director compensation in the coming years.
Similar increases were observed in Board compensation, with retainers, fees, and equity grants increasing in value from fiscal 2021. The report also highlights a significant shift away from meeting attendance fees for board members. In the latest data, only 8.4 per cent of companies provided a specific per-meeting fee, marking a nearly 50 per cent decrease from the previous year.
The oil and gas industry has been actively working towards increasing diversity around the boardroom table. As a result, it has the highest percentage of female board members (26.6 per cent) relative to Bedford's findings from both its mining (21.8 per cent) and clean technology (23.8 per cent) industry reports. It also represents an increase of 3.2 percentage points from 2021.
While strides have been taken when it comes to board diversity, this has not translated to an increase in female CEOs with only 3.2 per cent of CEOs and 11.6 per cent of all NEOs identifying as female.
"It's clear that the industry has taken strides on board diversity, but it lags behind when it comes to diversity in the C-suite, particularly for CEOs," says Stephen Diotte, Compensation Partner with Bedford. "The industry needs to make shifts to become more intentional when it comes to C-suite diversity. This could include best practice tools like developing a more comprehensive skills matrix and researching corporate practices at companies that have been successful in diversifying their boards and executive teams."
With oil and gas showing strong signs of growth after the prolonged downturn, Bedford looks forward to providing continued insight into the industry and its compensation practices.
The 2023 Report on Board & Executive Compensation and Governance in the oil and gas industry is available on the Bedford website.
Bedford Group/TRANSEARCH is one of the Top 10 largest retained executive search firms in the world, with 60 offices in 40 countries. With Canadian offices in Cochrane, Alberta, and Toronto, Canada, Bedford Group provides premium executive search, compensation strategy, and talent management solutions to a diverse group of clients of all sizes across the world. In addition to retained executive search and compensation strategy, Bedford provides services in succession planning, culture, organizational strategy, diversity and inclusion, leadership assessment and virtual onboarding.
SOURCE Bedford Consulting Group
Frank Galati, MBA, CPA, CMA, Managing Partner, Bedford Consulting Group, Tel:416-963-9000 ext 251, Cell: 416-970-7600, [email protected]; Mike Brown, For the Bedford Consulting Group, Worthington PR & Story, Cell: 587-590-4465, [email protected]
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