The highest-paid CEOs of some of the biggest names in U.S. production, refining and transportation saw their pay packages increase substantially in 2018, while others' declined even as crude oil prices bounced back.
Sector heavyweights such as Phillips 66 and Chevron Corp. featured in a list of the 10 top-earning chief executives in the oil, gas and coal industries, S&P Global Market Intelligence data shows, with new Chevron CEO Michael Wirth seeing a 115.7% increase in compensation over his 2017 pay to $19.4 million.
Kinder Morgan Inc. CEO Steven Kean, who saw the largest percentage increase in compensation, presided over welcome developments at his company, such as subsidiary Kinder Morgan Canada Ltd.'s sale of the Trans Mountain oil pipeline system and the C$7.4 billion expansion project to the government of Canada for C$4.5 billion. The midstream operator also reached a final investment decision to proceed with the 2-Bcf/d Permian Highway pipeline, which is expected to help alleviate gas transportation bottlenecks out of West Texas and New Mexico when it comes online in late 2020.
Kean's compensation rose 4,380.9% in 2018 compared to the prior year. Kean's base salary is $1, and his compensation consists primarily of long-term incentive restricted stock awards and related dividend equivalent payments.
The top earner, however, was KLX Energy Services Holdings Inc. CEO Amin Khoury, who was appointed in 2018 to lead the oilfield services company's separation from parent KLX Energy Services Holdings Inc. following a merger with Boeing Co. Khoury raked in $31.9 million of all-stock compensation.
In second place was Chesapeake Energy Corp.'s Robert Lawler with $22.7 million in cash, stock, nonequity incentive plan compensation and options granted, up 52.6% from his 2017 pay package. The independent gas driller's unit price, however, plummeted 47% in 2018 even as it finished selling off chunks of itself to pay down huge debts.
Investors were particularly frustrated by Lawler's comment in August 2018 that Chesapeake, which historically got into trouble borrowing big to buy land, might look to acquire more shale oil and gas leases. Investors also panned the company's nearly $4 billion acquisition of oil driller WildHorse Resource Development Corp. announced at the end of October.
Cheniere Energy Inc.'s Jack Fusco was third on the list. The LNG exporter reached several milestones in 2018, including shipping its Corpus Christi liquefaction terminal's first cargo and sanctioning the facility's third train.
Compensation for Halliburton Co. chief Jeffrey Miller, ninth on the list, fell 26.4% in 2018 even though oil prices rebounded. By mid-2018, around the time companies were holding annual meetings in which shareholders voted on that year's compensation, the price of West Texas Intermediate crude oil had skyrocketed 61% over the prior-year period, compared to a 6% drop between mid-2016 and mid-2017.
The oilfield services industry in 2018 began to recover from a three-year downturn that left investors skittish toward the heavily capital-intensive industry.
Rounding out the top 10 list were Valero Energy Corp. and ConocoPhillips' CEOs, whose pay packages declined by 4.7% and 1.8%, respectively.