Last week brought another reckoning for big oil as a court ruling and shareholder influence made it clear companies need to revisit their strategies for emissions reductions and clean energy. Here\u2019s what happened:<\/p>\n\n\n\n
- Do it faster.<\/strong> In the Netherlands, a court ruled an Anglo-Dutch oil producer would need to lower its emissions by 45 percent from 2019 levels by 2030, far more quickly than the company had intended. \u201cAnalysts said the\u2026ruling could set a precedent for similar cases against the world\u2019s biggest corporate polluters, which may now face related lawsuits and be forced to overhaul their business models,\u201d reported Derek Brower and Anjli Raval of Financial Times.
<\/li>- Change direction.<\/strong> For weeks, a U.S. oil supermajor had done battle with an investment group that holds 0.02 percent of its shares. The investment group wanted the company \u201cto gradually diversify its investments to be ready for a world that will need fewer fossil fuels in coming decades\u201d rather than focus on carbon capture and storage solutions, reported Sarah McFarlane and Christopher Matthews of The Wall Street Journal<\/em>.
To that end, the investment group nominated four outside board-of-director candidates stating, \u201cA Board that has underperformed this dramatically and defied shareholder sentiment for this long has not earned the right to choose its own new members or pack itself in the face of calls for change\u2026shareholders deserve a Board that works proactively to create long-term value, not defensively in the face of deteriorating returns and the threat of losing their seats.\u201d Other shareholders agreed and, in a highly unusual outcome, two of the four candidates were elected to the board, reported Ben Geman of Axios<\/em>.
<\/li>- Less is more.<\/strong> Two other multinational energy companies experienced shareholder uprisings recently, reported Sergio Chapa and Caroline Hyde of Bloomberg. Shareholder proposals to aggressively reduce emissions and limit pollution by a company\u2019s customers were approved despite the companies\u2019 boards urging shareholders to vote against the changes.<\/li><\/ol>\n\n\n\n
Major stock indices in the United States finished last week higher.<\/p>\n\n\n\n
(The one-year numbers in the scorecard below remain noteworthy. They reflect the strong recovery of U.S. stocks from last year\u2019s coronavirus downturn to the present day.)<\/p>\n\n\n\n
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<\/figure>\n\n\n\nHow Much is a CEO Worth? <\/h3>\n\n\n\n
The COVID-19 pandemic created enormous losses for many companies so it might seem logical some CEO pay packages would decline along with companies\u2019 profits. In fact, a number of CEOs announced high-profile salary cuts last year, reported Axios<\/em>.<\/p>\n\n\n\n
The stinger is salary is often a small part of CEO compensation. While executive compensation packages vary from company to company, they often include:<\/p>\n\n\n\n
- Base salary<\/li>
- Short-term incentives such as bonuses<\/li>
- Long-term incentives such stock options<\/li>
- Benefits such as health and life insurance, retirement plans, and paid vacations<\/li>
- Perquisites (perks), such as financial counseling, tax preparation, security, cars and drivers, corporate aircraft, and country club fees<\/li><\/ul>\n\n\n\n
When all aspects of CEO pay are considered, the majority of CEOs received higher pay in 2020.<\/p>\n\n\n\n
\u201cFortunately for those CEOs, many had boards of directors willing to see the pandemic as an extraordinary event beyond [CEOs\u2019] control. Across the country, boards made changes to the intricate formulas that determine their CEOs\u2019 pay \u2013 and other moves \u2013 which helped make up for losses created by the crisis,\u201d reported Stan Choe of the AP<\/em>.<\/p>\n\n\n\n
As a result, median pay for CEOs at companies in the Standard & Poor\u2019s 500 Index was $12.7 million, according to data analyzed by Equilar for the AP. That\u2019s a 5 percent pay increase over 2019 levels. In contrast, wages and benefits for non-government workers who were employed went up by 2.6 percent in 2020.<\/p>\n\n\n\n
\u201cCompanies have to show how much more their CEO makes than their typical worker, and the median in this year\u2019s survey was 172 times. That\u2019s up from 167 times for those same CEOs last year, and it means employees must work lifetimes to make what their CEO does in just a year,\u201d reported AP.<\/p>\n\n\n\n
<\/p>\n\n\n\n
\u201cConsumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.\u201d
—Adam Smith, Economist and philosopher<\/em><\/p>\n\n\n\n<\/p>\n\n\n\n
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Are we at a tipping point? One side effect of the pandemic was a collapse in demand for oil, which led to \u201cthe largest revision to the value of the oil industry\u2019s assets in at least a decade,\u201d reported Collin Eaton and Sarah McFarlane of The Wall Street Journal. Last week brought another reckoning for […]<\/p>\n","protected":false},"author":14,"featured_media":4621,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","meta":{"_acf_changed":false,"post_statement":"","post_description":"","post_cta":"","post_button":"Read More","post_button_url":"","compliance_id":"","post_disclaimer":""},"categories":[],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/oi_article\/4618"}],"collection":[{"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/oi_article"}],"about":[{"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/types\/oi_article"}],"author":[{"embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/comments?post=4618"}],"version-history":[{"count":0,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/oi_article\/4618\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/media\/4621"}],"wp:attachment":[{"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/media?parent=4618"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/categories?post=4618"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/tags?post=4618"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
- Change direction.<\/strong> For weeks, a U.S. oil supermajor had done battle with an investment group that holds 0.02 percent of its shares. The investment group wanted the company \u201cto gradually diversify its investments to be ready for a world that will need fewer fossil fuels in coming decades\u201d rather than focus on carbon capture and storage solutions, reported Sarah McFarlane and Christopher Matthews of The Wall Street Journal<\/em>.