Energy Insights

Relative TSR Still Delivers Real Pay-for-Performance Alignment in the Oil & Gas Industry

Among the ten largest Oil & Gas production companies that have reported 2017-2018 compensation actions, each has either implemented or enhanced a financial returns metric for 2018 incentive compensation.

Posted by on

The menu of industry annual incentive metrics (and some long-term incentive metrics) now includes several instances of ROCE, Cash ROCE, ROIC, estimated wellhead returns, and other non-GAAP measures of investment returns. Investors may welcome the incentive accountability to financial returns,…

Setting Annual Incentive Targets When Commodity Price Drops

One of the hardest challenges for a Compensation Committee is to set annual incentive performance targets at levels that are lower than the prior year’s actual performance.

Posted by on

One of the hardest challenges for a Compensation Committee is to set annual incentive performance targets at levels that are lower than the prior year’s actual performance. It is difficult to explain to shareholders when share price is dropping, how…

Should bonus outcomes be different by level?

Insights into whether there should be different standards for executive bonuses than for the broader population, and whether executives shouldbe held to a higher standard of accountability to shareholders.

Posted by on

In our experience, a large number of oil & gas companies provide the same bonus funding level for all bonus-eligible employees in the organization. There may be differentiation based on individual or business unit performance (horizontal differentiation) but no differentiation…