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Oil & Gas Crisis Response: 2020 Compensation Responses will lead to Sustained Changes

2020’s significant downturn already shows some marked differences from the 2008-2009 and 2015-2016 downturns (the last instances where oil prices fell more than 50% over a short time period).

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Mere weeks after boards approved compensation outcomes from 2019 performance, there’s a temptation to revisit or change those outcomes under the lens of 2020 performance. We believe that in the large majority of cases, those 2019 outcomes should stand on…

Use Compensation to Advance ESG Initiatives

From the July/August 2019 issue of the NACD Directorship magazine.

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Directors should take a close look at how their companies can use compensation to advance an environmental, social, and governance (ESG) strategy. A key to ESG oversight is the board’s examination of how compensation reflects and advances the company’s commitment…

2019 NACD Directorship 100 Released—The Annual List of the Most Influential Leaders in Boardrooms and in Corporate Governance

Michael Powers and Jim Wolf were named to the NACD Directorship 100 list for 2019, making it the seventh consecutive year for both Partners.

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The National Association of Corporate Directors (NACD), the authority on boardroom practices representing more than 20,000 corporate board members, announced the honorees of the 2019 NACD Directorship 100™, an annual recognition of the leading corporate directors, corporate governance experts, policymakers,…

2018 NACD Directorship 100 Released—the Annual List of the Most Influential Leaders in Boardrooms and in Corporate Governance

Michael Powers and Jim Wolf were named to the NACD Directorship 100 list for 2018, making it the sixth consecutive year for both Partners.

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The National Association of Corporate Directors (NACD), the authority on boardroom practices representing more than 19,000 corporate board members, announced the 2018 NACD Directorship 100, an annual recognition of the leading corporate directors, corporate governance experts, policymakers, and influencers—leaders who…

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.

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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,…

Managing Incentive Plans in a Cyclical Business

As seen in Corporate Board Member First Quarter 2018 - Compensation is always tricky, but it’s even tougher in an up-and-down business, where markets—as much as the managers—run the show. Jim Wolf, managing partner at Meridian Compensation Partners, offers advice on getting it right.

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There is no more contentious, complex or difficult issue for boards than setting up the right incentives for executives. With companies in cyclical businesses that may have commodity costs as a large portion of performance, the challenge gets even more…

NACD Directorship 100 Released—the Annual List of the Most Influential Leaders in Boardrooms and in Corporate Governance

Michael Powers and Jim Wolf were named to the NACD Directorship 100 list for 2017, making it the fifth consecutive year for both Partners.

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The National Association of Corporate Directors (NACD) announced the 2017 NACD Directorship 100, the annual list that recognizes leading corporate directors, governance experts, and other influencers who impact boardroom practices and performance. NACD identifies these outstanding directors and governance professionals…

The BP Shareholder Vote: A Cautionary Tale

Despite using the "correct" process, BP shareholders still took issue with the company's compensation programs.

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Compensation is often more about the message than the money. BP’s recent shareholder vote offered some valuable lessons for other energy companies about sending the right messages to shareholders when commodity prices impact business results. On April 14th, nearly 60%…

Compensation When Oil is in the $40’s

With oil prices in the $40 per-barrel range, this creates an entirely new environment for oil and gas compensation decisions. Meridian analyzes the themes and realities for 2015.

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Oil prices in the $40s create an entirely new environment for oil and gas compensation decisions this year. From our vantage point across the industry we’ve noted several important themes and realities: Situations differ. Low prices impact everyone, but some…

The Line Between Ownership and Compensation

Cheniere Energy’s recent challenges offer interesting lessons in understanding the differences between “ownership” and “compensation”.

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Cheniere Energy’s recent challenges offer interesting lessons in understanding the differences between “ownership” and “compensation”. Cheniere has faced notable public challenges to its executive compensation program, including the withdrawal of an incentive plan proposal to shareholders and failed Say on…

What if there were no annual bonuses?

Removing Annual Bonuses Could Help Companies Avoid Time-Consuming Discussions

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Each February, boards and management spend thousands of hours on their annual bonus programs. Energy companies in particular can struggle to evaluate annual performance in what is inherently a long-term business. Arguing over an incremental handful of bonus points can…

Investors Still Don’t Give Boards High Marks on Executive Compensation

In a Survey Investors Expressed Their Lack Of Trust in Board for Executive Compensation Decisions

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A recent PricewaterhouseCoopers (PwC) survey found that two-thirds of institutional investors don’t think that corporate boards are effective in controlling executive compensation. The PwC survey results imply that despite on average receiving over 90% shareholder support for Say on Pay,…

Changing the Guard

Five Potential Trends From Energy Leadership Adjustments

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Energy companies have hired or promoted a spate of new CEOs, with a dozen or more new incumbents or openings in the upstream sector alone. What compensation and governance trends might this concentrated wave of new leadership create over the…

What to Learn from Shareholder Activism

A Review of Recent Shareholder Activism in the Energy Industry

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Energy boards and management have paid close attention to activist shareholders this proxy season, including current proxy battles and investor activism at Hess Corporation (Elliott Associates), SandRidge Energy (TPG-Axon Capital) and Nabors (Pamplona Capital). Each has included a discussion of…