Oil CEOs Comp Up 4x Average

An analysis of CEO compensation at 25 of the largest publicly traded global oil and gas companies found that median income for of those executives increased more than four times the rate of that of executives in the Standard & Poor's 500-stock index as a whole.

Equilar, the compensation research consultancy, conducted the analysis for BusinessWeek. While oil prices skyrocket, some analysts tell BW that oil-company CEOs in particular are getting pay raises on factors that don't control, such as the price of oil, rather than "managerial prowess."

"Energy companies' improved performance is almost entirely due to high oil prices," says Paul Hodgson, an executive pay analyst for The Corporate Library, a corporate governance research organization in Portland, Maine. "But if [their executives] deny culpability for high oil prices, why are they getting rewarded for them?"

Executive comp for CEOs at the 12 largest U.S. oil companies rose by 5.8% from 2006 to 2007, from a median of $14.6 million to $15.4 million. That's more than four times the increase of compensation for S&P 500 CEOs, whose median increased by 1.3% from 2006 to 2007, or $8.7 million to $8.8 million, according to Equilar.

For the U.S. companies in the study, total compensation includes base salary, bonus, payouts form short-term and long-term incentive plans, the grant-date value of new stock and option awards, and other compensation.

Topping the list was Occidental Petroleum's longtime chief Ray Irani, who received a $33.62 million package in 2007, actually down from $52.14 million in 2006.

The head of the No. 1 U.S. energy major had the No. 2 compensation package: ExxonMobil's Rex Tillerson, with $21.66 million in 2007, up from $18.37 million in 2006.