Canadian CEO Compensation Trends In 2020: CanOils Analysis
Chief executive officers of a basket of Canadian gas producers received similar total compensation in 2020 compared to 2019, according to new analysis by CanOils of Canadian CEO compensation.
The CEOs of gas producers fared better than those of oil-weighted companies or oilsands producers.
In total, 38 TSX-listed companies are included in the analysis (also see Notes). The companies, all with output of over 1,000 boe/d for the year ended Dec. 31, 2020, have over 75 per cent of their production in Canada. Any no-longer-active company was excluded (e.g. Husky Energy Inc., Seven Generations Energy Ltd.).
The 38 producers were split into three peer groups:
- Gas producers (18): <50 per cent oil;
- Oil producers (15): >50 per cent oil, excluding the oilsands majors; and,
- Oilsands majors (5): Canadian Natural Resources Limited, Cenovus Energy Inc., Imperial Oil Limited, MEG Energy Corp. and Suncor Energy Inc.
“Total compensation for the CEOs of gas producers was flat in 2020 after it had already taken a very steep dive between 2018 and 2019,” said Mark Young, senior oil and gas analyst with CanOils.
Total compensation includes: executive salary, option based awards, share based awards and incentive plans (bonuses).
The data excludes anything listed as “other compensation” and any change in pension value reported. (“Other compensation” is mainly made up of large severance packages that skew the data set, in addition to smaller dollar amounts classified as “undisclosed.”)
The compensation breakdown for CEOs of gas producer was very nearly unchanged from 2019 to 2020.
“These CEOs have received more salary and bonus in both 2019 and 2020 than in previous years as a percentage of all compensation paid,” noted Young.
Moreover, salary and bonus make up 61 per cent of pay, much higher than in the other two groups.
In addition, 13 CEOs from gas-weighted producers saw their total compensation cut in 2020 but only seven saw a reduction in executive salary.
Total compensation has steadily declined for oil company CEOs since 2017, but has not reached the lows of 2016 despite the pandemic.
Young said 2020 pay saw more bonuses as a percentage of total pay, while share-based awards were reduced.
“Still, share-based awards dominate pay for oil company CEOs, and even with a drop below 50 per cent of total pay for the first time, 47 per cent is easily the largest figure of any group,” he added.
Two-thirds of the CEOs from oil-weighted producers saw their total compensation reduced year over year in 2020, while 11 saw a reduction in executive salary.
Total compensation for CEOs from oilsands producers took a steep, 32-per-cent decline in 2020 versus 2019 and is now lower than it was in any of the last six years.
Total compensation was leaning more towards options and share-based awards combined in 2020 compared to any other year. “The 12 per cent of total compensation made up of salary for oilsands producers is much lower than the oil or gas producers,” Young said.
All five CEOs saw their executive salary drop.
After a slight bump in salary overall in 2019, the 38 CEOs saw a drop in total compensation in 2020.
Looking across all companies, Young noted the compensation packages for CEOs are pretty much unchanged from year to year.
He said that 27 CEOs (71 per cent) saw their total compensation cut in 2020, with 23 of those seeing a reduction in executive salary.
Along with financial, operating and well-level performance data for all of Canada’s oil and gas producers, CanOils holds compensation data for CEOs, CFOs, COOs and other executives and directors for every TSX and TSX-V producer back to 2009. Visit CanOils for more information.
- Data confined to CEOs (all companies in the data set had a CEO or equivalent).
- All data sourced by CanOils from Information Circular regulatory documents.