Oil Executives' Net Worth Tied to Company Stock Performance

Oil company executives, including those at Hess, Occidental, Exxon, and others, have significant amounts of their net worth tied to the performance of their companies' stock prices. According to a Deutsche Bank report, executives Hess and Occidental are the most highly leveraged to changes in company share price. For every 1% change in share price, the net worth of Hess executives changes by $25 million, and Oxy executive net worth changes by $12 million.

Key Takeaways:

• Hess executives' net worth changes by $25 million for every 1% change in company share price, making them the most highly leveraged in the industry.
• Occidental executives' net worth changes by $12 million for every 1% change in company share price.
• Exxon's Lee Raymond had a net worth change of $11 million for every 1% change in share price, and $4 million without him.
• The average change in net worth for executives is $5 million for each 1% change in share value across the sector.
• John Hess held around 14% of Hess's shares as of year-end 2005, with a stock and options value of $1.8 billion.
• Valero Chairman Bill Greehey had stock and options valued at $750 million as of year-end 2005.
• Oxy Chief Executive Ray Irani and Exxon's Raymond were the top executives in terms of total compensation in 2005, each earning close to $50 million.
• Oxy Chief Financial Officer Steve Chazen was among the highest-paid executives in the sector, earning $15 million in 2005.
• The lowest-paid executives in 2005 were Suncor Chief Richard George, Oxy Executive Vice President R. Casey Olson, and Eni Chief Operating Officer Luciano Sgubini, each earning about $5 million.

Statistics:

• $25 million: The increase in net worth of Hess executives for every 1% change in company share price.
• $12 million: The increase in net worth of Oxy executives for every 1% change in company share price.
• $11 million: The increase in net worth of Exxon's Lee Raymond for every 1% change in share price.
• $4 million: The increase in net worth of Exxon executives (excluding Raymond) for every 1% change in share price.
• $1.8 billion: The value of John Hess' stock and options as of year-end 2005.
• $750 million: The value of Valero Chairman Bill Greehey's stock and options as of year-end 2005.
• 14%: The percentage of Hess shares held by John Hess as of year-end 2005.
• $50 million: The total compensation earned by Oxy Chief Executive Ray Irani and Exxon's Raymond in 2005.
• $15 million: The total compensation earned by Oxy Chief Financial Officer Steve Chazen in 2005.
• $5 million: The total compensation earned by Suncor Chief Richard George, Oxy Executive Vice President R. Casey Olson, and Eni Chief Operating Officer Luciano Sgubini in 2005.

Sources:

• Deutsche Bank report