Analysis: Big Oil CEOs thrived during pandemic, thanks to stock-heavy compensation packages that have since soared
06/09/2023 // Olivia Cook // Views

The CEOs of America's biggest oil companies were paid a lot more in the first year of the Wuhan coronavirus (COVID-19) crisis than initially estimated – thanks to stock-heavy compensation packages that have since soared in value, according to an examination of pay disclosures over three years.

A Reuters analysis of stock-based pay granted to CEOs at 20 American oil and gas companies in 2020 more than doubled by 2023 when shares were vested. This means that despite all of the economic uncertainty that began in 2020, including mass layoffs, refinery closures and slashed capital spending, Big Oil executives were left relatively unscathed. (Related: More Americans unable to pay on time as "buy now, pay later" loan scheme becomes popular.)

The analysis of filings by companies in the S&P 500 Energy Sector Index showed stock-based CEO pay is now worth nearly $500 million, up sharply from initial estimates of $187 million.

Investors, shareholder advocates and professors who study CEO pay said the massive returns on COVID-era compensation reflect the problems of stock-heavy pay for energy CEOs – mainly that it often links pay too closely to external factors, including oil and gas price swings, instead of long-term financial performance.

"Compensation committees need to do a better job of rewarding executives for true out-performance and not just necessarily where the commodity price is," said Aeisha Mastagni, a portfolio manager at the $307 billion California State Teachers' Retirement System, in response to the Reuters analysis.


The establishment of Compensation Committees composed of independent directors to insulate pay determination from conflicting influences became mandatory in the rules of the New York Stock Exchange and the NASDAQ.

The independent requirements have been progressively strengthened to comply with the rules adopted by the Securities and Exchange Commission (SEC) implementing Section 952 of the Dodd-Frank Act. The ban on executive loans introduced by the Sarbanes-Oxley Act and disclosure rules are also instruments aimed at limiting self-dealing.

CEOs from top companies paid 351 times higher than an average employee in 2020

The compensation surge of Big Oil executives massively distorts the CEO pay ratios that companies are required to disclose to investors to demonstrate that executive pay is somehow reasonable compared to other employee pay. For example, Occidental Petroleum Corp claimed in 2020 that CEO compensation was only 104 times higher than median employee pay, but the Reuters analysis showed that it was in fact 230 times higher after stock gains over the past three years.

This is part of a trend showing how chief executives at major American corporations are receiving millions of dollars in bonuses and raises even as many companies saw slumping sales and job cuts because of the pandemic. CEOs from the top 350 companies were paid 351 times as much as a typical worker in 2020 – with most of the CEO pay increases stemming from corporate boards awarding more, according to the Economic Policy Institute (EPI).

Most of the CEO pay increases stemmed from corporate boards awarding more company stock to top executives, EPI noted.

Surging CEO pay has long been a target of corporate critics. But those eight-figure paydays can look even more out of place when compared to the financial struggles that many households experienced during COVID-19.

Economist Lawrence Mishel, who co-authored the EPI report, said some companies touted reductions in pay for top executives to reflect the pandemic's impact on business but had little impact.

"CEOs offering pay cuts during the pandemic yielded favorable headlines, but were symbolic at best and a head fake at worst," he said in a statement.

Watch this video about Hess Corporation CEO John Hess proclaiming the "vitality of the oil and gas industry."

This video is from the News Clips channel on

More related stories:

Corporate America experiencing BANKRUPTCY BOOM as recession looms.

America's top 20 nonprofit hospitals received over $23 billion in COVID-19 payments (while killing or injuring millions of people).

Inflation remains a problem for middle- and lower-income Americans as Biden's Federal Reserve keeps raising interest rates.

Over a third of small businesses failed to pay rent on time or in full in October.

Sources include: [PDF]

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