Canadian energy CEOs see big jump in compensation

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Improving fortunes in Canada’s oil patch meant millions of dollars more in pay for the CEOs of the country’s biggest energy companies.

The top executives at seven big energy companies had an average increase in their compensation of more than 21 per cent in 2021, compared with the prior year. In dollar terms, that was an extra $2.3-million for each, bringing the average pay package to $13.4-million.

In sum, the seven men received total compensation of $93.8-million in 2021.

The Globe and Mail reviewed the proxy circulars of the three major pipeline companies – Enbridge Inc. ENB-T, TC Energy Corp. TRP-T and Pembina Pipeline Corp. PPL-T – as well as four major exploration and production or integrated companies: Canadian Natural Resources Ltd. CNQ-T, Suncor Energy Inc. SU-T, Cenovus Energy Inc. CVE-T and Imperial Oil Ltd. IMO-T

All seven companies are members of the S&P/TSX 60 Index of large Canadian stocks.

In their compensation discussion and analysis included in the shareholder circulars, the companies emphasize the role of share and option awards, which can decline in value, as well as the annual bonus, in making the vast majority of executive pay “at risk.”

Certainly, it was a good year for the companies’ shareholders: The three pipeline companies’ shares returned between 20 per cent and 37 per cent in 2021, according to S&P Global Market Intelligence. The others returned between 54 per cent and 102 per cent, with Cenovus the champion.

The companies, too, viewed their financial results as superior: All the companies that used targets for their annual bonuses paid them out above those targets, with most using “performance scorecards” that rated their final numbers well above expectations.

Cenovus and Suncor scored themselves more than 80 per cent above target, while Enbridge’s evaluation came in at 93 per cent above target.

TC Energy gave itself the lowest rating, 10 per cent above its overall target performance. After a workplace fatality in 2021, the company gave itself a zero rating on its safety score, which makes up 20 per cent of the overall rating.

That was “to reinforce the message that these incidents are not acceptable,” wrote Thierry Vandal, the chair of the board’s human resources committee, and Siim Vanaselja, the board chair.

All told, the seven men received annual bonuses totalling $15.51-million, up from an aggregate $10.45-million in 2020.

Enbridge, the most valuable of the seven by market capitalization, also has the highest-paid chief executive officer, Al Monaco. He made $19.03-million in 2021, up 11.6 per cent from $17.05-million in 2020.

Mr. Monaco’s pay package included a salary of $1.65-million, a bonus of $4.62-million, and $11.1-million in share and stock option awards.

Murray Edwards, executive chairman of Canadian Natural, made $16.11-million, up nearly 19 per cent from $13.57-million in 2020. Mr. Edwards takes a $1 salary each year, but received $13.6-million in share and stock option awards and a $2.49-million bonus. (While Tim McKay has the CEO title at Canadian Natural, Mr. Edwards is consistently the company’s best-paid executive.)

Pembina Pipeline’s Michael Dilger had the biggest increase in compensation, but only because he received $6.18-million in severance when he left the company in November. His total pay package of $14.35-million also included $5.21-million in share and stock option awards and a $1.47-million bonus. Mr. Dilger made $7.97-million in 2020.

Cenovus Energy’s Alexander Pourbaix had a jump of 47 per cent to $13.99-million, up from $9.51-million in 2020. He received $9.6-million in share and stock option awards and a $2.9-million bonus.

Suncor’s Mark Little made $11.80-million, up 16.4 per cent from $10.14-million in 2020. He received share and stock option awards valued at just more than $9-million and a bonus of $1.96-million, more than triple his 2020 award.

At TC Energy, François Poirier made $9.81-million in his first full year as CEO, including a $1.1-million bonus and share and stock option awards valued at $6-million. His predecessor, Russell Girling, made $14.55-million in 2020.

Imperial Oil CEO Brad Corson made $8.75-million in 2021, up nearly 95 per cent from a pay package just under $4.50-million in 2020. Quirks in pension accounting were responsible for more than $1.5-million of the reported compensation increase.

Exxon Mobil Corp. holds 69.6 per cent of Imperial Oil’s shares and pays the cash compensation, including pension benefits, of Mr. Corson, a veteran Exxon executive.

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