For executives at most large, publicly-traded companies, incentive compensation is an integral part of the total compensation package. For those in the energy sector, the average total compensation for CEOs and CFOs increased in both the E&P and oilfield service (OFS) sectors in 2018. For the E&P sector, CEOs saw a 5 percent increase in average total compensation and CFOs saw a 12 percent increase, while the OFS sector saw over 20 percent increases for both CEOs and CFOs compensation in the industry. Last year also consequently saw only 5 percent of E&P companies in the top two quartiles utilize annual incentive plans, while no companies in the OFS space utilized AIPs.

Examining the energy sector for annual and long-term compensation, and change in control benefits, the Compensation and Benefits practice of Alvarez & Marsal has compiled two reports analyzing the largest companies in the OFS and E&P sectors. The 2019 Oil & Gas E&P Incentive Compensation Report and 2019 Oil & Gas OFS Incentive Compensation Report are compiled annually using 2018 proxy statements of the largest companies in the U.S. to analyze the total compensation packages for Chief Executive Officers and Chief Financial Officers. The reports also reviews the benefits to which executives are entitled upon a change in control, and the CEO pay ratios in both sectors.

Brian Cumberland and J.D. Ivy, Managing Directors with A&M Taxand, both have years of experience providing clients with executive compensation tax advice. They are available to breakdown and further discuss some of the key takeaways from the reports, providing insight on some of the notable changes compared to some of the previous findings outlined in the 2017/2018 Executive Change in Control Report, and can also offer insight into the factors impacting the change in data.