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As of the end of 2015, the realizable values of compensation awarded to CEOs at five of Canada’s largest oil companies had slid an average of 40 percent below the figures that were reported to shareholders in the proxy statements, according to a Bloomberg review of regulatory filings.
But some shareholders only look at the reported figure, not the realized figure. That’s because pinpointing how much an executive actually makes can be difficult as some awards vest over several years and because not all companies show the difference between reported and realized compensation.
Oil and gas producers tend to include more equity in executive compensation than similar-sized companies in other industries, said David Bixby, a managing director at executive pay consultant Pearl Meyer.
Reported pay figures can also be inflated compared to realized values due to timing issues. Since filings for companies’ general meetings list compensation from the previous fiscal year, there can be a one-year lag between when stock awards are granted and when they are disclosed.
Many figures in 2016 proxies are based on “grants valued back in February of last year, when we were still midway down the slope,” said Bixby. “There were a lot of firms that saw their stock price decline another 50 percent between that time and now.”