MRO Shrinks CEO Pay and Cuts Emissions

(Bloomberg) -- Marathon Oil Corp. took a rare step among independent shale explorers by cutting executive compensation and boosting anti-pollution targets.

Such measures have become increasingly common among the top tier of major oil companies as management teams seek to allay investors concerned about environmental impacts, social issues and corporate governance.

The Houston-based oil driller will slash Chief Executive Officer Lee Tillman’s total compensation by 25% and cut greenhouse-gas emissions on a unit-of-production basis in half by 2025, the company said Wednesday in a statement. Kimmeridge Energy Management Co., an activist investor pushing other shale companies to take similar steps, applauded the moves a day later.

“We believe strong corporate governance is foundational to delivering ultimate shareholder value, and have modified our executive compensation framework to further align management interests with stakeholders and to incentivize the behaviors we believe are most important,” Tillman said in the statement.

The compensation changes, which also apply to the board of directors, include the elimination of oil-production metrics in calculating annual bonuses, Marathon said. Tillman’s 2019 total compensation climbed 15% from a year earlier to $14.1 million, according a federal filing.

Chesapeake Energy Corp. announced its own set of emissions-reduction targets on Wednesday. A pioneer of the shale patch that’s now working its way through bankruptcy, Chesapeake is targeting net-zero greenhouse gas emissions by 2035 and plans to halt routine flaring of excess natural gas on all new wells this year.

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