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ConocoPhillips Investors Reject Executive Pay Plan

Say On Pay (SOP) is back in the news—and this time in a BIG WAY! Three big energy companies—Exxon, Conoco and BP—just had shareholders reject their pay packages. At NFPCCmp;A this was a surprise since all 3 companies have excellent boards; excellent leadership and what we would have assumed, great shareholder outreach. This article by Collin Eaton in the Houston Chronicle (featuring comments by our President, Chris Crawford) specifically discusses Conoco, but then discusses how Apache’s executive compensation plans passed with flying colors, so not all is lost. Peer selection is always key; along with the right match to the job. However, for shareholders there’s that issue of performance and understanding a company’s “game-plan” with respect to compensation—specifically how disclosed packages are in alignment with shareholder interest. Add to this, the facts that 1. Not all shareholders have the same goals and 2. Anyone invested in energy over the last two years is probably “patience-light”…well you can see how a NO vote can result. This is as much art as it is science but performance and communication are CRITICAL.

Blog post written by Brent Longnecker, Chairman & CEO of Longnecker & Associates.

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