Three Tullow Oil executives shared pot of £2.2m last year

Company cut staff numbers, suspended dividend, and made a loss of $1.2bn during year

Storage tanks at Tullow Oil’s Ngamia 8 drilling site in Lokichar, Turkana County, Kenya. Photograph: Baz Ratner/Reuters

Storage tanks at Tullow Oil’s Ngamia 8 drilling site in Lokichar, Turkana County, Kenya. Photograph: Baz Ratner/Reuters

 

The top three executives at Irish-founded explorer Tullow Oil shared a pay packet of almost £2.2 million (€2.6m) last year, its annual report shows.

The London-listed group earlier this month published figures which showed it suffered an after-tax loss of $1.2 billion last year after writing off exploration assets and other impairments.

However, details of executive pay at the company, which is focused on a portfolio od assets across Africa and South America, are detailed in its annual report which was published on Tuesday.

It shows that chairwoman Dorothy Thompson received a total package of £511,898 during the year. Ms Thompson switched from non-executive chair to executive chair from December 9th, 2019, to September 8th.

Her remit for the period from July 1st to September 8th was to “ensure a smooth transition to the new chief executive officer”.

The new chief executive, Rahul Dhir, took up the role on July 1st. He received a total package of £686,519 last year which included a salary of £291,580, cash from the company’s bonus plan of £174,870, as well as deferred shares of the same amount.

Tullow chief financial officer Les Wood received a total package of £958,762 including a salary of £461,500, cash from the bonus plan of £185,521, as well as deferred shares of the same amount.

The annual report also shows that employee headcount at the company fell from 989 to 730 during the year. Staff costs were reduced by a third from £156.4 million to £105 million.

In her statement, Ms Thompson also noted that the company’s dividend to shareholders “will continue to be suspended” until Tullow has further reduced debt and strengthened its balance sheet.

In its annual remuneration statement, the company defended the move to grant bonuses to its senior executives.

“The [remuneration] committee deliberated on several occasions whether it was appropriate to make Tullow Incentive Plan (TIP) awards to our executives, given the financial impact of the pandemic,” it said.

“It noted that Tullow received no Government support in terms of furlough or direct grant and that we had already cut the dividend in 2019.

“As regards to Rahul Dhir, he was appointed half way through the year on the understanding that he would be eligible to receive a TIP award provided he delivered to our expectations.

“I can comfortably report that he has exceeded our expectations throughout. Rahul’s TIP outcome was 30.15 per cent of maximum.

“As regards to Les Wood, we noted that he received no TIP award for 2019 and has had no salary increase this year or in the prior year.

“Through 2020, Les as chief financial officer has delivered strong outcomes in his areas of responsibility.

“As such and noting the negative discretion exercised last year, we felt it absolutely appropriate to award him a bonus albeit at 20.1 per cent of maximum, which encompasses the pandemic challenges as outlined below.”

The report also noted that “a number of staff were made redundant” during the course of 2020, but added that “enhanced settlements were offered in excess of statutory requirements and no exceptional government financial support was used”.

In terms of outlook, Ms Thompson said she was “pleased to conclude the year with much greater confidence in the future of Tullow”.

“The business has a clear roadmap, which will be delivered by a lean and highly skilled and committed team which, like the board, is committed to driving value for our investors, our host governments and our people,” she added.