National Oilwell Varco Inc (NOV) has had a rough few years: Since 2017, the Houston company, whose drilling equipment is in major oilfields worldwide, has lost two-thirds of its value, costing shareholders a combined $9 billion.
FILE PHOTO: A pump jack operates at a well site leased by Devon Energy Production Company near Guthrie, Oklahoma September 15, 2015. REUTERS/Nick Oxford/File Photo
Company spokesman Blake McCarthy said NOV has recently worked to make executive pay terms more “shareholder friendly,” including a new cap on payouts for negative returns, which the company disclosed in an April filing. Slightly more than one-third of S&P 500 companies benchmark relative TSR against a broad index of firms. No energy companies do, according to compensation research firm Exequity LLP.
In proxy votes, investors overwhelmingly approve CEO pay packages in all sectors of the U.S. economy, including energy, regardless of stock performance. Average say-on-pay support in the energy sector was 90% in 2019, according to research firm Semler Brossy Consulting Group LLC. At NOV’s May 20 annual meeting, executive compensation received more than 90% support from shareholders.
For example, Devon Energy Corp CEO David Hager received $1.3 million in stock at the end of January as a reward for total shareholder returns falling by 41% over three years. That was good enough for an 11th place finish among its 15-company peer group, Devon disclosed in its proxy.
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