October 28, 2020

Agenda: ‘Excessive Personal Payday’ – Payouts Raise Hackles

By Jennifer Williams-Alvarez, Stephanie Forshee

Votes that seal the fate of the wealth of Noble Energy executives will be tallied today after shareholders virtually gather for a special meeting to approve Chevron’s acquisition of the Houston-based company, which was valued at $4 billion at market close Thursday.

Shareholders are expected to approve the deal, which was blessed by proxy advisory firms, but questions remain about the fate of golden parachutes for senior executives.

Until two years ago, Noble shareholders had historically shown overwhelming approval for the company’s annual say-on-pay proposals, with between 89% and 98% voting in support from the years 2011 to 2018, according to Farient Advisors’ Say on Pay Tracker. Then, in 2019, support for executive comp dropped to 81.5% and then dipped lower, to 77.3%, in April 2020. The golden parachutes at issue in the deal agreement are even larger pay amounts than what Noble shareholders had previously voted on, though. In addition to severance triggered by the change in control, the agreement between Chevron and Noble allows for additional transition awards, which will increase the total value to the executives’ pay packages by about 25%.

Under the change-in-control scenario, CEO David Stover will be due a total of $25 million, while COO Brent Smolik is due $14 million. CFO Kenneth Fisher is to receive $8.6 million. General counsel Rachel Clingman is due $6.7 million, while SVP of offshore John Elliott would leave with $6.7 million.

As of Sept. 27, Stover held $6 million in Noble stock. Since the start of 2020, his holdings have lost a total of $10.9 million in value, according to Farient Advisors’ Wealth Tracker, which calculates the wealth of CEOs.

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