Niko Resources has had a brutal go of it lately, but the company’s chief executive officer still took home $4.8-million (U.S.) in pay in the most recent fiscal year.
To be sure, that’s a big pay cut for Edward Sampson, whose compensation has averaged close to $12-million a year in the four prior years, mostly in stock options. But it’s not bad for a company that has seen its share price fall massively.
Niko’s shares dropped from $93 at the beginning of the fiscal year that ended March 31, 2012 to $35.09 at the end – a 62 per cent decline. And in 2011, Niko paid a $9.5-million fine after pleading guilty to bribing Bangladesh's junior energy minister in 2005.
Then, in mid-2012, Niko unveiled its second major reserve reduction in two years. That triggered a huge rout in the stock.
By the company’s reckoning in the regulatory filing containing the pay details, Mr. Sampson got paid total compensation that was 55 per cent of what CEOs in his peer group made. That peer group looked at six companies including Anadarko Petroleum Corp., Nexen Inc. and Tullow Oil Plc. (The full report from the company is available at sedar.com).
And about that stock rout: Niko included in its filing a so-called “look-back table” that shows just what the drop in the stock has done to Mr. Sampson’s big pay packets in recent years. So yes, the headline number is big, Niko is saying, but it’s not helping Mr. Sampson. He’s suffering along with the rest of shareholders.
For example, 2011’s $10.9-million in pay is only worth $1.1-million because the options are under water. And 2010’s $15.2-million is only worth $1.3-million now. Even 2012’s $4.8-million is only $1.2-million at this point.