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Incentive compensation is an integral part of the total compensation package for executives at most large, publicly traded companies. Taxand USA examines the 100 largest exploration and production companies on the US stock exchange.
To understand current annual and long-term incentive compensation pay practices in the oil and gas exploration and production sector.The report highlights the following:
Annual incentive plans
- 72% of companies with market capitalisation over $5 billion utilise annual incentive plans where the payout is at least partially determined in a formulaic manner, while only 23 percent of companies with market capitalisation smaller than $500 million utilize formulaic performance metrics.
Long-term incentive plans
- 96% of companies grant at least one form of long-term incentive award. The prevalence of awards varies by company size, but time-vesting restricted stock and restricted stock units are the most common form of award granted (used by 83 percent of all companies).
Quality tax advice, globally
Because incentive-based compensation makes up a significant portion of an executive’s total compensation package, it is important for compensation committees to understand how other companies in the industry are structuring their incentive programs in order to remain competitive