Tullow Oil share price tanks on back of executive bonuses but no dividends

The company’s top three executives shared total combined remuneration of just under €2.6m

Tullow Oil CEO Rahul Dhir received a total pay packet of £686,519 last year, comprising basic salary and bonus payments. Tullow made a €1bn loss last year, with revenues falling nearly 18%.

Shares in Tullow Oil fell by as much as 5% after the Irish-founded exploration company said it paid its top executives bonuses for a heavily loss-making year, while continuing to suspend shareholder dividends.

Tullow’s annual report shows that the company’s top three executives shared total combined remuneration of just under £2.2m (€2.6m) last year, with new chief executive Rahul Dhir and chief financial officer Les Wood also receiving bonus payments.

Earlier this month, Tullow reported an after-tax loss of $1.2bn (€1bn) for 2020 and a near 18% drop in annual revenue to $1.4bn. It did not pay a dividend to shareholders and is keeping that suspended for the foreseeable future.

Mr Dhir, who took over as Tullow’s CEO last July, was awarded an overall package of £686,519 last year. Chair Dorothy Thompson’s overall remuneration for 2020 amounted to £511,898 and that of Mr Wood totalled £958,762. On top of their basic salaries, Mr Wood and Mr Dhir also benefitted from payments from Tullow’s executive bonus plan.

Tullow’s remuneration committee deliberated, “on several occasions”, whether it was appropriate to make bonus, or incentive plan, payments to executives, according to committee chair Jeremy Wilson.

Incentive payments

Mr Dhir was appointed halfway through the year on the understanding that he would qualify for incentive payments if he delivered on expectations.

“I can comfortably report that he has exceeded our expectations throughout,” said Mr Wilson.

He said Mr Wood delivered “strong outcomes” last year and received no bonus for 2019 and no salary increase for the last two years.

In the annual report, Ms Thompson said until Tullow has further reduced its debt, which fell from $2.8bn to $2.4bn last year, “regretfully” the dividend will continue to be suspended.