1 April 2008
SAN FRANCISCO (AP) - Chevron Corp. (NYSE:CVX) Chairman David O'Reilly received a 2007 compensation package valued at $15.7 million, a 17 percent raise that lagged the dramatic rise in oil prices fueling the company's four-year streak of record profits.
Tuesday's disclosure of O'Reilly's 2007 pay comes amid widening resentment about the money pouring into Chevron and its oil industry peers as soaring energy prices make it tougher for households and businesses to make ends meet.
With the economic pain mounting, lawmakers are once again threatening to slap the oil industry with higher taxes. Executives from Chevron and other oil companies tried to soften the backlash in Tuesday appearances before a Senate committee in Washington.
O'Reilly, Chevron's chief executive since 1999, didn't testify at that hearing.
Crude oil ended 2007 at nearly $96 per barrel, about 57 percent higher than where they began. In recent weeks, oil has traded as high as $111, propelling gasoline prices beyond $3.50 per gallon in some parts of the country. Many analysts predict gasoline will surpass $4 per gallon later in the spring.
Most of O'Reilly's compensation is tied to Chevron's profits and stock price, which have climbed along with oil prices.
His 2007 salary of $1.65 million was supplemented by $3.6 million in performance-based incentives and stock awards valued at $10.2 million when they were granted in March 2007. Chevron also doled out $255,251 to cover various perquisites, including $82,456 for O'Reilly's use of corporate jets.
O'Reilly's total 2007 compensation rose from $13.5 million in 2006.
The Associated Press calculates executives' total pay based on salary, bonuses, incentives, perquisites, above-market returns on deferred compensation and the value of stock options and other awards granted during the year. This figure often differs from the total compensation the companies list in their proxy statements, guided by rules set by the Securities and Exchange Commission.
Chevron believes O'Reilly deserves to be richly rewarded for the longest stretch of prosperity in the San Ramon-based company's 128-year history.
In the past four years, Chevron has earned a total of $63 billion, including $18.7 billion during 2007. The performance helped to more than double Chevron's market value during the same period, creating $100 billion in shareholder wealth.
Chevron's stock price increased by 27 percent last year. O'Reilly capitalized by exercising 600,000 stock options to realize an $18.2 million gain.