Zayla recently conducted a preliminary analysis of energy industry proxy disclosures from the early stages of the 2025 proxy season. Below is an overview of initial trends noted. Please check back later for expanded analyses on executive compensation trends in the energy industry.
Sample Group Characteristics
Zayla reviewed compensation disclosures from 24 companies that have filed DEF14A filings as of March 19, 2025. Companies represented all energy industry segments, split as follows:
Of the 24 companies, 10 had revenues in FY2024 of less than $1B; the remainder ranged from $1.1B – $138.9B.
Energy CEO Compensation Trends
Zayla evaluated CEO pay for fiscal year 2024, noting a few trends:
- CEO pay across all companies ranged from $2.9M at the 25th percentile up to $13.4M at the 75th percentile – reflecting an average increase of 7% from FY2023;
- Downstream companies reported the highest compensation to date (and corresponding highest revenue), while oilfield services companies reported the lowest;
- E&P companies reported the largest spread in CEO pay to date;
- Continuing a trend noted in FY 2023, incentive pay outcomes reported in 2024 were strong relative to target:
- Companies with formulaic short-term incentive plans for their CEOs have reported payouts of target or better, with a median payout of 120% of target;
- Continuing the trend of limited use of discretion in executive pay programs in today’s corporate governance environment, only 3 companies reported application of discretion on bonus outcomes for 2024 – one company applied negative discretion and two companies applied positive discretion due to specific uncontrollable events;
- Companies that had performance-vesting long-term incentive awards vesting during FY 2024 reported outcomes generally well above target, averaging 157% of target.
- Companies with formulaic short-term incentive plans for their CEOs have reported payouts of target or better, with a median payout of 120% of target;
Zayla notes the above mirrors the firm’s insights derived from its consulting work and ECI survey data. The industry has seen a tight labor market the last couple of years, resulting in continued growth in compensation investments to attract and retain top talent. While recent headlines from the industry have hinted at elevated volatility (large companies conducting layoffs, new U.S. administration desiring lower commodity prices, etc.), companies would do well to maintain an understanding of what competitors are doing from a compensation perspective to ensure their offerings are competitive going forward.
Zayla will update this analysis later in the proxy season after additional filings are made public. For any questions, please contact the team at info@zayla.com or (832) 363 – 5089.
