Chief executives at US shale companies are continuing to receive bumper pay packets despite years of dismal returns, according to a new report. While most US oil bosses had their pay cut during last year’s historic oil price crash, which prompted widespread lay-offs and inflicted huge losses on the sector, the median decline in payouts was just 1 percent compared to 2018 levels, according to the analysis from Kimmeridge Energy Management, a private equity group that invests in the sector.

Shareholder returns over the same period were down 60 percent. The median pay for chief executives at the top firms was $11m in 2020.

‘It’s a staggering revelation around the lack of accountability at the board level,” said Mark Viviano, a managing partner at Kimmeridge. “There hasn’t been an acknowledgment of the magnitude of shareholder value destruction.”

The shale industry has fallen out of favor with shareholders after a decade of profligate spending and debt-fuelled drilling resulted in several years of steep losses.

A rise in oil prices to about $70 a barrel this year has driven a sharp rally in the sector’s shares. But the value of the S&P Oil and Gas Production ETF, an index of shale companies, is still about 35 per cent lower than the last time oil prices were at $70 a barrel, in late 2018.

“The primary responsibility of the board is to protect the interests of shareholders, but they appear more interested in protecting the lifestyle of the CEO,” he said.

Occidental Petroleum chief executive Vikki Hollub’s total pay was cut by 11 percent in 2020 compared to a year earlier, to $14.1m, as the company struggled through the pandemic. That brought her payback to roughly the same level as in 2018. The company’s shares fell more than 70 percent over the period.

Kimmeridge found the median payouts of performance-based plans was roughly 95 percent of the target in 2020, even though the median shareholder return was down 36 percent

Many shale groups tie executives’ performance-based pay by comparing returns to other shale companies rather than the broader market, which they :reenshot &counts for the industry’s price cycles. But it means a company’s chief