Investors rejected a compensation plan for ConocoPhillips’ top executives in an advisory vote on Tuesday, signaling disapproval in the company’s pay levels last year.
Sixty-eight percent of the Houston oil company’s shareholders voted against or abstained in the so-called say-on-pay vote over its 2016 compensation, according to preliminary tallies. Last year, 83 percent of the company’s investors approved its 2015 executive pay packages.
Its the first time the independent driller has failed to get shareholder approval in the non-binding vote since it spun off its oil refining business five years ago, the company said.
“We’re disappointed the proposal didn’t pass, and acknowledge how the shareholders have voted,” said Daren Beaudo, spokesman for ConocoPhillips, in an email. “We plan to actively engage in dialogue with our shareholders to better understand their views regarding our compensation programs.”
Oil prices fell to a dozen-year low in February 2016 but doubled by the end of the year, lifting pay for some oil executives. Conoco cut its workforce 30 percent during the oil bust in 2015 and 2016 and reduced capital spending 70 percent since 2014. In February 2016, it cut its shareholder dividend by two thirds to 25 cents a share.
Conoco reduced the total pay of its CEO Ryan Lance nearly 8 percent to $15.6 million last year, holding his base salary flat while slightly reducing stock and option awards. His cash incentives increased 4.5 percent to $2.6 million, regulatory filings show.
The company’s board of directors and its human resources and compensation committee plans to take the outcome of the vote into consideration in future executive pay packages, said Janet Carrig, senior vice president and general counsel at ConocoPhillips, in a recent conference call.